Stimulus fund for the U.S. automobile market

Funding local automobile manufacturing

News on the U.S. automobile stimulus package going to two local and one foreign car makers has rattled many in the industry.  It actually not only makes sense but the funds will stay within the country.

The gist is that we need to set aside any ill-conceived pride and push away bruised egos when dealing with the stormy waters of this financial meltdown.  The stimulus package from the Department of Energy, DoE went to three car makers that deeply represent what the U.S. stands for, both in terms of cars on the road and the country's role with automobile innovations.  Tesla, the startup, Ford, the conventional automaker and Nissan, the foreign car maker that builds locally.  All three have hybrids, HEV and EVs, all three applied and will use these funds within the nation.  So what does the DoE funds mean for these three car makers?

Why Tesla?  If Tesla Motors received $465 million for the upcoming Model S, it is also a way to reward traditional American entrepreneurship and innovations.  Entrepreneurs and startups have shown amazing automobile breakthroughs these last few years and have proven track records when it comes to innovative solutions, sometimes proving mainstream companies wrong.  If small to mid-size businesses are the back bone of the U.S. economy, in many ways, this reward is for entrepreneurship and startups in our country.  Somehow, the Daimler investment in Tesla Motors has probably helped convince the government.

Why Ford?  Ford has not taken the original bail-out loans the last government was giving to car makers but has been awarded $5.9 billion to use until 2011.  It will be used to improve the efficiency of its smaller internal combustion engines, ICE, as well as further its advanced hybrids, HEVs and pure EVs.  Ford already has an impressive line up of hybrids, a hybrid SUV that gets 34mpg in city driving, besting some hybrid sedans with its Escape hybrid.  It also has a sedan with its Fusion hybrid that has been getting great reviews.  It has two other pure electric vehicles, EVs it is working on, an electric Ford Focus developed by Magna International and the soon to be released electric Transit.   It was a good move on Ford's part to not agree to the original loans since ultimately, they did little but to push back the inevitable for the two others.  In many ways, Ford shows another aspect of America, that once a American company wakes up, it can correct its heading and get all of its ducks in a row.  Ford could be the precursor of what future American car companies could be like, more nimbler corporations.  If the old adage that it is too big to fail is not true then, is big even a good thing anymore?  Has it ever been?

Lastly, Why Nissan?  This is apparently the shocker for some but upon closer look, it makes a lot of sense.  Anyone driving on U.S. highways, as well as with the rest of the world cannot help but notice the high percentage of Japanese cars on the road.  Nissan receiving $1.6 billion that will stay in the country, mostly Tennessee to build the much anticipated EV-02.  This is an interesting turn of event in more ways than one.  If all the news around the automobile in the U.S. is Detroit centered, Michigan has survived because of its automobile industry and a Japanese car maker receiving over a billion dollar to be spent elsewhere is an eye raiser.  This could be the beginning of a new trend, making states are not over-dependent on a single industry.  This loan highlights America's natural ability to work in a diverse environment with healthy competition.

All in all, these loans each represent an aspect of America and what has made our nation great over the decades.  Now, it is up to car makers and consumers to do the rest.  It seems Tesla Motors will use these loans for electric vehicles, EV, while Ford might not have the choice but to spend some of it on their smaller, more efficient ICE engine in order to stay solvent until they can further develop their electric drive.

Roll Into Summer

Time to roll down the windows and hit the road.