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Biden administration announces $15.5 billion for automakers' electric vehicle transition

General Motors
GM's electric Cadillac Lyriq, manufactured at its Spring Hill, Tennessee plant.

The Biden administration on Thursday announced billions in grants and loans to help the auto industry transition to making electric vehicles — while retaining union workers for the new jobs.

The $15.5 billion program will be administered by the Department of Energy.

Car companies that have a long history in auto manufacturing with an existing union workforce, will get preference for some of the money. That could mean the Detroit Three would have an application advantage over car makers in southern states with non-unionized workforces.

President Joe Biden said the funding will help companies avoid painful plant closings and give existing workers the first shot to fill new jobs.

Michigan Congresswoman Debbie Dingell said the President's announcement included $2 billion for the Domestic Manufacturing Conversion Grant Program, which she authored and which was passed into law in the Inflation Reduction Act. Its aim is to retool and reopen auto plants as part of the transition to EVs, with a strong focus on just transition and rehiring workers with high wages.

In a statement, Dingell said, “To keep America a global leader in EVs and manufacturing, we must ensure electric vehicles, their batteries, all their components, and their infrastructure are built here at home. The Domestic Manufacturing Conversion Grant Program is specifically designed to ensure auto communities and those who have built their lives on the auto industry are not left behind."

"Today’s announcement shows that the Biden administration is committed to creating good-paying union jobs here, not China," said Michigan Congressman Dan Kildee in a statement. "For over a century, Michigan has led the way in automotive manufacturing because of its highly-skilled union workers. With these new efforts, Michigan will continue to lead the way and put the world on wheels."

The Alliance for Automotive Innovation, a trade group, said the program will further advance the EV transition, building on the already sizeable investments made by car companies.

In a statement, UAW President Shawn Fain said the EV transition must make sure auto workers have a place in the new economy.

"Today’s announcement from the Department of Energy echoes the UAW’s call for strong labor standards tied to all taxpayer funding that goes to auto and manufacturing companies. We are glad to see the Biden Administration doing its part to reject the false choice between a good job and a green job," Fain said. "This new policy makes clear to employers that the EV transition must include strong union partnerships with the high pay and safety standards that generations of UAW members have fought for and won."

Some of the announced funding will also go to developing the battery manufacturing industry in the U.S. — including sourcing battery materials domestically instead of importing them.

Tracy Samilton covers energy and transportation, including the auto industry and the business response to climate change for Michigan Public. She began her career at Michigan Public as an intern, where she was promptly “bitten by the radio bug,” and never recovered.
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