By on July 29, 2009

Ford applied for $11 billion dollars from the Department of Energy’s Advanced Technology Vehicles Manufacturing program (ATVMP). It received $5.9 billion, payable over 25 years. They are applying for another $5.1 billion. The mainstream media meme—that The Blue Oval Boyz are “pure” capitalists untainted by the stink of federal handouts—is bunk. Lest we forget, the DOE loans were the original bailout: a thinly disguised attempt to channel funds to the domestics. The money pays for retooling that the recipients would otherwise have to fund—freeing those funds for other purposes. Keep the lights on kinda stuff. When the “viability” requirement made the DOE loan a moot point for Chrysler and GM, THEN they headed off for “bridge loans.” Which became an investment in shares or, in Chrysler’s case, a partial write-off. Oops! Question: does anyone believe the DOE loans will help ensure that Americans drive more fuel-efficient vehicles? Anyway, Ford is on the take. Period.

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31 Comments on “Point of Order: Ford HAS Taken Federal Money...”


  • avatar
    GS650G

    And across town their competition is bathing in 100 dollar bills while washing away their debts and obligations

    The funny thing is Ford just might make some use out of the money, wouldn’t it be a surprise if for once tax dollars were put to good use?

  • avatar
    PennSt8

    Could someone please clarify why this is such a big deal? I guess it doesn’t matter that both Nissan and Tesla too money from the same program?

  • avatar
    Shogun

    PennSt8:
    FoMoCo was the only company who didn’t apply for a bailout out of the Big 3, so they had bragging rights that they didn’t need the help of the government.

    Mr. Farago is poking fun at the fact that supposedly, these bragging rights are gone now with the ATVMP.

  • avatar
    cpmanx

    OK then, let’s be honest. If we’re going to skewer Ford for taking government funds, let’s skewer *everybody* who’s doing it.

    To wit [with apologies to Wikipedia and other public sources]:

    Toyota has received billions in federal, state, and local government tax subsidies and incentives including $323.9 million in subsidies for the plant in Tupelo, MI; $371 million in subsidies for the Georgetown plant from Kentucky; $227.5 million in subsidies and tax incentives for the Tundra plant by Local, Texas, and U.S. taxpayers. And the list goes on and on.

    You could of course say the same for Mercedes, Hyundai, Nissan, Subaru, and every other foreign automaker that assembles vehicles in the U.S.

    Is there a “pure” capitalist car company out there? If so, I’d be very curious to hear about it. At least this is a low-interest loan program, not a plea for a handout.

  • avatar
    PennSt8

    ShoGun:

    I pretty much understood that fact, and I also understood where he was going with it. Fine so be it.

    Alluding to the fact that Ford took a handout (which BTW this is a loan if I’m not mistaken) similar to the ‘bailout’ packages that GM and Chrysler took is a bit misleading. I suppose if we are going to do that, TTAC might as well launch a full out investigation regarding the incentives and financial support that the Japanese and Germans have received from their respective governments as well.

  • avatar
    th009

    PennSt8: I suppose if we are going to do that, TTAC might as well launch a full out investigation regarding the incentives and financial support that the Japanese and Germans have received from their respective governments as well.

    Apart from Opel, I don’t believe any of the other German manufacturers are getting government assistance in the current crisis (though I’m ready to be corrected on this, in case I have missed something). There is a scrapping incentive program, but it’s not limited to people buying German cars.

    Daimler showed a significant Q1 loss, BMW had a relatively small loss, and VW was still profitable.

  • avatar
    Strippo

    The mainstream media meme—that The Blue Oval Boyz are “pure” capitalists—is bunk.

    I don’t think the MSM has been explicitly saying this. One might argue that the ATVMP loans have been under-reported, but until Ford defaults on those loans is there a story here that really interests people? It’s like arguing that solvent people who have jobs yet are taking advantage of the CARS program anyway are accepting government handouts. Maybe so, but blame the government for that, not the former clunker owners. Don’t hate the playa.

  • avatar
    lahru

    Ford has never bragged about the current circumstances and the money is purpose focused.

    I’d bet that most of the money “given” to GM/Chry will never be repaid. Never borrow more money than you have the ability to repay.

  • avatar
    jamie1

    This is being provocational for the sake of it. The hard fact remains that Ford is not seeking and has not been given tax payer funds to wipe out debts and restart their business.
    These are loans, repayable to the Government at fixed rates of interest that Ford and all the others that receive them, are obligated to repay.

    Ford should continue to be praised for their oustanding work in resturcturing their business without bailout funds. Whilst these loans will assist in transforming Ford (converting old truck plants to building small cars and BEV’s I remind you), the finanical obligations will be added to all those other obligations that Ford have. Just like all the others, these will be paid in full and not just be skipping through Bankrupcy court, but by hard work, great products and sheer bloody-mindedness!

  • avatar
    dwford

    This is not the same thing AT ALL. This program was developed long before the bankruptcy crisis’s and is open to ALL automakers that meet the criteria.

    The DoE program is no different than the 1000′s of other government programs designed to spur business in one direction or another.

