Ford to get $6B loans for creating fuel-saving autos

DETROIT — Employees of Ford gave U.S. Department of Energy Secretary Steven Chu a standing ovation Tuesday when he announced that the automaker would receive $5.9 billion in loans for the development of fuel-efficient cars.

Chu said one of the Obama administration's priorities is to award and disburse the loans as quickly as possible to move the nation toward energy independence.

"The American innovation machine, when revved up, is without a doubt the best in the world," Chu said while speaking to Ford employees and Michigan politicians at Ford's Research and Innovation Center.

Chu announced an $8 billion package of loans that also includes $1.6 billion to Nissan and $465 million to Tesla Motors. The loans are the first from a $25 billion program created in 2007 and authorized by Congress last year.

Ford it said plans to use the $5.9 billion in loans to retool 11 plants in five states.

In total, Ford President and CEO Alan Mulally said Ford intends to spend $14 billion in the United States on advanced technology over the next seven years. Ford anticipates that it could draw on the first portion of the loans within 35 days. Ford will be permitted to tap additional funds as it invests money in the future.

"This is the kind of partnership that will help American manufacturing not just survive, but thrive," Mulally said. "Ford intends to be the fuel-economy leader."

Chu said he has been talking to Mulally every two to three days in an effort to complete the review process.

Chrysler and General Motors were shut out of the early stages of the application process for $25 billion in available loans authorized by Congress in 2008 due to questions about their future viability.

But Tuesday, Chu said the Department of Energy began discussions with Chrysler shortly after it emerged from Chapter 11 bankruptcy and said discussions are also underway with General Motors in anticipation of the company's ability to exit from bankruptcy.

"So there is money there — I wouldn't say set aside — but we are trying to stretch the money as far as we can," Chu said.