“Nobody should be surprised, because back in the Great Recession, when millions of jobs across America hung in the balance, Donald Trump said rescuing the auto industry didn’t really matter very much. He said, and I quote again, ‘Let it go.’ Now, I can’t imagine that. I supported President Obama’s decision to rescue the auto industry in America.”
— Hillary Clinton, in remarks at a campaign rally at Wayne State University, Detroit, Oct. 10, 2016
In the 2012 presidential race, President Obama portrayed his Republican rival, former Massachusetts governor Mitt Romney, as heartless because Romney had written an opinion article in November 2008 that was titled “Let Detroit Go Bankrupt.”
Romney didn’t write the headline, and the phrase does not appear in the article. He made a more nuanced case for the auto companies refusing a government bailout and instead going through a managed bankruptcy. The companies ended up going through a managed bankruptcy – after getting nearly $80 billion in loans and other assistance from the Bush and Obama administrations. So Romney’s course was half-taken.
But the words of that op-ed hung around Romney’s neck like an albatross, contributing to his failure to carry either Michigan or Ohio in the election.
Now, Clinton is trying to suggest Trump was heartless about the auto industry’s plight, as well. Does she have a case? Our friends at FactCheck.org have highlighted this attack, but we thought it was important to take our own look.
One problem with fact-checking Trump’s statements on the issues is that he does so many interviews, and says so many contradictory things, that it is sometimes easy for Clinton to pick and choose various statements to create a narrative.
The Clinton campaign pointed to three statements by Trump.
One was an interview with Neil Cavuto on Fox News on Dec. 17, 2008, two days before then-President George W. Bush announced he would provide emergency funding to the auto industry because Congress was deadlocked on legislation.
“You just can’t just throw the money at the auto companies,” Trump said. “You have to get concessions, whether it is in bankruptcy or not in bankruptcy. And bankruptcy is not the worst thing. You would make a much better deal if they threw it into a chapter and they did DIP financing,” referring to debtor-in-possession financing. DIP financing, which places new debt ahead of existing debts, is what the U.S. government provided to Chrysler and General Motors when they went through their managed bankruptcies.
The Clinton campaign also said Trump claimed the auto bailout was “not vital,” but it is clear from the full transcript that Trump is referring to $112 billion given to the AIG insurance company, not the auto industry.
The second statement was Trump speaking to the CBS Morning News on March 6, 2009: “The question is whether or not we should do it or let them just go bankrupt, let them negotiate from bankruptcy, which is really what should happen.”
Finally, Trump made a meandering comment about the auto bailout on Aug. 11, 2015, in which he tried to have it all ways.
“You could have let it go, and rebuild itself, through the free enterprise system,” Trump said. “You could have let it go bankrupt, frankly, and rebuild itself, and a lot of people think that’s the way it should have happened. Or you could have done it the way it went. I could have done it either way. Either way would have been acceptable. I think you would have wound up in the same place.”
This is where Clinton gets her “let it go” line. She makes it sound like that’s what Trump said at the time— when she was casting votes as a senator to support the auto industry. But actually that statement was made years later — and Trump is saying he could have supported any option.
Meanwhile, here’s what Trump said in 2008. He was remarkably consistent.
On Dec. 9, in an interview with Greta van Susteren on Fox News: “I think you have to try and save the companies, and I think you can easily save the companies.”
On Dec. 10, on CNBC: “You have to save the car industry in this country.”
On Dec. 17, in the full interview with Cavuto: “I think the government should stand behind them 100 percent. You cannot lose the auto companies. They are great. They make wonderful products.”
On Dec. 19, on CNN in an interview with Wolf Blitzer: “Absolutely, they should try and save the companies. You just can’t lose Chrysler, you can’t lose Ford, and you can’t lose General Motors.”
Often, Trump would tout his idea that the companies should pursue a bankruptcy route, using DIP financing. As he put it to Van Susteren: “I would really say, and I’ve used it over the years — not personally, but I’ve used it for different companies — you throw it into a chapter, you negotiate your deal, you make some new deals, you keep some deals the way they are, and you just make it better. You make it work.”
In some ways, this was similar to Romney’s position at the time. Many independent analysts have concluded this would not have worked in late 2008, simply because the credit markets were so frozen that a bankruptcy was not a viable option. But Trump also coupled his support of a bankruptcy option with strong expressions of support for some sort of government action.
Trump’s 2015 iteration – that the free enterprise system could also have saved the car industry – was simply not tenable, according to experts. (We should also note that Trump’s running mate, Indiana Gov. Mike Pence, as a member of Congress in 2008, adamantly opposed government aid for the auto companies.)
The Pinocchio Test
Clinton is creating an imaginary Trump here, claiming that Trump didn’t really care about the auto industry.
The record is clear that Trump in 2008 was supportive of rescuing the auto industry, saying the government should do everything it could to save it: “You just can’t lose Chrysler, you can’t lose Ford, and you can’t lose General Motors.” He touted DIP financing, but he was relatively agnostic about the preferred path.
Even in 2015, when Trump seemed more uncertain about the preferred option, he said “you could have done it the way it went.” Clinton twists his “let it go” comment out of context and pretends he said it in 2008.
Clinton earns Four Pinocchios.
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