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Ford will use its loans to retool its factories to produce more fuel efficient models, like the 2010 Ford Fusion Hybrid, pictured here.  (Source: 2nd Green Revolution)

Steven Chu, US Energy Secretary and Nobel Prize winner
Ford reaps more benefits of not accepting government bailout funds

Ford will receive $5.9 billion in government loans to retool factories for production of fuel efficient vehicles, while Nissan will receive $1.6 billion. Tesla Motors also received approval for a $465 million loan.

Energy Secretary Steven Chu made the historic announcement at Ford headquarters. "By supporting key technologies and sound business plans, we can jump start the production of fuel-efficient vehicles in America," he said.

The loans are part of the Advanced Technology Vehicle Manufacturing Program, which provides incentives to new and established automakers to build more fuel-efficient vehicles, including hybrid and electric vehicles. The ATVMP was created in 2007 and appropriated funding in September 2008. The $25 billion program is supposed to reduce America’s dangerous dependence on foreign oil and create “green collar” jobs.

"These investments will come back to our country many times over by creating new jobs, reducing our dependence on oil, and reducing our greenhouse gas emissions," Chu said. "Ford will transform more than 35,000 jobs into green engineering and manufacturing jobs."

The program is not related to any economic stimulus package or bailout funding that General Motors and Chrysler have received. Although both companies also applied for funding under the ATVM program, they were deemed to not meet financial viability requirements of the program.  Chrysler emerged from bankruptcy earlier this month in an alliance with Fiat, while GM is still currently in Chapter 11 creditor protection.

Ford will receive the funds throughout 2011 to retool several factories in Michigan, Ohio, Illinois, Kentucky and Missouri in order to produce 13 models. The firm previously announced plans to invest $550 million in retooling its Michigan Assembly plant to produce the all-new Ford Focus and an accompanying battery-electric variant. The Michigan Assembly Plant used to produce Ford's behemoth body-on-frame SUVs: the Ford Expedition and the Lincoln Navigator and is currently being retooled.

"We're changing from a company focused mainly on trucks and SUVs to a company with a balanced product lineup that includes even more high-quality, fuel-efficient small cars, hybrids and all-electric vehicles," said Ford's Mark Fields. "As customers move to more fuel-efficient vehicles, we'll be there with more of the products they really want."

"The transformation of Michigan Assembly Plant embodies the larger transformation under way at Ford," stated Ford President and CEO Alan Mulally. "This is about investing in modern, efficient and flexible American manufacturing. It is about fuel economy and the electrification of vehicles."

The loan is part of a $14 billion investment plan in advanced technology vehicles that Ford  wants to implement over the next seven years.

A large portion of funds is expected to go into development of a battery-electric version of the Ford Focus. According to Ford, the vehicle will feature an electric motor and a lithium-ion battery pack. The vehicle is being developed in conjunction with Magna International and will go into production in 2011 as a 2012 model year vehicle.

Ford also has plans to market a battery-electric version of its upcoming Transit Connect commercial vehicle, a next generation hybrid, and a next generation plug-in hybrid by 2012.

Nissan's North American business unit will receive funds to retool its Smyrna, Tennessee facility to build electric cars. An advanced battery manufacturing plant is also being planned.

"Nissan expects to cut the costs of its batteries in half and ramp up production of 150,000 American-made competitively priced electric vehicles annually," Chu said, in a bid to deflect criticism of government loans to a Japanese company.

Nissan is Japan's third largest automaker. It plans to unveil its first electric vehicle model in Japan on August 2, with sales beginning next year. Nissan will sell those cars first in Japan, with US sales after April 2010. Global mass production will come in 2012.

"We are moving forward with zero-emission vehicles," said Nissan CEO Carlos Ghosn at a shareholders' meeting. "The U.S. is going to be a very important market for the company's electric vehicle strategy".

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Hybrid Escape
By therealnickdanger on 6/25/2009 8:40:09 AM , Rating: 5
... is one sweet vehicle. I'm amazed the during all the buzz surrounding the Prius and Insight that the Hybrid Escape hasn't received more love. In addition to getting very good mileage, it's also so much more versatile than the Prius or Insight.

