(Updates with DOE, White House and GM comments) By Ian Talley
DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The U.S. Energy Secretary on Wednesday urged Congress to modify rules for $25 billion in plant-retooling loans for cash-strapped auto companies and said the loans could be disbursed by year's end.
Secretary Samuel Bodman's comments indicate a much faster disbursement than the DOE has previously announced and may encourage Congress to modify the loan rules rather than approve an additional $25 billion loan request from the Big Three automakers.
DOE spokesman Andrew Beck said the Energy Department couldn't clarify whether the agency could still disburse the funds by the end of the year if the rules were modified, given it was still "a hypothetical." But he said timing "all depends on what type of modifications are made to [loan rules], and that will in turn dictate the process upon which the loans can be disbursed."
White House spokesman Tony Fratto said the Administration wanted the money, should there be a modification, "disbursed as soon as possible."
Automakers are seeking $25 billion from Congress this week to finance their short-term balance sheets in addition to the $25 billion that the 2007 Energy Bill approved for advanced-vehicle technology. In the case of advanced-vehicle-technology loans, companies would re-tool their plants to build advanced, high-efficiency vehicles.
Earlier in November, senior DOE officials had said it was "doubtful" that loans for plant retooling could be issued by the end of the year.
Auto companies Ford Motor Co. (F), General Motors Co. (GM) and Chrysler LLC are pleading for additional loans, saying that without the bridge money they may not be able to remain financially solvent for the next six months.
Republicans are blocking moves by Democrats for the additional funding, and instead Senate Minority Leader Mitch McConnell, R-Ky., said he's working on a compromise bill to use the current $25 billion in loans for the emergency funding.
"We think it's a good middle path ... a way that clearly has support in the Senate," White House's Fratto said.
A supporter of the industry, who has been adamantly pursuing the additional loans, Sen. Carl Levin, D-Mich., said Wednesday for the first time he would consider modifying the existing-loan regulations as an alternative.
Bodman said his agency was in the process of evaluating five applications, and depending on their quality, "it's possible we'll have money available by the end of the year," he told reporters on the sidelines of a conference here.
"It is not a useful thing to have another $25 billion, (and) I would hope ... Congress will modify the rules under which we can operate," he said. "Nobody wants to see these companies go broke."
He said the Bush administration was also not enthusiastic about using funds from the $700 billion Troubled Asset Relief Program for the auto firms.
GM CEO Rick Wagoner told the U.S. House Financial Services Committee Wednesday the existing loans "basically allows you to draw down against credit facilities once you've already spent the money ... It's helpful, but it doesn't address the near-term cash-flow issues."
Asked later on CNBC if he would accept the funds if they did become available within weeks, Wagoner said: "We're open to that." But he said he thought the advanced-tech loans should be kept separate.
One compromise being considered on Capitol Hill involves using more than $7 billion already appropriated for the Energy Department program to provide emergency aid to automakers. The Energy Department program would remain intact, with Congress at some point replenishing the program's funds, perhaps next year, Levin said.
Bodman would not say what companies had submitted the loan applications, citing confidentiality.
Under the current rules for the loan program, auto companies can borrow up to 80% of an advanced-technology-vehicle-project cost for up to 25 years, but they also must show they are financially viable enough to repay the loans.
-By Ian Talley, Dow Jones Newswires; 202-862-9285; ian.talley@dowjones.com
(Josh Mitchell and Siobhan Hughes in Washington contributed to this report)
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(END) Dow Jones Newswires
November 19, 2008 17:24 ET (22:24 GMT)

Publié le 19 novembre 2008 Copyright © 2008 Dowjones