By on June 23, 2009

Ford may “just say ‘no’” to TARP (Troubled Asset Relief Program) money that puts them under the control of the PTFOA (Presidential Task Force on Automobiles), but the other wise acronym-aversive automaker doesn’t mind bellying up to the DoE’s (Department of Energy) bailout buffet. Bloomberg‘s mysterious “people familiar with the plans” say Ford, Nissan and Tesla will all dine upon  loans from the “original” bailout package: the $25 billion feast created by the 2007 energy bill. The loans were intended to “help automakers boost fleetwide fuel economy.” In February, the DoE said they’d received 75 applications, totaling $38 billion. According to Bloomies, Ford, Nissan and Tesla are the first to get the handouts loans.

Ford’s asking for $5 billion, including almost a half billion to convert a Michigan factory that builds SUVs to build small cars. Tesla wants $450 million to develop its Model S and “expand a drive train business that sells parts to other automakers.” Nissan (the only foreign-based automaker to apply for the loans) said they’d requested “an unspecified amount,” but in a separate story Bloomberg states Nissan plans to start building electric cars in their Smyrna, Tennessee, plant, and that can’t be cheap to get going.

So why aren’t GM and Chrysler hoovering this buffet too? Ay, there’s the rub. To participate, a company must “be financially viable.” Those pesky bankruptcy proceedings kind of put a damper on this party. Whether they’ll be eligible to forage for the scraps left over once everyone else gets their share and the dust has settled from their “reorganizations” is yet to be decided. But I’m betting the Congressional kitchen will get busy cooking up a sumptuous second course for them if they just ask.

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31 Comments on “Ford, Nissan, Tesla First to Dine at DoE Bailout Buffet...”


  • avatar
    Kurt.

    75 applications? It would be interesting to see just what other industries applied…

  • avatar

    Maybe it’s time for another FOIA request?

  • avatar
    PaulieWalnut

    A bailout of financially viable companies? Isn’t that a bit of an oxymoron?

    I thought this money was there to greese the wheels of the new CAFE standards or am I being naive?

  • avatar
    P71_CrownVic

    And last I checked, the DoE is a department of the Government, therefore, Ford HAS indeed taken Government money.

  • avatar
    TaurusGT500

    $5 bil? And this is news?

    C’mon… Fuggedaboudit.

    5 large won’t buy you a jr. congressperson’s 3rd mistress. ….maybe a deposit on a soon-to-be-indicted City Councilperson.

    Peace. Out. …back to the Weather Channel.

  • avatar
    guyincognito

    See Musk was telling the truth. Just like that, Tesla has earned $450 million of “profit”.

  • avatar
    wmba

    According to the DOE website, the monies are loans, not grants, with an additional $7.5B in excess of the $25B to cover “defaults”.

    Since nothing has been given out yet, and this is for solvent companies, how does it become part of the bailout package, or why is it regarded as a “handout” above?

    Does TTAC assume that all loans will be forgiven, for some reason? Will the feds let Nissan off the hook, for example? Don’t think so myself.

  • avatar
    Vorenus

    I don’t blame Ford for this; the rest of Detroit gets handouts; why not the blue oval?

    Better late than never (from their point of view), I’m sure.

    I *still* see them as the lesser of three evils.

  • avatar
    tauronmaikar

    Even considering giving money to Tesla and Ford is, to me, already a failure by the DoE.

    Ford is building cars today the same way they did in 1960s. How can they compete with green technologies coming out of Germany and Japan? They should be let alone to their own devices.

    Tesla is a joke. Even if the clusterf#@#k that is Tesla succeeds in developing the “model S” it will do nothing for the environment. What is the point?

  • avatar
    Lumbergh21

    And, this is how the feds gain control over decision making at Ford. A story from last week noted the feds plan to have a say in any company’s dealings if they accepted fed money. Most were focused on TARP, but as I guessed, Ford was going to receive fed money through the energy bill’s provision for retooling to meet increased CAFE standards. Looks to me like Ford is taking fed dollars here and should expect a little whip cracking to follow.

  • avatar
    John Horner

    “Ford is building cars today the same way they did in 1960s. How can they compete with green technologies coming out of Germany and Japan?”

