Will Secretary Steven Chu give Chrysler The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program out of Section 136?

Solyndra has been in the news because, as Secretary of Energy, Dr. Steven Chu said, “there was no there, there.” $535 million from Sec 1705 down the drain. Every loan will be scrutinized, as they should be.

Is that the reason it is taking the Department of Energy (DOE) extra time to decide if Chrysler is going to get the loan they have requested?

Is it because Chrysler is owned by Fiat, an Italian company, meaning it is no longer a majority owned American company?

Section 136 of the Energy Independence and Security Act of 2007 provides for grants and loans to eligible automobile manufacturers and component suppliers for advanced technology projects that are established in the United States to produce light duty vehicles and components for vehicles which provide meaningful improvements in fuel economy performance beyond certain specified levels. The grants and loans can also cover engineering integration costs associated with those projects.

It doesn’t matter if the company itself is an American company, it matters if the company is an ongoing-concern, and the money is producing a more fuel-efficient vehicle that is produced in the United States, by American employees.

I spent over an hour, with Secretary Chu, touring the Ford and General Motors stands at the 2012 Detroit auto show. The whole time there were no other Government officials (except Chu’s handler), and no Congressional people. Until we got to the Chrysler stand. Woosh!

Out of the blue, Fiat’s CEO, Sergio Marchionne, showed up. That would be understandable, normal even. Fiat owns 58% of Chrysler Corporation and is looking for a Department of Energy Section 136 loan to retool for more fuel efficient cars.

Chu hid it well, but he had to think it was just as “coincidental” as I did when Senator Debbie Stabenow (D), and Representative John D. Dingell (D) showed up at such an opportune time.

The amount dispersed under Section 136, so far, along with the jobs associated with that loan are:

1. Fisker Automotive (granted April, 2010) $529 million 2,000 jobs
2. Ford Motor Company (granted Sep 2009) $5.907 billion 33,000 jobs
3. Nissan North America, Inc.(granted Jan, 2010) $1.448 billion 1,300 jobs
4. Tesla Motors (granted Jan, 2010) $465 million 1,500 jobs
5. The Vehicle Production Group LLC $50 million 900 Mar 2011 1 Closed

1. According to Fisker automotive, “The DOE approved two loans totaling $528.7M for Fisker to develop advanced technology vehicles that would lower dangerous emissions, reduce our dependence on foreign oil, make the US competitive in the global marketplace and create jobs in America. These loans have accelerated Fisker’s plans, enabling the company to grow our American jobs base to more than 700 full time and contract employees at our California headquarters and Wilmington, Delaware factory. The majority of that amount is specifically for development of Fisker’s next generation Electric Vehicle with extended range (aka Project Nina), which will be built in Fisker Automotive’s factory in Wilmington.”

2. According to the DOE website the first loans include a $5.9 billion loan to Ford for upgrading factories in five states to produce 13 more fuel-efficient models, a $1.6 billion loan to Nissan to build advanced electric vehicles and advanced batteries, and a $465 million loan to Tesla Motors to manufacture its new electric sedan.

Ford Motor Company will receive its loans through 2011, using the funds to upgrade its engine plants in Dearborn, Michigan; Cleveland, Ohio; and Lima, Ohio, and to upgrade its transmission plants in Livonia, Michigan; Sterling Heights, Michigan; and Sharonville, Ohio. Ford will also upgrade its assembly plants in Chicago, Illinois; Louisville, Kentucky; Dearborn, Michigan; Wayne, Michigan; and Kansas City, Missouri, converting two of the truck factories into assembly plants for cars. In addition, the Ford loans will finance advances in traditional combustion engines and electrified vehicles and help raise the fuel efficiency of more than two dozen popular models.

3. Nissan aims to manufacture a cost-competitive electric vehicle with a lithium-ion battery pack in Smyrna, Tennessee, and plans to eventually reach a production capacity of 150,000 vehicles per year. Tesla Motors will use its funding to finance a California-based manufacturing facility for the Tesla Model S sedan, an all-electric sedan that can be recharged at a conventional 120-volt or 220-volt outlet. Production will begin in 2011 and ramp up to 20,000 vehicles per year by the end of 2013.

4. Tesla Motors, Inc. closed a $465 million loan arrangement under the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program to (1) reopen an auto manufacturing plant in Fremont, California to produce specially-designed, all-electric, plug-in vehicles, and (2) to develop a manufacturing facility to produce battery packs, electric motors and other powertrain components that will power all-electric plug-in vehicles manufactured by Tesla and other original equipment manufacturers including Daimler and Toyota. The projects are expected to create up to 1,500 jobs.

5. Doe says that $50 million loan to The Vehicle Production Group LLC will support the development of the six-passenger MV-1, a factory-built wheelchair accessible vehicle that will run on compressed natural gas and create 900 jobs across the country. A prominent partner of VPG is Clean Energy, a Natural Gas Group of T. Boone Pickens.

From all appearances it looks like Secretary Chu was impressed with Chrysler’s efforts, which should please the Michigan Congresspersons.


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