GM is intensely lobbying Congress to approve $50 billion in loans before it adjourns this year, citing the choppy credit market as a delay for its plans to introduce new energy efficient vehicles like the Chevy Volt. GM is reeling from its shortsighted business goals which focused on gas guzzling SUVs & trucks. Should we the people help GM with federal loans?

Bob Lutz, Vice Chairman at GM insists that it isn’t a “bailout proposal,” according to the Detroit Free Press. “Don’t say bailout proposals. All the government is doing is underwriting the loan.”

The company is certainly focused on changing its focus, most obviously with its flagship green car, the Chevy Volt. Congress has already created a $25 billion program for automakers, but has so far failed to approve the $7.5 billion necessary to administrate the program. Now automakers have doubled their requests, and they’re seeking $50 billion.

With funding from the government companies like GM would have lower interest rates and more flexible repayment terms. That’s because a large portion of those funds are sourced from individual tax payers rather than businesses trying to make a profit.

But funding for development for new vehicles is only one layer of GM’s government lobbying. The company also is seeking tax credits for individual citizens to reduce the overall cost of owning a Chevy Volt. Presidential candidate Barack Obama is promising a $7,000 tax credit for those who buy advanced technology vehicles like the Chevy Volt. John McCain is advertising a $5,000 tax credit for low-emission vehicles, which the Chevy Volt would also qualify for.

Essentially GM is looking for assistance with it’s back and front end business processes, which are now in a train wreck because of its decision to produce and market products with short term profit but long term challenges. Even so, John Bozella, Chrysler’s vice president of external affairs and public policy makes a good point:

You can make a fairly strong contrast between a blank check-type bailout, which we’ve seen in recent months in some sectors of the economy, and a program that helps the industry transform itself.

Here’s hoping that if Congress approves $50 billion in loans to the auto industry, that real improvements in technology will result, and that the middle class is able to access those advancements.

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Entry was posted on Monday, September 1st, 2008 at 6:25 pm under Auto, Green Technology.

Read more entries by Matt Jansen.
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