Low taxes, energy rates and land: How Tennessee grew its auto sector

At a White House state dinner in February 1979, President Jimmy Carter pushed the governor attendees to persuade Japanese companies to make in the United States what they sell in the United States.

The nation was in a recession and needed investment that created new jobs. Former U.S. Sen. Lamar Alexander, Tennessee’s Republican governor at the time, listened intently knowing his own state was the third poorest in the nation. After that dinner, he jumped on a plane to meet with Nissan Motor Corp. executives in Japan.

Tennessee finally landed an investment from Nissan in 1980, starting the southern state’s auto story that is still generating new chapters after more than 40 years. Five years later, then-General Motors Corp. brought its Saturn plant to Spring Hill, Tennessee — and that’s about to happen again with the coming of Ford Motor Co.’s Blue Oval City to a small town 45 minutes outside Memphis in west Tennessee.

As the global auto industry and startups turn to electrification, Detroit’s own GM and Ford have picked Tennessee to help them deliver on their EV promises. Here, both are investing billions to build EVs and make the battery cells to power those EVs. Credit Tennessee’s land availability, location and lower energy costs that are likely to continue to attract new investment in the electric future.

“In some ways, I think Tennessee is the leading auto state,” Alexander told The Detroit News in an interview. “Until we have more research and development and more North American headquarters, we still got to scramble to earn our spurs as the leading auto state. But right now, based upon the attractiveness of a state to a manufacturer or supplier, Tennessee looks pretty good.”

From 2019 to 2021, Tennessee saw $10.7 billion in investments for EVs from the automakers already established there: namely, Volkswagen AG and GM, as the state is welcoming Ford under terms of a deal announced last fall.

VW in 2019 said it would invest $800 million in its Chattanooga plant for EV production starting this year. GM in 2020 said it would spend $2 billion to revamp its former Saturn plant, Spring Hill Assembly, to build both EVs and gas-powered products. The automaker and battery supply partner LG Energy Solution in 2021 announced Spring Hill would be home to their second $2.3 billion battery cell manufacturing site.

“We made a huge commitment to our Spring Hill team with our $2 billion investment to transition the facility to build EVs because they are an experienced, dedicated team that has a long history of building high-quality products,” GM spokesman Dan Flores said in a statement.

And Ford plans to invest $5.6 billion to build the BlueOval City campus and become the first to develop the state’s Memphis Regional Megasite. There, Ford plans to build next-generation F-Series electric trucks starting in 2025 and to make battery cells with partner SK Innovation. The site was already prepped with a $174 million investment by the state in infrastructure upgrades.

The latest push to get more auto investment in Tennessee came right from the top: Gov. Bill Lee, a Republican.

“When Governor Lee was sworn in, in one of our very early meetings, he said: ‘Bobby, I want us to focus on this transformation from the internal combustion engine to the electric vehicle. And it’s going to be transformational, and we’re going to do everything we can not only to protect our existing turf but also expand our footprint when it comes to recruiting companies,'” said Bob Rolfe, commissioner of the Tennessee Department of Economic and Community Development.

Michigan remains mighty

Michigan is still flying the Motor City flag high. The state is home to the Detroit three automakers and claims the headquarters, regional headquarters or technical centers of more than 20 others, according to a report by MICHauto at the Detroit Regional Chamber.

“When it comes to the density of R&D and engineering, there just is no comparison,” said Glenn Stevens, executive director of MICHauto and the Detroit Regional Chamber’s vice president of automotive and mobility initiatives. “However, Tennessee has a lot of really strong attributes to it. First of all, its geography is ideally situated as a kind of central point in not just the eastern part of the U.S., but when you get over to Memphis, you’re getting pretty close to the epicenter of the United States.”

Michigan today has a higher vehicle output than the southern state. Vehicle production here represented 20.1% of all U.S. auto production in 2021 and Tennessee’s represented 5.4%, according to the Center for Automotive Research. In December 2021, Michigan’s auto employment stood at 170,000 compared to Tennessee’s 73,900.

Like Tennessee, Michigan also has seen several automaker investment announcements since 2019, including, most recently, GM’s $7 billion investment to build and support mostly EV production here. Stellantis NV, formerly Fiat Chrysler Automobiles, in February 2019 announced a $4.5 billion investment in five Michigan plants including transforming a partially idled engine complex in Detroit into an assembly plant.

In December 2019, Ford announced a $1.45 billion investment at its Wayne, Michigan, plant for Bronco and Ranger production. And in September 2020, the Dearborn automaker said it would invest $700 million in its Rouge complex to support electric F-150 Lightning production; it later added $250 million to boost production capacity.

The loss of the $11.4 billion investment from Ford in both Tennessee and Kentucky pushed Michigan leaders to act swiftly to get GM’s investment here. Gov. Gretchen Whitmer partnered with Republican lawmakers to create a $1 billion economic development program that could spur investment like GM’s. The state gave GM $824.1 million in incentives for its $7 billion investment.

“Michigan is the birthplace of the automotive industry, and is poised to remain the global epicenter as we move into the next revolution of the transportation industry,” said Otie McKinley, spokesman for the Michigan Economic Development Corp., in a statement. “Since January of 2019, the MEDC has approved projects that committed to create over 20,000 jobs and $16.5 billion in private investment in the mobility and automotive manufacturing cluster.”

