Retooling faster if Auto Loan Package approved by Congress say Automakers
Congress could help save billions of dollars for automakers in Detroit, by approving a $25-billion auto loan package. With two weeks to go before the elections, fierce lobbying is going on by automakers and Michigan lawmakers, who want to see it through. The auto loan could speed up automakers efforts at retooling their factories to produce hybrids and other “green” vehicles.
Congress approved the $25 billion program in 2007 in an effort to help reduce U.S. demand for oil, but did not provide the $3.75 billion that the plan was estimated to cost. The plan was put forward to help auto manufacturers to meet 35 mpg fuel economy standards by 2020. But according to government estimates, Detroit would require $30.5 billion just to meet the targets for 2015.
The auto loan package was estimated to pay for up to 30% of the costs for factory retooling, according to last year’s energy law. But it was stipulated that cars or trucks built at the retooled factory would have to top their competitors’ fuel economy by at least 25%. While automakers have the support of Democrats and some Republicans, the Bush administration has not yet approved the auto loan package. “Green” groups including the Union of Concerned Scientists and the Sierra Club oppose the plan, and demand tougher fuel economy standards for automakers.