Obama to Tout Success of Auto Industry Bailouts

President Obama will fly to the United States auto industry’s mecca today on a quest to persuade taxpayers that their bailout investments in Chrysler and General Motors will yield a return.

Approaching a congressional election period where polls reveal a public skeptical of the $84.8-billion bailout and concerned about the economy, President Obama will use Detroit-area Chrysler and GM plants as a backdrop to tout what he calls an industry revival that has preserved over one million jobs.

In a broadcast yesterday, Obama offered a preview of the argument he will make.

“We are going to get all the money back that we invested in those car companies,” the president said on “The View” on ABC. The industry’s recovery “tells a good story” about the recovery of the U.S. economy as a whole, he believes.

Nevertheless, voters don’t seem to see it that way. According to a Bloomberg National Poll conducted on July 9-12, the federal bailout package to car companies is getting less popular—48 percent of respondents said they had less support for the move in recent months, while 17 percent said they had more support.

The previous head of Obama’s automotive task force, Steve Rattner, said that belief is disheartening.

“It appears that those of us behind it haven’t succeeded in convincing people that it’s worked,” Rattner said in an interview.

Today, Ronald Bloom, the senior counselor for manufacturing policy for the administration, said General Motor’s valuation is “right around $60 billion,” which is the amount the administration gave the carmaker.

Hiring Back Workers

Since Chrysler and GM emerged from bankruptcy over one year ago, the auto industry—including Ford, which did not accept federal assistance—has hired back 55,000 workers after letting go 334,000 during the prior year.

“If we hadn’t stepped in when we did, most observers believe at least a million jobs would have been lost,” said Bloom.

All three U.S. automakers posted a profit for the first quarter of 2010, which is the first time since 2004 that has happened. Moreover, GM is ready to go forward with an initial public offering this year, and Chrysler CEO Sergio Marchionne has predicted that his company will do the same in 2011.

“We're hopeful that General Motors can go public later this year, and we're hopeful that after that we'll be able to move our shares out,” said Bloom in an interview today. “At this moment we think things are going well.”