Michigan GREEN - Michigan Gets $1 Billion Plus In Battery Grants

August 5, 2009 - With the electrification of the American auto industry in mind, Michigan has for years been positioning itself as America's new battery capital.

Wednesday, under a perfect cerulean sky, at Detroit's groundbreaking and high-tech NextEnergy Center, Vice President Joe Biden announced more than a billion reasons Michigan may just make it.

The Obama administration announced $2.4 billion in grants to accelerate the development of next-generation batteries and electric vehicles.

And more than $1 billion of that money will be coming to Michigan in several major grants, which should create tens of thousands of jobs in the Great Lakes State.

Four companies -- A123 in Romulus, Johnson Controls - SAFT, Compact Power Inc. in Troy and Dow Kokam, a joint venture of Midland's Dow Chemical Co. and Townsend Kokam LLC of Kansas City, Mo. -- will receive more than $800 million for advanced battery manufacture and materials.

Chrysler LLC. General Motors Corp. and Ford Motor Co. will receive more than $400 million to manufacture thousands of advanced hybrid and electric vehicles, and battery and electric drive components.

And on the educational side, Wayne State University, the University of Michigan Ann Arbor, the University of Michigan Dearborn, Kettering University, Michigan Technological University and Macomb Community College will share more than $10 million for battery training and education for researchers, technicians, service providers, first responders and the general public.

Biden's address in TechTown was part of a larger announcement of a $2.4 billion initiative to help grow the advanced battery sector and lessen America's dependence on foreign oil. The initiative will support projects in more than 20 states. Michigan is receiving the largest share of the grant funding of any state.

The funding came under the American Recovery and Reinvestment Act, better known as the federal stimulus package. They were selected through a competitive process by the Department of Energy.

"For our nation and our economy to recover, we must have a vision for what can be built here in the future -- and then we need to invest in that vision," Biden said. "That's what we're doing today and that's what this Recovery Act is about."

The announcement marks the single largest investment in advanced battery technology for hybrid and electric-drive vehicles ever made. Industry officials expect that this $2.4 billion investment, coupled with another $2.4 billion in cost share from the award winners, will result directly in the creation tens of thousands of manufacturing jobs in the U.S. battery and auto industries.

While Biden was in Detroit, President Barack Obama made a similar grant announcement at Navistar International Corp. in recession-battered Elkhart, Ind. Navistar will receive a $39 million grant to manufacture electric trucks which the company reports will ultimately will create or save hundreds of jobs when full scale manufacturing at the site commences. Overall, seven projects in Indiana will receive grants totaling more than $400 million.

In Detroit, Biden's appearance began with a concert by the Detroit Cass Technical High School marching band, followed by a parade of Democratic politicians, except for the nonpartisan Detroit Mayor Dave Bing and NextEnergy CEO Keith Cooley.

"The renewable energy industry is coming together here, it's coming together now, and we at NextEnergy are ecstatic to be at that convergence," Cooley said.

Bing noted that "the auto industry had to become leaner and more efficient to compete in a global market and Detroit must do the same."

Obama economic adviser Larry Summers said that "no matter how well you manage monetary policy, no matter how well you manage fiscal policy, prosperity ultimately depends on strong business, on quality hard work and on innovation. These things have to be at the foundation of Americas prosperity. These things are what the auto industry and this city have been about for more than a century."

U.S. Rep. Gary Peters (D-Bloomfield Hills) said the "bset way to get this economy moving is by selling automobiles." And Rep. John Conyers (D-Detroit) said he plans to reintroduce a version of the former Humphrey-Hawkins Full Employment Act to help the economy along.

U.S. Rep. John Dingell (D-Dearborn) drew big laughs when he told Biden, "we are pleased to have you here. We are particularly pleased when you bring money. And we want to make sure you know you are welcome any time, especially on those occasions when you bring money."

U.S. Sen Carl Levin (D-Mich.) said the stimulus makes it "within our power to give our companies the support they need and deserve -- support that other companies in other countries have already got."

Gov. Jennifer Granholm said that the level of federal investment in Michigan was possible largely because of state economic development initiatives dating back to November 2006, to build a startup battery-maker industry within the state that would be eligible for grant awards.

"These are battery companies that would not have been here (in Michigan) to invest in, but for the credits from our initiatives to lure them here," Granholm said.

