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In Indiana, Obama touts success of auto industry bailout

By Nia-Malika Henderson and William Branigin
Washington Post Staff Writers
Tuesday, November 23, 2010; 4:25 PM

KOKOMO, IND. - President Obama used a visit to a revitalized Chrysler transmission plant here Tuesday to tout the success of his auto industry bailout, saying that all three major U.S. automakers are profitable and growing because his administration made "the right decision" to back them.

"There were those who were prepared to give up on Kokomo and our auto industry," Obama told workers at the Indiana plant, where he said hiring is increasing and Chrysler is investing more than $1.1 billion to boost production. "There were those who said it was going to be too difficult or that it was bad politics or it was throwing good money after bad."

Although those voices were "pretty loud," he said, "we made the decision to stand behind the auto industry . . . . We made the decision to stand with you because we had confidence in the American worker more than anything. And today we know that was the right decision."

Obama said each of the Big Three automakers - General Motors, Ford and Chrysler - has gained market share compared to foreign counterparts for the first time in more than a decade.

"We're coming back. We're on the move. All three American companies are profitable, and they are growing," Obama said to applause. "So here's the lesson: don't bet against America. Don't bet against the American auto industry. Don't bet against American ingenuity. Don't bet against the American worker. Do not bet against us."

In some ways, the president's appearance in this small Midwestern town known as the "city of firsts," where Old Ben, a two-ton bull, still gets bragging rights as the world's biggest stuffed steer, represented a kickoff of the 2012 race for the White House.

The visit by Obama and Vice President Biden was billed by the administration as part of its "White House to Main Street" effort to highlight economic progress and publicize the back-from-the-brink success of the automobile industry.

But with Republicans flexing their newfound power in Washington and gaming out their 2012 prospects, and the White House ready to put top political players back in campaign mode, it was hard not to see this visit as an opening argument for 2012.

As part of the campaign-style visit, Obama and Biden had lunch with firefighters, toured an elementary school, made an unannounced stop at a bakery and greeted people outside a car wash.

In his remarks at the transmission plant, Obama noted a key area of disagreement with Republicans in Washington: a dispute over extending tax cuts for the middle class. Obama said Congress needs to act in the next few weeks to prevent taxes from increasing in January by about $3,000 a year for a typical middle-class family. But he said Republicans also want to extend the tax cuts "for the wealthiest Americans, for millionaires and billionaires," forcing the nation to borrow $700 billion to pay for the cuts over the next decade.

"I don't think we can afford it right now," Obama said. He urged Congress, with its new Republican majority in the House, to approve the extension of tax cuts for the middle class, which he has previously defined as families earning less than $250,000 a year. "The last thing we can afford to do right now is raise taxes on middle-class families," he said.

The speech was attended by some of Indiana's leading Democratic officials, but Republicans generally stayed away.

Mitch Daniels, Indiana's popular Republican governor and a possible White House contender, was not on the tarmac to greet Air Force One when it landed. Instead, he was in downtown Indianapolis unveiling his agenda for the state, which revolves around cutting benefits and balancing the budget without tax hikes.

"Given what's happened in the midterms, I think the eyes of everyone are firmly on 2012, and I look at this visit as trying to repair the damage that was done in the midterms," said Edward Carmines, a political science professor at Indiana University. "The car bailouts and getting out in the country is important, but there's a real electoral angle to this visit."

Carmines said Obama has little chance of winning any states in 2012 that he did not win in 2008. "And of the states he did win, they have to figure out which ones he can retain in 2012, and that's where Indiana comes in."

Obama was the first Democratic presidential candidate to win Indiana's electoral votes in four decades. He won this state by the barest of margins, eking out a stunning victory by racking up a huge victory in Indianapolis and scooping up several border counties.

Tuesday afternoon, however, Obama found a different Indiana. As elsewhere in the country, the GOP is resurgent. Here, the Republicans are led by Daniels, who helped the party gain control of the state legislature and add two House members and a Senate seat to GOP column in Washington.

Election Day exit polls showed deep disapproval of Obama and his economic agenda.

Obama last visited Kokomo in April 2008 for a town hall meeting, at which he made the case for new investments in clean energy, good jobs and manufacturing. Tuesday, he told Kokomo residents that their town - labeled one of "America's Fastest Dying Towns" in 2008 - is in the middle of a stimulus-backed revival.

The town, divided about 50-50 between Republicans and Democrats, received $400 million in stimulus funding that, among other things, helped a revitalized downtown attract several new small businesses. The government-backed auto industry bailouts meant that 400 workers were rehired at a local Chrysler plant.

Unemployment has fallen from a grim 20 percent in 2009 to a still-troubling 12 percent as of September. About 20 percent of Kokomo's residents work in jobs connected to the car industry.

"We've had a lot of challenges over the last few years, and we are being recognized for getting through these times," said Mayor Greg Goodnight, the city's first Democratic mayor in 12 years. "I'm going to give Obama a 'thank you' and tell him he made the right decision with the auto bailouts."

Since the summer, the administration has been trying to make that argument stick, and at least one recent poll shows that people here are starting to believe that the investments were worth it.

In the Midwestern states, where manufacturing remains a driving economic force, the perception of whether the bailouts worked will be critical come 2012, especially among "Hillary Democrats," with whom Obama remains on shaky ground.

"Indiana has a lot of the types of voters for whom the president's appeal is weakest - older whites, especially men, who live in rural areas and small towns and who don't have college degrees," said Marjorie Hershey, a political scientist at Indiana University.

"If the Obama campaign can't placate some of these voters in Indiana, or counterbalance them with with a big turnout of Obama supporters, then he'll have trouble doing so in Pennsylvania, Michigan and Ohio, as well."

Branigin reported from Washington.

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