U.S. loans automakers $8 billion to get green

Ford, Nissan and Tesla will receive billions in government loans to ramp up development of more fuel-efficient cars.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

What investment strategy will you follow for the rest of the year?
  • Aggressively buying stocks
  • Slowly adding more stocks
  • Beefing up bonds and cash
  • Not changing a thing

Find Your Next Car


Find your next Car



DEARBORN, Mich. (Reuters) -- Ford Motor Co. will receive nearly $5.9 billion in U.S. government loans to spur development of more fuel-efficient vehicles, the Obama administration said Tuesday.

Japan's Nissan Motor Co. Ltd. will receive $1.6 billion, and start-up Tesla Motors Inc. will receive $465 million in advanced technology financing from the Energy Department program.

"By supporting key technologies and sound business plans, we can jumpstart the production of fuel-efficient vehicles in America," Energy Secretary Steven Chu said at Ford headquarters.

"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," he said.

The agency plans additional loans over the next several months to automakers and suppliers.

Chu said the administration began talks with Chrysler Group LLC on possible energy technology loans immediately after the company stepped out of bankruptcy protection this month. It is also having "technical" discussions with General Motors Corp., which is currently reorganizing in bankruptcy proceedings.

Both companies applied for financing last year but their financial distress disqualified them from consideration in the first round of financing. The $25 billion program is only open to viable companies.

Chrysler is operating in an alliance with Italy's Fiat.

"There is money there - I wouldn't say set aside - but we are trying to stretch these dollars as far as we can," Chu told reporters.

Both Chrysler and GM rely on government bailout funds to operate. Ford, struggling like other companies with the industry's sharp sales decline this year, is the only U.S. auto manufacturer that did not seek bailout assistance.

Ford will receive loan funds through 2011 to retool factories in Michigan, Ohio, Illinois, Kentucky and Missouri in order to produce 13 models. Ford is focusing on electrification and improvements to conventional engines as well as converting two truck plants for car production.

The loan is part of a $14 billion investment Ford plans in advanced technology vehicles over the next seven years, said Ford Chief Executive Alan Mulally.

The No. 2 U.S. automaker hopes most of that financing will come from government loans.

Nissan's North American unit will receive the funds to retool its Smyrna, Tennessee, facility to build electric cars and an advanced battery manufacturing plant, Chu said.

Tesla, based in San Carlos, California, will receive funds to build electric drive trains and electric vehicles.

Ford (F, Fortune 500) shares were up 14 cents, or 2.6%, to $5.52 in early afternoon trading on the New York Stock Exchange. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More
15 execs who make more than their CEOs Sure, corporate chiefs' pay often is eye-poppingly high. But at some companies, executives lower down the ladder quietly out-earned their CEO bosses. More
Novelty gifts for people with money to burn For those who've got the cash, these holiday gifts can really make a statement. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Copyright 2009 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.