Mitt Romney has worn his opposition to the Obama administration’s bailout of GM and Chrysler into Michigan as a badge of honor in the lead up to the state’s Republican presidential primary at the end of the month.
But that message may be a harder sell for him against the backdrop of GM reporting Thursday that it posted record profits in 2011 of $7.6 billion, 62 percent higher than the previous year’s.
In addition to those profits, GM will reportedly pay $7,000 in profit-sharing to unionized employees.
Earlier in the week, in a Detroit News op-ed Romney reiterated his 2008 stance against a U.S. taxpayer bailout out of GM and Chrysler. He argued that the companies should be forced into the regular corporate bankruptcy process to restructure.
Many experts have said the car makers would not have survived filing bankruptcy petitions without federal support since it was next to impossible to find the private lenders wiling to provide the companies with the billions of dollars they needed to continue operating as they shed costs and renegotiated their liabilities.
Both the departing Bush White House team and Obama’s new team in 2009 shored up the car makers with federal money. That gave the Obama White House more leverage to dictate terms as the companies eventually entered and exited bankruptcy proceedings.
Romney’s opposition to the federal bailouts of GM and Chrysler would seem to be risky in a state like Michigan with its economic and psychic dependence on the auto industry.
But many conservatives in the state, especially members of the Tea Party movement, have opposed the bailouts. So Romney’s position should, theoretically, find many receptive voters in Michigan.
Still, the potential problem for Romney, however, is that even some Republicans, let alone Democrats and many independents, are likely to see GM’s financial results as further vindication of the federal bailouts and Obama’s approach.
That could make Michigan voters a challenge for Romney to win over from Obama in the general election should the former Massachusetts governor become the Republican presidential nominee.