The state has offered the four companies federally awarded Wednesday, plus Ann Arbor-based Sakti3, up to $700 million in incentives if they meet sales goals. The companies could generate as many as 30,000 new jobs by 2020.

Finally, Biden took the stage, first joking about living and dying with Bing's basketball moves at Syracuse University as an Orange alum, then defending the Obama stimulus. Quoting Summers, he said "Six months ago we were talking about whether this recession would turn into a worldwide depresssion. Now today we're talking about when it will turn into recovery. So folks we're not there yet but we're moving in the right direction."

Biden said the battery grants, "in towns like Holland and Wixom and Brownstown and Sterling Heights, this is going to make a difference in people's lives."

He said the grants were crucial to keeping manufacturing going.

"The internal combustion engine built the auto industry, built this state and this city, and built the middle class," Biden said. "We believe the electric motor can build all those same things, while protecting our environment, and allowing us to tell the sheiks of the oil states, 'No thank you, we don't want it.'"

Details of the grants with Michigan ties are as follows:

Johnson Controls Inc, $299.2 million, Holland and Lebanon, Ore.: Production of nickel cobalt metal battery cells and packs, as well as production of battery separators by partner Entek for hybrid and electric vehicles.
A123 Systems Inc., $249.1 million, Romulus and Brownstown Township: manufacturing of nano-iron phosphate cathode powder and electrode coatings, fabrication of battery cells and modules, and assembly of complete batteyr pack systems for hybrid and electric vehicles.
Dow Kokam, KD ABG MI LLC, $161 million, Midland: Production of manganese oxide cathode / graphite lithium-ion batteries for hybrid and electric vehicles.
Compact Power Inc. on behalf of LG Chem Ltd., $151.4 million, St. Clair, Pontiac and Holland: Production of lithium-ion polymer battery cells for the GM Volt using a manganese-based cathode material and a proprietary separator.
General Motors Corp., $105.9 million, Brownstown Township: Production of high-volume battery packs for the GM Volt. Cells will be from LG Chem Ltd. and other cell providers to be named.
General Motors Corp., $105 million, White Marsh, Md. and Wixom: Construction of U.S. manufacturing capabilities to produce the second generation GM global rear wheel electric drive system.
Ford Motor Co., $62.7 mllion, Sterling Heights: Producing a Ford electric drive transaxle with integrated power electronics in an existing Ford transmission facility.
Magna E-Car Systems of America Inc., $40 million, Muncie, Ind. and Holly: Increasing production capacity of advanced automotive electric drive system component manufacturing plants located in the U.S.
Chrysler LLC, $70 million, Warren and St. Louis, Mo; Develop, validate and deploy 220 advanced plug-in hybrid electric pickups and minivans
General Motors Corp., $30.5 million, Michigan: Develop, analyze, and demonstrate hundreds of Chevrolet Volt Extended Range Electric Vehicles, 125 Volt PHEVs for electric utilities and 500 volt PHEVs to consumers.
Ford Motor Co., $30 million, Michigan and Kansas City, Mo.: Accelerate the launch and commecialization of PHEVs and EVs by partnering with 15 of America's leading utilities. Deploy up to 150 plug-in hybrid electric vehicles, including 130 Ford Escape PHEVs and 20 Ford E450 Van PHEVs.
Wayne State University, $5 million, Detroit and Warren: Educational programs for graduate, undergraduate and secondary students, teachers, technicians, emergency responders and the general public. Partering with NextEnergy and Macomb Community College.
Michigan Technological University, $2.98 million, Houghton and Western Upper Peninsula: Educational programs for graduate, undergraduate and secondary studentsand the general public. Partnering with Argonne National Laboratory, AVL, General Motors Corop. Eaton Corp., Horiba, MathWorks and Schweitzer Engineering Laboratories.
University of Michigan, $2.5 million, Detroit, Ann Arbor, Dearborn and Flint: Educational programs for graduate, undergraduate and secondary students, teachers and the general public. Partnering with University of Michgan - Dearborn, Kettering University, Ford Motor Co., General Motors Corp., Chrysler LLC, Eaton Corp., DTE Energy, Mentor Graphics, Ballard, Quantum Technologies and A123 Systems.

For a gallery of photos of the visit, see http://www.wwj.com/Biden-at-NextEnergy/4946929

To view a map of the award locations, visit http://www1.eere.energy.gov/recovery/pdfs/battery_awardee_map.pdf