Romney Lambasted For Accusations; Will It Matter?

• by Karl Greenberg , October 31, 2012

If Mitt Romney falls in the woods, will anyone hear it? The presidential candidate has made a major stumble in accusing GM, Chrysler -- and by extension the Obama administration -- of hurting America by shipping jobs to China. Problem is, as major national papers -- even ones that have endorsed him -- the president, the Vice president, General Motors, and Chrysler have explained, it's a misleading assertion. 

The Huffington Post reports that during a campaign event in Sarasota, Fla., Vice President Joe Biden called the ads "the most scurrilous" and "most flagrantly dishonest ads I can remember in my political career." The worst part, he said, is that the ad actually caused workers to call United Auto Workers and ask if it was true.

"What a cynical, cynical thing to do," Biden said of Romney. Central to the ad is that Jeep production is being shipped overseas. What is missing is context: all automakers playing in China produce, or have launched production and production alliances there for the simple reason that shipping vehicles en masse to China would be cost prohibitive and politically impossible. In reverse, automakers like Toyota, Hyundai, BMW and Volkswagen all make vehicles and components for the U.S. market in the U.S. for essentially the same reason.   

As U.S. News' Rick Newman points out, "It might be ideal if all the cars GM sold in China — 2.6 million last year — were made in the United States and exported there. But most big automakers that sell cars in China build them there, via joint ventures similar to GM's," he writes.

General Motors pulled out its saber on Tuesday, arguing that Romney had "entered some parallel universe," and calling it an example of the most cynical politics. At first a Chrysler spokesman said there was "no validity" to the ad. Then normally politically mum Chrysler CEO Sergio Marchionne weighed to confused employees on Wednesday, saying that the assertion that Jeep is moving all production to China is just wrong. “I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China.”

The matter is critical because election bellwether state Ohio has auto production. Rebecca Lindland, head of auto analysis at Lexington, Mass.-based Global Insight, said at issue is whether consumers bother to follow up with due diligence. "I would hope that voters would do a little research to look at the whole story," she says. "[Romney] should know better, regardless of whether he's done business there or not. It's inexplicable." 

Lindland points out that there's no way to do business, especially production-heavy business like automotive, without having partners or factories in China. "Even if you don't have product there you have to have alliances." She adds that producing vehicles in China has no effect on North American production and, in fact, helps it. "It does not take jobs from Americans to produce vehicles in China, and especially with Chrysler, the money comes back to the U.S. so it actually benefits them to build where they sell. It would be fiscally irresponsible to do so."

Robert Passikoff, president of New York-based marketing consultancy Brand Keys, says that it's a good bet that none of this will matter to voters because they won't care. "The meter, generally, won't budge," he says. "There's the fact that [Romney] can get up and over an 18-month period change his position several times and not see that affect support. 

“If people are not paying attention to that, this won't be any different. You always end up with 20% who are far left and 20% far right; but the difficulty is there are fewer moderate Republicans, and fewer candidates who represent real substance. We haven't had that in a long time."