Automakers Seek $50B In Loans From U.S.

Industry Wants Help To Modernize Assembly Plants, Develop Fuel-Efficient Vehicles

(AP)  Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

Industry officials said the loans, which are twice the amount authorized in last year's energy bill, are a top priority when Congress returns next month because of the declining fortunes of Detroit's automakers and tightening credit markets.

"The amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they're communicating what their funding needs are," said Alan Reuther, legislative director for the United Auto Workers union.

Congress authorized $25 billion in low-interest loans in last year's energy bill, but the auto industry's allies in Congress have been unable to get funding for the plan.

The loans would provide low-interest credit for up to 30 percent of the cost of retooling facilities to build hybrids, plug-in hybrids, electric cars and other alternatives.

Detroit's automakers have struggled this year amid a sluggish economy and consumers shunning large sport utility vehicles and trucks because of high fuel prices. General Motors Corp. reported a second-quarter loss of $15.5 billion and Ford Motor Co. reported an $8.7 billion loss.

The auto industry's future has been a top issue in Midwest battleground states key to the presidential race. Sen. John McCain had opposed the retooling efforts, arguing that his $5,000 tax credits for consumers who buy fuel-efficient vehicles and a $300 million battery prize would accomplish the same goal.

But in a statement released Friday, the Arizona Republican said Congress should fund the loan program in the energy bill: "I believe we should fund it and take action that will assist Detroit and its suppliers in making it through this difficult time of transition."

Douglas Holtz-Eakin, McCain's top economic adviser, said the conditions had declined for auto companies seeking access to capital. "It's a common sense response to the realities on the ground," he said.

Democrat Barack Obama previously outlined support for the loans, and a 10-year, $150 billion program for green manufacturing. Obama's campaign said Friday they would support the $50 billion loan program.

Auto industry officials have argued that the loan program would not represent a bailout, but would be similar to aid lawmakers have given to Wall Street investment banks and struggling mortgage firms. They also note that auto companies face tens of billions of dollars in costs from new fuel economy regulations.

"We don't see it as a bailout. We see it as government assistance to help retooling tied to the production of these advanced technology vehicles," Reuther said.

Congress would need to appropriate $3.75 billion to provide up to $25 billion in low-interest loans to car companies and their suppliers, according to a July 25 letter to House Democratic leaders.

The plan, which is still being discussed, calls for $25 billion in loans to be available in the first year, followed by an additional $15 billion in the second year and $10 billion in the third year, industry officials said. To activate the full $50 billion in loans, Congress would need to set aside about $7.5 billion to guard against a loan default.

GM and Ford spokesmen declined to comment on whether their companies would be pushing Congress to raise the loan limit, but expressed support for the program.

The loans in the energy bill showed how "government policy can be aligned with consumer demand and the efforts of the industry," said GM spokesman Greg Martin.

Mike Moran, a Ford spokesman, agreed: "Congress created a program for direct loans and we're hopeful that they can fund those this year."

[incog-nito]

I''m sure every conservative will agree that the "free market" should take care of these automakers, and that the government should not get involved.

[cbsfan73]

What? Are they planning to borrow borrowed money?

It''s pretty *** bad when you want to borrow from those already in debt up over their azzes.

[Michael Arnold]

Why NOT bail these losers out? We''re bailing everybody else out. Socialism at its very best!

[deacon20081]

Corporate Welfare....Bullzcrap the Auto makers have been yanking our chains on cars and trucks for years while earning billions. NOT A DIME should be "loaned" to these barnacles sucking on Americas teet.

[haoli25]

Financing incompetence again with corporate welfare.

[cbsfan73]

How to loan money that you don''t have?

[cbsfan73]

Wait a minute. Congress borrows money from foreign governments and loan sharks at prime rate and then wants to give the automakers a low interest loan?

Who is left paying the difference? The American tax payer, Mr. Cowardly himself.

[cbsfan73]

No wonder so many people fail in their personal finances. They are direct reflection of their government.

[antizion]

Screw the auto makers. They are working for the oil companies. A V* is capable of getting over 200MPG with a Pogue carb. Stanley Meyer, Dr. Puharich and others proved you can run a can on nothing but water.

Screw big oil and the companies that are in bed with them including big government and big banks.

[antizion]

Hey US tax payers... I built a piece of *** that supports big oil. Can I have some free corporate welfare now so I can give more of your money to the Standard Oil monopoly? Those poor Rockafellers are down to their last 11 trillion last I heard. Pathethic.

[antizion]

Hey US tax payers... I built a piece of *** that supports big oil. Can I have some free corporate welfare now so I can give more of your money to the Standard Oil monopoly? Those poor Rockafellers are down to their last 11 trillion last I heard. Pathethic.

[cbsfan73]

AntiZion wrote:
"Screw big oil and the companies that are in bed with them including big government and big banks."

