Presto! Pulling batteries and the auto industry out of a hat

Bulwinkle and the wrong hat (courtesy Bullwinkle Studios, Jay Ward Productions)

[COMMENTARY] I can’t help think of a running gag on the aged cartoon The Rocky and Bullwinkle Show whenever I hear excited buzz about battery manufacturing coming to Michigan.

Those of you of a certain age know what I’m talking about. Bullwinkle the Moose, ever the faithful naif, says to his cynical friend Rocky the Squirrel: Hey Rocky! Watch me pull a rabbit out of my hat!

And the goofy moose reaches in deeply and pulls out a snarling bear’s head instead. Rocky cracks wise while stating the obvious, Bullwinkle gives a comical retort, fade to black.

I haven’t figured out who’s playing Bullwinkle, but somebody believes they can put $335 million of state money and a couple billion of federal money into a hat and pull a battery plant or two out of the void along with the salvation of the auto industry.

But this is no joke; it’s not going to happen.

Let’s examine this process more closely:

A business planning to build a battery manufacturing plant will:

1. Request engineering firm(s) produce site plans based on market projections (site plans will be dictated by how much production volume, how much equipment and how much plant site is required to house equipment, staff, supplies and finished product); the timeline is about three to nine months, depending on how long this has already been in the works at the corporate level

2. Purchasing, product and manufacturing engineering departments cooperatively produce bid packages for plant and equipment, asking construction firms and manufacturing equipment companies to quote estimates on the facility. The timeline to receive, estimate and bid could be one to three months, and another three to 12 months for build-out of plant, installation, testing and worker training on equipment. (And we’re cooking with gasoline and nothing goes wrong, ever, during this entire period, right? Project managers out there will sigh with frustration born of experience at this notion. Don’t even mention the budget.)

We don’t know when the starting point will be for steps 1 or 2, by the way. With demand for cars projected to be down by as much as 10 percent over the previous year and possibly dropping more, it’s going to be difficult to forecast demand and therefore plant size and equipment.

The state legislation signed into law recently, providing $335 million in incentives towards battery-building technology and production, will likely go in the short-term (one to two years) to existing R&D and manufacturing outside Michigan, and may benefit the state only after two or three years have passed.

3. At some point down the road, batteries will be manufactured in Michigan — and maybe, just maybe, the price of gas will have increased dramatically, the grid will have been modified to provide more electricity without more carbon emissions and car buyers will buy a much larger percentage of electric and hybrid vehicles than the two percent of the entire vehicle market they buy today, and the newly reinvigorated auto industry will boom again.

There simply is no magical hat from which Michigan-based battery plants, high-volume production of all-electric cars and a grid to support them can be pulled. There’s not even a production-quality battery nor a standard for batteries upon which the automotive industry, environmentalists and consumers agree. The $2 billion in federal money won’t make a dent in this missing item, being little more than chickenfeed in comparison to the monies the automakers have already spent on alternative fuels. That’s step 0.1, by the way, which comes well before building a production plant.

Former president George W. Bush promised the Big Three automakers a couple hundred million in federal monies for research and development of fuel cells way back in the first half of his first administration. At that point in time, General Motors alone had already spent more than a billion dollars and years of man hours on fuel cell development, and we are enjoying the fruits of that investment now, aren’t we? It was not enough money or attention to make and commercialize fuel cell-powered cars, and the amount that the Bush administration offered the entire industry was lip service.

All of which makes the emphasis on battery manufacturing in this state, versus shovel-ready infrastructure projects, exasperating as hell. Infrastructure projects will create two to three times more jobs over the short-run and nearly all the money will stay in state, whereas the battery manufacturing will surely see a big chunk going to overseas companies like LG Chem and equipment manufacturers in Europe and Asia who will make the manufacturing equipment for the battery plant once production migrates here.

The bottom line: We are not going to see an automotive industry turnaround based on battery-powered cars inside the next two years, at a minimum. We’re also shooting at a moving target, with technological discoveries happening faster than we can build the plants to make the previous and increasingly obsolete technology.

We are going to have to be far more realistic as to what’s really in that hat and how to pull it out to optimum benefit of this state’s sustainable future, and how long it will really be before we’re no longer a cartoon at which others can laugh.