The Obama administration is guaranteeing a $250 million working capital loan to Ford Motor Company to finance the sale of $3.1 billion in cars and light trucks to buyers in Canada and Mexico.

The Export-Import Bank said its trade finance guarantee will support exports of more than 200,000 Ford vehicles that are built in Michigan, Missouri, Kentucky and Ohio, and equal to about 15 percent of Ford’s 2009 production.

Providing the actual loan is the Private Export Funding Corporation, a private-sector firm that only lends in connection with guarantees from the Ex-Im Bank or the Small Business Administration. The Ford credit and all related charges are to be paid off within one year, while the vehicles in transit to Canada and Mexico serve as security for the loan.

The action comes as President Obama is pushing various agencies to help spur job growth and meet his goal of doubling the nation’s exports within five years. His earlier financial bailouts and forced bankruptcies of automakers General Motors and Chrysler have been controversial, though Obama has defended them as saving millions of U.S. manufacturing jobs. Ford managed to avoid bankruptcy despite plunging sales during the worst of the recession, and did not seek a federal bailout.

Fred P. Hochberg, chairman and president of Ex-Im Bank, said its guarantee of the automaker’s loan “enables both Ford and hundreds of its small business suppliers to maintain their competitiveness in the global marketplace." This financing, he said, “will support thousands of high paying export-related American jobs.”

The export orders will be filled with production at vehicle factories in Chicago; Dearborn and Wayne, Mich.; Kansas City, Mo.; Louisville, Ky; and Avon Lake, Ohio. Obama toured a Ford plant in Chicago on Aug. 5, shortly after his trade promotion agency unveiled the export credit backing.

Vehicle models that are covered using the loan guarantee include the F-150 pickup, Explorer, Focus, Escape, Expedition, E-Series Van, Taurus, Lincoln MKS and Navigator. Tony Brown, group vice president at Ford Global Purchasing said more than 650 companies in 41 states produce parts and components for the vehicles being exported.

The Ex-Im Bank has been revving up its support this year for sales of U.S. goods abroad. In the first nine months of fiscal 2010, through June, it authorized $17.4 billion in loans, guarantees and insurance -- more than in all of fiscal 2009.

Source:JOC