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Detroit investing in new auto technology
Detroit investing
in new auto technology
Detroit aims to become world’s electric car supply
capital
Since
1903 when Henry Ford set up Ford Motor Company in Detroit, the City has been at
the forefront of all things auto. The recent recession has only served to
underline the importance the City has in the minds of Americans and their
government. Huge Federal and local government support has been given to keep
the companies in business and kick start a new generation of greener vehicle
production. The total amount of Federal support to the “Big three” auto makers
is estimated to be 130 Billion USD! (1) More than many countries total budgets!
Detroit
as the capital of car making in America stands to receive more Governement
funds than any other state (2). For example, Michigan got $1.4 billion in
federal stimulus grants in August 09 alone for advanced battery and
electric-vehicle work. Auto supplier Magna International of America, a
Troy, Michigan company, won $40 million from the Department of Energy to expand
two electric-drive-system manufacturing sites.
The
clear message that government is backing new automotive technology in Detroit,
is attracting the attention of foreign firms too. Such as Compact Power Inc.
(CPI), a subsidiary of Korean lithium-ion batterymaker LG Chem, which won
$151.4 million to produce lithium-ion polymer battery cells for General Motors’
upcoming electric car, the Chevy Volt.
Michigan
state government is determined not to be left behind the Chinese and others in
the race to substitute the internal combustion engine with low emission
technology.
Having
spent more than $700 million in tax incentives since 2006 to attract, retain,
and grow battery companies, the state is aiming to become the “advanced battery
capital of the world.” There’s wide agreement here on the consequences.
“We’re
faced with either finding new markets for those companies or losing them,” says
Greg Main of the Michigan Economic Development Corp (3). “We can’t be a
one-horse town any longer,” said Michael Robinet of auto forecaster CSM
Worldwide in Northville, Mich.
Whilst
there is considerable competition worldwide in producing electric cars,
Michigan does retain one advantage: a skilled workforce that knows a thing or
two about mass-producing cars and car parts. “Those folks are some of the best
workers the world has ever seen, and they deserve to have jobs,” says Keith
Cooley, CEO of NextEnergy (4), a Detroit-based nonprofit research facility and
business incubator for alternative-energy companies.
A
six-minute drive from Ford Motor’s original plant sits NextEnergy’s
45,000-square-foot headquarters and research labs. The non profit company is a
key player in Michigan’s efforts to reinvent the auto industry and, by
extension, itself.
NextEnergy
is working with nearby Wayne State University as well as Macomb Community
College to train workers for advanced electric-drive work via a $5 million
Department of Energy grant awarded in August. The organization has also helped
state officials vet alternative-energy companies that want to do business in
Michigan, such as A123 Systems Inc., which won $249 million in stimulus money
to make battery packs for hybrid and electric vehicles at two Michigan
locations. In September, the Watertown, Mass., company went public and saw its
stock soar 50 percent on its first trading day.
FPS
Comment
It’s
all too easy to focus on current problems and miss the bigger picture. Cities
rise, fall and reinvent themselves. So too Detroit. The days of the big gas
guzzler are gone, yet demand for transport grows. Detroit is better positioned
than nearly anywhere else to go forward with the new technologies as it has a
large skilled labour force, plenty of industrial capacity and local government
that is keenly aware of the need for change.
Whether
you think government subsidy is good or bad isn’t the point. It’s a reality and
the huge influx of funds will percolate throughout the greater Detroit area,
with consequent benefit for rents and house prices. Once the foreclosure
dumping tails off, as it already is for subprimes in the area, then there is
every likelihood of upswing of property prices.
Upon
hearing of the “Big Government” Democrats being elected earlier this year,
famous American property developer, Donald Trump, bought hundreds of
acres of development land along the Potomac river, to benefit from the
inevitable growth of government workers and the service industries that will
grow to supply them! Following this logic, he should have bought in
Detroit too, but then again, may be he has....
Source
(1)
CNN Money
(2)
www.whitehouse.gov
Vice
President Biden was in Detroit to announce over $1 billion in grants to
companies and universities based in Michigan. Reflecting the state’s leadership
in clean energy manufacturing, Michigan companies and institutions are
receiving the largest share of grant funding of any state. Two
companies, A123 and Johnson Controls, will receive a total of approximately
$550 million to establish a manufacturing base in the state for advanced
batteries, and two others, Compact Power and Dow Kokam, will receive a total of
over $300 million for manufacturing battery cells and materials. Large
automakers based in Michigan, including GM, Chrysler, and Ford, will receive a
total of more than $400 million to manufacture thousands of advanced hybrid and
electric vehicles as well as batteries and electric drive components. And
three educational institutions in Michigan, the University of Michigan, Wayne
State University in Detroit, and Michigan Technological University in Houghton
in the Upper Peninsula, will receive a total of more than $10 million for
education and workforce training programs to train researchers, technicians and
service providers, and to conduct consumer research to accelerate the
transition towards advanced vehicles and batteries.
(3)
www.michiganadvantage.org
(4)
www.nextenergy.org Back
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