- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

Bailed-out General Motors to Receive Another Wasteful Handout

Posted By Nicolas Loris On June 13, 2012 @ 8:00 am In Energy | Comments Disabled

[1]

The Department of Energy is awarding $54 million for energy projects [2] that should help manufacturing companies be more energy efficient. If your immediate response is, “If these technologies are going to lower a business’s costs, why aren’t they investing their own money?” then you’re asking the right question.

Bailed-out General Motors is receiving $2.7 million to [3] “develop an integrated super-vacuum die casting process using a new magnesium alloy to achieve a 50% energy savings compared to the multi-piece, multi-step, stamping and joining process currently used to manufacture car doors.” If General Motors wants to partner with a national laboratory or a research university to invent a manufacturing process for car doors that achieves dramatic energy savings and reduces costs, that’s wonderful. Go for it. But use your own money.

The Dow Chemical Company, a $9 million grant recipient for a carbon fiber production process that could potentially reduce production costs by 20 percent, had net sales of almost $60 billion and spent $1.6 billion in research and development in 2011 [4]. Dow spent $1.7 billion in R&D in 2010 and $1.5 billion in 2009. This is a company that needs a handout from taxpayers?

PolyPlus Battery Company is also receiving a $9 million handout to develop a manufacturing procedure that would ideally extend the range for electric vehicles. While extended battery life is undoubtedly a challenge for commercial electric vehicles, it’s a challenge for the private sector to undertake on its own. DOE also awarded PolyPlus a grant in 2010 as part of its [5] Advanced Research Projects Agency—Energy (ARPA-E) program that is fraught with its own problems [6].

Here’s one more. Teledyne Scientific & Imaging (another ARPA-E recipient) is a company that focused on research projects from agencies of the federal government or with prime contractors to the federal government but has expanded to provide R&D for other corporations [7]. Teledyne is benefiting from a $2.1 million DOE “investment” that could save the paper and pulp industry 110 trillion Btus of energy per year [3]. That’s about the equivalent of energy necessary to heat 1.1 million homes [8] in a given year. Such enormous potential cost savings should be reason enough for a company to pony up $2 million.

Energy-efficiency spending programs and legislation have largely enjoyed bipartisan support, because resourcefulness and saving money are good things. This is exactly why we don’t need to use taxpayer dollars to make businesses and homeowners more energy efficient. Businesses do not need public investment to improve efficiency and cut costs; they make those investments regularly with their own money. Technological advancements do often improve efficiency, but those investments should not be subsidized by the taxpayer, much less selected by Washington bureaucrats. Businesses and consumers will make these decisions, weighing preferences and considering trade-offs.

$54 million may be chump change compared to the tens of billions in taxpayer dollars already unloaded by the Department of Energy as part of the stimulus and general programs to commercialize technologies. But it represents the larger problem of the government’s continued meddling in areas the market is perfectly capable of handling. Congress needs to step in and eliminate funding for these programs.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/06/13/bailed-out-general-motors-to-receive-another-wasteful-handout/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/GM-headquarters-10-04-071.jpg

[2] is awarding $54 million for energy projects: http://www.doe.gov/articles/energy-department-announces-new-investments-innovative-manufacturing-technologies-0

[3] is receiving $2.7 million to: http://www.eere.energy.gov/pdfs/imi_project_descriptions.pdf

[4] net sales of almost $60 billion and spent $1.6 billion in research and development in 2011: http://www.dow.com/investors/pdfs/161-00769_2011_Annual_Report_Final.pdf

[5] also awarded PolyPlus a grant in 2010 as part of its: http://arpa-e.energy.gov/Portals/0/Documents/FundedProjects/BEEST%20Slicksheets/Polypus%20Final.pdf

[6] that is fraught with its own problems: http://blog.heritage.org/2012/06/04/time-to-return-arpa-e-to-its-original-mission/

[7] has expanded to provide R&D for other corporations: http://www.teledyne-si.com/html/randd.html

[8] heat 1.1 million homes: http://www.nj.gov/emp/facts/pdf/empsolutions.pdf

Copyright © 2011 The Heritage Foundation. All rights reserved.