How to screw them when we have a nation of cowards?

[cbsfan73]

Well, it''''s not as bad as it looks when you think about it. At least it is a loan.

The US government has given over 100 billion dollars to Israel since 1949. We are talking about one of the wealthiest nations on earth, ranking number 1 in the world for millionaires per capita.

[beehive21-2009]

You people should buy American, what''s wrong with you.Every time I see a friend buy Japanese,German,etc. autos, they get sick ? Gods Warpath

[cbsfan73]

Corporate America to the citizens:

Thank you for all the personal sacrafices of:

Doing without health care
Working more for less money
Going without a raise
Paying triple price for gasoline
Paying double price for groceries
Training foreign workers to take your job
Sending your children to a profitable war
Paying for the war
Being cowardly citizens

Without all your continuing support, we could not buy out luxury yachts, sports cars, resort homes, etc...

We thank you from the bottom of our wallets. We hope that our relationship always remains the same.

[cbsfan73]

If a politician represents the interests of a corporation (an artificial person), he/she has disrespected and is in opposition to the Constitution.

"For the corporation and by the corporation"? Not!

Seems they forgot that their job is to represent the real PEOPLE.

[b0ludo]

If I were a congressperson and I had traveled abroad, I would have realized that Ford, Vauxhall and Opel (GM) and Chrysler have been selling ultra-high-efficiency (60-80 MPG) Diesel vehicles in Europe for years. These companies have the right product at the right time, but they are saddled with the EPA and DOT''s heavy hand. You see, although these amazing wunderwagen are OK for Germans, French, Italians and Nordic Europeans, they "pollute" too much four our fragile consistencies, although the carbon footprint is half of a Prius'', without the problem in 7 years of what to do with a carload of batteries. We need a reality check in congress and we need to take a moratorium on these draconian requirements so we can put 70 MPG cars in the hands of Americans, but not at the $30K that a Prius or a Civic Hybrid will set you back, but at the sub-$14K that Europeans are paying today for a Ford Ka Diesel. Heck, for less than $30K, you can buy a Focus diesel, with a 53 MPG COMBINED city/hwy! Makes a Prius seem piggish, by comparison...

[wardoglrs]

Tell the auto makers to get there loan through a bank.
The tax payer is not a bank. Obama is and will be the social worker for the corps. WE will be slaves for them in exchanged for our low pay and no health care.

Welcomed to the new world order of bizz. And of course he is not voted in but Americans cant seem to think for themselves again and again....

You dont have to vote for him or McCain they both are losers and i suggest you look to Dr Paul and you better hurry cause time is running out...

Anther 4 yrs of hell and the debt is unpayable. The dollar is worthless and you all better get Gold Or Silver before the crash

[b0ludo]

It is amazing to read some of these posts. Some of my best friends whose heart bleeds for our unemployed American brothers and sisters, will flat out refuse to buy American... What exactly do they think buying Japanese or European does to our workforce?

[wardoglrs]

Spare any Change please? :[

[juwboy]

USA -- socialism for the rich, capitalism for the poor.

[dls3221]

Perhaps the US auto industry should look to Korea, India and Mexico for aid. After all, that''s were their automotive jobs are at. Those countries have the most to lose if they go bankrupt.

[afmca]

I knew it was just a matter of time. I say, NO loans unless there is totally new management. U.S. Auto corporate leaders are truly incompetent. They are the ones that ignored the marketplace, fought the increase in mpg standards, placed high efficiency technologies on the back burner, and based their entire futures on gas hogs and newer versions of 1960 muscle cars.

First taxpayers bail out the incompetent airlines and are screwed with $25 baggage fees; what will our taxpayer money get in return for bailing out the 3 stooges ... GM, Ford, and Chrysler.

Other bloggers put it best. Corporate welfare for failed CEOs. This folks is the Republican dream for America .. Reagan started it and Bush/Cheney has perfected it ... when are voters going to throw these immoral, corrupt politiciams out and vote in a party that will extract real benefits for Americans for our tax-payer supplied subsidies. If they can grab our money then corporations must be made to provide living wages and healthcare.

[j_flood]

This is a poor approach to take. Few if any companies deserve taxpayer money to revitalize their business. Who is next 84 Lumber, Home Depot - because home sales are down? Because high paid CEOs made poor choices while the rest of the industry seemed to understand the times is not the basis for a bailout! I''m a native Detroiter and know that refusing the money will cause pain. But so much of this could have been avoided with sound decisions as far back as 10 years ago. Wonder what Buffett would say/do?

[cbsfan73]

afmca asked:
"When are voters going to throw these immoral, corrupt politicians out and vote in a party that will extract real benefits for Americans for our tax-payer supplied subsidies."

Herein lies the problem folks. Don''t hand your power over to a political party.

This is the same as poking your own eyes out and asking someone to lead you around.

