General Electric Co
The largest U.S. conglomerate plans to seek federal stimulus money to fund construction of the factory, near Albany, New York. Initially the factory will make batteries for GE's forthcoming hybrid railroad locomotive.
We've always viewed the battery space would have to be something that GE is basic in, that we have competitive technology in and that could be a big growth business for us over time, said Jeff Immelt, chief executive of the world's largest maker of jet engines and electricity producing turbines.
We've invested about $150 million so far in this innovation, this technology, Immelt said.
This is the first GE project to seek funding from the Obama administration's two-year, $787 billion economic stimulus program, of which alternative energy is a cornerstone.
Immelt said he hoped GE would seek federal funds for other ventures related to clean energy and healthcare information technology, though he noted that the Fairfield, Connecticut-based company will continue to invest in these areas regardless of government money.
The company's other investments on the battery front include a $55 million stake in A123 Systems Inc, which Detroit automakers General Motors Corp
The move is part of GE's Ecomagination green business push, which it launched in 2005. Last year that venture generated $17 billion of revenue, ranging from sales of products such as electricity-producing wind turbines and high-efficiency jet engines to compact-fluorescent lightbulbs and highly efficient refrigerators.
Immelt said that GE expects to generate $20 billion in Ecomagination revenue this year and hit $25 billion in 2010. He added that he expects battery revenue to hit $500 million by 2015.
The economy clearly gives us headwind, but we still see a fair amount of interest globally for these types of products, Immelt told Reuters in an interview.
A123 is focused on lithium-ion based batteries, while GE's new factory will produce batteries based on a sodium-metal halide technology. GE believes that lithium-ion batteries are better-suited for short bursts of intense power, such as are required to start a vehicle moving, with sodium-metal halide a better option when large amounts of power are needed over a long period of time.
Hybrid locomotives, and the battery technology on board, could be an important part of how we ship goods by rail in the future, said Matthew Rose, CEO of No. 2 U.S. railroad Burlington Northern Santa Fe Corp
GE announced the move at its main research center in Niskayuna, New York, about 160 miles north of New York City. It expects the plant to open by 2011 and employ about 350 people.
(Reporting by Scott Malone; Editing by Brian Moss and Matthew Lewis)