GM LogoEnlarge Photo
Well, give them credit for resolve, anyway.
General Motors said today it was withdrawing its applications to the U.S. Department of Energy for $14.4 billion of low-interest loans under the DoE's advanced technology vehicle manufacturing program.
That's the program that so far has granted loans to Ford, Nissan, and Tesla in June 2009, and added more for Fisker the following September. Under the terms of the loans, carmakers must refurbish factories to make cars or parts that are at least 25 percent more fuel-efficient than the ones they replace.
Ford will use its $8 billion of loans primarily to equip engine plants to build more fuel-efficient turbocharged EcoBoost engines. Nissan, on the other hand, took $1.4 billion to erect an assembly hall and lithium-ion battery plant for the Nissan Leaf electric car it will start building in Smyrna, Tennessee, late next year.
Nissan lithium-ion battery pack plant under construction, Smyrna, Tennessee, Jan 2011Enlarge Photo
With its sales rebounding and its bankruptcy and subsequent government-led restructuring still fresh in mind, GM appears determined to minimize any entanglements with the Federal government.
The company's successful recent initial public offering (IPO) cut U.S. government ownership of the restructured GM to roughly one-third, which it is expected to sell over the next few years.
GM submitted the now-withdrawn application in October 2009; Chrysler still has an application pending. The DoE has been criticized for slow turnaround on loan applications that in some cases are fully 18 months old now.
"This decision is based on our confidence in GM’s overall progress and strong, global business performance,” said said CFO Chris Liddell. “Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet.”
Choosing to forgo the loans, Liddell said, would not slow GM's "aggressive plans to bring more new vehicles and technologies to the market as quickly as we can." And he pledged the company would continue to make "the necessary investments" to lead the industry in technology and fuel economy.
Time will tell.