WASHINGTON — The chief executives of Detroit’s Big Three automakers and the president of the United Automobile Workers union are scheduled to meet Thursday with House Speaker Nancy Pelosi about emergency financial aid for the companies, according to three people with knowledge of the plans. þþThe meeting would come just hours after the Energy Department said late Wednesday that the auto companies would be able to apply as soon as next week for $25 billion in low-interest loans to develop more fuel-efficient vehicles. But that loan program seemed unlikely to meet their needs, and some of the money could go to Asian carmakers with plants in this country.þþThe meeting with Mrs. Pelosi will be attended by Rick Wagoner, chairman of General Motors; Alan R. Mulally, chief executive of the Ford Motor Company; Robert L. Nardelli, chairman of Chrysler; and Ron Gettelfinger, president of the autoworkers. Legislators from states with heavy automotive employment are likely to be involved too. þþThe Energy Department said Wednesday that it had rushed through rules on how to process loan applications and was prepared to begin evaluating them next week. þþBut the money could only be used for expenses incurred after the application was filed, and not for general expenses or for expenses incurred so far.þþStill, the first reaction of the automakers was positive. A spokesman for General Motors, Greg Martin, said G.M. was “very pleased” by the accelerated release of the loans. þþThe Energy Department usually takes more than a year to write rules; Congress gave it 60 days but it completed the work in about 30. The program, hurriedly passed by Congress as part of the budget for the fiscal year that began on Oct. 1, was given to the Energy Department because it is intended to finance the development of high-mileage car models or components for them. þþAsked about whether the program would satisfy the automakers’ needs, David Hill, the department’s general counsel, said in a conference call with reporters that “we’ve done the best we can,” within the constraints of the legislation. þþProcessing a loan application would ordinarily take months, because an environmental evaluation is required. But if the White House declared an emergency, department officials said, some money could flow by the end of this year. The money would be doled out in “progress payments,” as expenses where incurred, the officials said, in a teleconference with reporters Wednesday evening. Under the ground rules laid out by the Energy Department, most of the officials could not be quoted by name. þþAnother complication is that before it can lend money, the Energy Department must conclude that the borrower has assets that exceed its liabilities, and is likely to be able to repay the principal and interest. þþThe rate would be at the Treasury’s cost of funds, which Energy Department officials said was about 4 percent a year. The term of the loan would be the shorter of 25 years or the life of the improvement being financed. It was not immediately clear if that meant the expected lifetime of a new car model.þþMatthew L. Wald reported from Washington and Bill Vlasic from Detroit.þþ
Source: NY Times