Can''t you see this America? No, you can''t, for you have already blinded yourself, preferring to be lead instead of leading your self.

The solution will come when we stand up and demand the right to vote on issues facing the nation. No longer allowing politicians to vote our consciences.

Only then will the nation be of the people, for the people and by the people.

[haoli25]

After the auto industry gets their $50B, watch the airlines line up next for a bailout...or errr...handout.

[shanev137]

"Conservative Republican" Bush has spent us into oblivion...more than any other president in our history.

[sistatee-2009]

Let''s see; I can''t afford a new car, but GM wants ME to loan their multi-millionaire CEO and his worthless, bungling, overpaid corporate managers $50 billion! Only in the United States (what''s left of it) do the homeless lend money to rich. When the next revolution starts, count me in.

[kevboom]

"watch the airlines line up next for a bailout..."

I believe the government already props up that industry. Anything to keep oil-guzzling airplanes in the air burning more oil to keep oil profits flowing. God knows all those kickbacks from the oil lobby to the crooked Congress has made sure we have no fuel-efficient train infrastructure in this country, and it''s taken decades to get Congress to approve higher fuel standards too.

At least they''re talking "loans" here that presumably would be repaid, not that I''m holding my breath. Frankly, this is tax money better spent than more handouts to oil companies to "increase production" and generate "alternative fuels." After years of tax breaks to big oil, we see just how effective that government handout has been. And sadly this is all McCain has to offer with his energy plan--more handouts to oil companies who he claims will drill, while strangely enough they''re already sitting on millions of acres of unused oil leases, effectively keeping production low and driving prices up. It doesn''t take a rocket scientist to figure out who he''s really trying to help, and it''s not the people.

[cbsfan73]

I have total confidence in American engineers and blue collar workers.

It''s the greedy fools at the helm that are the problem.

[cbsfan73]

kevboom wrote:
"Congress has made sure we have no fuel-efficient train infrastructure in this country, and it''''s taken decades to get Congress to approve higher fuel standards too."

This problem first cropped up back in the early seventies and our leaders have had over thirty years to solve it.

Thanks, Mr. Politician, for stabbing the American citizen in the back.

[sparks224]

$50 Billion from taxpayers so they can build more big dumb trucks?

If we''re going to loan them the money, we should have some say in what kind of cars they build.

Why did Toyota choose to build a 45mpg car, and GM did not?

[drivelphobe]

The auto manufacturers need to face up to their prior miscalculations and face the consequences. NO BAIL OUT! The CEO''s are bright people and the buck stops with them. If Al Mullaly didn''t see this coming, he should be fired. Businesses that build non-competitive products and refuse to acknowledge change, deserve to go down. It''s a tough life. They have ignored the obvious and attempted to squeeze every last dime out of their old factories, manufacturing equipment, tooling and tax breaks. Time to pay the piper. There is no reason the autos don''t get double the mileage they currently get, and alternative fuels should have been on their to do list for the past thirty years. Let them go down.

[sparks224]

"The CEOs are bright people and the buck stops with them...."
Posted by drivelphobe

Unfortunately all of the bucks stop with them. Regardless of how poorly they run the company.

All of the taxpayer''s bucks will stop with them too.

[ubrew12]

"Automakers Seek $50B In Loans From Gov''t"

Isn''t that the same amount they spent on advertisements convincing Americans that without an gas-guzzling SUV they weren''t real, independent Americans. (the kind with a daily need to cross a swollen mountain stream). For a while there, it seemed on TV that if you didn''t own an SUV you were probably a hippy and possibly ''rooting'' for the terrorists.

[brianbwb-2009]

No loan, if we put out 50 billion, I say we buy them out, and nationalize them. Instruct their engineers to quit holding up progress, and start designing and producing the most energy efficient cars possible. They should not be rewarded for their inability to conduct sound business.

They layed off Detroit, without concern for the lives of the people they threw away, why should we have any concern for them?

Modernize and build factories in the US only, don''t pay for a slave labor factory in China.

[ramos937]

No, No, No, A THOUSAND TIME NO.

If Toyota and Nissan can build auto plants in the USA and operate at a profit, why cannot Ford and the rest of the domestic car companies do likewise?

[cdfoxtrot2]

I say fu_ck the auto makers. They were asked, over and over, to produce fuel efficient vehicles and fought them tooth and nail through their lobbyists. Now they have to pay. The moron-in-chief also resisted tougher fuel standards, years ago, and bears some responsibility for this. Why they should get a bail-out from taxpayers for their terrible decision-making is beyond me. If taxpayers do end up forking out corporate welfare money to these people, it should be in return for equity - not some derisory interest on some loans.

