Wagoner says U.S. loans would be ‘very helpful’
GOVERNMENT LOANS FOR AUTOMAKERS
Automotive News | September 12, 2008 – 1:30 pm EST
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Rick Wagoner |
WASHINGTON — General Motors CEO Rick Wagoner said today that limits on use of low-interest government loans should be loosened.
He called his recommendation “an amplification of terms” rather than loosening.
But he contended that a project that leads to production of vehicles with 10, 15 or 20 percent better fuel economy should qualify for federal loans.
His comment came in response to questions from senators at a so-called energy summit. He said he was also speaking for Ford Motor Co., Chrysler LLC and the UAW.
As federal law is written, a project would have to lead to vehicles that are 25 percent more fuel efficient than comparable cars and trucks.
Wagoner said the problem with the 25 percent better fuel economy threshhold is that it sets the bar too high for many worthy projects, which would not get funded. Big gains in fuel economy are made in incremental steps, he said.
Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said in brief remarks after the summit that loan funding would be a "good investment" for America and he is optimistic it will be approved.
But Sen. Bill Nelson, D-Fla., chastised Wagoner for the auto industry always fighting fuel economy standards and predicted companies will be back next year for a financial rescue.
Wagoner noted that the industry supported last year’s fuel economy hike and "it’s a big one."
An energy law enacted last year authorizes up to $25 billion in loans, but Congress and the White House still must approve at least $3.75 billion in spending to unleash the loans. Industry leaders say they want that to happen this month. Some have said more is needed, but Wagoner said the $25 billion would be “very helpful.”
Senate Majority Leader Harry Reid, D-Nev., opened the summit by saying he expects to get the funding approved in the coming two weeks.
Asked what happens if loans are not approved, Wagoner said GM will keep pushing forward doing what it has been doing.
A Toyota lobbyist walking nearby was asked what he says if a lawmaker asks about loan funding, and he said, "We’re staying out of it."
While industry leaders call the loans a critical need, Wagoner skirted any reference to them in prepared remarks for the summit.
He said that automakers need to take the lead in developing new technologies that move the industry away from total reliance on petroleum but that others have roles to play, too.
“We need a clear, long-term policy, consistency of direction, alignment of regulation and a strong commitment from all sectors of American society to develop and implement the technologies that will allow us to achieve our mutual goals,” he said in the opening remarks.
Wagoner was part of a panel of corporate leaders at the summit.
The summit was organized by Senate leaders but is being conducted by the Senate Energy and Natural Resources Committee.
