Obama: Auto Industry Proving Naysayers Wrong

(AP)  President Barack Obama on Friday heralded the recent turnaround for U.S. automakers, arguing that thousands of jobs and increased production vindicate his unpopular decision to bailout the industry.

With Americans facing a still-limping economy and potentially pivotal congressional elections in three months, Obama is seizing on the positive new trends in the auto industry as evidence of broader economic good news. He launched an intensive campaign to highlight the story as a concrete area of improvement with direct ties to his administration's actions.

"This industry is growing stronger," Obama declared from the floor of Chrysler's Jefferson North plant, which recently added a second shift of production to the tune of about 1,100 jobs. "You are proving the naysayers wrong."

From here, where the president greeted workers making Jeep Grand Cherokees and sat in a mostly finished model, Obama went to nearby Hamtramck to visit a GM plant planning to assemble the Chevrolet Volt rechargeable electric car. That factory is one of nine the automaker will keep open during the usual two-week summer shutdown.

Taking advantage of a rare opportunity to drive, Obama got behind the wheel of a black Volt, buckled himself in and inched the car slowly forward about 10 feet (three meters), before declaring that the ride was "pretty smooth."

Obama will continue his autos tour next week when he visits the Chicago plant where Ford builds the Taurus sedan and plans to assemble a new Explorer sport utility vehicle. Unlike the other automakers, Ford did not receive the government's financial help. Hoping to ratchet up public notice further, the White House also had the administration's top auto officials brief reporters Thursday.

Following the government-led bankruptcies of GM and Chrysler, the companies have shown signs of improvement. Obama said that all three U.S. automakers are "operating at a profit, for the first time in six years."

But the claim that all three Detroit automakers are making money isn't quite true. GM and Ford are making money, but Chrysler has yet to post a net profit since leaving bankruptcy protection in June of last year.

The company had a first-quarter net loss of $197 million, but it made $143 million before interest and taxes. Chrysler's last full-year profit was in 2005, when it made $1.8 billion.

Obama said he understands why many in the country were skeptical or outright opposed - to a massive infusion of cash into the beleaguered industry, and acknowledged that "the politics of it weren't good."

"Listen this was a hard decision," he said. "I didn't want government to get into the auto industry - I've got enough to do."

In a report on the status of the auto industry, the White House said failing to intervene would have led to the loss of nearly 1.1 million jobs. The auto industry has added 55,000 jobs in the year since the automotive bankruptcies, making it the strongest year of job growth in the industry since 1999.

Obama pointed to several signs of progress: Plans by GM and Chrysler to skip the typical summer shutdown of several auto plants to meet demand for hot-selling vehicles and the addition of shifts at GM, Chrysler and Ford Motor Co. plants.

White House officials estimate that Detroit automakers could add 11,000 new jobs before the end of 2010.

The administration also says the government is on track to recover all the taxpayer money it poured into GM, Chrysler, auto lenders and suppliers to avert a near-certain industry wide meltdown.

However, the White House said that proclamation referred only to the $60 billion spent by the Obama administration, not the additional $25 billion funneled to the industry in 2008 under the Bush administration. The most recent government estimate found that taxpayers will lose $24.3 billion on the auto bailout.

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.

[1renegade]

@RobAla, I think the government is ticked off that Ford gave them the middle finger and now are proving why they didn't need any bailout. I will be buying a new truck in August and you can bet it will be a F-250 Ford. I'm dumping the piece of crap GM I bought 2 1/2 years ago.

[msjb12]

come on we all know it was bush give me a break it had to be him he blowed up the trade center, killed hussain, mutalated 1000s of musslims I have to quit writing now, I can't think of anymore BS to blame on poor ole George

[msjb12]

Not another pat on his back he better get some BENGAY for that arm

[bradkt1]

Critics of the auto industry bailout seem to be forgetting that when the government sells its equity share, the taxpayers are going to get a great deal of the money back because of the rise in stock prices.

In addition, the auto industry (most of it anyway) will have been significantly restructured and will be back on a solid economic footing and able to move forward.

They will be hiring again. The right wing of the GOP would have just let them fall off a cliff...taking all of those auto industry jobs along with it.

I didn't really like the bailout in principle, but I believe that it was the right thing to do.

[bradkt1]

Payback108: They had an unworkable structure that wasn't financially viable and a major restructuring was inevitable...no matter what was done.

I believe that the auto industry is much more than just about making and selling cars and trucks. It's not just any industry. It really is a major part of the economic and manufacturing backbone of this country. I believe that U.S. auto industry had to be saved and not simply sacrificed on the altar of political ideology...and so did Presidents Obama and Bush, as well as the majority of Senators and Congressmen of both major political parties.

