Romney's Blame of Obama for GM Cuts Misleading
NEW YORK (TheStreet) -- Mitt Romney can't shake bad PR about the 2009 General Motors(GM) bailout, even when he slams the president over the loss of jobs because of it.
In a television ad, the presumed GOP nominee's campaign noted that the bailout under the Obama administration forced Ohio dealerships to shutter buildings as one man interviewed in the commercial said "30-some" employees were out of work.
The line may be a bit misleading. The decision to shut down dealers across the country was a well-documented upheaval that saw congressional districts lash out at the people who made the cost-cutting decisions: GM management.
"Through dozens of meetings and discussions ... GM management came forward with a plan that accelerated the plant closings, eliminated the Pontiac brand, increased the job and dealer reductions, and added white-collar job cuts," Steven Rattner, the administration-appointed man who led the team that devised the bailout plan for the American automotive giants, wrote in 2009.
Rattner wrote that the companies -- not the government -- made the decisions about which dealers to close.
A Romney campaign official said on background that the point of the commercial is that Americans don't know how the decisions were made.
"We don't know how the decisions were made about what plants to close -- this is the difference between business decisions (letting the market sort it out) and political decisions. How did they decide who to shut their doors?" the official asked.
The advertisement may be a Romney campaign move to lighten how much the former Massachusetts governor's "Let Detroit Go Bankrupt" article has damaged his image among voters.
"Now he's saying the Obama administration cost the jobs for GM, so one way it gets
Romney in his op-ed did not suggest outright liquidation of the American automotive giants, he argued for debtor-in-possession financing. Analysts say DIP financing would have been virtually impossible in 2009.
The government injected some $50 billion into GM. For some perspective, data provided by Dealogic showed all lenders in 2008 provided a combined $13.63 billion on 47 DIP deals. All DIP loans from 2007 and 2008 combined would have accounted for just 48% of what lenders would have needed to restructure GM.