Starting Tenn.’s auto story

The multibillion-dollar auto projects coming to Tennessee now blossomed from the first auto investment Nissan made more than 40 years ago thanks to a simple map.

When Alexander was pitching his state to the Japanese automaker’s brass, he brought with him a satellite map of the United States with all the lights on at night. And when the Nissan executives asked Alexander where Tennessee was, he pointed right to the middle.

“That made a difference to Nissan because they were number one looking for a central location,” he said. But getting Nissan to sign on was just the first step. The state had to get its roads and infrastructure ready, and develop a supplier base.

“At that time, Tennessee had virtually zero auto industry,” Alexander said. “All the auto industry was where the auto was invented in the midwestern part of the United States.”

For Nissan, the state government spent $12 million for new roads and $7 million for employee training, according to a New York Times article in 1985. After the Nissan investment, Alexander sought to win the much-desired Saturn investment that multiple states were fighting to get.

GM and Saturn were sold on the Tennessee idea after Alexander told former CEO Roger Smith: “Instead of just competing in the showroom with the Japanese cars that are eating your lunch, why don’t you compete head-to-head where they’re made?”

GM liked that idea and selected Spring Hill for Saturn’s home. After that, Tennessee’s auto boom hit hard. The state built a four-lane highway to make way.

“And over the next 20 to 25 years about 1,000 suppliers came to Tennessee,” Alexander said. “And then came Volkswagen to Chattanooga and now more recently Ford to West Tennessee.”

Tennessee’s attributes

Aside from the automaker presence in Tennessee, the state also has more than 920 auto suppliers, including Japanese company Denso Corp., whose primary manufacturing center in North America for electrification and safety systems is located in Marysville, Tennessee.

Having an “experienced local supply base” is one of the factors that encouraged GM’s investment here, spokesman Flores said. Incentives also helped, including a $60 million economic development grant for Ultium Cells. And GM received $35 million for a FastTrack Job Training Assistance Program grant from the Tennessee Department of Economic and Community Development. The state approved some $884 million in incentives for Ford’s Blue Oval City.

Another selling point: Tennessee also has no income tax on wages and low property taxes. WalletHub ranks Tennessee 15th in the country for lowest property taxes compared to Michigan at 38th. Overall, Tennessee ranks second to last in the country for its overall tax burden, according to a WalletHub study.

Low energy costs aided the state in landing mega auto investments here. In 2020, the average retail cost for electricity was $9.52 per kilowatt hour — the 30th lowest ranking nationally, according to the U.S. Energy Information Administration. Michigan’s average cost for electricity was $12.21 per kilowatt hour that year. And the U.S. average rate was $10.59.

The state also has been preparing sites to make sure they are ready to go, so when Ford came looking the state had what it wanted. To help with that, Tennessee has the Tennessee Valley Authority, a utility provider that also does economic development. TVA covers seven states, and years ago it asked states to come up with a list of large industrial sites that could be developed for the auto industry.

“We’ve been on the offense to make sure that we’ve got the resources, not only the incentive resources, but also we’ve got enough shovel ready sites because a lot of these suppliers are now being required to have a quicker just-in-time process,” Rolfe said.

Up next is making moves on developing workforce, a struggle across the U.S. and one all states with major manufacturing sites are having to deal with.

“Economic growth depends on talent, business climate and the strength of communities where people want to work and build lives,” Stevens said. “For Michigan to continue to be a leader in the auto industry and its mobility and electrification transformation, we are going to need to lead in innovation, building the high-tech talent pipeline and by investing in communities and their physical and digital infrastructure.”

Read the original article, published in The Detroit News.

Innovator to Watch: Adastec’s Ali Peker

Dr. Ali U. Peker is the chief executive officer of Adastec Corp., a startup member of MICHauto’s Innovator Xchange. MICHauto spoke with Peker about Adastec, what makes the company unique, and what skillsets the next generation of entrepreneurs will need to succeed.

What makes your company or technology unique to the industry? 

ADASTEC is the most advanced company in the full-size bus automation market and the only one with public road deployments both in Europe and the U.S. ADASTEC provides factory-fitted, self-driving technology in cooperation with OEMs.

Why do you think Detroit is a great place to launch and grow a mobility or technology startup? 

Detroit and the state of Michigan, in general, are very focused and organized towards providing the best environment for mobility startups. The area is perfect for real-world deployments. The processes are designed to motivate startups. The testing grounds and high-quality Universities are within reach very open for partnerships. Organizations like DRP, Ann Arbor Spark, MICHauto, Michigan OFME work like an extension to your company and further enhance startups’ access to required resources.

Why do you think it is so important to connect startups with established OEMS, suppliers, and other consumers of innovation? 

Most deep technologies will require production expertise to make mass deployments possible. In today’s world, the productization of technologies requires a huge partnership network. A complete and scalable deployment is not possible without the ecosystem of OEMs and suppliers.

What advice would you give to entrepreneurs interested in the mobility and technology industry? 

Focus on the partners and ecosystem as much as you focus on your product and technology. Sometimes ideas do not scale well when the environment is not ready for mass deployments. You can enhance your possibility of success by offloading some of your burden to partners and access to larger markets.

What unique skillsets are needed from the next generation of entrepreneurs? 

Technology and how to manage a company change at an even faster pace. You should accept that and never stop learning.

