Looks like American automakers have found at least one more buyer for their vehicles. The U.S. government is planning on the purchase of $285 million worth of fleet vehicles that get better gas mileage than the current fleet. Under the plan, the General Services Administration will purchase more than 17,500 vehicles as a part of their existing deals with Chrysler, Ford, and General Motors.
U.S. President Barack Obama, and his administration, have said the purchases will take place by 1 June. Although it is unclear what will happen to the older fleet vehicles being replaced, many will likely be sold at government auctions.
The purchase is hardly a surprise. In the much talked about stimulus package approved by Congress, $300 million was included for the automotive purchase. This is not a gigantic purchase in the grand scheme of things, as the Big Three sold a combined total of 380,000 vehicles for March 2009. Still, the move may help to bolster confidence in the sector, while even a marginal increase in revenue would be welcomed by the automakers.
More than 14% of the vehicles will be hybrid sedans. 2,500 orders for the vehicles, which will likely include the Chevy Malibu, Ford Hybrid Fusion, and Saturn Aura, will be placed by the end of next week.
Of the deal, President Obama said, "The problems that caused this economic crisis weren't created in a day and it will take time and hard work to get our economy back on track. But I am 100% committed to a strong American auto industry, and we will stand with America's auto workers and their families during these difficult times." His statement was released earlier today by the White House.
The General Services Administration is the supply chain, transportation, and building management arm of the U.S. Government. It manages a federal fleet of nearly 650,000 vehicles worldwide. The scandal-plagued office has been rocked by the perjury and obstruction felony convictions of its former Chief of Staff David Safavian. At the same time, a GSA administrator was trying to cut the budget for fraud investigations. The same administrator, Lurita Doan, was also accused by the U.S Special Counsel of playing politics with the GSA. Since the GSA is supposed to be independent and nonpartisan, Doan was pressured to resign after several investigations into her conduct.