Ford receives $5.9 billion in loans from the US Energy Department
Ford has finally taken a piece of the pie.
Having been the only US auto manufacturer that has yet to tap into government loans, Ford Motor Co. finally joined its US colleagues, General Motors and Chrysler, in receiving government financing to the tune of $5.9 billion.
The Detroit-based automaker is planning to use the added funds to further accelerate the production of fuel-efficient cars, which by all accounts are the only cars that are gaining in traction as far as popularity and practicality is concerned.
As part of the Energy Department’s program in promoting fuel-efficient cars, the government sector is releasing $25 billion in loans to automakers in their development and production of these cars. Ford was the first to take a bite out of this pie with more manufacturers expected to follow suit.
In addition to Ford, Nissan has also sliced its own share, receiving $1.6 billion to aide in the production of their own fuel-efficient vehicles as did Tesla Motors Inc. who received $465 million. As far as the distribution of the funds is concerned, the first $10 billion of the 25 the Energy Department is releasing will be available this year while the subsequent $15 billion will be available next year.
Despite being different from the government bailouts GM and Chrysler got from the government, Ford wasted little time tapping in to this new resource. With the unpredictable nature of the industry, it seems to be a pretty logical move on their part to take advantage of any form of assistance any way they can get it.
With GM and Chrysler’s brush with bankruptcy making worldwide headlines, it wasn’t lost on anybody familiar with the industry that Ford also posted monumental losses of $14.7 billion in 2008 so it hardly comes as a surprise that they’d take a piece of the government’s $25 billion funding.
News has circulated that part of the $5.9 billion Ford borrowed may be used to pay off the costs it incurred when they converted a sports-utility vehicle plant in Wayne, Michigan into a production house for the Ford Focus.
Source: L.A. Times