Auto industry seeking $50B in loans from Congress
Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.
Industry officials said the loans, twice the amount authorized in last year's energy bill, will be a top priority when Congress returns next month because of the declining fortunes of Detroit's automakers and tightening credit markets.
"The amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they're communicating what their funding needs are," said Alan Reuther, legislative director for the United Auto Workers union.
Congress authorized $25 billion in low-interest loans in last year's energy bill, but the auto industry's allies in Congress have been unable to get money to pay for the plan.
The loans would provide low-interest credit for up to 30 percent of the cost of retooling facilities to build hybrids, plug-in hybrids, electric cars and other alternatives.
American automakers have struggled this year in a sluggish economy and consumers shunning large sport utility vehicles and trucks because of high fuel prices. General Motors Corp. reported a second-quarter loss of $15.5 billion and Ford Motor Co. reported an $8.7 billion loss.
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