CNBC News Releases


Steffanie Marchese
Barack Obama

WHEN: Today, Thursday, August 5th

WHERE: CNBC’s Business Day Programming and NBC Nightly News

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with President Barack Obama today on CNBC’s Business Day Programming and NBC Nightly News.

All references must be sourced to CNBC.


PHIL LeBEAU, host: We're joined by President Barack Obama for a chance to talk about the state of the economy, that state of the auto industry and you're back home in Chicago.

President BARACK OBAMA: It is great to be here, great to be at this historic Ford plant that for over 90 years has been putting out some of the best products in the world. And, you know, what we wanted to highlight was that American manufacturing and the American auto industry can and will succeed.

LeBEAU: This plant and Ford is a good example.

Pres. OBAMA: Right.

LeBEAU: Ford did not take a government bailout, and yet this plant is now going to be adding another 1200 jobs.

Pres. OBAMA: Right.

LeBEAU: Has been on a heck of a roll over the last year.

Pres. OBAMA: Right.

LeBEAU: How do you feel about the fact that Ford was able to rebuild its business without a bailout?

Pres. OBAMA: Right. Well, the interesting thing is if you talk to the Ford's CEO, he'll tell you that if GM had been liquidated, if Chrysler had been liquidated, that could've been a crisis for the entire industry, including Ford, because all those suppliers would've been lost and the brand of the American auto industry would've really been great diminished. Now Ford made some good decisions that put it into a better position than some of its American competitors, particularly around their financing situation. So Ford should be congratulated.

What I'm excited about is the fact that Ford is doing what GM and Chrysler are both doing, which is they are retooling for the future. Now, one of the things we saw here was a Ford Explorer that is now meeting new mileage standards, reducing their fuel--making their cars 30 percent more fuel efficient than they were before. And we're seeing that across their models. We're going to see it with GM, we're going to see it with Chrysler, partly because we were able to get US automakers and the industry as a whole to agree to new national fuel efficiency standards that give them the certainty they need to know, this is the kind of new car that we're going to need to build in the future.

LeBEAU: And yet, even as you and your administration are pushing America towards more fuel efficient vehicles...

Pres. OBAMA: Right.

LeBEAU: ...hybrids, electric vehicles that are coming, if you look at the sale data, last month SUV sales were up 29 percent.

Pres. OBAMA: Right.

LeBEAU: Year-to-date SUV sales were up 19 percent.

Pres. OBAMA: Right, right.

LeBEAU: Are you worried that Americans cannot kick this habit for large, less fuel-efficient vehicles?

Pres. OBAMA: Americans like big cars. And you know, the first new car I ever bought was a Jeep Grand Cherokee. And I remember the first time I was sitting up there and had my cup holders and I, you know, was all set up and I thought this is a nice ride. It's exciting to see companies like Ford producing SUVs that are more fuel efficient, like the Explorer. The new Jeep Cherokee is more fuel efficient. But what I think we're going to have to recognize is that we've got to be strong in the car market and in the truck market and in the SUV market, and all of those markets are going to be more fuel efficient in the future than they were in the past, and that means new technologies. And one of the things I want to do is make sure that those cars are made here in the United States. So alongside our--the help that we gave the auto industry, we're also creating an entire advanced battery manufacturing industry here in the United States. We used to have 2 percent of that market; by 2015, we expect to have up to 40 percent of that market. That's good whether it's a car or a truck or an SUV. Overall, our standards are going to be rising.

LeBEAU: Let me ask you about General Motors and Chrysler. How often are you briefed about the performance of those companies and what they're doing?

Pres. OBAMA: You know, I'm briefed periodically, but one of the things that we've made very clear is that we were going to, at the front end, make sure that we are partnered with them for their restructuring, but as soon as that happened and they got out of bankruptcy, they are run like any other company and we don't meddle.

LeBEAU: So you're not--people are fearful that you're getting these weekly, monthly updates.

Pres. OBAMA: No. They--I've got more than enough to do without trying to run an auto company.

LeBEAU: Here at CNBC, the idea has been brought up by one of our anchors, Erin Burnett, that General Motors ultimately was saved by the taxpayers, in part, by the decisions of the administration. And therefore, why shouldn't the average investor have an opportunity to partake in the IPO of General Motors as opposed to the big Wall Street firms and those investors who really are well-heeled?

