Obama praises automative resurgence in Michigan

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President Obama speaks at the Ford Michigan Assembly Plant Wednesday about the importance of federal aid in sustaining the auto industry. Buy this photo

By Will Greenberg, Daily News Editor
Published January 7, 2015

WAYNE, Mich. — Ahead of his State of the Union address on Jan. 20, President Barack Obama paired Detroit Lions references with words of optimism for the future in a speech at the Ford Michigan Assembly Plant on Wednesday.

The president used the town’s support for the football team, which was eliminated from the NFL playoffs this past weekend, as a metaphor for the country’s support of Detroit and the automobile industry.

“If there’s one thing that you can take to the bank when talking about Detroit, it’s that Detroit always comes back,” Obama said.

The president focused his attention Wednesday on the auto industry and Detroit’s integral role in it. He split his time between revisiting the decision to bail out General Motors and Chrysler — now Fiat Chrysler Automobiles — and discussing the recent growth in U.S. automobile sales.

Obama spoke of the initially unpopular decision to provide bailout money to GM and Chrysler, two of Detroit’s “Big Three” automotive companies in 2009. He said many feared that if those two went under, the third, Ford — which was not bailed out — could have suffered as well. He noted the importance of providing federal aid along with a strategic plan for recovery while trying to sustain the U.S. auto industry. He said the auto industry needed to “change with the times” and adapt their product and operations moving forward after the recession.

Ford spokeswoman Christin Baker said in a statement to the Daily that the company was proud both to host the president and to contribute to a growing U.S. economy. Ford has added 24,000 jobs since 2011.

Obama also made sure to celebrate Ford and other American auto companies. Speaking at the Ford Michigan Assembly Plant, which has added 1,800 new employees since 2011 to reach over 5,000 now, Obama rallied the crowd while announcing the United States has experienced 57 consecutive months of job growth and 11 million jobs have been added overall during that period. He said growth in manufacturing jobs has played a significant role in reducing Michigan’s unemployment rate, which now sits at 7.1 percent, an improvement from 2010's 14.6 percent.

Additionally, Obama noted that the auto companies have repaid the bailout money in full as of December 2014.

“America’s resurgence is real,” he said. “Don’t let anybody tell you otherwise. We’ve got the best cars and we are doing better than just about anybody else on earth. And now that we’ve got some calmer waters, now that the worst of the crisis is behind us, if we all do our part, if we all pitch in, then we can make sure that this rising tide is actually lifting all the boats.”

The president also noted the cooperation between management and labor, lauding each side’s willingness to make sacrifices during hard times.

“We rejected the false choice that either unions or businesses could succeed but not both,” he said.

Multiple reports show the auto industry on a steady incline. Fiat Chrysler Automobiles US finished the year with a 16-percent increase in sales from 2013 and General Motors’ sales jumped 5 percent from last year. Ford Motor Company saw a 1-percent drop in growth in the year, but had a better December in 2014 than in 2013. On Monday, the Detroit Free Press reported that the auto industry closed 2014 with its fifth consecutive year of growth. The industry sold 16.52 million vehicles, the best performance since 2006.

Additionally, Kelley Blue Book reports show U.S. automobile prices increasing last month, with FCA US increasing 2.3 percent from December 2013, GM up 4 percent and Ford up 3.4 percent.

Don Grimes, a CLMR senior research area specialist for the University’s Institute for Research on Labor, Employment and the Economy, said automobiles are still a “product people want.” He said he expects to see the industry continue to grow — though it is still subject to ups and downs over time.

“They weren’t making a product that was going away — it wasn’t like they were making carriages after they’ve been replaced with the auto industry,” Grimes said. “You were going to get a cyclical rebound and recovery in the auto industry because they were still making products that people still wanted to buy.”

Grimes said a positive sign has been the Big Three stabilizing their market shares, now controlling almost 45 percent of the market after a period of post-recession decline.

In his speech, Obama commended Detroit on Wednesday for its handling of the municipal bankruptcy as a sign of the city’s resilience.

Obama has made several trips to Southeast Michigan during his presidency, including stops in Ann Arbor and Detroit. Obama’s most recent trip to Detroit in November aimed to rally support for Democratic congressional-level and state-level candidates for the 2014 midterm elections. He also emphasized the industry’s resurgence then.

“I don’t have to tell you the auto industry that was on the brink of collapse is back on its feet, making better cars than ever, right here in Michigan,” he said in November. “It’s a testament to the grit and the resilience of American workers.”

Secretary of Labor Thomas Perez spoke briefly before the president arrived Wednesday, and echoed a similar sentiment. Perez said the auto industry wasn’t ready to die when Obama came into office, and Obama didn’t let it happen.

“The future is unquestionably bright because of your guts, your grit, your determination, your stick-to-itiveness, your partnership, your resolve,” he said, speaking to the mostly Ford-employed audience.