GM’s pass on E-Z money from DOE is astonishing

General Motors’ decision this morning to withdraw its application for more than $14 billion in low-interest loans from the U.S. Department of Energy is sure to confound its observers.

On the surface, it looks like “Government Motors” is tired of having consumers, customers, competitors, pundits and others refer to it as Government Motors.

Or is there more to this than meets the eye? With GM, things are always five times more complicated than you imagine.

The big $25 billion DOE fund -- from which GM was planning to consume the lion’s share -- is intended to spur research and product development into alternative-energy vehicles. Ford obtained almost $6 billion from the fund. Nissan obtained $1.4 billion, enough to put itself into the electric-car battery manufacturing business in Tennessee. Upstarts Tesla Motors and Fisker Automotive are both using DOE funds to diversify into family cars.

Imagine, under normal circumstances, what GM might have done with $14 billion.

That would have financed a lot of research, product development, engine designs, new materials, factory production lines and tooling costs -- all in the United States, in accordance with DOE rules. It’s difficult to believe that GM will now spend anywhere near that much on alternative-vehicle programs out of its own pocket.

Especially right now.

So the questions become: Is GM simply saying it doesn’t care to invest that much into the new field? Has GM concluded that there would not be enough return on investment to pay off the loans? Or has GM come up with a better plan for moving forward into alternative-energy vehicles? Like maybe outsourcing new technology from others? Or maybe even undertaking all this work somewhere other than in the U.S.A.?

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