Auto Bailout Antagonism Isn't Likely To Shut Down Romney

ANALYSIS

on February 20 2012 1:53 PM
Young Mitt Romney with father
His latest Michigan ad features a photo of a young Mitt Romney with his father, George Romney, a Republican who served as the state's governor from 1963 to 1969. aboutmittromney.com

Mitt Romney's severe opposition to the federal government's bailout of Chrysler and General Motors has become topic A among reporters and pundits heading into next week's Republican primary in Michigan.

The narrative goes like this: In a state dependent on auto manufacturing and its offshoots, any candidate not on board with the industry's rescue is doomed to electoral failure. While that might hold true for the general election, political insiders in the state say the stance taken by native son Romney is in line with that of his party and therefore unlikely to hurt his chances in the Feb. 28 open primary, in which non-Republicans are allowed to vote.

Opinions here are evenly divided among conservative voters over the wisdom of the government getting involved in the bailout of any industry, even something as essential to Michigan as the auto industry, said Bill Ballenger, the editor of the political newsletter Inside Michigan. But no one can be sure how many self-identified Democrats and independents may want to show up to stick it to Romney.

Of course, while Romney's stance against the Obama administration's decision in 2009 to support the Detroit Three through bankruptcy with low-cost loans may not be a disadavantage in the state, that's not to say he will actually win the primary there. Romney's now-famous lack of charisma and inability to appear authentically conservative to Republican voters are sufficiently large deficiencies, regardless of his position on salvaging the auto industry, as recent polls indicate.

Nonetheless, in order to dull any big or small backlash from his bailout opposition Romney has been eager to emphasize his Michigan roots on the campaign trail. His father, George Romney, was the president of American Motors and later served as governor. As a result, the presidential hopeful has been touting his ties to the auto industry, presumably in an attempt to forge a connection to Michigan's blue collar voters -- a little more than two years after positioning himself as the face of the bailout's opposition.

In an opinion essay published in the New York Times -- under the ominous headline Let Detroit Go Bankrupt -- on Nov. 18, 2008, one day after the chief executives of Chrysler, GM and Ford had come to Washington to ask for a multibillion-dollar rescue, Romney argued that a managed bankruptcy would benefit the Big Three by letting them shed excess labor, pension and real estate costs.

He wrote that the government should guide the auto makers through bankruptcy since they were unlikely to get private financing at the time, the height of the U.S. credit crisis. (Last week, Romney told a Michigan radio station that he supported a federal plan to provide loans to the auto companies in bankruptcy protection -- an approach that President Barack Obama adopted in 2009, having inherited the bailout concept from his Republican predecessor, George W. Bush.)

Romney in his essay didn't suggest that the industry be liquidated and he even called it vital to our national interest. But his blunt aside that the country could kiss the American automotive industry goodbye if a bailout went through provides a stark reminder of just how wrong many people believe the corporate-turnaround specialist was about the fate of the economic engine of his home state.

Last Thursday, GM announced a record $7.6 billion in net profit for 2011. Nearly 50,000 hourly workers will reportedly receive profit-sharing checks of up to $7,000.

But although Romney's bailout opposition is sure to be used against him if he's nominated to run against Obama, it is hardly a deal-breaker for Michigan Republicans in the primary.

Santorum, Paul, Gingrich -- none of the other candidates offer anything different, said Ballenger, referring to the other three hopefuls competing to face off against Obama.

Because all of his remaining rivals have also publicly decried the auto bailout, Republican voters aren't likely to single out Romney for punishment, Ballenger explained.

The only voters who are likely to show up on Feb. 28 with the bailout on their minds are independents and Democrats, he said.

In fact, Romney's stance could appeal to hard-line conservatives, particularly those in the state's still-formidable Tea Party movement, said Matt Grossman, a political science professor at Michigan State University who specializes in campaigns and elections.

There are certain segments of the population who, ideologically, are going to agree with him, Grossman said. But even they don't object to his policy.

In the end, Grossman doesn't see Romney benefiting outright. I don't think the bailout issue is going to help him politically with locals considering the headline for his initial op-ed was 'Let Detroit Go Bankrupt,' he said.

Romney's prediction that Washington intervention would lead to the demise of the auto industry stands to hurt him more than his opposition to the bailout itself, according to Grossman, who said voters already know that part of his history.

Rick Santorum, the social conservative who as of Sunday was polling slightly ahead of Romney in Michigan, has been clear about his own distaste for federal intervention in the economy. He told the Detroit Economic Club last week that the government should not be involved in bailouts, period.

Santorum's stance on organized labor is slightly more forgiving than Romney's -- the former Pennsylvania senator backs them for the private, but not public, sector, while Romney has recently attacked organized labor and union bosses -- but it may still be off-putting in a state where union membership is on the rise.

Last year, 18.3 percent of the Michigan work force was represented by a union, up from 17.3 percent in 2010, according to the U.S. Bureau of Labor Statistics. Unions have a stronger presence in the state than in the rest of the country. Overall U.S. membership in organized labor dropped to 11.8 percent from last year from 11.9 percent in 2010.

According to exit polls, a quarter of Michigan Republican primary voters in 2008 were from households that included a union member, according to Bloomberg News, a figure that could increase considering the state's rising membership rate.

That is amplified by the fact that the state's manufacturing employment -- which includes automobiles -- has been increasing steadily. There were about 505,000 manufacturing jobs in Michigan in December 2011, the BLS reports, a 5.5 percent increase from the previous year. The United States overall gained about 44,000 auto manufacturing jobs between January 2011 and January 2012, while creating more than 89,000 jobs in the automotive retail trade sector.

As in this year's earlier Republican primaries, voters' income may be one of the major factors in determining how Romney fares in Michigan. So far, he has won 52 of the 113 counties (46 percent) where the median household income is above that state's average. But Romney has struggled in less-wealthy counties, winning only 64 of 277 contests where the median household income was below the state average, according to a Wall Street Journal analysis.

Meanwhile, Santorum, who Bellanger believes is more appealing to the far-right conservatives who typically make up the majority of Republican primary voters, has a more balanced appeal when analyzed by household income. He has captured 146, or about 54 percent, of less-affluent counties, while also carrying a respectable 46 percent of higher-income areas.

Michigan's median household income is about $48,400, slightly below the U.S. figure of $52,000, the Census Bureau reports.

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