President Obama's visit to a Ford plant in Chicago Thursday touting the turnaround in the auto industry raises questions about who gets the credit for the company's recent good news, especially because Ford did not take federal bailout money. Ford has had five straight months of profits and it recently announced it would be adding 27 percent more jobs than originally planned.
The White House says the bailout helped Ford parts suppliers and that the "cash for clunkers" program was a big benefit to Ford. But analysts say Ford's remarkable comeback is because Ford had "better ideas" than the other two big auto makers.
Speaking at a Ford plant Thursday in Chicago, President Obama praised the auto company which was able to "weather" the economic storm "with no financial assistance." Ford did not ask for, nor did it receive, any part of the controversial $60-billion dollar taxpayer bailout given to Chrysler and General Motors in 2009.
Still, the President argued that Ford would have been hurt, if his administration and taxpayers had not bailed out the other two. He said, "if your competitors had gone down, they would have taken down a whole bunch of the suppliers you depend on. The brand of American autos would have diminished. That would have had severe consequences for Ford. And that's the challenge we faced when I took office: an industry that was on the brink."
In an interview with CNBC after the Ford assembly plant event, Mr. Obama insisted taxpayers will be repaid in full for the bailout given to Ford competitor General Motors. "We expect taxpayers will get back all the money my administration has invested in GM," Obama said. "Over time, that is going to be extraordarinarly significant. It means we stood up this industry and you know what, we got a return."
Last week the president traveled to Michigan to tout the fact both GM and Chrysler are profitable for the first time in six years and that the industry as a whole has hired 55,000 workers after losing about 400,000 jobs since 2008. Ford posted a $2.6-billion dollar profit for the second quarter, and the plant here in Chicago where the president spoke, built in 1924 to manufacture Model-T cars, will be adding 1200 new jobs to build the more energy-efficient 2011 Ford Explorer.
Republicans chided the president for coming to Ford, the last of his visits to the Big Three automakers, since Ford did not accept any bailout money. The Republican National Committee put out a statement saying, "Desperate to claim economic victory, Obama visits a Ford Plant to tout success he had nothing to do with."
But the Obama administration counters that $400-million dollars in loan guarantees by the Energy Department - to help Ford build more fuel efficient vehicles -contributed to the company's stronger economic position.
Of course, despite Ford's success, the company is still weighted down by debt - $27.3 billion. That number is staggering when compared to General Motors Co - $8.4 billion and Chrysler Group LLC - $8.3 billion. But again, GM and Chrysler accepted the government bailout, whereas Ford took out massive loans over the last few years to keep the company afloat during the industry downturn.
Nonetheless, Ford Motor Company Chief Executive Officer Alan Mulally says the right decision was made for Ford. "I don't think we really are disadvantaged, because people ask us about the debt," Mulally said in a recent interview with Fox News. "Because clearly when GM and Chrysler went through bankruptcy, that they shed a lot of their debt. Well, we took on the loans to transform Ford, and now, as we're profitable and generating free cash flow, we're actually paying back the loans, which is fantastic. And the good will for us not taking precious taxpayer money and actually running a healthy business and creating products that people want, I wouldn't trade our position."
Fox News' Anne McGinn contributed to this report.