Obama Declares Auto Bailout a Success

DETROIT — President Barack Obama on Friday declared the controversial bailout of the U.S. auto industry a success in visits to Detroit auto plants that came weeks before General Motors Co. is expected to take a critical step toward an IPO, reported The Wall Street Journal.

Public and investor support of the U.S. government's $60 billion rescue of GM and Chrysler LLC is important to Detroit auto makers as they prepare to make a return to public markets that will rely on solid sales and Wall Street support.

Also, public support for the bailout is key for the Obama administration, worried that Democrats who supported the unpopular bailout could be ousted in November elections.

The collapse of the companies would have been a "brutal, inevitable shot" to the nation's already struggling economy, Obama said in a speech at a Chrysler truck factory in Detroit. "Today, the industry is growing stronger, it's creating new jobs."

A new White House report released Thursday defends the decision to take ownership stakes in GM and Chrysler, saying the bailout helped avert an economic disaster. The administration said the U.S. auto industry has gained 55,000 jobs after losing 334,000 in the GM and Chrysler bankruptcies.

Ron Bloom, the Obama administration's auto czar, said Friday the latest valuation of the U.S. investment into the auto industry by the Office of Financial Stability stands at $60 billion.

"If we had done nothing, not only were your jobs gone, but supplier jobs were gone and dealership jobs were gone, and the communities that depend on them would have been wiped out," Obama said at the Chrysler plant.

The argument has done little to win over critics of the bailout who see it as a massive overreach of the federal government and a misuse of federal funds.

"The Michigan auto industry still has a long way to go and President Obama's tax, borrow and spend policies will only prolong Detroit's recovery," Republican National Committee spokesman Ryan Tronovitch said. "These policies aren't working."