US Energy Deparment To Give Funding of $187 Million For Vehicle Fuel-Efficiency

U.S. Energy Secretary Steven Chu will use a Cummins Inc. (CMI) facility in Columbus, Indiana, as the backdrop to announce the winning projects. All but one are based in Michigan and Indiana, two states that have been the focus of much of the clean-energy spending approved by Congress in last year's economic stimulus package.

The Obama administration is seeking to turn the focus to domestic economic issues after weeks spent on terrorism. The U.S. economy remains stuck in a rut, with an unemployment rate of 10% last month. Job creation is one of the Democrats' biggest challenges as they look toward the November congressional elections.

The U.S. Energy Department plans to announce that almost $54 million will go to Cummins for two projects, both in Indiana. Navistar International Corp. (NAV) is to receive $37.3 million to develop and demonstrate technologies to improve truck and trailer aerodynamics, among other purposes. Daimler AG's (DAI) truck unit will win almost $40 million to develop technologies in areas such as engine downsizing for a project in Oregon. It is the only project based outside of the U.S. Midwest to win a fuel-efficiency grant.

The Obama administration projects that the funding will create more than 500 jobs initially, mainly for researchers, engineers and managers. It forecasts that the projects will create more than 6,000 jobs by 2015, with many to be in manufacturing and assembly. Companies will have to match the Energy Department grants, with the result that a total of $375 million will be invested.