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Updated: 7:57 p.m. Friday, June 3, 2011 | Posted: 7:45 p.m. Friday, June 3, 2011

Bailing out GM, Chrysler kept auto industry alive, senator says

During visit to Chrysler facility in Toledo, Obama emphasizes industry is paying back its debts.

By Thomas Gnau

Staff Writer

Bailing out General Motors and Chrysler saved thousands of jobs nationally, Sen. Sherrod Brown and an Obama administration official said this week ahead of Obama’s visit Friday to a Chrysler facility in Toledo.

The president focused on the turnaround in the auto industry and how the government has recouped much more money than anticipated from the capital it sunk into Chrysler and General Motors two years ago to save them from collapse.

If he wanted validation, he got it from Chrysler employees. “Thank you for bailing out Chrysler,” a woman told him as he shook workers’ hands at the plant’s exit turnstile during a shift change. “Thanks for helping me keep my job,” added another.

Recently GM, Chrysler and Ford have been reporting significant increases in sales, although the industry this week reported a falloff in May.

“This industry is back on its feet, repaying its debts, gaining ground,” Obama told Chrysler workers. “Because of you we can once again say the best cars in the world are built right here in the U.S. of A.”

If the federal government had not engineered the $62 billion bailout of GM and Chrysler, “It’s clear we would have been in a depression in Ohio,” Brown said in a conference call with reporters, joined by Brian Deese, an assistant to Obama on the auto industry.

Brown’s office pointed to several Dayton-area suppliers to the Chevrolet Cruze in GM’s Lordstown, Ohio, plant in a bid to show the difference the bailout made.

The local suppliers include Delphi in Vandalia, which supplies harnesses and cables; Tenneco in Kettering, which supplies strut assemblies; Pioneer Electronics in Springboro, which supplies speakers; DTI Molded Products in Sidney, which supplies trim assemblies; and AK Steel in Middletown, which supplies steel coils. Inteva Products, which has a design center in Vandalia, also contributes the instrument panel to the Cruze.

Delphi and Tenneco have a combined 590 local employees. Inteva has about 150 employees in Vandalia. AK has about 1,700 hourly workers in Middletown.

The Republican National Committee on Friday wasted no time sending out a press release titled “Noticeable Omission,” tweaking Obama for failing to address the latest unemployment report that showed the jobless rate rose last month.

Matt Mayer, president of the conservative-leaning Buckeye Institute, challenged the idea that a one-time government bailout will steady the auto industry forever. Reduced labor costs for GM and Chrysler may make those companies more competitive with Toyota, but not necessarily with some of the newer nameplates, such as Hyundai.

“Where’s the track record of government bailouts being ultimately successful?” he said.

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