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Federal Auto Loans: When They Will Pay Off?

By the end of this weekend, lawmakers in Washington are expected to approve $25 Billion in low interest federal loans.

That will move the industry closer to getting badly needed money it can plow into re-tooling plants and developing new technology. To quote a friend of mine in Detroit, "So what?"

There's no doubt access to that money is badly needed. But how will it be spent? And How quickly will that investment pay off?

It won't be felt immediately. In fact, the money will likely take a few years before it's trickle down effect impacts new models, technology, etc. That's only half the issue, the other half is how the automakers, parts suppliers spend that money.

Sure, the appropriation is for future technology, but exactly what each firm will tab as a worthy project depends in part, on where the market is headed and what researchers deem as critical. In other words: it's still a crap shoot trying to determine how much of an impact these federal loans have.

But like it or not (and I know there are many of you who hate the idea) this money is coming and it will give the automakers and parts suppliers some breathing room.

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- Ford Motor

- General Motors

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- Honda Motor

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