Workers manufacture wind turbine blades at a factory in Grand Forks, N.D. (Creative Commons photo by Tuey via Flickr)

There are a great many unemployed engineers in Michigan, but few who know how to build hybrid and electric engines. And what about wind turbines? Anybody know how to build them?

So, Michigan is spending about $6 million aimed at not only retraining workers for all those green jobs, but it will attempt to quickly play matchmaker between companies that need certain skills and the retrained workers who have them.

But if you ask Marcia S. Black-Watson, a deputy director at the Michigan Bureau of Workforce Transformation, the value is much more than $6 million.

“Schools are dedicating their facilities, employers are offering their facilities, equipment,” she said in a recent interview. “Everybody has a stake in the game. The $6 million is purely what the state has set aside to help with this effort. But that by no means equates with the value.”

The program, known as the Green Sector Skills Alliances, involves accelerating worker training and agreements between educational institutions, the Big Three, Tier One suppliers and other companies. Accelerated education programs are set up to train them and place them in companies as soon as possible.

Andrew Levin, who is deputy director of the Michigan Department of Energy, Labor & Economic Growth, is in charge of the state’s No Worker Left Behind job retraining program.

“This is a chicken-and-egg problem,” Levin said. “You can’t go and train people in a generic way for green jobs. You know, quote-unquote green jobs. That’s not real. On the other hand, you can’t just sit back and wait and say, ‘OK, well, when some company with 10,000 employees is manufacturing thousands of huge wind turbines each year, then we’ll help train them.’ Because you’ll be a drag on the development. You have to get in there and be a catalyst. And that’s what we’re trying to do, is be a catalyst for growth of these different green sectors.”

What got the program rolling, Levin said, was a request by Ricardo Engineering, a British company that recently set up a battery center in Michigan. They told the governor’s office that it needs trained hybrid engineers. Turned out, so did a number of other auto industry suppliers. “It ended up being an industry-wide need.”

The result is what is being called the “Michigan Academy for Green Mobility,” which is expected to train about 200 engineers over the next year in an accelerated program. The jobs are waiting for them on the other side, says Black-Watson.

“So, we’re doing it sector by sector, wherever there is demonstrated employer leadership,” Levin says. “It’s all business driven, really.”

The next industry to take advantage of the program is tool and dye. Hard hit by the automotive downturn, what is left of the the tool and dye industry is still largely centered in Michigan. Recognizing the need to diversify, the state was initially approached by Laurie Schmald Moncrieff, president of Schmald Tool & Die Inc. in Burton.

“She came to us and said, ‘We need help,’ ” Levin said. By “we,” he means tool and dye companies employing anywhere from five to 40 people — all small companies.

Black-Watson said the Michigan Emerging Market Skills Alliance was created to get tool and dye workers “upskilled” into industries such as solar and wind. She is helping to create an organization that puts together a menu of opportunities for tool and dye workers. Anytime, they can send a few employees to get quick training from, for example, auto parts to solar panels.

“Where people want to play, we want to bring them together to try to jump-start the workforce,” she said.

“We can’t just depend on one car company or car companies in general,” Levin said. “We have to get into homeland security, into defense, into wind turbine manufacturing. We think that wind turbine manufacturing is not done up to latest manufacturing technology and so we think we can help.”

A researcher at Illinois' Argonne National Laboratory examines a lithium-ion battery, something the state of Michigan is hoping will help the auto industry escape from its economic doldrums. (Creative Commons photo courtesy Argonne National Laboratory via Flickr)

Just a couple of years ago, Cobasys LLC of Oakland County’s Orion Township seemed like the gleaming, silver edge of a prized toy in an old-fashioned Cracker Jack box.

Founded by a former General Motors chief, Cobasys supplied the nickel-metal hydride batteries for the hybrid version of the Chevrolet Malibu. And there was economic warfare going on between Michigan and Ohio, with Cobasys as the prize. Tax abatements were given, state help offered, infrastructure support thrown in, along with money for job training. With frustrations over Cobasys in mind, there was some discussion in Michigan government and economic circles over how Ohio appeared to offer better incentives for companies than Michigan.

It is now two years, and an economic and technological lifetime, later. Nickel-metal hydride batteries are largely viewed as yesterday’s technology. The hybrid Malibu? That’s history. And Cobasys is getting ready to file for bankruptcy protection.

In today’s climate, what seems like a desperate battleground for state technological and economic survival one year can look like a very dated, silly issue the next. But one positive thing has remained with us as a result: Michigan is now all set with goody-bags-full of incentives for battery companies that want to set up shop, or expand, in Michigan.