Pres. OBAMA: Well, here's the thing about the IPO. I am hesitant to talk about details on an IPO because it has to go through the Securities & Exchange Commission process of registration and so forth, so I've got to be careful where I tread here. GM has indicated that it is going to move forward with an IPO at some point later this year. When it does so, we expect that taxpayers will get back all the money that my administration has invested in GM. Over time, that is going to be extraordinarily significant, because what it means is we've stood up this industry, and you know what, we got a good return. But the general point about who's participating in the IPO, who can potentially be an owner in this company and also make some money on that investment over the long-term, beyond my looking out for the interests of taxpayers, I've got to be careful about what I say as regarding individual investors.

LeBEAU: But would you be open to the idea of the--of a Dutch auction, if you will, an open IPO so that the average investor might have an opportunity?

Pres. OBAMA: You're not going to get anything out of me on this one because as I said, I want to make sure that we are not breaching any registration rules or any requirements on the SEC. What I know is that as a general proposition, taxpayers can be made whole as a consequence of the good decisions that we made last year, even though those decisions were unpopular.

LeBEAU: Let me ask you about the job situation in the auto industry. Since you've taken office, 95,000 jobs have been lost in the auto industry. Now, some of them have started to come back in the last couple of months.

Pres. OBAMA: Right.

LeBEAU: And they're adding 1200 jobs here at General Motors--or here at Ford. It brings up the question, will those 95,000 jobs ever come back completely? Or should we expect that the auto industry is never going to return to where it was before?

Pres. OBAMA: Well, what you see in the auto industry is what you see in American manufacturing generally, which is that first of all, we were losing 300,000, 400,000 jobs the year before I took office. We've now gained 55,000 back. That means we're moving in the right direction. But American manufacturing has gotten leaner, it's gotten more efficient. It takes fewer workers to make the same number of cars than it used it. That's not going to change because automation and improved systems within these plants. And when you visit these plants, you can see it, the automation, the robots and so forth. What that means then, is that we've got to sell more products overseas, which is why I want to double exports, and we're working with this Ford plant, for example, and other manufacturers to figure out how we can boost our marketing overseas. It means that we've got to create new industries, which is why clean energy is so important, for example. The old industries are maturing to the point where we can make world-class products with steel and in cars, you name it, but it's probably not going to employ the same millions of people that once was employed. That means we have to create new manufacturing opportunities and that's what we're looking for in investing in things like clean energy.

LeBEAU: There is a troubling trend that we're seeing more and more of, companies have the cash to hire...

Pres. OBAMA: Right.

LeBEAU: ...but because they're worried about the future, instead of cutting jobs, they are now cutting pay and benefits. And it brings up the question, are we seeing a limit in terms of wage growth in this country?

Pres. OBAMA: Well, I think that we've got some great profits coming out of a lot of companies. They, obviously, were scared from the worse recession since the Great Depression and now their profitability's recovered, but that was primarily because they just got very lean, in fact, almost too lean. They have fired a lot of workers, reduced benefits and pay in some cases. Their profitability is now up, they've got a lot of cash on hand and the question is, when do they start reinvesting? Now, things were actually moving, ticking up at a pretty good pace back in the spring, and then just as people were starting to feel more confident, the crisis in Europe happened...

LeBEAU: Right.

Pres. OBAMA: ...and everybody pulled back. Now we've stabilized the situation in Europe, I think confidence is starting to come back, and you're going to see more and more of that money put to work hiring American workers. And as more workers get hired, that means they're spending more money, consumer demand starts moving up and pay starts moving up. So right now we've been in a negative cycle, a negative loop for a long time. What we're trying to get is that virtuous cycle where everybody starts benefiting. And the key thing that I want to communicate is America still has the best workers, we've still got the best universities, we've got the most dynamic economy. We've got the best free market system. I would still rather be America than any other country in the world, and most other countries would agree with that. But sometimes, you know, we have to get down on ourselves and think about how do we prepare for the future, make some big changes, before we come back out of--and that's, I think, we're on the brink of now moving into a better direction.

LeBEAU: Confident we're going to avoid a double dip recession?