[msjb12]

hell the unions can care less about all them little peon dealers

[sjc_1]

Geez there are a LOT of critics. No one has a clue, but they all have uniformed opinions. Next time you face a big decision, get a bunch of people together that will criticize you and tell it will never work, see how you like that.

[RobAla]

Then again, Ford took NO BAIL OUTS and it is doing great.

[sjc_1]

But then again, Ford went SO far in debt before the crash, they would either make it or go out of business.

[RobAla]

sjc_1: I'm sure I understand your point. Why is it a concern it a company borrows money and goes in debt? They do it all the time. In my opinion, no company is too big to fail. We have monopoly laws. The public should not be forced to sustain any company. If Chrysler had gone out of business, then Ford and GM would have picked up the business. That is how things work. Why should the public have to pick up the tab for poor business decisions made by a corporation?

The real jerks in this bailout situation are Fannie Mae and Freddy Mac. AIG and the auto companies are paying back the bail out money. Those two federal linked loan agencies are not. In fact, they are asking for more. The stupid reform of Wall Street and banks did not even address Fannie Mae and Freddie Mac. Besides that, it is ridiculous for a group of politicians (who ran up a $13 trillion national debt, and have mismanaged Social Security and Medicare to the verge of going bankrupt) to do any kind of financial reform on anyone. This is sickening. Can you tell that I am sick of these arrogant bozos?

[GertBFrobe]

Someone once said back in about 1909 that American democracy will prosper until the politicians discover that they can bribe the electorate with their own money. Thank heavens we saved GM. Without GM, how would the Mullets get their freak on without the Camaro redneck swagger vat? A friend had the misfortune to rent a Cobalt and the battery died while parked in my driveway. I went to give it a jump and much to my surprise, the battery is underneath the fuse box with a positive pole sticking out through the top of the fuse box. It is a fairly common thing to have battery gases corrode heavy battery cables right in the sheath to the point the car won't work. I wonder what will happen to the smaller gauge fuse box wiring in a few years? Think that would be cheap to fix? Perhaps all that "100 years of engineering excellence" is right up there with "re-paying the loans in full". And speaking of that, why did not the FTC not jump on them for that?

[wfw3536]

So when are we going to get the 60 some billion they owe us. And what about the thousands of folks put out of jobs who worked in dealerships that were closed unfairly by Obama and his administration. No one seems to care about these folks. Most of these dealers were making money, but were not the chosen ones.

[dadirt]

Oh yeah, now we find Harry Reed is trying to pass another giveaway for people wanting to buy the Chevy Volt because it is too expensive for the normal person to purchase. It is easier to sell cars when the government will give out a hand out to get rid of it. By the way, Ford makes the F150 pickup not GM, and the car batteries are not made in the US, so lets keep all those chineese happy.

I quit suporting GM when the President came on tv to say they paid the federal bail out back. It was a lie because they paid it back with money that Barry gave them. They pulled the add quickly. The government can say and do anything they want. There is very little truth in anything they ahve to say. They forced GM to build this red herring, and I understand it used high test gas! Wait until they get their electric bill!

[hakori]

dadirt, that's right rithtie, WHINE WHINE and WHINE some more. Poke that finger in a liberal's eye. Conservative are created in God's own image so that makes you PERFECT! Nevermind that when you guys have had power since Reagan the deficit BALLOONS, but it's the liberals who can't be trusted. Oh those evil liberals are ruining your America. WHINE WHINE WHINE and WHINE some more why don't you. That's right, get red faced and point that boney finer some more. Roll around in the floor and through a tantrum. That will fix everything. Dadirt and Rushbo sittin in a tree, along comes Beck and then you three SCR*w! Hey, if you guys had power it would be like the 2000's again. You could finish the job you started of destroying the middle class while you're ignorant of the fact that you're doing it. YOU ARE BRAINWASHED FOOLS and you are DANGEROUS in large numbers!

[hakori]

dadirt and sven655, I want to hear some more whining and blame gaming! Come on! Tell us some more how the dems are evil and the republicans are perfect and have and never will do any wrong. Hey, why take the responsibility of a financial meltdown when you can blame liberals, and it works with the BASE because the base is too brainwashed to know the difference. It must be nice to live in a world where facts are fluid and retoric trumps policy. What do conservatives love: PARTY! What about country: screw it if it's not MY CONSERATIVE COUNTRY! Liberals are the enemy! It's all the ****'s faults! It's all the poor people's fault! It's all those greedy welfare queen's fault! It's all those minority's faults! It's everyone's fault but ours!!!!!!!!!