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Obama seeks auto worker vote

WASHINGTON - US president Barack Obama is making his rescue of America's iconic auto industry a driving force for his 2012 re-election bid and a repudiation of attacks on his economic leadership.

At a Chrysler Jeep plant in the electoral bellwether state of Ohio, Obama, will argue that his high-risk decision to embrace an $80-billion government bail-out saved hundreds of thousands of jobs and rebooted an entire industry but his tour in Toledo may be overshadowed by the release of the latest set of jobless data which analysts expect to fuel fears that the economic rebound - crucial to Obama's hopes of a second term - is slowing.

With unemployment at nine percent, a slumbering housing market and with many Americans yet to feel relief in their wallet, Obama's arguments that the economy is on the move face strong headwinds. So the White House is extra keen to highlight the success of the auto bail-out.

"When Obama took office we had an automobile industry in freefall," said Ron Bloom, a counsellor to the president on manufacturing. "We had an economy in great distress but the automobile industry was falling faster than just about any other sector. Obama faced very difficult decisions..."

UNEMPLOYMENT AVERTED

Officials says the rescue of General Motors and Chrysler prevented the liquidation of companies that would have hammered the economy in fragile states and sparked widespread misery. Since then the industry has added 115 000 jobs, GM and Chrysler have exited bankruptcy and, along with Ford, are now churning out profits from popular new energy-efficient models.

Backdrops of cheering workers and packed assembly lines make great campaign fodder for the White House, especially in economically depressed areas of the country likely to play a key role in the 2012 election.

But back in 2009, the bail-out was highly controversial, and second-guessed by Obama's Republican opponents who warned against a government takeover of a huge sector of the economy and mocked the president as "the automaker-in-chief".

LOANS REPAID EARLY

The administration says the bail-outs didn't only save GM and Chrysler but also helped Ford - which did not take a bail-out - because it also used the supply chain propped up by its competitors.

"The impact of the collapse of GM and Chrysler would not have been just the couple hundred thousand people who worked at these companies," said Bloom. "Three times as many people worked in the supply base. Another three times as many worked in the suppliers, to say nothing of all the pizza parlours and dry-cleaners and all the other people in these communities."

US automaker Chrysler announced last week it had exited the US and Canadian rescue programme six years early with the repayment of billions of dollars provided during the crisis. The Treasury on Thursday agreed to sell its Chrysler shares to Fiat and for the first time since 2004 the Big Three automakers are operating at a profit.
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