Congress will fund up to $25 billion in low-cost government loans for retooling by Detroit’s Big Three, congressional leaders confirmed Tuesday, but won’t allow automakers to use the money for other projects, reports the Detroit News.
"This has been a long and hard bipartisan effort by the Michigan delegation to obtain funding for government loans that will assist U.S. auto manufacturers and component suppliers to retool their facilities to produce advanced technology vehicles," Michigan Sen. Carl Levin said. "The funding will provide up to $25 billion in loans, which would be repaid to the federal government.
"This should help to keep auto jobs in Michigan and in the U.S. and begin moving us toward the advanced vehicle technologies that are critical to our companies’ competitiveness in the global marketplace."
Detroit’s Big Three automakers have poor credit ratings, so these loans could save them more than $100 million per $1 billion borrowed, and they will have up to 25 years to repay the money. They could also ask the Energy Department to defer repayment for up to five years.
Detroit’s Big Three will not see the money from the loans until spring of next year at the earliest, officials said.