Ford Splits EV and ICE Vehicle Lines Into Separate Company Divisions

DEARBORN, Mich., March 2, 2022 – Ford is continuing to transform its global automotive business, accelerating the development and scaling of breakthrough electric, connected vehicles, while leveraging its iconic nameplates to strengthen operating performance and take full advantage of engineering and industrial capabilities.

“This isn’t the first time Ford has reimagined the future and taken our own path,” said Ford Executive Chair Bill Ford. “We have an extraordinary opportunity to lead this thrilling new era of connected and electric vehicles, give our customers the very best of Ford, and help make a real difference for the health of the planet.”

Last May, Ford President and CEO Jim Farley introduced the Ford+ plan, calling it the company’s biggest opportunity for growth and value creation since Henry Ford scaled production of the Model T. The formation of two distinct, but strategically interdependent, auto businesses – Ford Blue and Ford Model e – together with the new Ford Pro business, will help unleash the full potential of the Ford+ plan, driving growth and value creation and positioning Ford to outperform both legacy automakers and new EV competitors.

“We have made tremendous progress in a short period of time. We have launched a series of hit products globally and demand for our new EVs like F-150 Lightning and Mustang Mach-E is off the charts,” Farley said. “But our ambition with Ford+ is to become a truly great, world-changing company again, and that requires focus. We are going all in, creating separate but complementary businesses that give us start-up speed and unbridled innovation in Ford Model e together with Ford Blue’s industrial know-how, volume and iconic brands like Bronco, that start-ups can only dream about.”

Driving the change was recognition that different approaches, talents, and, ultimately, organizations are required to unleash Ford’s development and delivery of electric and digitally connected vehicles and services and fully capitalize on the company’s iconic family of internal combustion vehicles.

The creation of Ford Model e was informed by the success of small, mission-driven Ford teams that developed the Ford GT, Mustang Mach-E SUV, and F-150 Lightning pickup as well as Ford’s dedicated EV division in China.

“Ford Model e will be Ford’s center of innovation and growth, a team of the world’s best software, electrical and automotive talent turned loose to create truly incredible electric vehicles and digital experiences for new generations of Ford customers,” Farley said.

“Ford Blue’s mission is to deliver a more profitable and vibrant ICE business, strengthen our successful and iconic vehicle families and earn greater loyalty by delivering incredible service and experiences. It’s about harnessing a century of hardware mastery to help build the future. This team will be hellbent on delivering leading quality, attacking waste in every corner of the business, maximizing cash flow, and optimizing our industrial footprint.”

Ford Model e and Ford Blue will be run as distinct businesses, but also support each other – as well as Ford Pro, which is dedicated to delivering a one-stop-shop for commercial and government customers with a range of conventional and electric vehicles and a full suite of software, charging, financing, services, and support on Ford and non-Ford products. Ford Model e and Ford Blue will also support Ford Drive mobility.

Ford Model e will:

  • Attract and retain the best software, engineering, design, and UX talent and perfect new technologies and concepts that can be applied across the Ford enterprise;
  • Embrace a clean-sheet approach to designing, launching, and scaling breakthrough, high-volume electric and connected products and services for retail, commercial and shared mobility;
  • Develop the key technologies and capabilities – such as EV platforms, batteries, e-motors, inverters, charging, and recycling – to create ground-up, breakthrough electric vehicles; and
  • Create the software platforms and fully networked vehicle architectures to support delightful, always-on, and ever-improving vehicles and experiences.

Ford Model e also will lead on creating an exciting new shopping, buying, and ownership experience for its future electric vehicle customers that includes simple, intuitive e-commerce platforms, transparent pricing, and personalized customer support from Ford ambassadors. Ford Blue will adapt these best practices to enhance the experience of its ICE customers and deliver new levels of customer connectivity and satisfaction.

Ford Blue will exercise Ford’s deep automotive expertise to:

  • Strengthen the iconic Ford vehicles customers love, such as F-Series, Ranger and Maverick trucks, Bronco and Explorer SUVs, and Mustang, with investments in new models, derivatives, experiences, and services;
  • Help customers fulfill their passions and daily lives with the tailored brand and vehicle experiences, from off-roading to performance to family activities, especially for those situations when ICE capabilities are required;
  • Deliver new, connected, personalized, and always-on experiences for customers powered by Ford Model e’s software and embedded systems;
  • Make industry-leading quality and exceptional service a reason to choose and stay with Ford;
  • Root out waste and dramatically reduce product, manufacturing, and quality costs; and
  • Support Ford Model e and Ford Pro through proven, global-scale engineering, purchasing, manufacturing, and vehicle test and development capabilities for world-class safety, ride and handling, quiet and comfort, and durability.

Ford reaffirms guidance for 2022 of $11.5 billion to $12.5 billion in company-adjusted EBIT. The high end of the range equates to a margin of 8% which, if achieved, would be one year earlier than the company’s previous target. With these changes announced today, Ford is raising its longer-term operating and financial targets, including:

  • The company adjusted EBIT margin of 10% by 2026, a 270-basis-point increase over 2021– driven by higher volumes, improvement in the cost of EVs, and a significant decline in ICE structural costs of up to $3 billion
  • More than 2 million electric vehicles produced annually by 2026, representing about one-third of Ford’s global volume, rising to half by 2030, capturing with EVs the same, or even greater, market shares in vehicle segments where Ford already leads
  • In addition, Ford expects to spend $5 billion on EVs in 2022, including capital expenditures, expense and direct investments, a two-fold increase over 2021

Ford reiterated its commitment to achieve carbon neutrality by 2050 and to use 100% local, renewable electricity in all of its manufacturing operations by 2035.

