DailyTech - VP Joe Biden to Announce First Round of $2.4B Battery Grant in Michigan

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Auto VP Joe Biden to Announce First Round of $2.4B Battery Grant in Michigan
Jason Mick (Blog) - August 5, 2009 11:35 AM

106 comment(s) - last by JohnnyCNote.. on Aug 6 at 4:37 PM

Joe Biden is in Michigan today, reportedly to announce the first round of $2B in battery grants. (Source: The Weekly Standard)

Grants bring good news to state's troubled economy

Michigan is among the states that has been hit hardest by the recession. The government went to extreme measures to keep the state's economy from collapsing, including assuming majority ownership of GM and propping up Chrysler through bankruptcy. Now the federal government is preparing to reach deeper into its pockets to help the state out even more.

Vice President Joe Biden is in Michigan today at the NextEnergy Center in Detroit. He is reportedly going to announce the first round of $2B USD in Department of Energy battery grants. The grants should boost the state's economy and help develop better electric vehicles, currently favored as the future of the car industry by the domestic automakers.

The federal government is also separately loaning money to battery manufacturers under the $25 billion Advanced Technology Vehicle Manufacturing Incentive Program (ATVM). Among the battery manufacturers that applied for that loan are A123 Systems, EnerDel, and Compact Power. Thus far Ford, Nissan, and Tesla Motors received ATVM loans. It is unknown who the grants will go to, but A123 Systems, EnerDel, and Compact Power seem like leading candidates.

Ed DeSeve, the president's special advisor on the stimulus program, had stated about on July 21, "I think you'll see over the next week or so ... some industrialization focus, for example, on the battery grants that are coming. It makes sense to put those in places where there is productive working capacity -- people who can do the jobs. There are plants where the jobs can exist, and I think you are going to start to see more and more of that over time."

The ATVM loans must be repaid eventually by automakers and battery makers. However, the DoE grants do not have to be repaid. Michigan has also offered battery makers some big tax cuts in hopes of luring business into the state.

A limited amount of tickets to Mr. Biden's appearance have been offered to the public on a first-come-first-serve basis.

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RE: Good

By FITCamaro on 8/5/2009 5:06:55 PM , Rating: 2

There is a big difference between government contractors who do work for the government and get paid for it and a private company who supplies nothing to the government for the money it receives.

I won't deny there is waste in defense contracts. I work for a defense contractor. Part of the waste though is government imposed though.

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RE: Good

By Keeir on 8/5/2009 8:57:03 PM , Rating: 2

quote:
Part of the waste though is government imposed though.

Actually, large amounts of government waste are self-imposed. Essentially, to prevent the possibility of large fraud, the government ensures each and every transaction is a little bit wasteful. Requirements of procurement must be meant and typically a government contract will come with all sorts of requirements that are not typically needed in a private setting.

For instance we have all heard of the 500 dollar Wrench or some such? The government can't just buy a wrench. Someone might (gasp!) say they spent 50 dollars on a 25 dollar wrench and pocket the difference. (Do this a few million times and its large waste) Instead, the government puts in place procedures to
A. Make sure the wrench is needed
B. Define what wrench is needed
C. Request for Bids to Supply Wrench
D. Decide Which Wrench to Purchase (Defend Purchase)
E. Purchase the Wrench
F. Ensure the Wrench is made correctly (not if the end product is acceptable but a host of other requirements)
F. Distrabute the Wrench or Store the Wrench
G. Create a system to track the wrench
H. Ensure Steps A-G are Auditable and Defendable

For small procurement efforts, the overhead or fixed cost of this ensures the end price will be much much higher than a private company buying from private company.

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RE: Good

By Xavier434 on 8/6/2009 8:31:11 AM , Rating: 2

Correct. It's kind of ironic actually. The reason why they have to go through all of that trouble is because they are constantly being regulated by the people which I think is a great thing, but such regulation does come with a price. The ironic part is that a primary means of incentive for a lot of people to regulate is to try and keep wasteful spending down. Some might argue that we are cutting the nose to spite the face. I guess it all boils down to moderation as most things do. I really don't know for certain...

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RE: Good

By Xavier434 on 8/6/2009 8:38:08 AM , Rating: 2

Never forget who the government really is.

The government is the people. It is NOT the politicians as much as they may think it is sometimes. Therefore, when you say that that government contractors are doing work for the government and getting paid for it what you are really saying is that these contractors are doing work for "the people" and getting paid for it by us.

This is very similar to that of grants. Grants are a form of tax dollars just like these defense contracts. It is money being paid by "the people" with the intention of doing something for "the people".

The biggest difference when it comes to the end result between grants and defense contracts is what we are actually buying. The rest is primarily logistics.

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