    RF, you’re just poking the snake with this one.

  • avatar
    trk2

    There is a big difference in taking government loans targeted at developing new technologies (something that happens every day in a number of industries) and taking government money just to stay in business.

  • avatar
    mattstairs

    I don’t like these loans either, but at least:

    They are available to all manufacturers.

    They are loans that should be repaid, not bailouts that will never be recovered in full.

    The government is making life difficult through CAFE, so this is a bit of a makeup.

    I know the transplants have received millions in tax breaks, but I’d like to see a tally of Detroit 3 tax breaks sometime as well.

  • avatar
    rnc

    My comment disappeared?

    Was considered flaming, I will leave the below part (which should not be considered as such, however I feel it is the truth and alot of people I would imagine agee with me)

    I love TTAC but the obvious bias against Ford degrades the quality sometimes. It’s almost like they are praying for F to fail so they can be right on all 3, you would think this would be one situation were you would be glad you were wrong?

  • avatar
    superbadd75

    I hardly see where Ford taking DOE money available to ANY manufacturer in the U.S. (not just domestics) compares to GM and Chrysler taking money just to make it to next week. Not to mention the fact that GM has applied for the DOE money on top of the bailout. Sure, Ford’s losing money like everyone else in this economy, but they’re not in the same boat as GM and Chrysler. Yet.

  • avatar
    rnc

    It isn’t comparible to GM or Crysler, taking loans from a program that was approved before the collapse of the car market and is available to any company with manufacturing operations in the US for the sole purpose of retooling factories to build cars/trucks that were more fuel efficient than the ones produced there before is so far away from being bailed out.

    Now if the program was approved last month, for only car makers that are headquartered the US and haven’t filed for bankruptcy protection in the last CY and could be used for descretionary purposes with the option of converting to equity (at cents/dollar) if it couldn’t be paid back, then it would qualify as Ford “TAKING” federal money in a way that would be comparible to what GM and Chrysler received.

    Its amazing to see the tide of perception turning in Ford’s direction, that would be the best indicator that they are doing it right.

  • avatar
    johnthacker

    Toyota has received billions in federal, state, and local government tax subsidies and incentives including $323.9 million in subsidies for the plant in Tupelo, MI; $371 million in subsidies for the Georgetown plant from Kentucky; $227.5 million in subsidies and tax incentives for the Tundra plant by Local, Texas, and U.S. taxpayers. And the list goes on and on.

    Yeah, but local and state incentives from other states hurts people from those states. If it’s not my state doing it, I don’t worry about them as much. Also, the smaller the unit of government that makes the incentives, the relatively more of the cost will be born by the people benefiting from the bribe. At some point it’s kind of silly– towns can pay a company an amount larger than the economic benefits that the town is getting from the plant, but that’s their problem. I also don’t worry all that much about foreign governments, for the same reason.

    That’s why one form of these sorts of arguments don’t work with me. Subsidizing overall hurts the person doing the subsidizing. In some cases, if another state or country subsidizes a plant, they’re just basically giving me free money by not taxing me but lowering the cost of goods. Just because everyone else wants to jump off a bridge or throw rocks in their harbor is no reason for me to want to do the same.

    OTOH, it’s true that the DOE loans are technically available to any company, but I’m pretty sure that Ford believes that it has an advantage going after them, being a domestic. (And some people in Tesla believe that they have an advantage by being based in the same state as the Speaker.) So, sure, it is unfair. Not a reason to pile on more unfairness, but certainly Ford’s boasting is somewhat weakened.

  • avatar
    adonasetb

    happy now?

  • avatar
    Mr. Sparky

    Yes, Ford has participated in a government loan program. The government wants more fuel efficient cars, so they are offering loans.

    I too participate in government sponsored give aways. I have an HSA and a SEP-IRA (I’d have a Roth-IRA too if they’d let me), and my son has a 529 account. I get a huge tax saving now or down the road. Why? The government would like me to retire, pay my medical bills, and be able to fund my child’s education (so he can make more money and thus more tax revenue).

  • avatar
    Vorenus

    rnc:

    You said what I’m thinking.

    TTAC:

    Ford is still the lesser of three evils, by far. They are now competing against Japan, Korea, AND Government Motors. Can you blame them?

  • avatar
    gslippy

    Yes, but Ford has a fighting chance to repay the money.

    And they didn’t use it to meet next month’s payroll – it is not a bailout.

  • avatar
    Mr. Sparky

    Ok, lets think this argument through… Ford isn’t ‘“pure” capitalists’ because they took advantage of a government program. Ok, I think we don’t understand capitalism.

    In “pure capitalism”, organizations do what is in their best interest without regard to others since this will result in vigorous competition resulting in improved effeciency and growth for the economy and the masses as a whole.

    If a company is expected to act in its best interest and a third party (the US Gov) offers its cheap money (loans) paid for mostly by other people (tax payers), a pure capitalist company should respond by:

    A) Cash the check immediately and use it to improve profits.

    B) Refuse to participate since it creates a burden on others and give a speech on how they are standing up for finanical responsibility.

