How New Fuel Economy Standards Are Creating New Jobs

A fundamental part of President Obama’s strategy to energize our economy is making smart investments in research and technology to create jobs for American workers. Today, the President will be visiting the Johnson Controls advanced battery manufacturing plant in Holland, MI to highlight the key role that innovative technologies will play in the future of the U.S. auto manufacturing industry, helping automakers achieve historic fuel efficiency standards, spurring economic growth, and creating high-quality domestic jobs in cutting edge industries across America.

Today’s trip builds on the President’s recent announcement of historic fuel-efficiency standards for cars and light trucks which will bring fuel efficiency to 54.5 miles per gallon by 2025 and which, combined with steps already taken by this administration, will save American families $1.7 trillion at the pump and reduce oil consumption by 12 billion barrels by 2025.  It also builds on this week’s announcement of first-of-their-kind fuel-efficiency standards for work trucks, buses and other heavy-duty vehicles, which will save American businesses who operate and own these commercial vehicles approximately $50 billion in fuel costs over the life of the program. These new standards will also protect public health by cutting air pollutants such as air toxics, smog, and soot.  New cars and light duty trucks built with the recently announced standards for Model Year 2017 through Model Year 2025 will reduce carbon dioxide pollution by over 6 billion metric tons – equivalent to the emissions from the United States last year, or what the Amazon rainforest absorbs in three years.

Because the Administration was able to create a single, national program that runs through 2025, companies like Johnson Controls have the certainty they need that investments in new, game-changing technologies will pay off, enabling them to create good-paying jobs across the United States – a fact that was highlighted in a report released this week by the United Auto Workers, the Natural Resources Defense Council, and the National Wildlife Federation. The report lists the top 15 states employing the highest number of autoworkers in clean, efficient technologies:  Michigan, Ohio, Indiana, North Carolina, Kentucky, Pennsylvania, Texas, Alabama, California, South Carolina, Tennessee, New York, Illinois, Virginia, and Arizona.

And, these standards include some specific incentives to encourage early adoption of advanced technologies that represent game changing performance improvements – including electric vehicles and “off cycle” technologies like start-stop technology, where the engine actually shuts off when the driver stops at a red light to avoid wasting fuel while idling. The start-stop functionality relies on batteries like the ones Johnson Controls is manufacturing now in Holland, and will soon be manufacturing at another one of their existing battery plants outside of Toledo, Ohio which is being retrofitted to handle increased demand. Johnson Controls estimates the conversion will create 50 jobs. 

This builds on efforts since the start of the Administration to advance innovative battery technology that’s manufactured at home.  Back in 2009, the President announced $2.4 billion in Recovery Act grants towards the development of batteries and advanced vehicle technology. Those investments are already paying off for the American people. Johnson Controls received a $300 million grant to build domestic manufacturing capacity for advanced batteries for hybrid and electric vehicles, which enabled them to open their first domestic lithium-ion plant in Holland, Michigan and hire about 150 people to work on the project. 

And as facilities like Johnson Controls’ Holland plant continue to grow, we’ll see a ripple effect of economic activity in other cities and states through their vast network of suppliers. The U.S. automotive industry directly employs 700,000 people engaged in manufacturing vehicles and vehicle parts. This represents the single largest manufacturing industry in the United States. And since July of 2009, the automotive sector has added approximately 113,000 jobs, its strongest period of job growth since the late 1990s, much of this growth coming from manufacturers of vehicle parts.

And we’re seeing our share of this market grow.  Just a few years ago, the U.S. had only two factories manufacturing these advanced vehicle batteries and we produced only 2 percent of the world’s advanced batteries. But over the next few years, in part because of the critical investments we’ve made, our nation will have the ability to produce enough advanced batteries to support 500,000 plug-in and hybrid vehicles per year. All told, we’ll produce 40 percent of the world’s advanced batteries – which will go a long way towards creating more jobs and boosting the domestic auto industry.