Peters, joined by auto industry and labor leaders in Detroit, touts chip legislation

Detroit — U.S. Sen. Gary Peters on Monday took a Senate subcommittee hearing about the automotive sector to the Motor City to tout legislation that would support domestic semiconductor chip manufacturing.

The Bloomfield Township Democrat, chairman of a Senate subcommittee on surface transportation, maritime, freight and ports, convened a field hearing on automotive innovation and semiconductor chips at the Detroit Regional Chamber’s downtown headquarters.

There, Peters called for passage of legislation that includes $52 billion in chip funding, with $2 billion set aside for legacy chips used in autos — a provision written by Peters and Sen. Debbie Stabenow, a Lansing Democrat.

Peters and witnesses who testified during the hearing emphasized the growing importance of semiconductor chips — an ongoing global shortage of which has hampered auto production for more than a year — in modern cars, trucks and SUVs. Today’s vehicles feature thousands of chips that support functions ranging from braking to power steering to heated seats. And electric, digitally-connected and under-development autonomous vehicles require an even greater number of the components.

Peters cast domestic chip production as crucial not only to combating climate change, but to U.S. competitiveness and national security. Today, the U.S. produces only about 12% of the world’s chip supplies, down from roughly 37% decades ago. Most of the world’s semiconductor production is based in Asia.

“In terms of electrification, novel semiconductor technologies promise to reduce charging times, extend range and enhance performance for electric vehicles, among other benefits,” he said. “And not only will electric vehicles help save our planet by combating climate change, they will also reduce our dependence on foreign energy sources and protect Americans from unpredictable gas prices.”

To prepare for a future defined by electric and autonomous vehicles, he argued, the U.S. must shore up its supply chains by bolstering domestic production of chips and other vital goods — an imperative he said has been brought into focus by the supply-chain disruptions the U.S. has experienced during the coronavirus pandemic.

“Our supply chains are efficient, but they are not resilient,” said Peters. “Much of this is due to the fact that we’re too reliant on overseas production.”

Steve Dawes, director of United Auto Workers’ Region 1D, in his testimony advocating for passage of the legislation explained the vital function that semiconductor chips serve in vehicle assembly.

“Electronics control your brakes, steering, your fuel management, your radio, your lights, your cameras, your heated seats, your heated steering wheel, your speedometer, to number just a few,” he said. “Many of these functions were historically operated with cables, shafts, mechanical methods. Now each of these functions are controlled by a dedicated module. Each of these modules contains chips.”

Meanwhile, Garrick Francis, vice president of federal affairs for the Alliance for Automotive Innovation, which represents automakers in the U.S., echoed support for the legislation, casting it in terms of U.S. competitiveness as the automotive industry undergoes one of its most significant transformations in history.

“Government policies, investments, and programs must be modernized and transformed to reflect changes in the global marketplace and gaps in the supply chain,” he said. “Expanding and securing critical supply chains while developing new ones is a key factor in whether the U.S. will remain a leader in automotive innovation.”

Jay Rathert, senior director of strategic partnerships for KLA Corp., which supplies the semiconductor industry and recently opened a second headquarters in Ann Arbor, testified that “a talented and creative workforce, a fair and hospitable business environment, and an ongoing commitment to an investment in R&D” are primary factors guiding the semiconductor industry.

“KLA’s business is worldwide, but we support efforts to increase competition in the chip industry and to restore advanced manufacturing and foundry production in America,” Rathert said in advocating for passage of the CHIPS Act.

Glenn Stevens, executive director of MICHAuto, testified that investment in domestic chip production would support the creation not only of manufacturing jobs, but high-tech jobs — a prospect that will require a “sophisticated talent strategy” in Michigan and across the country.

“These bipartisan pieces of legislation are our chance to secure America and Michigan’s position as a dominant leader in automotive and mobility manufacturing and innovation for the future,” he said. “We shouldn’t pass this opportunity up.”

Peters noted that both the Senate and House now have passed separate bills that would fund the CHIPS Act and said he hopes to see the Senate version approved “within the next few days,” he told The Detroit News, at which point the process to meld the Senate and House versions would begin.

