Transportation’s LaHood says US made a good investment of taxpayer money in the auto industry

Transportation boss lauds US investment in autos

DETROIT — The Obama administration defended last year’s federal bailout of automakers on Monday, pointing to gleaming new vehicles at a major automotive showcase as a sign of the industry’s rebirth.

Transportation Secretary Ray LaHood, speaking at the Detroit auto show, credited the administration’s work to save General Motors, Chrysler and auto lender GMAC Financial Services with about $80 billion in aid, along with the government’s $3 billion Cash for Clunkers program that boosted auto sales.

“This was a good investment of taxpayer dollars in an industry that needed a little bit of an infusion of resources,” LaHood said. He noted that GM had recently repaid the government $1 billion in loans and was showing signs of recovery. “Today is a new beginning.”

LaHood joined House Speaker Nancy Pelosi, D-Calif., more than a dozen lawmakers and other Obama administration officials at the auto show in a sign of support for the industry. The nation’s auto sector has been ravaged by the economic downturn, leading to massive job losses, a sharp decline in auto sales and bankruptcies striking GM and Chrysler and dozens of suppliers.

The lawmakers were taking in displays of new vehicles and green technologies from automakers and meeting with top industry executives. The trip also included meetings with Detroit Mayor Dave Bing and Michigan Gov. Jennifer Granholm, whose state has held the nation’s highest unemployment rate for much of the past four years.

Providing more help, the Energy Department announced $187 million in funding for projects to boost the fuel efficiency of heavy-duty trucks and passenger vehicles. General Motors, Chrysler and Ford Motor Co. were among the beneficiaries.

GM vice chairman Bob Lutz said Sunday that Washington’s interest in the auto industry was welcome after being ignored by U.S. lawmakers for decades while other nation’s backed their carmakers.

He said he had always thought the U.S. “was the only car-producing nation in the world where the administration and the politicians … didn’t know about American car companies, didn’t care about American car companies — none of the politicians drove American cars.”

“It’s like we were the stepchild of the American industry and the American economy,” Lutz said.

“Unfortunately it took the financial failure of the American automobile industry to make the whole country aware of the importance of the American automobile industry,” Lutz said at a Society of Automotive Analysts event.

LaHood said the auto industry was “one of the very strong pillars of our economy. We know as this industry comes back the economy will come back.”

Government leaders took a prominent role on the first day of the North American International Auto Show, a major industry showcase with wall-to-wall vehicle unveilings and thousands of journalists. The government’s influence was apparent — even a local coffee company served “organic bailout blend” in the media lounge.

On the Net:

North American International Auto Show: www.naias.com/