As Obama hails auto bailout, rise in unemployment rate dampens message
President Obama visits a Chrysler plant in Toledo, Ohio, to extol the success of the auto bailout. But new figures released Friday put the unemployment rate at 9.1 percent.
On a day when America's unemployment rate ticked disappointingly upward, President Obama visited Ohio Friday to focus attention on some brighter economic news spot in the economy – a revival in the automotive industry.Skip to next paragraph
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The government's rescue of two major carmakers, GM and Chrysler, has worked, Mr. Obama said at a Toledo Chrysler plant. He said the move to save the companies made the recession less severe and is helping to preserve American leadership in a key industry.
His message comes as Italian carmaker Fiat announced this week that it will buy the equity stake in Chrysler now held by the US Treasury. Fiat, already a big Chrysler stakeholder alongside the United Auto Workers union, will own a majority of the company.
"Today, all three American automakers are turning a profit," Obama said, referring to Ford as well as the two firms that went through a government-aided restructuring. "That hasn’t happened since 2004."
But the president's speech in Toledo also came amid new signs of weakness in the general economy, amplified Friday by monthly job numbers that were weaker than expected. The Labor Department reported that the economy added just 54,000 jobs in May, and that the unemployment rate rose to 9.1 percent.
Obama's track record
Obama acknowledged the problems, but used the appearance to defend his track record on the economy.
"Even though the economy is growing, even though it’s created more than 2 million jobs over the past 15 months, we still face some tough times," Obama said. "This economy took a big hit.... It’s taking a while to mend."
He said the government will have to tighten its own belt after several years of record deficits, but said fiscal reforms must not come at the expense of investments in science, education, and infrastructure.
"Just as we succeeded in retooling this industry for a new age, we’ve got to rebuild this whole economy for a new age," he said.
Republican critics on Friday pointed to the rise in unemployment as a sign Obama's policies are failing to put the economy on track.
Bailout 'averted a collapse'
At the same time, many private-sector economists and policy analysts say the revival of Detroit automakers is a genuine tale of policy success – albeit a story that is still unfinished.
"The philosophical arguments against the government favoring one industry over another are compelling, but when viewed pragmatically, the support provided the US auto industry by both the Bush and Obama administration averted a collapse," Jeremy Anwyl, who heads the automotive website Edmunds.com, said in a written analysis on Friday.