PoliGraph: American Future Fund flier ignores key details

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Even if you were paying only marginal attention to the Democratic National Convention this week, you would have heard at least one mention of President Barack Obama’s effort to salvage the ailing auto industry.

Obama’s supporters repeatedly pointed to the auto bailout as an example of how his policies created jobs.

The American Future Fund, a conservative political outfit based in Iowa, disagrees. Minnesota is among the states where the group has being stuffing mailboxes with fliers that claim the auto bailout was unsuccessful.

“Where did President Obama’s $50 billion GM taxpayer bailout create jobs? In China,” the flier states.

This statement is misleading to the point of being false.

Americas Future Fund_autojobs_China- PAGE 1.jpg

The Evidence

Americas Future Fund_autojobs_China- PAGE 2.jpg

The government’s assistance to the auto industry actually started under George W. Bush’s administration, when he authorized some of the Troubled Asset Relief program cash to be given to GM and Chrysler in the form of loans.

In the spring of 2009, GM headed into bankruptcy. At that point, the federal government invested another $30 billion into the company to become GM’s largest shareholder. That was on top of the $19.4 billion that had already been given to GM starting under the Bush administration.

So, it’s true that the government has invested about $50 billion into GM. But that money started flowing under the Bush administration. Today, GM has paid back about $23 billion of that, and has recently reported record profits and high demand since it went bankrupt.

GM makes cars on six continents including in the United States and China, according to its website. And it’s also true that GM is selling a lot of cars in China because it is a quickly growing market. Just this week, GM announced that sales of its cars there were up by 7.3 percent since August 2011.

The same can be said for the United States, where sales are up 10 percent today compared to a year ago.

But to say that GM used bailout dollars to ship its jobs overseas is incorrect, said Mike Wall, an auto industry analyst with IHS Global Insight.

“It is something that they have been doing for some time, certainly pre-bailout,” Wall said. “This has been something that has been going on for a better part of a couple decades or longer.”

Wall also points out that GM has been creating jobs in the United States, too, as the company tries to keep up with growing demand at home, invest in new auto technology and prepares to update its fleet next year.

For instance, earlier this year, GM announced that it was opening a facility in Texas slated to employ 180 people. And in 2011, GM opened an idled plant in Spring Hill, Tennessee, Wall pointed out. That investment created over 600 jobs, and is expected to create more than 1,100 jobs in the future, according to GM’s website.

The Verdict

Reasonable minds can disagree about whether the auto bailout was a good idea, and whether it’s fair that GM’s cars are being made and sold in China.

But the American Future Fund’s ad gets several things wrong:

First, the auto bailout started under the Bush administration, and some of that $50 billion was already dedicated to the company when Obama took office. Further, GM has long been investing in the Chinese market. But the same is true for the American market.

As a result, this campaign flier leans toward false.

This installment of PoliGraph was done with the help of MPR’s new On Message feature. To learn more about how you can send us your campaign fliers, robocalls, and emails, click here.

SOURCES

The U.S. Treasury Department, Daily TARP update, accessed Sept. 7, 2012

Fox News Insider, Timeline of the auto bailout, Aug. 2, 2010

Factcheck.org, Is GM Becoming China Motors?, by Brooks Jackson, June 8, 2012

The Congressional Oversight Panel, September Oversight Report: The Use of TARP Funds in the Support and Reorganization of the Domestic Automotive Industry, Sept. 9, 2009

CNN, GM posts record profit 2 years after bankruptcy, by Chris Isidore, Feb. 16, 2012

General Motors, About Our Company, accessed Sept. 7, 2012

General Motors, GM Will Build $200 Million Stamping Facility in Texas, Jan. 31, 2012

General Motors, GM Sales in China Grow 7.3 Percent, Set August Mark, Sept. 5, 2012

General Motors, GM U.S. Sales Increase 10 percent: Chevrolet passenger car sales up 25 percent, Sept. 4, 2012

Interview, Mike Wall, auto industry analyst, IHS Global Insight, Sept. 6, 2012

  • http://:www.mnpolticalroundtable.com Mac Hall

    fliers that claim the auto bailout was unsuccessful.

    “Where did President Obama’s $50 billion GM taxpayer bailout create jobs? In China,” the flier states.

    I received one of these in our mailbox and wondered something else :

    Where did American Future Fund get the money for this ?

    How did they get my spouse’s name … we are not registered with any political party nor do we financially contribute to any party

    My answer – what a waste of someone’s money.

    And why would an Iowa-based organization target Obama in Minnesota … sending the same flier into Iowa would make sense … and even its targeting of Senate contests in FL, WI, NV, and NM make sense … but I do not get why they sent this piece to Minnesota.

    Will we see their “Janesville” commercial on Minnesota television stations ?

    Any idea how much this cost ?

    BTW, we got another mailing from them since this one came out.

  • Catharine Richert

    Hi Mac.

    It turns out that the American Future Fund has been sending this flier – and others – all over the state. It appears to be part of their larger strategy to target multiple states and multiple congressional races.

    They do not have to disclose their donors because they are set up as a 501c4 social welfare organization. They do have to say how much they are spending on specific ad buys, but the FEC has no information on how much this specific ad cost the group.

    However, it does list an expenditure of nearly $700,000 on a separate flier being sent to Minnesotans that criticizes Obama for blaming others for inaction in Washington.