Chrysler Group LLC has withdrawn its application for an Advanced Technology Vehicles Manufacturing loan from the U.S Department of Energy.
The maker originally had hoped to receive as much as $7 billion through the program, designed to assist in the development of advanced, high-mileage powertrain technologies – in the process reducing U.S. dependence on imported petroleum. It applied shortly after emerging from bankruptcy in 2009, but distribution of funds has largely been put on hold as the ATVM program has become caught up in Washington’s increasingly partisan politics.
Ford was able to secure a loan, as was Japanese automaker Nissan and a number of solar panel manufacturers and battery companies. However, the loan program, which was signed into law by President George W. Bush in 2007, has come in for heavy criticism from tea party Republicans after the bankruptcy of Solyndra, a Calfornia-based solar panel manufacturer, which received a $500 million loan.
Under pressure from Republicans, the DOE slowed the loan approval process last year, ultimately leading a number of other applicants to withdraw their applications – including General Motors, which had sought $14 billion.
During the North American International Auto Show, Chrysler chief executive officer, Sergio Marchionne expressed frustration with the Department of Energy loan process. “Why am I bothering? The executive asked, if the loan was going to be either rejected or sharply reduced.
By the time Chrysler decided to withdraw its request it had already cut back to $3.5 billion the money it was seeking. At this po9int, Chrysler plans to fund development of hybrids, plug-ins and other advanced technologies on its own.
“The company remains confident in its strategy to bring competitive, fuel-efficient vehicles and technologies to market on schedule. This decision will not impact Chrysler’s ability to achieve its previously announced business plan targets,” Chrysler said in a statement.
Meanwhile, U.S. Representative John D. Dingell (D-MI15) expressed his disappointment that Chrysler and the Department of Energy (DOE) could not reach an agreement on funding and the duration of the loan terms for Chrysler’s Section 136 application.
“I am disappointed that Chrysler withdrew its Section 136 application. I regret that DOE and Chrysler were not able to come to an agreement that clearly would have benefitted American workers and manufacturers,” said the veteran Michigan Congressman.
Rep. Dingell noted that Chrysler had a strong 2011, with sales improving significantly faster than the industry as a whole. It has added 9,400 new jobs and repaid in full the loans it received from the U.S. and Canadian treasuries as part of the 2009 bailout. The maker, he said,` would have been a perfect candidate for the loan program.
“Although Chrysler has withdrawn its loan application, DOE must start acting decisively so we can fulfill the President’s goal of out-competing the rest of the world,” Dingell added
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