At Battery Plant, Obama Pushes Job Creation

President Barack Obama stands with Michigan Gov. Jennifer Granholm, after looking at electric vehicles, Thursday, July 15, 2010, at the groundbreaking ceremony at Compact Power, Inc., a subsidary of LG Chem Ltd., a battery plant in Holland, Mich.
President Barack Obama, searching for an economic success story that can resonate with the public, put his hopes Thursday in the fledgling electric vehicle battery industry, a sector with a promising but uncertain future.

Obama's quick trip to the auto-making state of Michigan underscored the White House's efforts to spur job creation with the help of public money. Speaking at a muddy construction site where work will soon begin on a plant producing batteries for Chevrolet and Ford electric cars, Obama said U.S. manufacturing is poised for a comeback.

"When you buy one of these vehicles, the battery could be stamped "Made in America" - just like the car," he said.

With Democrats facing shaky prospects in the November congressional elections and the unemployment rate stuck near 10 percent, Obama is under pressure to show that his $862 billion stimulus is delivering results and spurring private sector investment that can lead to a sustained recovery.

The plant in Holland is expected to employ 300 people during construction, with another 300 hired when the factory is fully operational. "Government can't generate the jobs or growth we need by itself," Obama said. "But what government can do is lay the foundation for small businesses to expand and to hire."

While the technology Obama is promoting is not yet widely available, the White House sees an opportunity to boost the industry in the U.S. and drive down costs while doing so. Electric cars on the market, such as the Tesla Roadster, retail for around $100,000, though federal tax credits can drive down the price somewhat. More affordable models, the Nissan Leaf and the Chevy Volt, are coming onto the market later this year.

Obama spoke to workers at the site of the future Compact Power plant, which received $151 million from the government's $2.4 billion investment in advanced batteries and electric vehicles.

The degree to which the giant stimulus law is working as promised remains a matter of deep political divide.

"Come back in five years. If this plant has 4,000 workers, then we can come back and say maybe it was a good investment," said Republican Rep. Peter Hoekstra of Michigan. "If this plant is shuttered because we overbuilt battery capacity in the United States of America, people will come back and say it was a poor choice. The thing is, we're risking taxpayer money."

Officials say more than a dozen major automakers and several startup companies are introducing electric vehicles over the next three years.

When those vehicles start production, Obama wants the batteries inside to be made in the U.S. With construction now under way on nine advanced battery plants, officials say the U.S. is on pace to increase its share of the world's battery production from 2 percent to 40 percent in the next five years.

"This is a symbol of where Michigan's going," Obama said. "This is a symbol of where Holland is going. This is a symbol of where America is going."

Michigan could be the biggest benefactor of the electric vehicle industry. Still reeling from job cuts by big automakers, the state's unemployment rate stands near 14 percent. But the state is expected to receive nearly $1 billion from the electric battery grants. Most of the batteries are now manufactured in Asia.