Automaker aid for building fuel-efficient vehicles moving about as fast as this car

The $25-billion loan program that was rushed through Congress to save the sputtering auto industry may not deliver any money to Detroit for more than a year, imperiling a plan to help automakers ramp up production of fuel-efficient vehicles, the Washington Post reports today.

"The loan package, the largest government subsidy for the auto industry since the 1979 Chrysler bailout, is intended to aid production of more fuel-efficient cars," the Post reports. "During the gas crisis of the 1970s, Asian and European automakers capitalized on America's growing appetite for smaller cars. Since then, the Big Three have slipped and continue to lose market share to Toyota, Honda and other foreign brands."

According to the AP, the loan package would reward automakers with $25 billion in below-market loans, "costing taxpayers $7.5 billion to subsidize the retooling of plants and development of technologies to help U.S. carmakers to build cleaner, more fuel efficient cars. Companies would not have to begin repaying the loans for five years."

To qualify for the loans, automakers must prove they can build vehicles at least 25 percent more fuel efficient as they work toward meeting new standards of at least 35 miles per gallon by 2020. But will $25-billion even be enough for that? Not according to the Post: "By many estimates, it'll cost all automakers, foreign companies included, $100 billion to meet the new efficiency standards in 2020."

[Times photo by Jim Damaske]

--Craig Pittman

Comments

[ChrisP]

NO NO NO, This is what is known as a shakedown. The Government should make those 'big 3' morons pay back the billion-dollars they were already given ten years ago. They didn't fail to develope fuel efficient vehicles, they abandoned them. Once again, the government is rewarding corporate irresponsibility rather than punishing it.

Oh, Chevy and Ford's answer to the $4 dollar gas pinch over the summer was 1 or 2 miles per gallon more efficient? They are still making SUV's. Call it what they want CUV, Crossover whatever. The point is, at this rate Americans might see a 48mpg Chevy or Ford by 2021.

Is that acceptable to you? There are people building electric vehicles in their garages, and Chevy can't even get the "Volt" to go up a hill???????