Obama says GM survival essential to U.S. economy

Tuesday, September 15, 2009

Obama says GM survival essential to U.S. economy

Robert Snell / The Detroit News

Warren, Ohio — President Barack Obama visited a General Motors Co. automobile assembly plant Tuesday hard hit by the industry downturn and hailed economic recovery efforts that will put more than 1,000 workers here back on the job next month.

In his first visit to an automobile plant since the November election and since General Motors Co. and Chrysler Group LLC emerged from bankruptcy court, Obama said "automakers are getting back in the game," and defended the government’s $50 billion investment, and ownership stake, in GM.

"We intervened for one simple and compelling reason: Your survival and the success of our economy depended on making sure that we got the U.S. auto industry back on its feet," he told a cheering crowd that included GM President and CEO Fritz Henderson.

"Our belief was that if GM retooled and reinvented itself for the 21st century, it would be good for American workers, good for American manufacturing, and good for America’s economy. I’m pleased to report that’s exactly what’s begun to happen at this plant and at others."

But he cautioned that there is much work to do.

"We’ve got in a deep hole, and it’s going to take some years to get back out of this hole," he said, flanked by pallets stacked with engines and red, white and blue bumpers. "We’ve got a lot of work to do not to just get our communities moving again and get the economy moving again, but to build a stronger foundation."

Still, fears linger in a region with the second-highest rate of unemployment in the state.

Autoworker Jay Tomasic, who returned to work Monday after a seven-month layoff, was among a dozen or so workers who met with Obama for about 20 minutes before the speech and talked with the president about improving worker training, the "cash for clunkers" program and the need to improve the nation’s infrastructure.

He said there is some concern today’s progress could fall apart.

"Everybody’s got that in the back of their mind, that anything could happen," said Tomasic, 31.

Few plants have mirrored GM’s near-death experience like the 43-year-old Lordstown plant, which makes the Chevrolet Cobalt small car, and, until recently, the Pontiac G5.

Thirteen months ago, then-CEO Rick Wagoner and dignitaries attended a splashy event in the plant to announce a third shift and $350 million investment to build the Chevrolet Cruze sedan, which is expected to launch next year and get 40 miles per gallon.

A month later, the auto industry and financial markets collapsed. By January, Lordstown had lost two shifts and about 2,800 workers. The Obama administration in late March forced Wagoner out and pushed GM into filing Chapter 11 bankruptcy.

In April, GM announced it was idling Lordstown for three weeks along with 12 other plants as part of a broad plan to trim 190,000 vehicles from production, shave surplus inventories and align production with demand.

The last 13 months have been unsettling, pipefitter Mike Diamandis, 52, said before the president’s speech. "The bottom fell out," said Diamandis, who has worked at the plant 24 years. "You didn’t know day to day what would happen."

With GM out of bankruptcy and workers returning next month, he is optimistic, pointing to economic indicators showing the recession is easing.

After GM emerged from bankruptcy court July 10, the automaker announced it was adding production at GM’s Orion Township and Lordstown plants, which had been in production four days a week.

GM said last month that a second shift is being called back to work at Lordstown because of increased demand for the Chevrolet Cobalt, which was a big seller during the $3 billion "cash for clunkers" program and to prepare for production of a new, more fuel efficient compact model next year. Cobalt sales were up 14 percent in August from a year ago to 17,393.

John DeBernardo returned to work a month ago to the plant’s trim shop.

During the last 13 months, he has been laid off for 12 weeks straight and endured a rocky schedule that saw him working one week and off the next. He is not worried that the pending return of coworkers and enthusiasm surrounding the Cruze will be broken. "Everybody is really upbeat and positive," the 38-year-old said. "We’ve got a great product coming. And want to make a good launch of it."

Obama told workers he would continue to fight for them and America so they can find good jobs.

"You deserve better than the attitude that’s prevailed in Washington, Wall Street, and sometimes, Detroit for far too long; an attitude that valued wealth over work, selfishness over sacrifice and greed over responsibility," he said.

The workers being recalled include 1,000 hourly workers and 50 salaried. About 150 workers returned Monday.

"I think we’re on the right track and will come back strong," Diamandis said. "It’ll be good to see the parking lot full again. It’s not good when it’s too easy to find a parking spot."

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