Obama to announce $500M manufacturing investment initiative

President Obama on Friday will announce the launch of the Advanced Manufacturing Partnership (AMP), an initiative that would provide more than $500 million to encourage investments in promising technologies.

It is the administration’s second initiative in less than a month intended to boost U.S. manufacturing. 

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In a speech at Carnegie Mellon University in Pittsburgh, the president will outline a plan whereby the federal government, industry and universities can work together to better determine needed areas of investment. 

“Today, I’m calling for all of us to come together — private-sector industry, universities and the government — to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world,” Obama will say, according to prepared remarks.

“With these key investments, we can ensure that the United States remains a nation that ‘invents it here and manufactures it here’ and creates high-quality, good-paying jobs for American workers,” the president will say. 

The plan would “work together as part of an overall manufacturing agenda,” a senior administration official said. 

“We have a long history in partnering with industry, and we’ll use AMP to make breakthroughs for next decade and the decades ahead,” an official said during a conference call with reporters on Thursday. 

“If we can lead in these kinds of technologies, we can revitalize manufacturing and make America the destination of choice for people who want to make things,” the official said. 

Senior administration officials pushed back against suggestions that the federal government was picking winners, arguing that the development of the manufacturing agenda is a promotion of “innovation policy,” not so-called industrial policy. They insisted that the private sector will choose the best direction for federal spending.

“The government isn’t doing this by its lonesome,” one official said. “We’ll leave it to the private sector to determine the winners and give them tools to work with.”

The official argued that some public support is needed in the early stages of basic research, calling it a “public responsibility.”

The plan calls for extracting funding from existing programs, and would likely require some increases in funding for organizations such as the National Science Foundation (NSF), which has a framework in place for delivering funding to universities that would likely be used, an official said. 

Starting this summer, the departments of Defense, Homeland Security, Energy, Agriculture, Commerce and other agencies will coordinate, with the aim of gathering $300 million to invest with industry.

Initial investments would include small high-powered batteries, advanced composites, metal fabrication, bio-manufacturing and alternative energy, the officials said. 

The Energy Department will be tasked to come up with $120 million aimed at technologies that would lead to more energy-efficient manufacturing processes.

The NSF, NASA, National Institutes of Health (NIH) and Department of Agriculture will combine to provide $70 million to support research in robotics, which would help factory workers, healthcare providers, soldiers, surgeons and astronauts, according to officials.

Another $100 million will be set aside for a materials genome initiative, with the aim of helping U.S. companies double their speeds and reduce the costs of discovery, development, manufacturing and deployment, officials said. 

The overall effort by the White House comes amid troubling signs for the economy that represent a growing problem for Obama ahead of his 2012 reelection bid. 

The labor market continues to lag behind its projected pace of job creation, with the unemployment rate rising to 9.1 percent last month behind the addition of only 54,000 jobs in May, suggesting a slowing economy. 

Manufacturers also are increasingly nervous about their ability to fill job openings becoming available as skilled workers retire, as the current workforce isn’t prepared with the skills necessary to take their place. 

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Manufacturing growth has lost steam during the economic recovery, recently hitting its slowest pace in nearly two years, according to the latest figures. The sector, which fueled the nation’s growth, has been dragged down by a spike in energy prices through the first several months of the year. 

In early June, the Obama administration outlined the expansion of a industry-led worker-training program — Skills for America’s Future — intended to improve partnerships with community colleges and create easier-to-understand, uniform job-training requirement standards for prospective manufacturing employees. 

Friday’s announcement also includes coordination with the Commerce Department’s development of a $12 million advanced manufacturing technology consortium that would help identify public-private partnerships to remove barriers to the development of new products.

In addition, the Defense Department is investing $24 million this year to develop and improve transparent armor, stealth technology and targeting systems. The Pentagon is developing an online marketplace to increase domestic manufacturing capacity in industries related to national security.

AMP is being developed based on the recommendation of the President’s Council of Advisers on Science and Technology, calling for a partnership between the groups involved to identify the most pressing challenges and opportunities.

The universities involved are the Massachusetts Institute of Technology, Carnegie Mellon University, Georgia Institute of Technology, Stanford University, University of California-Berkeley and University of Michigan. The manufacturers will be Allegheny Technologies, Caterpillar, Corning, Dow Chemical, Ford, Honeywell, Intel, Johnson and Johnson, Northrop Grumman, Procter and Gamble and Stryker.