Obama, on the Road Again, Touts Success of Auto Industry in Indiana

November 24, 2010 - 6:29 AM

Kokomo, Ind. (AP) - President Barack Obama promoted the revival of the U.S. auto industry Tuesday, taking his pitch to the heart of the Rust Belt where a bruising economy has taken its toll on Democrats.

Obama and Vice President Joe Biden toured a rebounding Chrysler transmission plant in this hard-hit industrial city, holding it up as a symbol of the "hope and confidence" of a better economy even while millions are still unemployed and hurting.

"We're coming back," Obama said. "We're on the move."

The visit represents the White House's new focus on showcasing the results behind his administration's politically contentious economic stimulus and the bailouts of Chrysler and General Motors.

The economic message, however, was overshadowed by North Korea's surprise shelling Tuesday of a South Korean island, a provocation that added another complication to Obama's recent foreign policy challenges.

And in a sobering development that underscored the president's economic difficulties, the Federal Reserve lowered its outlook for the economy through 2011, citing worse-than-expected growth.

Obama made sure to embrace a new Commerce Department report that the economy grew slightly faster last summer than first thought, benefiting from stronger spending by U.S. shoppers and improved overseas sales of U.S. goods. He called the news welcome and then promised, "We're going to keep on making it grow faster."

The trip to Kokomo, a city Obama visited during his 2008 presidential campaign, came a week after GM's initial public stock offering, a turnabout sign for the bailed-out automaker.

"We made the decision to stand with you because we had confidence in the American workers, and today we know that was the right decision," the president said.

For Obama, the visit was also a chance to promote the $800 billion economic stimulus he pushed through Congress in the early days of his presidency.

Before touring the plant, Obama stopped at the Kokomo Fire Department, which the White House said was able to rehire nine firefighters with help from stimulus money.

The presidential motorcade also stopped at an elementary school where Obama greeted cheering, screaming children. The Kokomo-Center Township Consolidated School Districts received more than $12 million in stimulus money, the White House said.

"I shook his hand!" one delighted child said.

"I got trampled," said another.

Obama went out of his way Tuesday to engage with the public, an apparent effort to correct what he has said was his failure to explain his policy decisions to Americans.

At one point, he stopped at a small bakery to order pumpkin rolls, apple fritters, cinnamon rolls and doughnuts. The White House says the husband-and-wife owners received a $140,000 loan from the economic stimulus to buy the former doughnut shop. It opened nearly a year ago.

Despite signs of recovery, the economy is growing too slowly to reduce the nation's unemployment, which stands stubbornly at 9.6 percent, and Obama and his fellow Democrats felt the repercussions in this month's midterm elections.

In Indiana, Democrats lost a Senate seat and two House seats and were driven into the minority in the state legislature.

Democrats also suffered major losses in Ohio, Michigan and Illinois -- all states that Obama carried in his 2008 presidential run. Michigan and Ohio elected Republican governors and placed control of the state legislatures in GOP hands. Illinois filled Obama's former Senate seat with a Republican.

Those are signs of the enormous challenge facing Obama over the next two years. Unless the economy shows dramatic improvement, incremental gains such as stabilizing the auto industry or recouping much of the money used to bail out giant financial firms are not big political winners.

"The auto progress not withstanding, it doesn't solve every problem that we've had," senior White House adviser David Axelrod said in an interview Monday. "There's no panacea, no silver bullet. Until we get that momentum going to the point where we can fill in that huge hole the recession created, people are going to be frustrated."

GM has given the administration some bragging rights, at least for now.

The company launched one of the largest initial public offerings in U.S. history last week, more than a year after it was pushed into bankruptcy by the Obama administration and two years after the Bush administration propped it up with billions of dollars in loans. All in all, the taxpayers' stake totaled about $50 billion.

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.

Steve McClellan, a 17-year Chrysler veteran who thanked Obama "for saving our jobs," acknowledged the political price Obama and Democrats paid because of the auto industry bailout.

"He took a whooping on that," he said. "It's very unfortunate."

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Associated Press writer Jim Kuhnhenn in Washington and Rick Callahan in Kokomo, Ind., contributed to this report.