Biden: U.S. Automakers Will Thrive Despite Economy
TOLEDO, Ohio (AP) — Vice President Joe Biden said Monday that U.S. automakers will thrive in the coming years despite the economic challenges still facing the industry.
Addressing auto workers, Biden painted a rosy picture of an industry that only a year ago was facing questions about whether it could survive and still is struggling to sell cars and other vehicles.
"Don't believe those who will say this is temporary," Biden said at a Chrysler assembly plant less than a week after General Motors announced plans to return to the stock market this year.
During a tour of the plant, Biden said he was pleased that GM plans to return to the stock market some time this year. But he was less confident that the government will end its ownership of the automaker any time soon.
"I don't know if we can totally get out of GM," he said when asked whether the government would be able to get rid of its stake of GM this year.
He later said that he had no idea how much money the government will get back this year. "I don't know what the number will be, but it's a big number," he said.
The U.S. government now owns about 61 percent of GM, which it got in exchange for giving the company $50 billion in survival aid last year. GM has repaid $6.7 billion.
GM is eager to see its initial public offering reduce the government stake in the automaker because it has said government ownership has hurt GM's public image and sales.
Chrysler Group LLC CEO Sergio Marchionne said Monday that the company will pay back its governments loans within four years. The automaker received about $15 billion in government help and was placed under control of Italian automaker Fiat as part of its bankruptcy. The company has repaid about half of the $4 billion loan portion of its aid and is considering a public stock offering sometime in 2011.
"I'm satisfied," Marchionne said. "We're ahead of the plan."
He cautioned, though, it would be difficult to show a net profit this year.
Chrysler has made strides in the past year, lowering its losses and increasing demand for its cars after emerging from bankruptcy protection. But the automaker still needs to show it can make a profit and pay off government loans.
Chrysler said earlier this month it had a second-quarter loss of $172 million, a $25 million improvement from the first quarter.
"We've got faith in you," Biden told a worker on the Jeep Wrangler assembly line.
He told the workers that letting the industry fail a year ago would have crippled not only the automakers but also parts suppliers that employ more than 420,000 people nationwide.
"What people fail to understand about the industry is that it's not just not the jobs here," Biden said. "It's the guy making the steel, it's the guy making the rubber."