US to loan $5.9 bln to Ford to aid fuel efficiency

Well, this is interesting, especially when combined with a few other developments I’ll speak about after the quote.

The US government will loan 5.9 billion dollars to Ford Motor Co. and 1.6 billion dollars to Japanese automaker Nissan to invest in improving the fuel economy of their US-built vehicles, officials said Tuesday.

The loans are the first awarded out of a 25-billion-dollar program to help automakers meet upcoming fuel efficiency standards, Energy Secretary Steven Chu said at a press conference.

“These loans will help the auto industry meet and even exceed the president’s tough new fuel standards while creating jobs, reducing our dependency on foreign oil and ensuring America’s competitiveness.”

Another 465 million dollars will be loaned to electric sports car maker Telsa.

Additional loans will be awarded to “large and small automobile manufacturers and parts suppliers up and down the production chain” over the coming months, said Chu

Ford will use the 5.9 billion dollars retool plants in five states and boost the fuel efficiency of close to two million new vehicles annually.

Nissan will use the loans to modify its Tennessee plant to produce zero-emissions electric vehicles and the lithium-ion battery packs to power them.

As I mentioned above the quotes, there is an interesting tie-in for this blog. A lot of metal stamping dies, and the original production of them, have gone off-shore.

There are a determined bunch of people in Detroit (and no doubt in other places too, but I only know about the Detroit bunch) who want to play catchup and bring their toolmaking lead time and costs down, in line with off-shore toolers, in order to keep that work onshore. I’ve kept in loose touch with a few of them, belong to some of their groups on LinkedIn and other places, and in general applaud what they’re doing. I did, however, question their belief that they could bring 50% of the diemaking that went offshore back. I don’t think those dies are coming back unless and until they need to be retooled.

This may be the retooling opportunity they’re looking for/need. Retooling for greater efficiency means making better use of steel components, smarter brackets with stiffening ribs instead of using thickness to get the strength needed, use of aluminum where possible, etc. These things mean new dies, and therefore, a chance to start over again on-continent.

So this may well be a very good thing.

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