Stimulus Creating Jobs -- In China

February 11, 2010, 10:00 a.m.

Turns Out Wind Power is China Power
(brought to you by FromDC2Iowa.blogspot.com*)
As if we don't already have enough evidence of what's wrong with masquerading corporate subsidies and bailouts as "jobs programs," see Nicholas Johnson, "Unemployment Answer is Jobs Not Bailouts," February 6, 2010, it now turns out that the "green" stimulus money for the jobs Obama promised American workers went to GE instead, and such wind power turbine manufacturing jobs as were created are located in China and other countries, not the U.S.

"Obama has consistently made the creation of green jobs a priority for his administration. At a gathering of the AFL-CIO on Sept. 15 [2009], he pledged to create a 'clean energy economy that will free America from the grip of foreign oil and create millions of new green jobs that can't be outsourced.' The president pledged to make ‘made in America’ not just a slogan but 'a reality.'” Russ Choma, "Overseas firms collecting most green energy money," American University Investigative Reporting Workshop, October 29, 2009.

It now turns out that, "[U]nless American manufacturers can quickly scale up production lines to build the equipment, parts, and systems to meet the heightened demand the United States will cede to overseas competitors a once-in-a generation opportunity to create millions of new jobs. The U.S. currently imports more than 70 percent of the component parts for these systems. If the international market in clean energy were a pizza, we would be left with the crust. About half of the installed wind energy capacity in the U.S. is imported . . .." Seph Petta, "Lessons From Europe on Clean Energy Manufacturing Policy That Works," Apollo News Service, May 19, 2009.

The American University report, linked above, indicates that 88% of the stimulus money going to wind companies is going to foreign firms, citing the Department of Energy.

The Capitol Steps have put our imminent demise to music in "Buy, Buy American Pie":



Now here is more on the subject in the form of excerpts from Russ Choma, "Overseas firms collecting most green energy money," American University Investigative Reporting Workshop, October 29, 2009:

Obama has consistently made the creation of green jobs a priority for his administration.

At a gathering of the AFL-CIO on Sept. 15, he pledged to create a “clean energy economy that will free America from the grip of foreign oil and create millions of new green jobs that can't be outsourced.” The president pledged to make ‘made in America’ not just a slogan but “a reality.” (Transcript.)

Obama is well aware of America’s role as an energy innovator slipping while foreign competitors have taken the lead. At a campaign event in Portsmouth, N.H. in October 2007, the president noted that technologies invented in America – like wind turbines, solar panels, and compact fluorescent bulbs – are being developed overseas and sold back to American consumers.

“This will change when I am president,” he said. . . .

The most important figure, however, may be the number of turbines that were installed by these four companies. According to Iberdrola Renewables, the company only employs 800 people in all of their U.S. operations. It’s the production of turbines that matters most economically. In fact, as much as 70 percent of the economic activity generated by investing in wind comes from the manufacture of the modern, highly sophisticated turbines – but this is where foreign companies actually have their strongest grip on the market.

In the case of these 11 wind farms, according to data provided by the companies themselves in regulatory filings and collected by the American Wind Energy Association, 982 turbines were installed – 695 of them were manufactured by a foreign company.

A study by the Renewable Energy Policy Project , a think-tank that advocates renewable energy technology research, estimates that for every 1,000 megawatts of wind energy that is developed, 4,300 jobs are created: 600 for operation and maintenance of the wind farms; 700 for the installation of new turbines; and 3,000 for manufacturing.

The cash grants were given for the installation of 1,763 megawatts of capacity – 1,566 installed by foreign companies. Using the Renewable Energy Policy Project’s own numbers, as many as 4,500 manufacturing jobs may have been created overseas. . . .

The manufacturing market is thoroughly dominated by foreign companies . . . more recently Asian manufacturers . . .. The U.S. market for wind turbines and components is growing rapidly, but the import/export numbers offer a grim picture of who is winning the battle.

According to U.S. Customs data for 2008 and the U.S. Trade Commission, the U.S. imported $2.5 billion worth of wind turbines last year -– up from $365 million in 2003. . . .

But the American market is narrow – GE Energy accounted for 42.7 percent alone . . .."

. . .

The cash grants that were handed out in September theoretically will trickle down to American workers when the market demands locally built turbines -– but that’s not guaranteed to happen.

“There is a larger concern that turbines might be coming from China,” said Xizhou Zhou, an analyst at IHS CERA, a global energy advisory firm, pointing to other industries where cheaper costs have allowed Chinese manufactured goods to replace American-made products.

Although Vestas Americas said it plans to establish an American supply chain, other manufacturers, even American-owned ones, have begun building supply chains in countries with cheaper labor costs to provide the thousands of parts that may finally be assembled in the United States. Zhou cited three facilities GE owns in China to produce turbine components, . . .

And see Jim Tankersley, "Wind energy job growth isn't blowing anyone away; Despite record growth in generating capacity, the industry is creating few employment opportunities overall," Los Angeles Times, February 2, 2010.

February 12 addition: "No matter what Congress does to lower the cost of labor, employers won’t hire unless they believe demand will be sufficient to sell whatever the business produces." Editorial, "How Not to Write a Jobs Bill," New York Times, February 12, 2010, p. A30. The New York Times got that much right. Only by putting money in the pockets of workers -- not their potential employers -- can "demand" be created in that 70% of our economy that is driven by consumers. Unfortunately, the editorial does not take the next logical step and propose a federal jobs program.
_______________

* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself.
-- Nicholas Johnson
# # #