UPDATE 1-Channeling Iron Man, Obama announces Midwest manufacturing hubs

Tue Feb 25, 2014 5:52pm EST

By Jeff Mason

WASHINGTON Feb 25 (Reuters) - Joking that he would blast off in an "Iron Man" suit, President Barack Obama on Tuesday announced that two new manufacturing institutes aimed at creating quality jobs would be located in the Midwest cities of Chicago and Detroit.

Obama, who calls Chicago his home town, is seeking ways to find jobs for middle-class Americans and raise their incomes the U.S. economy continues to recover from a brutal recession. In the absence of a consensus in Congress on how to proceed, he has pledged to act on his own when he can.

Part of that push is an effort to expand manufacturing jobs, many of which were lost in preceding decades as U.S. companies searched for cheaper labor abroad.

Both of the institutes will be led by the Defense Department. They will be supported by $140 million in federal funds and another $140 million from businesses and universities.

The Detroit institute will focus on lightweight and modern metals manufacturing, while the Chicago-based hub will be based around digital manufacturing and design technologies.

At a White House event to highlight the initiative, Obama noted that he was joined by researchers who were inventing some of the most advanced metals on the planet and designers who were working on prototypes in the digital cloud.

"Basically, I'm here to announce that we're building Iron Man. I'm going to blast off in a second," he said to laughter. "This has been a secret project we've been working on for a long time. Not really. Maybe. It's classified."

With a Republican-led House of Representatives focused on cutting federal spending and reducing the size of government, the president has been forced to scale back his plans for the institutes, finding money from savings within existing programs rather than securing a big chunk of new spending for them.

The administration also announced a competition for the next manufacturing institute, this one on advanced composites, as part of its goal to launch four institutes this year.

Obama introduced the manufacturing innovation institute idea in 2013. It is based on a German model and draws on a pilot program in Youngstown, Ohio. The president's goal is for there to be 45 such institutes in all.

"I don't want the next big job-creating discovery to come from Germany or China or Japan. I want it to be made here in America," he said.

"I'm really excited about these four hubs. The only problem is Germany has 60 of them."

He said Germany had been able to take the lead in manufacturing in certain areas because of its investment in such institutes and training for workers. The U.S. manufacturing sector, meanwhile, was adding jobs for the first time since the 1990s.

The Obama administration in January announced the first hub in Raleigh, North Carolina, which is focused on spurring development of energy-efficient, high-power electronic chips.

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