“I think we’ll find a path forward,” he said. “Folks understand how important it is to get this passed, so I’m confident that we’re going to get to the final product. And I’m very confident we’re going to be focused on the legacy chips that are absolutely essential for the auto industry, that we’re going to be able to get it done soon.”

Vermont Sen. Bernie Sanders, an independent, recently called the $52 billion in funding represents “corporate welfare to the profitable micro-chip industry.”

But Peters told The News Monday that he sees it as a national security issue: “We know this a global economy and that other countries invest in this production because they believe that it is essential for their economic security. We have to do the same thing in the United States.”


Read the original article published by The Detroit News.

MICHauto Testifies on Supply Chain and Talent Shortages Impacting the Industry and Economy During Field Hearing with Sen. Gary Peters

Today, March 28, MICHauto Executive Director Glenn Stevens Jr. testified before the Senate Commerce Subcommittee on Surface Transportation, Maritime, Freight, and Ports during a field hearing led by Sen. Gary Peters on autonomous vehicles. Speakers from KLA, the UAW, and the Alliance for Automotive Innovation joined Stevens in providing testimony. Several MICHauto investors were present for the hearing including Denso International America Inc., Dunimas Energy, Foley & Lardner LLP, Ford Motor Company, Piston Group, and Stellantis.

In his testimony, Stevens brought attention to the current issues impacting the automotive and mobility industry with an emphasis on supply chain shortages, the lack of high-skilled talent, and the future of electric and autonomous vehicles. Stevens highlighted the need for bipartisan legislation and investment to address current supply chain issues, expand manufacturing job opportunities, and position the U.S. and the state of Michigan as leaders in mobility and innovation.

Read Stevens’ testimony below and watch the full video.

The United States and particularly Michigan remain at the forefront of automobility innovation and production worldwide. The Great Lakes State leads the nation in the number of automotive manufacturing jobs, investment in automotive R&D far outpaces the rest of the nation, and Michigan’s auto manufacturing output represents 18% of all U.S. vehicle production. However, as both the COVID-19 pandemic, the weeklong closure of the Ambassador Bridge in early February, and Russia’s recent invasion of Ukraine have made clear, episodes of instability that transcend national borders also have painful impacts on the global supply chain and Michigan’s signature industry. As this committee knows, the current shortage of semiconductors has hampered the auto industry’s ability to build and sell vehicles here in America and around the world. In fact, according to AutoFocus Solutions, Michigan Automakers produced 280,000 fewer vehicles, known as “unrecoverable vehicles,” in 2021 due to the semiconductor shortage. Furthermore, North America, in general, produced 2.3 million unrecoverable vehicles compared to China at one million.

There is no shortcut or silver bullet to solve this issue, chips are among the most important components in the assembly of vehicles and will only become more important as autonomous and electric vehicles become more ubiquitous throughout the market. Currently, a disproportionate amount of chip manufacturing is done far from our shores, in countries like Taiwan and South Korea and the shortage of chips now stalling U.S. auto production, illustrates the problematic nature of relying on these foreign suppliers. Therefore, our elected, labor, and industry leaders must prioritize building a more resilient domestic supply chain.    

Intel’s announcement earlier this year that it would invest $20 billion in the construction of two chip factories in Ohio is a promising signal that policymakers and the private sector are recognizing the importance of this issue. Lawmakers in Washington can turbocharge these efforts by passing the CHIPS Act, which would invest $52 billion to expand domestic research, design, and production of chips. There are several other important pieces of legislation I would like to highlight as well. The FABS Act creates a tax credit for semiconductor manufacturing and design that will further incentivize domestic production. The Investing in Domestic Semiconductor Manufacturing Act will ensure that the CHIPS Act, once enacted, will include U.S. suppliers that produce the materials and manufacturing equipment that enable semiconductor manufacturing. This will further incentivize the production of materials and equipment in the United States while also reducing the risk of foreign supply chain bottlenecks. The Securing Semiconductors Supply Chain Act will direct the Commerce Department’s SelectUSA program to solicit feedback from states about how they are working to attract foreign direct investment related to semiconductor supply chains, and then to develop a strategy to build on states’ efforts and augment them with federal support.  All these complementary and bipartisan pieces of legislation demonstrate what my colleagues from industry and labor also know, that building this technology in the United States isn’t just good for business and the American worker, it’s sound public policy.   

