Obama: Auto bailout to be repaid

July 30, 2010 http://detnews.com/article/20100730/AUTO01/7300386

Obama: Auto bailout to be repaid

President to promote industry’s success in Detroit factory visits

DAVID SHEPARDSON
Detroit News Washington Bureau

Washington — President Barack Obama said Thursday that taxpayers will be repaid for the $85 billion auto bailout — at least the money his administration infused — as he touted the auto industry’s turnaround.

"We are going to get back all the money that we invested in those car companies," Obama said in an interview broadcast on ABC’s "The View." "You now have all those U.S. companies showing a profit."

White House Press Secretary Robert Gibbs clarified that the president was referring to the $60 billion his administration loaned to the auto industry, not the $25 billion the Bush administration advanced.

The most recent government estimate is that taxpayers will lose $24.3 billion on the bailout of General Motors Co., Chrysler Group LLC and Ally Financial Inc. Treasury Secretary Timothy Geithner said this month he thinks the estimate will decline further. Gibbs has argued that even if taxpayers lose some money on the bailout, the alternative of 1 million or more jobs being lost would have been far worse.

Obama is going to promote the recent success of the domestic automakers in his visits today to Chrysler’s Jefferson North Assembly Plant and GM’s Detroit-Hamtramck Plant. Chrysler has added 1,100 workers at Jefferson North as it started production of the new 2011 Jeep Grand Cherokee, while GM is building its extended-range electric Chevy Volt in Detroit.

The White House released a report Thursday that said the auto industry had added 55,000 jobs in the year ending June 30 and that Detroit’s Big Three will add up to 11,000 jobs by the end of this year. The White House said the auto job growth is the best in the industry since 1999. In 2008, the auto industry shed 400,000 jobs.

The CEOs of Chrysler and GM, Sergio Marchionne and Edward Whitacre Jr. — along with United Auto Workers President Bob King — will give Obama quick tours of both facilities in what is Obama’s first trip to Detroit as president.

The UAW said in a statement that GM will file its paperwork for a public stock offering in mid-August, clearing the way for the government to begin selling off its 61 percent majority stake. GM is also expected to report a second-quarter profit next month.

Obama will be accompanied to Detroit by Transportation Secretary Ray LaHood, auto czar Ron Bloom and auto recovery czar Ed Montgomery.

Bloom said Thursday at a briefing that the government hopes GM will hold a public offering this year, but he declined to say how much the government might sell during its IPO.

"We are not running these companies," Bloom said. "We don’t like having this investment, but we’re not going to sell it at a fire sale."

Many Republicans still oppose the auto bailout funding.

Former Arkansas Gov. and GOP presidential hopeful Mike Huckabee told the Charlotte Observer this month that both Bush and Obama were wrong to tap the $700 billion Troubled Asset Relief Program to fund the auto rescue.

"I think history will prove that it teed up the even greater insanity of the stimulus and the bailouts. As tragic as it would have been (to let GM fail), the greater tragedy is setting up an entitlement mentality where nobody has the risk of failure except the people who pay," Huckabee said.

Previewing a message for today, Obama said on "The View" that the new clean car technology the government is helping to fund will make U.S. companies world leaders.

Obama is expected to be in Michigan less than four hours. Mayor Dave Bing, Gov. Jennifer Granholm and U.S. Rep. Carolyn Cheeks Kilpatrick, D-Detroit, are to greet him at the airport. Both U.S. Sens. Debbie Stabenow and Carl Levin of Michigan are to fly with Obama on Air Force One and take part.

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