Biden Plan Picks Winners of Green Jobs 05/18 06:10
WASHINGTON (AP) -- In Georgia, school bus-maker Blue Bird has visions of
going from selling a few hundred electric buses annually to 15,000. In
Michigan, Ford plans to produce an all-electric version of its F-150 pickup
Both companies are looking to President Joe Biden's $2.3 trillion
infrastructure proposal to help transform the automotive sector as electric
vehicles shift from a luxury niche to mainstream America. The plan reflects an
effort by Biden to accelerate certain sectors of the economy with the belief
they'll become the engines for growth in the decades to come.
"You need someone to give you a real jumpstart," Blue Bird CEO Phil Horlock
said. "This is actually changing the landscape."
Biden will visit Ford's electric vehicle plant in Dearborn, Michigan, on
Tuesday, returning to an industrial state that contributed to his election
victory and is the center of an auto sector that'll likely need some government
help to move away from gas guzzlers.
The Democratic president wants the government to accept the risk of
investing in a series of industries such as electric vehicles and
semiconductors that he believes will become the backbone of the U.S. economy.
It's a sharp philosophical divide from Republican lawmakers who would rather
the federal government focus more on the steel, concrete and asphalt of
conventional infrastructure projects.
"He has an industrial policy -- which we've always had but never admitted,"
said Brett Smith, director of technology at the Center for Automotive Research.
"Our industrial policy had been that low-cost energy wins. He's shifting that
to carbon-free energy is the industrial policy."
Biden said in a speech last week that his proposed new tranche of government
spending is required to keep the U.S. economy competitive and fair on top of
the coronavirus relief that's already flowing. Besides infrastructure, Biden is
asking for another $1.8 trillion -- putting the combined total spending at
roughly $4 trillion -- to devote to education and families.
Biden said his infrastructure plan is "an eight-year investment strategy to
make sure working people of this country get to share in the benefits of a
rising economy and to put us in a position to win the competition with China
and the rest of the world for the 21st century."
The infrastructure package would be paid for by higher corporate taxes.
Leading business groups such as the Business Roundtable and U.S. Chamber of
Commerce have opposed raising the corporate rate from 21% to 28%. But some of
the companies that could benefit directly from the spending appear willing to
make that trade, and that complicates the politics of the moment because there
are clear winners and clear losers, such as the fossil fuel sector.
Biden is openly saying government dollars should seed new opportunities for
businesses. It's an effort to steer where private investors direct their money
and a response to other nations like China that have backed favored industries
such as electrical vehicles and semiconductors that could threaten America's
A White House official said that some businesses briefed on the
infrastructure proposal have also seen it as having the qualities of an
industrial policy in which government works in concert with companies.
One element of Biden's plan that draws companies' attention is the $50
billion proposed for the Commerce Department to monitor U.S. manufacturing
capacity and fund investments to support production of critical goods. The
official, who spoke on the condition of anonymity to reveal internal
discussions, said companies interpret it as a new way of thinking about supply
chains when supplies of computer chips, lumber and other goods are squeezed.
But the risks are that industrial policies can misspend dollars that would
be better directed by the private sector. That can come at the expense of jobs
as the initiatives often go through a political prism instead of an economic
"The problem with industrial policy is that it quickly becomes highly
political," said Thomas Duesterberg, a senior fellow at the conservative Hudson
Institute. "The administration's focus on promoting green technology is
important but will result in a substantial net loss of manufacturing jobs by
reducing production of domestic oil and gas, and in turn chemicals, while
subsidizing wind and solar products whose production is dominated by Chinese
and European manufacturers."
Some businesses insist the types of government investment in Biden's plan
The major hurdle for moving U.S. drivers away from internal combustion
engines is the lack of charging stations. Biden proposes $174 billion for
electric vehicles, including funds to construct 500,000 charging stations by
2030. Their presence would help to overcome drivers' fears of being stranded in
a powerless car, one of the challenges confronting Ford and General Motors as
they seek to go electric.
The Center for Automotive Research's Smith stressed that automakers would
like to command the same premium on their stock that Tesla -- a pioneer of
electric vehicles -- enjoys. But doing so requires the government to shoulder
some of the risk to transition to a new infrastructure for powering vehicles.
"You don't sell the cars without the charging stations at this point," Smith
said. "It makes or breaks the technology."
Presidents have long relied on businesses to push their messages to voters.
Biden's predecessors Donald Trump and Barack Obama touted an Intel chip factory
in Arizona as proof of economic gains, yet the U.S. semiconductor industry
declined relative to the rest of the world. Biden proposes a $50 billion
investment in semiconductor manufacturing and research, one of the publicly
bipartisan pieces of his infrastructure package.
Intel's chief government affairs officer, Jeff Rittener, said the company
supports the investment, though it still wants to know more details about the
potential increases in corporate taxes. He warned that without the government
investment the country would lose out to other global competitors on what has
become a building block of the modern economy.
"Only 12% of worldwide semiconductor manufacturing is done in the U.S.,
whereas if you go back a number of years it used to be greater than 35%," he
said. "We anticipate, and studies have shown, that if nothing is done this
percentage is going to drop further."