GM, Chrysler set for More Government Loans
Chrysler Group LLC and General Motors Co. are seeking a combined $23 billion in loans from the U.S. Department of Energy for renovating factories. If approved, the loans would come from a $25 billion fund set up in 2008, and would carry a lower rate of interest than loans already provided by the U.S. Government.
GM’s request of $14.4 billion and Chrysler’s application for $8.55 billion have passed the several hurdles required by the loan programme. The purpose of the loans is to spur development of fuel efficient vehicles that use at least 25% less fuel than similar sized models, and companies must prove that the loans will be used to that end.
Thus far, $9 billion has been handed out from the programme. Over 100 different companies have applied for a combined total of $42.7 billion. Amongst those companies are Ford Motor Co., which took $5.9 billion after initially requesting $11 billion. Nissan, Fisker and Tesla have each received their share, respectively taking $1.6 billion, $529 million, and $465 million. The loans were handed out on a 25-year payback plan
Financing may be used either to build or renew factories, or directly for the production of parts and vehicles.
Source: Detroit News
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