There’s $25 billion awaiting assignment at the Department of Energy. That money is supposed to be directed to help subsidise the next generation of start ups and entrepreneurs working on electric automobiles. The program was approved in 2007, the DOE got the money in September 2008, but nothing’s been done with it.
Now that General Motors, Chrysler and the auto part makers are on bended knee asking for money, they’ve trained an eye on some of that cash. The catch for these companies, as well as other applicants, is that a company getting money from the fund must be deemed financially viable. Will any of the ailing automakers earn such a distinction? We’re waiting to see.
We don’t think they should be able to get at the funds. The money for the program is supposed to help companies developing technology that will produce more electric cars, not prop up the old guard. It reminds us of giving money to hurt banks and saying “Now go lend that money to people and each other.” Instead, the banks held onto the money.
If we give this money to automakers to spend it on electric car programs, can we trust they’ll really do that while the rest of their business dies? This is what they want:
NY Times: The Energy Department has whittled the initial 75 loan applications, which seek a total $38 billion, down to 25 for a second round of reviews. General Motors is requesting $8.3 billion, earmarking a portion for the Chevy Volt, a plug-in hybrid. Ford Motor is asking for $5 billion for a variety of electric car retooling programs and Chrysler, a unit of Cerberus Capital Management, is asking for around $5 billion. Even Nissan said it has submitted an application for one of its American plants that meet the program’s criteria.
There are alternatives available to the bigger car makers, like bankruptcy, or a different government aid. For the small companies hoping to get DOE funding, this is all they have. Either get this money or dissolve. It sounds risky to hand money to anyone, but would you give $20 to someone you know will burn it (Big 3) or someone you think could either burn it or turn it into $40 (start ups)?