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Nissan applies for US federal funding
By Alan Ohnsman |
February 9, 2009, Monday
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Print Edition
Print Edition
NISSAN Motor Co is alone among Japan's car makers in seeking a US federal loan under a program to develop fuel-efficient vehicles, vying for funds with GeneralMotors Corp, Ford Motor Co and battery-car start-up Tesla Motors Inc.
The Energy Department, which set rules to apply for US$25 billion of low-cost loans in November, may begin disbursing funds in one to two months, Energy Secretary Steven Chu said on Friday. While the agency got 75 applications for projects totaling US$38 billion, only 26 are "substantially complete," spokesman Phil West said.
Unlike the US$17.4 billion in emergency federal loans GM and Chrysler LLC received to avoid bankruptcy, the Energy Department funds are part of 2007 legislation creating tougher fuel-efficiency rules. Any manufacturer can apply as long as the money is used to make vehicles in USfactories that produce cars with at least 25 percent better fuel economy.
Alan Buddendeck, Nissan's US vice-president of communications, declined to specify the amount the company is seeking or the car models for which the funds are intended, Bloomberg News said.
The bigger Japan-based competitors, Toyota Motor Corp and Honda Motor Co, did not seek funds.
Nissan's application may draw complaints from those questioning whether the program should be open to foreign companies.
Plunging car demand has drained manufacturers' revenue, complicating plans for models that use less fuel and reduce carbon exhaust.
Nissan may report its first operating loss for a fiscal year since 1995, Japan's Nikkei newspaper estimates. That may boost the appeal of getting access to capital at less than bank lending rates.
"A great deal of this money will be misappropriated to recipients that do not deserve it," said Alan Tonelson, a research fellow at the US Business & Industry Council.
"The Nissan application and its possibility of receiving these funds points to weaknesses in the way this legislation was written."
He faults the program for not requiring that models built using the funds also contain high levels of US-made auto parts and materials.
The Energy Department, which set rules to apply for US$25 billion of low-cost loans in November, may begin disbursing funds in one to two months, Energy Secretary Steven Chu said on Friday. While the agency got 75 applications for projects totaling US$38 billion, only 26 are "substantially complete," spokesman Phil West said.
Unlike the US$17.4 billion in emergency federal loans GM and Chrysler LLC received to avoid bankruptcy, the Energy Department funds are part of 2007 legislation creating tougher fuel-efficiency rules. Any manufacturer can apply as long as the money is used to make vehicles in USfactories that produce cars with at least 25 percent better fuel economy.
Alan Buddendeck, Nissan's US vice-president of communications, declined to specify the amount the company is seeking or the car models for which the funds are intended, Bloomberg News said.
The bigger Japan-based competitors, Toyota Motor Corp and Honda Motor Co, did not seek funds.
Nissan's application may draw complaints from those questioning whether the program should be open to foreign companies.
Plunging car demand has drained manufacturers' revenue, complicating plans for models that use less fuel and reduce carbon exhaust.
Nissan may report its first operating loss for a fiscal year since 1995, Japan's Nikkei newspaper estimates. That may boost the appeal of getting access to capital at less than bank lending rates.
"A great deal of this money will be misappropriated to recipients that do not deserve it," said Alan Tonelson, a research fellow at the US Business & Industry Council.
"The Nissan application and its possibility of receiving these funds points to weaknesses in the way this legislation was written."
He faults the program for not requiring that models built using the funds also contain high levels of US-made auto parts and materials.
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