• by Karl Greenberg , September 11, 2008

Chrysler LLC Chairman Jim Press is all for it; just don't call it a bailout. Press, speaking at a press conference this week in Michigan, said Congress should quickly approve the Advanced Technology Vehicles Manufacturing Initiative, a low-interest, $25 billion loan to fund fuel-efficient alternatives to traditional internal combustion engines.

 

He said the loan--designed to help Ford, GM and Chrysler boost research and development of hybrid, electric and other powertrains-- was also promised as part of the 2007 Energy Bill, which mandated that automakers achieve a minimum of 35 mpg (a 40% improvement) in CAFE by 2020. Although the loan numbers in last year's energy bill were for $25 billion, automakers have been lobbying to double that.

In any case, the cash isn't going anywhere until Congress says it is: Congress has to approve some $3.5 billion--or $7 billion if automakers get the $50 billion--needed to cover potential debt on the loan.

Sounding frustrated, Press said the loan guarantee program is being "batted back and forth like a tennis game.

"First of all, this loan guarantee was part of the energy bill passed last year," he said. "It's a loan guarantee, not a bailout, and in fact, the only expense is the difference between the prevailing interest rates."

He said the money would, in Chrysler's case, speed up the company's introduction of fuel-cell battery vehicles. "It's a way to accelerate technology. The battle right now with the technology is making it affordable so we can get it into the hands of customers--so we can sell it in volume," he said. "This accelerates our plans forward by years and also gives us as a company and country a much better global level of competitiveness by getting products that are more in tune with the market quicker than we could if we waited for the product cycle to run through.

"We are worried about dependence on foreign oil. But if you fast-forward 15 years, where will batteries come from? Right now, the major source of batteries is from other countries. We need to stimulate that development here in Michigan. This money will allow us to do that," he said.

Rick Wagoner, General Motors' chairman, will pitch the $50 billion loan at a Senate energy summit today. Ford's CEO Alan Mullaly said this week that he predicts the Detroit automakers would get the $50 million. Democratic presidential nominee Barack Obama backs the $50 billion loan, while Republican John McCain supports the $25 billion loan in last year's bill.