US senators want action on auto retooling loans

WASHINGTON, Feb 4 - Two U.S. senators have asked Energy Secretary Steven Chu to set a timeline for distributing up to $25 billion in loans to help U.S. auto companies produce more fuel efficient vehicles.

Dianne Feinstein, a California Democrat, and Olympia Snowe, a Maine Republican, wrote to Chu this week requesting an aggressive timeline for revising regulations and issuing the financing.

"Many of the applicants for the first tranche of loans plan to make significant capital investments that they would otherwise be unable to afford," the lawmakers wrote.

"Providing these firms with a precise timeline would allow them to plan their business operations during a time of extraordinary financial challenge."

Snowe and Feinstein were instrumental in driving Congress to boost average auto fuel efficiency by 40 percent to 35 miles per gallon between 2011 and 2020.

The advanced technology loan program was created in the 2007 energy law mainly to help U.S. automakers General Motors Corp, Ford Motor Co , and Chrysler LLC retool factories and make other changes necessary to produce more fuel efficient vehicles.

GM, Chrysler, and Ford have all submitted applications for financing to help develop better hybrids as well as accelerate work on electric vehicles and cars that run on fuels other than gasoline.

Smaller companies have also submitted applications for loans.

The loans would be separate from the $17 billion bailout approved by the White House and Treasury Department for GM and Chrysler in December.