Economic Stimulus Funds Go to Work

On February 16, President Barack Obama signed into law The American Recovery and Reinvestment Act, more familiarly known as the Obama stimulus package. The new law intends to pump some $790 billion into the US economy as it suffers one of its worst downturns since the Great Depression.

The plan boosts spending in a variety of industries including construction, energy, education, and health care. Hoover’s Editors take a look at a few of the companies that stand to benefit from the funds.

1. General Electric

Led by CEO Jeff Immelt, who serves on Obama’s Economic Recovery Advisory Board, GE expects to pick up stimulus-derived work in electrical-grid construction, energy improvements in government buildings, and other infrastructure projects. In a recent letter to stockholders, Immelt wrote that he envisions the government as being a “key partner” in the company’s growth.

2. Austin Industries

After laying off workers and cutting back on operations, Austin Industries highway-construction subsidiary Austin Bridge & Road is among the many road builders paving the way for more contracts as a result of stimulus funds. Austin Bridge & Road president Jim Andoga fears, however, that many firms desperate for work will set their bids too low.

3. CRH

Irish band U2 celebrated the contributions of Irish immigrants in the US with The Hands That Built America. Irish construction-materials firm CRH might be taking some inspiration from the song as it expands its US operations now that the Obama plan will be driving money into road building.

4. Satcon Technology

Satcon, which makes power components for use in solar energy systems and fuel cells, expects profitability by mid-2009 thanks to stimulus funds for renewable energy.

5. Vestas Wind Systems

Obama signed the stimulus plan into law in Colorado, so it’s fitting that Danish wind-turbine maker Vestas Wind Systems will expand its operations in the Centennial State to take advantage of potential growth in the renewable-energy industry. By 2010 the company will pump $680 million into its Colorado facilities.

6. Solyndra

Solar panel manufacturer Solyndra is expecting a more direct benefit from the stimulus plan. The stimulus package is guaranteeing a $535 million federal loan that covers 73% of costs for the construction of a new manufacturing plant. Once the plant is finished, it will employ about 500 workers.

7. Centex Corporation

An $8,000 tax credit for first-time homebuyers is among the provisions of the plan designed to increase residential construction. Home-builder Centex is offering further incentives, such as a 1 percent interest rate reduction, to enhance the value of the tax credit. Centex claims that with the tax credit and the company’s incentives, a home buyer can save $40,000 in interest on a $200,000 home.

8. BBL Construction Services

BBL Construction subsidiary BBL Carlton is completing a $22 million apartment and parking construction project in Charleston, West Virginia. The project is being funded by tax-exempt bonds created by the Obama stimulus package.

9. EMCOR Group

Like GE, EMCOR, a specialty electrical and mechanical construction firm, stands to benefit from stimulus package measures that promise up to $6 billion for improving the energy efficiency of federal buildings. EMCOR already has a significant background in providing facilities services for government buildings in Washington, DC.

10. Martin Marietta Materials

This construction materials manufacturer’s CEO, Stephen Zelnak, expects his company’s earnings to go up by 50 cents per share this year as a result of the stimulus plan. With construction of highways, airports, and other infrastructure projects rising, MMM is hoping for an uptick in orders for materials.