DEARBORN, MI – Ford Motor Co. is not seeking a government bailout, but rather a loan to help advance fuel-saving technologies designed to meet pending corporate average fuel economy regulations, says CEO Alan Mulally.
“Absolutely don’t think it’s a bailout,” he says at a private event here. “We haven’t decided the exact nature of it, but we think it’s going to be a loan at lower interest rates with the commitment to pay it back.”
Ford, General Motors Corp. and Chrysler LCC, along with industry suppliers, are seeking up to $50 billion in government loans, a provision featured in last year’s Energy Independence and Security Act.
The government “included a provision in that bill last year for the financing of loans to the automotive industry, both the OEMs and suppliers,” Mulally says.
“It didn’t get as much play as the rest of the bill did. We were very supportive of (the bill). This is a very important industry, and it’s a huge transformation that the auto industry is going through.”
In a recent interview with The Los Angeles Times, Chrysler Vice Chairman and President Jim Press echoed Mulally’s stance on the government-backed loans.
“This wasn’t the auto industry’s request,” he says. “It was in the energy bill that was passed last year. It’s not a loan bailout, and it’s not because the U.S. car companies are distressed.”
The Energy Independence and Security Act calls for $25 billion in government funds to assist the industry, but auto makers are expected to lobby for more in Washington next week.
Mulally declines to reveal whether he personally will be meeting with government officials but says asking for more than $25 billion is definitely a possibility.
“What was written in (the bill) was $25 billion,” he says, “but there are many people who believe it would be helpful to have more.”
While an official decision has yet to be made on the federal loans, Mulally is confident they will be issued.
Lawmakers are “deciding how to fund it, including what the specific amount should be and the criteria. We’re looking forward to working with the government on it.” he says, adding that the auto industry’s relationship with the federal government has improved over the last few years.
“I think we have a lot of people in our corner that believe in the industry and that Ford is doing the right thing.”