Ford, being the only company that didn’t get the much-publicized bailout back in 2008, had the envious position of bragging about its financial stability to its Detroit rivals. But this time it’s Ford, not GM or Chrysler, that has been receiving loans from the US government in order to upgrade its assembly lines.
Ford received $5.9 billion in June 2009, and since then has received more than $4.5 billion to retool 11 plants in five states, according to a Department of Energy spokeswoman. The Department of Energy made these loans available for companies to improve the fuel efficiency of their cars, which is markedly different than the loans that General Motors and Chrysler received as part of the government’s Troubled Asset Relief Program.
While both GM and Chrysler has paid off their loans (making a big stink about it in the process), Ford is the only company that quietly owes more than $4 billion to the government. “If you ask the general public which automaker owes $4 billion to the government, no one would guess Ford,” said Rebecca Lindland, an automotive analyst. “They did take Department of Energy loans and somehow that’s better, but I’m not sure it’s different if it is still taxpayer money.”
Ford isn’t the only company to receive a loan from the Department of Energy. Nissan received a loan totaled around 1.4 billion dollars in order to build the Leaf, and smaller fries Tesla and Fisker received amounts of $465 million and $529 million, respectively.
Ironically, GM and Chrysler had applied for the same loans in 2008, but weren’t deemed viable companies—one year before both went bankrupt. Yet some companies are crying foul at how easily Ford received the loans: Chrysler CEO Sergio Marchionne said that he was “baffled” at the strict conditions that Chrysler needed to match for their loan, and the relatively lax ones that Ford met.
GM had long since withdrawn their application for a $14.4 billion loan, as the public heaped on them for their more substantial $49.5 billion bailout.
In the end, some believe that Ford didn’t even need the Department of Energy loans, as it wasn’t cirtical to the company’s survival: it only allowed them to retool their plants slightly faster, and get more fuel-efficient cars into production. “The bigger question is,” said Aaron Bragman of consulting firm IHS Automotive, “why has the DOE dragged its feet and is not helping anyone else?”
Source: Detroit Free Press