Obama vows to help rebuild industry to compete, win

President Barack Obama on Tuesday vowed to hold U.S. automakers accountable for "bad practices" but promised to help create a "retooled, re-imagined auto industry."

In remarks to a joint session of Congress, Obama gave a sobering assessment of the nation's ills--mainly economic--but said: "We will rebuild, we will recover, and the United States of America will emerge stronger than before."

About midway through the speech, the president said:

"As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices.

"But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it."

The pointed reference to the automobile industry was not unexpected.

Obama backed President George W. Bush's decision last December to approve $17.4 billion in emergency loans for General Motors and Chrysler LLC.

Obama has created a multi-agency task force to consider restructuring plans from the two automakers and their requests for $21.6 billion in additional loans. The panel also is expected to consider requests from suppliers for $18.5 billion in aid.

The government has moved on other fronts to provide support to automotive lenders and to free up credit for vehicle purchases and dealership inventory.

Obama's speech, his first appearance as president before Congress, also provided a preview of his first budget proposal, to be outlined Thursday, and of his legislative agenda for the early part of his administration.

Obama, a Democrat, was elected the nation's 44th president in November.

He said his budget would not attempt to solve every problem but would focus on three critical areas: energy, health care and education.

On the first, he called for a market-based cap on carbon emissions, which would support the production of more renewable energy.

He said: "We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we've fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea."

Throughout the address, Obama struck a balance between grim economic reality and a more hopeful outlook to try to reassure worried Americans their country will emerge from crisis "stronger than before."

Obama included a sober assessment of the economic emergency , seeking to temper expectations that his administration's rescue efforts would yield quick fixes.

"While our economy may be weakened and our confidence shaken, though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover," Obama said.

"And the United States of America will emerge stronger than before," he told a chamber packed with lawmakers, cabinet members and invited guests.

Five weeks after taking office, Obama pressed the case for his economic plans while laying out a broad agenda.

The address to the Senate and House of Representatives came against a backdrop of growing anxiety across the country in the face of the worst financial meltdown in decades.

While his public support is strong, Wall Street remains skeptical of his economic remedies.

Jittery investors sent U.S. stocks to a 12-year low on Monday, but the markets rallied on Tuesday on Federal Reserve Chairman Ben Bernanke's assurances that the country's troubled banks should be able to weather the downturn without being nationalized.

Trying to show he would make good on his promise of fiscal responsibility, Obama said he had identified $2 trillion in budget cuts over the next decade. Obama has also vowed to halve the annual deficit by the end of his term.

By Harry Stoffer- Automotive News