Obama sends stimulus aid to foreign firms

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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.

President Obama announced the grants during a visit to Indiana and said the funds would create domestic jobs and instigate more “green” manufacturing in the United States. But because so few American companies have the necessary technology, much of the money will initially go toward manufacturing electric vehicle batteries overseas.

Three grants went to General Motors Corp., one for $105.9 million to help produce high-volume battery packs for the GM Volt automobile. But cells for the packs will be built in South Korea and by “other cell providers to be named.”

The largest single grant, for $299.2 million, went to Johnson Controls Inc. for the production of nickel-cobalt-metal battery cells and packs at plants it plans to build in Holland, Mich., and Lebanon, Ore. Johnson has partnered with Saft Advanced Power Solutions LLC, a French company, to develop the batteries. Saft, which makes its batteries in France, also won a separate $95.5 million grant.

A123 Systems Inc., which received $249.1 million, is looking to construct manufacturing plants in Romulus and Brownstown, Mich., to build battery cells and modules, but now produces its batteries in China.

KD ABG MI LLC of Midland, Mich., received $161 million for the production of manganese oxide cathode and graphite lithium-ion batteries in that state. It is a joint venture between U.S.-based Dow Chemical Co., South Korea’s Kokam Co. and some venture capital firms.

Compact Power Inc. in Troy, Mich., won a $151.4 million grant to produce the new batteries and build factories in Michigan. It is the U.S. subsidiary of LG Chem Ltd., a South Korean company.

And EnerDel Inc. of Indianapolis, which received $118.5 million to build lithium-ion batteries at plants it owns in Indiana, is a subsidiary of companies controlled by a Russian oligarch.

Of the grants awarded for 48 projects, the lion’s share — $1.07 billion — went to the six companies with foreign ties and are meant to produce advanced battery and electric drive projects.

“If we want to reduce our dependence on oil, put Americans back to work and reassert our manufacturing sector as one of the greatest in the world, we must produce the advanced, efficient vehicles of the future,” Mr. Obama said.

According to the Energy Department, which oversees the grant program, GM will receive more than $240 million in three grants, while Ford Motor Co. will get $92.7 million and Chrysler Group LLC will receive $70 million.

“This investment is an important step toward creating and building an industry in the United States that addresses market requirements and long-term opportunities for growth and new jobs in this country,” said Johnson Controls President Alex Molinaroli.

Johnson Controls-Saft began operations at a lithium-ion cell manufacturing and battery assembly facility in Nersac, France, earlier this year and expects to have its U.S. operation under way before the end of 2010.

“This grant is another exciting step towards creating an American battery infrastructure, which may reduce our dependence on foreign oil and increase our nation’s energy security,” said A123 President David Vieau. “The capital provided by the DOE’s investment will help us speed our growth and better compete in global markets.”

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