General Motors Withdraws Request For $14.4 Billion Loan
This move will help separate GM from the heard, as both Ford and Nissan have used government funds for their clean-vehicle programs. The DOE founded the program, which is called the Advanced Technology Vehicles Manufacturing Loan Program, being used by the other two automakers in December of 2007.
General Motors had originally applied for the loan back in October of 2009 as it was emerging from bankruptcy. Now, with sales skyrocketing, GM is attempting to become more independent.
On top of separating themselves from the competition, GM has established that it no longer needs the help of the United States government, which now only owns 26.5 percent of the company following a successful initial public stock offering.
Based on the news of their loan request being withdrawn, GM Chief Financial Officer Chris Lidell had this to say:
"This decision is based on our confidence in GM's overall progress and strong, global business performance. Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet."
Ford was given a loan of $5.9 billion under the new DOE program in 2009, while Nissan got $1.4 billion and Tesla Motors got $465 million. Chrysler applied as well, but there has been no ruling on whether they will be getting the money or not.
The Advanced Technology Vehicles Manufacturing Loan Program was suppose to give automakers money towards updating factories to make vehicles that would get brilliant fuel economy. The program has $25 billion to hand out in total. This program is unrelated to the United States Treasury Department's Troubled Asset Relief Program, which funded automakers in their time of need.
Ford will use its funds for their engine plants in Dearborn, Michigan; Cleveland, Ohio; and Lima, Ohio, and to upgrade its transmission plants in Livonia, Michigan; Sterling Heights, Michigan; and Sharonville, Ohio. Ford will also upgrade its assembly plants in Chicago, Illinois; Louisville, Kentucky; Dearborn, Michigan; Wayne, Michigan; and Kansas City, Missouri.