Dingell Pushes Access to $25 Billion in Plant Aid for GM, Ford
2008-08-05 15:25:18.980 (New York)
By Jeff Green
Aug. 5 (Bloomberg) -- A Michigan lawmaker is asking the U.S.
to speed rules that would free up $25 billion in government loans to convert General Motors Corp., Ford Motor Co. and Chrysler LLC factories to build alternative-fuel vehicles.
The funding is part of last year's energy bill, and the rules were supposed to be written within a year of its December passage, Representative John Dingell wrote yesterday in a letter to U.S. Department of Energy Secretary Samuel Bodman.
``It is essential for the department to undertake this effort with urgency,'' wrote Dingell, a Democrat and chairman of the House Energy and Commerce Committee. ``Providing the domestic automobile industry with targeted and timely assistance will help stimulate the entire economy.''
The push follows Ford's and GM's posting of a combined $24.2 billion in losses for the second quarter. GM, Ford and Chrysler are closing factories that produce pickups and sport-utility vehicles being shunned by U.S. consumers as gasoline hovers near
$4 per gallon. They are also speeding development of models such as gasoline-electric hybrids, fuel-cell vehicles and electric cars that use less or no fossil fuel.
``The Congress and candidates are asking how they can support an industry critical to the economy,'' GM spokesman Greg Martin said. ``We're pointing to an existing mechanism that can help,'' he said, referring to the Energy Independence and Security Act of 2007. Ford spokesman Mark Truby and Chrysler spokeswoman Shawn Morgan didn't have an immediate comment.
Dingell said that vehicle sales account for about 4 percent of U.S. gross domestic product. He said he is committed to securing ``substantial appropriations to fund the award and loan programs before Congress adjourns for the year.''
The rules call for loans for as long as 25-years with an interest rate set at the cost of funds to the Department of Treasury for obligations of comparable maturity, according to the text of the legislation. The loans can cover as much as 30 percent of the cost for assembly plants, component production and some engineering of qualifying vehicles and components.
For related news:
Autos and government: TNI AUT GOV BN
Tuesday, August 05, 2008
Speaking of socialism....
Have to love this. I'm so glad that my money is going to below-market loans to companies that I would guess, in aggregate, have not made money over their 100 year history. Just think about that...and we are talking about lending them $25 Billion of taxpayer money? This is crazy. From Bloomberg today: