President Barack Obama, speaking hours after a disappointing jobs report, highlighted renewed hiring by the nation’s auto sector and his administration’s role in rescuing the industry.

He told workers at a Chrysler Group LLC assembly plant in Toledo, Ohio, that the all three domestic auto makers are adding jobs, adding shifts, gaining market share and turning a profit—and that Chrysler had now completely repaid the government’s investment in the company, reported The Wall Street Journal.

With Mr. Obama preparing for re-election amid a still-weak economy, he has found the auto industry to be one of the few bright spots. The White House has gone out of its way to point to Republican opposition to his 2009 decision to bail out both Chrysler and General Motors Co. He cast his decision as politically risky but right on the merits.

“We could have done what a lot of folks in Washington thought we should do, and that is nothing. We could have just let U.S. automakers go into an uncontrolled free fall,” he said, standing in front of an assembly line loaded down with half-built Jeep Wranglers. “And that would have triggered a cascade of damage all across the country.”

Mr. Obama spoke after the government reported that private-sector employers added 83,000 jobs in May, the smallest gain since mid-2010. Overall, non-farm payrolls rose by 54,000, below economics expectations, and the jobless rate rose to 9.1 percent from 9.0 percent in April.

The president didn’t address those numbers directly but spoke generally about economic drags, including high gasoline prices, instability in the Middle East and other “bumps in the road.”

“We still face some challenges,” he said.

In Toledo, Mr. Obama accentuated the positive, highlighting the spillover effects of a healthy auto industry, both for companies that supply parts to Chrysler and for local restaurants and other businesses. To underscore the point, he stopped by Rudy’s Hot Dog for a hot dog and bowl of chili.

After the speech he bought a pair of garden gloves at Fred’s Hardware, near the plant. He told the cashier that he had been to the Chrysler plant and believed a rebound there was spilling over to neighborhood businesses. “A lot of the guys over there come over here,” he said.

He made the same point in his remarks.

“Without you, who would eat at Chet’s or Inky’s or Rudy’s?” the president said to cheers as he named local favorites. “Or who would buy all those cold ones at Zinger’s? ...What would life be like here in Toledo if you didn’t make these cars?”

After his speech, he shook hands with workers, many of whom expressed their gratitude. “Thanks for saving my job,” said one.

The president also announced that Chrysler was now completely out of government hands. Italian auto maker Fiat SpA will pay the U.S. Treasury $500 million to buy its remaining 6 percent stake in Chrysler, a move that should be completed in 30 to 60 days. Under the deal, Fiat will also pay the Treasury $75 million for the right to purchase the 45.7 percent Chrysler ownership stake held by the United Auto Workers union’s health-care trust fund. Fiat must negotiate a purchase price with the trust fund.

The Treasury will keep 80 percent or $60 million of the $75 million and share the remaining 20 percent with the Canadian government. In all, the Treasury will walk away with a total of $560 million in the deal . Acquiring the Treasury’s shares will lift Fiat’s stake in Chrysler to 52 percent.