Obama lauds Ford’s bid to boost auto exports, including 2011 Explorer

Obama, at a Ford plant in Chicago on Thursday, said the automaker’s plan to increase auto exports fits with his aim of doubling sales of American products abroad over the next five years. The plant will produce a more fuel-efficient 2011 Explorer for foreign buyers.

By MARK GUARINO | Staff Writer Christian Science Monitor
posted August 5, 2010 at 7:32 pm EDT

Chicago —  President Obama defended the government bailout of the US auto industry during a visit Thursday to a Ford Motor Co. plant here, noting that his plan to rebuild the US economy by doubling exports over the next five years requires a strong domestic auto industry able to compete for trade in the global marketplace.

Ford’s plant on Chicago’s South Side, which will make cars and trucks to be sold in Canada and Mexico next year, is considered a model effort to boost sales abroad. Ford accepted no government bailout money in 2009, as the US automakers struggled to stay afloat amid the Great Recession, but Mr. Obama Thursday announced the company will receive a $250 million loan guarantee from US Export-Import bank to finance more than 200,000 vehicles.

The production increase means 1,200 new jobs at the plant, which is starting to build a smaller version of the Ford Explorer that is likely to be more appealing to foreign buyers.

Speaking to about 1,700 workers at The Chicago Assembly Plant, a historic Ford factory that dates back to 1924, Obama said job growth in the automotive industry this year should rebut “naysayers in Washington” who criticized the federal government’s intervention in General Motors and Chrysler.

“There were a lot of folks who were ready to write off the American auto industry, who thought we should just have walked away from you.… That’s not how you build a better future,” he said.

Sales for Detroit’s Big Three for the first seven months of 2010 increased compared with the same period last year. GM, Ford, and Chrysler saw sales rise 13, 23, and 11 percent, respectively, according to Automotive News.

The “timing is good” for the three US carmakers to set their sights on boosting sales in emerging markets such as China and the Middle East, says Paul Eisenstein, publisher of TheDetroitBureau.com, which tracks the automotive industry. That would not only diversify their production models, but also give the automakers a buffer against unstable economic conditions at home.

“When you’re building only for the North American market, you’re extremely vulnerable to the ebbs and flows of the market and shifting consumer tastes. If you can create a global market for some of your vehicles, you’re in a better position to help balance the load,” says Mr. Eisenstein.

In his speech Thursday, Obama hailed the new 2011 Explorer, a hybrid crossover, as the type of vehicle that will be popular with foreign carbuyers. Its production is partially a federal effort, as Ford received a $400 million loan from the US Department of Energy to help revamp its South Side facility to produce what is considered a more fuel-efficient vehicle.

Obama credited the new national fuel-efficiency standard as an example of how US carmakers would benefit by making “cars that the world wants to buy.”

“What I said last year was if American automakers were willing to make the tough choices necessary to make them more competitive in the future, America would stand by them.… This was good for consumers, it was good for the environment, and it finally gave our automakers the certainty they needed to plan for the future,” he said.

The push for fuel-efficient models would not have happened without the federal government’s intervention, says Eisenstein.

“All these things are showing a new aggressiveness, a new vision, a new willingness, and an ability to deliver,” he says. “If they continue on the path they are on right now, then there’s no question that we will eventually look back at the bailout as one of the best things that happened.”

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