    Now that is just nonsense. Two days ago I test drove a Fusion Hybrid and was impressed at what a well executed vehicle it is. Anyone who thinks this vehicle is no better than a 1965 Ford Fairlane obviously hasn’t actually driven or worked on any vehicles from the 1960s. In fact, the Fusion Hybrid is a better vehicle than the Camry Hybrid or the canceled-due-to-lack-of-sales Accord Hybrid. The Germany based automakers are way behind the curve on next generation powertrains.

  • avatar
    davejay

    So. How ’bout Tesla sells controller technology to Ford and Nissan, Nissan starts building Better Place-compatible electric cars in Smyrna using the Tesla technology, and Ford starts building Volt-style (ie electric with an EcoBoost range extender) electric cars using the Tesla technology? All funded by the DOE.

  • avatar
    mpfrazer

    I’m still trying to figure out what it is that TTAC has against Ford. It seems that GM and ChryCo can hardly do any wrong based on the posts on this site, even though they took our money with no promise to pay it back just to save them from bankruptcy, but Ford takes a $5B LOAN, which will be PAID BACK, and all of the sudden they are being accused of being bailed out by Uncle Sam. Can someone explain this to me? What gives?

  • avatar
    dolorean23

    A bailout of financially viable companies? Isn’t that a bit of an oxymoron?

    It would be, if that were true, but it isn’t. Its a simple loan situation, offered by the government for a specific application of Congress’ mandated law. I agree with WMBA, there’s no smoking gun here.

  • avatar
    Bancho

    I don’t get the Ford hate. They screwed up in the past very badly but they have been the ONLY domestic to actually take steps to correct their problems and they are executing orders of magnitude better than the 2 failed domestics yet they get hammered anyhow?

    The federal money in question is loans for a very specific purpose. It’s not fun money or funds to keep the lights on. Ford is completely entitled to take advantage of these funds as long as they’re used in the manner dictated.

  • avatar
    rolosrevenge

    I don’t think this is a bailout at all. That is like saying that I am getting a bailout if I accept DoE research money for my PhD dissertation on Wind Power Integration. You give a grant when all you get in return is research, you give a low interest loan if you want a product. This is no bailout, hence the proof of solvency before you are accepted.

  • avatar
    Gregg

    Man,talk about a misleading headline. No truth there. This is a 2007 program for which money was approved in 2008. Now twisted into bailout.

  • avatar
    jamie1

    Ford is building cars today the same way they did in 1960s. How can they compete with green technologies coming out of Germany and Japan? They should be let alone to their own devices.

    This is simply a lie and should be exposed as such. I fail to understand where this hatred for Ford is coming from. They take no bail-out money, are developing and already have on the market cars and trucks that beat the best in the world (including the Japanese and Germans) and are now accessing a LOAN that they will repay without going to the taxpayer with a begging bowl!

    Lets all please get some perspective here and praise the one domestic car maker that is actually standing on their own feet.

  • avatar
    Kyle Schellenberg

    There’s this little thing called journalistic sensationalism. Polarizes people; creates posts.

    If the money is used for its intended purpose then it’s legit. If it ends up on the hood of cars then you’ll know it’s a bailout.

  • avatar
    jkross22

    For those okay with our tax dollars being granted to automakers, let me ask you this: Is there any guarantee or accountability for the use of this money the way it is intended on being spent?

    I’m guessing no, since, you know, it’s not that much. Without accountability or a way of measuring the success of this grant, this money should not be given. Put another way, if you have no way of measuring success, don’t spend the money.

  • avatar
    50merc

    Ford is “financially viable”? I’m not saying it’s doomed, but last I looked, Ford’s liabilities exceeded assets. In other words: negative net worth. That’s a condition that used to be called insolvency. By loaning money to Ford, the government is essentially betting that Ford will manage to pull out of the hole it is in. (Of course, the government doesn’t lose much sleep over prospects of collecting what’s owed it. It’s just other people’s money, after all.)

  • avatar
    CarnotCycle

    Haha, I called this one for Tesla about seven months ago. Its just too much of a eco-hipster-company not to get on Uncle Sugar’s tits with the Donks running things in D.C. Elon’s other public subsidy is SpaceX, so he’s had a few years to build up the Rolodex and hone the protocols needed to unlatch the bra in the first place.

