Daniel Howes

Commentary: GM plant gives state chance to recharge

Any way you frame it, General Motors Corp.’s move into the clean, 21st-century battery business is a big win for a place badly in need of one.

Metro Detroit is likely to emerge from the process with the first battery pack assembly plant operated in the United States by any automaker. The region — possibly Warren, according to a ranking official — could end up with the nation’s largest battery lab, even as an advanced battery research facility is established at the University of Michigan.

The state, beset with the nation’s highest unemployment rate and an image as the epicenter of industrial decline, could reap as many as 15,000 jobs over the next five years from GM and suppliers, the president of the Michigan Economic Development Corp., Jim Epolito, told me Monday.

What all of this could say about Michigan’s economic future and its technical capability, as governments, automakers and consumers seek viable alternatives to gas-powered transportation, is hard to understate.

But this much is certain: It’s all good, positive and modern, in sharp contrast to the past few months of decline, distress, political ridicule and predictions of impending dissolution. GM as the solution is preferable, and much more refreshing, than GM the problem.

"Hopefully we’ll become ‘battery valley’ or ‘fuel cell valley,’ " Epolito said. "It’s a huge race. We can become the battery capital of the world. It’s a marvelous, positive statement for Michigan and we need more of that."

Yes, we do — as much as this place needs GM to steer clear of likely financial collapse. The Detroit automaker’s bold step into a space dominated by the Asians generally and Toyota Motor Corp. specifically is a claim for relevance, technical capability and longer-term thinking that would have resonated with the smart folks in Washington had any of them bothered to show up.

"Design, development, and production of advanced batteries must be a core competency for General Motors," Chairman Rick Wagoner said at the North American International Auto Show. "Our facility will be the first lithium-ion battery manufacturing plant operated by a major automaker in the U.S."

Skeptics will dissent, focusing instead on GM’s near-term cash needs, its awful credit ratings, an imploding global car market and prospects the recession will lengthen. Understandable maybe, but insufficient in an industry where failure to anticipate and plan for the future is equivalent to corporate suicide.

Meanwhile, the opportunities for Michigan here are significant: the first electric-drive car, the Chevy Volt, would be assembled in GM’s Detroit-Hamtramck plant; the battery pack, the first of its kind, would be sourced from the state; battery R&D would be ramped up, and the state’s flagship university would be positioned to reassert its leadership in cutting edge automotive research and engineering.

GM’s move is vital for the state to begin repositioning itself as a center for clean battery research, engineering and manufacturing — a key strategic goal of Gov. Jennifer Granholm’s controversial economic development strategy. But it’s not sufficient.

"This is going to be a $50 billion industry by itself, " said Michigan House Speaker Andy Dillon, D-Redford. "And it’s not just automotive."

For Michigan to play a key role in the electric car industry, manufacturers of key components such as batteries and power units need to set up operations in the state. Otherwise, Shai Agassi, founder of the Better Place electric car project, told The Detroit News, there’s no purpose to ship those components here "just to wrap the metal around them."

Which comes down to one word — competitiveness. GM’s battery investments, a complement to its billion-dollar play for the Volt, are designed to take advantage of a $335 million tax-incentive package approved by the Michigan Legislature.

The simple truth is that Lansing’s political class, even as it wrestles with another massive budget deficit, cannot lose sight of the need to improve Michigan’s business climate with the same intensity it readily focused on the film industry. Done right, with lures the size of GM and Ford Motor Co., electric-car suppliers in search of new customers are likely to come.

"I reject the notion that we can’t do it here" in Michigan, President Fritz Henderson said of GM’s advanced technology effort. "To be good at electric vehicles, you’d better be good at batteries and vehicle integration. This is something that we needed to do and wanted to do."