Automakers maintain FFV targets in bailout plans

By Anna Austin | January 12, 2009
In order to prevent bankruptcies, each of the Big Three automakers (General Motors Corp., Chrysler LLC and Ford Motor Co.) submitted loan plans to Congress on Dec. 7, all maintaining their goals of making 50 percent of their new vehicles flexible-fuel vehicles (FFVs) within the next three years.

In early December, GM and Chrysler told lawmakers they are only weeks away from running out of funds. Ford said it would reach the same status a few months into 2009.

To avoid what seemed to be inevitable and the aftereffects of such a blow, the U.S. House of Representatives passed a $14 billion emergency loan plan for automakers in early December, but the request was rejected by Senate Republicans over the timing of wage concessions proposed by the United Auto Workers. The Bush Administration quickly stepped in, announcing one week later a $17.4 billion emergency loan that is slated to come from the U.S. Treasury's $700 billion financial stabilization fund. The automakers received an immediate $13.4 billion, and the remaining $4 billion will be distributed in February. "In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush said in a press conference Dec. 19.

Ford's financial plan stated that ethanol is "an important long-term solution to our energy needs, especially as second-generation fuels become available." The company also recommitted to doubling its production of FFVs by 2010, making 50 percent of its fleet E85-capable by 2012. It added that it has produced demonstration hybrid and plug-in hybrid vehicles capable of running on E85.

GM's plan suggests full compliance with the Energy Independence & Security Act of 2007, which requires the U.S. to use 11.1 billion gallons of renewable fuels in 2009, increasing annually to 36 billion gallons in 2022. GM also indicated it would continue its goal of producing 50 percent FFVs in 2012.

Chrysler has more than 1.7 million FFVs already on the road and indicated it's on target to meet its 50 percent FFV commitment, as well.

A large number of organizations and companies encouraged a financial support system for automakers, including the National Ethanol Vehicle Coalition. "U.S. automakers are leading the way in developing and marketing flexible-fuel vehicles, but without immediate financial assistance, those efforts may go by the wayside," said NEVC Executive Director Phil Lampert.