    C) Call global warming bunk, chomp on a cigar, and tell reporters that the G8 will be a Caprice and then not.

    The answer is A. Free money, not my problem, let’s make money with it!

    *Answer B is the correct answer for what to do if your a Republican governor with a mistress in South America padding your resume for a 2012 presidential run.

    *Answer C: Hey multiple choice set needs an answer for “Who is Maximum Bob?”

  • avatar
    Runfromcheney

    I bet P71 Crown Vic will be here shortly to shit talk Ford a bit.

    Until then, I disagree with the tone of how Robert is treating this. Until Ford starts sucking up a hundred billion in bailout money because it can’t survive by itself, I don’t want to hear about it.

  • avatar

    “Ford applied for $11 billion dollars from the Department of Energy’s Advanced Technology Vehicles Manufacturing program (ATVMP). It received $5.9 billion, payable over 25 years. They are applying for ANOTHER $5.1 billion. (For the math aversive, that would put them $.1 billion above their original request.)

    Point of Maths Order:

    5.9 billion plus 5.1 billion = 11 billion. They’re not $.1 billion over their original request, they’re just back to it, unless there’s $100 million in unmentioned administrative costs or something in there.

    Also, Ford hasn’t taken bailout $ specifically, the Advanced Tech money is kind of different. The gov’t has lots of incentive programs like this. Everybody takes federal money. I’m pretty sure GM took some of this money and then went back for straight-up bailout bucks. It’s different. I don’t think anybody’s really saying Ford is squeaky-clean and wouldn’t take federal dollars if they were sitting on the table. The main thing is they didn’t take a big fat loan from the gov’t just to try to stay in business like Chrysler and GM did, which I do consider noteworthy and puts them above the other US automakers in my mind.

    p.s. +1 Mr. Sparky

  • avatar
    Bancho

    Ford is taking advantage of a federal program intended to improve the efficiency of their vehicles. Sure, it’s federal money, but it’s not in any way, shape, or form, the equivalent of a bailout. Ford is also *not* bragging that they didn’t dine at the same trough as GM and Chrysler.

    As a taxpayer, I don’t mind this particular case of federal money being used in this manner.

  • avatar
    P71_CrownVic

    Mr. Farago is poking fun at the fact that supposedly, these bragging rights are gone now with the ATVMP.

    What do yo mean “supposedly”?

    The bragging right ARE gone…they took money from the US Govt. Or is the DOE not part of the US Govt.?

    Ford also took money from the Swedish Govt. to keep Volvo afloat.

    Now, I don’t have a problem with companies taking moeny from the Govt…I DO have a problem with Ford prancing around saying the didn’t take any Govt. Money. That is a blatant lie.

    I bet P71 Crown Vic will be here shortly to shit talk Ford a bit.

    If by “shit” you mean the truth, then yes.

  • avatar
    P71_CrownVic

    I’d bet that most of the money “given” to GM/Chry will never be repaid. Never borrow more money than you have the ability to repay.

    Try again…

    Chrysler has already paid back some money…

  • avatar
    stuki

    “Pure capitalists” take whatever money they can cost effectively get their hands on. If investing in lobbyists, children of politicians’ internships, and PR campaigns to sucker an ever more ignorant population into believing government ever has, will, or even could if they wanted to, provide any net positive contribution whatsoever by barging into private relations, pays higher returns than simply attempting to build cars; well, that’s the route a true capitalist will take. Hardly Ford’s fault that the American electorate has degenerated to the point where they’re so easily taken by anyone from Bernie Madoff and Goldman Sachs to Che Guevara and Barack Obama.

  • avatar
    PennSt8

    th009:

    My comments were not limited to recent economic events. I was speaking in general. Take the protectionist laws that Lower Saxony has on the books in relation to VW. In fact doesn’t the government there own part of VW?

  • avatar
    rnc

    “Chrysler has already paid back some money…”

    Chrysler Financial is owned by Ally Bank, they have paid back TARP funds related to Chrysler Financial but this has no relationship to the Chrysler Motor Corp. or monies loaned to them.

    Try again.

  • avatar
    th009

    PennSt8: My comments were not limited to recent economic events. I was speaking in general. Take the protectionist laws that Lower Saxony has on the books in relation to VW. In fact doesn’t the government there own part of VW?

    Yes, Lower Saxony owns 20%, and has done so since the company was privatized in 1960. The “VW Law” essentially gives Lower Saxony a blocking minority on major corporate decisions. (With the impending Porsche merger, this may now actually disappear.) Lower Saxony is largely a silent partner, and primarily uses the blocking minority to protect jobs in the state, home to the major VW facilities in Wolfsburg and Hannover.

    There are no “protectionist” laws, though — the EU is fully open to imports, and EU generally is quite strict about prohibiting market-distorting state aid. (Though Opel seems to have squeaked past that rule …)

  • avatar
    Moparman426W

    Our government gave the transplants billions of dollars in incentives when they built plants in the south. This doesn’t even count with the tax breaks they have gotten over the years.


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