UPDATE 3-Obama defends record, cites auto success in Ohio

Fri Jun 3, 2011 7:04pm EDT

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By Alister Bull

TOLEDO, Ohio, June 3 (Reuters) - Under pressure from high unemployment, President Barack Obama reminded voters that his 2009 auto bailout saved thousands of jobs during a visit on Friday to Ohio, a state vital to his re-election hopes.

Obama greeted workers and toured a Chrysler plant in Toledo in a campaign-style event several hours after the release of a monthly employment report delivered Americans a stark reminder that the labor market remains weak and joblessness persistently high. [ID:nOAT004818]

The report follows a rash of data signaling the U.S. economy may be losing steam. Obama, a Democrat, must coax the jobless rate down convincingly in order to be confident of securing a second White House term.

Polls show he is still favored over all potential Republican opponents, but the troubled economy remains his biggest weakness.

That vulnerability was underscored by data showing unemployment edged up to 9.1 percent in May from 9.0 percent in April. No U.S. president has been re-elected with an unemployment rate higher than 7.2 percent since Franklin Delano Roosevelt more than 70 years ago.

Speaking at the Ohio plant, Obama did not address the jobs report directly. But he cited high gasoline prices and the economic disruptions from the March earthquake in Japan as "bumps on the road" to economic recovery.

"We know what's possible when we invest in what works," he said, highlighting his support for a U.S. auto industry which has now returned to profitability from the brink of collapse. "Just as we succeeded in retooling this industry for a new age, we've got to rebuild this whole economy for a new age."

Republicans are using the weak economy to attack Obama and Mitt Romney kicked off his second bid for the White House this week by accusing Obama of spending too much and hurting jobs. [ID:nN02249837]

"Today's unemployment numbers show that we are going backwards, and that is the wrong direction for America. President Obama's policies made the recession worse and as a result more people are out of work," Romney said on Friday.

Obama won Ohio by a 4-point margin over challenger John McCain in 2008. But the state went narrowly to Republican President George W. Bush in 2004, and is expected to be highly competitive in 2012.

AUTO INDUSTRY REBOUND

The White House claims credit for the rescue of the auto industry and hopes this success for U.S. manufacturing will warm Obama to blue-collar voters, whose support he needs to win next year.

Obama watched the Chrysler production line as a dashboard unit was fitted into the body of a Jeep, and was thanked by workers for bailing out their company.

"Thank you for paying it back," he told one woman as he greeted her at the end of her shift.

Chrysler repaid the U.S. government $5.9 billion last month, deepening ties with Italian automaker Fiat SpA FIA.MI and highlighting the extent of the U.S. auto industry's recovery since 2009.

The auto industry bailout was initially expected to cost taxpayers $80 billion, but estimates have since shrunk to a small fraction of that.

"Chrysler has repaid every dime and more of what it owes the American taxpayer from the investment we made during my watch," Obama said. "And by the way, you guys repaid it six years ahead of schedule."

The U.S. Treasury Department said on Thursday it reached an agreement to sell its remaining 6 percent equity stake in Chrysler to Fiat in a deal that will net Washington $560 million.

General Motors Co (GM.N) filed for bankruptcy in 2009 but soon emerged from under court protection thanks to Washington's rescue. Its profits are now beating expectations.

Ford Motor Co (F.N) did not take a U.S. government bailout but did receive direct and indirect financial assistance through loans, capital, tax credits and other programs that have aided its strong turnaround.

The administration expects the rescue will end up costing taxpayers around $14 billion, and argues it saved far more money because it safeguarded hundreds of thousands of jobs.

This spared authorities from having to pay billions of dollars in unemployment benefits, as well as forgoing tax revenue. (Editing by Mohammad Zargham and Eric Walsh)

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Comments (7)
Patriot_70 wrote:
I had to laugh when I read this article. I guess people have forgotten that Obama used stilulus money to shut down an engine plant and move the workers to mexico.

Jun 03, 2011 4:25pm EDT  --  Report as abuse
TheCBob wrote:
Also, he brokered a deal to sell Chrysler to Fiat. Saving American jobs by selling American companies to foreign countries? What’s wrong with this picture?
Hooray for Ford! They didn’t take any bailout bucks and managed to increase sells at the same time. Now that’s American!

Jun 03, 2011 4:47pm EDT  --  Report as abuse
ugg wrote:
Obama did not only save the Auto Industry—–He saved your pension fund, my pension fund, he saved our Banking system, the world banking system and many financial instructions that did not deserve to be saved. Why did he save them also? Because we are all stuck together so much, if they went down, we all would have went down. Problem is Republicans will not admit that, it would hurt them politically to admit Obama saved us from a deep Depression. Now they are intentionally doing anything they can to slow the economy to make Obama look as if it is his fault. Remember the Tea Party; they were going to get Republicans elected to the House and Senate because Republicans said with a majority they will create jobs. Oh! You sure can’t believe anything they say.

Jun 03, 2011 4:48pm EDT  --  Report as abuse
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