President Obama Hails Auto Industry Recovery in Michigan

July 30, 2010 -- Saying that his critics will now have to acknowledge that they were wrong, President Obama traveled to Michigan today to tout the revival of the auto industry after his administration's controversial bailout of General Motors and Chrysler last year using tens of billions of taxpayer dollars.

In his shirt sleeves, Obama gave a rousing defense of the bailout to 1,500 workers at a Chrysler plant in Detroit. While their future was in doubt a year ago, he said, they have proven the naysayers wrong and the industry is on the upswing.

Last year's dire circumstances forced his administration into a corner, he added, "with very few choices."

"If we had done nothing, not only were your jobs gone, but supplier jobs were gone, and dealership jobs were gone, and the communities that depend on them would have been wiped out," he said.

He credited auto workers with playing a key role in bringing their industry back.

"You are proving the naysayers wrong, all of you," he said. "They thought it would be impossible for your company to make the kind of changes necessary to restore fiscal discipline and move towards viability.

"Today, for the first time since 2004, all three U.S. automakers are operating at a profit; first time in six years."

Obama's trip included stops at the Chrysler plant and a GM assembly plant in the Motor City area.

At the GM plant, Obama climbed into a black Chevy Volt -- first checking with his Secret Service agent to make sure he was allowed to drive -- and drove it about 10 feet on an assembly line.

Obama exited the vehicle with a broad smile: "I'm telling you guys, pretty smooth," he said.

A White House spokesman said it has been "awhile" since the president has driven himself in a car.

The GM plant produces the new Chevrolet Volt rechargeable electric car and is one of nine plants that the company will keep open during the standard two-week summer shutdown. The Chrysler plant makes the new Jeep Grand Cherokee and just added a second shift and 1,100 new jobs.

Obama will travel to a Ford plant in Chicago next week that recently added 1,200 new workers as a result of a loan from the Department of Energy.

The president and his administration have consistently defended their decision to bail out the auto industry, calling it a difficult but necessary move in order to keep the domestic automakers from falling over the economic cliff and save jobs.

The White House said Thursday that the auto bailout "certainly saved communities from economic devastation."

Both GM and Chrysler slashed labor costs and dealerships when they went through bankruptcy and have come out the other end more profitable despite lower sales rates. Analysts say there is no doubt that the bailout rescued the companies.

This year is on track to be the strongest year for job growth in the auto industry since 1999, according to government figures.

The auto industry shed 334,000 jobs the year before GM and Chrysler went through a structured bankruptcy but has gained 55,000 jobs in the year since, a report released by the White House Thursday concluded.

Analysts estimated that about 1.1 million jobs could have been lost if the automakers had been liquidated.

"The president didn't think that walking away from a million jobs in these communities made a lot of economic sense," White House spokesman Robert Gibbs said.

Because of the bailout, Gibbs added, the auto industry "looks fundamentally different in its progress than we did just a year and a half ago."

Detroit may seem an unlikely place for Obama to tout job creation. Michigan's unemployment is the second highest in the nation, at 13.2 percent.

The White House said Thursday there is still a long way to go before the region bounces back but it continues to work with auto workers and their communities to focus on their needs and concerns.

"We can't be happy with the unemployment rate in the state of Michigan at over 13 percent or in Detroit [at] 20 percent," said Ed Montgomery, head of the White House Council on Automotive Communities and Workers. "But these are providing some needed resources to help autoworkers and others in the community begin the process of finding jobs."