Investing more in the domestic production of chips means expanding not just the number of manufacturing jobs but also high-tech jobs associated with the automotive industry and strengthening our ability to keep such jobs in the United States. This is both an opportunity and a challenge as these represent thousands of good, high-paying jobs but will require a sophisticated talent strategy that requires both the public and private sectors to implement. Congress could take a huge step toward implementing such a strategy by agreeing upon a finalized competitiveness package, that reconciles the House’s Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength (COMPETES) Act and the Senate’s U.S. Innovation and Competition Act (USICA). In addition to including much of the legislation I previously mentioned that will directly support U.S. manufacturing, both the House and Senate legislation includes significant new funding for our nation’s science agencies and R&D that will drive innovation in all kinds of important areas, from AI and machine learning to Critical Minerals Mining Research. This legislation would also establish a regional technology hub program that could greatly benefit a region like ours as it grapples with the automobility industry’s rapid transition around both EVs and AVs.

Speaking of AVs, to ensure that we’re not just building the vehicles of today but also innovating for those of tomorrow, policymakers should act now. To this end, we encourage the adoption of federal legislation that will create a safer and more robust autonomous vehicle testing and research environment. Therefore, the Senate should revive the AV START Act. First introduced to the Senate in 2017 by Senators Peters and Thune, this legislation would create a Highly Automated Systems Safety Center of Excellence to review, assess and validate the safety of self-driving vehicles; expand testing exemptions to ensure vehicle manufacturers and manufacturers of automated driving systems are eligible and give the National Highway Traffic Safety Administration the authority to expand exemptions for automated vehicles. This is the type of proactive policymaking that can future-proof the nation for what may otherwise be a tumultuous period for both the industry and drivers as more and more autonomous driving technology is adopted.

Finally, in order to ensure that we are the leaders in this technology and other mobility innovation, we need more high-skilled and high-tech workers to come to the United States. Lawmakers from both parties are aware, in the global economic competition with China and other economic powers, there is perhaps nothing more important than the battle over talent attraction and retention. Despite the much-heralded rise of China over the last several decades, there is still no better place to innovate and do business than the United States. Our universities and research institution are the best in the world. Our business climate and rule of law ensure that new businesses can grow faster and without the fear of public or private interference or corruption that they might encounter elsewhere. Lawmakers can sharpen this competitive edge by taking up the bipartisan immigration legislation currently in the House of Representatives. The Fairness for High-Skilled Immigrants Act would remove arbitrary per-country caps on the number of high-skilled foreign workers that can come to the United States each year. The current system caps the percentage of green cards that any one country can receive at seven percent, a threshold that is quickly met by large populous countries with many high-skilled workers eager to come to our country. Removing these caps will ensure that a first-come-first-served and merit-based system can be implemented that will positively benefit America’s need for high-skilled talent in places like Southeast Michigan and around the country.

In closing, Michigan, the birthplace of the automobile, remains globally competitive as a leader in the automobility sector. The industry employs over 1.1 million people in the State, contributes $304 billion every year to the State economy, and continues to draw significant foreign talent and investment to Michigan. However, this status will be challenged as the industry continues to undergo historic transformations in the coming years. Policymakers would therefore be wise not to let the past success of the American auto industry lull us into a false sense that we will continue to enjoy such success in the future. We need all our leaders, from Capitol Hill to the C-Suite to the Union Hall, to come together, champion, and enact the type of future-oriented legislation I have talked about today. These bipartisan pieces of legislation are our chance to secure America and Michigan’s position as a dominant leader in automobility manufacturing and innovation. We shouldn’t pass it up.


Stellantis, LG Energy Solution invest $4.1B for EV battery plant in Windsor

Detroit News
Mar. 23, 2022
Breana Noble

Michigan has missed out on another electric-vehicle battery plant — this time, to its neighbor across the Detroit River.

