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President Barack Obama said the U.S. government will buy 17,600 new, fuel-efficient vehicles from ailing American automakers by June 1.
Obama made the announcement Thursday in a statement issued by the White House, saying the General Services Administration will spend $285 million of Recovery Act Funds to purchase the vehicles for the government fleet.
All purchases will be made from manufacturers with an existing contract with the GSA, which are General Motors Corp. (NYSE: GM), Chrysler LLC, which operates an engine plant in Kenosha, and Ford Motor Co. (NYSE: F). This includes the purchase of 2,500 hybrid sedans that will be ordered by April 15.
“This is the largest one-time purchase of hybrid vehicles for the federal government fleet in history,” according to the statement.
The decision was made to buy the vehicles on the short timetable to help give a boost to the economy, as well as demonstrating the Obama administration’s support of the U.S. auto industry.
President Obama said, “The problems that caused this economic crisis weren’t created in a day, and it will take time and hard work to get our economy back on track. But I am 100 percent committed to a strong American auto industry, and we will stand with America’s auto workers and their families during these difficult times.
“This is only a first step, but I will continue to ensure that we are working to support the American auto industry during this difficult period of restructuring."