A Central New York factory that makes parts for electric heat pumps says it may cut back its expansion plans after President Donald Trump’s administration canceled a $5 million grant to help pay for the project.
The $25 million expansion at Bitzer Scroll Inc. in DeWitt would add a new assembly line for the company’s high-efficiency compressors and initially create 20 new jobs.
But the Department of Energy said Thursday it is terminating grants totaling nearly $8 billion for 223 clean energy projects in 16 states.
The department provided a list to syracuse.com | The Post-Standard that included Bitzer Scroll among the terminated grants.
Before the list was released, White House budget director Russell Vought touted the pending cuts for clean energy projects – all in states that backed Kamala Harris in last year’s presidential election.
“Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being cancelled,” Vought wrote on X.
John Allcott, vice president of North American operations for Bitzer Scroll, said he didn’t receive notice from the Department of Energy until after he was contacted Thursday by a syracuse.com reporter.
He said the canceled grant is the latest challenge for Bitzer as it tries to expand an American plant set to benefit from rising demand for energy-efficient heat pumps.
“It impacts us significantly,” Allcott said of the lost funding. “It would just be far harder to finance the expansion. We’d probably end up dropping some components of the project, and that hurts all around.”
Bitzer Scroll was already dealing with $10 million in increased costs this year after Trump added import tariffs on Chinese-made motors used in its products, Allcott said.
Those motors cost about $108 each, he said. But now the tariffs have added $118 per unit in extra costs, more than the motor itself.
“The whole thing of Trump bringing jobs back to America is completely running in reverse for us,” Allcott said. “It’s just killing us.”
He said employment at the plant in a former John Deere warehouse has dropped from 152 to 113 people in recent months amid the rising costs and uncertain economic conditions.
“It’s not an easy time right now,” Allcott said. “If I was a board member right now at Bitzer, I might be saying it doesn’t make any sense to manufacture in America.”
Bitzer Scroll has been touted as a shining example of the manufacturing resurgence in the Syracuse area after Carrier Corp. shut down its massive air conditioning plants and other big companies like New Process Gear shuttered factories.
Bitzer SE, the German firm that is Bitzer Scroll’s parent company, decided to open a plant in Syracuse in 2009 precisely because the region had lost so many manufacturing companies, leaving a skilled workforce behind.
Carrier closed two manufacturing plants in DeWitt in 2004, leaving 1,200 people without jobs making air conditioners and related parts. Many of the jobs were outsourced to Asia.
Bitzer, a leading maker of compressors in Europe, opened its plant in an abandoned General Motors factory after a global search for a site to make its scroll compressors.
Bitzer, founded in 1934, employs 4,500 people worldwide in 75 locations, including 21 manufacturing plants.
Before it started manufacturing in DeWitt, Bitzer opened a design center on Collamer Road in 2006. It marked the first time the company had designed compressors outside of Germany.
Three years after opening its manufacturing facility in the former GM Inland Fisher Guide plant in Salina, Bitzer moved to larger quarters a mile away at the former John Deere warehouse in DeWitt.
Bitzer Scroll’s manufacturing plant in DeWitt is shown Friday, Oct. 3, 2025. (Charlie Miller | cmiller@syracuse.com)
The local plant continued to grow as demand for heat pumps surged. A 2022 federal law provided rebates and tax credits to encourage the use of heat pumps in homes and other buildings, lowering their energy costs.
In addition, New York is requiring electric heat pumps or other electric heating systems in every new home built in the state starting next year.
Bitzer’s compressors are a key component of heat pumps used in commercial and industrial buildings and apartment buildings.
But now the company’s plans to expand in Central New York could be in jeopardy because of the terminated grant and increased costs from tariffs.
Bitzer Scroll’s main competitor, Denmark-based Danfoss, opened a new plant in Mexico last year where it benefits from lower labor costs.
Only one other Bitzer Scroll competitor, global manufacturer Copeland, still makes compressors in the United States.
Allcott said he plans to ask the company’s board in Germany if it wants to come up with extra funding to make up for the loss of the federal grant and keep its expansion plans on track.
“I just don’t know if they will have the appetite to invest that kind of money with what they’re seeing right now,” he said, referring to the Trump administration’s policies. “It’s just so counterproductive. You have to think it through because you’re hurting American business.”
Bitzer Scroll’s grant was among almost 50 for clean energy projects in New York canceled by the Trump administration.
The Department of Energy said it made the decision after a review “determined that these projects did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”
Bitzer Scroll and the other grant recipients will have 30 days to appeal the termination decision, the department said.
Sen. Charles Schumer, D-NY, the Senate minority leader, said Trump’s move to cancel the grants is part of an “endless campaign for chaos and revenge” against Democratic-majority states.
He suggested the timing is linked to the shutdown of the federal government that began Oct. 1 after Democrats in Congress refused to pass a funding bill.
Democrats have been pushing to restore Trump’s cuts to Medicaid and to renew tax credits for Affordable Care Act premiums in any new spending plan.
“This goes beyond targeting blue states,” Schumer said in a statement. “It’s taking a wrecking ball to working families’ lives, putting construction workers out of a job and raising families’ electric bills for political gain.”
Trump, in an interview that aired Thursday night on One America News, warned that his administration could cut projects favored by Democrats amid their dispute over the government shutdown.
“I’m allowed to cut things that never should have been approved in the first place and I will probably do that,” Trump said. “We could cut projects that they wanted, favorite projects, and they’d be permanently cut.”
Schumer said the canceled projects represent billions of dollars of private investment and tax revenue that will be lost to local communities.
“Instead of playing politics with the shutdown, President Trump should be working on bipartisan solutions to lower Americans’ costs and create jobs,” Schumer said.
Schumer pushed to create a federal grant program for clean energy projects through the Inflation Reduction Act of 2022.
The grant for Bitzer Scroll’s expansion came from the Department of Energy’s Heat Pump Defense Production Act Program, which is designed to boost U.S. production of energy-efficient heat pumps.
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