Ford to get retooling aid: Chrysler, GM can't share in billions while in bankruptcy

Tue. June 23, 2009; Posted: 08:05 AM

Jun 23, 2009 (Detroit Free Press - McClatchy-Tribune Information Services via COMTEX) -- NSANY | Quote | Chart | News | PowerRating -- The Obama administration is to announce today retooling loans for Ford Motor Co., Nissan Motor Co. and Tesla Motors, the first under a $25-billion program to spur fuel-efficient vehicle production in the United States, said people familiar with the decision.

The loans are to be the first from the program funded last year by Congress to cushion the costs of converting plants and engineering new, fuel-stingy models. Congress has granted up to $25 billion so far, but automakers and Michigan lawmakers want $50 billion available, a step President Barack Obama supported as a candidate.

The announcement is to be made by U.S. Energy Secretary Steven Chu at Ford headquarters in Dearborn. The administration said earlier this year it would award $10 billion in loans this year and the rest in 2010.

Administration officials declined to comment Monday.

Ford stands to get the largest share of the loans among the three Detroit automakers and at least a head start on Chrysler Group LLC and General Motors Corp. Ford had sought up to $11 billion, but it wasn't clear Monday how much it will get. Because of their bankruptcies, GM and Chrysler didn't qualify for the first round of loans, which under law can go only to "financially viable" companies.

GM's financial plans filed as part of its bankruptcy forecast the automaker would get $5.7 billion in retooling loans from 2010 through 2013. Chrysler's bankruptcy forecasts call for the automaker to receive $6 billion in loans.

Nissan and California-based Tesla sought loans to build electric cars.

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