Ford, GM, Chrysler Set for $25 Billion in Government Loans

  • Published on September 18th, 2008

Following a meeting earlier this week with House of Representatives speaker Nancy Pelosi, the ‘big three’ US automakers Ford, GM and Chrysler, are optimistic about their prospects of receiving a multi-billion dollar loan. Pelosi told reporters in Washington yesterday that she plans to unveil a $25 billion finance package next week, which will probably be added to a ‘stopgap’ government funding bill.

When (and if) finally approved, much of the loan will be used to convert production to smaller, more fuel efficient vehicles, which are increasingly popular in Europe as a result of the escalating energy crisis. The money will also be added to existing U.S. Advanced Battery Consortium grants to help fund the development and manufacture of next-generation battery technology, such as those used in the forthcoming Chevrolet Volt.

Speaking after the meeting, Alan Mulally of Ford and Chrysler’s Robert Nardelli said they were “encouraged” and “pleased” after pitching for the massive loan, likely to come in the form of low-interest financing. The reaction is unsurprising given the continuing poor financial performance of the sector, amid heavy operating losses and double-digit interest rates in a tightening credit market. The looming crisis in the car industry has led some commentators to speculate that, without the loan, U.S. automakers might struggle to survive long enough to produce plug-ins and other fuel-efficient models that can compete with existing Japanese offerings like the Toyota Prius.

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Image Credit – AndrewEick via flickr on a creative commons license

About the Author

is a writer and freelance journalist specialising in sustainability and green issues. He lives in Cardiff, Wales.
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  • andre

    Ford the best car 🙂

  • tom

    These loans to Ford, GM and, Chrysler are an investment in the American economy and America's future. If you don't want competition, see what will happen if we buy all our vehicles from foreign countries. There will still be more than enough out sourcing to foreign suppliers for components used in domestic brand vehicles.

  • peters

    It's pretty simple. If you or I are financially irresponsible we get to go bankrupt. Nothing should be above that. Toyota developed the needed technology, new companies like Aptera are popping up, and volkswagen is developing a car that consumes 1l/100km. People knew this was coming, they had the chance to do something other than increase the size of their trucks and SUVs. The money would be so much better spent on rail investment.

  • Uncle B

    Green cars are not built with the same technology that the big three have expertise in! Green cars are built with electrochemical and chemistry skills in Lithium battery design, super-magnet drives, computer controlled electric transmission and braking, drive by wire technologies, carbon fiber construction, advanced polymer composites, aerodynamic flow streaming, Ultra-lite design techniques, aluminum and titanium smarts, electronics and physics engineering. The 'Big Three' offer heavy sheet metal construction smarts, annual sheet-metal change smarts, V- 8 iron-cast engine block technology, lossy inefficient hydraulic transmissions, sloppy, power-sucking hydraulic steering controls, power wasting friction brakes and other ' lost in the 1930's "grease-pit" expertise!' General Motors recently spent a large fortune developing a 620 hp, 8 mpg, 230mph car! The newest example of the peak of their technology, the 'Vette' a car that languors on the sales lots, priced above anything practical for the average American, getting fuel economies we simply cannot afford, and goes at a rate of speed three times above the posted legal limit in most of our country. The question has to be asked, When their stock is at it's lowest point in history,and they are bumming money from the government, Why in Hell did they do this? I hope Congress gives them nothing, and chooses instead to give support to the aerospace industry, the next real source of reasonable commuter transportation and the automotive future for America!

  • KBO

    Maybe if they spend the last ten years readying for the oil crunch instead of building crappy SUVs, they wouldn't be in this predicament. As long as foreign cars are more fuel efficient and are actually built to last (as opposed to this being just a slogan), I'll buy them.

    But I don't own a car anyway, so whatever.

  • bryan Miler

    It's time for GM, Ford and Chrsyler to die with honor.