WASHINGTON—The Barack Obama campaign will deliver a counterpunch to Mitt Romney’s misleading auto ads with spots of its own in Michigan and Ohio that attempt to set the record straight and raise questions about Romney’s character.

Obama’s campaign called Romney’s ads—which imply that American auto jobs have been outsourced to China as a result of the president’s 2009 auto bailout—“one of the most misleading, hypocritical and indefensible ads we’ve ever seen in a presidential race.”

Romney’s auto ads began running in Ohio on Sunday, after he asserted during a campaign rally last week that Chrysler planned to move production of its Jeep models from Ohio to China. Chrysler has twice denied the claim—first on its blog following Romney’s comments and again through its CEO after Romney’s campaign aired television and radio ads.

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General Motors, too, entered the fray this week, with its spokesman referring to Romney’s ads as “politics at its cynical worst”—a line the new Obama ad captured.

The Obama ad splices together news headlines and stories calling Romney’s ads “wholly inaccurate” and “clearly misleading.” A narrator says “We know the truth, Mitt,” before ending with a clip of Romney repeating the headline from his infamous New York Times column of 2008—“Let Detroit go bankrupt.”

Romney, whose father was an auto tycoon and Michigan governor, has repeatedly argued against the auto bailout, attacking it as a waste of taxpayer dollars and instead championed a managed bankruptcy with private financing instead. But with no willing lenders at the time—not even Bain Capital, which Romney had helped found—General Motors and Chrysler would have been liquidated, economists said.

Obama’s campaign strategists are highlighting Romney’s misleading ads as a desperate attempt to win working and middle class votes. The ads, which continue to run, show that Romney cannot be trusted as president, they said.

In response, Amanda Henneberg, a Romney spokeswoman, repeated the campaign’s defense that that ads are technically accurate. GM and Chrysler are in fact expanding their production overseas, though the companies say the expansion does not come at the expense of American jobs.

“President Obama can’t run from the facts. As a result of his handling of the auto bailout, American taxpayers stand to lose $25 billion and GM and Chrysler are expanding their production overseas,” Henneberg said. “Unlike President Obama, Mitt Romney has a comprehensive plan to revive manufacturing, create millions of good-paying jobs, and deliver real change and a real recovery.”

American Bridge, a Democratic super PAC, began running a web ad in the battleground state of New Hampshire on Thursday that criticizes Romney’s tenure as Massachusetts governor. The $20,000 ad buy targeting independent voters cited Romney’s “failures” during his single term: one of the worst job creation rate in the country, state jobs being shipped to India, as well as a higher than average decline in the number of manufacturing jobs. The group hopes to expand the ad to a handful more swing states on Friday, said Chris Harris, an American Bridge spokesman.