President Barack Obama will be in Detroit on Friday to tout the success of one his administration's more controversial decisions -- the bailouts of General Motors and Chrysler. Both automakers were facing bankruptcy last year when the federal government stepped in and offered $86 billion to help the companies transform themselves into leaner, more competitive operations.
The bailouts have been controversial and have led some to scornfully refer to GM as "government motors." Still, the administration's efforts have helped create 55,000 jobs during the last year, according to a White House report, which also says a million or more jobs would have been lost if the companies were allowed to fail.
The plants Obama is visiting today are emblematic of the revival both GM and Chrysler are seeing, the result of stronger consumer demand for domestic autos. Chrysler's Jefferson North assembly plant on Detroit's east side, which produces the newly revamped Jeep Grand Cherokee, has added a second shift.
No Summer Shutdown This Summer
Chrysler's new lease on life is also attributable to Italy's Fiat, which stepped in and bought a chunk of Chrysler prior to last year's bankruptcy. The merging of the two companies has brought new technology to Chrysler, plant employee Bernie Kitter told NPR. The president's visit has further lifted workers' spirits, says Kitter, who hopes Obama's appearance means the plant has a strong future ahead of it.
The president's second stop will be at a GM assembly plant in Hamtramck, a small working-class city surrounded by Detroit. The Hamtramck facility is one of nine that GM said last month would remain open during the routine summer shutdown to keep up with the pace of demand for its new cars.
The plant is also the site where GM's new Chevrolet Volt electric car (pictured, with Obama in an earlier press event) will be built. The $41,000 vehicle, which can go 40 miles on a single charge of its lithium-ion batteries before the gasoline engine kicks in, will hit dealer showrooms in seven states by year-end. GM intends to produce 10,000 Volts, with plans to expand production to 30,000 in 2012.
Not Yet Recovered
Though the companies and, by extension, Detroit are experiencing a revival, there is evidence aplenty that the industry isn't the job-creating powerhouse it once was. Obama's route to the factories will take him past abandoned warehouses and decayed factories, NPR reported, a reminder of the 334,000 area jobs that were lost in 2008 alone.
Auto sales have improved over last year's record lows, but the administration says it's still too soon to say the U.S. auto industry has recovered. Though a gain of 55,000 may be reason to celebrate, much more work remains to do to restore Detroit's long-lost luster.
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