Pres. OBAMA: I am confident about that. I think that we've got a lot of work to do. There are some trends that we've got to address, particularly in terms of long-term unemployment, and you addressed this earlier. So a lot of folks who went from manufacturing, went into the construction industry during the housing bubble, that bubble popped. You've got a lot of blue collar guys who are now working for work. We've got to make sure that we're providing them some support. One of the things where we could employ a lot of those folks is in rebuilding America's infrastructure for the 21st century, and that's something that I'd like to work between Democrats and Republicans to agree on, how can we get that new 21st century infrastructure. And the second thing we've got to really look at in terms of long-term economic growth has not yet been dealt with is the deficit and the debt. Now, the good news is, health care reform, which we did last year, we just got a report from the trustees that Medicare and Medicaid--or that the Medicare trust fund has been extended for 12 years because of the reforms that we initiated. So seniors, their benefits are more secure. We are going to guarantee that their benefits are there, but we're also going to make sure that it's there for the long term. But we still have more work to do on Social Security and entitlements, on federal spending generally. We've got to get--make sure that our fiscal house in order. If we do that, if we've got a 21st century infrastructure and we've got workers like the ones at this Ford plant, there's no reason why can't succeed.

LeBEAU: A few last questions here and the first one is tomorrow is the jobs number.

Pres. OBAMA: Yeah.

LeBEAU: And there is a feeling on Wall Street that if this number is weak, it brings up the question whether or not your administration needs to offer tax incentives to corporations to induce more hiring. Do you need to step up to the plate and do even more in terms of tax incentives to really get these companies to hire?

Pres. OBAMA: I mean, the interesting thing is we've just gone through a two-week debate in which I'm trying to move a small business bill that provides exactly what you're talking about, tax incentives for small businesses that create two out of three American jobs. We'd eliminate capital gains for start-ups. We had tried to work with the other parties in getting some of these things done precisely because the recovery is still not as strong as it should be. For some reason, they're blocking it even though these are things that traditionally Republicans have stood for, the Chamber of Commerce is in favor of, the NFIB is in favor of it, and for some reason they're still blocking it from getting out of the Senate. That doesn't make sense. We definitely need to do more to help small businesses, make sure they can get credit, make sure that we are lessening their tax burden.

LeBEAU: Finally, Freddie Mac comes out today and says the average 30-year mortgage is now down to a record low...

Pres. OBAMA: Right.

LeBEAU: ...4.49 percent. I mean, that's a rate you and I never would've dreamed of when we were growing up, and yet housing starts and housing sales, they continue to lag. When do you expect the housing market to come back?

Pres. OBAMA: You know, I had a lunch with Warren Buffett a couple of weeks ago and he made a very simple point. He said it takes about 1.4 million new homes a year to absorb new families that are born. For a pretty long stretch of time, we were building two million a year. So we built up this big inventory. We're now building half a million a year. So that inventory's getting absorbed. It's going to take some time for all of it to be absorbed. But sooner or later, we're going to get back up to 1.4 million homes needing to be built to accommodate all these new families. So we have--we're still suffering from the overhang of this massive overbuilding. It's going to take some time, but we have stabilized the market in many regions. One of the things that's happening in our economy is that some states are doing well and some sectors are doing well. They're in full recovery mode. And then in other states or in other sectors of the economy, they are still very weak. And what we need to do is to build on where we're going strong, help those areas that are still weak, those regions that are still weak. If we do that, I think we'll be on the right path, but we've got to keep on moving forward.

LeBEAU: Final question...

Pres. OBAMA: Yeah.

LeBEAU: ...and it has to do with the auto industry.

Pres. OBAMA: Yeah.

LeBEAU: When was the last time that you went out and drove a car by yourself. And I'm not talking at the Secret Service test track, you know.

Pres. OBAMA: Right.

LeBEAU: But went out and said, I want to go out for a drive.

Pres. OBAMA: I can't do it. The Secret Service doesn't allow it.

LeBEAU: Do you miss it?

Pres. OBAMA: I miss nothing more than just driving right along Lake Shore Drive. I would love to hop in a convertible right now on a nice day like today and drive all the way up along the lake. But I can't do it. So my driving is either at the Secret Service testing site, the training site there where you can do some J-turns and do some pretty spiffy moves, or the golf cart. Those are the two opportunities I get to drive, and I miss it tremendously.

LeBEAU: President Barack Obama, thank you very much. Appreciate it.

Pres. OBAMA: A pleasure. I enjoyed it. Thank you very much.

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