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Romney wanted to—and would have—“let Detroit go bankrupt”

Mitt Romney knows that the auto rescue saved more than 1 million jobs and that the industry is roaring back. In the last presidential debate, he once again tried to rewrite the history of his position on the auto rescue, claiming that he would have extended help to Detroit. If Americans take a look at his record, they’ll find the incontrovertible proof that Romney opposed the President’s plan to save the auto industry from the beginning. Here are the facts:

  1. Romney opposed the auto rescue, period.

    When America’s automakers needed a lifeline, Romney stated his position clearly—“let Detroit go bankrupt.” And during the Republican primaries, Romney criticized the President’s successful rescue of the industry, calling it a “mistake.”

  2. President Obama did not take Romney’s advice on the auto rescue.

    Now that the auto industry is surging back, Romney says that “the course I recommended was eventually followed.” That’s not true. There’s an enormous gulf between what Romney advocated for—a “private bankruptcy” with guarantees for financing after the fact—and the President’s actions to save the industry. Here’s what reports have said about Romney’s claim:

    • Reuters fact check: “Romney argued in the Times article that the automakers should not get government help but instead go through a private bankruptcy process to trim costs. That is not what happened.

    • Associated Press fact check: “There was a tremendous difference between the course [Romney] advocated and the one that was taken.”

    • The New York Times fact check: “Mr. Romney’s position was that the government should not bail out the auto industry with financial assistance—which is exactly what the Obama administration proceeded to do.”

    • The Economist: “Even Ford, which avoided bankruptcy, feared the industry would collapse if GM went down. At the time that seemed like a real possibility. The credit markets were bone-dry, making the privately financed bankruptcy that Mr. Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.”

  3. Romney’s own auto plan would have forced the industry to shut down.

    Most crucially, Romney—despite his contradictory statements designed to whitewash his past positions—never supported providing direct government assistance to GM and Chrysler during a bankruptcy restructuring. In his New York Times op-ed, he made clear that the only government role he wanted would occur after bankruptcy already occurred.

    That means the most he ever supported was government “guarantees” of post-bankruptcy financing—but every independent expert to look at the issue has confirmed that, amid the worst financial crisis since the Great Depression, it would have been impossible to attract private capital to stand behind these companies, even with a government guarantee post-bankruptcy, and as a result they would have liquidated under Governor Romney’s strategy.

    Romney’s prescription wasn’t a plan, it was a fantasy—a dangerous one that economists say would have led to the Big Three’s collapse and catastrophic job losses across the country.

    • Auto Nation CEO Mike Jackson: When asked what he thought of “Mitt’s assertion that private financing ‘DIP’ was available in fall of ‘08 into ‘09,” Jackson replied, “That is pure fantasy and you have to ask, what was he doing in ‘08 and ‘09 that he did not see this?”

    • Reuters’ Paul Ingrassia: “While Romney asserts that a ‘managed bankruptcy’ funded by private investors could have rescued General Motors, absolutely no private money was on the horizon in 2009 for either GM or Chrylser ... the frightened banks wouldn’t have financed it anyway. The only alternative to a government bailout was the outright liquidation of both companies.”

    • Moody’s Chief Economist Mark Zandi: “Without any government help, the Big Three will quickly end up in bankruptcy and be effectively liquidated, resulting in hundreds of thousands of layoffs at just the wrong time.”

    • Former GM Vice Chairman Bob Lutz: “Bob Lutz, the vice chairman of GM at the time and an outspoken Republican himself, said the loan guarantees Romney talks about would not have made a difference due to the cash crunch at the time. “The banks were even more broke than we were. Who had the money?” he told the Detroit Free Press in February. “Loan guarantees don’t do any good if the banks don’t have any money.”

  4. In auto states, they aren’t buying Romney’s bogus claims.

  5. The auto industry is at the heart of Midwestern states like Ohio, where it helps support one in eight jobs. People in these states remember President Obama’s bold decision to revive the auto industry—and Mitt Romney’s calls to just let it go bankrupt. They know that Romney’s plan would have been devastating to communities across the country. Take look at what they’ve said about Romney’s auto fiction:

    • Toledo Blade: “When the history of the 2012 presidential campaign is written, the absurdity of presumptive GOP nominee Mitt Romney taking credit for the rebound of the U.S. auto industry will warrant an entry all its own … He can’t have it both ways—‘Drop dead, Detroit’ in 2008 and ‘I saved you’ in 2012.”

    • Detroit Free Press: “Romney won’t regain Michigan’s trust until he acknowledges the critical role that government played in sustaining the state’s auto industry—and abandons the fiction that Detroit’s recovery was his idea.” [5/9/12]

    • Akron Beacon Journal: “Romney advised no government help until after bankruptcy. The president understood such a course wasn’t practical, and would have been devastating to Ohio, Michigan and other states woven tightly into the auto industry.

The President made the decision to save America’s auto industry. Mitt Romney would’ve just let it go bankrupt. No matter how hard he tries to hide his real position—it’s written in black and white for every American to see. Share the facts so everyone knows that President Obama is the only candidate who bet on the American worker.