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Hillary Rodham Clinton heaped on praise for the U.S. auto industry's role as a job creator and driving force in the nation's economic recovery on Monday (Jan. 27) during a speech at the National Automobile Dealers Association Convention & Expo in New Orleans.
Despite all her praise for the thousands of car dealers in the audience, the former first lady, senator from New York and US Secretary of State joked with the traditionally very Republican and very conservative auto industry retailers, suppliers and factory executives gathered at the Ernest N. Morial Convention Center in New Orleans that it has been quite some time since she's taken the wheel herself...
"The last time I actually drove a car myself was in 1996...I remember it very well. Unfortunately, so does the Secret Service, which is why I haven't driven since then." – Hillary Rodham Clinton
The 2014 NADA Convention drew more than 20,000 auto dealers, suppliers and factory personnel, as well as other industry representatives. These thousands of car people started arriving on Wednesday and Thursday and worked their industry's largest Convention, which comes to New Orleans every four years, from Thursday through Monday.
Hillary Clinton echoed many of the opening remarks made by NADA leadership, while emphasizing the role small businesses, led by car dealers and the rest of the auto industry have played in rebuilding the US economy on both the domestic and global markets for American built cars and trucks.
"Every day in countless places and in countless small ways, businesses like yours help to stitch our country together, the fabric, the richness of it," – Hillary Rodham Clinton
Her NADA Keynote was one of dozens of speaking engagements Clinton has lined up across the country since stepping down from her post as the nation's top diplomat in 2012. In recent interviews and speeches, Clinton has backed same-sex marriage, prodded Congress to rewrite immigration laws and lamented the overall and pervasive gridlock in Washington D.C. All of which appear to be the requisite political posturing that would lead up to Clinton making a run for the Democratic nomination as their candidate for the 2016 presidential election.
On Monday at the NADA Convention in New Orleans, Clinton interwove memories of the worn out and mechanically unreliable clunkers she drove early in her career with more recent lessons learned during her time as secretary of state under the Obama administration.
"We have to show a face to the world that says very clearly, you want to be on America's side." – Hillary Rodham Clinton
During a question and answer session with outgoing NADA Chairman Dave Westcott, Clinton brushed aside a question about whether she plans to run for president in 2016. She said she's more focused on looming issues such as the debt limit than making a second bid.
"Let's solve the problems that we have elected officials to solve right now," Clinton said. "We can worry about the next election later. I think we spend too much time looking over the horizon instead of looking straight ahead."
Clinton, who as a senator supported the use of government funds to bailout banks and U.S. automakers (General Motors and Chrysler) after the 2008 financial crisis, said rising auto sales and increased manufacturing show government investments in the auto industry worked as intended.
"That doesn't mean that they were not without cost," Clinton said. "I know NADA lost dealerships, lost jobs, lost those small businesses that were at the core of a lot of communities. But the overall picture turned out to be positive."
Clinton highlighted a General Motors manufacturing plant in Uzbekistan opened in 2011 as an example that the recovery of the American economy will be global in scale.
She said key policy issues stand in the way of global growth, including working to build a positive relationship with China, the world's largest emerging market, as well as taking a strategic approach to opportunities afforded by a boom in domestic natural gas and oil production.
"We are engaged, we are leading because we care about our values, we care about democracy, we care about human dignity and all that goes along with it," Clinton said. "But we also want to build middle classes that will buy American products. We have to show a face to the world that says very clearly, you want to be on America's side."
Source for Above: NOLA.com/business/hillary_clinton
General Motors Co. is free from U.S. taxpayer ownership almost half a decade after first receiving government aid, underscoring the domestic auto industry’s rebound from the deepest downturn since the Great Depression.
The Treasury Department’s sale yesterday of final shares of GM signals the end of Government Motors, as the nation’s largest automaker was derisively labeled by some critics after the U.S. government stepped in with emergency funding in 2008. Bailouts from the George W. Bush and Barack Obama administrations helped GM avoid liquidation and reorganize in a 2009 bankruptcy that has given new life to the company.
“This marks one of the final chapters in the administration’s efforts to protect the broader economy by providing support for the automobile industry,” Treasury Secretary Jacob J. Lew told reporters yesterday on a conference call.
Buoyed by lower debt, reduced labor costs and a focus on only its strongest brands, GM is emblematic of a revitalized U.S. auto industry that’s on pace to reap the fastest sales growth since 2007. While the U.S. said it lost about $10.5 billion on its investment of $49.5 billion, the government’s exit paves the way for an influx of fresh investor money.
“Detroit is back. And GM could lead the way forward on the equity front,” Dallas-based Hayman Capital said in a presentation published last week on the website HVST.com.
The exit would end restrictions on pay for top executives that the largest U.S. automaker has said hampered recruiting, and analysts have predicted it may clear the way for the company to initiate a dividend or stock buyback.
A total automobile-industry shutdown from a liquidation of GM and Chrysler would have cut 2.63 million jobs from the U.S. economy in 2009, according to a study by the Center for Automotive Research released just hours before the Treasury announced its stake sale. The bailout saved or avoided the loss of $105 billion in transfer payments and the loss of personal and social insurance tax collection in 2009 and 2010, according to CAR.
