Factcheck: Democrats wrong about Obama and auto bailout

Former Michigan Governor Jennifer Granholm gave an electrifying speech at the DNC that fudged a number of essential facts about the auto bailout, while omitting others.

Former Michigan governor Jennifer Granholm gave an impassioned speech at the Democratic National Convention crediting President Barack Obama with the bailout of the American automobile industry and saving hundreds of thousands of jobs in the process.
 
Shouting and holding up a clenched fist, the once aspiring actress and current television show host,  also took direct aim at Republican presidential candidate Mitt Romney.  Yelling into the microphone, Granholm jeered  at the beginning of her speech "I'm Jennifer Granholm, from the great state of Michigan, where the trees are just the right height," in reference to former Massachusetts Governor Romney's more inexplicable gaffes.
 
Speaking about the former Bain corporation executive,  "How did he make that fortune? And at whose expense? You know too often he made it at the expense of middle-class Americans. Year after year, it was profits before people."  All of this, she said, is in contrast to President Obama,  who "saved more than 1 million American jobs" with the bailout. "But it wasn't just Michigan" that benefited she continued, saying  "In Colorado, the auto rescue saved more than 9,000 jobs! In Virginia, more than 19,000 jobs!"
 
Democrats in the industrial Midwest have frequently bashed Romney, a Michigan native, for opposing the bailout in its early stages. Romney, whose father was once CEO of now-defunct American Motors, wrote in an op-ed that suggested the troubled automakers should go into bankruptcy without government intervention. The headline of the op-ed in  The New York Times was "Let Detroit Go Bankrupt," which Democrats have understood as an Olympian indifference to the struggles of the once great American automobile industry and unemployment. 
 
Fact-checkers and pundits begged to differ with Granholm. Manny Lopez, a former Detroit News opinion page editor who now edits Michigan Capital Confidential, opined that Granholm had rattled off “a list that is neither real nor able to be confirmed because it uses the false and ambiguous ‘saved’ jobs claim. Additionally, the claim that 1 million jobs were saved is dubious. This assumes that the collapse of GM and Chrysler would have taken down all automakers. GM employs about 77,000 people in the United States; about 48,000 hourly and 29,000 salaried. Her math simply doesn't work.” Lopez was auto editor at the Detroit News during the auto industry meltdown and bankruptcies.
 
 
(Manny Lopez, Michigan Capitol Confidential)
 
Speaking in an exclusive interview with Spero News, Lopez added “Jennifer Granholm has never been on a stage that she didn’t like to be on, and has never let actual statistics and numbers get in the way of a good performance.”  What Granholm did not do, said Lopez, was to credit the George W. Bush administration for allocating $17.4 billion to keep the automobile industry from collapse, “after Congress refused to act in 2008.”  This was a point echoed by Ryan Grim and Dave Jamieson of the Huffington Post. Writing about Granholm’s speech, they noted “But Granholm left out a significant element of the story. During the time between Obama's election and inauguration, he worked closely with President George W. Bush to save the industry. In 2008, Bush announced $17.4 billion in loans to the automakers. Had he not done so, it's unlikely the industry would have made it to Jan. 20th.” Quoting President George W. Bush, who justified the bailout, they wrote ‘There's too great a risk that bankruptcy now would lead to a disorderly liquidation of American auto companies.’" 
 
As for Granholm’s claim that 1 million autoworker jobs were saved, Lopez said that is a figure that is impossible to prove. Lopez noted that General Motors, which took the government bailout, now employs no more than 77,000 workers, while bailed out Chrysler has even fewer. The figure put out by Granholm would have to include workers at Ford, which did not take the bailout. “So between the two companies, at best,” said Lopez, “we’re talking about 150,000 jobs saved.”  
 
Lopez also spoke to how the bailout favored General Motors retirees who are members of the United Auto Workers labor organization. Salaried employees of Delphi, a former unit of General Motors, are currently suing to have their pensions restored that were gutted by the provisions of the bailout. “The pension structure is proven to be inefficient and couldn’t maintained,” said Lopez, “The Delphi retirees, unfortunately, have a long road to travel, but they are very determined and have a good case to be made.” 
 
While Lopez said he could not predict exactly how a Romney presidency would handle the situation confronting President Bush in 2008, he did say that Romney would choose a different course and instead find alternative sources of funding to prop up  the vital car industry. 
 
Update: This article replaces an earlier version that was in error.


Spero News editor Martin Barillas is a former US diplomat, who also worked as a democracy advocate and election observer in Latin America. He is also a freelance translator.

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