I love my shaggin' wagon Magnum's 5.0s 0-60 time, but I would not be opposed to buying a hybrid Escape as my daily driver. Well, I guess I'd really rather get the hybrid Tahoe, but that thing is retardedly expensive.

RE: Hybrid Escape
By Lord 666 on 6/25/2009 8:45:27 AM , Rating: 2
Interesting taste of vehicles there. From your 244DL 350 project, the Magnum, to the Escape Hybrid.

RE: Hybrid Escape
By therealnickdanger on 6/25/2009 10:38:42 AM , Rating: 2
LOL yeah, I live a varied life. I dunno, I have been told I'm weird by lots of people I trust, so take that as you will.

RE: Hybrid Escape
By Screwballl on 6/25/2009 11:51:45 AM , Rating: 2
Not weird, I would say much more realistic than many out there. Me and my 6'5" frame could not fit in any of these tiny hybrid cars, at least not comfortably.
I am also looking forward to hybrid or alt. fuel SUVs and minivans that get decent mileage (anything over 20mpg city for these would be great), that I can actually drive plus use in comfort and get my family (2 active daughters and wife) around safely.
It is good that they are doing the initial testing and product sales with these small cars but if they want to really start to get sales going they will start doing this in more minivans, crossovers and mid/full size SUVs and at a reasonable price.

RE: Hybrid Escape
By Samus on 6/25/2009 8:33:55 PM , Rating: 3
Cheers to the Ford Escape Hybrid. Thanks Mazda!

RE: Hybrid Escape
By lco45 on 6/25/2009 9:52:57 PM , Rating: 2
Hehe, nothing wrong with a little variety.

I have a Jeep Grand Cherokee 4.0l and two scooters (100CC and 200CC)!

I'm also into green/hi-tech cars, but can't justify the expense, esp. when my scooters get way better mileage than the best hybrids...

It will be good to see what tech comes out of this loan to Ford and others, bound to be some interesting times ahead.


RE: Hybrid Escape
By mdogs444 on 6/25/2009 8:47:52 AM , Rating: 3
Probably because anyone looking to buy a $30k+ compact SUV isn't doing it for the gas mileage. Especially considering you can get a standard Escape for more than $10k less. No way you're going to reap $10k benefits solely by using less fuel.

Although the concept is great and the car is nice, I think its just too expensive over a standard model to get an extra 10-12mpg or however much you save.

The Pruis and Insight have gotten so much attention (I think) because they are cars (not the evil SUV) and they are priced comparable to the nicer entry level models from both Honda & Toyota.

I have the Tahoe LTZ, but would never buy a Hybrid for it. In my opinion, if you're already purchasing a $50,000+ SUV, then you're not too worried about getting an additional 5MPG for $15,000 in added cost.

RE: Hybrid Escape
By HinderedHindsight on 6/25/2009 9:25:58 AM , Rating: 3
I purchased a 2009 Ford Escape Hybrid Limited back in February and it is an awesome car. The enhanced gas mileage alone is definitely not worth the extra 12 K , but between the hybrid technology and a slew of extra features that Ford dumped into the vehicle does offset the extra cost in my mind. The CVT drives much differently than your standard Escape with a 5 speed, and it feels more powerful and faster than the standard I4 Escape. It also frequently beats the EPA estimates by 2-3 mpg combined.

I do have a few gripes about it, but much fewer than any other car I've owned, and in my subjective opinion, it was worth the added cost. Overall though, I think it is more directly comparable to the Escape with a V6. The difference in fuel savings is more dramatic (16 mpg city/5 mpg highway/11 mpg combined difference) while the price differential isn't as high. I paid $34000 for a decked out FEH Limited (without AWD) while a decked out V6 FE would have run me over $27000. With the added Hybrid rebate available at the time, the price differential at this point is about $4000, between the added features that the V6 doesn't have, the much nicer ride, and the added gas mileage more than make up the difference to me.

