President Barack Obama is going to the heart of the U.S. auto industry to push an important election-year claim: his administration's unpopular auto industry bailout has turned into an economic good-news story.
Mr. Obama will visit three auto plants over the next several days to tout what White House press secretary Robert Gibbs calls "a success story."
In a report released Thursday, the White House said the auto industry has hired 55,000 workers - adding jobs for the first time since 1999 - and predicts another 11,000 new hires by the end of the year owing to plant refurbishments and added shifts.
All Big Three automakers have also announced quarterly profits - the first time that has happened since 2004. GM showed a profit of $865 million in the first quarter of 2010 (its first since 2005), and Chrysler earned $143 million. Ford just announced a $2.6 billion profit for the second quarter - its fifth straight quarterly profit.
The administration also pointed to increased demand leading GM and Chrysler to skip the typical summer shutdown of several auto plants and the addition of shifts at GM, Chrysler and Ford Motor Co. plants.
Exports of U.S. vehicles and parts are up (with sales to China alone totaling $1.85 billion in the first five months of 2010).
The White House said yesterday that the U.S. government will recoup the $60 billion the Obama administration spent on the auto industry bailout to avert an industry-wide meltdown.
In an interview broadcast Thursday on "The View," President Obama said, "We are going to get all the money back that we invested in those car companies."
Unclear is recoupment of an additional $25 billion spent during the Bush administration.
In its report the White House said failing to intervene would have led to the loss of nearly 1.1 million jobs.
"There's no doubt that the team that worked on auto restructuring here at the White House is surprised at where GM and Chrysler are," press secretary Robert Gibbs said on CBS' "The Early Show". "The Big Three all reported a profit for the first time since 2004, and these companies are hiring again - the auto industry's hiring again for the first time since 1999.
"There's no doubt it is a success story. We've got a ways to go. But there's no doubt that the investments that had to be made in the auto industry, the sacrifices and the restructuring that have been made, have put the auto industry on a much better path toward sustainability and one that's creating jobs again."
On Friday, Mr. Obama will visit GM's Hamtramck plant, which is planning to assemble the Chevrolet Volt rechargeable electric car. The plant is one of nine the automaker will keep open during the usual two-week summer shutdown.
In nearby Detroit, Mr. Obama will tour Chrysler's Jefferson North plant, which recently added a second shift of production, adding about 1,100 jobs.
Next week, the president will visit the Chicago plant where Ford builds the Taurus sedan and plans to assemble a new Explorer sport utility vehicle.
GM has repaid $6.7 billion that the government considered loans, with the remaining $43.3 billion converted into a 61 percent stake in the company. GM is expected to conduct an initial public offering of shares in the company later this year, a move that could help the government recoup some of its investment.
United Auto Workers President Bob King said in a statement Thursday that GM would file paperwork in mid-August to start the process of selling stock to the public.
Chrysler received about $15 billion in government help and was placed under control of Italian automaker Fiat as part of its bankruptcy. The company has repaid about half of the $4 billion loan portion of its aid and is considering a public stock offering sometime in 2011.
Ron Bloom, the administration's senior counselor for manufacturing policy, said it was unclear how long the government would hold ownership stakes in the companies. "We don't like having this investment, but we're not going to sell it at a fire sale," he said.