Obama on auto bailout: 'American industry is back'

@CNNMoney June 3, 2011: 3:11 PM ET

WASHINGTON (CNNMoney) -- Casting an upbeat message on a day when gloomy job growth figures loomed, President Obama touted the recovery of the Big Three automakers at a Chrysler plant in Toledo, Ohio, on Friday, saying it couldn't have happened without his 2009 bailouts.

At a Chrysler plant that makes Jeep Wranglers, the president talked about the jobs saved in Toledo, as an example of the broader economic recovery.

"Each day, when you clock in, you're doing more than earning your pay by churning out cars, you're standing up for this company. . . and showing the world that American manufacturing and American industry is back," Obama said.

So far, the federal government has invested roughly $80 billion in Chrysler and General Motors (GM, Fortune 500), half of which has been returned so far, White House economic adviser Ron Bloom explained earlier in the week. The other U.S. automaker, Ford Motor (F, Fortune 500), did not receive federal assistance.

When they occurred in 2009, the auto bailouts were controversial and unpopular among Americans still angry about bank bailouts. Bailing out the automakers was one of President Obama's first big moves after taking office, a risky bet to stave off even further financial collapse.

"When the president took office, we had an automobile industry in absolute freefall," said Bloom, who helped orchestrate the auto bailout working for Treasury back in 2009. "Since that time, we've seen some really positive and encouraging signs."

The president touted how all three automakers have gained market share, added jobs and shown they can make money. He also talked about the trickle-down effect of healthy automakers throughout the broader economy.

"The Wrangler you build here directly supports 3,000 other jobs, with parts manufactured all across America. Doors from Michigan. Axles from Kentucky. Tires from Tennessee. And this plant indirectly supports hundreds of other jobs right here in Toledo," Obama said.

The president also talked about the politics of doing nothing at the time, allowing Chrysler to collapse and close plants, which would have had a disastrous effect on the Toledo economy.

"That would have triggered a cascade of damage all across the country," Obama said. "By the time the dominos stopped falling, more than a million jobs, and countless communities, and a proud industry that helped build America's middle class for generations wouldn't have been around anymore."

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The president praised the government's recently announced exit from its ownership stake in Chrysler, reiterating the details of the buyout by Italian automaker Fiat.

The Treasury will sell its 6% stake, of 98,461 shares, to Fiat for $500 million. While the repayment closes the book on the bailout, taxpayers are still about $1.4 billion short of recouping all the money given to Chrysler in 2009 to keep it afloat during bankruptcy.

"Chrysler has repaid every dime and more it owes the American taxpayer," Obama said in his speech. "And, by the way, you paid it six years ahead of schedule."

The president did talk about recent headwinds, and dour jobs numbers, which he called a "bump in the recovery road," in his speech. Earlier Friday, the Labor Department said 54,000 jobs were created in May -- a figure that was less than economists expected -- and the unemployment rate edged up to 9.1%.

He said in the U.S. economic recovery "we still have a long way to go," and that the economy is "taking a while to mend."

"I want our future to be big and optimistic," he said, talking about the need to make investments in education and green technology to build more jobs.

"I want you to remember the improbable turnaround that's taken place here at Chrysler," he said. To top of page

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