And no offense to Prius owners if you love your car, but I considered it, and just couldn't get myself to buy one. Not because it's a Toyota, not because it's small, but because of the feel and design of the car. Plus, Toyota's tax credit ran a long time ago.

RE: Hybrid Escape
By therealnickdanger on 6/25/2009 10:37:07 AM , Rating: 2
I would only buy a used Hybrid Escape, some go for around 12K, so well worth it IMO. ;-)

RE: Hybrid Escape
By Noya on 6/25/2009 8:02:14 PM , Rating: 2
I would only buy a used

Completely agree. Buying a late model "creampuff" owned by a gray haired retiree is about the best deal for any vehicle.

On another note, at $30k+ I would prefer the luxury and acceleration of an Acura RDX/MDX or Lexus RX350 wanna be SUV.

RE: Hybrid Escape
By lco45 on 6/25/2009 9:54:41 PM , Rating: 2
Yeah, but mileage is still a big factor.
I love my Jeep, but I hate the cost of fueling it.
If I could get a hybrid jeep, or at least the same thing that used half the fuel I'd be loving it.


RE: Hybrid Escape
By freaqie on 6/30/2009 11:31:15 AM , Rating: 2
there are companies that adapt cars to dybrid/electric driving.
and although it can be expensive.
but it might be worth it looking into that.

By tallcool1 on 6/25/2009 11:42:07 AM , Rating: 1
There was not much detail in this article about why Nissan is getting this loan from the US govt? As much debt as the US government is in, it is hardly in position to give out loans to foriegn companies.

RE: Nissan?
By nuarbnellaffej on 6/25/2009 12:38:47 PM , Rating: 3
The article clearly states that the funds go to Nissan's "North American" business unit, for retooling a plant in the US.

RE: Nissan?
By TomZ on 6/25/2009 4:16:53 PM , Rating: 2
Since the NA business unit is owned by the parent company in Japan, the loan is in effect to a foreign company. So I think the OP's comment is pretty valid.

I'm not for or against the loan (since when does the government care what US citizens think anyway), but I think we should be honest about the facts.

RE: Nissan?
By lco45 on 6/25/2009 9:56:14 PM , Rating: 4
Jobs and taxes are all in the US.
It's a loan (with interest), not a handout.


RE: Nissan?
By Mitch101 on 6/26/2009 12:29:32 PM , Rating: 2
I have never owned a Ford Vehicle. But because they toughed it out when the others went with hands out and came back looking for another hand out. I honestly wouldn't have cared if we wiped this one from the books. Government surely wastes money on many fronts but I see this as investing in America. I never looked at a Ford seriously before but they are winning me over.

RE: Nissan?
By Andrwken on 6/26/2009 10:12:17 PM , Rating: 3
It's really time to get over this feel good story about Ford. Do people not realise that when GM emerges from bankruptcy, Ford will have twice the debt as GM or Chrysler. Here is a quote from a recent CNN article.

"The problem for Ford is that its strength was only relative to the greater problems at GM and Chrysler. Ford built its cash reserves not through profits, but by mortgaging most of the company's assets before the credit crisis of 2008 cut off funding for the other automakers."

They don't have the cash to burn, they mortgaged the farm to stay afloat while the other two had the real cash. Now they are using loan money, not cash, that needs to paid back while they other two filed chapter 11 and restructured. Right now they are sitting on 32 billion in debt compared to 17 and 11 billion for GM and Chrysler respectively. My bet is that by the end of the year they will also be lining up to clear the books as well. So let's try not to give these guys too much credit for getting a loan at a time when anyone could because they were in worse shape than anyone else.

Link for your reading pleasure,

Back in the day...
By cparka23 on 6/25/2009 2:36:18 PM , Rating: 3
Remember when car companies budgeted for their own R&D? What happened... Did the money get pushed into corporate jetliners and Rick Wagoner's severance package?

Every bit of news about the auto industry just screams in testament to the utter lack of foresight on the part of auto execs. I know I'm stating the obvious here, but it's just too appalling to leave unsaid.

