PRESIDENT Barack Obama took to the Detroit auto show today for a victory lap around the industry his administration saved in the depths of the financial crisis. There’s no doubt that the American car business today reflects the goals Obama set seven years ago. Detroit automakers enjoy record sales and huge profits, while employing more workers and building more efficient models. Yahoo report.
The question now is: How long will it last?
During his visit, Obama noted how unpopular his plan was at the time: putting General Motors and Chrysler through bankruptcy in 2009, merging Chrysler with Fiat and spending $50 billion to save GM. (All told, the U.S. government pumped $80 billion into the auto sector and got back roughly $70 billion).
“In exchange for help we demanded responsibility. The industry retooled and restructured, everybody sacrificed and everybody put some skin in the game,” Obama said in his speech at a UAW-GM training center. “I could not be prouder of this industry and the road we traveled together,”
When Obama announced his plans for GM and Chrysler in March 2009, their futures were in the balance. Both were running entirely on government loans; the financial crisis had scared every other investor away. While GM was too big to fail, Obama’s auto task force had an intense argument over whether it should keep Chrysler open or shut it down, folding the best parts into GM.
Obama himself chose to keep Chrysler open, pending a deal with Fiat. In announcing the rescue plans that March, the president said his goal was “an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future.”
“I am absolutely committed to working with Congress and the auto companies to meet one goal,” Obama said. “The United States of America will lead the world in building the next generation of clean cars.”
Seven years later, a fair assessment would say most of those goals have been met. When he tours the floor of the Detroit auto show today, Obama will pass by new electric or plug-in hybrid models from each of Detroit’s Big Three—the Chevrolet Bolt, the Ford Fusion and the new Chrysler Pacifica.
U.S. automakers and their suppliers now employ 929,400 workers, a growth of nearly 50 percent since their lowest point in June 2009. But for all the success that Obama can tout today, not all of his goals were met.
Back in 2008, Obama vowed to push for 1 million electric and plug-in hybrid vehicles on American roads by 2015, backed by billion of dollars in government incentives. The actual total: roughly 400,000, less than half the target.
Already, automakers are warning that future fuel economy rules will be tough to hit as long as oil costs remain near record lows. The EPA estimates that the average fuel economy of new cars sold in 2015 was flat with the year before, as trucks and SUVs once again surged over smaller cars and hybrids; GM’s corporate average fuel economy is expected to decline year-over-year in 2015 due to a booming pickup business.