Obama: Auto bailouts worked

@CNNMoney February 28, 2012: 2:25 PM ET

NEW YORK (CNNMoney) -- President Obama on Tuesday defended his administration's 2009 bailout of the auto industry in a speech to the United Auto Workers union, saying it prevented another Great Depression from hitting the Midwest.

Obama said that, despite claims of Republican critics, the bailout was the only way to prevent the closure of General Motors (GM, Fortune 500) and Chrysler Group and the collapse of the nation's supplier base.

He referred to the $80 billion bailout as a bet on the American worker, and added "Now, three years later, that bet is paying off, not just for you but for America."

Obama pointed to successes in the auto industry since the bailout. Those successes include record profits at GM and the company again claiming title of world's largest automaker. He also pointed to strong market share gains by Chrysler Group and a bout of hiring by the automakers and their suppliers -- an estimated 200,000 jobs so far -- along with plans to add additional workers in coming years.

The president made the speech at the UAW convention in Washington, but it came on the day of the Republican primary in the auto industry's home state of Michigan.

The ongoing auto bailout debate

And Obama took barely veiled shots at Republican rivals Mitt Romney -- who, the president said, wrote an op-ed piece in late 2008 entitled "Let Detroit Go Bankrupt" -- and Rick Santorum, who has also been critical of the bailout in the weeks leading up to the Michigan vote.

Without mentioning him by name, Obama disputed Romney's statements in recent weeks that the reorganization could have been accomplished without federal assistance, and that the UAW and its members at the automakers got off too easy as other creditors took hits in the bankruptcy process.

"With the economy in complete freefall, there were no private companies or investors willing to take a chance on the auto industry. No one was lining up to give you guys loans. Anyone in the financial sector could tell you that," Obama said.

Big Michigan winners: GM & Ford

He said that without the bailout, GM and Chrysler would have gone under -- and that would have sparked widespread failures among suppliers and even a bankruptcy at rival Ford Motor (F, Fortune 500).

The president said that those like Romney who advocated taking a tougher line with the UAW were pursuing "anti-worker policies in hopes unions like yours will unravel."

Republicans weren't backing down from their criticism of the bailout on Tuesday.

"This is an insider deal for his union cronies who got billions in bailout money and are now backing Obama's re-election campaign," said Kirsten Kukowski, spokeswoman for the Republican National Committee.

The speech had the flavor of a campaign speech, with an enthusiastic audience greeting the president with chants of "Four more years." The UAW leadership has vowed to make a major push to re-elect Obama, especially with membership concentrated in the battleground states of Michigan, Ohio and Indiana.

Obama wandered from prepared remarks when he told workers about how much he like the plug-in electric Chevrolet Volt, even though the Secret Service hadn't allowed him to drive it when he sat in one recently.

"Five years from now, when I'm not president any more, I'll buy one and drive it myself," he said, sparking additional chants of "Four more years" from the crowd. To top of page

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