Seeking $34 billion from Congress, automakers promise electric cars
Ford, General Motors, and Chrysler, seeking access to $34 billion in taxpayer-financed loans, have presented to Congress plans to invest in clean technologies and to accelerate the development of fuel efficient vehicles.
Ford asked for $9 billion, which it describes in a press release as "potential access to a temporary bridge loan." But it does not expect to have to tap into the credit line. The company says that it expects to make it through next year without federal assistance, and that it projects that its pretax earnings will break even or be profitable in 2011. But it says that it would like to have the cash handy, in case the economy worsens unexpectedly or one of its major competitors goes bankrupt, disrupting Ford's suppliers, dealers, and creditors.
Ford is in better shape than the two other major US automakers. General Motors, which owes creditors $45 billion, told the a Senate panel that, unless it receives $18 billion in loans over the next year, it will be forced into bankruptcy. Chrysler says that it owes creditors more than $26 billion, and asked for $7 billion in loans.
CEOs of the so-called Big Three approached lawmakers in Washington two weeks ago to ask for a total of $25 billion in taxpayer-financed loans to rescue their flagging industry. They left empty-handed and chagrined after it was revealed that they flew to Washington in separate private jets. Congressional leaders demanded detailed plans from the automakers.
They returned this week – this time via company cars – asking for a higher figure and presenting their plans to the Senate Banking Committee.
Ford's plan [PDF] promises a battery-powered electric van that will be available to commercial fleets beginning in 2010, followed by an electric sedan a year later. The company also spells out a detailed plan to invest about $14 billion over the next seven years on technologies to improve fuel efficiency by 25 percent.
GM's plan [PDF] promises to "substantially change its product mix over the next four years, and launch predominately high-mileage, energy-efficient cars and crossovers." The company touted its Chevy Volt, a fully electric car that is scheduled for production in 2010, and introducing a competitor to Daimler's Smart Fortwo, which runs on a conventional internal combustion engine but is very fuel-efficient because of its tiny size. The company also touts its flex-fuel – that is, corn ethanol – equipped vehicles, which are widely regarded as disastrous by environmentalists, and its investment in hydrogen fuel cells, a technology that many regard as currently impractical. [Eoin's note: I originally mischaracterized the maker of the Fortwo.]
By 2012, GM promises to offer 15 hybrid models. It currently offers six, more than any manufacturer.
The company is also expected to sell its Saab brand, as well as Hummer, a brand loathed by environmentalists worldwide.
Chrysler's plan was not available on their company website, but it was published on Autoblog. The company's Global Electric Motorcars division is currently the largest domestic producer of all-electric vehicles, but they have limited range and power. Chrysler promises an all-electric, full-function car for 2010, and three more by 2013. The automaker also promises improved fuel efficiency for 73 percent of its 2009 models.
Additionally, each of the CEOs have promised to accept annual salaries of only $1 if they take government loans. All of these plans – particularly Ford's – sound like promising steps toward sustainable motoring, albeit ones that should have been taken at least a decade ago. If the Big Three's CEOs are able use taxpayers money to successfully deliver on their electric promises, maybe they deserve to have their salaries doubled.
