The U.S. Export-Import Bank said on Thursday it approved a loan guarantee for Ford Motor Co to finance $3.1 billion in exports of cars and trucks to customers in Canada and Mexico.
The announcement comes as President Barack Obama visits his home town of Chicago to tour a Ford assembly plant in an effort to highlight the U.S. auto industry's export potential and his administration's role in revitalizing the sector.
The bank's loan guarantee will cover more than 200,000 Ford vehicle exports, representing 15 percent of the company's 2009 production.
This transaction alone will support thousands of high paying export-related American jobs by exporting superior goods and services to international buyers, Fred Hochberg, chairman and president of Ex-Im Bank, said in a statement.
Obama's trip is his second in a week to highlight what his administration sees as one of its top economic successes: turning around grim prospects for the U.S. auto industry and saving valuable manufacturing jobs.
Last week Obama visited General Motors Co and Chrysler plants in Detroit, where he defended his decision to bail out those two companies in 2009.
The Private Export Funding Corporation (PEFCO) will provide the funding for the revolving $250 million loan backed by Ex-Im's guarantee, the Ex-Im Bank said. The loan, fees and interest will be paid off in one year.
Plants in Illinois, Michigan, Missouri, Kentucky and Ohio will manufacture the vehicles.
Obama's Ford trip focuses on trade. He has set a goal of doubling U.S. exports over five years.
Ford avoided the bankruptcies that engulfed GM and Chrysler but supported its rivals in their requests for U.S. government funding that also helped to prevent a collapse of the auto parts supply base.
JOBS, JOBS, JOBS
The president, a Democrat, is eager to emphasize economic success stories ahead of November congressional elections that are expected to produce significant gains for Republicans, who have hammered Obama for failing to reduce near double-digit unemployment levels.
The Obama administration points to the auto sector as one area where its actions saved jobs.
Ford plans to add 1,200 jobs for a second production shift at its Chicago Assembly Plant, where it expects to start building a new version of its Ford Explorer SUV later in 2010.
Some of the Chicago jobs will be filled by current Ford workers on indefinite layoff and some by new workers at lower wages negotiated with the United Auto Workers union.
The plant was retooled with help from a $400 million Energy Department loan extended to help the company make more fuel-efficient vehicles. The Explorer is a leaner and greener make-over of its once hot-selling SUV that was a cash cow for the automaker a decade ago.
The Obama administration believes the smaller and more fuel-efficient Explorer is prime for export and that Ford has embraced Obama's wish for American business to be more aggressive in capturing overseas market share.
Ford expects to be solidly profitable this year, but it borrowed more than $23 billion in late 2006 to fund its turnaround, leaving it with a far heavier debt load than the post-bankruptcy GM and Chrysler.
(Additional reporting by John Crawley, editing by Jackie Frank and Vicki Allen)