Romney China-made Jeep comments become Ohio campaign issue

Mitt Romney's focus on Chrysler Group LLC's desire to build some Jeeps in China has spawned a TV ad battle in Ohio, where the Republican presidential candidate and President Barack Obama are trying to attract car-minded voters with a week to go until Election Day.

A Romney campaign ad contradicts the company's assertion that it has no intention of shifting Jeep production out of North America to China. Chrysler Chief Executive Officer Sergio Marchionne assured employees in a letter Tuesday that “Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand. It is inaccurate to suggest anything different.”

Polls show the White House candidates in a tight race in Ohio for its 18 electoral votes. Second only to Michigan in automotive industry jobs, Ohio benefited from the government-backed bankruptcy of General Motors Co. and Chrysler under Obama. Romney opposed that bailout.

Romney has argued at campaign events in the state, and in his Ohio TV ad, that he would be better for the auto industry than Obama, whom he said hasn't prevented jobs from leaving the country. His advertisement highlights what it calls Chrysler's desire to “return” Jeeps to China, without saying the company is expanding its North America Jeep operations.

Obama Ad

Obama's campaign responded with an ad scheduled to hit Ohio airwaves today, labeling the Romney ad “dishonest.” At an Obama rally yesterday in Youngstown, Ohio, former President Bill Clinton and Vice President Joe Biden criticized the Romney ad, with Biden calling it “absolutely, patently false.”

Romney's ad debuted over the weekend and has appeared more than a dozen times each in the Toledo and Youngstown markets, according to Kantar Media's CMAG, a New York-based ad tracker.

The 30-second spot shows cars being crushed as a narrator says Obama “sold Chrysler to Italians who are going to build Jeeps in China. Mitt Romney will fight for every American job.”

What isn't said is that Chrysler is retaining and expanding its Jeep production in North America, including in Toledo, as it separately weighs expanding into China, the world's largest auto market.

‘No Intention'

Chrysler emphasized in a blog post that it has “no intention of shifting production of its Jeep models out of North America to China.”

“They are inviting a false inference,” Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania, said of the Romney campaign. “It is literally accurate and inferentially false. We also call it ‘not the whole story.'”

Obama's response ad, released yesterday, says Romney “turned his back” on the auto industry and then pivots to the Jeep issue.

“And now, after Romney's false claim of Jeep outsourcing to China, Chrysler itself has refuted Romney's lie,” a narrator says. The ads concludes: “Mitt Romney on Ohio jobs? Wrong then, dishonest now.”

Clinton said at the Youngstown event that Chrysler called it “the biggest load of bull in the world” that they'd consider shutting down Jeep's North America operations.

Speaking after Clinton, Biden put it more bluntly.

“I mean, what are you talking about?” Biden said. “I have never seen anything like that. It's an absolutely, patently false assertion. It's such an outrageous assertion that, one of the few times in my memory, a major American corporation, Chrysler, has felt obliged to go public and say, there is no truth.”

Jeep Discussions

Italian Fiat SpA, majority owner of Chrysler, is in discussions with its Chinese partner, Guangzhou Automobile Group Co., to make Jeeps in China.

China taxes imported vehicles and is proposing additional tariffs on U.S.-made vehicles. To avoid China's tariffs on imported vehicles, automakers typically form joint ventures with Chinese companies to make cars and trucks in the country.

At the same time, Chrysler is adding production crews at Toledo and Detroit plants, an expansion that the company said means 2,200 new jobs.

Romney first claimed that Jeep is decamping for China in front of a crowd of 12,000 supporters at his Oct. 25 rally in Defiance, Ohio. The singer Meat Loaf performed at the event in the Defiance High School football stadium.

“I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China,” Romney said. “I will fight for every good job in America, I'm going to fight to make sure trade is fair.”

Chrysler Response

Romney's Toledo ad cites an Oct. 22 Bloomberg News story about Fiat's discussions with Guangzhou. Even before Romney spoke in Defiance, Chrysler defended the accuracy of the story while addressing people who may be misinterpreting it.

“Despite clear and accurate reporting, the take has given birth to a number of stories making readers believe that Chrysler plans to shift all Jeep production to China from North America, and therefore idle assembly lines and U.S. workforce,” Gaulberto Ranieri, a senior vice president for corporate communications, wrote in an Oct. 25 blog post on Chrysler's website. “It is a leap that would be difficult even for professional circus acrobats.”

The company has no intention of abandoning its North America production, Ranieri wrote. “A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments.”

No Announcement

Romney officials didn't announce the new ad before it was released, as the campaign has with many of its commercials.

“The fact that they didn't release it publicly tells you they know the ad is dishonest,” Hall Jamieson said. She said the ad builds on Romney's message that Obama is shipping jobs overseas and that the bailout wasn't effective.

The United Auto Workers, in press statements and in an Obama-campaign media call yesterday, condemned Romney's Defiance comments and the subsequent ad.

“Anyone with an ounce of knowledge about the auto industry and Chrysler's production plans would know what Mitt Romney said wasn't true,” UAW Vice President General Holiefield, who directs the union's Chrysler Department, said in an Oct. 27 press release.

‘Word-Smithing'

Ken Lortz, UAW director of the region that includes Ohio and Indiana, said in an Obama campaign conference call with reporters yesterday that the Romney ad represents “the lowest form of political tactics.” The spot features “clever word- smithing” to avoid outright falsehoods, he said, “but the intent of the ad is completely dishonest.”

Chrysler announced a year ago that it would add 1,100 jobs to the Toledo Jeep plant and in January that it will add a third crew and 1,100 jobs at its Jefferson North Assembly Plant in Detroit, which makes Jeep Grand Cherokee and Dodge Durango sports-utility vehicles.

Ohio has the second-highest total automotive industry employment after Michigan, with almost 850,000 jobs from manufacturing, parts and dealers, according to an April 2010 report by the Center for Automotive Research in Ann Arbor, Michigan.

The center concluded that under a worst-case bankruptcy scenario for Chrysler and GM under which GM never fully recovered, Ohio would have lost more than 201,000 auto-related jobs in 2009 and 2010, a May 2009 report said.

The industry accounts for 4 percent of Ohio's jobs, and since 2009, the start of Obama's bailout initiatives, auto- related jobs have increased by 6.1 percent, or 11,100 jobs in Ohio, according to a Bloomberg Government analysis.

That has helped keep Ohio's unemployment rate lower than the national average, the analysis concluded. In September, the jobless rate in the Buckeye State was 7 percent compared with the U.S. rate of 7.8 percent that month.

--With assistance from Craig Trudell in Southfield, Michigan and Mark Niquette in Columbus. Editors: Jeanne Cummings, Don Frederick

To contact the reporter on this story: Julie Bykowicz in Washington at jbykowiczbloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21bloomberg.net