The year is 2010. Hope and Change still lingers in the air. The water in Flint, Michigan is passably safe to drink. And Donald Trump doesn’t have a single pledged delegate to his name.
This year saw $8 billion from the $831 billion American Recovery and Reinvestment Act of 2009 (ARRA) appropriated to dozens of so-called “high speed rail” projects across the country. The projects were said to be “shovel-ready” — and some were — but many are still ongoing, er, creating jobs today.
Workers at an LG Chem plant in Holland, Michigan have already been put on furlough before a single battery has come off the line. Workers have three weeks of paid “work”, and one week off unpaid at the $300 million plant.
Just in time for today’s tour of Michigan’s “battery belt,” the Obama Administration has released a study [full PDF here] of its electric vehicle stimulus efforts which concludes that the money was all well spent. Though the report covers a number of programs, from the ATVM “retooling loan” program which is backing companies like Nissan, Tesla and Fisker, to charging station subsidies, the major accomplishment of these billions of dollars is encapsulated in a single claim:
By 2012, thanks in part to the Recovery Act, 30 factories will be online and the U.S. will have the capacity to produce 20 percent of the world’s advanced vehicle batteries. By 2015, this share will be 40 percent.
As you can see from one of the report’s graphs (above) the US will achieve this 40 percent share of the world’s EV battery production just as two-thirds of the cost is beaten out of the things. And because batteries don’t follow Moore’s Law, it’s all diminishing returns from there. So what happens come 2015?
If you listen to the commentators, you’ll believe that tax breaks and stimulus measures are the sole reason for China’s car boom. It turned the country into the #1 car market in the world. What’s more, the boom continued unabated in 2010. Wonks are worried that the market will crash when the stimuli are withdrawn. Don’t worry. There will be new ones. This time, for electric cars. (Read More…)
Vladimir Putin has announced that his government will spend $19.6b (584 billion rubles) on auto-sector stimulus, with spending planned on technology development, employee re-training, direct subsidies, and cash-for-clunker-style consumer stimulus. Another $20b of investment is expected from foreign automakers. These measures are aimed at a host of of ills besetting the Russian auto industry and market, ranging from what the government describes as a 4-7 year technological deficit, and a 50 percent drop in sales last year.
First, let’s get something out in the open.The Detroit Free Press’ story on the jobs impact of Uncle Sam’s Motown mega-order forgets to mention one salient fact. As TTAC reported back in June, one-third of the 17,600 vehicles ordered from Chrysler, Ford and GM were/are/will be assembled outside the United States. Any article about the order’s effects on American jobs should begin with that fact, which this one has. Surprise! The federal fleet sailing to The Big Three’s rescue did no such thing for American autoworkers. “The overriding purpose of the stimulus was to jump-start the economy and create jobs, though Obama never claimed the vehicle purchases would create jobs. While the latest reports from stimulus recipients show all three carmakers getting orders totaling $270 million so far, job creation from the purchases was nil.” Don’t you just love it when the media pre-apologizes for the President? How about when a major manufacturer lies about its federal blessing to please its federal taskmasters?
The Detroit Free Press reports that Senator Barbara Mikulski (D-MD) has added some car dealer-friendly provisions to the proposed $43g (gazillion) economic stimulus package.
Mikulski’s proposal would grant a tax credit for vehicles bought between Nov. 12 of last year and Dec. 31 of this year. The tax break would only go to families making less than $250,000 a year, and would only apply to interest on loans up to $49,500.
“Everyone wants to save auto manufacturers, but no matter how much government aid we give to the Big Three auto makers, they can’t survive if consumers don’t start buying cars,” Mikulski said.
True dat. HOWEVER, this is like putting a band aid on an arterial wound. Until the U.S. housing market recovers, car sales will not come back. And maybe not even then, for a while anyway. How Congress/the feds do that remains to be seen. Later.