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Chrysler, GM seek U.S. retooling loans

June 24, 2009

Chrysler, GM seek U.S. retooling loans

Energy officials in talks with carmakers


U.S. Department of Energy Secretary Steven Chu said Tuesday that his department is in discussions with General Motors Corp. and Chrysler about their applications for a $25-billion retooling loan program intended to spur fuel-efficient vehicle production.

Chu made the comments at Ford’s Research and Innovation Center in Dearborn, where he announced $5.9 billion in loans for Ford Motor Co., $1.6 billion for Nissan and $465 million for Tesla Motors.

Hundreds of Ford employees, Michigan Gov. Jennifer Granholm, U.S. Sen. Debbie Stabenow, D-Mich., UAW Vice President Bob King and other leaders attended the event.

Congress authorized funding for the Advanced Technology Vehicles Manufacturing program in 2008.

To qualify, a company must manufacture vehicles in the United States and be viable — a condition that, at least initially, made Chrysler and General Motors Corp. ineligible.

Chu said he did not have viability concerns about Ford, the only domestic automaker that has not received emergency federal loans. Chu said discussions with Chrysler about funding started immediately after it emerged from bankruptcy. "With regard to GM, we’ve actually already begun the review … hoping they will emerge," Chu added.

GM has submitted three applications to the Department of Energy for $10 billion. Chrysler’s bankruptcy forecasts call for the automaker to receive $6 billion in federal retooling loans.

Free Press staff writers Greg Gardner and Justin Hyde contributed to this report.

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