Ford Granted Loans for Fuel Efficient Cars
June 23, 2009 by Mark Ellis
Filed under Business
The U.S. Department of Energy is all set to loan automaker Ford Motor Co. $5.9 billion so that it may hurry its development of fuel efficient vehicles. The announcement was made by the Energy Department’s Secretary Steven Chu to a gathering at Ford’s Research and Innovation Center, garnering a very positive reaction from the crowd.
Ford will not be the only company to get a piece of the pie: the $5.9 billion for Ford sits alongside $1.6 billion given to Nissan and $465 million Tesla Motors will receive. These loans stem from a $25 billion program that was created in 2007 but only approved and put into play by Congress last year.
According to Ford’s President and CEO, Alan Mulally, the company will invest heavily into developing fuel efficient vehicles, planning to spend upwards of $14 billion over the next seven years. If Ford continues down the road of energy efficiency research, it is entitled to even more government funding in the future.
Ford Focus (Image: Flickr)
Taxpayers do not have unlimited funds — but the government continues to spend money like it’s their own pocket book.
When capitalism’s business cycle veers into discomfort (unemployment, slowing sales and borrowing, etc.) — the State (government) now suppresses recession with monetary policy (making money cheap and abundant) and fiscal policy (quantitative easing, injections of liquidity, stimulus programs, etc.) so nobody feels pain. But the problems are still there, just hidden for a time by the bailouts. They will continue to grow until another bailout is needed (e.g. Chrysler).
Capitalists and those that embrace the free market reject this narrow notion for many reasons. Chief among them is that fact that experience and progress is the byproduct as we surmount difficulty. The Marines say, pain is weakness leaving the body. These downturns are inefficiencies leaving the system. These loans will be used to prop up inefficient systems. Nobody truly learns. Nobody truly grows. Nobody progresses.
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Stop the paronioa: You do not need to boycott car manufactures that accept bailouts. Capitalism thrives when you make a decision that fits you. You should find the car that you want — and that meet the criteria important to you. Car manufacturers that accept bailout money will be required to add inefficiencies to their business model and are at a disadvantage to produce the car that meets your needs the best. You should make car manufacturers and dealers compete for your business.
So if you are thinking about a car, check out this process on this blog: http://excarsalesman.typepad.com/