The auto bailout will rank as “one of the most important interventions, maybe the most important, in U.S. economic history,” Sean McAlinden, CAR’s chief economist, who led the analysis, said yesterday in a telephone interview. Without it, “the upper Midwest would still be a gaping, double-digit unemployment hole in the economy, 600,000 retirees would’ve lost their pensions.”
GM closed at a record high of $40.90 yesterday. The automaker’s shares soared 42 percent this year through yesterday, outpacing the 27 percent gain of the Standard & Poor’s 500 Index.
GM is being helped by having some of its best products in a generation, bringing out 18 new or refreshed cars and trucks this year and 14 next year. It’s part of GM’s effort to transform its lineup into one of the industry’s newest from among the oldest.
Those new products are winning some rave reviews. The Chevrolet Impala was the first U.S. car chosen as the best sedan on the market by Consumer Reports, a first in at least 20 years, and the Cadillac CTS was picked as Motor Trend’s car of the year.
This year has included many milestones for GM: It was returned to investment-grade status by Moody’s Investors Service in September after losing it eight years ago; it returned to the S&P 500 after being booted off on the eve of bankruptcy.
The automaker also led one of the industry’s most closely watched new-car quality measures in June when J.D. Power & Associates said GM topped the consultant’s Initial Quality Study. That was a first for GM in the study’s 27-year history.
GM has said that the Government Motors tag repelled some customers.
“This has been a long, hard road,” Mark Reuss, president of GM North America, told reporters yesterday before the Treasury’s announcement. The benefit from shedding government ownership could come immediately, he said. “I think probably some people will begin to consider us right away, maybe the next day.”
The successes come after five tense years that were filled with uncertainty and change for GM.
Rick Wagoner, chief executive officer at GM when the automaker sought government help, lost his job as part of Obama’s auto task force work. His successor Fritz Henderson didn’t last a year as CEO. He was followed by Ed Whitacre, former CEO of AT&T Inc., who was placed on the board as chairman by the government coming out of bankruptcy. He prepared the company for a 2010 initial public offering, then left before the IPO roadshow.
Dan Akerson, also added to GM’s board in the bankruptcy, became GM’s fourth CEO in less than two years in late 2010 and has overseen efforts to complete the automaker’s reorganization.
“We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,” Akerson said yesterday in a statement. “Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.”
He’s replaced several senior executives, including naming Mary Barra the first female head of GM’s product development operations. He’s set several aggressive mid-decade goals, including boosting North America operating margins, stemming Europe losses and increasing China sales.
Akerson has emphasized strengthening GM’s Chevrolet and Cadillac brands globally while also announcing plans to pull Chevy mostly out of Europe and shut the first assembly plant in Germany since World War II.
GM’s new product has brought new optimism to the company, which has reported 15 straight profitable quarters and has increased U.S. sales faster than the total market has grown.
“There have been tens of thousands of people that can now put food on the table,” Reuss said of GM recovery. “There are plants that operate at 110 percent of capacity and there are all of the good things that happen in those towns where those plants are, and the supply bases. There are restaurants again, there’s all of the service business operating again. How do you put numbers on that? I feel good about that.”
GM and its Chevrolet Volt plug-in hybrid were seized on by Republicans who used it as the symbol of the auto bailout, which was unpopular outside of auto-heavy states, such as Ohio and Michigan. Presidential hopeful Newt Gingrich faulted the Volt for its lack of space for a gun rack, while nominee Mitt Romney called it “an idea whose time has not come.” American Tradition Partnership Inc., a conservative group, referred to Volts as “exploding Obamamobiles.”
Obama said he “refused to walk away” when the industry was poised to lose 1 million jobs in the midst of a deep recession. The 18-month contraction was the longest since the 43-month slump during the Great Depression, according to the National Bureau of Economic Research.
“When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong,” Obama said in statement. “Today, that bet has paid off. The American auto industry is back.”
Now that U.S. automakers have emerged from a painful period of restructuring and they’re all turning profits, more changes are visible on the horizon.
Akerson recently turned 65 and the company had previously announced that his compensation has been changed to allow him to retire within three years. Ford CEO Alan Mulally, 68, is among the leading candidates to become the next Microsoft CEO, people familiar with the matter have said. Chrysler Group LLC, majority owned by Fiat SpA, is preparing for an IPO early next year.
The Treasury began its sell-down of GM shares about a year ago after announcing in a deal for the automaker to buy back $5.5 billion worth of stock, or 40 percent of the government’s holding at the time. The Treasury also said it would sell off the remaining shares within 15 months in the open market.
The government’s plan to exit helped boost investor confidence, and GM rose in May above its $33 a share IPO price for the first time in more than two years after falling to a low of $18.80 in July 2012.
“Had we not acted to support the automotive industry, the cost to the country would have been substantial -- in terms of lost jobs, lost tax revenue, reduced economic production, and other consequences,” the Treasury said in an e-mailed statement.
GM’s largest shareholder is now the United Auto Workers retiree health-care trust with 9.2 percent, followed by the Canadian governments with 7.2 percent, GM said in a statement.
“The automotive industry is back,” Lew said.
To contact the reporters on this story: Tim Higgins in Southfield, Michigan, at firstname.lastname@example.org; Ian Katz in Washington at email@example.com; Kasia Klimasinska in Washington at firstname.lastname@example.org
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