Rick Wagoner, then the chairman of General Motors, speaks at the North American International Auto Show in January where he said that batteries for the Chevy Volt will be made at a production facility to be built in Michigan. (Creative Commons photo by Grist.org via Flickr)

Look out, Ohio. And Indiana. And Kentucky. Yes, they all have dreams of becoming the center of the U.S. lithium-ion battery industry, too — possibly throwing a wrench in Michigan’s plan for automotive battery dominance.

Companies and technologies — no matter how promising they appear — come and go. That’s why private investors are urged to diversify. But cash-strapped governments betting on their future cannot afford to. Nickel metal hydride is definitely out. Corn ethanol was last year’s news. Now, Michigan Gov. Jennifer Granholm has visions of this state reviving itself as “the world’s epicenter for automotive research and design … literally redesigning the entire notion of the automobile.” Or, at the very least, “what we want to do is be the domestic place where batteries are produced,” Granholm wrote late last month.

It appears that Michigan, this time around, is at least focusing on the right technology at the right time.

Companies like lithium-ion battery developer Sakti3 in Ann Arbor are living off of venture capital funding but are eager for government funding in order to survive. They will develop their technology in the direction government wants them to go. And everybody from the Obama administration on down has decided that government incentives and funding will focus around development of lithium-ion batteries for hybrid and electric vehicles. Funding for hydrogen fuel cell development has been cut at the federal level. The energy secretary says that it’s just too far away from being ready for prime time.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, agrees with both the focus of Michigan’s big technological and economic push and with the aspirations of Michigan’s governor. After all, with leading battery companies like A123 Systems and LG Chemical with branches in Michigan, the state at least has a shot.

“You might as well start out with some really significant players,” Cole said. “And that’s exactly where we are right now in this state.”

Cole said Michigan’s main thrust is actually in two areas. Lithium-ion batteries are getting most of the media coverage, but the state is also pushing non-food biofuels. We’re not talking about corn ethanol, but companies like Boston-based Mascoma, which can make cellulosic ethanol from a number of different kinds of feedstocks. The company is working on a plant in Michigan’s Upper Penninsula that will turn wood chips into fuel.

A good way to illustrate how to combine both of Michigan’s thrusts — lithium-ion batteries and non-food biofuels — is to look at the planned hybrid electric Chevy Volt. If you operate it on a mix of E-85 (15 percent gasoline, 85 percent alcohol) the effective mpg of the gasoline in the fuel is 400.

“When you combine those two technologies,” Cole said, “you really can end up with some game-changing capability.”

It all sounds great on paper, but that still leaves the question of whether Michigan can become, as the governor wants, the leader in these technologies rather than simply one more player.

Indiana recently signed a deal to bring lithium-ion battery developer EnerDel to its borders in a deal that could bring more than 850 new jobs.

And Ohio still is a thorn in Michigan’s side … or lower.

Recently, BASF — the world’s largest chemical company — proposed construction of one of North America’s largest lithium-ion battery material production plants in Elyria, Ohio. The plant would make use of technology licensed to BASF from Argonne National Laboratory in Illinois. Plant construction would be made possible thanks to a Recovery Act grant through the U.S. Department of Energy. If all the chips fall into place, the new plant would represent the highest ideals behind Obama’s stimulus plan, not to mention public-private partnerships coming together to create jobs and move cutting-edge technology from the lab to the marketplace.

And none of it would happen in Michigan.

This is not to minimize Michigan’s own respectable public-private partnerships between academic institutions, automakers and private industry. However, even the optimistic governor should be aware that the state is not only competing with Asia in building a lithium-ion battery infrastructure, but with neighboring states with ambitions just as sweeping.

There is, however, one important difference: Michigan, as far as it has fallen from grace as the center of automotive manufacturing, still has further to fall if it is not careful.

Cole calls the lithium-ion battery push the “offensive” side of Michigan’s plan for economic revival. What he calls the “defensive” can also be categorized under “be careful what you wish for.” An all-electric drive means some major retooling in the auto industry.

“If we get electrification of the powertrain — if that goes big — the impact on the transmission business, the general powertrain business here could be hit very, very hard,” Cole said. “We could lose some very important manufacturing and we would at least want the replacement manufacturing being here rather than someplace else.”

So, in Michigan, everybody’s talking about batteries. But what they’re really talking about, compared with competing states with similar aspirations, is a much bigger chunk of Michigan’s future.

Will the state win the battery war?

“That remains to be seen,” Cole said. “We certainly have a shot at it. This is not something that’s out of the realm of possibility.”

These days, that will have to do.

