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WHICH AUTOMAKER OWES US TAXPAYERS 4 BILLION?

Discussion in 'Politics, Elections & Legislation' started by LUGNUTZ426, Jan 12, 2012.

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  1. LUGNUTZ426

    LUGNUTZ426 TS Member

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    The answer may surprise you...it did me. Ford. Took 4 billion in low interest retooling loans from Dept of Energy. Gm and Chrysler have repaid all restructuring loans with interest.
     
  2. Ross

    Ross Well-Known Member

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    Didn't know that, sure wish they (Ford) would have spent it better. Drove Fords for about 15 years, got 3 duds in a row switched to Chevy in 1970-71 they weren't perfect but much better, bought another Ford truck in 2004, will go back to Chevy. I pull the same load and route now as before--Chevy--11 to 11.5 mpg-Ford 8 to 8.5 mpg. Ford does run O.K. uses no oil etc. but much noisier, rougher ride, cheaper interior (seats etc.)gauges & controls placement just not planned out well enough. Nothing real serious just not up to my quality standards. Ford cars & trucks still better than some of the foreign offerings I have been in & around. Ross Puls
     
  3. scott calhoun

    scott calhoun Well-Known Member

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    Lugz -

    Are you saying that Ford borrowed all that money and defaulted on repayment? I hadn't heard anything about that, figured if they defaulted on $4B it would have made the news.

    Or is it a case of they borrowed the money and are repaying it as required per the terms of the loan? Was the loan to avoid going out of business, or just taking advantage of a government program that was available to a wide variety of companies in the auto industry?

    There is more information (facts) about the loan below.

    Scott

    9/18/2009

    DOE Finalized $5.9B Loan to Ford
    SustainableBusiness.com News


    The Department of Energy (DOE) on Thursday announced that it has closed on its loan offer of $5.9 billion to Ford Motor Company (NYSE: F) to transform factories across Illinois, Kentucky, Michigan, Missouri, and Ohio to produce more fuel efficient models.

    The loan is part of the Department’s Advanced Technology Vehicles Manufacturing program (ATVMP), and the loan for Ford Motor Company is the first to be finalized since the program was appropriated in the fall of 2008.

    On June 23, 2009, DOE issued a conditional loan commitment to Ford to finance up to 80% of qualified expenditures to improve the efficiency of light vehicles by using technologies that improve internal combustion engines and transmissions, reduce vehicle weight, reduce vehicle drag with more aerodynamic designs, and improve vehicle efficiency through the development of hybrid and plug-in electric vehicles.

    The loan proceeds will enable Ford to raise the fuel efficiency of more than a dozen popular models, representing close to two million new vehicles annually, and save more than 200 million gallons of gas a year.

    The DOE said the loan builds on steps taken by the Obama Administration earlier this week to require an average fuel economy of 35.5 miles per gallon in the year 2016. That standard will reduce oil consumption by an estimated 1.8 billion barrels, prevent greenhouse gas emissions of approximately 950 million metric tons, and save consumers more than $3,000 in fuel costs.

    In June of this year, the Department of Energy announced conditional loan offers to Ford Motor Company, Tesla Motors, and Nissan Motors for a total of $8 billion. The program was appropriated $7.5 billion by Congress to support up to $25 billion in loans to companies making cars and components in US factories that increase fuel economy at least 25% above 2005 fuel economy levels.

    The DOE said it plans to make additional loans under this program over the next several months to large and small auto manufacturers and parts suppliers up and down the production chain.

    Applications for the loan program have included vehicles running on electricity, biofuels, and advanced combustion engines, and were submitted by both car and component makers, US automakers, US manufacturing subsidiaries of non-US-based companies, major US auto parts suppliers, and innovative startups.
     
  4. TOOLMAKER 251

    TOOLMAKER 251 Active Member

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    Some ts.commers either listen to too much propaganda or drink the kool-ade. Article in big government.com "how did GM pay back its TARP loan so fast? it didn't. The government handout money was placed in different accounts, so they took money from a escrow account (govt. loan money) and paid the TARP loan off. Reported from Wards magazine, Ford received a 10 billion no to low intrest re-tooling loan from the Dept. of energy which was not a bailout loan.
     
  5. scott calhoun

    scott calhoun Well-Known Member

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    Rich -

    Did you read the posted information about the loan? The information provides all the details on what the DOE program is about.

    It is not a bailout, it was a completely separate program as part of a DOE program to increase vehicle efficiency and lower fuel usage.

    The reason you wouldn't go to a bank is because the government was offering a better deal. When you go to buy a new appliance or a new car, if the merchant is offering 0 percent financing, do you pass on that option and go to a bank and borrow the money at 5 percent? Just like a consumer, Ford and the other companies are looking for the best deal when it comes to borrowing money.

    You might not agree with the government running a program like this, but those calls should go to the White House and the DOE. It's hardly Ford's fault for participating in a program that was designed by the government to help further their cause of making more efficient vehicles.

    Scott
     
  6. Catpower

    Catpower Molon Labe TS Supporters

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    I'm with Scott on this, it was a loan made by the government, if they pay it back, it's not a hand out
     
  7. TOOLMAKER 251

    TOOLMAKER 251 Active Member

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    Rick, Ford was granted a loan from the DOE for re-tooling and R&D on developing new higher efficiency vehicles. GM's loan was to save the union workers, the DOE recently gave a multi billion loan to Tesla motors who is not filing for bankruptcy.
     
  8. Stl Flyn

    Stl Flyn Well-Known Member

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    Scott said it right.

    If you look back at when the bailout money was being distributed, Ford was the only one of the big three that said they did not need the money. When the regulation requirement of higher fuel milage was passed the government knew that in order for these factories to be upgraded to meet these standards the chances of getting a loan from a big bank would be zero. Looking at the state of the economy at that time. Ford was, and still is in the best position to pay those loans back. It looks to me like Ford is way ahead of the game right now. I wonder when GM, and Chrysler will even be in the position to begin updating there factories with these loans. I think buying Ford stock may be a good buy at this time. Hmm. It looks like you will need some time to be worth the investment. Then again look at who won car of the year, Hyundai. Go figure. Jon
     
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