Background Press Call by Senior Administration Officials on New Action to Ensure the Future of the American Auto Industry
11:49 A.M. EDT
MR. FERNÁNDEZ HERNÁNDEZ: Good morning, everyone.
Thank you for joining today’s press call on new action from the Department of Energy to ensure the future of the auto industry is built here in America.
As a reminder, the call will begin with on-the-record remarks from Secretary of Energy Jennifer Granholm, Acting Secretary of Labor Julie Su, the president’s National Economic Adviser — Adviser Lael Brainard, the president’s National Climate Advisor Ali Zaidi, and Senior Advisor to the President for International Climate Policy John Podesta.
After their remarks, there — we will have a question-and-answer period, which will be on background and attributable to “senior administration officials.”
The contents of this call and the materials you all will receive over email are embargoed until tomorrow, July 11th at 5:00 a.m. Eastern.
With that, let me turn it over to Secretary Granholm.
SECRETARY GRANHOLM: Thanks so much. Hello, everybody. Thanks for joining us today.
President Biden came into office determined that the auto communities in America who built the cars of the 20th century would also build the cars of the 21st century.
And that’s why I am so thrilled to share with you that tomorrow, the Department of Energy is going to announce nearly $2 billion to modernize historical auto manufacturing facilities as they retrofit to produce electric vehicles and components.
This investment, which is funded by the president’s Inflation Reduction Act, is going to expand or reopen or revive 11 at-risk facilities in eight states. It’ll save 15,000 jobs and create nearly 3,000 more. And a majority of these jobs are union jobs.
This announcement is a hallmark of the Biden administration’s industrial strategy, which is a strategy to bring manufacturing and jobs back to America after years of offshoring.
When I was governor of Michigan before and during the Great Recession, it became painfully clear to me that the auto industry needed to embrace the future. But in order to do that, they needed a federal partner, especially to compete with other countries who were subsidizing their auto industries. And that’s what this massive investment is all about.
The nine selectees include major automakers like GM, Fiat-Chrysler Automotive, Volvo, as well as suppliers like American Auto Parts.
And together, these selectees have a collective 575 years of experience in auto manufacturing, which is why they’re ideally positioned to take this industry into the 21st century.
These companies are receiving federal funding to retrofit and upgrade their facilities, including installing new equipment to make their operations cleaner and more efficient. And these projects will enable production of over 1 million electrified light-duty vehicles and 40,000 electrified trucks and buses per year, nearly doubling our country’s annual production of electric vehicles.
As a condition of receiving funding, the nine selectees have made strong commit- — commitments to supporting autoworkers.
And we competitively selected these projects to protect high-skilled, high-quality auto jobs. Every one of these facilities is unionized. And every selectee has committed to funding training to ensure workers have the skills to remain essential in the next industrial revolution.
For so long, we acted as though the best days of American manufacturing were behind us and there was nothing we could do about it. Under President Biden, we are doing something about it. We’re giving 15,000 American workers the chance to keep their jobs. We’re giving the communities who built American cars for generations the chance to build the vehicles of the future. And we’re giving American manufacturing a chance to get off the sidelines and get ahead of the competition.
Thank you so much.
And now I will pass it over to my colleague, Secretary Su.
ACTING SECRETARY SU: Thank you, Secretary Granholm, for your extraordinary leadership and your commitment to centering workers in our nation’s new industrial strategy.
So, I am so proud to join you today to make this announcement about these conversion grants. What this announcement shows is that we can achieve our climate goals and our good jobs goals at the same time. In fact, we must.
President Biden’s Investing in America Agenda is about building our country and investing in industries to make electric vehicles and batteries right here in America, to install electric vehicle charging stations from coast to coast, to weatherize homes. And at the same time, it’s about creating good jobs with the power to change lives.
A good job is a job that comes with good pay and benefits, where workers are treated with dignity and respect, where they know they will come home healthy and safe at the end of the workday, and where they can exercise rights.
As President Biden says all the time, “It’s about being able to look your children in the eye and say, ‘Everything is going to be okay’ and mean it.”
The Department of Labor has been hard at work with our colleagues across the administration to make sure that federal investments are also creating millions of good jobs.
And the Department of Energy’s work on this has been really key.
In President Biden’s America, we’re creating over 2,900 high-quality auto jobs and, as Secretary Granholm just said, saving over 15,000 more jobs through these grants alone.
In President Biden’s America, we’re reprioritizing workers who have been left out, left behind, and let down by failed economic policies of the past.
Together, we’re funding projects where workers have a real voice on the job, where they have training and upward mobility, and where they have access to supportive services like childcare and transportation.
We know that good jobs are not just good for workers, not just good for customers, not just good for families, but also good for employers. Good jobs mean higher retention and lower recruitment costs.
