Loans Expert

The U.S. unexpectedly lost 85,000 jobs in December, supporting Federal Reserve forecasts that a labor market recovery will take time and making it more likely interest rates will stay near zero for the next six months.

Payrolls fell last month after a revision showed a gain of 4,000 in November, the first in almost two years. The median estimate of economists surveyed by Bloomberg News projected no change in December. The jobless rate held at 10 percent.

According to TransUnion’s annual auto loan forecast, the national auto loan delinquency rate will increase about seven percent to 0.92 percent by the end of 2010. The 60-day delinquency rate is expected to be at 0.86 percent at the end of 2009.

“Our forecast indicates we will see auto loan delinquencies drop in the first and second quarters of 2010 due to many factors such as ‘cash for clunkers’ and tightening lending standards,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “Delinquencies will rise in the second half of 2010 as economic pressures, along with traditional spending patterns of summer vacations, back to school and the holidays, will continue to strain consumers. While the rate of increase should be relatively mild, it is a cautionary number to those expecting an abrupt turnaround in the auto finance industry.”

Three automakers, including the Ford Motor Company, will get the first $8 billion from a $25 billion loan program intended to accelerate development of more fuel-efficient vehicles, the national energy secretary said Tuesday.

Ford, the only Detroit automaker that did not receive emergency government loans this year, will get $5.9 billion to help it retool 11 factories in the Midwest. The money, about half as much as Ford had requested, will help it make 13 of its models more fuel-efficient. Ford plans to start selling four models of electric vehicles by 2012.

Warning of a doomsday economic scenario, the top executives of the Big Three US automakers made a historic appeal yesterday for $25 billion in loans, telling Congress the money is desperately needed to stave off the collapse of the companies and the direct and indirect loss of millions of jobs.

“It’s about saving the US economy from a catastrophic collapse,” GM chairman Rick Wagoner told the Senate Banking Committee.

The chief executives of Chrysler and Ford also pleaded for the loans, which would come on top of a $25 billion package approved in September to help the automakers shift production to hybrid and other fuel-efficient vehicles. Since the passage of that measure, the credit markets have frozen, further cutting auto sales.

The White House has been in talks with Congress about finding a way to accelerate loans to automakers under a $25 billion program already appropriated for the troubled industry, spokeswoman Dana Perino said on Friday.

Asked at a briefing why automakers were not being considered for aid under the $700 billion bailout program for the financial industry, Perino said the White House was working to accelerate funding via a program approved specifically for the auto industry.

WASHINGTON – The Bush administration could quickly disburse $25 billion in loans to U.S. automakers if Congress amends the 2007 energy act that authorized the loan program, a top Bush administration official said on Thursday.

“The solution is right there. It just needs an amendment and the money can be out pretty quickly,” U.S. Commerce Secretary Carlos Gutierrez told Reuters in an interview.

The Bush administration would rather use the Energy Independence and Security Act of 2007 to aid the auto industry, than dip into the $700 billion financial rescue package, he said.

The U.S. Energy Department said today it has set the interim rules for how automakers can apply for as much as $25 billion in federal loans to help cover the costs of producing more energy-efficient vehicles.

Issuance of this interim final rule opens the process for automakers and component manufacturers to immediately apply for government funding under the Advanced Technology Vehicles Manufacturing Incentive Program,” Energy Secretary Samuel Bodman said in an e-mailed statement.

The department completed the guidelines in about half the 60-day period required by Congress, potentially giving carmakers quicker access to funds. Members of Congress, including House Energy and Commerce Committee Chairman John Dingell of Michigan, pressed the department to move quickly on the rules to help struggling U.S. automakers.

Democrat Barack Obama said on Tuesday that as president he would demand that up to $25 billion in government loans targeted for distressed U.S. automakers be distributed quickly.

Obama told reporters that General Motors Corp, Ford Motor Co and Chrysler LLC find themselves in a unique financial situation, having been hard hit by rising gasoline prices this year and the global credit crunch.

While much of Washington’s attention this past weekend focused on dealing with the crisis in the financial markets, Congress also made a move that could benefit much of Michigan.

A huge $634 billion federal spending bill that cleared the Senate on Saturday includes a $25 billion line of credit for U.S. automakers.

The deal will allow the Energy Department to provide 25-year loans at an expected interest rate of 5 percent to General Motors Corp., Ford Motor Co. and Chrysler LLC. The loans will provide the capital that the companies need to push ahead with development of gas-electric vehicles, more fuel-efficient engines and plug-in electric cars.

WASHINGTON — Loans for automakers and parts suppliers from a $25-billion pool expected to pass Congress this week might not reach the industry for six to 18 months, the U.S. Department of Energy said Thursday.

That timing goes against the wishes of Michigan lawmakers, who had hoped to see loans begin flowing by the end of this year.

Detroit automakers are facing a cash crunch that is expected to last through 2010, and lawmakers added requirements to the loan program this week to speed the process of handing out funds.