Published: April 04, 2009 10:36 pm      

A new beginning for auto industry

U.S. can lead globe in clean-car era

Editor’s note: The White House offered fewer than 12 newspapers the following op-ed by President Obama.

One of the challenges we have confronted since the beginning of this administration is what to do about the state of our struggling auto industry. We simply cannot let our auto industry vanish. This industry is an emblem of America. It is what helped build the middle class and sustained it throughout the 20th century. And it is a source of deep pride for generations of Americans. But we cannot make the survival of our auto industry dependent on an unending flow of tax dollars.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year – only on the condition that they would develop plans to restructure. As I said in my speech early last week, after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. My administration, therefore, is offering GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure.

For GM, that will mean making those much-needed changes that will let them emerge from this crisis a stronger and more competitive company. For Chrysler, that will mean reaching a sound agreement with the international car company Fiat or another company that protects American taxpayers – and if they do, we will consider lending up to $6 billion to help their plan succeed.

To signal America’s commitment to its auto industry and to all who buy American cars, we are also taking an unprecedented step – if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe. In fact, it will be safer than ever because it will be guaranteed by the United States government.

But we must also recognize that the difficulties facing this industry are due in no small part to the weakness in our economy. That is why, to increase auto sales, we will ensure that Recovery Act funds set aside to buy government cars go out as quickly as possible. We will ramp up our efforts to get credit flowing and make car loans available to people who need them. We will provide a new tax benefit for auto purchases made between February 16th and the end of this year – a provision that could save families hundreds of dollars and lead to as many as 100,000 new car sales.

And we will also find ways to increase car sales while modernizing our auto fleet. Such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel efficient cars and purchase cleaner cars, have been successful in boosting auto sales in a number of European countries. I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting immediately.

While the storm that’s hit our auto towns is not a tornado or a hurricane or a flood, the damage is clear, and we must respond. That is why I have appointed former Deputy Labor Secretary Edward Montgomery as the new Director of Recovery for Auto Communities and Workers to cut through red tape and ensure that the full resources of our federal government are leveraged to assist the workers, communities, and regions that rely on our auto industry.

Together with Labor Secretary Solis and my Auto Task Force, Ed will help provide support to autoworkers and their families, and open up opportunity in manufacturing communities. Michigan, Ohio, Indiana, Wisconsin and every other state that relies on the auto industry will have a strong advocate in Ed. He will direct a comprehensive effort that will help lift up the hardest hit areas by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they are needed most. And Ed will also lead an effort to identify new initiatives to help support your communities going forward.

Many of your families have been going through tough times for longer than you would care to remember. And I cannot pretend there isn’t more difficulty to come. But I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be, will mark not an end, but a new beginning – a new beginning for a 21st century American auto industry that is creating new jobs, unleashing new prosperity, and leading the world in designing and building the next generation of clean cars.