General Electric (NYSE: GE) announced today plans to build a manufacturing plant for storage batteries that would be a part of its GE Transportation unit. GE hopes to serve the rail, marine, mining, telecommunications and utility sectors. In some sectors, it hopes its breakthrough technologies would significantly aide in reducing emissions.The new $100 million production facility, scheduled to be fully operational by mid-2011, will be located in upstate New York and will create 350 new manufacturing jobs. GE has chosen this location also for its proximity to its GE Global Research in Niskayuna, where advances to the battery chemistry were developed.
GE says the batteries, in which it has invested more than $150 million to develop, will rely heavily on new materials, new manufacturing technologies and intelligent controls. At full capacity, the plant could produce approximately 10 million cells, or enough energy storage to power 1,000 U.S. homes for a month or enough energy to support 1,000 GE hybrid locomotives.
Indeed, this battery technology according to GE will allow it to be the first manufacturer to introduce a hybrid, heavy-haul freight locomotive that reduces emissions while improving fuel efficiency. In addition, GE said it's transportation unit continues to research and develop emissions-reducing hybrid technology for workboats in order to reduce diesel emissions in harbors and ports.
New York State has partnered with GE in this project (not the first time the two have partnered) by pledging more than $15 million in incentives. But GE aims for even more stimulus money and said it is in the process of filing an application for U.S. Department of Energy stimulus funding for this project. Of course, CEO Jeff Immelt had his own spin: "This type of public-private partnership is essential to rebuild America's manufacturing base, create new jobs and to accelerate the pace at which new technology comes to market."
It may be surprising to hear of this new investment given GE's recent attempts to improve its cash position in light of its financial division losses -- like slashing dividend and cutting its workforce this year. Still, GE may not be spending more money overall, but rather redirecting it from less growth areas to ones with higher potential growth areas such as Healthymagination and Ecomagination.
GE believes the battery business, part of its Ecomagination initiative, could be a $1 billion business over the next decade. While the green-business push generated $17 billion in revenue last year, and while the hybrid locomotive may be indeed the way of the future, GE still needs to face initial difficulites with its automotive batteries as the auto industry continues to struggle.
GE shares are down over 6 percent, or 87 cents, this afternoon to $13.32.
Disclosure: Long GE
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Reader Comments (Page 1 of 1)
5-12-2009 @ 4:31PM
Rollando said...
Knowing GE, as a former employee, they will succeed with this project. They already have committed huge sums of money into it. They would not do this if they were not sure of themselves. As for automotive batteries difficulties, it will only be a matter of time before they find a solution. They do have a dedicated engineering and research teams.