Market Overview

Obama Speaks on Auto Industry


President Obama began a bus tour of Ohio and Pennsylvania on Thursday. During the 250 mile “Betting on America” tour, Obama has defended his economic policies and decision to bail out US automakers.

Prior to the tour, the Obama campaign said in a statement that, “The President will also talk with voters in their communities about the choice in this election, whether we want to grow our economy from the middle out, not the top town.”

In a recent ad ran in Ohio, Obama stated, "Mitt Romney's companies were pioneers in outsourcing U.S. jobs to low-wage countries. He supports tax breaks for companies that ship jobs overseas. President Obama believes in insourcing."

The ad also commented on his decision to rescue US automakers General Motors (NYSE: GM) and Chrysler.

Moreover, on Thursday, the Obama administration took another step forward in the United States' trade disputes with China. The President urged the World Trade Organization to stop China's duties on US car exports.

“When the American auto industry was on the brink of collapse, and more than 1 million jobs were on the line, Romney said we should let Detroit go bankrupt, I refuse to turn my back on communities like this one. That Chrysler plant up the road is bringing on another 1100 employees to make the cars that the world wants to buy. The Wrangler built right here in Toledo, just set an all times sale records," said the President in a speech.

The President added, “That is why my administration brought trade cases against China at a faster pace than the previous said administration, and we won those cases. This morning my administration took a new action to hold china accountable for unfair trade practices that harm American automakers.”

Also on Thursday, the Obama administration stated that China imposed $3.3 billion worth of unfair duties on US auto exports. The administration said the Chrysler Jeep Wrangler was one of the unfairly taxed cars. The Jeep Wrangler is made in Ohio, the location of Obama's Thursday tour stop. In Obama's first presidential election, he saw large support from the area.

The Obama administration bailed out Chrysler and General Motors in 2009. Obama has criticized Mitt Romney for stating that he would have let companies go into bankruptcy.

The automotive industry saw June sales increases that beat analyst estimates. Chrysler provided its 27th consecutive monthly year-over-year sales increase, which was 20 percent in June. GM posted a 16 percent year-over-year monthly gain, the company's best month of sales since September of 2008.

Kurt McNeil, General Motors' vice president of U.S. sales, noted, “The combination of new products, available credit, lower fuel prices and modest economic growth was a stronger influence on consumer behavior than economic and political uncertainty.”

Shares of General Motors traded around 0.3 percent lower Thursday.


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