Join Date: Nov 2004
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Ford share of federal loan to go to retooling plants
Dearborn -- U.S. Energy Secretary Steven Chu presented Ford Motor Co. with $5.9 billion in loans today to help the automaker develop and manufacture a new generation of fuel-efficient vehicles.
"The American innovation machine, when it revs up, is the greatest in the world," he said during a press conference here. "Today, we're putting that engine into gear."
Chu also announced a $1.6 billion loan to Japan's Nissan Motor Co. to produce electric vehicles and batteries in Tennessee and a $465 million loan to California's Tesla Motors to produce a cheaper version of its electric vehicle, as well as powertrain components for Daimler AG
Ford CEO Alan Mulally vowed that Ford would use its money to become "the fuel-economy leader."
"We are transforming our business, we are retooling our plants," he said.
Ford will use the money to retool or modernize factories: Michigan Assembly in Wayne, Van Dyke Transmission, Dearborn Assembly, Dearborn Engine, Livonia Transmission, Chicago Assembly, Louisville Assembly, Kansas City Assembly, Cleveland Engine, Lima Engine and Sharonville Transmission.
Ford will borrow the federal funds at a dramatically lower rate than it could on the open market.
Chu said he is already in talks with the Chrysler Group LLC, following its emergence from bankruptcy, and expects to move on its loan application shortly. General Motors Corp. has also applied for loans through the program, but must emerge from bankruptcy before it can proceed.
"There is money there," Chu said.
The federal government has allocated a total of $25 billion for the program, which is designed to help automakers and suppliers meet tough new fuel economy standards.
These are the first conditional loan commitments reached as part of the Department of Energy's Advanced Technology Vehicles Manufacturing program. The department plans to make additional loans under this program during the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.
"We have an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America," President Barack Obama said in a statement released by the Department of Energy.
"These loans -- and the additional support we will provide through the Section 136 program -- will create good jobs and help the auto industry to meet and even exceed the tough fuel economy standards we've set, while helping us to regain our competitive edge in the world market."
Chu said that by supporting key technologies and sound business plans, "we can jumpstart the production of fuel efficient vehicles in America."
"These investments will come back to our country many times over -- by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions," Chu said in the same statement released by the administration.
These commitments will help reduce the 140 billion gallons of gasoline Americans consume each year, the administration said, lessening the nation's dependence on the volatile world market for oil, and decreasing the cause of a fifth of the nation's carbon emissions.
The White House recently announced an agreement to raise passenger car fuel standards from 27.5 miles per gallon to a target of 35 mpg by 2016.
"Today's announcement by Secretary Chu is welcome news and a credit to Ford's commitment to advanced manufacturing here in Michigan," said U.S. Sen. Debbie Stabenow, D-Lansing.
"These low-interest loans will provide Ford with much-needed capital to retool older auto plants in order to produce more advanced technology vehicles such as the Ford Fusion hybrid.
"I am confident that these loans will help revitalize plants and communities, save jobs, and protect our U.S. manufacturing base here at home."
U.S. Rep. Fred Upton, R-St. Joseph, said the loans "culminate a two-year, bipartisan effort, spanning two administrations to help create green collar jobs for our workers.
"Ford will continue its rich tradition of building top-of-the-line vehicles, made by Michigan workers, as they transition to the greener, more fuel-efficient cars and trucks of tomorrow," Upton said in a statement released by his office.
"This first round of loans could not have come a moment too soon, and I am confident that Ford will continue to be at the forefront as we transition to the next generation of advanced, green vehicles. As a nation, we have already lost 20 percent of all our manufacturing jobs, and these loans will certainly help stem further losses."
Ford Motor Co.: Ford will receive $5.9 billion in loans through 2011 to help "finance numerous engineering advances to traditional internal combustion engines and electrified vehicles," the energy department said. The money will help Ford convert two truck plants to the production of cars. Ford will raise the fuel efficiency of more than a dozen popular models, including the Focus, Escape, Taurus and F-150. The energy department said the loan will help transform nearly 35,000 employees to green engineering and manufacturing jobs in factories in Michigan, Illinois, Kentucky, Missouri and Ohio. The facilities that will be impacted by Tuesday's announcement include Dearborn Assembly, Dearborn Engine, Livonia Transmission, Michigan Assembly and Van Dyke Transmission.
• Nissan: Nissan will get $1.6 billion to produce electric cars and battery packs at its manufacturing complex in Smyrna, Tenn. The loan will help in the construction of a battery plant and modifications to the existing assembly facility. Nissan anticipates the project may result in an increase of up to 1,300 jobs in Smyrna when full production is reached.
• Tesla Motors : Tesla will receive $465 million that will also advance electric vehicles. The first loan will finance a manufacturing facility for the Tesla Model S sedan, which is expected to be roughly $50,000 cheaper than Tesla's first vehicle, the Roadster. The all-electric sedan runs on electricity from any conventional 120V or 220V outlet. The energy department said production of the Model S will begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013. It expects to create 1,000 jobs in Southern California.
The second part of the loan will support a facility to manufacture battery packs and electric drive trains to be used in Teslas and in vehicles built by other automakers, including the Smart for Two city car by Daimler. The new facility expects to employ 650 people in the Bay area of Northern California.