McCain backs tax credits for GM Volt, others

By Steve Holland

WARREN, Michigan (Reuters) - Republican White House hopeful John McCain told embattled GM employees on Friday he backs their development of an electric car and said Americans should be able to receive $5,000 tax credits to buy them.

Battered by a deepening slump in sales and concerns about whether it can ride out an economic downturn, General Motors Corp. is counting on the Volt to break its reliance on gas-guzzling vehicles at a time when truck sales are tumbling and fuel prices are near record levels.

McCain celebrated the electric plug-in Volt during a visit to the GM Technical Center, which employs 17,000 people, in the presidential election battleground state of Michigan.

He said it could represent the answer to U.S. dependence on foreign oil as well as energize the country's devastated manufacturing base, adding: "The old jobs are not coming back."

"The eyes of the world are now on the Volt," McCain told GM employees gathered around him in a campaign town hall meeting.

He called the Volt, expected to roll off the assembly line in 2010, a "key and vital and integral part of our ability to break our dependence on foreign oil."

McCain's rival in the November election, Democratic candidate Barack Obama, also said on Friday that he supports consumer tax incentives for fuel-efficient cars. In a letter to the United Auto Workers, Obama touted tax credits and loan guarantees for auto companies to help them overhaul their plants.

"We need to make sure our automakers are ready to build these next generation of vehicles right here in the United States," Obama said.