LANSING (AP) – U.S. Senate candidate Pete Hoekstra is on record supporting the federal bailout of two Detroit automakers when he was a Michigan congressman.

But during a Thursday campaign appearance with Herman Cain, he was quick to agree with the former GOP presidential candidate’s assertion that the government was wrong to have bond holders take a bigger loss than the United Auto Workers during bankruptcy proceedings.

“If you had allowed it go to through bankruptcy court, everyone would have been treated the same. They weren’t,” Cain said in front of a Troy audience.

Hoekstra, one of several Republicans vying to take on Democratic incumbent Debbie Stabenow, joined in.

“Mr. Cain is exactly right,” he said. “Where this got all messed up is when the government and the executive branch started rewriting the rules (to) whatever they wanted.”

The auto bailout criticism also has come from two of the Republican presidential candidates campaigning in Michigan ahead of the state’s Tuesday presidential primary. Former Massachusetts Gov. Mitt Romney and former Pennsylvania Sen. Rick Santorum have alleged that the Obama administration “gave” GM to the union as a political favor.

The facts show that the bankruptcy proceedings General Motors Co. and Chrysler went through involved complex arrangements. In those, the companies, unions, government and courts fashioned a plan to lighten staggering costs for health care and pension costs at the heart of the automakers’ decline.

A trust owned by the United Auto Workers – but not directly managed by the union – received a 17.5 percent ownership stake in GM in return for taking over the health care costs of the company’s blue-collar retirees (the company also has white-collar retirees not covered by the trust). When the company sold stock to the public, the ownership stake declined and now stands at about 10 percent.

In return for gaining a share of GM ownership, the UAW agreed not to strike over wages at Chrysler or GM in the last round of contract talks, froze wages for existing workers and agreed to lower wages for new hires, among other concessions.

Hoekstra repeated his criticism during a Friday morning appearance on CNN. He said the federal funds made it more certain that the companies would emerge intact from bankruptcy, but he found fault with “some of the decisions that were made in terms of favoring certain bondholders versus the unions.”

Michigan Democratic Chairman Mark Brewer criticized Hoekstra’s remarks.

“Hoekstra is flip-flopping so he can pander to the far right and win his primary, even though the auto rescue saved 1.4 million jobs,” the Democrat said Friday in a statement. “It’s clear that Pete Hoekstra will stand with the Tea Party and Republican leaders, rather than stand up for jobs in Michigan.”

Hoekstra campaign spokesman Paul Ciaramitaro said the Holland Republican hasn’t changed his position. In late 2008, the congressman voted for the federal government to loan Chrysler and GM money – in addition to what they would get from the Troubled Asset Relief Fund – if the automakers demonstrated a path back to viability.

The bill failed to pass the Senate but its measures were similar to what the Obama administration ultimately followed during the companies’ managed bankruptcy.

“I supported the federal government being the backstop to the auto industry and guaranteeing that it would emerge from this process. I did not agree with the administration’s decisions to support unions over bondholders in a manner that was unfair, not transparent and inconsistent with bankruptcy law,” Hoekstra said in a statement released by his campaign. “This has been my position from the beginning.”

© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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