Included in the $634 billion spending bill President Bush signed Tuesday evening is funding for $25 billion in low-cost government loans for the auto industry, reports The Detroit News.
Detroit’s Big Three automakers will be able to borrow money at a low interest rate of about five percent to help retool their plants to build advanced technology vehicles that are more fuel-efficient. The low interest rate allows the Big Three to save more than $100 million for every $1 billion borrowed, as they would likely pay about 15 percent or higher if they acquired the loans regularly.
"We commend the Congress and the President for their action at a critical time in the auto industry’s transformation," GM spokesman Greg Martin said late Tuesday. "Now, we need the rulemaking process to keep pace with the urgency in which we’re developing new technologies."
Although this is a big success for Detroit automakers, the money won’t be immediately available. Energy Secretary Samuel Bodman said in a letter last week that it could take "six to 18 months or more" to approve and award the funds.