Ford, Nissan, Tesla First to Dine at DoE Bailout Buffet

Frank Williams
by Frank Williams

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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  • CarnotCycle CarnotCycle on Jun 24, 2009
    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.
  • Cpmanx Cpmanx on Jun 24, 2009

    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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  • Rust-MyEnemy Whoa, what the hell is wrong with Jalop1991 and his condescension? It's as if he's employed by Big Plug-In or something."I've seen plenty of your types on the forums....."Dunno what that means, but I'm not dead keen on being regarded as "A type" by a complete stranger"" I'm guessing you've never actually calculated by hand the miles you've driven against the quantity of gas used--which is your actual miles per gallon."Guess again. Why the hell would you even say that? Yes, I worked it out. Fill-to-fill, based on gas station receipts. And it showed me that a Vauxhall Astra PHEV, starting out with a fully charged PHEV battery, in Hybrid mode, on my long (234-mile) daily motorway daily commute, never, over several months, ever matched or beat the economy of the regular hybrid Honda Civic that I ran for a similar amount of time (circa 5000 miles)."You don't use gasoline at all for 30-40 miles as you use exclusively battery power, then your vehicle is a pure hybrid. Over 234 miles, you will have used whatever gas the engine used for 200 of those miles."At least you're right on that. In hybrid mode, though, the Astra was using battery power when it wasn't at all appropriate. The petrol engine very rarely chimed in when battery power was on tap, and as a result, the EV-mode range quickly disappeared. The regular hybrid Civic, though, deployed its very small electric reserves (which are used up quickly but restore themselves promptly), much more wisely. Such as when on a trailing throttle or on a downward grade, or when in stop-start traffic. As a result, at the end of my 234 miles, the Civic had used less gas than the Astra. Moreover, I hadn't had to pay for the electricity in its battery.I look forward to you arguing that what actually happened isn't what actually happened, but I was there and you were not."Regardless, that you don't understand it appears not to have stopped you from pontificating on it. Please, do us all a favor--don't vote."You really are quite unpleasant, aren't you. But thanks for the advice.
  • Tassos Jong-iL Electric vehicles are mandated by 2020 in One Korea. We are ahead of the time.
  • 1995_SC Can you still get some of the tax credits under the new program?
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