It’s Obama’s Auto Industry—But Not For Much Longer
January 20, 2016
President
Barack Obama took to the Detroit auto show today for a victory lap
around the industry his administration saved in the depths of the
financial crisis. There’s no doubt that the American car business today
reflects the goals Obama set seven years ago. Detroit automakers enjoy
record sales and huge profits, while employing more workers and building
more efficient models.The question now is: How long will it last? During
his visit, Obama noted how unpopular his plan was at the time: putting
General Motors and Chrysler through bankruptcy in 2009, merging Chrysler
with Fiat and spending $50 billion to save GM. (All told, the U.S.
government pumped $80 billion into the auto sector and got back roughly
$70 billion).“In
exchange for help we demanded responsibility. The industry retooled and
restructured, everybody sacrificed and everybody put some skin in the
game,” Obama said in his speech at a UAW-GM training center. “I could
not be prouder of this industry and the road we traveled together," When
Obama announced his plans for GM and Chrysler in March 2009, their
futures were in the balance. Both were running entirely on government
loans; the financial crisis had scared every other investor away. While
GM was too big to fail, Obama’s auto task force had an intense argument
over whether it should keep Chrysler open or shut it down, folding the
best parts into GM.Obama
himself chose to keep Chrysler open, pending a deal with Fiat. In
announcing the rescue plans that March, the president said his goal was
“an auto industry that is once more out-competing the world; a 21st
century auto industry that is creating new jobs, unleashing new
prosperity, and manufacturing the fuel-efficient cars and trucks that
will carry us towards an energy-independent future.”“I
am absolutely committed to working with Congress and the auto companies
to meet one goal,” Obama said. “The United States of America will lead
the world in building the next generation of clean cars.”Seven
years later, a fair assessment would say most of those goals have been
met. When he tours the floor of the Detroit auto show today, Obama will
pass by new electric or plug-in hybrid models from each of Detroit’s Big
Three—the Chevrolet Bolt, the Ford Fusion and the new Chrysler Pacifica. All
have made gains toward more efficient vehicles since the 2009
recession, from Ford’s twin-turbo V-6 pickups to Chrysler’s 9-speed
transmissions. GM and Ford will soon report 2015 earnings totals that
come close to or surpass records. Fiat Chrysler, the company the
industry had given up on, now employs roughly 78,000 workers in North
Americ
U.S.
automakers and their suppliers now employ 929,400 workers, a growth of
nearly 50 percent since their lowest point in June 2009. But for all the
success that Obama can tout today, not all of his goals were met.Back
in 2008, Obama vowed to push for 1 million electric and plug-in hybrid
vehicles on American roads by 2015, backed by billion of dollars in
government incentives. The actual total since then: 411,130 as counted by HybridCars.com, less than half the target. Already,
automakers are warning that future fuel economy rules will be tough to
hit as long as oil costs remain near record lows. The EPA estimates that
the average fuel economy of new cars sold in 2015 was flat with the
year before, as trucks and SUVs once again surged over smaller cars and
hybrids; GM’s corporate average fuel economy is expected to decline
year-over-year in 2015 due to a booming pickup business.
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