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Jeep production in China weighs on crucial Ohio vote

Is China's gain necessarily Ohio's loss?

How voters in Ohio answer that question could decide who wins the White House on Nov. 6. The state and its 18 electoral college votes are coveted by both of the presidential candidates and, with less than a week to go, both sides are playing hardball.

Republican nominee Mitt Romney went on the offensive this week with a new ad that accuses President Barack Obama of selling "Chrysler to Italians who are going to build Jeeps in China."

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The Obama campaign shot back with its own ad recalling Mr. Romney's 2008 New York Times op-ed titled "Let Detroit Go Bankrupt."

Official fact checkers have called the Romney ad misleading and a spokesman for General Motors called it "cynical."

But Mr. Romney does raise a valid point. If Chrysler is resuming production of Jeeps in China for the domestic market, doesn't that necessarily mean it won't be exporting vehicles from the United States to China?

And won't that eventually mean fewer jobs in Ohio?

"Right now, every Jeep is built in America by an American and sold to the world," Mr. Romney's top campaign strategist told The New York Times. "Now, instead of adding jobs in Toledo, they will be making Jeeps in China by the Chinese and selling them in China."

Both Chrysler and General Motors, which were bailed out to the tune of $80-billion (U.S.) by the U.S. government, have insisted they are ramping up auto production in Ohio. Chrysler has announced plans to add 1,100 jobs at a Jeep factory in Toledo to build vehicles for the domestic market.

Still, despite the bailouts, neither Chrysler nor General Motors are out of the woods. There is no guarantee that, within a few years, they will not once again be grappling with the same problems that drove them to their knees in the first place.

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That is, unless they can gain access to new export markets.

China is the fastest growing auto market in the world and American-made cars are largely shut out of it. Chrysler and GM operate there through joint ventures with Chinese owners. Mr. Romney insists his trade policies would make it easier for Chrysler and GM to export their products from the United States to China.

Mr. Romney's ad may be a perfect illustration of raw politics. But it is also a reminder that the auto bailouts are still a work in progress. Did they "save" the U.S. industry, as Mr. Obama contends, or just buy it time?

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About the Author

Columnist Konrad Yakabuski writes on politics, policy and business for The Globe and Mail’s Comment section and Report on Business. More


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