A proposal to offer up to US$20 billion (HK$156 billion) in loan guarantees to automakers to develop alternative fuels, hybrids and other energy-saving technologies is expected to be introduced in the US Congress next week.
The plan by Representative Mike Rogers, a Michigan Republican, is specifically aimed at the struggling Big Three domestic vehicle manufacturers - General Motors, Ford and DaimlerChrysler unit Chrysler Group.
It is the first large-scale government proposal designed to help Detroit's auto sector since its financial troubles became more acute this year.
Rogers hopes the initiative can speed research and development of gasoline-electric hybrid technology, clean diesel, hydrogen, and flexible fuel alternatives.
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Developing and mass-producing fuels like gasoline-ethanol blends has become a big consumer and political issue, with gas prices high and sales of big trucks and SUVs on the wane.
Ford said it has already been talking to the Energy Department about its loan guarantee program that could be applied to alternative fuels development and plant retooling.
GM spokesman Greg Martin called Rogers' loan guarantee plan an "intriguing idea" that merits "serious consideration."
The option would also be open to foreign manufacturers, which would have to move their research and development operations to the United States to qualify. Under a loan guarantee, the government backs the majority of financing from banks and other private sector lenders. REUTERS
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