Fortified by chili dogs from Rudy's Hot Dogs, President Barack Obama arrived at Chrysler Group LLC’s Toledo Assembly complex Friday afternoon to herald the auto industry's rebound after a government bailout and announce a deal for Fiat to buy the Treasury's remaining stake in Chrysler.

His visit coincides with the release of a dismal economic report that showed an uptick in national unemployment.

The president tried to remain upbeat as he began delivering his remarks at the plant.

"I know there are a lot of hard-working people here," he said, noting some of their favorite haunts like Rudy's and Zinger's as places that share the economic impact of their employment.

TRANSCRIPT: Click here to read a transcript of Obama's speech

Mr. Obama touted the resurgence of the U.S. auto industry and credited his federal bailout, which assured the survival of Chrysler and General Motors Co. Both automakers filed for bankruptcy protection in 2009 to enact severe cutbacks and other changes. Now, both firms are profitable.

"What would life be like here in Toledo if you didn't make these cars?" he asked the audience.

PHOTO GALLERY: Click here to view images of Obama's visit

Prior to his speech, the President toured a portion of the Wrangler assembly line where its instrument panels is installed and its distinctive front grille is attached. Touring with him was Mauro Pino, plant manager of Toledo Assembly complex.

Among the three dozen workers who greeted him was Nicole Jones, who with another worker was wearing a red T-shirt that said “President Obama” on the front and “Thank you” on the back.

“Those are awesome t-shirts,” Mr. Obama said.

After an eight-minute tour, the President posed for a group photo with workers. He then moved to a podium to begin his remarks to more than 400 workers and others in attendance inside the factory, including Chrysler Chief Executive Sergio Marchionne and community, political, and labor dignitaries.

Mr. Obama told the employees that when they make cars, they were "sticking up for this way of life ... showing the world that American manufacturing and American industry is back."

He said the government's intervention into making sure the auto industry did not experience a financial meltdown was evident in the local workforce.

"Toledo, you showed that this was a good investment, betting on American workers," the President said. He described them as people who "recapture the toughness of who we are, the builders and the doers."

U.S. Rep. Marcy Kaptur (D., Toledo), who had met Mr. Obama at Toledo Express Airport and traveled with him to the plant, echoed those sentiments. "Our work force is the best, there is no question and today they were rewarded for being the best," she said.

After his speech, the President entered the Wrangler plant’s paint shop area, greeting first-shift workers as they left for the day.

For eight minutes he shook hands, with several workers happy to see him. Worker John Dandar pulled out two photographs that he asked the president to sign. The photos were taken when Mr. Obama was in the Toledo area campaigning in 2008.

He told Mr. Obama: “Thanks for saving my job.” The President responded: “I appreciate your service, Mr. Dandar.”

The President then left the Chrysler plant and made a brief stop at Fred’s Pro Hardware on Stickney Avenue and Pearl, where the President purchased two pairs green garden gloves.

He was asked by an employee about the gloves, and he said, referring to his wife Michelle, “She doesn’t let me near the garden.”

VIDEO: President Obama's speech at the Toledo Assembly Complex.

Matthew Wamsley, 40, manager at Fred’s Pro Hardware, was thrilled when the president walked through the doors of his business.

Mr.  Wamsley was unaware the president was visiting until “five minutes before he walked in the door.”

“It was exciting. I was in the military so I was close to a president before [President Clinton], but never this close,” Mr. Wamlsey said.

The store, a quarter mile south of the Chrysler plant, is frequented by Chrysler employees. Workers said the store would have been hurt badly had Chrysler gone out of business.

Afterward, the President crossed the street, where a crowd of about 150 people had gathered spontaneously. They greeted him enthusiastic. 

James Johnson, 55, shouted to others in the crowd, “I shook the President’s hand, I’m not going to wash this hand, ever.” He said, “I’m 55, and that’s the first time a shook a president’s hand.”

After the hardware store stop, Mr. Obama’s motorcade got back on the Ohio Turnpike and headed in the direction of the airport.

At 3:02 p.m., the President boarded Air Force One, which began to taxi by 3:09 p.m. and lifted off by 3:14 p.m.

Mr. Obama's visit had begun when Air Force One landed at Toledo Express Airport at 11:28 a.m. Friday. He stepped off the airliner with Sen. Sherrod Brown (D., Ohio) and was greeted by Toledo Mayor Mike Bell, Miss Kaptur, and others.

The President walked over to a small crowd, signing autographs and shaking hands of the select group of Toledo-area friends and family members of people employed by the White House, the Secret Service, and the Air Force were allowed on the tarmac for the arrival.

Carla Firestone, Toledo-Lucas County Port Authority spokesman, said it was a traditional gathering allowed for the arrival of Air Force One.

Among the invited crowd in the greeting area was 10-year-old Blake Borowski, a fourth-grader from Whitehouse, Ohio. He was brought to the event, with his brothers, by their father. Standing at the fence, Blake was among the first hands the President shook.

“We are thrilled to be in Toledo, especially with this great weather," Mr. Obama said in response to a reporter’s question. "We’re going to go see some Jeeps being made.”

The President got into his motorcade about eight minutes after stepping off of the plane. He headed east on the Ohio Turnpike and then north on I-75.

En route to the Chrysler plant that makes Jeep Wranglers, Mr. Obama stopped at 12:15 p.m. a Rudy’s Hot Dog restaurant on Sylvania Avenue, surprising owners Harry and Andreas Dionyssiou as well as about 20-25 customers. The workers inside screamed with excitement upon seeing the President.

