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Dead Batteries

- August 11, 2011

While Americans Worry About The Economy, Obama Focuses On Stimulus Programs Which Hold Little Promise Of Job Growth

“On Thursday, August 11, The President Will Travel To Holland, Michigan, To Tour The Johnson Controls Inc. Advanced Battery Facility.” (Press Release, “President Obama To Travel To Holland, Michigan,” The White House, 8/4/11)

THE LAST TIME OBAMA VISITED HOLLAND, HE CLAIMED THE NATION WAS “HEADED IN THE RIGHT DIRECTION”

July 2010, OBAMA: “But What I'm Absolutely Clear About And What This Plant Will Prove Is That We Are Headed In The Right Direction And That The Surest Way Out Of The Storms We've Been In Is To Keep Moving Forward And Not Go Backwards.” (President Barack Obama, “Remarks at Compact Power, Inc., in Holland, Michigan,” 7/15/10)

Obama’s Economic Advisors Predicted That The Stimulus Would Keep The Unemployment Rate Below 8 Percent With Stimulus. (Christina Romer and Jared Bernstein, "The Job Impact Of The American Recovery And Reinvestment Plan," 1/9/09)

  • Rather Than Keeping Unemployment Below 8 Percent, “The Jobless Rate Has Stayed Above 8% For 30 Straight Months, The Longest Stretch Of High Unemployment Since The Great Depression In The 1930s.” (Jeffry Bartash, “U.S. Economy Gains 117, 000 Jobs In July,” Market Watch, 8/5/11)

Since The Stimulus Passed, The Nation Has Lost 1.6 Million Jobs And The Unemployment Rate Has Increased From 8.2 Percent To 9.1 Percent. (Bureau Of Labor Statistics, BLS.gov, Accessed 8/5/11)

“The Jobs Report Friday Showed 44.4% Of Unemployed Americans, Or 6.2 Million People, Were Out Of Work For More Than Six Months In July.” (Luca di Leo and Jeffrey Sparshott, “Payrolls Grow As Unemployment Ticks Down,” The Wall Street Journal, 8/5/11)

APPARENTLY, “THE RIGHT DIRECTION” MEANT GIVING GREEN ENERGY STIMULUS FUNDS TO FOREIGN COMPANIES

Last Time President Obama Was In Holland, Michigan, “The President Handed $150 Million In Stimulus Money Over To Korean CEO Peter Bahnsuk Kim Of LG Chem.” "But the green economy looks like a lot of green for the well-connected. The president handed $150 million in stimulus money over to Korean CEO Peter Bahnsuk Kim of LG Chem. LG Chem is an $11 billion Korean conglomerate that hardly seems a candidate for the American Recovery Act. No wonder the program is so unpopular." (Henry Payne, Op-Ed, “He Came, He Saw, He Insulted,” Detroit News, 7/16/10)

Nearly Half Of Obama’s $2.4 Billion Devoted To Advanced Batteries Went To Foreign Companies. “Nearly half of the $2.4 billion in federal grant money awarded Wednesday to stimulate the U.S. economy and boost the production of hybrid and electric vehicles went to six companies with ties to places as far away as Russia, China, South Korea and France. ... But because so few American companies have the necessary technology, much of the money will initially go toward manufacturing electric vehicle batteries overseas.”  (Jerry Seper, “Obama Sends Stimulus Aid To Foreign Firms,” The Washington Times8/6/09)

Obama’s $2.4 Billion Investment In Batteries Is An “Enormous Bet On A Product That Has Yet To Gain Broad Commercial Success.” “But the administration's $2.4 billion investment in the development of batteries and other electric-car technology in the United States is an enormous bet on a product that has yet to gain broad commercial success. Major manufacturers have yet to sell electric cars in the United States. Hybrids, though they have been around for a decade, represent less than 1 percent of the nation's roughly 250 million-vehicle fleet.” (Anne E. Kornblut And Peter Whoriskey, “Obama Pours Energy Into Electric-Car Batteries, But Will It Jump-Start Industry?”  The Washington Post, 7/16/10)

  • There’s “No Proven Market” For The Battery. “‘The battery story is highly questionable,’ said Menahem Anderman, the founder and chief executive of Total Battery Consulting. ‘Basically, there's really no proven market, neither electric vehicle nor plug-in hybrid electric vehicle -- and there's really no battery company in the United States that has a verified product.’” (Anne E. Kornblut And Peter Whoriskey, “Obama Pours Energy Into Electric-Car Batteries, But Will It Jump-Start Industry?” The Washington Post, 7/16/10)
  • In 2014, Capacity To Build Batteries Will Be Three Times Greater Than Demand. “Although U.S. battery makers could export their products, the global market is glutted, according to analysts. Anderman said global capacity to build car batteries in 2014 will be three times greater than demand that year. Even some of the U.S. companies that have received the federal grants express concerns that their capacity to build parts for electric cars is far outstripping consumers' demand.”  (Anne E. Kornblut And Peter Whoriskey, “Obama Pours Energy Into Electric-Car Batteries, But Will It Jump-Start Industry?”  The Washington Post, 7/16/10)

The Stimulus Money Was Spent On Batteries For The Chevy Volt, A Vehicle That Isn’t Profitable Even With Taxpayer Subsidies

