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TRUTH TEST: Obama, Romney on auto bailout

11:55 PM, Nov 1, 2012   |    comments
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Throughout the 2012 political season, 9NEWS will hold those who run political ads on our networks accountable for what they say.

Check out previous Truth Tests here.

We start first with President Obama.

VOICEOVER: When the auto industry faced collapse, Mitt Romney turned his back.

Verdict: This is a statement of opinion.

Romney did write an opinion piece about bankruptcy published in the New York Times. We'll examine it a little later in this article.

VOICEOVER: Even the Detroit News criticized Romney for his wrong-headedness on the bailout."
Verdict: That's true.

It's part of a direct quote from the Detroit News. But the quote comes from an editorial endorsing Romney.

The editorial says President Obama made an extraordinary contribution to Michigan by leading the rescue of GM and Chrysler. But it also says Romney is a son of Detroit having grown up in the auto industry, and believes he will improve the overall economy, which only helps the auto industry.

The ad goes on with statements of opinion about President Obama's role in the auto bailout.

VOICEOVER [ROMNEY]: That's exactly what I said. The headline you read which said "let Detroit go bankrupt."

Verdict: Half-true

This is often the case with political ads. The editing of that quote with Romney does not give you the full context of that interview.

Mitt Romney called for Detroit to go bankrupt. The headline they are talking about is from a 2008 New York Times opinion piece Romney wrote.

Romney did not write the headline but he backed it up an interview with CBS . In that opinion piece, Romney called for a managed bankruptcy of GM and Chrysler before those companies got a bailout check.

He said, at the time, the federal government should only provide guarantees if lenders defaulted after bankruptcy.

Now, Mitt Romney responds in his own ad.

VOICEOVER: Who will do more for the auto industry? Not Barack Obama. Fact checkers confirm his attacks on Mitt Romney are false.

The ad is refering to a Politifact article. It said Obama was mostly false by saying Romney opposed any government help to carmakers.

Romney has said he would have provided a government guarantee for carmakers after bankruptcy.

VOICEOVER: The truth? Mitt Romney has a plan to help the auto industry. He's supported by Lee Iacocca and The Detroit News.
Verdict: It's true. 

The Detroit News and the former CEO of Chrysler, Lee Iacocca, both endorsed Romney.

VOICEOVER: Obama took GM and Chrysler into bankruptcy.
Verdict: It's true. 

President Obama led GM & Chrysler into what the New York Times called a government sponsored bankruptcy.

But that statement, in the ad, is misleading because it ignores the fact that Mitt Romney advocated a traditional bankruptcy, backed by government guarantees.

VOICEOVER: And sold Chrysler to Italians who are going to build Jeeps in China.
Verdict: This claim is very misleading. 

The article comes from Bloomberg News. Since that article, a Chrysler spokesman says the company won't shift Jeep production from the U.S. to China, as this ad might have you believe.

He said Chrysler is exploring the opportunity to add factories in China, while keeping jobs in the U.S.

The Bottom Line:

Mitt Romney did not say automakers should completely shut down or liquidate through bankruptcy.

And President Obama did not sell Chrysler to Italians so they could outsource jobs to China.

Ultimately, GM and Chrysler received money from the federal government under President Obama's tenure, went through bankruptcy, and are now posting rising sales, but saving those companies did cost taxpayers money.

(KUSA-TV © 2012 Multimedia Holdings Corporation)

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