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A Desperate, Deceptive Gambit for Romney in Ohio

How desperate is Mitt Romney to win Ohio? Before you answer, pay attention to what he and his campaign have been saying about the auto industry in the last few days.

As you may have heard, Romney on Thursday scared the bejeezus out of Ohio autoworkers when, during a rally, he cited a story claiming that Chrysler was moving Jeep production to China. Thousands of people work at a sprawling Jeep complex in Toledo and a nearby machining plant. Many thousands more work for suppliers or have jobs otherwise dependent on the Jeep factories. It’s fair to say that they owe their jobs to President Obama, who in 2009 rescued Chrysler and General Motors from likely liquidation. If Chrysler moved the plants overseas, most of those people would be out of work.

The story turns out to be wrong. As Chrysler made clear the very next day, in a tartly worded blog post on the company website, officials have discussed opening plants in China in order to meet rising demand for vehicles there. They have no plans to downsize or shutter plants in the U.S. On the contrary, Fiat, the Italian company that acquired Chrysler during the rescue, just spent $1.7 billion to expand Jeep production in the U.S. That includes $500 million to renovate and expand the Toledo facilities, with 1,000 new factory jobs likely to follow. On Monday, about the same number of people will report for their first day of work in Detroit, when Chrysler adds a third shift to a Jeep plant it operates there.

Did Romney intend to mislead Ohio voters? I was prepared to give him the benefit of the doubt. Presidential campaigns are chaotic, particularly in their final weeks. Maybe somebody on Romney's staff read the story, which bubbled up in the right-wing press and included a genuinely confusing statement from Fiat, and gave it to the candidate without checking its veracity. But, even after Chrysler clarified its intentions, the Romney campaign refused to answer questions from reporters about the erroneous claim. Now I think I know why: A new Romney ad references the same story.

The campaign does not appear to have announced the ad. The Obama campaign captured video of it, during a broadcast in the Toledo area. Here's how it ends: 

Obama took GM and Chrysler into bankruptcy, and sold Chrysler to Italians who are going to build jeeps in China. Mitt Romney will fight for every American job.

Although the statements about Chrysler are true individually, together they imply that the Obama Administration's action led to the outsourcing of American jobs. That is obviously false, both in the specific sense of what Chrysler is doing and in the more general sense of what the entire auto industry is doing. Just look at the numbers (or the graph below). According to the Bureau of Labor of Statistics, the number of autoworkers fell almost in half between 2002 and 2009, from around 1.1 million to around 600,000, as the industry was in something like a death spiral. Then, as Chrysler and GM were on the brink of true collapse, the Obama Administration stepped in with federal loans and a managed bankruptcy. Almost immediately, the automobile manufacturing sector started growing again. Since July, 2009, the workforce has risen by about 150,000 jobs and that's purely in vehicle manufacturing. If you include parts and other related jobs, it's 250,000.

And that's the net increase. By providing Chrysler and GM with the financing they needed to avoid liquidation, the Obama Administration prevented those companies from putting more people out of work Overall, according to estimates by the Center for Automotive Research, the rescue probably saved at least a million jobs.

Of course, this kind of deception is emblematic of the campaign Romney and his supporters have waged in the last few days. They insist that Romney never thought government should let Chrysler and GM collapse. But Romney's vague and inconsistent rhetoric included statements that he would have opted for a “private sector bailout”—something that was not possible in 2009, because private investors were in no position to make the necessary loans.* As Detroit Free Press columnist Tom Walsh wrote on Friday,

Throughout the primary campaign, [Romney] joined other Republican candidates in a chorus of bailout-bashing and union-bashing when the auto bailouts came up, painting the Obama administration's crisis-management effort as a reckless campaign to run up the national debt and do favors for labor unions.

Romney’s advisers have also tried to downplay the importance of the issue altogether. A Romney strategist recently told Politico’s Mike Allen that Obama’s constant invocation of the rescue makes the president a “one-trick pony,” even though one of eight jobs in Ohio is tied to the auto industry.

The auto industry rescue was a huge, complex undertaking. Reasonable people can quibble with individual decisions the president and his advisers made, whether it was which dealerships to close, what concessions to demand from unions, or how much to pay different bondholders. And it'd be nice if Chevy started selling a few more Volts. But overall the rescue has been a success, particularly when it came to saving and creating jobs. As Greg Sargent put it the other day, “Obama got it right on the auto bailout, and Romney got it wrong.” That reality helps explain why Obama has held a slim but persistent lead in the Ohio polls—and why Romney will say just about anything to confuse the issue.

* The fact-checkers at Politifact have challenged Obama for suggesting, during the final presidential debate, that Romney opposed government assistance for the industry. Their rationale: Romney did propose government guarantee of "post-bankruptcy" financing. I respect Politifact for doing a difficult job and generally doing it well. But I think they're making unnecessarily fine distinctions here. The real issue with the auto industry crisis was whether the government should make loans directly—and whether it should do so on the front end, rather than as companies were preparing to exit bankruptcy.

Updates: David Shepardson, who has been following this story closely for the Detroit News, reported Sunday that the Romney campaign on wouldn't answer questions about the advertisement. Sam Stein of the Huffington Post did get a response: The Romney campaign pointed him to news reports that Jeep was expanding operations in China. "The campaign's defense, in the end," Stein wrote, "rests on the fact that the ad never technically says that Chrysler is moving production to China—just that it is going to build Jeeps there."

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