The U.S. House of Representatives passed a bill this afternoon approving a $25 billion low-interest loan for domestic automakers. The bill passed with an overwhelming majority – 370 to 58 – and is on its way to the Senate for a vote on Friday before the White House gets the opportunity to lay pen to paper on March 6, 2009. The rates and rules of the loan are required to be spelled-out by the U.S. Department of Energy within 60 days of the bill becoming law, but automakers could be allowed to repay the loans over as long as 25 years, along with the Energy Department deferring payment for up to five years.
Detroit's Big Three (or 2.8, or whatever) are counting on the loans to retool factories for more fuel-efficient vehicles, protect jobs and help fund the escalated development costs of fuel-efficient drivetrains. Having seen more government bail-outs than we'd like to over the past couple weeks, we're not ready to call this one a full-blown bail-out like those given to Fanny Mae/Freddie Mac, and AIG. These are low-interest loans that will likely come with specific stipulations on how the money can be spent. It's up to General Motors, FoMoCo and Chrysler LLC to spend them wisely.
[Source: Automotive News - Sub. Req.]
