Automakers could receive up to $6 billion in direct loans to modernize their assembly plants to build gas-electric hybrids and advanced vehicles under an agreement reached Wednesday by Senate budget leaders.
An additional $300 million would help research and develop advanced batteries critical to plug-in hybrid vehicles, said Sen. Debbie Stabenow, D-Mich., who has sought the funding.
Stabenow said the provisions would be included in an economic stimulus package expected to be considered next September. Michigan lawmakers have sought the federal aid as General Motors Corp., Ford Motor Co., and Chrysler LLC, have announced reductions in salaried workers and plant closures amid a difficult economic period.
Credit agencies have maintained a negative outlook for automakers, making it more difficult for the companies to borrow money. Domestic automakers have outlined plans to revamp their factories to build more fuel-efficient vehicles instead of large trucks and sport utility vehicles.
"This is about supporting our industries to retool in Michigan," Stabenow said.
The supplemental spending plan would include $1.5 billion for energy efficiency and renewable energy programs, and a large portion of the money would be directed toward manufacturing.
Under the agreement, $900 million would be set aside in case of a loan default to provide up to $6 billion in low-interest loans for the industry. Officials said the loans could be used to modernize all domestic plants, but older plants would receive priority.
The $300 million funding for advanced battery technology would attempt to address long-term, cost-effective storage systems to help bring plug-in hybrids or plug-in electric vehicles to market.
GM is developing an extended-range plug-in electric vehicle called the Chevrolet Volt, which it hopes to bring to market in 2010. Toyota Motor Corp. says it will bring out a plug-in hybrid with lithium-ion batteries by 2010 that it will target toward leasing customers.
Ford has a demonstration fleet of 20 plug-ins through a partnership with Southern California Edison. The companies are studying ways to accelerate mass production of the hybrids.
"It's very encouraging to hear of the support and partnership of government with the U.S. manufacturing industry," said Ford spokesman Mike Moran.
(Copyright 2008 by The Associated Press. All Rights Reserved.)