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.

By MARK GUARINO | Staff Writer Christian Science Monitor

posted June 4, 2011 at 1:51 pm EDT

Chicago – 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.

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.

While overall unit sales are up from the previous year, GM and Ford reported losses in May, which were blamed on gas prices that rose to just under $4 a gallon. GM sales dropped 1.2 percent from the same month the previous year, while Ford sales fell 2.6 percent.

Speaking from a Chrysler plant in Toledo, Ohio, Obama admitted “there will be bumps on the road to recovery” such as “high gas prices, the earthquake in Japan, and unease about the European fiscal situation.”

His address arrives one day after the US Labor Department reported that the economy added just 54,000 jobs in May and the unemployment rate rose to 9.1 percent.

Federal government obstruction was the subject of the weekly Republican address, given by US Sen. Lamar Alexander of Tennessee, who criticized the Obama administration for promoting policies that limit job creation.

Much of his speech focused on the National Labor Relations Board which he said moved to stop the Boeing Company from operating a non-union plant in South Carolina because the state is a “right to work” state, which does not require workers to join a union or pay union dues.

Sen. Alexander said such restrictive measures will prevent foreign companies from expanding into both union and non-union states and further drive jobs over the border.

“Our goal should be to make it easier and cheaper to create private-sector jobs in this country,” he said. “Giving workers the right to join or not to join a union helps to create a competitive environment in which more manufacturers like Nissan and Boeing can make here what they sell here.”

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