Obama to Set $250 Million Loan Guarantee for Ford Exports
Stock Chart for Ford Motor Co (F)
President Barack Obama will announce a $250 million loan guarantee today to finance Ford Motor Co. exports, as he defends his administration’s bailout of the U.S. auto industry, according to a White House statement.
Obama will tour an automobile factory in Chicago, where Dearborn, Michigan-based Ford, the only Big 3 U.S. automaker that didn’t take bailout money, will begin assembling the new 2011 Explorer later this year.
Ford is spending about $400 million to add 1,200 jobs to build the Explorer sport-utility vehicle. The factory Obama will tour is already hiring new workers at an entry-level wage of about $14 an hour, under a two-tier wage system that starts at about half the amount paid to hourly production workers hired previously.
Obama will highlight potential foreign sales of the Explorer as helping the U.S. meet his goal of doubling exports over the next five years, the statement said.
The president will also announce the Export-Import Bank’s $250 million loan guarantee, which will finance $3.1 billion of exports to Canada and Mexico of more than 200,000 U.S.-made vehicles, including Explorers, the statement said.
Ford is redesigning the Explorer, once the best-selling SUV in the U.S., on a chassis used for the Taurus sedan. Explorer sales in the U.S. slid 33 percent to 52,190 last year as more consumers bought smaller vehicles with higher fuel economy. Ford sold more than 400,000 of the SUVs in 2000.
Defending Auto Aid
The president has stepped up his defense of government aid to automakers as polls show voters remain skeptical of the bailout. A Bloomberg National Poll conducted July 9-12 shows the federal assistance package to automobile companies is becoming less popular: 48 percent say they became less supportive of it in recent months, while 17 percent say they have become more supportive.
Yesterday in a speech to labor leaders in Washington, Obama said his administration “couldn’t walk away” from thousands of jobs even though the bailout “was not popular in the polls.”
Last week in Michigan, Obama visited plants operated by General Motors Co. and Chrysler Group LLC, the two companies that received most of the $85 billion in government aid from Obama and the administration of his predecessor, President George W. Bush.
Without the government money, Obama has said, the two companies could have gone under, dragging down the entire auto industry, including suppliers and Ford, which supported aid for its competitors.
About $67 billion in loans and equity investments are still outstanding, according to administration figures. Obama advisers have said they expect to recoup about $60 billion of the taxpayer money given to the industry, including loan repayments and the proceeds from GM share sales to the public.
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