Stellantis NV and Korean battery maker LG Energy Solution on Wednesday said their joint venture will invest more than $4.1 billion (5 million Canadian dollars) into a battery manufacturing plant in Windsor, Ontario, creating 2,500 jobs. It will be the first large-scale, domestic, EV battery manufacturing facility in Canada, and the largest investment in the country’s automotive sector ever, according to the companies and political leaders. Construction is scheduled to begin later this year with operations expected to launch in the first quarter of 2024.

The gain for the city of Detroit’s southern neighbor is beneficial in strengthening the cross-border region’s automotive ecosystem and helps to secure the futures of Stellantis’ assembly plants in Metro Detroit, experts say.

But it also suggests just how competitive it is for the significant investments needed as the state’s largest industry undergoes a historic transformation toward electrification. Automakers need cell production near their plants, but also are opting for locations offering millions of dollars in incentives, low energy costs and other business advantages.

“It’s clearly identified where we’ve had weaknesses,” Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, said of the competition Michigan has faced in attracting EV investment. “And actions are being taken to solve them. The programs and the solutions are aligned. This is really critical that we have these private-public partnership solutions coming.”

The new battery plant could have an annual capacity of more than 45 gigawatt hours; the company declined to specify how many vehicles that would support. Stellantis said it is too early to determine whether hires at the plant could be Americans.

“A key part of our future” Mark Stewart, Stellantis’ chief operating officer in North America, said during a news conference, “is right here in Windsor with this first announcement of our first battery JV with LG Energy Systems.”

The 4.5 million-square-foot facility — the size of 112 National Hockey League arenas — will sit on 220 acres that is an empty field behind the city of Windsor’s Public Works Facility about 8 miles from Stellantis’ Windsor Assembly Plant.

The battery manufacturing site will support vehicle production in the United States and Canada. Stellantis will announce a second EV battery plant in the coming weeks that will be in the United States, Stewart said. It has a second joint venture with Korean battery manufacturer Samsung SDI for a plant with an initial annual capacity of 23 gigawatt hours that could grow to 40. The automaker declined to speculate whether the Windsor investment counts out Michigan.

“It’s not just one battery plant, and you’re done,” said Quentin Messer Jr., CEO of the Michigan Economic Development Corp., who noted the MEDC has been in conversations with Stellantis since it began its electrification journey. “We continue to talk and continue to be in active conversation” with Stellantis, though he would not specify if they were late-term.

“To say that we lost out would be saying that the game is decided at the score at the end of the first quarter.”

To secure the investment, Canadian municipal, provincial and federal governments offered “millions of (Canadian) dollars” in incentives to support the project, Ontario Premier Doug Ford said, to preserve Canada’s auto sector and build out its EV supply chain. Closing of the project is subject to regulatory approvals.

“The world is moving to clean tech, and this is Canada’s time to lead the way,” Canadian Prime Minister Justin Trudeau said in a recorded video message due to participation in a North Atlantic Treaty Organization summit.

It marks a continued reversal of fortune for the Great White North. Canadian auto workers union Unifor secured an investment to save Ford’s Oakville Assembly Plant during 2020 contract talks. General Motors Co. in November resumed truck production at its Oshawa Assembly Plant in Ontario after it was down for two years. Stellantis is expected to cut Windsor to one shift from two this summer, but has committed to investing $1.13 billion into Windsor by 2024 for a new platform supporting plug-in hybrid and electric vehicles. The EV battery plant is a positive sign that will happen.

“Now,” Windsor Mayor Drew Dilkens said. “we’re more assured today that future generations will be able to realize their dreams here as well.”

It also may bode well for the future of Brampton Assembly Plant in Ontario, experts said. Forecasters predict the factory that makes the Dodge muscle cars and Chrysler 300 sedan could be without product if the electric Charger and Challenger go to Belvidere Assembly Plant in Illinois. Brampton is more than 200 miles away from Windsor.

“I’m not concerned about the plant closure for Brampton,” Ardis Snow, chairperson for the Brampton unit at Unifor Local 1285, said last week. “I think we’ve positioned ourselves well for future investment and product.”