    I have a question, does anyone know if Tesla’s workforce is unionized? Technically, they’re a foreign auto-importer more than a “car maker” at this point. Being now-dependent on Fedbucks, being based in California, and living on an image more than an innovation to survive, how long can Tesla stay off the union’s radar? I don’t think for too long myself, $400 million is enough money to get the mob union to want in on the action.

  • avatar
    P71_CrownVic

    I don’t get the Ford hate…The federal money in question is loans for a very specific purpose. It’s not fun money or funds to keep the lights on.

    So what? Ford took government money.

  • avatar
    Bancho

    P71_CrownVic:

    “So what? Ford borrowed government money.”

    Fixed

  • avatar
    BDB

    Bancho–

    You’re talking to someone who said GM being bankrupt was a “non-issue”, but is pissed about a DOE loan every automaker that assembles cars here will likely end up taking (see: 75 applicants). Just FYI, difficult to reason with that.

  • avatar
    Bancho

    BDB:

    You’re right of course. I just can’t help myself sometimes.

  • avatar
    King Bojack

    Holy shit, a government wants to encourage something and is willing to lend cash to those capable of doing it? Hot shit that’s NEWS! While we’re at it we’ll bash the piss out of the companies that “fall for the government’s devious plan!!!”

    In other news, the governemnt does shit like this all the time. It’s not exactly a bad thing. Apparently the government can’t even invest in our countries future w/o ridicule these days.

  • avatar
    joe_thousandaire

    How is this in anyway a bailout? Has the definition of “bailout” now come to define anytime a private business excepts money from a federal government program in any way for any reason. Apparently in Mr. Williams mind it does. Or maybe he thought using the infamous B-word would get him a few more page-views. Or maybe the boy just aint that bright.

  • avatar
    Nicodemus

    “…but the other wise acronym-aversive automaker”

    You’ve obviously never worked at Ford if you believe them to be acronym averse.

  • avatar
    CarnotCycle

    How is this in anyway a bailout? Has the definition of “bailout” now come to define anytime a private business excepts money from a federal government program in any way for any reason. Apparently in Mr. Williams mind it does. Or maybe he thought using the infamous B-word would get him a few more page-views. Or maybe the boy just aint that bright.

    If the government were trying to procure something for itself it might be a rational deal. I can see the government spending money on procuring something or developing it needs for instance.

    But what’s going on here is what my lefty compadre Ralph Nader would term “corporate welfare.” Giving Tesla $400 million dollars? This is a company that has already plowed through maybe that much already to electrify a British toy-kit-car. They were incredibly late and very over-budget on doing even that. They canned their plans for a New Mexico facility. The company is run – or was run – by egomaniacs who snipe at each other on the internet like teenage girls. They haven’t even designed or built their own car.

    Maybe Tesla is worth investing money in, I’m hardly an authority on their prospects. But I am aware that Tesla is at best a speculative venture. This is a gamble for a VC firm, or an IPO, something like that. The government shouldn’t be blowing our loan from China on speculative ventures. Tesla got bailed-out. Maybe not Ford, but its the same deal…speculative investment. Government is not a private commercial bank, shouldn’t act like one. Last time I checked, they’ve got bigger fish to fry at this point, frankly.

  • avatar
    cpmanx

    Oh brother. Did you ever take out a small-business loan? Federal college loan? Collect unemployment? Accept a government voucher for a digital TV converter? Claim a tax credit for a charitable donation? Send a letter using the (subsidized) US Postal Service? Participate in any government-funded program or loan that is designed to influence your behavior?

    Then you, too, have dined at the bailout buffet! You are just as bad as Ford.

    The real issue here is how the government is going about promoting improved vehicle fuel economy. Instead of taking the efficient but politically toxic path of raising the gas tax, we get this byzantine combination of CAFE regulations to force automakers to change what they build, followed by low-interest loans to enable them to do so–since as long as gas prices remain low, the market will not support the high-mileage cars that the regulations require. Yes, it is foolishness on the part of the government, but that foolishness exists because the public overall is not willing to tolerate straight talk or direct action.


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