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G.M. and Ford Officials Seeking U.S. Loans to Meet Fuel Goal

LCT Staff
Posted on September 17, 2008

DETROIT — Executives from General Motors and the Ford Motor Company pressed their case on Tuesday for $25 billion in federal loans in a series of high-level meetings with lawmakers in Washington.

The appearances by G.M.’s chairman, Rick Wagoner, and Ford’s executive chairman, William C. Ford Jr., underscored how vital the industry considers the loans as it tries to meet tougher fuel-efficiency regulations.

Wagoner traveled to Washington shortly after G.M. unveiled the production version of its Chevrolet Volt electric vehicle in Detroit. The timing was coincidental, given that G.M. was celebrating its 100th anniversary on Tuesday.

But G.M. executives said advanced alternative-fuel vehicles like the Volt are the type of project that would benefit from the loan program created last year in fuel-economy legislation.

“It certainly could help us finance this vehicle,” said Frederick A. Henderson, G.M.’s president. “This is exactly the kind of vehicle that was contemplated when the money was put in the bill.”

House Democrats are hoping to attach financing for the loans in an energy bill, an economic stimulus package or a broader appropriations measure.

Auto executives, however, are concerned that Congress will not complete the loan financing during its abbreviated session this month.

Moreover, Detroit is doing all it can to distinguish the loans from the crisis on Wall Street and the Bush administration’s decision not to rescue the investment bank Lehman Brothers from a bankruptcy filing.

“The Wall Street crisis will diminish the chances of Detroit getting what it wants,” said John A. Casesa of the investment firm Casesa Shapiro Group.

In a speech Tuesday night to the Economic Club of Washington, Wagoner emphasized that the loans were an integral part of legislation that mandates a 40 percent increase in corporate fuel economy.

“Nobody called it a bailout then, because it wasn’t,” Wagoner said. “And it still isn’t.”

Ford and two other Ford Motor executives, Mark Fields and Joseph R. Hinrichs, met Tuesday with lawmakers who have auto plants in their districts.

Lawmakers are also expected to hear Wednesday from Ford’s chief executive, Alan R. Mulally, as well as Chrysler’s chairman, Robert L. Nardelli.

Source: The New York Times

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