[colvinatch]

I find it the height of hipocracy that the political right, the GOP, the nazis who currently run this country is all for a free market and profit taking... that is until it fails, then of course we want a big government bailout, witness the banks who were all about making as much money as possible from risky loans, when they fail... bail us out. Now we have an automotive industry wanting a bailout, why weren''t they putting money into R and D during their hayday? why weren''t they putting money into the bank for this day? Instead they were all bout distributing wealth to their shareholders int he form of dividents, now they are standing in line with their hands out. ABSOLUTLY NOT!!!

[ubrew12]

They''re probably asking now cuz they know an Obama administration wouldn''t give them a dime.

Trying to convince Americans that we could burn oil like there was no tomorrow indefinitely. Talk about swallowing their own Kool-aid. Let the automakers go Japanese. Labor will do just fine, it makes no difference to them WHO owns the company. Its just all the investors in Ford, GM, etc that will lose their shirts... and deserve to.

[ubrew12]

Lets be clear about this: American automakers missed the fact that oil was going to get more expensive. That''s like going to Paris and missing the Eiffel Tower. Under such leadership, such a gov''t loan would be throwing good money after bad. American taxpayer money.

[eddom949]

Auto companies don''t consist of subsistence laborers, last I checked. Some of the executives are multimillionaires. Does the CEO of Ford have responsibility for hundreds of people''s finances? And they want $50 billion, not from Uncle Sam, but from the taxpayers? What about the people who pay their dues year after year and have it automatically deducted? Where''s the accountability, if this is free market economics? You don''t see Toyota asking for loans, and I for one would rather have Social Security than a car.

[jerr11]

The republicans do not believe in welfare so I expect the Bush/Cheney team to say no to these bums.

Hey get to work and build some good cars!

No Welfare for Lazy automakers!

[formrusmcsgt]

General Motors Corp. reported a second-quarter loss of $15.5 billion and Ford Motor Co. reported an $8.7 billion loss.
----
It appears to me that the US automakers are trying to hold us hostage here.

While Toyota and Honda were developing hybrids and fuel cells, Detroit kept cranking out pickups muscle cars and SUVs because of their enhanced profit potential.

And now that their greed has led to their suffering, they want a bailout.

No.

Let them earn their success like all businesses have to.

[jerr11]

Under such leadership, such a gov''''t loan would be throwing good money after bad. American taxpayer money.

Posted by ubrew12 at 04:29 PM : Aug 23, 2008



I agree.

I think American taxpayers money is better spent buying the peace in Iraq!

Hey Gen Betrayus, give those Islamist warlords and Jihadists some more of them good old American greenbacks!

Great War Strategy!

If you can''t beat them, pay them!

To which McCain says:

"My Friends, the surge is working!"

LOL

[jediservant]

So they want tax payer money to retool and build overseas.

I say we call and write all of congress and let them know where tax payers and tax payer votes come from.

[cbsfan73]

jediservant wrote:
"I say we call and write all of congress and let them know where tax payers and tax payer votes come from."

Like they really care. Vote one out, another comes in.

[cbutler69]

You dont want to bail out the auto makers but think nothing of the billions of dollars that have been squandered on the space program. Year after year we send the shuttle up for what nothing, it is a bottomless money pit, at least the auto workers have jobs here, but make it a stipulation that ALL WORK DONT HERE IN THE USA and not some over seas country.

[ubrew12]

Cbutler69 said: "You dont want to bail out the auto makers but think nothing of the billions of dollars that have been squandered on the space program....the auto workers have jobs here, but make it a stipulation that ALL WORK DONT HERE IN THE USA and not some over seas country."

That stipulation applies as easily to Toyota and Honda as it does Ford and GM. As far as I''m concerned, Ford and GM blew it, knew the consequences, and its ''game over'' for them. Their autoworkers can make the move to Toyota and Honda, and potentially get paid more for moving. But, lets admit, that Ford, GM, etc MAY just be looking for a way to blame the government for massive layoffs. They misread their customers and now must pay the price. That''s capitalism. But, NOOOO, they want to make it look like the gov''t didn''t step in and help them out of the deep doo-doo they stepped in with eyes open.

Regards the space program, consider this: every day, the earth absorbs more solar energy over her surface than human civilization has used in ALL of her 100,000 year history. Yet the earth itself only absorbs 1% or less of ALL the energy the sun puts out, every day. This means that any space-bearing civilization gets an immediate ticket to the future of humanity, from a power perspective. The action, as they say, IS in space, cuz that''s where the power is.

[cheetah-man7]

Posted by B0ludo............It is amazing to read some of these posts. Some of my best friends whose heart bleeds for our unemployed American brothers and sisters, will flat out refuse to buy American... What exactly do they think buying Japanese or European does to our workforce?


-------------------------------------------------

There''s nothing "amazing" about it. The average guy has learned that buying American cars is simply not a good thing. If we want top qulity, great mileage, etc... - WE BUY JAPANESE! Simple! What part of this do you refuse to understand?