In total, we estimate these projects will generate $3.9 billion in total economic value.
In a pro-worker, pro-union administration, we recognize that union workers have built the middle class, and those same workers are going to power our clean energy future. They’re the ones building electric vehicles, installing those charging stations, and engineering new climate solutions. And they’re the ones who are going to get a fair share of the profits they’re creating.
So, we will not let our transition to clean energy be a — be a zero-sum game where workers get left behind and where local plants close and move overseas.
The Department of Energy has made clear, as this administration has made clear, that grants are not blank checks to corporations. They should uplift entire communities and maintain high-wage jobs.
This is just transition in practice. It’s how everyone will share in the promise and prosperity of a clean energy future.
So, thank you for letting me join you today, and congratulations to all the grantees.
I will now turn it over to the president’s economic adviser and director of our National Economic Council, Lael Brainard.
MS. BRAINARD: Well, thank you, Acting Secretary Su. And thanks to everyone for joining us.
This announcement marks another important chapter for the U.S. auto industry, ensuring that the workers and communities that have powered the iconic American industry for the past century will continue to lead it for the next century.
This investment delivers on the president’s commitment to enable our auto companies to retool, reboot, and rehire in the same factories and communities, and enable the manufacturing communities and workers that were left behind under the previous administration to make a comeback.
The president believes the American auto industry is a vital engine of the U.S. economy, creating pathways to good middle-class jobs and making up the largest share of American manufacturing output.
This investment is a key element of the president’s strategy to position the American auto industry and American autoworkers to win the future.
The president has delivered a historic recovery for the auto industry, creating 275,000 auto jobs and celebrating 20 new auto facilities, while 90,000 auto jobs were lost and zero new auto plants were announced during the previous administration.
Already, we’ve seen nearly $180 billion in announced private-sector investments in electric vehicle and battery supply chains on the strength of the president’s auto industry policy.
The president has combined tax credits and funding to support investments along the entire auto supply chain and rebates to enable consumers to own the car of their choice along with hubs to ensure we have the best auto workforce in the world and protection against unfair and nonsecure practices, including a 100 percent tariff on imported Chinese vehicles and data security oversight of these connected cars.
The president has been personally engaged to make sure good auto jobs remain here in America, inviting a worker from Blue Bird to the White House to discuss the organizing campaign that has led to a successful first contract, traveling to Michigan to stand with UAW members, and celebrating successful organizing drives from Chattanooga, Tennessee, to Fort Valley, Georgia.
The president will not take his foot off the pedal when it comes to supporting the U.S. auto industry.
And, with that, I’m going to turn it over to National Climate Advisor Ali Zaidi.
MR. ZAIDI: Thank you, Lael. Thanks, everybody, for joining.
When President Biden came into office, he laid out how tackling the climate change meant creating good union jobs and advancing environmental justice in communities so often left out and left behind.
Over the last three and half years, you’ve seen the president deliver on that vision, translating policy choices on things like vehicle emissions standards and investments in cleaner transit, championing our workers all into wins both for climate and for our economy and our workforce.
And at every step of the way, you’ve seen folks count out this comeback. You’ve seen folks say that we could not bring back batteries that were invest — invented in the United States, in our labs, and by our scientists back to the United States to be manufactured here.
And yet, thanks to the president’s investment agenda, we have 15 gigafactories and counting to build those batteries here in the United States of America.
Folks said we couldn’t compete on the upstream of the electric vehicle revolution — areas like lithium production and processing and recycling.
And yet, today, across the country, we are seeing new facilities be opened up — from the beginning of the supply chain all the way through circular economy to the recycling — being built, manufactured by workers here in the United States of America.
Folks looked at the United States lagging on private investment in the electric vehicle revolution that’s taking place around the world, lagging countries like China. And now, thanks to the President’s leadership and despite all the skeptics who said it could not be done, the U.S. is leading — the number-one nation destination for clean energy manufacturing capacity, attracting that private capital, becoming a magnet for that investment to come here to the United States.
Transportation, as you all know, accounts as — accounts for the single-largest source of pollution in terms of greenhouse gases in our economy in the United States. But thanks to the president’s leadership, we are on track to tackle that source of emissions and do it in a way that creates good-paying jobs across the economy.
In doing that, not only are we delivering new sources of clean transit — that iconic yellow school bus going green –but we’re also delivering to the American people options to save money on mobility from point A to point B — thousands of dollars of fuel and maintenance costs saved over the life- — lifetime of a vehicle.
It’s never been a good bet to bet against American workers, American innovation, American ingenuity. And the U.S. auto industry is proving that: proving that when you have a president who looks at the challenge of climate change and sees jobs, a president who invests in America, we have what it takes to win the future.
With that, let me turn it over to my colleague, John Podesta.
