“We were able to help create over 100,000 jobs. On the president’s watch, about 100,000 jobs were lost in the auto industry and auto dealers and auto manufacturers, so he’s hardly one to point a finger.”
— Mitt Romney, interview on Hot Air, May 16, 2011
The 100,000 jobs is back! The presumptive GOP nominee all but stopped mentioning he created 100,000 in the private sector after we declared in January that claim was untenable and unproven. The biggest problem is that Romney is counting all the jobs added by companies long after he had left the leadership of Bain Capital — and even after Bain’s investment in the companies had ended.
In the Hot Air interview, Romney even made this claim while at the same time arguing that a recent Obama campaign commercial slamming the job losses at a particular Bain investment was unfair because “the steel factory closed down two years after I left Bain Capital. I was no longer there, so that’s hardly something which is on my watch.” (Technically, Romney had not completely extricated himself from Bain but that’s another story.)
The logic there escapes us. Romney appears to be saying it is okay to count jobs created after he left Bain, but it’s not okay to count jobs lost after he left Bain.
As we have said, Romney “certainly has a good story to tell about knowing how to manage a business, spotting opportunities and understanding high finance.” But if he wants to wall off companies that failed after he stopped managing Bain, he also has to stop counting jobs created after he left Bain.
So Romney gets a “repeat offender” award — our crack graphics staff is still developing the icon — for once again saying he created 100,000 jobs. But let’s also look at his claim that 100,000 jobs were lost in the auto industry “on the president’s watch.” That’s a new one.
The Romney campaign often cites Bureau of Labor Statistics to make its case that the number of overall jobs has declined in Obama’s presidency, so that’s the first place we looked.
The BLS data show that much of the decline in auto industry employment took place in 2008, before Obama became president. Just in 2008, some 254,000 jobs disappeared in vehicle and vehicle parts manufacturing and 211,000 at vehicle dealerships. The numbers are equally grim if you just look at auto manufacturing and dealerships.
But since January 2009, when Obama took office, overall there has been an increase in jobs. The number of jobs hit a low point in November 2009, but then it has slowly inched upward so that Obama can point to the auto industry and says there has been a net gain.
In vehicle and vehicle parts manufacturing, the total number of jobs has increased by 73,000. For dealers, the gain has been nearly 30,000. So, all told, that’s more than 100,000 — instead of a decrease of 100,000 as Romney claims.
It is a little more difficult to isolate the automobile-only numbers because the manufacturing number is not seasonally adjusted. So, in that case, we have to use January-to-January figures. But that also shows a total gain of about 50,000 jobs in the auto industry.
We presented these figures to the Romney campaign and asked how the former Massachusetts governor calculated the 100,000-loss figure. We were first directed to an article that appeared in the Washington Examiner on Thursday — after Romney gave his interview. The article calculated that 112,150 workers at General Motors and Chrysler dealerships lost their jobs as part of the painful restructuring imposed on those companies in exchange for getting additional bailout money.
Certainly, the TARP special inspector-general wrote an interesting report on those dealership cuts, suggesting they were done in a haphazard fashion with little regard for how many jobs would be affected. The report does not calculate how many jobs were lost — it simply says “tens of thousands of dealership jobs were immediately put in jeopardy” — in part because there is a dispute over how to calculate job losses at auto dealerships. (The method used by the Examiner — 50 jobs per dealership — is rejected by GM and other manufacturers as too high for failing dealerships, the report said.)
The report concluded:
At a time when the country was experiencing the worst economic downturn in generations and the Government was asking its taxpayers to support a $787 billion stimulus package designed primarily to preserve jobs, Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses and thereby potentially adding tens of thousands of workers to the already lengthy unemployment rolls — all based on a theory and without sufficient consideration of the decision’s broader economic impact.
Treasury, however, strongly disagreed with the report’s conclusion, saying both companies faced almost certain failure and liquidation, which would have resulted in even bigger job losses. “Today, both GM and Chrysler have emerged as stronger global companies,” Treasury said, despite “deep and painful sacrifices from all stakeholders.”
In any case, Romney’s statement— “On the president’s watch, about 100,000 jobs were lost in the auto industry ”— certainly does not suggest he is only focusing on the job cuts at the dealerships of two auto companies for just a period of months. But the Romney campaign said he was not talking about the entire auto industry.
“I think we are well within our rights to say that ‘on the president’s watch’ refers to when the Obama administration was in control of them,” said Eric Fehrnstrom, senior adviser to Romney. “The point we are making is that just like in private equity, layoffs can occur when restructuring troubled firms. We are not referring to the entire auto industry, foreign and domestic, during Obama’s presidency.”
Fehrnstrom pointed to some numbers to substantiate the 100,000 figure. For instance, GM dropped by 45,000 jobs from Dec. 31, 2008 to Dec. 31, 2011, according to filings at the Securities and Exchange Commission.
Chrysler’s numbers are not public anymore, but he also pointed to the decline in dealerships for both companies, which he said would amount to 100,000 even if one assumed 35 employees per dealership.
These are useful statistics, but we have trouble getting past the BLS data, especially when on other occasions, Romney has used “watch” to refer to the entire Obama presidency. Here are two examples—one recent, one near the start of his campaign:
“Under this president’s watch, more Americans have lost their jobs than during any other period since the Depression.”
— Mitt Romney, April 3, 2012
“President Obama has stood watch over the greatest job loss in modern American history, and that, my friends, is one inconvenient truth that will haunt this president throughout history.”
— Mitt Romney, Feb. 11, 2011
So we really believe we have to evaluate his statement against the record of Obama’s presidency.
The Pinocchio Test
Romney’s remarks make little sense. Not only is his claim of creating 100,000 jobs at Bain untenable, but also his assertion that 100,000 jobs have been lost in the auto industry “on the president’s watch” does not add up.
Yes, there were some painful cuts in the auto industry at the start of Obama’s presidency, largely because tough choices had to be made. One could argue whether those choices were necessary or effective, but the bottom line is clear: No matter how you slice it, jobs overall have grown substantially in the auto industry under Obama. In fact, it is one of the bright spots of today’s economy.
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