Article published June 24, 2009
Ford, Tesla, Nissan to share $8B U.S. loans
3 to join government in 'green' car venture
ASSOCIATED PRESS
DEARBORN, Mich. - Cultivating the next generation of fuel-efficient vehicles, the Obama Administration said yesterday it would lend $5.9 billion to Ford Motor Co. and about $2.1 billion total to Nissan Motor Co., and Tesla Motors Inc. in a government-industry partnership to build "green" cars.
U.S. Energy Secretary Steven Chu said the three automakers would be the first beneficiaries of a $25 billion fund to develop fuel-efficient vehicles. The loans to Ford will help the company upgrade factories in Ohio, Michigan, Illinois, Kentucky, and Missouri to produce 13 fuel-efficient vehicles.
Nissan will receive loans of $1.6 billion to retool its plant in Smyrna, Tenn., to build electric vehicles and to construct a battery manufacturing plant. Tesla will get $465 million in loans to build electric vehicles and electric-drive powertrains in California.
The loans were established to help auto manufacturers meet new fuel-efficiency standards of at least 35 miles per gallon by 2020, a 40 percent increase over current standards.
"These loans will help the auto industry meet and even exceed the president's tough fuel standards," Mr. Chu said at Ford's Research and Innovation Center. "This means the most fuel-efficient cars in the world must be made right here in America."
Dozens of auto companies, suppliers, and battery makers have requested $38 billion from the loan program, which was created last year to give car companies and suppliers low-interest loans to retool their facilities for green vehicles and components such as advanced batteries.Ford had been seeking about $5 billion in loans by 2011 and a total of $11 billion from the program to invest $14 billion in advanced technologies over the next seven years.
The loans will help Ford convert two truck plants to produce cars and help the company raise the fuel efficiency of nearly 2 million new vehicles a year. The government said it will help Ford transform nearly 35,000 jobs into "green" engineering and manufacturing jobs.
Ford has said it intends to bring several battery-electric vehicles to market starting next year, with a plug-in hybrid vehicle coming by 2012.
"We want to be in every mar-ket segment in the U.S.," Alan Mulally, Ford's chief executive officer, said. "Every year forever we want to continue to improve fuel efficiency."
Nissan said it will use its loan to make zero-emissions vehicles and build a plant to make lithium-ion battery packs. The Japanese company has out-
lined plans to develop an all-electric car with 100 miles of pure battery range for release in late 2010.
The electric car will initially be built in Japan. But a company executive said the loans could create up to 1,300 jobs at the two facilities and lead to U.S. production of the electric car beginning in 2012.
Tesla of San Carlos, Calif., will use $365 million for production engineering and the assembly of the Model S sedan, an all-electric vehicle that is expected to travel up to 300 miles per charge and go on sale in 2011. Tesla will use $100 million for a powertrain manufacturing plant expected to employ 650 workers.
General Motors Corp. has requested $10.3 billion in loans from the energy program, and Chrysler Group LLC has asked for $6 billion. Energy officials have said the loans could go only to "financially viable" companies, preventing GM and Chrysler from qualifying for the first round.
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