“This new structure will enhance our capacity to generate industry-leading growth, profitability, and liquidity in this new era of transportation,” said John Lawler, Ford’s chief financial officer. “It will sharpen our effectiveness in allocating capital to both the ICE and EV businesses and the returns we expect from them – by making the most of existing capabilities, adding new skills wherever they’re needed, simplifying processes, and lowering costs. Most importantly, we believe it will deliver growth and significant value for our stakeholders.”

Ford Model e and Ford Blue will work hand-in-glove with other parts of the Ford enterprise. Ford Pro will continue to deliver industry-leading products, services, and support that commercial customers depend on. Served by Ford Model e and Ford Blue, Lincoln will continue to create compelling vehicles with an exceptional ownership experience to match. Ford Drive will continue to develop new digitally connected mobility businesses. And Ford Credit will continue to support the customer experience and drive loyalty with a full suite of financial products and services.

With the creation of Ford Blue and Ford Model e, Ford is announcing several leadership appointments. Farley will serve as president of Ford Model e, in addition to his role as president and CEO of Ford Motor Company.

Doug Field will lead Ford Model e’s product creation as chief EV and digital systems officer. He will also lead the development of software and embedded systems for all of Ford. Marin Gjaja will be Model e’s chief customer officer, heading the division’s go-to-market, customer experience, and new business initiatives.

“Designing truly incredible electric and software-driven vehicles – with experiences customers can’t even imagine yet – requires a clean-sheet approach,” Field said. “We are creating an organization that benefits from all of Ford’s know-how and capabilities, but that can move with speed and unconstrained ambition to create revolutionary new products.”

Kumar Galhotra will serve as president of Ford Blue.

“Ford Blue’s mission is extremely ambitious,” Galhotra said. “We are going to invest in our incredible F-Series franchise, unleash the full potential of hits like Bronco and Maverick, and launch new vehicles like global Ranger pickup, Ranger Raptor, and Raptor R. We’ll pair these great products with a simple, connected, and convenient customer experience that earns higher loyalty. We are going to be hyper-competitive on costs and make quality a reason to choose Ford. And by doing all that, Ford Blue will be an engine of cash and profitability for the whole company.”

Stuart Rowley and Hau Thai-Tang will take on new global roles to support Ford’s transformation. Rowley will be chief transformation and quality officer. He will establish quality as a reason to choose a Ford and lead Ford’s drive to improved efficiency, reduced complexity, and a lean, fully competitive cost structure across the enterprise. Thai-Tang will lead Ford’s industrial platform as chief industrial platform officer. He will lead product development, supply chain, and manufacturing engineering for ICE products and common systems across Ford Blue, Ford Model e, Ford Pro and Ford Drive.

View the full news release. 

Innovator to Watch: Airspace Link’s Michael Healander

Michael Healander is the co-founder and chief executive officer of Airspace Link, a startup member of MICHauto’s Innovator Xchange. MICHauto spoke with Healander about Airspace Link and the growth of technology startups in Metro Detroit.

What makes your company or technology unique to the industry?

The AirHub Platform is the only one of its kind focused on integrating all of the stakeholders in the drone ecosystem, including state and local government, to ensure that drones are able to integrate into the national airspace and into communities at scale. We’re focused on not only launching a new dimension of mobility but ensuring it is in harmony with and fully benefits the communities in which it will operate.

Why do you think Detroit is a great place to launch and grow a mobility or technology startup? 

Focusing on drones as the next dimension of mobility, Detroit made perfect sense to begin our journey. It’s been a great place to collaborate on multi-modal mobility platforms and has some of the top companies and leadership in mobility to collaborate with.

Why do you think it is so important to connect startups with established OEMS, suppliers, and other consumers of innovation?

Startups often fill gaps that don’t make sense for larger companies to dive into. Airspace Link is a great example of that. Our technology is the trusted neutral platform in the drone ecosystem to help operators and government stakeholders coordinate, communicate, and plan operations that are safe and in harmony with the community.

What advice would you give to entrepreneurs interested in the mobility and technology industry? 

Getting involved in the Detroit mobility and startup community will be invaluable to growing your business. The partnerships we’ve grown with public and private stakeholders have been instrumental in scaling our business here in Detroit.

 What unique skillsets are needed from the next generation of entrepreneurs? 

The most important skill an entrepreneur can have is the ability to pivot quickly and adjust to rapidly changing regulatory and market conditions. Our business has made several pivots as the industry emerges in order to position ourselves for success, no matter which way the regulatory or market trends sway.

Learn more about Airspace Link. 

Lansing could adopt requirement for EV charging stations

FOX 47 News
Mar. 2, 2022
Luisa Wiewgorra

GM’s battery plant breaking ground in Lansing this summer is the first step to an electric future, which means Lansing and the state will need to start thinking about the logistics to support it.

“Can I charge it? Where do I charge it? How do I charge it? How long does it last? There’s a lot of learning that has to happen with regards to consumer adoption in electric vehicles,” said Glenn Stevens, the executive director of MICHauto.

