A large green-car loan fund that was created in the Bush years and which began dispensing money under the Obama White House dodged a bullet late Monday.
But the spotlight turned on the Department of Energy's Advanced Technology Vehicle Manufacturing loan program in this dispute may keep the fund in the cross hairs for the next budget showdown.
Conservative members of Congress this time agreed to drop efforts to trim the $25 billion pool of money by $1.5 billion to fund disaster relief as part of the resolution that would keep the government operating until mid-November.
ATVM is a big target because it has lent only $9.1 billion of the $25 billion to just six companies, though it has 18 applications for about $10 billion total under review.
And automakers are doing well financially, while American buyers already are showing more interest in fuel-efficient vehicles, lessening pressure to subsidize building such vehicles.
Meanwhile, the bankruptcy of solar panel maker Solyndra earlier this month has heightened scrutiny of such federal green loan programs.
The ATVM doesn't yet have a lot of success to show, either.
Loans have been doled out for a pair of auto start-up companies, Tesla Motors and Fisker Automotive, which still are far from being ready to produce the cars for which they primarily received the loans. Ford Motor -- which has become one of the most profitable automakers, with net income of $2.4 billion in the second quarter alone -- also is the biggest loan recipient to date, with nearly $6 billion. And Nissan, a Japanese automaker, will make electric-car batteries in the U.S. in the future.
Even alternative-energy car advocates find themselves scratching their heads when it comes to the program.
"Washington never should have been picking winners and losers in the first place," says Ron Cogan, publisher of the Green Car Journal, a magazine chronicling the alternative-energy car industry. The program, he says, has placed far too great an emphasis on electrification of the auto industry without paying heed to other promising, more near-term technologies, such as natural gas, biomass and clean diesel.
With the investments taking longer to pay off than some expected, Chelsea Sexton, a longtime electric-car advocate based in California, says of the program: "Based on the way it's going so far, it should end."
The program loans so far have been in keeping with President Obama's pledge to put a million electrified cars, fully electric or hybrid, on the road by 2015. And the Energy Department also touts the effects in jobs saved or created, counting more than 40,000, including 33,000 at Ford alone, which has several electric vehicles on the way.
The program, and similar ones, has thrust the government into the role of venture capitalist, picking which companies to back, and also getting put on the hook for any losses.
Left out in the cold
Those not among the chosen have been some of the program's severest critics. One is a small firm in San Diego County, Calif., that made waves a few years ago with an egg-shaped electric car, the Aptera. Steve Fambro, co-founder of Aptera who has since moved on to an agricultural venture, says he recalls showing up at events with a drivable version of his car only to see rivals push mock-ups off a trailer.
Yet some of them got money; his company did not.
But others that haven't received funding still hope to tap in. Plug-in hybrid van start-up Bright Automotive, with operations in Michigan and Indiana, is one of them.
"These programs are critical to creating thousands of manufacturing jobs, improving energy security by reducing America's dependence on foreign oil and investing in American innovation and know-how," says Michael Brylawski, Bright's executive vice president. "We strongly encourage Congress to maintain this long-standing program."
There are plenty in Congress who agree: 77 House Democrats sent a letter to Speaker John Boehner, R-Ohio, disputing the attempt to cut $1.5 billion from the program in the latest dispute. "We're working to save a program that was created with bipartisan support and has literally brought thousands of auto jobs from Mexico to Detroit," wrote Rep. Gary Peters, D-Mich., in a statement.
The ATVM loan program was signed into law by then-president George Bush in 2008. Its purpose was to provide loans to automakers and suppliers for upgrading production facilities to make vehicles with 25% better fuel mileage than the same or similar model in 2005.
Also, the facilities and jobs had to be in the U.S.
In June 2009, the Department of Energy announced loans of $5.9 billion to Ford and another $2 billion or so to others. They were to combine it with private money to reconfigure factories that would in some way provide fuel-saving products. More projects have since been added for $9.1 billion in loans to six companies.
Two recipients would seem to bend the U.S.-company rule: Nissan, whose corporate headquarters is in Japan, and Severstal Dearborn, a unit of a Russian steel giant.
But DOE says that Nissan, in this case, is the Nissan North America unit and that the money and jobs are in the U.S. Severstal Dearborn (Mich.), which owns the old Rouge Steel that Ford once owned, likewise is seen as keeping the jobs in the U.S.
Here's a look at each ATVM loan. The number of jobs created is according to the company and DOE. The number of cars removed is a DOE index, saying the improved fuel economy would equal removing that many cars yearly from the road.
Ford Motor, $5.9 billion. Jobs saved or created, 33,000. Cars removed: 388,000.
Ford says that without the money, it couldn't have converted 11 engine, transmission and assembly plants in five states -- Michigan, Ohio, Illinois, Missouri and Kentucky. The updated drivetrain components will boost fuel economy in a variety of models. The assembly plants will build more fuel-efficient vehicles.
Michigan Assembly plant in Wayne is the poster factory for the remake of Ford's product lineup. It was converted from a big-SUV factory to one that builds the Focus compact car and will be able to build three types of small, electrified models: pure battery vehicles, gas-electric hybrids and plug-in hybrids.
Nissan North America, $1.4 billion. Jobs saved/created, 1,300. Cars removed, 39,000.
The money is being used to add an assembly line in Smyrna, Tenn., that can build up to 150,000 Nissan Leaf battery cars per year. Nissan sold 6,168 Leaf cars in the U.S. the first eight months this year.
The loan also is paying for the construction of a battery factory able to build 200,000 advance-technology battery packs for Leaf and for other automakers who find it handier and cheaper to buy the packs instead of developing them.
The facilities are to be running by the end of 2012.
Severstal Dearborn, $730 million. Construction jobs created, 2,500; production jobs saved/created, 260. Cars off the road, 51,000.
Severstal doesn't have its money yet, but expects to close with the DOE within weeks. The company already has updated two facilities with its loan money, expected the government loan to in essence repay itself, and it plans to open a third in 2013 -- but won't if the DOE loan unexpectedly falls through, Severstal spokeswoman Katya Pruett says.
The modifications are to allow the company to make advanced high-strength steel, mainly for Detroit car companies. It weighs less than conventional steel, helping improving mileage, but also can meet crash-safety standards.
Fisker Automotive, $529 million. Jobs saved, 2,000. Cars removed, 30,000.
Fisker makes fancy electric cars but has sold none yet. CFO Joe DaMour says the first few Karma electric cars have been shipped to U.S. dealers from Finland.
The company, based in Anaheim, Calif., used the first $170 million of the loan to pay for U.S. engineering and other development work on the foreign-made car.
It is using the rest to buy, refurbish and equip a closed GM factory in Delaware to build a larger, higher-volume electric car code-named Project Nina. Fisker says Karma production also will eventually be moved to Delaware.
The Delaware factory has just 40 workers now, mainly engineers, and will add another 40 by year's end. The rest, mainly assembly line jobs, will come closer to the start of production in the next year or two.
Tesla Motors, $465 million. Jobs, 1,500. Cars off the road, 5,000.
Electric-car maker Tesla is expanding from a single model -- a $100,000-plus two-seater -- to add a lower-price sedan. Tesla has applied for a second loan, but neither the automaker nor the DOE would provide details.
Vehicle Production Group, $50 million. Jobs created/saved, 900. Cars off the road, 2,000.
The Mishawaka, Ind., company's MV-1 is a wheelchair-accessible van fueled by compressed natural gas, which burns cleaner than gasoline.
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