Throwing Good Money After Bad, Again

Speaking of the government stimulus spending and green jobs. The Obama administration picked Southeast Michigan as one of 20 regions from around the country for economic growth grant money. The goal is to create an economic cluster of so-called clean technology manufacturing that is expected to generate jobs, business and exports for the region. Emphasis on jobs, business, and exports for the region.

News of the transaction is also noteworthy. You have the headline-grabbing union-busting Huffington Post putting a happy face on the deal. But when you follow the link to the story, you’ll see evidence that this is yet another waste of taxpayer money in the name of green jobs. Apparently, the thieves at the Huffington post don’t even read the stories they steal, let alone give credit to Jaclyn Trop, the writer of the story.

In reading the story, the economic growth stimulus money will be used in the Southeast Michigan Advanced Energy Storage Systems Initiative. Batteries. Great idea when you consider that Michigan is home to more than 35 advanced battery companies and suppliers for battery systems and electric vehicles, more than any other state, according to the Michigan Economic Development Corp.

Sounds like a good investment of taxpayer money. Except for the fact that, once again, markets exist when there is demand for a product. Lacking demand, there is no market, no business. According to the article, this is a product that nobody wants. What is the point of boosting manufacturing of a product that is already over supplied and without market demand sufficient to stay in business and effectively compete with China?

Michigan has given solar and lithium-ion battery manufacturers tens of millions of dollar in state tax incentives in recent years, but both industries are building more products than there is demand for, according to industry reports.

OK, that was the ‘good’ news. The bad news is . . .

The worldwide manufacturing capacity of lithium-ion batteries for electric vehicles will greatly exceed supply unless demand by automakers increases significantly in the short run, according to a September report by Bloomberg New Energy Finance.


Energy Conversion Devices Inc., the Auburn Hills maker of solar panels and lithium-ion batteries, has been trying to sell its battery operation. And its losses grow since demand for solar panels in Europe has dried up and Chinese companies have offered lower-priced alternatives.

Given the circumstances in the marketplace, I’m not anticipating this government spending will have a different result than Solyndra. Meanwhile, keep a sharp eye out for all the new jobs, business, and exports for Southeast Michigan.

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