GM Sold Only 125 Volts In July, Not “Exactly Inspiring.” “The latest sales figures for Chevrolet’s Volt electric vehicle aren’t exactly inspiring. As Jonathan Last put it on the Weekly Standard’s blog: ‘The July sales numbers are out and the Chevy Volt continues to electrify (get it?) the country. GM sold … 125 Volts last month!’” (Tom Bemis, “Chevy Volts Aren’t Selling Like Ipads,” Market Watch’s “The Tell,” 8/3/11)

  • “Cheaper Cars That Don’t Get Tax Benefits Are Selling Better.” “Volts list for around $40,000, but that  can drop to the low $30s when a $7,500 tax credit is taken into account. It’s that tax subsidy that really raises the ire of free-marketers. After all, cheaper cars that don’t get tax benefits are selling better, even at GM.” (Tom Bemis, “Chevy Volts Aren’t Selling Like Ipads,” Market Watch’s “The Tell,” 8/3/11)

GM Admits That The First, And Possibly Second, Generation Of The Volt Will Not Be Profitable – Even With Over $2 Billion In Government Subsidies. “The Volt, touted as an important image-changer for General Motors, is scheduled to arrive late in 2010. Company executives previously had acknowledged that the first generation of this plug-in hybrid-powered car would not be profitable.” (“Chevy Volt Is Exception To 'Pay The Rent' Rule” Automotive News, 4/7/09)

  • Troy Clarke, President Of GM's North American Operations: “We Can’t Make Money On The First Volts.” “‘We can't make money on the first Volts,’ said Troy Clarke, president of GM's North American operations. ‘But as we get a chance to change the generations of technology, we'll lose less and less.’" (“Chevy Volt Is Exception To 'Pay The Rent' Rule” Automotive News, 4/7/09)
  • “Even The Second-Generation Version May Not Make Money.” “Even the second-generation version may not make money, Clarke added during an interview last week with Automotive News. . . Clarke is unsure whether even the second-generation Volt will be profitable. "It would be my hope that we'd be close to breakeven," he said. Most cars are redesigned every five years or so.” (“Chevy Volt Is Exception To 'Pay The Rent' Rule” Automotive News, 4/7/09)

According To The President’s Auto Task Force, Without Significant Reductions In Cost, The Volt Will Not Be Commercially Viable. “GM is at least one generation behind Toyota on advanced, ‘green’ powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable.”  (President’s Automotive Task Force, “Determination Of Viability Summary – General Motors Corporation,”WhiteHouse.gov, 3/30/09)

THE CAR BATTERY PROGRAM IS ANOTHER EXAMPLE OF OBAMA’S STIMULUS LEGACY THAT HAS FAILED TO PERFORM

Less Than Half Of Obama’s Battery Plants Will Be Operational By The End Of 2011. “Top political aides inside the West Wing are convinced that the early success of the battery investments and other green-energy grants will help Obama sell the Recovery Act to voters. They point out that nine new electric battery manufacturing plants have been funded from $2.4 billion in Recovery Act money -- but only four of them will be operating before 2011.” (Michael D. Shear and Steven Mufson, “Obama Sticks With Clean-Energy Goals,” The Washington Post, 7/13/10)

Industry Officials Question Whether Obama’s “Grand Plans For A Green Nation” Are Realistic.  “President Obama has grand plans for a green nation — 1 million electric vehicles on the road within four years and clean power sources providing 80% of the nation's energy by 2035. But a day after getting a surprisingly extensive shout-out in Obama's State of the Union address — he sees clean tech as the country's best chance to seize its ‘Sputnik moment’ — industry officials were less than enthused and questioned whether the ambitious targets were even attainable.” (Tiffany Hsu, “Obama’s Clean-Energy Goals Have Industry Questioning Feasibility,” Los Angeles Times, 1/27/11)

“Even Obama's Democratic Allies Say The Investment In A Clean-Energy Future Is Unlikely To Provide A Lot Of Relief To The Unemployed.”(Michael D. Shear And Steven Mufson, "Obama Sticks With Clean-Energy Goals," The Washington Post, 7/13/10)

Obama’s “Environmental Agenda Is In Tatters” And “Green Jobs” Have Not Brought Down Unemployment. “Obama’s environmental agenda is in tatters. His green jobs plan has done little to make a dent in unemployment, which persists at close to 10 percent. Obama’s signature environmental initiative, cap-and-trade, died in the Senate in July. And, during the first year of Obama’s tenure, China massively outspent the United States on clean-energy technology.”  (Michael Shellenberger, “Cap And Charade,” The New Republic, 10/14/10)

  • Obama’s Green Strategy “Was Flawed From The Start.” “In truth, the president’s strategy was flawed from the start. Cap-and-trade would not have birthed a domestic clean-energy economy—indeed, it wasn’t designed to. Meanwhile, the administration’s green stimulus spending was split between short-term, if worthy, investments in green technology, to which far too little money was allocated, and overhyped public-works projects that would never have delivered the new industrial economy Obama promised as a candidate.”  (Michael Shellenberger, “Cap And Charade,” The New Republic, 10/14/10)

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