Canadian leaders championed the country’s access to the mining of critical materials for EV batteries, including cobalt, lithium and nickel. The province highlighted efforts to lower taxes, reduce electricity costs and cut red tape to decrease the cost of doing business in the province by $7 billion a year, said Vic Fedeli, Ontario’s minister of economic development, job creation and trade.

“Our government has a plan to attract more investment in the autos and manufacturing sectors, a plan that is connecting resources, industries and workers in northern Ontario to the future of clean steel and electric vehicles,” Ford said. “Today, we’re once again seeing that plan in action.”

The announcement from the automaker and battery maker also alleviates some concerns that a days-long blockade last month of the Ambassador Bridge by Canadian truckers protesting vaccine mandates that delayed commercial traffic, resulting in downtime at businesses like the Windsor Assembly Plant, would inhibit future investments in the region.

“We have been long-standing partners for nearly 100 years, right?” Stellantis’ Stewart said, noting 90% of the minivans produced in Windsor are delivered to the United States. “We see absolutely nothing different in terms of these batteries, as well.”

Stellantis currently doesn’t offer any fully electric vehicles in the United States, though it does have plug-in hybrid offers on its Chrysler Pacifica minivan built in Windsor, Jeep Wrangler and two-row Grand Cherokee. Batteries for those vehicles come from LGES and Samsung SDI.

Because EV batteries are heavy and transporting them increases risks for damage, automakers typically look for locations within proximity of their assembly plants. Stellantis has several within a 70-mile radius of the selected battery plant location, including two in Detroit and one each in Sterling Heights; Warren; Toledo, Ohio; and Windsor.

That means this investment in Windsor is a good thing even for Michigan, said Glenn Stevens, executive director of MICHauto, the automotive and mobility arm of the Detroit Regional Chamber.

“We really do look at and view Windsor and Ontario as part of the supply chain and ecosystem and cluster density here. This investment actually makes it stronger,” he said. It provides Metro Detroit plants “a committed source of batteries near them, which means those plants have a plan for the future.”

The automaker is investing $35.5 billion into electrification and software by 2025 and expects that half of its sales in the United States and Canada will be fully electric by 2030 with 25 models. To get there, it will need about 150 gigawatt hours of annual capacity for batteries in North America, according to its strategy shared earlier this month.

The Windsor battery plant is the fifth LGES has announced with a Detroit Three automaker. In partnership with General Motors Co., their Ultium Cells LLC joint venture is constructing battery plants in Lordstown, Ohio; Spring Hill, Tennessee; and Delta Township near Lansing. The location of a fourth plant has yet to be announced.

LGES also has a separate battery plant it solely owns in Holland for which the Michigan Economic Development Corp. on Tuesday approved almost $190 million in incentives for a $1.7 billion expansion to quintuple production there by 2024.

Meanwhile, Ford Motor Co. with Korean battery supplier SK Innovation Co. Ltd. opted to make an $11.4 billion investment for EV and battery production in Tennessee and Kentucky, leading to a public rift with Gov. Gretchen Whitmer.

“We did not have the ability to do what we as a state knew that we needed to do in order to retain investment in increasingly energy intensive events and advanced manufacturing,” Messer said, noting this was known prior to Ford’s announcement, but that it accelerated actions for site readiness, bipartisan funding allocation and cooperation with energy providers.

“We are significantly more and more competitive than we were a few short months ago, and I am confident we will be even more competitive in the future.”

Messer said the MEDC is emphasizing the hardworking talent and innovative DNA of Michigan residents, the government response demonstrated in recent months like for the battery investment in Delta Township, its environment protected from natural disasters like hurricanes, and access to water.

“Michigan is competing and has a compelling value proposition for any automaker, any electric battery maker,” Messer said. “And we plan to tell the Michigan story in it, and we’re taking steps to make sure that happens.”

Already there are signs of improvement: Business Leaders for Michigan in its state outlook in January had indicated the Mitten was underperforming in attracting electric-vehicle investments, especially as the state represents roughly a quarter of U.S. internal combustion engine-related jobs.

