WASHINGTON -- Consider this parable of corporate politics.
A major auto company creates a $25 billion fund to invest in high-risk, high-reward technology ventures. A few years later the portfolio is performing well, but a couple of ventures go bust. A band of activist shareholders calls for killing the fund.
Its managers are understandably worried. The fund gives them influence. In their eyes, it could change the world. So they will do whatever they can to keep it alive.
This dynamic, familiar to anyone who has struggled within the silos of corporate power, helps explain why the U.S. Department of Energy is repurposing the $25 billion Advanced Technology Vehicles Manufacturing Loan Program, which Congress created in 2007 to get more efficient cars onto U.S. roads.
Energy Secretary Ernest Moniz announced April 2 that the Energy Department is taking steps to make the program more attractive to suppliers, not just automakers. Moniz signaled that he wants to lend money for projects such as efficient powertrains or lightweight aluminum.
"People have been very appreciative," Peter Davidson, executive director of the Energy Department's Loan Programs Office, told Automotive News. "They didn't seem to realize that we were still open for business. Now they know: We are open for business."
It was a nice gesture, but it also showed that the Energy Department is feeling heat behind the scenes. Six days after Moniz's announcement, the U.S. Government Accountability Office put the Advanced Technology Vehicles Manufacturing Loan Program on an annual list of programs that Congress may want to defund.
The reason: Despite the Energy Department's protestations, the program didn't look open for business.
During the economic downturn, it was very much open, lending more than $8 billion to companies such as Ford, Nissan and Tesla when private capital was scarce. The department still has authority to lend $16.6 billion, but it hasn't approved a loan since March 2011.
Interest rates are low and capital is readily available, so automakers do not need government cash. What's more, they are wary of being associated with loan recipient Fisker Automotive, which stuck taxpayers with $139 million in unpaid debt when it went bankrupt.