A crowd outside cheered as Mr. Obama walked into the restaurant.

Harry Dionyssiou shook the president’s hand while Mr. Obama ordered two chili dogs with onions, mustard, cheese, as well as French fries and a bowl of chili. Mr. Obama also bought meals for Sen. Sherrod Brown, Rep. Marcy Kaptur, and Mayor Mike Bell, who accompanied him.

Harry Dionyssiou said,  “How wonderful. Girls, fix him one of each.”

Mr. Obama jokingly chastised Miss Kaptur for ordering ketchup on her hot dogs. “As an aficionado of hot dogs,” he said, “you should never put ketchup on a hot dog.”

He then plunked down two $20 bills to pay the tab.

Regina Weaks, a longtime Rudy’s employee, said, “I was very surprised when he walked in the door, although I got a little suspicious when I saw the 20 cop cars in our parking lot.”

The President stood and talked with customers while he was eating his hot dogs. Mr. Bell urged him to have Faygo red pop.

Sen. Brown introduced him to customer Kelly Nelson and said, “This is Kelly Nelson, she may need a note to get back to work because she’s going to be late.”

The President also greeted two of the customers from a Chrysler supplier Faureicia, which makes parts for the Jeep Liberty and Dodge Nitro at Chrysler’s Toledo Assembly complex. He asked the two unidentified men if the company was a Jeep supplier and they said yes. “Keep up the good work,” Mr. Obama said.

He left the restaurant after about a half hour and arrived at the Chrysler plant at 12:50 p.m. A crowd of about 75 people — mostly United Auto Workers — had been gathered since about noon near the Chrysler plant off Stickney Drive.

“If it wasn’t for [Mr. Obama’s] faith and confidence in the auto industry, we wouldn’t be here,” said Ray Wood, president of the UAW Local 14.

“This is an opportunity for us to thank him, even if he just looks out the window when he comes by.”

Some members of the group were wearing red T-shirts and carrying signs that said “Vote Democrat” and “Union Blood is Thicker than Tea.”

Matt Wise, a Chrysler security guard, wore an "Obama changing history" T-shirt under his security guard uniform.

Mr. Obama possibly may make two or three other stops, and will depart from the airport by late afternoon. The events are not open to the public.

The president also is expected to talk about an agreement announced Thursday night for Italian automaker Fiat SpA to buy the U.S. government's stake in Chrysler.

Ohio Republican Party Chairman Kevin DeWine Friday criticized Mr. Obama’s “victory lap” in Toledo by noting the newly released national unemployment numbers, which showed sparse hiring and an increase in the rate to 9.1 percent in May, up from 9 percent the month before.

“Today’s economic news further underscores the fact that unemployed workers in Ohio aren’t looking for a presidential campaign stop, they need jobs,” Mr. DeWine said.

“With one in 10 Toledo residents out of a job and national unemployment again on the rise, Barack Obama would best serve the city, and our state, by joining [House] Speaker [John] Boehner [of Ohio] in offering serious proposals which focus upon deficit spending restraint and domestic job creation.”

As the Republican presidential field begins to take shape, the White House is keenly aware that Obama's handling of the economy generates some of his highest public disapproval ratings.

White House officials said the overall trend was in the right direction compared to the job losses that were occurring a couple years ago, playing down this month's poor report as a bump in the road.

"Every time we look at those numbers we don't get too excited by what those numbers say, or we don't get too disappointed by what those numbers say. What we're looking at is the overall trend," spokesman Josh Earnest told reporters traveling with the president on Air Force One. "If you look at where we've come from, the turnaround is pretty dramatic."

The Bush and Obama administrations spent $80 billion to bail out General Motors and Chrysler and help guide them through bankruptcy. The Obama administration says it will recoup more than 80 percent of that and Obama intends to defend the bailouts as money well spent.

A report by the president's National Economic Council this week said the taxpayers' loss from the bailout will be about $14 billion. The Treasury Department initially had expected much greater losses.

Chrysler last week announced it would be paying off its remaining loans to the U.S. and Canadian governments ahead of schedule. And late Thursday, Treasury announced a deal to sell its remaining stake in Chrysler for $560 million to Italian automaker Fiat. That still means that of the $12.5 billion that the Treasury Department used to bail out Chrysler, about $1.3 billion will not be recouped, Treasury said.

GM received $49.5 billion in the U.S. bailout, and the federal government has recovered about half of that by selling a portion of its ownership stake in the company. It intends to sell its remaining 26.5 percent share of the company at a later time.

GM, Chrysler and Ford had been reporting significant increases in sales, but the industry this week reported a falloff in May.

The industry resurgence is one of the few positive notes in an economy that had been growing moderately but has now hit a listless patch. Unemployment had been dropping from a high of 10.1 percent in October of 2009. But it now has experienced back-to-back increases since it hit 8.9 percent in March.

The auto industry is also a major employer in presidential battleground states like Michigan, Ohio, Indiana and Missouri, all of them important for Obama's re-election prospects in 2012. The industry recovery gives Obama the opportunity to distinguish himself from Republicans who had criticized the government's intervention.

Among them was Republican presidential candidate Mitt Romney, who had called for Chrysler and GM to go through bankruptcy without government assistance. Romney on Friday defended his position. "The right process for an enterprise in trouble is not to be given money by the taxpayers in a bailout," he told CBS's "The Early Show."

The Associated Press contributed to this report.

First Published June 3, 2011, 1:23 p.m.