Grants Steered to Green Car Research

$2.4 Billion for Battery Makers

By Dana Hedgpeth and Scott Wilson
Thursday, August 6, 2009

The Obama administration announced $2.4 billion in grants to companies developing car battery and hybrid technology as the president and others traveled around the country Wednesday to extol the benefits of the government's massive stimulus package.

Ford and its two struggling rivals, General Motors and Chrysler, were among the biggest beneficiaries of the aid, receiving more than $400 million for research and development work as part of an energy program meant to create jobs and reduce the country's reliance on foreign oil.

President Obama touted the grants during a stop in Elkhart, Ind., as he sought to defend his administration's handling of the downturn. He discussed how new spending on education and research, and his push to reform health care -- which he says will eventually bring down costs to business -- fit together to form the basis of a stronger economy.

The energy grants, for instance, amount to the largest-ever investment in battery technology -- creating and preserving, Obama said, "thousands of Hoosier jobs."

Vice President Biden and Cabinet members announced individual grants during visits to Michigan, North Carolina and other states. "For too long we failed to invest in this kind of work, even as countries like China and Japan were racing ahead," Obama said. "I want the cars of the future and the technologies that power them to be built right here."

The awards mark the end of an intense competition among more than 250 companies and universities vying for the work. All told, 48 programs received funding in more than 20 states, including 11 programs in Michigan and seven in Indiana.

Among the big winners in Michigan was Johnson Controls, which will receive nearly $300 million. The company, a supplier to Ford, is turning a plant in Holland, Mich., that once made electronics for car interiors into one that will produce lithium-ion cells for hybrid vehicles and assemble battery systems.

Another company, A123 Systems, received $249.1 million. It has a deal to supply Chrysler.

Other winners in Michigan include Compact Power and Dow Kokam, which will get $300 million for making battery cells and materials. The University of Michigan, Wayne State University and Michigan Technological University will get funds for workforce training.

General Motors was the biggest winner among the Big Three Detroit automakers.

It received $241.4 million to make battery packs for its Chevrolet Volt electric car, build a real-wheel electric-drive system and do other work. Ford received $92.7 million in grants to make electric drive axles, plug-in hybrid electric vehicles and other projects. Chrysler received $70 million to develop 220 plug-in hybrid electric pickups and minivans.

Four of the top recipients have foreign partners or foreign-related subsidiaries, according to Department of Energy officials. The government has insisted that companies do their manufacturing in the United States.

During his stop in Elkhart, Obama singled out a grant to Navistar, a recreational-vehicle maker there that once employed 116,00 people and now has just 12,000 workers.

The company will receive a $39 million grant to build 400 battery-powered trucks -- an announcement that drew raucous applause. One woman shouted: "Thank you."

"Thank you," Obama answered. "Thank the American people."

Wilson reported from Elkhart.