The United States Senate has approved stop-gap loans worth $25 billion for the beleaguered Detroit-based auto industry. The loans, which were highly anticipated by the automakers, are to be used for retooling old plants and for developing fuel-efficient new vehicles.
The loans, which will be doled out by the Energy Department, will be available to automakers no sooner than six months from now and will carry a 5 percent interest rate. That’s at least half the interest rate the automakers would have otherwise had to pay given their current status within the weakened economy. The loans will be good for up to 25 years before they will need to be repaid.
Michigan senator Debbie Stabenow has declared that the minimum six month period before the loans become available to automakers to be unacceptable. She says she will work to make the Federal loans available much sooner.
