Advanced Technology “Green” Loans Arrive

Ford, the only Detroit automaker that did not receive emergency loans from Congress this year, was recently approved for $5.9 billion in funds from the Advanced Technology Vehicle Loan Program.

The funds Ford is to receive account for approximately one-fourth of the $25 billion program budget. Three automakers are to receive a total of $ 8 billion in the first round of loans approved by the program, which include Ford, Nissan, and Tesla Motors. Nissan will get about $1.6 billion to refurbish their Smyrna, Tennessee factory, which will now produce electric vehicles. Tesla Motors was granted $465 million to produce drive trains and electric vehicles in their California-based factories.

Several other U.S. based automobile manufacturers applied for the Advanced Technology Vehicle Loan Program, which was created in 2007 to help meet new emissions and fuel economy standards. GM and Chrysler were among some of the applicants that were denied funding during the first round. The two were deemed ineligible due to their recent bankruptcy, but will most likely be reconsidered during the second round.

Due to the large number of advanced technology initiative programs being set forth by auto industry, congressmen and congresswomen from key manufacturing states are pushing to get the budget doubled from $25 to $50 billion.

Ford, who was granted $5.9 billion, about half of what they requested, will use the funds dispersed through 2011 to improve factories and provide jobs in five centrally located states. Factories in Ohio, Michigan, Illinois, Kentucky, and Missouri will employ some 35,000 engineers and factory-level employees. According to Fords’ Chief Executive, Alan Mulally, Ford intends to invest a total of $14 billion in advanced technology over the next seven years and will begin repaying their newly granted loan in 2012.

Nissan intends to improve one of their factories in Tennessee. By modifying it to produce hybrid-electric cars and batteriews, Nissan hopes to eventually create 1,300 new jobs and produce 150,000 electic vehicles annually.

Tesla Motors, a six-year old California based company, intends to build to new plants in their home state. One, which will manufacture its model S series battery-powered sedan, and another that will focus on producing battery packs and drive trains. Between the two new factories, Tesla hopes to create some 1,650 for Californians.

Energy Secretary, Steven Chu, told the New York Times that, “Transforming the American automobile industry will not be easy, but it can be done. The most fuel-efficient cars in the world must be made here in America.”

It is obvious that US auto makers are embracing the initiative to produce more eco-friendly and efficient vehicles; however, such an initiative requires substantial funds. Hopefully the Energy Department will be able to step-up to the challenge and get the American automobile industry back on its feet.