Ford will receive $5.9 Billion in low interest loans from the US Govt Advanced Technology Vehicles Manufacturing Loan Program (ATVMLP). The funding will go towards transforming factories in Illinois, Kentucky, Michigan, Missouri and Ohio to produce 13 more fuel efficient models. Tesla ($465 million) and Nissan ($1.6 billion) were also approved to receive some of the low-interest loans.
From the DOE press release:
Ford Motor Company will receive $5.9 billion in loans through 2011 to help finance numerous engineering advances to traditional internal combustion engines and electrified vehicles. In addition, theses loans will help the company convert two truck plants to the production of cars. Ford will be raising the fuel efficiency of more than a dozen popular models, including the Focus, Escape, Taurus and F-150, representing close to two million new vehicles annually and helping to transform nearly 35,000 employees to green engineering and manufacturing jobs in factories across 5 states: Illinois, Kentucky, Michigan, Missouri, and Ohio. Ford is driving a major upgrade, leveraging a portfolio of technologies, including the direct injection, smart turbocharging EcoBoost engine, advanced transmissions, and new hybrid technologies.GM and Chrysler were told their finances have to improve before they can receive any loans from the government's program to loan billions to retool factories in order to make more fuel efficient vehicles. The program was set up by Bush before the TARP program began.
The facilities that will be impacted by today’s announcement include: Chicago Assembly, Louisville Assembly, Dearborn Assembly, Dearborn Engine, Livonia Transmission, Michigan Assembly, Van Dyke Transmission, Kansas City Assembly, Cleveland Engine, Lima Engine, and Sharonville Transmission.
The car companies at the time wanted the loan program, but said the funds would not be available in time to help them survive. Thus, the loans that GM and Chrysler eventually took which allowed them to survive for a few months more before going into bankruptcy.
Ford President and CEO Alan Mulally released this statement on the government loan program:
"Ford Motor Company is proud to be among the first automakers deemed by the government to be among the best companies with the best technologies in American manufacturing and fuel efficiency. This green partnership between Ford and the U.S. government will help accelerate the development of advanced technologies for even better fuel efficiency and emissions. Ford is absolutely committed to fuel economy leadership with every new model we introduce. In fact, we plan to invest nearly $14 billion in advanced technology vehicles in the next seven years. Our partnership with the Department of Energy also will help retool our U.S. plants more quickly to produce fuel efficient vehicles and help meet the new, rigorous fuel-economy requirements."Ford anticiaptes they will begin repaying the loans back in 2012
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1 comment:
Taxpayers do not have unlimited funds -- but the government continues to spend money like it's their own pocket book.
When capitalism's business cycle veers into discomfort (unemployment, slowing sales and borrowing, etc.) -- the State (government) now suppresses recession with monetary policy (making money cheap and abundant) and fiscal policy (quantitative easing, injections of liquidity, stimulus programs, etc.) so nobody feels pain. But the problems are still there, just hidden for a time by the bailouts. They will continue to grow until another bailout is needed (e.g. Chrysler).
Capitalists and those that embrace the free market reject this narrow notion for many reasons. Chief among them is that fact that experience and progress is the byproduct as we surmount difficulty. The Marines say, pain is weakness leaving the body. These downturns are inefficiencies leaving the system. These loans will be used to prop up inefficient systems. Nobody truly learns. Nobody truly grows. Nobody progresses.
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Stop the paronioa: You do not need to boycott car manufactures that accept bailouts. Capitalism thrives when you make a decision that fits you. You should find the car that you want -- and that meet the criteria important to you. Car manufacturers that accept bailout money will be required to add inefficiencies to their business model and are at a disadvantage to produce the car that meets your needs the best. You should make car manufacturers and dealers compete for your business.
So if you are thinking about a car, check out this process on this blog: http://excarsalesman.typepad.com/
Sincerely,
Ford Fan
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