According to ChargeHub, there are only 38 public charging stations in Lansing. With Tesla being the first to put chargers in place, there are not only different brands but also different types of chargers.

“There are level one, level two and level three. Level three being the fast chargers, which takes 30 minutes to charge, and then level one being something that you might have in your home,” said Stevens.

Experts and EV owners said electric vehicles are easy to charge if you own a house.

“If you own a home and you’ve got a garage, it’s really easy to be an EV owner. If you live in apartment that is way more challenging,” said Aaron Viles, the director of campaigns of the Electrification Coalition. “So, the utilities, I think, are thinking about some of their proposed plans. And I’m excited about what they’re thinking about doing.”

As of right now, Consumers Energy offers a $500 rebate for newly installed level 2 charging stations to its customers.

The Lansing Board of Water and Light is offering incentives for its customers who own or may want to buy an electric vehicle. “If a BWL electric customer installs a level 2 charger and has their vehicle registered at the same home address, they may qualify for a $1,000 rebate,” said BWL spokesperson Amy Adamy.

Viles addressed the price of electricity versus the price of gas. “Obviously, right now we’re seeing the price of gas isn’t exactly predictable, and it can spike because of world events that we have zero control over. But the price of electricity is far more dependable, far lower,” he said.

“The great thing that’s not discussed very often about electric vehicles is that as we adopt more of them, we can manage the charging of electric vehicles,” said Viles. “So, we can charge them at times when the utilities have more excess electricity to put into the grid, or it’s not going to be utilized otherwise. That managed charging gives utilities a lot of flexibility, so they can actually charge us less for the rates of our electricity because they can manage their demand because of electric vehicles.”

“When I was convinced that there were enough charging stations out there that I could, it could drive an electric vehicle and get to various places around the state I decided to make, make that purchase. And I’ve been very happy with it,” said Charles Griffith, the climate and energy program director of the Ecology Center in Ann Arbor.

According to Griffith, EV’s are not necessarily the best vehicles for long distance trips yet, but that this is constantly improving as well as the charging speed of batteries.

The City of Lansing is now developing a plan for public charging stations which is expected to take three-to-six-months.

Public Service Director Andrew Kilpatrick said, the city is investigating the potential for an ordinance that would require new constructions to provide charging stations or “at least the electric infrastructure to support them.”

Another major concern for customers is the affordability of electric vehicles.

President Joe Biden’s infrastructure bill is financially supporting electric vehicles and chargers. His Build Back Better Plan has proposed up to $12,500 tax credits.

“Now on a state level from an electric vehicle, Governor Whitmer in her budget has proposed, I think it’s $2,000, per EV, plus a $500 credit if you install a charging station in your home,” said Stevens. “That, in addition to the current $7500, means that if the governor’s proposal was adopted by the legislature, there would be up to $10,000 for consumers to have.”

Treasurer of the East Michigan Electric Auto Association Larry Turtle says the average price that people pay for cars today is not the $19,000 Civic but is the 35 $38,000. SUV. “All those people that have SUVs could afford a Tesla,” said Turtle.

GM, Ford, and other major automakers signed on to a pledge at the UN Climate Summit in November of 2021, that they would transition their markets to phasing out new gasoline and diesel-powered vehicles by 2035.

Viles pointed out the importance of state leadership to ensure that electric vehicles that are being produced in Michigan are also being sold in Michigan, as the competition increases.

“It’s great for reducing your costs of fueling because you don’t have to go to the gas station several times a week if you’re commuting. And it’s just a lot cleaner for the environment,” said Griffith.

View the original article.

The Automotive Hall of Fame Announces Diverse Class of 2022 Inductees

The 2022 Automotive Hall of Fame’s Induction & Awards Ceremony on July 21, 2022, will recognize a truly diverse collection of mobility pioneers from around the globe. This group includes trailblazers and icons who defied personal, professional, and cultural odds to bring their immeasurable contributions to the automotive industry. Chamber President and Chief Executive Officer Sandy K. Baruah is on the Automotive Hall of Fame board of directors. The Chamber and MICHauto are critical supporters of Hall’s work to advance the automotive industry.

“This year’s class of inductees continues to recognize the diversity of contributions to this industry,” said Sarah Cook, president of the Automotive Hall of Fame. “From manufacturing to racing, road travel to the rarest of luxury performance vehicles, this group tells some of the most interesting and important stories of the industry, and we couldn’t be more pleased to recognize their achievements and welcome them into the Hall of Fame.”

2022 Automotive Hall of Fame Inductees

Alma and Victor Green, authors and publishers of The Green Book, a travel guide for Blacks traveling America. Published from 1936-1966, featuring more than 10,000 businesses over its publishing history, the book was distributed by mail order, word of mouth, and by purchase at Esso gas stations across the country. Alma and her predominantly female staff continued publishing The Green Book after Victor’s death in 1960. The last edition of The Green Book was published in 1966, helping Black Americans travel the country safely.

Lu Guanqiu, a Chinese entrepreneur and trailblazer who used his creativity and wits to evolve Wanxiang from a local bicycle repair shop in the 1960s to a global supplier. Wanxiang was the first Chinese company to sell automobile parts to American OEMs and now has operations in 22 states in the U.S. Lu’s leadership brought a greater understanding of global climate issues to China. He spearheaded the drive for clean energy, including starting several battery and electric vehicle initiatives in the late 1990s. He then acquired and revived clean energy related companies A123 Systems, and Fisker Automotive Holdings, Inc., which transformed into Karma Automotive.

