Washington — The White House confirmed Monday that President Barack Obama will visit Ford Motor Co.’s Michigan Assembly plant on Wednesday — a factory that is closed this week because of lagging demand for its small gasoline-powered and hybrid cars.
The visit — Obama’s ninth to a U.S. auto factory since taking office and 14th trip to Michigan — is expected to herald the dramatic turnaround of the U.S. auto industry. Automakers sold about 16.5 million vehicles in 2014 — the best annual sales performance since 2006 — as U.S. auto production topped 11 million for the first time since 2005.
The White House said Obama’s speech will highlight “the workers in the resurgent American automotive and manufacturing sector now that the auto rescue has been completed and the decision to save the auto industry and the over one million jobs that went with it.”
Obama will land Wednesday afternoon at Detroit Metropolitan Airport and travel to the Ford plant about 11 miles away. He is scheduled to be on the ground in the state for less than two hours before flying to Phoenix.
Automakers and dealers have added more than 400,000 jobs since the industry hit bottom in June 2009.
But the Wayne factory that employs about 5,100 and makes the Focus gas-powered car and C-Max hybrid gasoline-electric car is shuttered this week because of falling demand caused in part by plummeting fuel prices. Autoworkers on temporary layoff get most of their pay. Oil prices fell Monday below $50 a barrel on the New York Mercantile Exchange for the first time since April 2009, while Michigan gasoline averaged $1.91 a gallon Monday, according to AAA Michigan.
In December, General Motors Co. said it would be forced to lay off 610 workers this year at two Michigan factories because of lagging demand for small cars. Edmunds.com auto analyst Jessica Caldwell said the percentage of SUVs and pickup trucks sold in December was the highest since December 2005 as cars accounted for 44.8 percent of light vehicle sales.
Ford said Monday that U.S. Focus sales declined 6.4 percent in 2014 to 219,634, and C-Max hybrid and plug-in hybrid sales are down 21.6 percent to 27,595. In December, Focus sales fell 4.4 percent from a year ago, and C-Max dipped 3.3 percent.
The Michigan Assembly plant is traditionally down for about two weeks around Christmas but is adding another down week this week to manage “capacity,” Ford spokeswoman Kristina Adamski said Monday. Small car sales are typically slow in the winter, and low gas prices are also driving down demand.
“We are seeing buying decisions swaying more toward SUVs,” she said. “Dealers don’t need the (small car) inventory” now, she added.
Ford made the decision to close the plant to reduce supply of small cars before the White House approached the company about holding an event. The company told White House officials the plant would be closed when they inquired about holding the event.
Environmentalists and the Obama administration insisted during the recession and bailout debate that the domestic auto industry needed to build more and better small and alternative-energy cars and trucks. Detroit’s Big Three automakers suffered because they had a lack of small fuel efficient cars when gasoline prices rose sharply in 2007 and 2008. U.S. domestic automakers have dramatically improved the sales and performance of small cars during and after the federal bailout and government retooling loans.
The Obama administration won agreement from major automakers to double fuel efficiency standards by 2025 to 54.5 miles per gallon — a move that was expected to save Americans hundreds billions of dollars at the gas pump but cost the auto industry an estimated $200 billion over 14 years.
The Obama administration said in 2012 that drivers would save $1.7 trillion at the pump from 2012 through 2025. Society will see net benefits of $326 billion to $451 billion, the administration said then. But the estimate included significantly higher gas prices of $4 a gallon. If gasoline prices remain low for an extended period, it will reduce the benefits Americans will receive.
Ford CEO Mark Fields will be on hand as will Ford Executive Chairman Bill Ford Jr. at the plant that was one of those boosted by $5.9 billion in low-cost government loans from the Energy Department in 2009 — as it shifted from building sport utility vehicles to fuel efficient small cars.
“Ford Motor Company looks forward to hosting President Obama at Michigan Assembly on Wednesday. We are proud of how our employees contribute to U.S. economic growth, and that we have added nearly 24,000 American jobs since 2011 to meet strong customer demand for our cars, utilities and trucks,” Ford spokeswoman Christin Baker said in a statement.