Obama Champions Auto Industry Turnaround in Michigan
Alex Wagner
White House Correspondent
Posted:
07/30/10
Championing the federal government's bailout of the American car industry as "the right thing to do," President Obama Friday took to Michigan to trumpet the turnaround of two flagship American businesses that had been left for dead just over a year and a half ago.
Visiting a Chrysler plant in Detroit, Obama told 1,500 employees and local leaders, "You have proved the naysayers wrong," and avowed his "belief in the American worker and the American economy." He continued his whistle-stop tour at a General Motors plant in Hamtramck, Mich., where the new hybrid electric Chevy Volt will soon roll off the production line. The president test drove a Volt, saying the ride was "pretty smooth," and noted that the plant was also responsible for making Cadillacs used in the presidential motorcade -- though, he added, "The Secret Service soups them up a bit."
It was a rare chance for the president to bask in some positive economic news: following his administration's $60 billion bailout of the troubled U.S. car industry, all "Big Three" companies -- Ford, Chrysler and GM -- are in turnaround. It was a welcome respite for the White House, which had to contend the same day with the urelease of second quarter economic figres showing anemic GNP growth of only 2.4 percent -- the lowest in a year. Obama briefly addressed the figures, and pointed to the silver lining, saying "Our economy has been growing instead of shrinking."
But back to the good news: According to a White House release, in April GM repaid its $6.7 billion loan to the U.S. Treasury, ("This leaves a remaining U.S. government interest of $2.1 billion in preferred stock and 60.8% of the common equity," the White House said). The company achieved a net profit of $865 million in the first quarter of 2010 -- its first since 2005 -- and is on track to announce an initial public offering (IPO) later this year, which should assist the federal government in recouping the rest of its loan.
In May, under the stewardship of Italian car maker Fiat, Chrysler repaid $1.9 billion to the U.S. Treasury -- about half of its $4 billion loan, made available through the Trouble Asset Relief Program (TARP). The company reported a 2010 first quarter operating profit of $143 million, and it, too, is considering an IPO sometime in 2011.
Ford Motors, where President Obama is scheduled to make a stop next week, has also showed a strong rebound this year, going from an operating loss of $638 million this time last year, to a net profit of $2.6 million in the second quarter of 2010. (The company did not receive bailout funds.)
Beyond increased profitability, the president pointed to the bailout's positive effect on jobs. According to the White House, in the year before GM and Chrysler emerged from bankruptcy, the auto industry shed 334,000 jobs. In the year since, auto industry employment has increased by 55,000 jobs, "the fastest year-over-year growth in auto employment since 1999." The president noted that "more than 1 million jobs could have been lost if Chrysler and GM had been liquidated." Both plants on the president's itinerary -- GM's Hamtramck and Chrysler's Jefferson North plant -- skipped the customary summer plant shutdown to meet growing consumer demand this year. An added shift at the Chrysler plant has created 1,100 additional jobs.
Citing what he dubbed a "very controversial decision," the president recalled those who were skeptical of the federal government's efforts to intervene on behalf of the troubled car industry, calling them the "leaders of Just Say No campaign." "I wish they were standing here today," said Obama. "I will bet on the American worker any day of the week."
Follow Alex Wagner on Twitter. Watch her discuss the President's latest appearance on "The View" on MSNBC's "Countdown"
Visiting a Chrysler plant in Detroit, Obama told 1,500 employees and local leaders, "You have proved the naysayers wrong," and avowed his "belief in the American worker and the American economy." He continued his whistle-stop tour at a General Motors plant in Hamtramck, Mich., where the new hybrid electric Chevy Volt will soon roll off the production line. The president test drove a Volt, saying the ride was "pretty smooth," and noted that the plant was also responsible for making Cadillacs used in the presidential motorcade -- though, he added, "The Secret Service soups them up a bit."
It was a rare chance for the president to bask in some positive economic news: following his administration's $60 billion bailout of the troubled U.S. car industry, all "Big Three" companies -- Ford, Chrysler and GM -- are in turnaround. It was a welcome respite for the White House, which had to contend the same day with the urelease of second quarter economic figres showing anemic GNP growth of only 2.4 percent -- the lowest in a year. Obama briefly addressed the figures, and pointed to the silver lining, saying "Our economy has been growing instead of shrinking." But back to the good news: According to a White House release, in April GM repaid its $6.7 billion loan to the U.S. Treasury, ("This leaves a remaining U.S. government interest of $2.1 billion in preferred stock and 60.8% of the common equity," the White House said). The company achieved a net profit of $865 million in the first quarter of 2010 -- its first since 2005 -- and is on track to announce an initial public offering (IPO) later this year, which should assist the federal government in recouping the rest of its loan.
In May, under the stewardship of Italian car maker Fiat, Chrysler repaid $1.9 billion to the U.S. Treasury -- about half of its $4 billion loan, made available through the Trouble Asset Relief Program (TARP). The company reported a 2010 first quarter operating profit of $143 million, and it, too, is considering an IPO sometime in 2011.
Ford Motors, where President Obama is scheduled to make a stop next week, has also showed a strong rebound this year, going from an operating loss of $638 million this time last year, to a net profit of $2.6 million in the second quarter of 2010. (The company did not receive bailout funds.)
Beyond increased profitability, the president pointed to the bailout's positive effect on jobs. According to the White House, in the year before GM and Chrysler emerged from bankruptcy, the auto industry shed 334,000 jobs. In the year since, auto industry employment has increased by 55,000 jobs, "the fastest year-over-year growth in auto employment since 1999." The president noted that "more than 1 million jobs could have been lost if Chrysler and GM had been liquidated." Both plants on the president's itinerary -- GM's Hamtramck and Chrysler's Jefferson North plant -- skipped the customary summer plant shutdown to meet growing consumer demand this year. An added shift at the Chrysler plant has created 1,100 additional jobs.
Citing what he dubbed a "very controversial decision," the president recalled those who were skeptical of the federal government's efforts to intervene on behalf of the troubled car industry, calling them the "leaders of Just Say No campaign." "I wish they were standing here today," said Obama. "I will bet on the American worker any day of the week."
Follow Alex Wagner on Twitter. Watch her discuss the President's latest appearance on "The View" on MSNBC's "Countdown"