President Barack Obama said in an interview broadcast today that the U.S. government will recover taxpayer money spent to bail out the auto industry.
The auto industry “tells a good story” of how the United States is rebounding from the worst recession since the 1930s, Obama said during an appearance on the ABC daytime program "The View."
The program was taped Wednesday in New York.
In exchange for U.S. bailout money that reached $85 billion, the auto industry has been restructured, and “you now have all those auto companies showing a profit," Obama said.
“They've re-hired 55,000 workers,” he said. “We are going to get all the money back that we invested.” Many voters don’t see it that way now. A Bloomberg National Poll conducted July 9-12 shows the federal assistance package to automobile companies is becoming less popular: 48 percent say they had become less supportive in recent months versus 17 percent who say they have become more supportive.
Steve Rattner, the former head of president’s automotive task force, said that perception is disappointing.
“It appears that those of us behind it haven’t succeeded in convincing people that it’s worked,” he said in an interview.
To tout the auto industry's recovery, the president is scheduled to visit General Motors Co. and Chrysler Group LLC auto plants in Michigan on Friday.
"That progress is significant, but we've still got a long way to go before we're all the way back," Obama said. "And the best thing is we're now creating an entirely new clean energy, clean car technology around advanced batteries and whatnot that will make us a world leader,” he added.
The White House issued a 5-page report on the state of the auto industry on Thursday.
"In the year before GM and Chrysler emerged from bankruptcy, the auto industry shed 334,000 jobs," the report said, citing the Bureau of Labor Statistics. "In the year since, auto industry employment has increased by 55,000 jobs. This is the fastest year-over-year growth in auto employment since 1999."
The White House also credited the Treasury Department's Automotive
Supplier Support Program for stabilizing the battered automotive parts and supply industry.
"After experiencing 54 bankruptcies in early 2009, bankruptcy filings have largely subsided since October 2009," the 5-page report said. "Based on industry surveys, only 10 percent of suppliers are in violation of their debt covenants."
The $5 billion supplier support program was terminated in early April.
The most recent government estimate is that U.S. taxpayers will lose $24.3 billion on the bailout of GM, Chrysler and Ally Financial Inc.
Treasury Secretary Timothy Geithner said this month he thinks that estimate will decline further.
The new report issued today also said the prospect of taxpayer repayment and a faster-than-anticipated exit from government involvement in the industry has improved.
The Obama administration pumped about $60 billion into the automakers, finance companies and the program for ailing automotive parts makers.
The Bush administration initially loaned GM and Chrysler $17.4 billion in December 2008 to keep the automakers afloat until the Obama administration could create a restructuring plan. In addition, the Bush White House pumped nearly $6 billion into auto and mortgage finance company GMAC, now Ally Financial.
GM and Chrysler were also quickly ushered in and out of bankruptcy under the Obama administration's turnaround.
GM plans an initial public offering by year-end. The stock sale will be the first step toward undoing the government's 60.8 percent stake in the automaker.
Chrysler, now controlled by Italy's Fiat SpA, does not anticipate going public until 2011. The U.S. government owns 9.9 percent of Chrysler.
GM has paid back $7.7 billion in loans and interest, including a $6.7 billion payment in April, on the $50.7 billion spent on its rescue, while Chrysler has returned $2.5 billion of the $12.5 billion it was granted under the government's bailout.
In May, Chrysler Financial repaid $1.9 billion to the Treasury that was made available through the Trouble Asset Relief Program. In addition, Chrysler Financial has already fully repaid the $1.5 billion TARP loan that it received to support auto financing.
Reuters and Bloomberg News contributed to this report