MR. PODESTA: Thanks. And thank you, everyone, for joining. I’ll be brief.
I do want to commend Secretary Granholm and her team at the Department of Energy for their diligent work in getting these important awards out the door.
And I want to commend Secretary Su for her leadership in making sure that clean energy jobs are good-paying, union jobs.
As my colleagues have noted, this is what “Investing in America” agenda is all about: investing in communities all across America who’ve been left out and left behind by targeting facilities from Marysville, Michigan, to Toledo, Ohio; Belvidere, Illinois, that were shuttered or at risk of closing.
American can and will win the competition of the 21st century by retooling those facilities to support clean car production and lead the global auto industry, creating nearly 3,000 good-paying, union jobs and retaining 15,000 more.
President Biden sees the climate crisis as an imperative, but also an opportunity. And it’s because we can and must build the clean energy economy that benefits everyone — one that brings new industries to life, creates the high-performance clean vehicles of the future, leaves workers better off than they were before, improves public health, and takes care of our planet.
Today’s awards are bringing that vision ever closer to reality.
Thank you. And that — with that, I’ll turn it over to Angelo to take your questions.
MR. FERNÁNDEZ HERNÁNDEZ: Thanks, John. And thanks, everyone.
We will now move on to the question-and-answer portion of the call. As a reminder, this will be on background and attributable to “senior administration officials.” As some of you are already doing, please use the “Raise Hand” function on Zoom. And we will get started in a second.
Great, we will get started with Maxine. You should be unmuted now.
Q Hey. This is Maxine Joselow with The Washington Post. Thanks so much for doing this call.
I just wanted to request if you could send us all a list of the 11 manufacturing plants that are actually getting this funding. I noticed on the materials that you sent out via email those — that list wasn’t included and was just hoping that you could get that to all of us. Thanks.
MR. FERNÁNDEZ HERNÁNDEZ: Yep, we will have that to you all today.
Okay, our next question will come from Rachel. You should be unmuted now.
Q Hey. Thank you for taking my question. I was just wondering if you could speak a little bit more, I guess, to the need for this. Like, would these facilities have otherwise shut down? And, if not, like, why are they getting these funds? Thanks.
SENIOR ADMINISTRATION OFFICIAL: Hi, Rachel.
So, yes. I’m going to go ahead and shift over to [senior administrator official] to answer this question.
SENIOR ADMINISTRATION OFFICIAL: Thanks, Rachel. [Senior administrator official] here.
We are looking for facilities that are at risk of closure in this program. And so, the goal of this program is to support facilities that have an opportunity for conversion, have been long-standing operating facilities in historic automotive communities. And we prioritize the new selection facilities that were — were either temporarily shuttered or were at risk of shuttering.
And so, as you’ll see in our — our jobs numbers, we are both retaining jobs that would have otherwise been lost as well as adding new jobs associated with the production of new vehicle types and new components.
MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We will go to David next. You should be unmuted now.
Q Thanks for having this call, everyone.
Following up on Maxine’s question about the list. Maybe I could see it on the list later, but I wanted to see if you can give any color or narrative around some of the plants that have been chosen — since we’re not going to have access to you when we see those that list — about what kind of plants we’re going to see and also whether any of these are actually closed now and are going to reopen or whether they’re all factories that are currently operating.
SENIOR ADMINISTRATION OFFICIAL: I’m happy to jump in again.
So, we indeed do have some facilities that — that are closed and are going to be reopening through this program and re-ramping back up in terms of production.
And in terms of the (inaudible) facilities, you’re going to see vehicle components manufacturing as well as full-vehicle assembly. And that is across different vehicle types: light-duty passenger vehicles, trucks, buses, and even, you know, (inaudible) in the two-wheeler space. So, you know, a broad range of — of vehicle types and including some facilities that are going to be coming back online through this program.
Thank you.
MR. FERNÁNDEZ HERNÁNDEZ: Thank you.
We will go to Grant next. You should be unmuted now.
Q Great. Thanks for doing this call. Grant Schwab here with the Detroit News. Just wanted to ask: What kind of application process was there for these grants, and how many applicants did you guys get?
SENIOR ADMINISTRATION OFFICIAL: Hi. Yes. So, we — you know, all of the DOE awards go through a rigorous merit review process. This included a concept paper initial submission, followed by full applications. I will say that the program was heavily oversubscribed. You know, our concept paper phase was more — more than a four-to-one ratio of what the ultimate funds were — were ultimately allocated.
We can’t speak to the specific companies that applied, but we had a wide range of applications, which, you know, is also reflected in the ultimate selections that span, as [senior administration official] mentioned, the — the supply chain and ultimate assembly.
