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Officials working with the Department of Energy tell the Detroit News that GM and Chrysler face no major obstacles in their quest for huge retooling loans from the DOE’s Advanced Technology Vehicle Manufacturing Loan program. GM is seeking $14.4b and Chrysler has asked for $8.55b in low-cost government loans. Says Matt Rogers, a senior adviser to the Energy Department
Project finance details need to be worked through, but those things are working out just fine as we work directly with the companies. It’s really a process of making sure that each of the projects that they have are in fact competitive.
Er, competitive compared to what?
As former Tesla Marketing boss (and frequent ATVML critic) Darryl Siry puts it:
So the guys from the DOE and Booz Allen Hamilton or AT Kearny are trying to judge whether the series hybrid Chevy Volt will be competitive? It certainly will be disadvantaged if you don’t fund it. Why? BECAUSE YOU FUNDED THEIR COMPETITION. Now that you have screwed up the natural forces of the marketplace, the DOE must provide equivalent support for the Volt program and let them compete on a level playing field with Nissan, Ford and even Tesla and Fisker.
And he’s right: All four firms he mentions have received money from the ATVML program, despite qualifying for unproven products. Besides, viability of the Volt program was never the main problem with GM’s bid for DOE loans. The big hangup was a financial viability clause, that GM now undoubtedly passes, having received tens of billions of dollars in direct taxpayer support. If you’re going to help GM over the financial hurdle, why pretend that the Volt’s viability is an issue? Especially when the presidential task force on autos already ripped into the Volt’s chances pre-bailout, only to come to swing back in favor of Chevy’s hail mary.
We’ve known that GM needs this money since last summer, and we’ve contacted the DOE several times trying to follow up on the status of GM and Chrysler’s loan applications. Why this whole process has been so shrouded in mystery is hard to understand, and this secrecy is more than a little troubling considering the impact these decisions have on the industry. But then, that bridge was crossed when the bailout happened… why the DOE is wasting time pretending that it might not give GM and Chrysler the cherry on top of their bailout is tough to fathom.
7 Comments on “DOE Loans In The Works For GM, Chrysler...”
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Most of us, with the exception of Mr. Farago, gave Ford (and to a lesser extent Nissan) a pass for the DOE loan, because we agreed it was a loan. If the government now believes that GM and Chrysler will pay back these low interest loans as well then griping about it would create a double standard.
I’m pretty sure GM is good for the money because they have a track record of paying back loans, in full, with interest, 5 years ahead of the scheduled deadline.
Three comments:
1. Why are these clowns at GM so in love with pop music soundtracks? It really detracts from both the message and the memorability of the commercial or promo video, or whatever this 4 minute monstrosity is supposed to be.
2. I tried looking at the commercial from the standpoint of a casual observer. It was boring (I cut it off after about 2 minutes) and it doesn’t really hit home the message of Chevrolet. Who, other than auto junkies, would ever associate that rocket concept car with Chevy?
3. They really need to read about Stephen Arnold and “sonic branding”. Having your own sonic logo (jingle or music track) really does help hammer the brand home. Everybody remembers the NBC Chimes or the T-Mobile tones, who remembers crappy Top-40 music from 25 years ago and who’s going to associate it with a car?
For those who didn’t see my rant in another thread, here is an example of an effective commercial, in my way of thinking:
http://www.youtube.com/watch?v=WRfarOd7jxw
This has everything you need in a commercial. It’s memorable, it’s entertaining, it’s got a catchy jingle (sonic branding) and it hammers home product features.
“Why this whole process has been so shrouded in mystery is hard to understand”
No, it isn’t. The process is shrouded because it is an act of theft against the taxpayers. Government Motors is a giant slush for funneling money to the UAW and other supporters of the Democratic Party. The Volt program functions as an important sluice for the slush, as well as an alabi: that the political payoff is not graft, it’s an investment in a glowing, high-tech, environmentally responsible future.
I think that the administration will not give more “bailouts” to GM and Chrysler because the public is against it overwhelmingly. However, the failure of either one of these companies would be embarrassing, so a way will be found to funnel tax dollars into these companies. It just will not be called a bailout this time.
Sound of grinding teeth.
Does anybody else find the picture for this post a little disturbing? I’m glad to see it isn’t what I thought it was at first glance…
No wonder why that Lesko guy is so freakin’ happy all of the time…
The end of that ad was just a bit too trippy for me…