Obama Defends Stimulus Grants to Electric-Car Battery Plants

By Nicholas Johnston
(c) 2010 Bloomberg News
Thursday, July 15, 2010; 12:00 AM

Obama will attend the groundbreaking in Holland, Michigan, of a factory for Compact Power Inc., a unit of South Korea's LG Chem Ltd. that got a $151 million stimulus grant to make electric-vehicle batteries.

The completed factory will employ more than 300 workers to produce batteries for General Motors Co.'s Chevrolet Volt and Ford Motor Co.'s Focus Electric vehicles.

"None of this would have been possible without the Recovery Act," White House communications director Dan Pfeiffer told reporters on a conference call yesterday. He criticized Republican opposition to the $862 billion stimulus.

"If they had their way we would not be breaking ground," he said. "These industries would not be created here."

Obama and other administration officials have stepped up their defense of the stimulus measure which was passed shortly after the president took office. The president spent a two-day trip to Missouri and Nevada last week talking about government spending on battery-driven trucks and tax credits that encourage clean-energy manufacturing.

An administration report released yesterday said the stimulus package will help encourage $280 billion of investment by private industry and local governments that leads to job creation. About 3 million jobs have been "saved or created" by the legislation so far, the report said.

Republicans have said the stimulus is wasteful, hasn't reduced unemployment and has added to the record budget deficit.

"No amount of Washington spin or fuzzy math can change the fact that the trillion-dollar stimulus is failing by the Obama administration's own standards," House Republican Leader John Boehner of Ohio said in a statement. "The American people have had enough of Washington Democrats' job-killing spending spree."

The White House hasn't made much progress in selling the stimulus spending to voters. Asked how their opinion of the stimulus has changed in recent months, respondents to a Bloomberg National Poll were divided almost evenly among those who say they had become more supportive, those who are less supportive and those who haven't changed their opinion.

Since the legislation was approved in February of 2009, the U.S. unemployment rate has climbed to 9.5 percent in June from 8.2 percent.

In his appearance today, Obama is to highlight $2.4 billion in stimulus spending aimed at encouraging development of new battery and electric-vehicle technology.

According to a Department of Energy report, the spending will raise the U.S.'s manufacturing capacity for advanced- vehicle batteries from 2 percent of the world market to 40 percent by 2015.

"We can't succeed in the 21st century relying on 20th century technology," said David Sandalow, the Energy Department's assistant secretary for policy and international affairs.

© 2010 bloomberg.com