DENSO booth, NAIAS 2009, Detroit Mich. (Photo: MarkinDetroit via Flickr.com)

DETROIT — A news conference by the president and CEO of automotive part maker DENSO International America was relegated to the basement of Cobo at the North American International Auto Show (NAIAS), right next to the fragrant flora of the Michigan Economic Development Corporation’s EcoXperience.

But the news down below, just as it was above, was not exactly rosy.

DENSO warned of its first operating loss since 1950. The main company it supplies, Toyota, says it will see its first losing quarter in 71 years.

So, what else could DENSO Veep Hiromi Tokuda do at the auto show except talk about algae?

Yes, algae.

Tokuda focused on what DENSO is calling, “Cultivating the Green Machine.” And by “green,” of course, he was not talking about money. Like the American automakers upstairs, there is no good financial news to report.

“If I can make anything clear to you this morning, it would be this: DENSO’s green efforts are not just for show,” Tokuda said.

DENSO, whose North American headquarters is in Southfield, really does have some interesting environmental research going on. One of them involves algae absorbing greenhouse gases emitting from DENSO’s own factories.

So, yes, Tokuda is right. DENSO’s environmental initiative is not just marketing. But it is, just like those of the upstairs neighbors, a bit diversionary.

And that, for better or for worse, is the story of Detroit’s NAIAS 2009.

NAIAS 2009 is open to the public and runs through Jan. 25 at Cobo Hall in Detroit, Mich.

Howard Lovy has covered science, technology and business for The Detroit News and ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has appeared in the Wall Street Journal, Wired News and Salon.com.

Ford

DETROIT — A year ago, a confident Chrysler opened the North American International Auto Show with Dodge trucks herding cattle down Jefferson Avenue.

This year, Michigan Gov. Jennifer Granholm came to Cobo on a mule.

A mule, of course, is Detroit-speak for a prototype automobile, and while Granholm’s ride boasted significantly less horsepower than last year’s methane-emitting stampede, the governor seemed at last on the right road after years of a visionless policy for Auto Industry 2.0.

The car she drove to the auto show was a Ford Focus souped up with an electric powertrain. And while Ford (NYSE:F) would not reveal who made the lithium-ion batteries that made the vehicle go, it might have been Johnson Controls-Saft. The joint venture between the U.S. auto supplier and the French battery producer made the batteries that went into Ford’s experimental fleet of plugin hybrid electric vehicles (PHEV).

The head of that joint venture, Mary Ann Wright, had some unflattering things to say about politicians last year, calling them “ignorant” and in need of education on what exactly it takes to compete with the Asians when it comes to plug-in hybrid and electric vehicle technology.

So, when Granholm buzzed in to the auto show on an electric mule last week and made a big show out of signing a bill granting battery companies up to $335 million in tax credits to make Michigan their home, was that finally government shedding its ignorance?

The answer, if you want to use the language of a 12-step program, is that government is on the way to recovery because it recognizes that it has an ignorance problem. To Granholm’s credit, she also recently kicked in more than $2.4 million in tax credits over 10 years to an Ann Arbor company called Sakti3, which is also developing lithium-ion batteries. And nobody could have called Granholm ignorant when, during the recent national spanking Detroit received in Congress and the national media, she said on “Meet The Press” that lack of government funding would mean “replacing our reliance on foreign oil with the reliance on foreign batteries, because it’s the battery that’s going to be driving the electric vehicle in the future.”

No, not ignorant anymore. But late. A couple of years ago, Michigan was notoriously a bad place for small tech startups to start up. Surrounding states like Ohio simply could offer better deals.

Michigan recognized the problem and slowly began to ramp up tax and other incentives. But it still lacked vision. Remember the “ethanol economy” that Granholm heavily promoted a year ago? That fizzled in the wake of environmental criticism and a slow realization that ethanol is, at best, a transition technology along the way to electric and, ultimately, hydrogen fuel cells.

While the Big Three, and Michigan, are incredibly happy about the eventual arrival of lithium-ion battery manufacturing for electric hybrid vehicles, that’s already old news in Asia, where there is no question of government support for the auto industry not only directly, but also through training its engineers on how to implement it.

General Motors (NYSE:GM) recently chose Compact Power, a subsidiary of the Asian LG Chem, to provide the lithium-ion batteries for its Chevy Volt. The reason, according to GM, was its U.S. competitor, A123 Systems, was still just a startup and inexperienced and, most importantly, the battery manufacturing infrastructure just does not yet exist in the United States.

Yes, did you catch that word? MSNBC’s Rachel Maddow has called it one incredibly sexy word for the coming Age of Obama. Let’s see that word again.

