Obama touts auto industry recovery while GOP asks 'What jobs?'
Obama says his administration took the right steps in preventing the auto industry from total collapse. But the US economy is slow to add jobs, and that's a major political target for Republicans.
Signs that the US automotive market is recovering from its days of insolvency and declining sales is being heralded by President Obama as evidence that his administration took the right steps in creating measures to prevent the industry from total collapse.Skip to next paragraph
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In his weekly radio and Internet address Saturday, Obama recounted the criticism his administration received two years ago for providing federal money to General Motors and Chrysler, among other measures, and taking control of both companies to streamline innovation so they can produce vehicles that are considered more fuel-efficient compared to the foreign competition.
“We decided to do more than rescue this industry from a crisis,” Obama said. “We decided to help it retool for a new age, and that’s what we’re doing all across the country. We’re making sure America can out-build, out-innovate, and out-compete the rest of the world.”
The White House reports that the federal government has received exactly half of the $80 billion it spent to stabilize the industry. Estimated losses are expected to be $14 billion, according to a Congressional Budget Office report. At least 1 million jobs were saved at automakers and their suppliers, the administration says.
Chrysler repaid about $7.6 billion to the US and Canadian governments. The US also reached an agreement with Italian automaker Fiat SpA in which the automaker will purchase the government’s remaining 6 percent stake in Chrysler for $500 million.
Fiat will also purchase the right to buy the remaining shares retained by the United Auto Workers union retiree health care trust for $75 million. In the agreement, the US will receive 80 percent, or $60 million, while Canada will receive the remaining $15 million.
According to recent sales, Chrysler appears to be poised for a comeback. US market share rose 10.9 percent in May compared to 8.5 percent the same month last year. The company also reports it added about 6,000 jobs since it left bankruptcy.