Trump budget targets loan programme that could help Lordstown

DETROIT (AP) – The Trump administration’s budget proposal scraps a loan programme that could help an upstart electric vehicle company’s plans to reuse the now-closed General Motors (GM) factory in Lordstown, Ohio.

In a summary of the budget for the coming fiscal year, the administration said on Monday it wants to eliminate the Advanced Technology Vehicle Manufacturing Loan Program, which was created in 2007 to foster development of fuel-efficient vehicles.

Lordstown Motors Corp, a new venture that’s trying to reopen the former Lordstown GM factory east of Cleveland to build electric trucks, is considering asking for a USD200 million from the loan fund. It’s also getting a USD40 million loan from GM.

But it’s not clear just yet whether the loan programme’s demise would cut off money for Lordstown Motors. There are still just over seven months left in the current budget year, and the programme still has more than USD17 billion available to loan, according to the Department of Energy, which runs the programme.

Lordstown Motors said on Monday that is has not yet applied for the loan and that it is just one of several financing options under review.

Snow covers the perimetre of the General Motors’ Lordstown plant, in Lordstown, Ohio. PHOTO: AP

“We will factor this new information into our decision-making process, but our business model stands on its own without it,” the company said in a statement.

Lordstown Motors could still apply for a loan during the current budget year, the Energy Department said.

Eliminating the programme could be problematic for President Donald Trump, who campaigned on bringing back manufacturing jobs to Ohio, a key state in his re-election campaign. Trump lambasted GM for plans to close the Lordstown plant and then praised the new electric truck venture. According to a summary of Trump’s budget plan, the administration wants to eliminate the loan programme and others because the private sector should have a primary role in taking risks on new commercial projects.

“The government’s best use of taxpayer funding is in earlier stage R and D,” the document said.

US Rep Tim Ryan, a Democrat who represents the area and has been helping Lordstown Motors with the loan application, said he plans on talking with the Trump administration and is optimistic there is a way to make sure the money is available.

“I can’t see why they wouldn’t want to be a part of this,” Ryan said on Monday. “It would be something we could work on together, and at the end of the day this will lead to jobs with good wages and benefits.”

These type of public-private partnerships, he said, are needed to help create a new manufacturing economy and rebuild the middle class.

The Advanced Technology Vehicles manufacturing programme started under the Obama administration with USD25 billion, the Energy Department said. It loaned USD5.9 billion to Ford Motor Co to upgrade its factories to build efficient vehicles, and another USD1.45 billion to Nissan Motor Co to retool a Tennessee factory to build electric vehicles. Nissan repaid its loan, as did Tesla Inc, which got USD465 million to ramp up its Fremont, California, plant.