Romney defends opposition to auto bailout in Detroit

Reuters News
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Posted: Jun 09, 2011 12:59 PM
Romney defends opposition to auto bailout in Detroit

By Scott Malone

DETROIT (Reuters) - Republican presidential hopeful Mitt Romney defended his stand against federal lending to rescue the nation's ailing automakers during the recession while on a visit to Michigan -- the state that most benefited from that move -- on Thursday.

The former Massachusetts governor, who last week officially kicked off his second run at the White House, told voters he believed that General Motors Co and Chrysler could have been saved without the injection of government funds.

Protesting members of the United Auto Workers union and other local activists criticized the former executive of private equity firm Bain & Co for a 2008 op-ed in the New York Times titled "Let Detroit Go Bankrupt," that argued against government financing.

"Ultimately the car companies did go through a managed bankruptcy and they shed some of the excess debt, some of the excess burdens of their distribution system and some of the excess costs that had been imposed by the UAW over the years and so I'm pleased that process was carried out," Romney told reporters in Detroit.

"It would have been best not to have had the president and government put their hands on the bankruptcy process ... Bailouts are not the answer."

Romney, who has made attacking President Barack Obama's handling of the economy a centerpiece of his campaign, said the administration needs to tackle the nation's rising deficit.

"When you have a government spending massively more than it takes in as President Obama's government has done, you say to anybody thinking of investing in America, whether an entrepreneur or a country, that they don't know what the future is going to be for the value of that currency," Romney said.

BUSINESS BACKGROUND DIVISIVE

GM and Chrysler, now managed by Italy's Fiat SpA, both emerged from bankruptcy after receiving government funding. The United States last week reached a deal to sell its stake in Chrysler to Fiat, but is still weighing its options on its 32 percent stake in GM.

A few dozen UAW members picketed outside a diner in Livonia, Michigan, outside Detroit, where Romney had a breakfast of scrambled eggs and toast, spoke with voters and signed autographs, including a baseball mitt -- a reference to his first name.

"He didn't support the government bailout loans for GM and Chrysler, which was clearly wrong; that was good for the companies, good for the workers and good for Michigan," said David Dogonski, 43, a UAW member.

He said he thought Romney -- who spent four years as a Massachusetts governor -- lacked government experience, adding "I don't think he's qualified."

Others said Romney's business experience appealed to them.

"I like him because he's got business experience," said Paul Gambka, 58, an accountant from Holly, Michigan, who said he had not yet picked a favorite from the field of candidates seeking the Republican nomination to run for president in 2012 against incumbent Barack Obama, a Democrat.

"The deficit is the No. 1 concern for me," Gambka said.

Polls show Romney as one of the front-runners for his party's nomination to contest next year's election. A Reuters/Ipsos poll released on Wednesday showed him holding the support of 20 percent of Republicans, trailing former Alaska Governor Sarah Palin's 22 percent. A separate poll by Quinnipiac University put Romney in the lead with 25 percent of likely Republican voters, with Palin at 15 percent.

Romney's moderate stance among his rivals may give him an advantage in Michigan's open primary. The state allows supporters of either party to vote in the primary, so some Democrats may choose to vote in the Republican primary.

"There will be an important dynamic where the candidates try to crossover Democratic and independent voters without alienating the Republican base," said Matt Grossman, an assistant professor of political science at Michigan State University. "This should be an opening for Romney."