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

What do you think?


  (116) posted on 06.29.2009

Well, we have to very critical on our comments for the reason that it is not only Ford which taking a bite, Nissan too. Now the main point why Ford is into this band wagon is this is according tot the plan of the US govt that all American car makers develop thier own line up of fuel efficient cars. Tesla is an exception to this project although US based, it is partly owned by a German company. But it is clear that is it not only for American brands it is for all interested companies that have bases in the US-its all about global warming, and social responsbility I suppose.

  (137) posted on 06.29.2009

I beleive that Ford was initially asking for 5 Billion and the govt gave them 5.9 and in exchange Ford will take home around 5.3 not bad. Nowadays to play your card well in very important and biting the right thing is very significant— this decision is not bad and even though for some this may sound like Ford is taking the dwindling road of GMC and Chystler, to take this loan subsidy will fund alot of projects especially in developing its hybrid/electric market.

  (78) posted on 06.29.2009

I guess, Ford’s biting a piece on the Govt loan does ont mean they are on the loosing edge, I think they are playing theri card very wisely and prodently this time, in the period of uncertainty, to tap a new ground is always a good business opportunity and by taking a good loan by supporting a govt product is a win-win decision in hte long run.

  (79) posted on 06.29.2009

I think this plan of the US government to provide loans in encouraging car makers to produce more fuel efficient products is a very responsible action that the Obama adminstration knowing the fact that there is really money on this section once tapped properly. Besides this development in autmobile have been long awaited. I think it is just hightime.

  (177) posted on 06.29.2009

I think the US Govt is pushing this project very hard. The direction of US car companies under the Obama administration are geared towards the reduction of CO2 emission and I think thid is very possitive direction for the US, being one of highest producer of CO2 in the world.

  (231) posted on 06.29.2009

Let me just add about what Chu said in an interview and to quote Thorman: “It’s an exclusively U.S.-centric project: cars made in America for American consumers,” “It’s a loan, it’s not a gift.” Although we noticed that Ford did not accept the inital bailout plan from the US govt, it seems that Ford benefited from the decision and in the end gained despite thier loses in 2008. However a more significant point here is that this is not a bailout money, this is a loan intended to retrcuture the automobile industry towards electric powered vehicle.

  (289) posted on 06.29.2009

AS what Secretary Steven Chu said. ‘There Is Money’ “There is money there,” “We are trying to stretch all the dollars as far as we can. We would like to help all the auto manufacturers who manufacture in the U.S.” So in this case the real aim is to improve the market by tapping the hydrid-electic car market as there is money there and everyone is welcome to join the band wagon.

  (314) posted on 06.29.2009

I think there is nothing wrong about Ford receiving a piece of government fund especially in developing a line up tuned to the government policy as we all know, these companies in their heights also supported the government funds, and now its just a time for them to reap what they deserve in order to conply with the demand of the US CO2 emission policy.

  (318) posted on 06.29.2009

Well we have clarify the purpose of this loan for Ford. The aid is separate from bailouts for General Motors Corp. and Chrysler LLC. It was part of Congress’s 2007 energy bill to help automakers boost average fuel economy by about 40 percent, to 35 miles (56 kilometers) per gallon by 2020 which Obama recently moved to 2016.

  (421) posted on 06.29.2009

I believe this is a good opportunity for Ford to develop its line up based on the US congress plan to develop the American market towards the hybrid segment. And we all know that Ford also faced loses and this is just timely for Ford to take part into this piece of government funds.

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