Oct 01, 2010 Brian Bradley
The outcome of November's mid-term elections (the Republicans gained control of the house and weakened the Democrats majority in the Senate) has changed the prospects for a variety of economical aspects, including those of the auto industry. Thus the new Republican majority in the House will investigate and try to block Obama's administration initiatives considered detrimental to the auto industry. Initiatives like safety legislation, the new consumer finance agency's regulations, fuel economy proposals and the EPA's new ethanol standard. Lobbyists are glad Republicans will rule as the House oversees the new Consumer Financial Protection Agency chief, Harvard law professor Elizabeth Warren. Also the president of the Association of International Automobile Manufacturers, Michael Stanton, said that the U.S. Transportation Department is likely to take some of the bill's technology provisions such as new standards for brake-override systems and black-box crash data recorders, and issue proposals on which automakers will have input.
On the other hand, it seems that the auto industry is providing President Barack Obama a good news story: automakers are making money, plants are hiring and the taxpayers' stake in General Motors is dwindling. Last month, Obama joined Vice President Joe Biden in his first domestic trip since the November 2 elections, at a Chrysler auto plant in Kokomo, Indiana. For the president, this trip was a chance to respond to his bailout critics, but also to promote the $800 billion economic stimulus he pushed through Congress in the early days of his presidency. The Chrysler bailout helped keep the company's Kokomo transmission plant open. The Kokomo area also benefited from about $400 million in stimulus money, including an $89 million Energy Department grant to help Delphi Automotive Systems develop electronic components for hybrid vehicles. Declared one of "America’s fastest-dying towns" by Forbes magazine in 2008, Kokomo hit bottom in June 2009 when unemployment in that midsize city in north-central Indiana reached 20.4 percent. Unemployment is still higher than the national average, but it dropped by nearly 8 percentage points to 12.7 percent in September. According to the Center for Automotive Research in Ann Arbor, the steps taken by the Obama Administration to aid General Motors, Chrysler, Ford and other automakers saved the jobs of more than 1.4 million Americans in 2009, and another 314,400 in 2010. Additionally, these steps prevented "personal income losses totaling $71.9 billion for 2009 and $24.6 billion for 2010." GM launched one of the largest initial public offerings in U.S. history last month, more than a year after it was pushed into bankruptcy by the Obama administration. General Motors received, last year, a $49.5 billion taxpayer bailout and, this year, has returned to the U.S. stock market at $33.00 a share. The treasury made 11.7 billion from GM stocks and it is reported to have been a great success. Chrysler will be investing $1.1 billion in order to boost production nationwide. Obama said: "We made a great decision to stand behind the auto industry". And he added: "We've still got a long road ahead and a lot of work to do to rebuild this economy. We are finally beginning to see some of these tough decisions that we made in the midst of crisis pay off."