Ferruccio Lamborghini, an Italian entrepreneur who created the iconic Lamborghini line of luxury performance sports cars. Lamborghini first found success following WWII, manufacturing tractors in Northern Italy for local small farms. His proclivity for mechanical quality allowed him to expand his product lines, and his success enabled him to purchase a variety of sports cars, including a Ferrari. A quibble with the vehicle’s transmission inspired his own tinkering and the determination that he could create a better vehicle. Thus, Automobili Ferruccio Lamborghini S.p.A. came to life. His attention to detail led his team’s delivery of cutting-edge, mid-engine supercars like the Miura and later the astonishing Countach.

Taiichi Ohno, a Japanese engineer and former Toyota executive who helped establish the fabled Toyota Production System (TPS). TPS is a way of making high-quality goods in the quickest and most efficient way possible. TPS revolutionized not only the Japanese automotive industry, but global vehicle manufacturing as well. Ohno spent much of his career training and consulting suppliers and employees on his revolutionary manufacturing process. Ohno left us with three books outlining his revolutionary philosophies: Toyota Production System (1978), Workplace Management (1984), and Just-in-Time for Today and Tomorrow (1988).

Lyn St. James, a true pioneer in advancing women’s participation in the automotive and racing worlds. She was the first woman to win the Indianapolis 500 Rookie of the Year award in 1992 and competed in a total of 15 IndyCar races over nine years. In 1994, she established the Women in the Winner’s Circle Foundation and created the Complete Driver Development Program, which trained female racers from around the world. She also organized the Women’s Sports Foundation, Women in the Winner’s Circle Project Podium Scholarship. She mentors young women in motorsports, is a motivational speaker, the author of two memoirs, serves on the board of the United States Automobile Competition Committee, and represents the United States on the Federation Internationale de l’Automobile Women in Motorsports Commission.

Event Details
The Automotive Hall of Fame Induction & Awards Ceremony will be held on Thursday, July 21, 2022, at The Icon (200 Walker St. Detroit, MI). Event sponsorships are available and can be purchased online at www.automotivehalloffame.org/2022-sponsorships/

Wall Street is changing its mind about automakers like Ford and GM. Here’s why

The Detroit News
Feb. 21, 2022
Jordyn Grzelewski

Wall Street has long taken a dim view of legacy automakers — but that’s begun to change as the likes of Ford Motor Co. and General Motors Co. demonstrate they’re serious contenders in the electric and digital revolution that’s reshaping the automotive industry.

This reassessment is happening even as investors appear to be cooling on many of the pure-play electric-vehicle startups that had been richly valued by financial markets seeking the next Tesla Inc. Some of them are now struggling with leadership shakeups, federal investigations, challenges ramping up production amid unprecedented supply-chain disruptions, short sellers targeting them, and growing competition from traditional manufacturers.

“What we’re seeing, certainly since the start of the year, is a shift in fund flows from the growthier, more speculative names, a lot of the new EV companies, and sort of a re-rating of the traditional auto manufacturers,” said Garrett Nelson, an equity analyst at CFRA Research. “I think the Street is now looking at the traditional automakers and seeing an opportunity for a re-rating of those businesses as their EV share increases.”

Experts point to Ford in particular as a good example of this trend. It was the top-performing auto stock of 2021, soaring roughly 138%. Meanwhile, GM’s stock on Jan. 4 posted its highest-ever closing price — $65.74 — since emerging from bankruptcy over a decade ago.

Since then, shares of both automakers have slipped on earnings reports that disappointed some investors amid a broader market contraction. And both still have to execute on their plans, with crucial milestones looming through the middle of the decade. Still, experts say, the narrative has shifted significantly in the last couple of years.

“I think what the markets have been seeing in the last six, nine, 12 months — at least for the legacy automakers who they thought were suddenly going to get swamped by all these newcomers that were focused on EVs — is the industry seems to be pivoting much faster than the Wall Street types expected,” said Sam Abuelsamid, an e-mobility analyst at Guidehouse Insights.

“I think the markets are saying, ‘These guys have a pretty decent chance of not just surviving, but thriving, in this new era.'”

Tesla spurs investment

Historically, investors have valued legacy automakers as mature businesses with low prospects for growth. That assessment remained even as Tesla — which now has a valuation of nearly $1 trillion — emerged as the dominant force in the burgeoning EV segment.

That’s because investors have viewed Tesla as a tech stock — despite the vast majority of its revenue coming from car sales — and because they’ve bought into the company’s promises of revenue growth enabled by autonomous driving, Abuelsamid said.

That success on the stock market — and more recently, Tesla’s ability to significantly ramp up vehicle production — has driven a wave of investment into other EV-only companies attempting to follow in Tesla’s footsteps. The Austin-based company’s stock closed at $856.98 per share at week’s end (the market was closed Monday for Presidents Day), down more than one-fourth from the start of the year but still valued more highly, by far, than any of its competitors.

Meanwhile, EV-related companies that went public via special purpose acquisition companies (an increasingly popular way to bring a company public and sidestep the traditional initial public offering process) raised about $15 billion in 2021, Bloomberg reported earlier this month, citing new data from its research service.

