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Mitt Romney falsely claimed in a recent speech that “Jeep, now owned by the Italians, is thinking of moving all production to China.” Chrysler says it is considering adding Jeep production sites in China to address rising demand in that market. But the company says it is “a leap that would be difficult even for professional circus acrobats” to suggest that it would close U.S. facilities and move all operations to China.

 

Despite Chrysler’s admonition, Romney is now making a similar claim in a new TV ad.

The ad says, “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.” It’s misleading to suggest that Chrysler’s decision to expand into China will cost U.S. jobs — especially after the company has said it would have no impact on its U.S. operations.

It’s also misleading to say “Obama took GM and Chrysler into bankruptcy” without mentioning that Romney, too, advocated a bankruptcy plan. In fact, Romney wrote a 2008 op-ed that said: “A managed bankruptcy may be the only path to the fundamental restructuring the industry needs.”

The ad also says that Romney “has a plan to help the auto industry,” but the Republican nominee has no specific plan for the industry. He is referring to his general tax and economic plans that he believes will help all industries, including the auto industry. And he touts an endorsement from the Detroit News, but the self-described conservative paper said it endorsed Romney “despite his wrong-headedness on the auto bailout.”

 

Building Jeeps in China?

The ad — titled “Who Will Do More?” — first aired in Toledo on Oct. 27, without giving the usual notice to reporters covering the campaign, as Politico wrote. Ohio is a key swing state that may determine the outcome of the election. It is also one of three states where Chrysler builds Jeeps.

In asking the question “Who will do more for the auto industry?” the ad makes two deceptive claims in a single sentence: “Obama took GM and Chrysler into bankruptcy, and sold Chrysler to Italians who are going to build Jeeps in China.”

Let’s take the claim about China first, since it has emerged as a new talking point for Romney. He made a similar — and outright false — claim during an Oct. 25 campaign speech in Ohio. In Defiance, Ohio, Romney said: “One of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China.”

That’s simply not true, and Chrysler has said so.

Here are the facts: Chrysler is considering returning to China because demand for Jeep vehicles is rising in Asia, as reported in an Oct. 22 article by Bloomberg News. The company had produced Jeeps in China for that market before 2009, when the Italian automaker Fiat became the majority owner of Chrysler as part of the U.S. government’s auto bailout.

But this doesn’t mean that Chrysler will be moving any of its U.S. operations to China. In fact, Bloomberg reported: “Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley referred to adding Jeep production sites rather than shifting output from North America to China.”

In a blog item on its corporate website, Chrysler said that “despite clear and accurate reporting,” some misinterpreted the article to mean that Chrysler would end production of Jeeps in the U.S. and move operations to China. “It is a leap that would be difficult even for professional circus acrobats,” Chrysler spokesman Gualberto Ranieri wrote in his blog.

Ranieri, Oct. 25: Let’s set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China. It’s simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation. A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments.

So, Romney was flat wrong when he said in his speech that Chrysler “is thinking of moving all production to China,” and his ad is misleading when it says that Chrysler is “going to build Jeeps in China.”

 

GM, Chrysler & Bankruptcy

The ad also misleads Ohio voters when it says “Obama took GM and Chrysler into bankruptcy.” That’s true, but not the full story. The facts are that Romney in 2008 advocated that U.S. automakers go through a “managed bankruptcy” without the kind of extensive government assistance that Obama ultimately provided.

In a Nov. 18, 2008, New York Times op-ed headlined “Let Detroit Go Bankrupt,” Romney argued against a bailout. He wrote: “A managed bankruptcy may be the only path to the fundamental restructuring the industry needs.” As for government assistance, he said the “federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.”

In its endorsement of Romney — which the TV ad touts — the Detroit News wrote that it endorsed Romney “despite his wrong-headedness on the auto bailout.”

Detroit News, Oct. 25: Don’t assume that it was a no-brainer for a conservative newspaper to endorse a conservative presidential candidate. We recognize and are grateful for the extraordinary contribution President Obama made to Michigan in leading the rescue of General Motors and Chrysler. Had either of those companies been allowed to go under, Michigan’s economic maladies would have become fatal.

 The president stepped up with the support the two automakers needed to keep themselves and their suppliers in business. We have said in past editorials that while Romney rightly advocated for structured bankruptcies in his infamous “Let Detroit Go Bankrupt” New York Times op-ed, he was wrong in suggesting the automakers could have found operating capital in the private markets. In that article, Romney suggested government-backed loans to keep the companies afloat post bankruptcy. But what GM and Chrysler needed were bridge loans to get them through the process, and the private credit markets were unwilling to provide them. Obama put a rescue team to work and they were true to the task.

 In the end, the self-described “conservative newspaper” endorsed Romney because it prefers his economic plans — which brings us to our final point.

The Romney ad also says that he “has a plan to help the auto industry,” but he has no specific plan for the industry. Romney is referring broadly to his economic plans, which he believes will help all industries — including the auto industry.

In a Feb. 24, 2012, speech in Detroit, Romney outlined his economic plan. He called for cutting spending, “like subsidies to Amtrak and funding for Planned Parenthood,” reducing the size of the federal government payroll by 10 percent, and returning federal programs to the states, beginning with Medicaid.

“This is a plan to get America back on track. And to get Michigan on track we also need to see a strong and vibrant auto industry,” he said.

It’s a matter of opinion whether Romney’s plan is better for the nation in general and the auto industry in specific. We leave that up to voters to decide on Election Day.

 

– Eugene Kiely