Auto Bailout Is Hot-Button Issue In Michigan

STEVE INSKEEP, HOST:

General Motors made a record-breaking profit last year. And to date, taxpayers have recovered close to half the $50 billion federal investment in the company. So the auto bailout worked, right? Wrong, say Republican presidential candidates, who insist the bailout was a huge mistake.

DAVID GREENE, HOST:

Michigan Radio's Tracy Samilton reports.

TRACY SAMILTON, BYLINE: Today, Bruce Hadden's looking forward to cashing a $7,000 bonus check from General Motors. Let's flash back, though, to late 2008. GM was broke. Banks had shut off the lending pipeline. Without a federal bailout, it was almost certain the company would have to shut its doors - forever.

BRUCE HADDEN: I know it scared the heck out of me.

SAMILTON: Hadden says he wouldn't have just lost his job if GM shut down. The federal government would have taken over his pension, and cut it.

HADDEN: So I was wondering how I was going to make it.

SAMILTON: GM's plight also scared the heck out of a lot of other people. Rebecca Lindland is an analyst with IHS Automotive. She says there was overwhelming agreement in the industry a bailout was the only viable option.

REBECCA LINDLAND: Because otherwise we were looking at a freefall.

SAMILTON: At least a million jobs lost, predicted the Center for Automotive Research. The ripple effect from GM's collapse would have been enormous. Three and a half years later, Rick Santorum got cheers in Michigan by suggesting the auto industry would have gotten along just fine without GM.

RICK SANTORUM: Capitalism works. Markets work.

(SOUNDBITE OF APPLAUSE)

SAMILTON: Mitt Romney, son of former American Motors CEO George Romney, criticized President Barack Obama's handling of the bailout.

MITT ROMNEY: Instead of going through the normal managed bankruptcy process, he made sure the bankruptcy process ended up with the UAW taking the lion's share of the equity in the business.

SAMILTON: Actually, the U.S. Treasury got most of GM's equity. And here's candidate Newt Gingrich campaigning in Tulsa.

NEWT GINGRICH: Now let me start with a simple premise that most Oklahomans will understand, you cannot put a gun rack in a Volt.

(SOUNDBITE OF LAUGHTER)

SAMILTON: President George W. Bush recently said the bailout prevented massive unemployment and insists he'd do it again.

Auto consultant Jim Hall heads a firm called 2953 Analytics. He says GM has to be careful how it defends itself.

JIM HALL: How seriously do you argue with crazy people?

SAMILTON: There are plenty of people who are far from crazy who figure the criticism of GM is to be expected. The company went bankrupt; now its corporate image is being batted around like a cat toy. But Hall says the attacks affect more than just GM.

HALL: You're hurting taxpayers, you're also hurting anybody that owns a GM share and you're hurting the government's chance of getting its cash out of GM.

SAMILTON: Unfortunately for the automaker...

LINDLAND: GM is a company people love to hate.

SAMILTON: People aren't just mad about the bailout, says IHS Automotive analyst Rebecca Lindland. She thinks customers had been losing faith in GM's cars for a long time. So GM has to resurrect its image, not just defend it.

(SOUNDBITE OF ONLINE GM AD)

SAMILTON: That's a new online ad GM is running to defend the Volt. Selim Bingol is GM´s vice president of communications. He stresses the company's appreciation for the bailout.

SELIM BINGOL: The people of GM are eternally grateful for the help that we got and are really proud about the progress we're making and really want the citizens of U.S. and Canada to know it was a good thing they did.

SAMILTON: He figures the controversy will continue until the presidential election in November. But given the passions awakened by the automotive bailout, that may be wishful thinking.

For NPR News, I'm Tracy Samilton, in Ann Arbor. Transcript provided by NPR, Copyright NPR.