US President Barack Obama has announced a £23m aid package for a joint venture with a West Midlands van firm.
Coventry-based electric vehicle maker Modec is setting up an operation with US truck giant Navistar International Corporation which will see vehicles designed by the 80-strong firm roll off US production lines to supply the huge North, Central and South American markets.
Modec is predicting fast jobs growth as a result and aims to boost its current 80 staff members to 120.
The venture uses £23 million from the US government awarded as part of the £1.4 billion grants package announced by President Obama to accelerate the manufacture of electric vehicles and batteries in the country.
But the announcement has raised questions over how overseas governments are showing themselves more active than the UK in supporting the development of a low-carbon commercial vehicle market.
Modec chief executive Bill Gillespie said Navistar’s decision to partner with Modec reflected its world-leading technology and would result in a jobs boost both at the firm and in its supply network in the region.
Modec’s suppliers include Midland engineering companies such as ABT which provides the firm with chassis and Zytec, based in Lichfield, which supplies it with drivetrains.
Mr Gillespie said: “It’s a huge endorsement of the technology that we have in vehicles that one of the biggest truck manufacturing companies in the world comes to a UK company employing 80 people for that technology.”
The firm has reached an agreement with Navistar to initially supply 400 completed vehicles to the US, after which it will make the transition to providing just components when the US firm takes over the manufacturing by 2011.
Despite production eventually migrating to the US, the deal spells a lasting boost to the UK firms who supply Modec with its proprietary components and who will continue to supply the US production line.
Mr Gillespie acknowledged there was a certain irony in the fact that action taken by an overseas government to stimulate its own low-carbon manufacturing sector had helped boost the West Midland firm. He said although the UK government had announced programmes to stimulate the low carbon electric commercial vehicle market, such as the Low Carbon Vehicle Procurement Programme, it had been slow off the mark in delivering other incentives.
“There have been a lot of announcements that incentives will become available but the cash hasn’t been forthcoming with the speed that it has overseas,” he aid.
A Department for Business Innovation and Skills spokeswoman said: “We have created a low carbon economic area for automotive in the North East, which will benefit the industry across the UK with focussed skills development and R&D.”