DETROIT — Political rhetoric about the 2008-2009 federal loans to the auto industry has ratcheted up in recent days.

At the Democratic National Convention in Charlotte last week, President Obama’s handling of the near-fall of GM and Chrysler was frequently spotlighted. United Auto Workers president Bob King and former Michigan governor Jennifer Granholm where among those to not only hail the auto jobs saved by the loans, but to criticize Republican presidential candidate Mitt Romney for his proposal on the best course of action during the crisis, which they paraphrased by the headline (that Romney didn’t write) on his 2009 New York Times op-ed: “Let Detroit Go Bankrupt.” (I’ve written before for CJR on Romney being stuck with this headline.) Romney, in turn, argued on Sunday’s Meet the Press that Obama wasted about $20 billion dollars by not efficiently handling the bailout loans.

As the campaigns volley—and as both GM and Chrysler try to sidestep the rhetoric by banning presidential campaign visits to their plants and ceasing, in GM’s case, its long tradition of providing cars to both political conventions—reporters are charged with cutting through inflated or otherwise misleading claims. Michigan journalists are specially suited to do this, and an article in The Detroit News on Sunday is a solid example of how it can be done.

The story, by DC-based David Shepardson, opens by paraphrasing Romney on Sunday’s Meet the Press—he said that “President Barack Obama wasted $20 billion in the auto bailout that could have been used to fund teachers and police”—and then notes in the very next sentence that with this line of criticism, “Romney is trying out a new message on the auto bailout in the face of constant pounding by Democrats at last week’s Democratic National Convention.”

Shepardson then walks readers through Romney’s “new message,” first quoting Romney directly…

My view was General Motors should have gone into bankruptcy earlier. The president resisted that for six months. I said, ‘Let them go into bankruptcy. Help them come out. But let them go in.’ And I don’t think most Americans know that GM went bankrupt. … The president put them into bankruptcy. And he finally did what I also thought was the right thing to do, but I thought it from the very beginning. And that would have saved us $20 billion or so that otherwise— would — would have been able to be invested in, in things like teachers and policemen, as well as growing our economy.

…and then filling in the blanks, including the source of Romney’s “$20 billion” claim. “Romney is referring,” Shepardson writes, “to an estimate released by the Treasury Department in August—first reported by The Detroit News—that the US will lose $25.1 billion on the auto bailout, 15 percent more than the previous estimate” (inexplicably, the News doesn’t link readers to its own earlier reporting).

Readers then get a few paragraphs of pushback on Romney’s message from “former auto czar Steve Rattner” (it’s “‘ludicrous’ to suggest ‘we held off putting GM into bankruptcy’”) and from an Obama campaign spokesperson, after which Shepardson provides background on the auto loans, measuring Romney’s criticism against the facts. (He also references another News piece that goes un-linked.) To wit:

In late December 2008, President George W. Bush gave GM and Chrysler and their finance arms $25 billion, and gave them until Feb. 17, 2009, to file viability plans with the new Obama administration.

It’s not clear how the two automakers could have been forced into bankruptcy before then by Obama…

Romney has insisted the auto industry would not have collapsed if he had been in charge.

“They needed to move into a managed bankruptcy process rather than getting money up front by President Bush or President Obama,” Romney said in a Detroit News interview last year. “They wasted a lot of money.”

Critics of that approach say automakers were unprepared for bankruptcy in late 2008 and that without immediate government assistance they would have been forced into an uncontrolled bankruptcy or outright collapse.

Romney is not accurate to say Obama’s bankruptcy actions were the same he proposed.


Obama’s auto task force used a section under the bankruptcy code to use government money to buy the “good assets” of GM and Chrysler in bankruptcy by outbidding anyone else, allowing the companies to exit in just 40 days.

If Romney’s course had been adopted, GM and Chrysler could have been in bankruptcy for months or years before exiting—and would have had much more debt on their balance sheets.

Anna Clark is CJR's correspondent for Michigan, Wisconsin, Ohio, and Pennsylvania. A 2011 Fulbright fellow, Clark has written for The Guardian, Grantland, and Salon; blogs at Isak; and can be found on Twitter @annaleighclark. She lives in Detroit.