Romney Defends Stance on Auto Bailout

The campaign’s new focus on Michigan, which will hold its Republican primary on Feb. 28, comes as new national polls, including a New York Times/CBS News survey, show Rick Santorum surging to a tie with Mr. Romney.

Mr. Romney’s new advertisement, called “Growing Up,” shows him driving a car and reminiscing about life in Detroit. He criticizes President Obama and concludes by saying: “I want to make Michigan stronger and better. Michigan’s been my home, and this is personal.”

The commercial is to begin running on Wednesday, according to a Republican who tracks media spending and who said the advertising cost a modest $178,000 on the NBC station in Detroit.

A “super PAC” backing Mr. Romney also began an advertisement in Michigan attacking Mr. Santorum for voting as a senator to raise the debt limit, to increase spending, to request earmarks and to let convicted felons vote. “Rick Santorum. Big Spender. Washington Insider,” proclaims the ad, from Restore Our Future.

Mr. Romney also sought to highlight his connections to Michigan in the opinion article published in The Detroit News on Tuesday, while also deflecting potential criticism about his opposition to federal loans to rescue the auto industry.

Noting that he was born in Detroit and that his father was president of the American Motors car company in the 1950s, Mr. Romney wrote that he was 7 years old when he got his “love of cars and chrome and fins and roaring motors” from his father.

But the main message of the piece was to defend an Op-Ed article Mr. Romney wrote just two weeks after the nation chose Barack Obama as president in 2008. Published in The New York Times, it had the simple headline “Let Detroit Go Bankrupt.”

Mr. Romney’s explanation is a complicated one, especially given the industry’s remarkable turnaround in the last three years.

Mr. Romney says he always favored what he calls a “managed bankruptcy” for the auto companies that would have allowed the businesses to restructure and emerge stronger than before. He criticized Mr. Obama for choosing what he called a “bailout” of the industry that benefited big labor unions.

But Mr. Romney next acknowledges that General Motors and Chrysler did in fact go through a “managed bankruptcy” at the urging of Mr. Obama’s administration — and he takes credit for being the one to have the idea first.

“Managed bankruptcy may sound like a death knell. But in fact, it is a way for a troubled company to restructure itself rapidly, entering and leaving the courtroom sometimes in weeks or months instead of years, and then returning to profitable operation,” Mr. Romney wrote in the piece. “The course I recommended was eventually followed.”

Officials in Mr. Obama’s administration, and many economists in both parties, scoff at Mr. Romney’s suggestion that a managed bankruptcy was possible without the billions of dollars in government aid to the car companies. They say Wall Street and private equity firms in early 2009 were in no position to lend the kind of money that the companies needed to manage the bankruptcy process in an orderly fashion.

They also point out a fact that Mr. Romney neglects to mention in Tuesday’s opinion article: that it was the Bush administration that made the initial loans to General Motors and Chrysler, starting the “bailouts” that Mr. Romney derides.

In a conference call with reporters on Tuesday, Jennifer M. Granholm, a former Democratic governor of Michigan, accused Mr. Romney of “stabbing us in the back” despite being from Michigan.

“I think he should say: ‘I’m sorry. The president was right,’ ” Ms. Granholm said. “Instead, he is justifying what he said, which turned out to be a terribly wrong piece of advice.”

Democrats also accuse Mr. Romney of trying to rewrite the history of his earlier positions.

In the first paragraph of his 2008 opinion article, Mr. Romney made an unmistakable prediction: “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”

In fact, General Motors announced last month that it had earned $8 billion in profits in 2011 and had set a target of $10 billion in profits for 2012. Chrysler this month reported a profit of $225 million for the fourth quarter of 2011.

Mr. Romney now argues that the auto industry would be even better off if it had not received government money. And he accuses Mr. Obama of “crony capitalism” because the Chrysler bailout included provisions that gave the United Auto Workers an ownership stake in the company after it emerged from bankruptcy.

Mr. Romney called that an “$85 billion sweetheart deal disguised as a rescue plan” and argued that it was to benefit the unions, which were the president’s political supporters. He wrote that the federal government should “divest itself” of its remaining ownership position in General Motors and should turn the proceeds “over to the nation’s taxpayers.”

In fact, the restructuring of Chrysler during the bankruptcy process did involve agreements with the United Automobile Workers and the administration that led to a much smaller union, plant closings and a two-tier wage system that has helped to trim costs. The company also trimmed health care costs that had long been called an impediment to profitability.

Officials for Mr. Obama’s administration have long argued that such concessions from the unions were possible only because of the leverage the government wielded through the bailout and bankruptcy process.

Bill Vlasic contributed reporting from Detroit, and Jeremy W. Peters from New York.

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