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GM and Ford seek longer R&D tax credit period

GM and Ford seek longer R&D tax credit period

Nelson Ireson June 10th, 2008 Nelson Ireson By Nelson Ireson Author June 10th, 2008
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December 31st, 1969 A tax credit that makes it more affordable for American carmakers and companies in many other industries throughout the U.S. to invest in their respective research and development cycles expired at the end of 2007. The bill that would have reinstated it failed to pass the Senate by 10 votes yesterday, and now a broad coalition that includes GM and Ford has joined together to urge the Senate to ensure the credit is a part of whatever new tax bill is passed. The Detroit 3 spend billions of dollars annually on R&D projects. The joint letter submitted to the Senate on Tuesday by GM and Ford warns that failure to extend the tax credit could force the companies to bring their work on renewable energy and improved efficiency to a halt, reports The Detroit News. Such a move could negatively impact a large number of companies that support the Detroit 3 as well as the carmakers themselves. GM, for example, has a very close relationship with both Coskata and Mascoma, two cellulosic ethanol production firms. Ford recently became the first carmaker to join the Climate Registry, although earlier this year it was put on Conde Naste's Toxic Ten list of corporate polluters. Regardless of whether the companies actually pull out of their R&D funding and whether that pull out causes a cascade of problems for the related industries, it's certain the loss of the tax credit will only add to the pain caused by the carmakers' heavily slumping retail sales if it's not reinstated soon.
GM and Ford seek longer R&D tax credit period

GM and Ford seek longer R&D tax credit period

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A tax credit that makes it more affordable for American carmakers and companies in many other industries throughout the U.S. to invest in their respective research and development cycles expired at the end of 2007. The bill that would have reinstated it failed to pass the Senate by 10 votes yesterday, and now a broad coalition that includes GM and Ford has joined together to urge the Senate to ensure the credit is a part of whatever new tax bill is passed.

The Detroit 3 spend billions of dollars annually on R&D projects. The joint letter submitted to the Senate on Tuesday by GM and Ford warns that failure to extend the tax credit could force the companies to bring their work on renewable energy and improved efficiency to a halt, reports The Detroit News. Such a move could negatively impact a large number of companies that support the Detroit 3 as well as the carmakers themselves.

GM, for example, has a very close relationship with both Coskata and Mascoma, two cellulosic ethanol production firms. Ford recently became the first carmaker to join the Climate Registry, although earlier this year it was put on Conde Naste's Toxic Ten list of corporate polluters. Regardless of whether the companies actually pull out of their R&D funding and whether that pull out causes a cascade of problems for the related industries, it's certain the loss of the tax credit will only add to the pain caused by the carmakers' heavily slumping retail sales if it's not reinstated soon.

Tags: Industry, General Motors

Posted in: Ford, News


Comments (5 total)

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  1. By Gunnar #1, Posted: 6/11/2008

    What about Chrysler? Don't they have a say inside the Beltway anymore?

  2. By bambam #2, Posted: 6/11/2008

    Who's Chrysler? LOL
    its a pretty close call, if something needs fixing for that 10 votes then fix it.

  3. By chris #3, Posted: 6/11/2008

    this kind of disgusts me a little. I wont lie. the USA has spent 2 trillion dollars on iraq and they cant subsidize a portion of the 15 billion a year that the big 3 spend on R&D?

    bam, I know what you mean, if 10 people have a problem with the wording, change the wording, but if anything, it's mediocre bills that always end up screwing people because it doesnt help as much as they want and the senate will just say "well at least you got something"

  4. By Turkle #4, Posted: 6/11/2008

    I find it paradoxical (if that is a word) that our legislative body in D.C. would pass a bill that recently increased the mpg requirements for an industry that has lost some of its tax incentives for R&D research. Can you say "Throwin' the domestics under the bus!". The sad thing is that some politicians see a company making a profit and label it as an evil entity that must pay for its arrogance. Instead of providing a carrot (tax breaks) to accelerate R&D, Congress and the Senate would rather hit the domestics in the face with a shovel.

  5. By chris #5, Posted: 6/11/2008

    turk; that's the american sentiment. there's so much hatred towards the american auto industry in the form of union hatred, poor quality products, big recalls, or big financial shortcomings and windfalls.

    the auto industry requires land and resources that generate taxes, employ people that provide taxes, and sell products that generate taxes. if the american auto industry really got global, they could even start exporting some very valuable merchandise to lower the gigantic trade deficit of the USA.

    but congress will see a fat lazy late 20 something child that's still living at home.

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