Friday, September 01, 2023

US Providing Up to $12 Billion to Retrofit Auto Plants for EVs

Ari Natter
Thu, August 31, 2023 



(Bloomberg) -- The Biden administration is making up to $12 billion available for automakers to retrofit their facilities to make electric vehicles and hybrids.

The funding comes amid tense negotiations between Detroit auto companies and the United Auto Workers, which has raised concerns the transition to EVs may threaten union jobs. It includes $10 billion in newly announced funds from a US Energy Department loan program for clean vehicles. The Energy Department also said it’s planning to make available an additional $3.5 billion in financing to expand domestic battery manufacturing for vehicles and the nation’s power grid.

US Energy Secretary Jennifer Granholm vowed Thursday the US wouldn’t leave American autoworkers behind, telling reporters the funding will support projects in longstanding auto making communities to help retain workers amid the transition.

The financing signals the Biden administration is doubling down on efforts to support carmakers’ transition to EVs, even as it seeks to retain support from labor groups pushing for more autoworker job security and higher wages.

“This funding will help existing workers keep their jobs and have the first shot to fill new good jobs as the car industry transforms for future generations,” President Joe Biden said in a statement.

The UAW’s new president, Shawn Fain, cautiously welcomed the measure, noting it came with language favoring projects offering higher pay and union representation. Fain had warned the White House earlier this month not to push EVs at the expense of blue collar jobs.

The union, which is in the middle of contentious talks with the three legacy Detroit automakers over a new four-year contract, blasted a June announcement of a $9.2 billion federal loan to a Ford joint venture as a gateway to “low-road jobs.”

“The EV transition must be a just transition that ensures auto workers have a place in the new economy,” Fain said Thursday in an emailed statement.

Read More: UAW Boss Seeks 46% Raise, 32-Hour Work Week in Carmaker ‘War’

The Alliance for Automotive Innovation, which represents most major auto manufacturers in Washington, said in a statement the incentives and grants from the Department of Energy “will further advance the domestic automotive supply chain and globally competitive battery manufacturing platform that automakers have already made sizable investments.”

A spokesperson for General Motors Co., which has pledged to electrify its entire fleet by 2035, said the carmaker supports public funding that promotes “domestic investment in manufacturing.” Representatives for Ford and Stellantis NV, which owns the Jeep and Ram brands, said their companies were reviewing the announcement.

Shares of GM and Ford closed up less than 1% in regular trading Thursday in New York. Stellantis fell less than 1%.

In addition to electric vehicles, the financing can be used for factories that make efficient hybrid, plug-in electric hybrid, plug-in electric drive and hydrogen fuel-cell vehicles, the department said.

The funding, which also includes $2 billion in “manufacturing conversion grants” from Biden’s signature climate law, comes amid a broader administration goal of having EVs represent at least half of all new car sales in the US by 2030.

--With assistance from Chester Dawson and Keith Laing.

 Bloomberg Businessweek

US offers $12 billion to auto makers, suppliers for advanced vehicles


Thu, August 31, 2023 
By Timothy Gardner

WASHINGTON (Reuters) -The Biden administration is offering $12 billion in grants and loans for auto makers and suppliers to retrofit their plants to produce electric and other advanced vehicles, Energy Secretary Jennifer Granholm said on Thursday.

"While we transition to EVs, we want to ensure that workers can transition in place, that there is no worker, no community left behind," Granholm, a former governor of car-manufacturing state Michigan, told reporters in a call.

Speeding grants and other subsidies to fund conversion of existing auto plants to build electric vehicles could help the White House blunt criticism from automakers and the United Auto Workers (UAW) union over proposed environmental rules aimed to help usher in the EV era.

The UAW has warned that a rapid change could put thousands of jobs at risk in states such as Michigan, Ohio, Illinois and Indiana.


Last week UAW members voted overwhelmingly in favor of authorizing a strike at the Detroit Three automakers if an agreement over wages and pension plans is not reached before the current four-year contract expires on Sept. 14.

On Thursday UAW President Shawn Fain cheered the announcement, saying the policy "makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won."

President Joe Biden said in a release that "building a clean energy economy can and should provide a win-win opportunity for auto companies and unionized workers who have anchored the American economy for decades."

Fain has vowed to save a Jeep factory in Belvidere, Illinois, that Stellantis has put on track to shutter. The automaker has left open the possibility that the factory could get a new product with government aid.

When asked about the chances that the grants could keep that factory open, Granholm said plants that had been built up around communities are "prime for taking advantage of these funding opportunities."

There will be no specific labor requirements for companies to obtain the funding, but projects that have better labor conditions will have a greater chance of receiving the funding, an Energy Department official said on the call.

The administration will also offer $3.5 billion in funding to domestic battery manufacturers, Granholm said.

For the advanced vehicles, $2 billion in grants will come from the Inflation Reduction Act which was passed by Democrats last year, and $10 billion in loans will derive from the Energy Department's Loans Program Office.

(Reporting by Timothy Gardner in WashingtonAdditional reporting by Joe White in Detroit;Editing by Bill Berkrot and Matthew Lewis)

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