Infrastructure.

It’s even coming out of the mouths of GM, which appears to be ahead of the other U.S. automakers when it comes to reading the proverbial writing on the wall. Larry Burns, vice president for research and development for GM, has called for “sharing the public/private risks and rewards — possibly creating a partnership between the U.S. government, auto manufacturers and suppliers, the energy and infrastructure industries …”

What many in the U.S. Congress — and Detroit’s critics across the country — failed to grasp is that the auto industry is infrastructure and just as important to our national health and future as rebuilding crumbling bridges. And, a key part of that infrastructure involves batteries. An investment in the auto industry, in batteries, is akin Eisenhower’s launch of the Interstate Highway System. Old Dwight pictured the system as being used for national defense. Civilian use, of course, completely overshadowed the need to move missiles around.

Better batteries, stand-alone fuel cells, for our automobiles will eventually translate to better, smarter power for our homes and offices. It is directly related to new smart grid technologies that will replace our creaking, old 20th century electric power infrastructure.

Michigan is celebrating its decision to go charge up its battery industry, and it should. But the manufacture of lithium-ion batteries is not labor-intensive. There will be new manufacturing jobs coming to Detroit. However, the battery industry will be part of a global automotive economy. Asia is already a few years ahead technologically and in building the workforce necessary to maintain the new infrastructure.

Michigan is getting it. Slowly. Michigan government is working with private industry and the educational system to re-educate out-of-work auto engineers and turn them into battery engineers. Look for an announcement from Michigan in the next few months.

But, still, the race is for second place. Here’s an illustration.

Last year, Toyota had to halt production of its electric Prius because of safety issues with cobalt-based lithium-ion batteries. Without getting too technical, cobalt-based batteries are the ones that tend to go boom. However, because they already had trained battery engineers and flexible manufacturing processes, Toyota was able to stop on a dime and switch to another formula for its batteries. Toyota was able to do that because it had already made an investment in infrastructure.

So, while Michigan will not lead the herd, it at last has found its way toward the ranch. And, perhaps, the Made in Detroit brand will mean something again. At the very least, with hard work and investment, it will no longer be synonymous with the stuff that comes out the southern end of a north-going steer.

Howard Lovy has covered science, technology and business for The Detroit News and ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has appeared in the Wall Street Journal, Wired News and Salon.com.

MEDC's EcoXperience track at NAIAS 2009, Detroit Mich. (photo: Howard Lovy)

Here’s Michigan Economic Development Corporation’s EcoXperience track in the basement of COBO Hall. (Click to expand the thumbnail picture.)

My initial impression? It smells like rotting vegetation down there. In the picture, though, you can see one of the cool little Jetsons’ cars in the background.

The feature succeeded in a couple of ways. First, it generated some significant news coverage because journalists love “hands-on” stuff.

And also it took up significant COBO real estate to make up for the fact that this event was very scaled-down compared to previous years.

But if you ask the wilting tulips (picture below), trying in vain to find the sun, I’m not sure they would agree that the whole experience was eco-friendly.

Wilting tulips in MEDC's EcoExperience track, COBO Hall, Detroit Mich. (photo: Howard Lovy)

Karma plate at North American International Auto Show, Detroit Mich. (photo: Howard Lovy)

At last year’s auto show, I wondered whether Karma could also mean “covering all bases.” A main investor in Fisker Automotive, which makes the all-electric Karma, is Vinod Khosla, an important player in the next phase of the auto industry — whatever form that may take.

Khosla is a major Silicon Valley venture capitalist who has also bankrolled the building of ethanol infrastructure. Remember ethanol? Michigan Gov. Jennifer Granholm was going to create an “ethanol economy” in Michigan not too long ago.

Well, recently Khosla tossed a couple million to an Ann Arbor startup called Sakti3, which is developing lithium-ion batteries that, according to the Detroit Free Press are more advanced than those that GM selected for the Chevy Volt.* The Michigan Economic Development Corp. recently kicked in $3 million and the Granholm administration gave it more than $2.4 million in tax credits over 10
years.

So, when a venture capitalist gives money to cover all bets, he’s diversifying, I suppose. When the state government does it, is it just chasing after the flavor of the day? I do not know the answer.

However, I did ask a question of somebody who does have an answer. Accompanying the Karma this year was also the all-electric Tesla. A major investor of the Tesla is Steve Jurvetson, another West Coast VC. It seems like both companies represent a West Coast scouting party by Silicon Valley geeks to see if Motown is ripe for conquering.

