Obama defends government aid to U.S. auto industry

CHICAGO - President Barack Obama defended government aid to the U.S. auto industry, telling workers at a Ford Motor Co. plant Thursday that they are a vital part of the economy.

"I refuse to walk away from this industry and American jobs," Obama said after touring a factory where Dearborn, Mich.-based Ford, the only Big 3 U.S. automaker that didn't take bailout money, will begin assembling the new 2011 Explorer later this year. "I have put my money on the American worker."

The assistance to General Motors Co. and Chrysler Group LLC helped prevent the loss of hundreds of thousands of jobs and "severe consequences" for the U.S. economy, Obama said.

He announced that Ford would get a $250-million loan guarantee from the Export-Import Bank. It will finance $3.1 billion of exports to Canada and Mexico of more than 200,000 U.S.-made vehicles, including Explorers, an administration statement said.

Ford is redesigning the Explorer, once the best-selling SUV in the United States, on a chassis used for the Taurus sedan. Explorer sales in the United States slid 33 percent to 52,190 last year as more consumers bought smaller vehicles with higher fuel economy.

The company is spending about $400 million to add 1,200 jobs to build the Explorer sport-utility vehicle. The Chicago plant is already hiring new workers at an entry-level wage of about $14 an hour, under a two-tier wage system that starts at about half the amount paid to hourly production workers hired previously.

In an interview with CNBC after the factory tour, Obama said, "Ford should be congratulated" for making decisions that allowed it to keep going without government help.

Building vehicles, including trucks, with better fuel efficiency will be crucial for the industry and a combination of regulations and incentives will help toward that goal, Obama said.

Also Thursday, military fighter jets escorted a small biplane out of protected airspace above Chicago during Obama's visit.

The North American Aerospace Defense Command said the F-22 fighters were patrolling the airspace and intercepted the plane shortly before noon. There was no threat to the president, officials said.