Rebranding GM, Chrysler Bailouts Means Michigan is in Play for 2012

The fact that President Obama is trying to turn the negative of his unpopular bailout of General Motors and Chrysler into a political positive tells us two things:

First, at a time of high unemployment, Obama is digging hard for an argument that he has been a jobs president.

Second, the president thinks Michigan is in play for 2012.

The Great Lakes State hasn’t been seriously contested by the GOP in presidential elections since 1992, when it made the switch from Republican-leaning swing state to Democratic stalwart. As the state’s automotive economy foundered and suburban Detroit began to empty out, the GOP just couldn’t compete.

But in the run-up to the 2010 election, depopulation began to work to Republicans’ advantage. The economic collapse of the state was so complete after the Panic of 2008 that it was no longer just affluent residents with portable skills who fled the state, but also the former plant workers and other laborers at the core of past Democratic domination. In the 2010 Census, Wayne County, home to Detroit, had a population of 1.8 million. In 2000, it had been 2.1 million.

A century ago, farm boys and the grandchildren of slaves across the South fled economic hardship for opportunity in Detroit and Henry Ford’s unheard of wage of $5 a day. Now, many of their grandchildren are completing the cycle, fleeing the moribund Motor City for the fast-growing economies of Texas and other warmer climes.

The reduction in reliably Democratic precincts, combined with the high intensity of conservative-leaning voters in the rest of the state – voters antagonized by the Obama agenda and appalling economic conditions – brought a major reordering of Michigan politics.

In 2010, Republicans, led by gubernatorial candidate Rick Snyder, swept statewide offices and flipped two congressional seats to retake the majority of the state’s 15-member House delegation.

But the win by Snyder, former CEO of Gateway computers and a political novice, was particularly resonant because of the contrast between him and his opponent, Lansing Mayor Virg Bernero. Bernero was in many ways a public face for the auto bailouts. He took the case to Capitol Hill and the airwaves in late 2008 and 2009. He was a top-tier advocate for not only the massive cash infusions granted to the companies but the even more controversial move in which the federal government wiped out the claims of private-sector creditors in order to keep the companies afloat. He championed the United Auto Workers-Obama administration proposal in which the unions were given ownership shares in the companies.

But Bernero didn’t even carry the union vote. A Detroit News poll before the election showed businessman Snyder with the edge in labor households, never a good sign in union-label Michigan. Snyder mostly steered away from taking a position on the bailouts, focusing instead on private-sector development.

While Democrats are betting that a high turnout for Obama among the state’s large black population and a softening of the economic gales blowing against Michigan will be enough, they are acting a little worried.

The party has trumpeted the news that GM and Chrysler have paid back big chunks of their public debt and are accusing the frontrunners of the Republican presidential field of wanting to “let Detroit go bankrupt.” The party has tapped former Michigan Gov. Jennifer Granholm and former Ohio Gov. Ted Strickland, who was washed out in the political tide of 2008, to join with the UAW to sell the bailouts as a success and to cast Republicans as rooting for the failure of GM and Chrysler.

Part of this is in an effort to rebrand the bailout blitz of 2009, one of the least popular Obama policies, as a bold but limited move to save the Midwestern economy and keep Michigan from collapsing.

Republicans argue that by keeping the failed companies afloat and stiffing creditors, the administration has stunted reform in the industry. They point to the continued success of privately held Ford as a template for the industry.

But the Democratic rebranding effort may be more about Michigan’s 16 electoral votes – as many as Missouri and Nevada combined – than the national debate over bailouts and nationalization.

Snyder is locked in a battle over his tax and education plans. After Snyder’s budget came out in March, his approval rating in the Michigan State University poll took a 15-point dive to 44.5 percent, exactly the same as Obama’s in the state.

Michigan looks very much like a swing state right now.

We have read a lot lately about the Obama campaign’s strategy for raiding Republican turf in the West and South, leaving whomever the GOP nominates to spend time and resources defending votes in places like North Carolina. Boosters have even suggested the president may make a pass at Texas.

But that’s all pipe dreaming right now. Texas is redder than ever and Democrats have been on a two-year schneid since Obama’s victory there in 2008. But it’s a good storyline to tout since it might make Republicans misallocate resources in a campaign where Obama will have money to burn.

A raiding strategy, though, only works if your own firewall holds. And if Michigan doesn’t stay true blue in 2012, Obama doesn’t have a logical path to victory.

Chris Stirewalt is FOX News’ digital politics editor. His political note, Power Play, is available every weekday morning at FOXNEWS.COM.