* Obama reminds voters he saved U.S. auto industry
* Tours auto plant in 2012 battleground state of Ohio
* Obama must cut U.S. jobless rate to secure second term
(Updates with details)
By Alister Bull
TOLEDO, Ohio, June 3 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
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
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.
"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
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
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
(Editing by Mohammad Zargham and Eric Walsh)