But spurred by tightening environmental regulations, growing consumer and investor appetite for plug-in vehicles, and Tesla’s success, legacy automakers have accelerated their pivot to electrification, committing to tens of billions of dollars in investments over the next several years. Despite the massive spending and pivot this entails, auto executives have signaled they see huge growth opportunities in EVs, digitally connected services and, eventually, autonomous vehicles — and, over the last year or two, Wall Street has started to take note.

Re-evaluating Detroit

For years, Ford shareholders were frustrated with the Dearborn automaker’s lagging stock price, which was hovering around $7 per share two years ago. On Friday, it closed at $18.04 per share — up amid reports that CEO Jim Farley is looking at ways to separate the company’s electric-vehicle business in a bid to boost investor sentiment.

Under Farley, who took over in October 2020, the Blue Oval has laid out a turnaround strategy centered on electrification, digital connectivity and commercial vehicles. It’s boosted its EV spend to $30 billion through 2025. It launched the all-electric Mustang Mach-E to largely positive reviews, and this spring will launch a battery-electric version of the F-150, America’s best-selling truck — a move that experts see as a bellwether moment for EV adoption.

“The (F-150) Lightning launch — it’s the epicenter of the future of the Ford story,” said Dan Ives, an analyst at Wedbush Securities. “They’ll have clear speed bumps from the supply chain — but if they knock it out of the park, Ford globally starts to be viewed not as your grandfather’s Ford, but as a next-gen EV disruptor.”

In 2021, Ford became the second best-selling EV maker in the U.S. behind Tesla — a position it’s vowed to maintain as it aims to boost annual EV production capacity to 600,000 by the end of next year.

Investors have reacted positively to what’s happening at the Blue Oval. Ford was the highest-growth auto stock last year, and on Jan. 10 it surpassed $25 per share in intraday trading — the highest price it’s hit in more than 20 years. The stock is down about 17% from the start of the year.

“We think Ford is well on its way to achieving this transformation,” said Nelson of CFRA, which has a buy opinion on the automaker.

The firm has a hold opinion on GM’s stock, with analysts there believing the Detroit automaker “still has a ways to go” in proving it’s capable of pulling off this pivot, Nelson said.

GM aims to field a zero-emissions lineup by 2035, with plans to introduce 30 new EVs by 2025. The automaker recently launched the GMC Hummer EV pickup truck, is launching the Cadillac Lyriq soon, and recently unveiled the Silverado EV that launches next year and already has 110,000 reservations, among other planned EV offerings.

On a recent call with analysts, CEO Mary Barra underscored the need to move faster, announcing the company is targeting 400,000 EV deliveries in North America by the end of 2023.

“We can and we will keep up our aggressive pace backed by strong results,” she said, noting that the company’s “clear priority is to accelerate our EV plan and drive growth.”

As recently as a couple of years ago, said Guidehouse’s Abuelsamid, investors perceived legacy automakers as being slow to the electric transition and believed they would lose market share to EV startups like Rivian Automotive Inc. and Lucid Group Inc. But that perception has changed in the last year or so, thanks in part to major EV reveals and launches.

And traditional car makers have a potential advantage over pre-revenue startups: profits from their internal combustion engine vehicle sales. Even Tesla, which was founded in 2003, didn’t have a profitable year until 2020. Legacy manufacturers also have global scale and distribution networks.

And in the last couple of years, Ford, GM and other legacy automakers have taken steps to shore up their EV supply chains, signaling they’re serious about electrification, said Abuelsamid: “One of the things that, for the financial markets, demonstrates the seriousness of the automakers to make this switch to electric is the fact that they are not just announcing these electric vehicles, but they are also investing heavily in the entire supply chain, in battery production, and down the line to raw materials and some of the intermediate materials that are required to produce batteries and to produce the other components.”

Also noteworthy for investors is that both Barra and Farley say they see significant growth opportunities tied to digital connectivity. GM expects to double its revenue to about $280 billion by 2030 and hit profit margins of between 12% and 14% by that time, with connected services and subscriptions underpinning much of that growth. And Ford projects that, by 2030, new connected services could be worth more than $20 billion in revenue.

Not all investors are convinced, at least in the short term. Morgan Stanley, for example, downgraded GM’s stock earlier this month from overweight to equal weight on the automaker’s outlook for 2022 and concerns about its EV plans, CNBC reported. And investment bank Jefferies in January downgraded its rating of Ford to a hold, with analyst Philippe Houchois saying that it is “premature to re-rate legacy OEMs for their electric vehicle progress since earnings remain mostly driven by cyclical shortages, returns remain within historical norms and the EV transition is largely a zero-sum-game initially.”

“Investors are highly skeptical, especially of GM and Ford, after so many stumbles over the last decade,” said Wedbush’s Ives. “But now with electric vehicles, it’s the biggest transformation to the auto industry since the 1950s, and Detroit stands to play a big role.”

EV stocks stumble

Meanwhile, once-hot EV stocks have tumbled recently.

Rivian, widely seen as one of the most promising Tesla contenders, had the largest initial public offering of 2021, raising about $12 billion. The company is backed by Ford and Amazon, and has a contract to build delivery vehicles for the e-commerce giant. But amid challenges ramping up production, the market has erased much of the company’s post-IPO value, with the stock dropping from a high of $127 per share at Nov. 16’s close to less than $70 per share last week.

