June 23rd, 2009
Taxpayers are NOT bailing out Ford Motor, or are we?
We all know the sorry saga of two-thirds of the former Detroit Big Three. GM in bankruptcy, shedding brands and trying to become competitive once again. Chrylser is now essentially a distribution arm for Fiat, a second tier car company that had no American market share a year ago. But proudly Ford was standing on its own! The healthy survivor among the The Shrunken Three.
Until this week. Now the Department of Energy (DOE) has announced nearly $6-billion worth of loans to…Ford! The complex program is cleverly entitled “Advanced Technology Vehicles Manufacturing Incentive Program.” Not quite a bail-out but the loans are immediate and carry through 2011.
Here are five Ford initiatives that are slated for government support:
1) EcoBoost engines available on more than 90% of N. American domestic nameplates by 2013.
2) Six-speed transmissions available on 100% of domestic nameplates by 2012. THat makes for fuel efficiency.
3) Battery-powered electric Transit Connect commercial vehicle for sale in 2010 and a battery electric Focus passenger car for sale in 2011.
4) Development of a new dedicated hybrid and plug-in hybrid electric vehicle for sale in 2012.
5) Development of advanced lightweight materials to help drive fuel economy gains.
This money will be used to retool the factories that once turned out those gas-eating big trucks and SUVs for which Fod was justly known across the car industry, until the whole business collapsed last year. Ford gets this money so it can meet the tightening mileage standards for cars sold in the U.S.
TESLA AND NISSAN GET SOME CASH
Start-up Tesla and Nissan of North America also got some DOE money. Tesla, based in Silicon Valley, got nearly half a billion. Nissans got $1.6-billion to convert its Smyrna, Tennessee, plant to build electric cars.Will Toyota and Honda also get similar loans? Do they even need loans?
MORE LOANS TO COME
There are numerous companies hopping to cash in on the DOE’s loan program which has a pot of $25-billion altogether. That leaves $17-billion in hand-outs. You gotta love this piece on Louisiana’s V-Vehicle Company. They’re hoping for DOE help to supplement investments from Kleiner Perkins and T. Boone himself. And the photo in the news report: that very same Louisiana governor who so loudly protested against the stimulus bill and other federal spending.
A newsman since 1969, Harry Fuller has worked for CBS, ABC, CNBC Europe, CNET and was founding news director at TechTV. See his full profile and disclosure of his industry affiliations.
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