Bloomberg News

Obama Says GM, Chrysler Growth Not Enough to Lessen Pain at Pump

March 03, 2012

President Barack Obama said the U.S. auto industry’s resurgence and new fuel-efficient vehicles “will make a difference” in checking rising gas prices, though “it won’t solve everything.”

In his weekly address today on the radio and the Internet, Obama said his administration’s rescue of the U.S. auto industry saved the jobs of more than 1 million people and helped the auto industry add more than 200,000 new jobs over the past 2 1/2 years.

“They’re not just building cars again; they’re building better cars,” the president said, noting that General Motors Co. (GM) is again the world’s No. 1 automaker. He said U.S. auto companies are manufacturing cars that will average almost 55 miles per gallon in the coming years. “That means folks will be able to fill up every two weeks instead of every week, saving the typical family more than $8,000 at the pump over time.”

Obama has been riding a wave of positive economic news as homebuilding and car sales have improved and jobless claims have declined. While the numbers beat forecasts, indicating the recovery is gaining steam, gas prices are rising -- driven up in part by increased tensions over Iran’s nuclear program -- and are a source of concern for the administration.

The president repeated his call for an “all-of-the-above” energy strategy to focus on domestic gas production and developing clean energy sources. Since he took office, Obama said, U.S. dependence on foreign oil has declined in part because of increased domestic oil production.

Ending Subsidies

He asked listeners to contact their representatives and ask them to end $4 billion in subsidies to the oil industry.

“I don’t think oil companies need more corporate welfare,” he said.

Gasoline for April delivery fell 7.96 cents, or 2.4 percent, to settle at $3.2721 a gallon on the New York Mercantile Exchange. Prices rose a fourth straight week, gaining 3.8 percent. Gasoline is up 22 percent this year.

Demand has fallen as prices at the pump are rising. Regular gasoline at the pump, averaged nationwide, rose 0.3 cent to $3.741 a gallon on March 1, according to AAA data. Prices have increased 14 percent this year, and are 10 percent higher than a year earlier.

GM in January reported a record $9.19 billion in net income for 2011 as sales rose 7.6 percent last year to 9.03 million vehicles. Chrysler Group LLC said March 1 that car and truck sales increased 40 percent in February compared with a year earlier.

Auto Bailout

On Feb. 28 the president gave an impassioned speech to the United Auto Workers annual legislative conference in Washington on the same day as the Michigan primary, home of the U.S. auto industry. Without naming the candidates, Obama said Republican presidential contenders who rejected the auto bailout would have let the auto industry die.

In today’s Republican radio address, Representative Doc Hastings of Washington, chairman of the House Natural Resources Committee, said “rising gas prices are a huge drain on our economy” and, like the president, he said members of his party are pursuing an “all-of-the-above” energy strategy.

“Though the president now claims to support ‘all-of-the- above,’ he has consistently blocked American energy production,” Hastings said, citing the president’s rejection of TransCanada Corp’s (TRP) Keystone XL pipeline, which would carry oil from Canada to U.S. Gulf Coast refineries. Hastings said former Democratic President Bill Clinton supports the pipeline as does Obama’s jobs council.

Depending on Foreign Oil

Republicans say the pipeline would create jobs and lessen U.S. dependence on foreign oil, while opponents say it will harm the environment. Hastings said Obama also has restricted drilling in other offshore locations and his administration has proposed regulations that would hurt other domestic sources of energy.

Hastings praised the Republican-controlled U.S. House for passing legislation to reduce government regulations on energy sources; open more drilling offshore and in 3 percent of the land in the Arctic National Wildlife Refuge; require the approval of the Keystone pipeline; and to spur energy development leases.

“We hope the president will live up to his rhetoric,” Hastings said. “Hardworking taxpayers can’t wait to have the pain at the pump addressed.”

To contact the reporter on this story: Kate Andersen Brower at Kandersen7@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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