Another startup, Lordstown Motors Corp., saw its stock plummet in the face of numerous controversies and recently has hovered at less than $4 per share. The automaker faced a short-seller report claiming it misled investors about the orders it had for its Endurance truck and last year became the subject of a federal investigation into its business, among other issues.

Another embattled startup, Nikola Corp., also has seen its stock tank since it went public via a SPAC deal in 2020, at which point its market capitalization soared past $30 billion. But it has since faced controversies including the indictment of its founder on charges of criminal fraud related to the business, which he’s denied. Bloomberg reported that the company paid a $125 million civil penalty to resolve fraud claims. Its stock closed at $7.92 per share on Friday, down nearly 23% so far this year and nearly 90% from its peak closing price.

Faraday Future Intelligent Electric Inc. went public via SPAC in 2021 and it, too, has dropped over the last few months. It said earlier this month that its chairman, Brian Krolicki, was stepping down after an internal investigation found the company may have misled investors about pre-orders, Bloomberg reported.

High-profile leadership turnover also has shaken up Canoo and Troy-based Electric Last Mile Solutions. And since late last year, Fisker Inc. and Lucid’s stocks have trended downward, too.

“It’s been a dark cloud over EV SPACs,” Ives said. “And some of that is macro, but a lot of it is company-specific, and it’s caused investors to be skeptical of many of these stories.

“And what that’s ultimately done, it’s caused more investors, when they want to play the EV and green tidal wave theme … to play through the likes of Ford and GM.”

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Glenn Stevens on Mobility with WILS

Glenn Stevens, executive director of MICHauto Discussed the UP200, it’s economic impact and the opportunity for Michigan to lead in outdoor innovation and mobility with WILS’s Dave Ackerly. The UP200 is one of America’s premier 12-dog, mid-distance sled dog races and draws mushers from around the United States and Canada.

Ford names mobility veteran as CEO of Michigan Central

Crain’s Detroit Business 
Feb. 21, 2022
Arielle Kass

Ford Motor Co. has named a CEO of Michigan Central, the innovation district the Dearborn-based automaker is building in and around the old train station in Detroit.

Joshua Sirefman, the co-founder and former president of Sidewalk Labs in New York, will take the helm of the district. Sirefman, 54, will be responsible for the real estate development, as well as collaboration across different sectors, Ford said in a news release Monday. He’ll be in charge of the Innovation Services Business that oversees the agenda set by Ford, Google and other partners in the collaborative space.

Sirefman will also focus on recruitment and placemaking, as well as coordinating governance of the site to ensure there’s sustainable innovation activity that takes place there.

His role will include oversight of Michigan Central Foundation, the new philanthropic arm that will provide training, programming and research for residents, students and businesses in the area.

Sirefman is the “perfect fit” to lead the development, Mary Culler, chief of staff to Ford Executive Chair Bill Ford and president of Ford’s philanthropic arm, the Ford Fund, said in the release.

“His experience in mobility, developmental planning and community engagement — which was especially important to us — will be key to helping guide the district’s team and partners along the path to meaningful innovation that truly helps in creating a more accessible future for all,” Culler said.

“Like all things, the best ideas in mobility come from diverse perspectives and I firmly believe Michigan Central is uniquely positioned to both catalyze such ideas and support the long-term vitality of Detroit,” Sirefman said in the release. “I see this incredible asset — Michigan Central — and the work developed and piloted here living at the nexus of physical, social and economic mobility. As an open platform welcoming all to break new boundaries in innovation across all three fronts, we have an exciting opportunity to be a world-leading place of impact — starting with Detroit communities and extending outward.”

Sirefman is a New York native, but has ties to Detroit through the creation and operation of a program through the Islandview Village Development Corp., a nonprofit community redevelopment organization. The program transformed a declining industrial corridor into a model urban industrial area while encouraging job growth and economic development. Sirefman also co-designed a citywide grassroots industrial retention program as a member of Detroit Economic Growth Corp.

His experience includes urban planning, technology and government in the public, private, institutional and nonprofit sectors. Sirefman has a master’s degree in urban planning from the University of Michigan and a bachelor’s from Wesleyan University.

Sidewalk Labs was founded as an Alphabet company focused on urban innovation. Prior to its creation, Sirefman started Sirefman Ventures, a development services firm that leads transformative projects for corporate, nonprofit and government entities. It led Cornell University’s bid in a New York City competition to attract a new applied sciences graduate program and helped lead the development of the Cornell Tech campus. Sirefman also was a member of New York Mayor Michael Bloomberg’s economic development team and oversaw development in the United States for Brookfield Properties.

Michigan Central will operate as a wholly owned subsidiary of Ford Motor Co. The 30-acre district will focus on strategy and planning, business development, innovation services and mobility partnerships.

The district’s goals include the future of mobility and through Michigan Central, a public-private partnership including Michigan and Detroit designated a Transportation Innovation Zone at Michigan Central, the first in the Midwest. It will allow companies to pilot technologies in a safe, real-world environment.

The former train station that anchors the district is set to open in 2023. Work is already being done through Michigan Central, including an app that helps visually impaired people navigate complicated urban landscapes, programs to support electrification of commercial fleets and work toward changing how goods move on the first and last 50 feet of their journey.

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