Obama says government’s aid to U.S. automakers “paid off” in saving the industry

Article by Christian Andrei, on October 17, 2011

President Barack Obama visited General Motors Co.’s Orion assembly plant together with South Korean President Lee Myung-bak to showcase a free trade agreement that the Congress approved this week. Obama also moved to defend a federal "investment" that assisted GM and Chrysler LLC to reorganize under bankruptcy in 2009.

Obama told GM workers there that the government's aid to U.S. car companies "paid off" in rescuing the U.S. automotive industry and in adding jobs. He went on to add that the cars that are being assembled at this plant are “a testimony to the American spirit."

Meanwhile, Lee assured workers at the plant that the free trade agreement doesn’t mean that jobs will move overseas and that instead, jobs will be created for them and their families. This deal gives a wider access to GM, Ford Motor Co. and Chrysler Group LLC into the Korean market while guarding the U.S. industry against a flood of imports from Hyundai Motor Co. and Kia Motors Corp.

The congressional approval of the deal on Oct. 12 is a significant event for Obama since it resolved a four-year-old issue. Obama will be up for-reelection in 2012 and points against him include unemployment being fixed at 9.1% nationwide and 11.2% in Michigan. It also marks the rare coming together of bipartisan groups on a deal that raises the prospects of new jobs in a beat-up industry.

Matt Grossmann, assistant professor of political science at Michigan State University in East Lansing, said that there have been plenty of policies that have aided the auto industry, including the GM-Chrysler bankruptcy bailout and the electric-car battery plants. [source: Bloomberg]

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