As Congress and the White House scrambled in the fall of 2008 to confront the most severe economic crisis since the Great Depression, Mitt Romney felt compelled to say what many in his native Michigan would consider heresy: Do not bail out the troubled American automakers.
Government checks would not solve the car companies? long-term problems, Romney wrote in an opinion article that he asked The New York Times to publish. The better path, he suggested, was a court-administered restructuring that would leave the companies with costs more in line with the global competition. The article carried the headline Let Detroit Go Bankrupt, which critics continue to use against him.
General Motors and Chrysler did eventually enter bankruptcy, and the headline was written by an editor, not by Romney. Yet more than three years later, the position he took still leaves many of his allies in the business world befuddled. It has also opened up an awkward distance between Romney and some top Republicans in his native state who insist that the $80-billion assistance plan completed by the Obama administration, expanding on steps taken by President George W Bush, was the only viable path to save the carmakers from ruin.
But in that tumultuous moment ? just after President Obama?s election but before he took office ? Romney had both personal and political reasons to speak out.
He wrote of the experience of his father, George Romney, who as the head of American Motors had turned that company around, and he drew on his own experience as a private equity manager who had remade companies through bankruptcy. At a time when the bank bailout program that Congress passed six weeks earlier had left many on the right angry and concerned that the response to the financial crisis was undercutting free markets.
Whether his opposition to the bailout plays as the kind of principled stand that Tea Party voters find reassuring or as an example of the cold, ruthless brand of capitalism that his opponents charge is responsible for his fortune will help determine how Romney fares in Michigan?s primary on February 28 and likely beyond. The Michigan Republican primary electorate is expected to be very conservative, defined at least as much by the kinds of conservatives who are suspicious of union power as
it is by those with a more direct stake in the auto industry?s rebound.
?He gets attacked and mischaracterised for wanting to let Detroit die, and that?s not the case,? said speaker Jase Bolger of the Michigan House, a Republican. He said Romney?s opposition to the auto rescue on principle could do the candidate more good than harm among primary voters.
The politics of the bailout and the industry?s comeback remain complex and not limited to Detroit. After the Michigan primary, the nominating contest moves into states where the automotive industry also has a significant presence: Alabama, Illinois, Mississippi, Ohio and Tennessee.
Some Republicans have criticised Romney?s insistence that federal intervention was wrongheaded as an example of what they see as his willingness to say anything to win over sceptical conservatives.
?He?s playing the same song as Rush Limbaugh and Glenn Beck,? said Bob Lutz, a former vice chairman for General Motors who said he was still so upset with Romney that he had cast his absentee ballot in Michigan for Rick Santorum.
The Obama campaign sees a potential advantage and is moving to seize it.
Romney has defended his 2008 plan, most prominently in an opinion article for The Detroit News, as essentially a blueprint for the path that Detroit ended up taking. ?The course I recommended was eventually followed,? he wrote. All of those things eventually happened, as Romney said.