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House passes $25 billion loan for domestic automakers

Posted Sep 24th 2008

Filed under: Government/Legal

The U.S. House of Representatives passed a bill this afternoon approving a $25 billion low-interest loan for domestic automakers. The bill passed with an overwhelming majority – 370 to 58 – and is on its way to the Senate for a vote on Friday before the White House gets the opportunity to lay pen to paper on March 6, 2009. The rates and rules of the loan are required to be spelled-out by the U.S. Department of Energy within 60 days of the bill becoming law, but automakers could be allowed to repay the loans over as long as 25 years, along with the Energy Department deferring payment for up to five years.

Detroit's Big Three (or 2.8, or whatever) are counting on the loans to retool factories for more fuel-efficient vehicles, protect jobs and help fund the escalated development costs of fuel-efficient drivetrains. Having seen more government bail-outs than we'd like to over the past couple weeks, we're not ready to call this one a full-blown bail-out like those given to Fanny Mae/Freddie Mac, and AIG. These are low-interest loans that will likely come with specific stipulations on how the money can be spent. It's up to General Motors, FoMoCo and Chrysler LLC to spend them wisely.


House passes $25 billion loan for domestic automakers - Autoblog
 

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Senate approves auto industry loans

9/27/2008, 2:15 p.m. EDT

WASHINGTON (AP) — The Senate has approved funding for $25 billion in government loans to help the auto industry modernize plants and build more fuel-efficient vehicles.

The loans were approved Saturday and have been a top priority for domestic automakers and suppliers, who lobbied for the funding.

Executives with General Motors, Ford and Chrysler asked for the low-interest loans to help them produce fuel-efficient vehicles at a time when they deal with a sluggish economy and weak sales.

Auto companies have had trouble accessing credit because they have poor bond ratings and would only qualify for double-digit interest rates.

The loans were approved earlier this week by the House. The bill now moves to President Bush, who is expected to sign it.


LINK:Senate approves auto industry loans - NewsFlash - mlive.com
 
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