(Bloomberg) — In the opening years of the Obama administration, the bankruptcy of General Motors Co. and discontinuation of its Hummer brand of military-style sport utility vehicles epitomized a nation sharply adjusting from gas-guzzlers and the Great Recession.
On Wednesday, President Joe Biden will visit the Detroit plant set to churn out the next generation of Hummer vehicles. It’s a trip that might not be possible without the 2009 bailout that saved GM, but it comes under a cloud of economic anxiety evocative of the turbulence Biden’s former boss had to navigate.
Unlike their predecessors, these Hummers are battery-powered — the first of what the automaker says will be a broad array of electric trucks and SUVs to be built at the $2.2 billion facility known as “Factory Zero.” The president intends to argue that their production embodies transformational changes to the American economy that will be unlocked by the $550 billion bipartisan infrastructure law he signed this week.
The bill includes not just $7.5 billion to build about 400,000 new electric charging stations, but billions more for roads, rail, and ports. The stakes are immense: White House officials are counting on the legislation to turn around perceptions that both the nation’s economic standing and Biden’s presidency are faltering.
Some seven in 10 Americans say the economy is in bad shape, according to a Washington Post-ABC News poll released last weekend. Fifty-five percent say they disapprove of Biden’s economic performance, while his overall approval rating has cratered to just 41%.
White House officials have acknowledged the political toll that inflation is taking on the president’s political prospects. Thanks to post-pandemic supply chain bottlenecks and ravenous consumer demand, prices are rising at the fastest rate in three decades. A report released last week from the Bureau of Labor Statistics said costs for energy and medical care were among factors pushing consumer prices up 6.2% last month, compared to the prior year.
Biden’s team maintains that months of congressional infighting over his signature legislative proposals — including a $1.75 billion social spending package still under negotiation — has made it difficult to promote their accomplishments.
“Your life is going to change for the better, and that’s literal,” Biden said Monday at a White House signing ceremony for the infrastructure law. “We’re going to lower costs for you and your families.”
White House Press Secretary Jen Psaki said Monday that promoting the new law provides Biden the opportunity to “be out in the country, connecting the agenda, the impacts on people’s lives, moving beyond the legislative process to talk about how this is going to help them.”
Biden himself has adopted a more sympathetic tone as he looks to win back suburban and female voters who helped propel him to the White House. At the bill signing, the president told Americans weary from the pandemic that “we hear you and we see you.”
Road Trips
Other administration officials are expected to hit the road in the coming days to promote the infrastructure program. And the White House is trying to organize its daily messaging around touting the bill that’s been signed — not the particulars of the battle over the second leg of the president’s domestic agenda, a package of tax changes and climate and social spending called Build Back Better.
That means seeking backdrops like the one provided by the GM factory. The plant will provide new union jobs in a crucial swing state that flipped from former President Donald Trump’s column in 2016 to Biden in last year’s election. GM says the factory will eventually employ as many as 2,200 people.
GM Chief Executive Officer Mary Barra threatened to close it in 2018 as part of a restructuring, but instead repurposed it as part of the company’s push into electric vehicles.
Biden’s visit offers him an opportunity to burnish his green credentials and celebrate the public-private partnerships he says are key to combating climate change.
GM announced in October plans to install up to 40,000 vehicle chargers across the U.S. and Canada, with a focus on underserved areas where charging access is limited. Barra has committed to spending almost $750 million to expand charging infrastructure and to spend $35 billion to make 30 new electric vehicles over the next four years.
She aims to offer a carbon-free lineup of cars by 2035. GM has a target of doubling revenue by the end of the decade by selling new electric models alongside its gasoline burners, as well as starting its self-driving robotaxi business and selling software-based services in the car.
Chip Shortage
The trip to the GM facility risks underscoring some of the headwinds facing Biden’s presidency.
His proposal to allow U.S. carmakers with union workforces to offer bigger tax credits for EV purchases than nonunion rivals has stirred controversy, as it would benefit companies like GM and Ford over Tesla Inc. and foreign manufacturers.
And automakers have been badly hurt by a microchip shortage after COVID-19 ravaged the workforces of major Asian chipmakers.
As a consequence, manufacturing delays have spiked prices for both new and used automobiles, and left many dealers with empty lots as they wait for production to increase. AlixPartners estimated that automakers globally will build 7.7 million fewer cars in 2021 than they would have without supply chain shortages – up from 3.9 million fewer in a May forecast.
White House officials have asked automakers and chip companies to turn over information this month about their semiconductor supply chains so the administration can identify and address bottlenecks. The U.S. is also hoping to roll out an early alert system to manage future semiconductor supply chain issues.
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