DETROIT — President Barack Obama on Friday heralded the recent turnaround for U.S. automakers, arguing that thousands of jobs and increased production vindicate his unpopular decision to bailout the industry.
And that federal funding has “paid off” for Kokomo because some of those jobs have come to the area, said Rich Boruff, president of United Auto Workers Local 685.
With Americans facing a still-limping economy and potentially pivotal congressional elections in three months, Obama is seizing on the positive new trends in the auto industry as evidence of broader economic good news. He launched an intensive campaign to highlight the story as a concrete area of improvement with direct ties to his administration’s actions.
“This industry is growing stronger,” Obama declared from the floor of Chrysler’s Jefferson North plant, which recently added a second shift of production to the tune of about 1,100 jobs. “You are proving the naysayers wrong.”
From here, where the president greeted workers making Jeep Grand Cherokees and sat in a mostly finished model, Obama went to nearby Hamtramck to visit a GM plant planning to assemble the Chevrolet Volt rechargeable electric car. That factory is one of nine the automaker will keep open during the usual two-week summer shutdown.
Taking advantage of a rare opportunity to drive, Obama got behind the wheel of a black Volt, buckled himself in and inched the car slowly forward about 10 feet, before declaring that the ride was “pretty smooth.”
The introduction of the new model of the sport utility vehicle led Chrysler to add a second shift at the Michigan plant. That in turn caused the company to add a shift at its transmission plant in Kokomo to keep up with the demand. The vehicle opened 300 positions in Kokomo.
“We’d probably end up, at best, being a supplier” without the bailout, Boruff said. “How many jobs are in Chrysler now? You’ve got the jobs in Chryser. You’ve got the supplier base. That supports everything we do, right?”
But if any of the 1,100 jobs Obama mentioned in Detroit were to come to Kokomo, it would be several months down the line, he said.
“We didn’t see the number of jobs that were coming that we got,” he said. “Nobody saw the 300 jobs we got that were just coming off the street.”
Obama will continue his automakers tour next week when he visits the Chicago plant where Ford builds the Taurus sedan and plans to assemble a new Explorer SUV. Unlike the other automakers, Ford didn’t receive the government’s financial help. Hoping to ratchet up public notice further, the White House also had the administration’s top auto officials brief reporters Thursday.
Following the government-led bankruptcies of GM and Chrysler, the companies have shown signs of improvement. Obama said that all three U.S. automakers are “operating at a profit, for the first time in six years.”
But the claim that all three Detroit automakers are making money isn’t quite true. GM and Ford are making money, but Chrysler has yet to post a net profit since leaving bankruptcy protection in June of last year.
The company had a first-quarter net loss of $197 million, but it made $143 million before interest and taxes. Chrysler’s last full-year profit was in 2005, when it made $1.8 billion.
Obama said he understands why many in the country were skeptical — or outright opposed — to a massive infusion of cash into the beleaguered industry, and acknowledged that “the politics of it weren’t good.”
“Listen, this was a hard decision,” he said. “I didn’t want government to get into the auto industry — I’ve got enough to do.”
In a report on the status of the auto industry, the White House said failing to intervene would have led to the loss of nearly 1.1 million jobs. The auto industry has added 55,000 jobs in the year since the automotive bankruptcies, making it the strongest year of job growth in the industry since 1999.
• Daniel Human, Kokomo Tribune business reporter, contributed to this report.
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