CBNNews.com - Detroit's big three automakers will receive a low-interest $25 billion loan from the federal government.
The aid comes after Detroit spent the last 18 months lobbying Congress for loans. The automakers say the loan will enable them to modernize their plants and to build more fuel-efficient vehicles.
But the plan is somewhat controversial, with some arguing that the loan is just another government bailout to the rescue.
"It's not a bailout. It's a good investment between industry and government," Chrysler Vice Chairman Jim Press said.
"Oh, I'd call it a bailout," Prof. Peter Morici, an economist at the University of Maryland, said. "They are having increasing difficulty borrowing money in the private credit markets because there's a high risk of default. In that environment, giving them a government loan is a bailout."
General Motors, Chrysler, and Ford have been in the red for years. Automakers argue the loan will reduce America's dependence on foreign oil. The loans are expected to carry an interest rate of around five percent, considerably lower than they might otherwise have to pay.
Now they hope to replace all their gas guzzlers with hybrids and electric plug-ins by 2010.
Sources: CBN News, The Associated Press