Barack Obama’s presidential campaign said Friday that the federal government should act swiftly to help unlock credit for the financing of car loans crucial to U.S. automakers. The lack of access to consumer car loans was hurting the industries and threaten the nation’s manufacturing sectors, Michigan’s congressional delegation said this week.
The Democrat supports call by Michigan lawmakers for the Treasury Department and the Federal Reserve to use their authority in the seven hundred billion dollars bailout plan to help the industry deal with the tight credit markets said Jason Furman Obama’s economic adviser. Auto finance companies and banks tightened credit standards for they can’t borrow money to lend or they been reluctant to lend and risk defaults.
Obama called the administration to speed up the availability of $25 billion in low-interest loans approved by Congress last month. The funding would help auto manufacturers and suppliers retool their plants and build fuel-efficient vehicles.
Obama’s economic adviser Jason Furman said “He doesn’t want to take any options off the table to help the industry through this financial crisis.” Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke could take several steps under the bailout provisions, said the Michigan lawmakers. They also said the companies were considering asking the Fed for access to a program that provides low-cost credit.

Executive Chairman Bill Ford said Friday, Ford Motor Co. will keep investing in new fuel-saving technology even if it does not get any government loan guarantees, but the loans will help the automaker get the technology to market more quickly. In an interview at an event marking the loans are important to help the industry deal with higher fuel economy standards, carbon dioxide emissions limits and a marketplace that has shifted from trucks to more fuel-efficient cars.
Ford said “I think it is important to our whole industry, all the retooling were doing as an industry, to really meet the future demands of fuel economy and CO2 and all the new technology that’s really going to be needed to achieve that.” The company will go on without the loan guarantees, but its work will be tougher.
The company doesn’t have a number in mind for how much it would borrow. But Ford said the government-backed loans, which Ford (F, Fortune 500) intends to repay, would mean the difference between single-digit interest rates and the double-digit rates now available in a tight credit market. That potentially could save the troubled automaker millions of dollars.
Ford has lost $23.9 billion in the past 2 ½ years and has had to mortgage its assets to stay in business as the U.S. auto market has shifted away from profitable trucks and sport utility vehicles to more fuel-efficient models.