House Republicans make push to kill auto loan program

David Shepardson
Detroit News Washington Bureau
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Washington — House Republicans are making a new push to scrap a long-unused $25 billion loan program designed to provide low-cost government funds to underwrite development of advanced technology vehicles and parts.

The U.S. Energy Department hasn’t made a new loan from the $25 billion Advanced Technology Vehicle Manufacturing Program in more than four years. The program was funded in 2008 and awarded $8.4 billion in loans; it has $16.6 billion in unused funding. It hasn’t made a new loan since March 2011 and came under scrutiny after two of five companies receiving loans halted production.

“The budget rescinds all unobligated balances from the president’s stimulus green energy programs,” House Republicans said in a summary of their budget proposal. “The government cannot recover taxpayer dollars from failed projects like Solyndra, but it can protect taxpayers from being on the hook for future boondoggles.”

Republicans have been trying for years to recover billions set aside in 2008 to subsidize the loans.

Created by Congress in 2007, the program got caught up in the debate to fund the government in 2011, but in recent years, as House Republicans have called for ending program, the Senate has refused to go long.

But now Republicans are in charge of the Senate. The current chairman of the Senate Commerce Committee, John Thune, R-S.D., in 2013 introduced an amendment to end the loan program that wasn’t approved.

In October, the Energy official overseeing the program said it expected to announce new loans soon. “We are very happy with the whole relaunch,” Peter W. Davidson, executive director of the Energy Department’s Loan Programs Office, said. “We’ve been very encouraged since then about what’s going on, so we expect to make a couple announcements ... certainly this year.”

In May, the Energy Department posted an environmental review document on its website disclosing it was planning to award a loan to Alcoa Inc. to produce aluminum for cars in Alcoa, Tennessee. It said the loan would expand capacity for the auto market by 640 million pounds of aluminum per year. No loan has been completed.

In February 2012, Vehicle Production Group LLC — a Michigan startup building wheelchair-accessible compressed natural gas vehicles that won $50 million in loans — stopped production. The Energy Department sold its unpaid $50 million loan to Allen Park-based VPG to AM General for $3 million; the company agreed to acquire VPG’s MV-1 wheelchair-accessible vehicles. Taxpayers lost about $42 million on that sale.

Recipient of $529 million Fisker Automotive Inc. filed for bankruptcy, resulting in a $139 million loss to taxpayers.

Some applicants waited months or years for an answer only to be rejected. Dearborn steelmaker Severstal OAO was tentatively approved for a $730 million loan in 2011, only to be later rejected. The department stopped making nearly all loans after the collapse of solar panel startup Solyndra LLC — especially before the 2012 election.

General Motors Co. and Fiat Chrysler Automobiles NV abandoned loan requests after years of talks with the department. Dozens of auto suppliers applied for loans, only to see the Energy Department reject them all.

Some loans have performed well: $5.9 billion to Ford Motor Co.; $1.4 billion to Nissan Motor Co.; $465 million to Tesla Motors, which repaid loans nine years early.

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