Saddled with a slowdown in hiring, President Barack Obama is drawing attention to the auto industry’s rebound, visiting a Chrysler plant in politically important Ohio as he seeks to highlight a rare bright spot in the sluggish economic recovery.
WASHINGTON (AP) — Saddled with a slowdown in hiring, President Barack Obama is drawing attention to the auto industry’s rebound, visiting a Chrysler plant in politically important Ohio as he seeks to highlight a rare bright spot in the sluggish economic recovery.
Obama was traveling to Toledo on Friday, making the latest in a string of domestic trips to promote his economic agenda and defend the much maligned government bailouts to Chrysler and General Motors. The president planned to speak to plant workers and local business owners about the significance of the industry’s turnaround.
The trip comes on the same day that the Bureau of Labor Statistics announced a significant drop in hiring for May — only 54,000 new jobs — and an uptick in unemployment to 9.1 percent. As the Republican presidential field begins to take shape, the White House is keenly aware that Obama’s handling of the economy generates some of his highest public disapproval ratings.
"We have said from the beginning that the road out of the dark place we were in when this president took office in terms of the economic recession, the depths of the recession we were in, was not going to be smooth every step of the way," White House spokesman Jay Carney said.
Austan Goolsbee, chairman of the Council of Economic Advisers, said in a statement, "There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years."
The Bush and Obama administrations spent $80 billion to bail out General Motors and Chrysler and help guide them through bankruptcy. The Obama administration says it will recoup more than 80 percent of that and Obama intends to defend the bailouts as money well spent.
A report by the president’s National Economic Council this week said the taxpayers’ loss from the bailout will be about $14 billion. The Treasury Department initially had expected losses closer to 60 percent.
Chrysler last week announced it would be paying off its remaining loans to the U.S. and Canadian governments ahead of schedule. And late Thursday, Treasury announced a deal to sell its remaining stake in Chrysler for $560 million to Italian automaker Fiat. That still means that of the $12.5 billion that the Treasury Department used to bail out Chrysler, about $1.3 billion will not be recouped, Treasury said.
GM received $49.5 billion in the U.S. bailout, and the federal government has recovered about half of that by selling a portion of its ownership stake in the company. It intends to sell its remaining 26.5 percent share of the company at a later time.
GM, Chrysler and Ford had been reporting significant increases in sales, but the industry this week reported a falloff in May.
The industry resurgence is one of the few positive notes in an economy that had been growing moderately but has now hit a listless patch. Unemployment had been dropping from a high of 10.1 percent in October of 2009. But it now has experienced back to back increases since it hit 8.9 percent in March.
The auto industry is also a major employer in presidential battleground states like Michigan, Ohio, Indiana and Missouri, all of them important for Obama’s re-election prospects. The industry recovery also gives Obama the opportunity to distinguish himself from Republicans who had criticized the government’s intervention.
Among them was Republican presidential candidate Mitt Romney, who had called for Chrysler and GM to go through bankruptcy without government assistance. Romney on Friday defended his position. "The right process for an enterprise in trouble is not to be given money by the taxpayers in a bailout," he told CBS’s "The Early Show."
Copyright 2011 The Associated Press.
(AP Photo/Michael Conroy, File)
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