With the help of $1.5 billion for economic development approved by state lawmakers in December, however, the state is now outperforming that ICE share with five of 12 planned North American battery plants, including the expansion at LG’s Holland plant, Ultium Cells’ plant in Delta Township, and a line to pack together battery cells at GM’s plant in Lake Orion.

In total, LGES has secured more than 200 gigawatt hours annually in North America, which is about 2.5 million EVs. The manufacturer previously shared a commitment to invest $4.5 billion into North America. Bloomberg reported earlier Wednesday that LG Energy Solution also plans to supply cylinder-type batteries for U.S. startups from a new plant in Arizona.

“Through this joint venture (with Stellantis), LG Energy Solution will be able to position itself as a critical player in building green energy value chains in the region,” LGES CEO Youngsoo Kwon said in a statement. “Creating a joint venture battery manufacturing company in Canada, recognized as one of the leading nations in renewable energy resources, is key for LG Energy Solution as we aim to power more electric vehicles around the world.”

View the original article.

State of the Region Industry Spotlight: Automotive and Mobility

Today, March 24, the Detroit Regional Chamber released its 2022 State of the Region report. This year’s regional report card explored data on the ongoing economic impacts of the COVID-19 pandemic on employment, consumer habits, industry sectors, and more.

The automotive and mobility industry in Michigan is one industry sector that has been largely impacted by the COVID-19 pandemic. Michigan, which is home to 96 of the top 100 suppliers in North America and contributes 1.1 million jobs and $304 billion to the economy annually, has been affected significantly by supply chain strain and inventory shortages.


U.S. Light Vehicle Sales

At the start of 2021, U.S. Light Vehicle Sales were projected to increase steadily after experiencing a drop as low as 8.6 million in April 2020 due to operational shutdowns. While sales strongly bounced back in early 2021, since April 2021 there has been a consistent decline in the annualized light-vehicle sales rate, due in part to the ongoing semiconductor chip shortage in the U.S.

At the same time, Average Transaction Prices (ATPs) reached $47,077, up nearly 14% compared to December 2020.


North American Car and Truck Production

In 2021, Michigan car and truck production increased 18%, with total vehicle production reaching 1.03 million in December of 2021. In Michigan, vehicle production totaled 1.8 million units in 2021, an increase of over 17.6% over 2020.  The top producing plants in Michigan – Stellantis’ Sterling Heights Assembly Plant, Jefferson North Assembly Plant, and Ford Motor Company’s Dearborn Truck Assembly Plant – are all located in the Detroit region.


Manufacturing PMI

In addition to an increase in vehicle production, the Manufacturing PMI (Purchasing Managers Index) continues to recover with its 19th consecutive month of growth as of December 2021, signaling that the manufacturing economy is expanding.

A manufacturing PMI above 50% over a period indicates an expansion in manufacturing activity.


Michigan’s EV Footprint

While the state’s signature industry has faced challenges due to supply chain deficiencies, the electric vehicle footprint has grown significantly. According to MICHauto’s 2021 Michigan is Automobility Report, one-third of U.S. battery production and development takes place in the state of Michigan, positioning the state to be the epicenter of the next decade of automotive production and innovation.

Numbers show that Michigan is paving the way for greater EV advancement through investments in new facilities that will produce all-electric vehicles and components. A total of $10.6 billion was invested in EV and AV firms throughout the state from 2010 to 2020.


For more about the Detroit region by the numbers, view the full 2022 State of the Region Report and watch the event presentation.

MICHauto Connects Mobility Industry and Innovators with New Innovator Xchange

Today, MICHauto, announced the formation of the Innovator Xchange, to help OEMs, suppliers, and other businesses better engage with startups or early-stage companies working on technologies that will advance the automotive and manufacturing ecosystem in Michigan. The MICHauto Innovator Xchange will accelerate growth and industry transformation by creating an access point for startups to engage with businesses in the MICHauto community.

“The strength of Michigan’s automotive, mobility, and manufacturing industries have always relied on innovation,” said Devon O’Reilly, director of entrepreneurship, community engagement, and mobility initiatives for the Detroit Regional Chamber. “The MICHauto Innovator Xchange will create a more robust ecosystem for startups to bring their work to the marketplace. This will help ensure that Michigan’s signature automotive industry remains a global leader.”

