Administration loans go to Ford, Nissan, Tesla

During the presidential campaign, Barack Obama promised to provide "support to domestic automakers to invest $50 billion to retool their manufacturing facilities in America to produce (fuel efficient) vehicles." During his two years in office, his administration has taken steps to carry out that promise.

The groundwork for this promise was actually laid under his predecessor. The Energy Independence and Security Act of 2007, signed by President George W. Bush, established the Advanced Technology Vehicles Manufacturing Loan Program, which offers direct loans "to support the development of advanced technology vehicles and associated components in the United States." Advanced technology vehicles are designed to meet a higher standard -- 125 percent of the federal fuel efficiency standards for 2005.

A congressional spending bill enacted on Sept. 30, 2008, appropriated $7.5 billion to support a maximum of $25 billion in loans, and also provided the Energy Department with $10 million for program administration costs.

That's where the Obama administration's role begins. On June 23, 2009, the Energy Department announced $8 billion in competitively bid, conditional loan commitments for the development of advanced vehicle technologies

The loan commitments included $5.9 billion for Ford Motor Co. to increase fuel efficiency capabilities of 13 models of cars made in factories in Illinois, Kentucky, Michigan, Missouri, and Ohio; $1.6 billion to Nissan North America, Inc. to retool a battery manufacturing facility in Smyrna, Tenn.; and $465 million to Tesla Motors to manufacture electric drive trains and electric vehicles in California. The administration promised to make additional loans at a later date.

The amount allocated for this program -- $25 billion -- is only half the amount Obama promised during the campaign, so to become a Promise Kept will require authorizing additional funding. But he'll have two more years to fight that battle. For now, the loan arrangements made already qualify this promise for a rating of In the Works.