House Approves $25 Billion for Detroit Three To Push New Technologies

Washington DC September 25, 2008; The AIADA newsletter reported that yesterday the House of Representatives approved $25 billion in government loans for the auto industry as part of a larger spending bill.

The loan is intended to help the industry refurbish its plants and develop hybrid vehicles. The loans are a major win for General Motors, Ford, and Chrysler, who lobbied for the funding as they dealt with a sluggish economy and weak sales.

"We all know that there is real growth for our economy in this sector of jobs — green jobs, alternative fuel jobs — and I think we all feel the stresses on our domestic auto producers," said Sen. Claire McCaskill (D-Mo).

MSNBC reports the Senate will consider the loans later this week. The companies hope to receive the loans at government interest rates of about 5 percent, which would save them about $100 million a year for every $1 billion in loans.

Industry officials floated a three-year, $50 billion loan proposal earlier in the month before settling on $25 billion. "As we go forward, we will be starting on the second $25 billion," said Rep. John Dingell (D-Mich).