The MICHauto Innovator Xchange Community

The MICHauto Innovator Xchange will have two main types of organizations.

  • MICHauto investor companies, including OEMs, suppliers, and other consumers of innovation.
  • Startup or early-stage companies with a CASE (Connected, Autonomous, Shared, Electric) or Industry 4.0-related technology seeking to engage directly with the automotive and advanced manufacturing ecosystem in Michigan.

Startups Already Involved in Innovator Xchange

The following startups have already joined MICHauto’s Innovator Xchange.

  • Airspace Link
  • Adastec
  • Hage Auto
  • Kuhmute
  • Jade
  • Integral
  • Vehya

Participation in The MICHauto Innovator Xchange

MICHauto’s commitment to advancing a community of innovation will allow technology companies and startups better access to networking opportunities, operational support, and funding. Furthermore, Innovator Xchange members will have access to exclusive programming, data and research, and quarterly thought leadership events. This new ecosystem will connecting consumers of innovation with creators of innovation.

Organizations that are interested in joining the innovator exchange should contact Devon O’Reilly, director of mobility initiatives for MICHauto, at doreilly@michauto.org or 313-402-0371.

For more information, including an application to join, visit https://michauto.org/innovator-xchange

Graphite Processing Plant for EV Industry, 125 Jobs Planned in Warren

Crain’s Detroit Business
Kurt Nagl
March 22, 2022

Graphex Technologies LLC is planning a graphite processing plant in Warren expected to create 125 jobs and give automakers a local supply of a mineral vital for lithium-ion car batteries.

The company is entering a joint venture with Royal Oak-based Emerald Energy Solutions LLC to invest $50 million to $60 million in the facility, said John DeMaio, president of Graphex’s graphene division.

The 150,000-square-foot plant, expected to be operational by the second quarter of 2023, would have the capacity to produce annually 15,000 metric tons of coated spherical graphite — the main anode material for most electric vehicle batteries and renewable energy storage.

It would be among the first large-scale graphite processing plants in the country and the first domestic plant for Graphex, which has roots in Hong Kong.

“It produces a couple of effects. It’s bringing technology and jobs back to the U.S.,” DeMaio said. “It’s providing local supply chain to the EV (industry) and EV battery production. Because Graphex has control of that entire midstream, it affords a level of stability and predictability in supply chain.”

Stability is the key word for automakers rethinking their supply base after the upheaval of the past couple of years, including the microchip shortage, Ambassador Bridge blockade, and geopolitical conflict. At the same time, the transition to EVs has offered a variety of companies such as Graphex a new entry point into the automotive market.

Jobs at the graphite plant would be a mix of unskilled production labor, skilled mechanical work, and management positions with a pay range of $15-$60 per hour.

The company is seeking local and state incentives for the facility, which will have production, storage, testing, and administrative offices.

The plant will be in the Emerald Business Park, a recently renovated, multi-building industrial complex on Hoover Road just north of Eight Mile Road that also houses cannabis grow operations.

Emerald Energy Solutions, an affiliate of the business park operator, will fund the construction and operation of the plant, while also managing governmental and regulatory concerns.

Graphex said it will arrange for the supply of graphite from China, where it has a base, and provide the patented technological expertise for processing it.

DeMaio declined to detail the ownership structure of the joint venture or disclose terms of the agreement.

Graphex is a subsidiary of publicly traded Graphex Group ADR, which is domiciled in the Cayman Islands with an administrative headquarters in Hong Kong. It reported revenue of $49.9 million in 2020, the most recent year available.

Although the company does not have any supply contracts in place with Detroit area automakers and battery makers, DeMaio said those discussions are ongoing and he is confident they will be fruitful. The Warren plant is a speculative though confident play for future EV business, DeMaio said.

“The Big 3 and others, to hit their projections of numbers of electric vehicles produced, they know that they have to beef up the supply chain, and they’re looking to lock down stable supply as local as they can,” he said.

View the original article.

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.

Leadership
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.