June 23rd, 2009
02:59 PM ET

Financial Dispatch: Carmakers get billions to go ‘green’

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/06/23/art.auto.bailout.jpg caption="Ford, Nissan and electric car start-up Tesla Motors will be the first companies to benefit from a new government program geared toward helping automakers produce more fuel-efficient vehicles."]

Andrew Torgan
CNN Financial News Producer

More government money is flowing into the auto industry.

It’s all part of a $25 billion loan program that Congress created to help automakers retool their factories to build cars that are at least 25% more fuel-efficient than vehicles made in 2005.

Ford, Nissan and electric car start-up Tesla Motors will be the first beneficiaries of that program. Ford is getting nearly $5.9 billion. Nissan will receive $1.6 billion and Tesla will receive $465 million. More than 100 auto and auto parts makers have applied to the program.

Ford says it will use some of the money to refit some of its truck and SUV plants for small-car production in North America. The company also has plans to build new flex-fuel vehicles and a variety of electric models.

Home sales rise, but prices plummet

Sales of previously-owned homes rose 2.4% last month as increasingly affordable home prices and a first-time tax credit attracted hesitant buyers.

And distressed property sales have pushed prices lower, year over year. The median price for an existing home last month was $173,000, down nearly 17% from $207,900 in May 2008.

$6 billion available to buy foreclosed homes

So with home prices at their most affordable in many years, that’s opened up homeownership to many who had been locked out during the housing boom. And now, the federal government is launching a plan to hook up buyers of repossessed properties with very attractive terms.

The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which intends to combat blight by reducing the number of foreclosed homes on the market.

The money, which has only started to flow during the past few weeks despite much of it being authorized last summer, will go to state and local housing authorities and non-profit organizations involved in providing housing for middle- and low-income families.

Gas price shift into reverse

Gas prices decreased by 7-tenths of a cent overnight to $2.68. That’s the second straight day of declines.

The average price of a gallon of gas is down $1.431 or 34.7% from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.078) and California ($3.025). The cheapest gas prices are in Missouri ($2.500).

Survey sees thaw in hiring freezes

The job market, still the worst in decades, may become a tad less chilly in the months ahead as a majority of employers now think the economy is inching towards a recovery.

A survey released Monday by consulting firm Watson Wyatt, found that 62% of employers are planning to reverse hiring freezes over the next 12 months. It also showed that 69% of companies in the survey plan to eliminate salary freezes.

Mars, Venus and investments

A new study from Fidelity Investments found that a majority of couples disagree about a major component of their retirement planning, such as the age at which they plan to retire, whether they'll work in retirement or where they'll live after they retire.

Among the key findings:

-Less than half of couples make decisions jointly regarding the day-to-day financial decisions of the household such as budgeting and bill payment.

-Only 38% of couples jointly discuss investment decisions for retirement savings.

-And 60% don't agree on their respective retirement ages.

The one area where couples generally agree is that the biggest concern in retirement is health care expenses.

Filed under: 360° Radar • Andrew Torgan • Finance • Gas Prices • Job Market
soundoff (6 Responses)
  1. Tim Gibson

    While green may be the path, why is the the government, the taxpayers to spend money we do not have to provide the auto industry to do what they knew they should have done in the 70's period.

    Instead it has been left as it was due to the oil trade and the powers that be who fought any attempt to use less imported oil. Built an empire in the sands on oil and in the same instance dipped into the terrorist market.

    Now, we pays for the greed in that deal? Sure is not the big 3.

    June 23, 2009 at 6:14 pm |
  2. Sabrina in Las Vegas

    It is about time the auto industry got more green to go green.

    Hopefully the oil and tire cmpanies don't buy up the stock in those companies and bury it the way they did the mass transit that used to run along the San Gabriel foothills to LA and to Arrowhead...not that I would take it (don't like being swished that much), but others use our metro system.

    I don't know how those NYers do it, the weather, the tight conditions, living up so high in the air or going under ground...yikes, I would rather just stay in LA and drive a hybrid.

    I am afraid of heights and being underground or open water or elevators/motion....lol.

    Anyway, I hope Ford models its hybrid and green cars after Toyota...a true green car that can run without gas.

    June 23, 2009 at 5:27 pm |
  3. Melissa

    Just fine with me. Better to go green than continue the way we are with the oil companies screwing us over.

    June 23, 2009 at 4:52 pm |
  4. Lisa in CA

    Why are my tax dollars being used to help these automakers get competitive in the market-place? If they are so far out of touch with reality that they need government assistance to point them in the right direction, then they deserve to fail. I can think of much better uses for that $8b.

    June 23, 2009 at 4:37 pm |
  5. earle,florida

    For those of you that were to young to remember, back in the 70's the Saudi's had an oil-embargo against the United States, that not only made gas rationing lines,but put the United States on the path to it's worst recession since the Great Depression. Now,fast foward to early 2008,and gasoline rose to $4.12/gal. regular! It helped to crush our economy,and exasperate the financial (my personal opinion,only) meltdown. Some might disagree with my rationale,but the past isn't so far back that we should ignore the warning signs. All we need is to have the middle-east flare-up,and bingo,gas rationing lines will reappear overnight! I myself don't care what my car looks like,as long as it meets current safety (point A-point B standards),and gets 50-60mpg. The Hybrids (electric/gas) cars that Ford,and GM,and others are making now will do the trick (and by the way they get approx. 70+mpg city) for me. PS. For those that wait til it's to late,can buy the Chinese junk headed our way,at top dollar! Go President Obama!

    June 23, 2009 at 3:48 pm |
  6. Just say NO

    All this go green hype is costing billions. People don't buy a Prius because it costs so much more and takes way too long to get that money back in gas savings. Although I won't buy a Prius because it is the ugliest car ever made!! You can't throw billions around and try to cram this down our throats, I'm not buying it!

    June 23, 2009 at 3:15 pm |