News // Autos
Ford gets $5.9 billion loan from Department of Energy
21 September 2009 , 12:48louisville.bizjournals3137
Dearborn, Mich.-based Ford (NYSE: F) will use the money to retool plants in Illinois, Kentucky, Michigan, Missouri and Ohio, according to a news release from the Department of Energy.
Funds for the loan were granted through the department’ s Advanced Technology Vehicles Manufacturing program, which was created to encourage the development of advanced vehicle technologies that will reduce the nation’ s dependence on foreign oil and create jobs.
The Obama administration has set a goal of requiring vehicles to have an average fuel economy of 35.5 miles per gallon by 2016. Doing that, the administration said, will reduce oil consumption by an estimated 1.8 billion barrels and greenhouse gas emissions by an estimated 950 million metric tons.
Although Ford officials have said that the automaker is not in need of a federal bailout to remain solvent, they lobbied for more than a year for the Department of Energy loan, which they believe is needed to conduct the research and development and begin production of the vehicles that will meet the higher energy consumption standards.
In July 2008, Ford officials announced plans to end longtime production of the Ford Explorer and Mercury Mountaineer at the Louisville Assembly Plant and retool the plant to begin production of a small, fuel-efficient car by 2011.
The company also has spent millions of hundreds of millions of dollars to establish a flexible body shop and production line at the Kentucky Truck Plant on Chamberlain Lane.
The retooling allowed Ford to move production of its Ford Expedition and Lincoln Navigator SUVs to the plant from a production plant in Wayne, Mich. That plant was retooled to accommodate production of a new generation Ford Focus compact car.
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