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Obama Uses Union Event to Hit Republicans on Auto Bailout

Photographer: Chip Somodevilla/Getty Images

President Obama with United Auto Workers' executive board during their National Community Action Program Legislative Conference on Feb. 28, 2012 in Washington. Close

President Obama with United Auto Workers' executive board during their National... Read More

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Photographer: Chip Somodevilla/Getty Images

President Obama with United Auto Workers' executive board during their National Community Action Program Legislative Conference on Feb. 28, 2012 in Washington.

President Barack Obama previewed a theme for his re-election campaign to a union gathering in Washington, saying the Republican presidential candidates would have left the auto industry and its workers “hung out to dry.”

Obama spoke to the United Auto Workers on the same day the Republican candidates, all of whom criticized the government rescues of General Motors Co. (GM) and Chrysler Group LLC, are competing in a primary in Michigan, home of the U.S. auto industry.

Without naming any of his potential rivals, Obama ridiculed their stance and quoted a statement made by Mitt Romney in a Nov. 19, 2008, New York Times op-ed article. He said the success of the bailout has them trying to “completely rewrite history.”

“The same folks who said if we went forward with our plan to rescue Detroit, ‘you can kiss the American automotive industry goodbye,’’ Obama said at the UAW’s annual legislative conference. ‘‘Now they’re saying we were right all along.”

Obama’s political advisers have said the campaign will highlight his decision to intervene in the auto industry and provide billions of dollars government financing at the outset of his term. While unpopular at the time, and contested within his administration, the intervention has allowed Chrysler and GM to return to profitability and restore thousands of jobs.

GM last month reported a record $9.19 billion in net income for 2011 as sales rose 7.6 percent last year to 9.03 million vehicles. Chrysler reported a 42 percent increase in car and truck deliveries compared with a year earlier.

Economic Benefits

The result has been a boom for the economies in the electoral swing states of Michigan and Ohio, as well as Indiana. All three have improved faster than that of the U.S. since April 2009 when GM and Chrysler were forced into U.S.-backed bankruptcies as part of an $80-billion bailout, according to the Philadelphia Federal Reserve. Michigan is expected to lead all 50 states over the next six months, the Fed data show.

The three states also ranked among the top eight performers for improvement of economic health in the Bloomberg Economic Evaluation of States from the third quarter of 2009 through the third quarter of last year.

Political Impact

Obama won all three states in 2008 and the job increases may help him in November. The auto bailout story also fits in Obama’s broader campaign argument that while the recovery from the worst recession in seven decades has been sluggish, his administration’s actions prevented the U.S. from sliding into a depression.

The Conference Board’s index of U.S. consumer confidence rose in February to the highest level in a year and more that forecast, the New York-based private research group reported today. A drop in firings, bigger payroll growth and higher stock prices are supporting consumer sentiment and may spur the spending accounting for about 70 percent of the economy.

Obama also seeking to portray himself as aligned with the interest of middle-income Americans in seeking what he’s called economic fairness.

He said autoworkers made sacrifices under the rescue plan, including reductions in health-care benefits they had earned, fewer hours and wages.

“They’re out there talking about you like you’re some special interest that needs to be beaten down,” Obama said. “Since when are hardworking men and women -- who are putting in a hard day’s work every day -- since when are they special interests?”

Democratic Constituency

Unions are a traditional Democratic constituency, providing support with campaign spending and volunteers. The UAW reported $4.8 million in independent expenditures to help elect Obama in 2008, according to the Federal Election Commission. That was second among labor unions to Service Employees International Union and its locals, which spent $33 million.

While not billed as a political event, Obama was greeted as he walked on stage by chants of “four more years” from the 1,700 people in attendance.

Founded in 1935, the UAW claims 390,000 members and another 600,000 retired members in the U.S., Canada and Puerto Rico. It represents workers at 1,700 employers, according to the union’s website.

To contact the reporters on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net; Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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