I asked Jurvetson whether the auto industry finally “gets it,” whether there’s hope for the Big Three now that they are developing their own all-electric vehicles. His answer:

“All disruptive innovation comes from new entrants,” Jurvetson wrote to me. “Always has. Always will. So I’d keep my eye on the startups for change that matters.”

In other words, whether it’s death by ethanol or death by electricity — the Big Three are still dead? Well, Jurvetson is an interested party, so we can take that into account. However, it might be good to cover all our bases and not make any predictions yet. In this case, Karma is not instant.

Fisker Automotive

The Tesla (photo: Howard Lovy)

Howard Lovy has been a journalist for more than 20 years, and has focused on science, technology and business for most of this decade. His reporting on automotive innovation and nanotechnology has earned praise for making complex issues understandable to nearly everyone. He has worked, among other places, for The Detroit News, ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has
appeared in the Wall Street Journal, Wired News and Salon.com.

[* Ed. note: paragraph has been revised to correctly attribute the comparison to the Detroit Free Press. Michigan Messenger apologizes for any misunderstanding. (27-JAN-09)]

Al Roker at NAIAS 2009, Detroit Mich. (photo: Howard Lovy)

NBC weatherman Al Roker takes a “test drive” of a Ford Shelby Mustang at the Detroit Auto Show. That’s the story. There’s really nothing else that needs to be said here.

(Click thumbnail to expand photo.)

So, while GM and other U.S. automakers promote their plans for hybrid cars, what they’re talking about are hybrids between gasoline and electric motors — like the Volt. Toyota, using the technology it already honed through its best-selling Prius, is already ahead in what it views as the real future — fuel cell hybrid vehicles, or FCHVs.

It’s not a plug-in, so it does not drain the electric grid. What Toyota is talking about is the next step beyond the electric-gas hybrid transition and the final death of the internal combustion engine.

Toyota's Fuel Cell Hybrid Vehicle (FCHV) at the NAIAS 2009 (photo: Howard Lovy)

Signage about Toyota's fuel cell stack for its FCHV at the NAIAS 2009 (photo: Howard Lovy)

Howard Lovy has been a journalist for more than 20 years, and has focused on science, technology and business for most of this decade. His reporting on automotive innovation and nanotechnology has earned praise for making complex issues understandable to nearly everyone. He has worked, among other places, for The Detroit News, ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has
appeared in the Wall Street Journal, Wired News and Salon.com.

GM's Volt, 2007 vs. 2009

When General Motors unveiled its electric hybrid Chevy Volt an economic epoch ago — at the 2007 North American International Auto Show, what it gave us (PDF 219k) seemed almost too good to be true. GM appeared to “get it” when it came to the new environmental consciousness sweeping popular culture. For the first time, a major auto company acknowledged the eventual demise of the internal combustion engine. What it gave us was something of a transitory nature, but it was a start.

Remember, GM has been bashed bashed in an indie movie popular that summer, “Who Killed the Electric Car?” about GM’s ill-fated EV-1. When the Volt was unveiled, Bob Lutz told a group of gathering reporters, oohing and ahhing over the sleek-looking vehicle, “In the old days, we were sort of against electric vehicles because we knew the battery technology wasn’t adequate. And we knew we were going to create dissatisfaction and we knew they would be a tough sell. And guess what, they were — other than (with) a hearty band of people who were extremely enthusiastic about electric vehicles.”

And not only that, the thing was actually going to be made out of recycled water bottles. Yes, no kidding. Bob Lutz gripped and grinned with GE Plastics chief Greg Adams as GE folks announced that there were 400 post-consumer water bottles making up parts of the car. A few months later, GE Plastics was sold to a Saudi Arabian conglomerate, and where that project stands, I do not know. What I do know is that the Volt on the floor in the 2009 Auto Show looks, well, doesn’t look quite as sleek. It looks like quite an ordinary car. Part of a slippery slope we noted before.

So, I guess what I’d like to know is, “Who Stole GM’s Original Volt?”

GM's Volt, circa 2007 (photo: Howard Lovy)

The Volt as it originally appeared when it debuted in 2007.

GM's Volt, circa 2009 (photo: Howard Lovy)

The Volt as it appeared today at the North American International Auto Show in Detroit, Mich.

Howard Lovy has been a journalist for more than 20 years, and has focused on science, technology and business for most of this decade. His reporting on automotive innovation and nanotechnology has earned praise for making complex issues understandable to nearly everyone. He has worked, among other places, for The Detroit News, ClickOnDetroit.com and helped found Small Times, an Ann Arbor magazine focusing on nanotechnology and microsystems. His freelance work has
appeared in the Wall Street Journal, Wired News and Salon.com.