Exclusive interview: Obama says cheap gas won’t last
Washington – — President Barack Obama is warning Americans that cheap gas prices won’t last indefinitely, and he’s standing by his support of small, fuel-efficient vehicles.
“I would strongly advise American consumers to continue to think about how you save money at the pump because it is good for the environment, it’s good for family pocketbooks and if you go back to old habits and suddenly gas is back at $3.50, you are going to not be real happy,” Obama said in an exclusive telephone interview with The Detroit News on Tuesday, the eve of his visit to Ford’s Michigan Assembly plant in Wayne.
During his Michigan appearance, the president will tout his administration’s bailout of the U.S. auto industry, which saved at least a million jobs and a critical part of the U.S. and Michigan economy. It’s among a series of actions he has taken that Obama is highlighting at stops in several U.S. cities as he prepares for his Jan. 20 State of the Union address.
Obama said “folks should enjoy” low gas prices, but cautioned that they won’t be around forever. Americans could sock away some of the money, “or better yet” buy a new car or new appliance, he said.
“The American people should not believe that ... demand for oil by China and India and all these emerging countries is going to stay flat. Just demographics tell us demand is going to continue to grow, that over the long term it will grow faster than supply and we have to be smart about our energy policy,” Obama said.
The Ford plant he visits Wednesday makes fuel-efficient and alternative fuel small cars. Its workforce is on temporary hiatus because those vehicles are not selling well. In fact, trucks and SUVs outsold traditional cars in the U.S. in 2014, according to sales numbers released Monday. Industry experts attribute some of the sales surge in trucks and SUVs to lower pump prices.
Oil prices have fallen 40 percent since June — the fastest decline in three decades — as gasoline prices have plummeted to around or below $2 a gallon in much of the country.
Automakers are building small vehicles and those with hybrid or electric powertrains in part to meet stricter government-required fuel efficiency standards by 2025 — another of Obama’s accomplishments.
In his interview with The News, Obama heralded the resurgence of the U.S. auto industry, which sold more than 16.5 million cars and trucks in 2014 and is poised for more growth this year, after the government concluded the $85 billion auto rescue.
He’ll repeat that theme, and his administration’s rescue package, Wednesday in Wayne.
Obama defended the costs of the bailout to the government: $9.3 billion. He noted the U.S. Treasury recovered all of the funds awarded to the firms, but not some of the initial $25 billion the Bush administration gave General Motors Co. in the waning days of its administration.
“It’s been a good deal for the American taxpayer. It’s been a good deal for autoworkers. It’s been a good deal for America and it saved about a million jobs,” Obama said.
Automakers, dealers and suppliers have added more than 400,000 jobs since June 2009 and auto sales hit 16.5 million in 2014 — the best performance since 2006.
The final steps marking the government’s exit from the industry, which included the forced bankruptcy of Chrysler and GM, came in December — six years after it began.
“The auto industry has led a resurgence of manufacturing in America,” the president said. “The quality of the cars has gotten so much better that we are competitive — not just in SUVs — but up and down the line. The branding of American cars is back to where it should be. Michigan’s unemployment rate has fallen faster than the overall employment rate.”
Still, Obama said he is concerned about some slow auto recalls and wants the nation’s new top auto regulator to fix problems in the recall system that emerged during congressional hearings. A record-setting 63.5 million vehicles were recalled last year.
He wants his new chief of the National Highway Traffic Safety Administration, Mark Rosekind, to “work with the auto companies to catch problems early and recognize that in today’s environment — with savvy consumers and active social media — you are being penny wise and pound foolish not catching these problems on the front end.”
“They’ll catch up with you,” Obama said. “When you don’t catch them early, you are putting people at risk.”
Obama didn’t directly address GM’s record-setting $35 million fine for its delayed recall of 2.6 million vehicles linked to at least 42 deaths and 58 injuries, but he said the problems are fixable.
“Working in a systematic way to identify what has caused some of these recall problems, why isn’t it that they haven’t been caught earlier and fixing the process should be Mark’s top priority,” he said. “The quality of American cars has greatly improved. The safety of American cars has greatly improved. The durability and customer satisfaction of American cars has greatly improved.”
In his interview with The News, Obama also disclosed details that he hasn’t previously discussed on his decision to save Chrysler LLC in March 2009 — even as his economic and political advisers were divided over whether to let the Auburn Hills automaker fail. The auto bailout ultimately became a cornerstone of his re-election campaign and helped him defeat Republican Mitt Romney.
He noted that Chrysler was the “sickest” of the Big Three in early 2009. His advisers, the president said, all recommended that a restructuring of General Motors Corp. was viable, but some suggested that by letting Chrysler die, GM and Ford Motor Co. — the latter of which won government loans but did not take a bailout — would have been healthier.
“Part of it just had to do with the numbers and the weakness of the company,” Obama said.
Obama declined to “second-guess” the actions of the Bush administration to give GM a $25 billion shot in the arm.
His administration, the president said, crafted “a plan that was not just writing a check but insisting on collaboration between management and workers and suppliers and dealers and shareholders, where everybody had to make some sacrifices. ... There was clear-eyed recognition that we couldn’t sustain business as usual. That’s what made this successful. If it had just been about putting more money in without restructuring these companies, we would have seen perhaps some of the bleeding slowed, but we wouldn’t have cured the patient.”