As he heads toward a crucial primary contest in Michigan, Mitt Romney is once again trying to explain what may have been the worst headline in years for a presidential candidate trying to secure a victory in the home of the American auto industry.  Published just two weeks after the nation chose Barack Obama to be president in 2008, the Op-Ed by Mr. Romney in The New York Times had the simple title: “Let Detroit Go Bankrupt.”  On Tuesday, The Detroit News published a new opinion article by Mr. Romney in which he sought to explain to the state’s voters — the same ones he is now courting — exactly what he meant.  The explanation is a complicated one, especially given the industry’s remarkable turnaround in the last three years.  Mr. Romney says that he always favored what he calls a “managed bankruptcy” for the car companies that would have allowed the businesses to restructure and emerge stronger than before. He slams President Obama for choosing what he calls a “bailout” of the industry that benefited big labor unions.  But in the same breath, Mr. Romney 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 on Tuesday. “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 that 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 Bush administration that made the initial loans to General Motors and Chrysler, starting the “bailouts” that Mr. Romney derides.  “Does anyone believe what Mitt says: that the American auto industry would be better off today if the president hadn’t intervened in 2009?” David Axelrod, a top strategist for Mr. Obama, wrote in a Twitter post on Tuesday morning.  They also accuse Mr. Romney of trying to rewrite the history of his earlier positions.  In the first paragraph of his 2008 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 set a target of $10 billion for 2012. Chrysler this month reported a profit of $225 million for the fourth quarter of 2011.  That economic reality poses a risk for Mr. Romney if voters in Michigan simply remember the headline of his earlier article and conclude that he was — and remains — indifferent to the plight of the workers there, and wrong about what should have been done in Detroit. And Democrats are doing everything they can to cement that perception.  A recent e-mail from the Democratic National Committee’s rapid response team alleged that “Romney lined his pockets by firing workers, shipping jobs overseas and forcing companies into bankruptcy. And let’s not forget that he famously said ‘Let Detroit go bankrupt,’ which would have decimated the auto industry.”  Last May, Brad Woodhouse, the communications director of the committee, said that “Mitt Romney must think that the entire country has fallen into a state of amnesia if he believes he can get away with this revisionist history.”  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 calls that an “$85 billion sweetheart deal disguised as a rescue plan” and argues that it was done to benefit the president’s political supporters.  “While a lot of workers and investors got the short end of the stick, Obama’s union allies — and his major campaign contributors — reaped reward upon reward, all on the taxpayer’s dime,” Mr. Romney wrote.  He argues 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 between the labor unions 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 have long been called an impediment to profitability.  Officials for Mr. Obama’s administration have long argued that such concessions from the unions were only possible because of the leverage that the government wielded through the bailout and bankruptcy process.  For Mr. Romney, the next two weeks will be critical. Michigan voters go to the polls on Feb. 28, and Mr. Romney faces a strong challenge in the state from Rick Santorum, a former senator from Pennsylvania.  In his Tuesday article, Mr. Romney notes that he was born in Detroit and that his father served as president of the American Motors car company in the 1950s. Mr. Romney says that he was 7 years old when he “got my love of cars and chrome and fins and roaring motors” from his father.  “The dream of the Motor City is and always has been one of ideas, innovation, enterprise, and opportunity,” Mr. Romney writes. “And with a Detroiter in the White House, that dream can be realized once again.”  The question for Mr. Romney is whether voters in Detroit and elsewhere around Michigan will conclude that he has their best interests at heart.  Bill Vlasic contributed to this report.
Mitt Romney, in an Op-Ed in The Detroit News, seeks to explain why he supported managed bankruptcy for American automakers.