SENIOR ADMINISTRATION OFFICIAL: And to underscore — so, you know, very competitive merit review process as we go through with all of our grants at the Department. This program had a particular focus on labor.
So, we really dug in and tried to understand how facilities were planning to not only just, you know, convert the design of their manufacturing facilities to produce new products but how they were going to bring that workforce along with them and actually, you know, retrain, reskill, and ensure that, you know, the support was provided to workforce to be able to — to kind of come in to the site and attain a high-paying job through the course of this ramp-up and ultimately post-conversion.
MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We’ll go to Ben next. You should be unmuted now.
Q Hi. Thanks. So, one thing I’m wondering is: Will 100 percent of the output of these facilities — whether they’re automakers or elsewhere in the supply chain, will 100 percent of the output of facilities receiving funding need to be for electric vehicles specifically?
SENIOR ADMINISTRATION OFFICIAL: So, we take electric vehicles as a very broad term. So, EVs — so, the output from these facilities, some of that is relevant for fuel cell vehicles, hybrid vehicles, as well as fully battery electric vehicles. So, a broad range of new high-growth vehicle (inaudible) will be supported.
MR. FERNÁNDEZ HERNÁNDEZ: And we have about time for two more questions. We will go to Matthew next. You should be unmuted now.
Q In the press release, you mentioned this is not a commitment by DOE to actually award this money. So, what timeframe are we talking about actually getting this money out the door? And if you could just go again a little bit more into your criteria for how these companies were selected, since you have not given us a list of who’s — who’s won the money.
SENIOR ADMINISTRATION OFFICIAL: So, as we move forward in our standard process, our first step is to make our selections. That means that we are going to move into negotiations with each of the companies, and we are going to work through actually creating budget periods and milestones for each of the companies that will unlock tranches of this funding.
So, you know, we’re not handing out all of the funding at once but actually working with the company to align the funding to their construction plan and, you know, be able to have that clear — clear milestones that need to be met for the next tranche of funding to be unlocked. And that activity — negotiation activity usually takes a few months, and we will initiate it tomorrow, right after we make those selection announcements.
As to the second question on the criteria, our criteria are, you know, as mentioned, the commercial viability and the strength of the plan. First and foremost, the labor and, you know, the strength of the plan that the company had around actually retaining and re- — for maintaining the staff to work in these facilities and as well as adding new jobs.
And then, you know, we also look at the technical merit of the solution that they’re going to be producing and pulling forward. That is, of course, in the — all in the context of having a strong community benefits plan, even, you know, outside of labor and making sure that these projects are structured in a way that gives them a license to operate for the long run and that they continue to be part of our history of American automotive manufacturing.
MR. FERNÁNDEZ HERNÁNDEZ: Thank you. And our final question will come from David. You should be unmuted now.
Q Hey, thanks for this. Thanks. I may have missed this part. But so, are we going to get the full list? When will we get the full list of the projects? Is that tomorrow? Is it a date down the road?
MR. FERNÁNDEZ HERNÁNDEZ: We’ll have that list for you a little — a little later today.
Q Okay, thanks.
And can you — just in terms of what the companies have to commit to — right? — as part of getting these awards — you know, what are the clawback provisions? Do they have to commit to specific job totals, commit to keeping the plants open for a specified period?
And even on the case of some of these awards, you know, this is for projects that might not start for a couple of years. Is the government basically holding the money back until those — those projects begin?
SENIOR ADMINISTRATION OFFICIAL: Go — go ahead. Sorry.
SENIOR ADMINISTRATION OFFICIAL: Yeah, absolutely. So, the companies are committing to a production schedule in terms of ramping up manufacturing capacities and new products. For facilities that are shuttered and reopening, that involves, you know, reactivating these facilities. And so, as part of that, we have, you know, our usual milestones around new equipment delivery, groundbreaking and construction that’s happening.
There’s also a training and reskilling schedule around workforce, as well as, you know, ultimate targets around number of jobs retained and number of jobs added.
So, you know, the companies that made commitments over the course of the application process, we are going to layer those commitments into time now in our negotiation window. And as the company meets those milestones — which extend to production milestones as well as workforce milestones and community benefits milestones — they will unlock, you know, the next measured amount of capital. We typically — it depends on each project. Each project is (inaudible).
But we — we have a series of budget periods, and we define those with the company upfront before we finalize the award. And then the company will kind of move forward into that process, so there won’t be any kind of, you know, holding back that the company is not expecting. Rather, we — we align on that schedule upfront and then hope to expeditiously move forward.
MR. FERNÁNDEZ HERNÁNDEZ: Thank you so much. And that’s all the time we have today.
As a reminder, the contents of this call and the materials you will receive over email are embargoed until 5:00 a.m. Eastern tomorrow.
Thanks for joining us.
12:16 P.M. EDT