RE: Back in the day...
By mdogs444 on 6/25/2009 2:57:43 PM , Rating: 2
While the execs do seem to be focused on short term gains, rather than long term profitability, they really are only a smart part of the problem.

Unions using a stranglehold on the companies by forced strikes kept the companies costs increasing. In the past, the auto companies would just pass on the extra costs to the consumer without problem. Now, those costs have gotten so high, that their sales are lacking, and decreasing - if not completely vanishing - their profits.

When your cost per car are $1500-2000 more than your competition, forcing your sales number to dip due to higher prices, how do you expect to save enough for R&D? Just imagine - if they only sold small cars, they'd have tanked years ago because the profit margins on those are small, if not nonexistent due to the increase in cost. It's much easier to pass on several thousands of dollars of costs onto a $30,000 SUV than it is a $14,000 economy car.
I know I'm stating the obvious here, but it's just too appalling to leave unsaid.

No, whats really appalling is that so many people like to lay blame solely on executives and corporate greed, when they know darn well that they can't say that with a straight face.

RE: Back in the day...
By lco45 on 6/25/2009 10:00:30 PM , Rating: 2
I completely agree.

It's disgraceful that the car companies have essentially painted themselves into a corner, making cars that are more and more out of date, and now need a big helping hand to research future products, which should have been part of their operating expenses over recent years.

I blame the bonus system where execs are rewarded for this year's performance, often at the expense of future years.
Execs should be striving for the health of the company, not for a flash of profit this financial year.
Fix the problem by paying decent salaries and zero bonuses to execs. The incentive is they get fired if they suck at their jobs.


One correction...
By Mozee on 6/25/2009 8:27:28 AM , Rating: 2
The firm previously announced plans to invest $550 million in retooling its Michigan Assembly plant to produce the all-new Ford Focus and an accompanying battery-electric variant. The Michigan Assembly Plant currently produces Ford's behemoth body-on-frame SUVs: the Ford Expedition and the Lincoln Navigator.

The Expedition and Navigator haven't been built in that plant since December 2008. Both lines where moved to the Kentucky Truck Plant and have been building units there since the move was completed in March '09. Michigan Assembly is being retooled for the upcoming European Focus as you said, though.

RE: One correction...
By Regs on 6/25/2009 9:12:21 AM , Rating: 1
Likely just a copy & paste from another site. As a reader, I love to hear contributions from other members to correct facts as all media outlets tend to get a little lazy on the details that could start deadly rumors.

Power > Weight Ratio
By TimberJon on 6/26/2009 11:03:21 AM , Rating: 2
I just want to stress the importance of power to weight ratio in vehicles. Some vehicles just don't have adequate power to move its unladen bulk. I made the mistake of taking a '06 malibu 4cyl off the lot when the V6 I came for was tore up. Lookit the power on that thing, and it's curb weight. Add 180 lb guy and 120lbs of crap and you have a brick on wheels with a lawnmower engine.

Even empty I still only get around 300 miles to the tank, which is about what my Wifes 350z gets. I drive all highway and she drives all streets. It's an awkward mixup. On the highway she gets around 28mpg and I get around 24. Gearing probably also playes a role but the bottom line is.. with ICE's if you are lacking power/torque then your mileage will suffer unless you are a low-rpm athlete.

I am used to a '93 Maxima SE with 210HP and that is a pretty light car at about 3100 lbs.

Today? I say Mitsubishi wins power to weight ratios... Their curb weights are rediculous. Shopping carts with lawn mower engines. No offense to Mitsu owners.

By Runiteshark on 6/25/2009 4:55:26 PM , Rating: 1
Oh joy, Nissan got money. Perhaps now they can afford to put oil coolers as standard on the 370z to prevent it from overheating all the time.

And perhaps they can learn how to do DI on their VQ37HR too.

By lco45 on 6/25/2009 10:04:33 PM , Rating: 2
Not really.
You're replacing Iraq with Iraq & Bolivia.

Instead of using oil for everything you're using lithium for cars and oil for plastics.

Spread the risk, eh?


"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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