Bain Capital Turned Down Chance to Invest in GM

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Mitt Romney says that he opposed the government bailout of Detroit because the private market would have provided loans so GM and Chrysler could go through managed bankruptcy, but it turns out the firm Romney once led, Bain Capital, turned down the chance to do so. The government's auto task force asked Bain Capitol if it would like to invest in GM's European operations, The New York TimesJeremy W. Peters reports, but Bain said no thanks. Detroit executives and Obama administration officials say that Romney is wrong: government money was necessary because at the worst of the financial crisis, private companies would not have lent the $80 billion the automakers needed. Based on The Times report, we now know that the government's argument was true in the case of at least one company: the one Romney helped found and shape.

This isn't the first reported connection between Romney's former businesses and the Detroit bailout. In Jaunary, CNBC reported a Bain & Company employee advised the auto task force on closing some dealerships in November 2009. (The company initially denied the report, before admitting it was true.) That is an uncomfortable fact for Romney, who wrote a Times op-ed in 2008 headlined "Let Detroit Go Bankrupt," and defended it last week in the Detroit News. Romney argued in the latter essay that without a bailout, GM and Chrysler would be as healthy as they are today, but unions wouldn't have gotten such a nice "sweetheart deal" out of it. But that's not how many in the auto industry in Michigan see it, Peters reports. Bob Lutz, a former vice chairman for General Motors, told him he was still so mad at Romney he mailed in his absentee ballot for Rick Santorum. Lutz said of Romney's op-ed: “I think all of us in the auto industry who knew what the situation was were profoundly disappointed and, I would say, angry... We all saw it for what it was, which was a political ploy to the right.” Mike Jackson, chief executive and chairman of AutoNation, was nicer to Romney, but still thinks he was wrong. As the auto retailer told The Times:

“I think the American people in principle agree with Mitt Romney. Unfortunately, we were in the midst of a historic, catastrophic, financial meltdown. And it was one of those moments where the reality trumped your principles. You had to hold your nose.”

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