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Tue October 18, 2011
Magic bullets in the form of advanced battery manufacturing (Part 2)
Three years ago, the advanced battery industry in the United States existed only in the imagination.
Plenty of people believed electric cars would be the next big thing, and they would be powered by lithium ion batteries; the same kind of batteries that are in cell phones and laptops.
But in 2008, almost all of the lithium ion batteries in the world were made in Asia.
Randy Thelan heard that might be about to change.
Batteries come to Michigan
Thelan heads up the local economic development office in Holland, Michigan, a small town on the shores of Lake Michigan.
He had heard one his local companies, Johnson Controls might be getting into the battery business.
"It wasn't like we were making a direct pitch that we knew they were building a factory. It was just sort of planting the seed, and suggesting to their leadership, keep Holland in mind as you guys are looking to invest and add to their capacity," says Thelan.
While Thelan was working his angle for Holland, the state of Michigan was about to make a big commitment to the new future in batteries.
In December of 2008, then Governor Jennifer Granholm signed a new law to offer up to $335 million in tax incentives for battery companies in Michigan.
Within a year, Holland landed that Johnson Controls battery plant.
The next year it landed another one for LG Chem,and now, just down the road in Muskegon, Michigan, another lithium ion battery plant is going up.
Thelan estimates these companies and their suppliers will have created about 750 jobs by the end of the year.
"Ultimately, by 2020, we believe this is a 10,000 job, $2 billion opportunity for West Michigan and we're well on our way," says Thelan.
Number of battery-related jobs over hyped?
Not everyone is on board with those job projections.
Pike Research analyst Dave Hurst tracks the electric vehicle industry.
"In terms of direct jobs, I would think there'd be something closer to the neighborhood of four to five thousand jobs," says Hurst.
When he says he expects to see four to five thousand jobs, he means nationwide.
So, in his view, the jobs numbers in Holland and elsewhere are being oversold.
"But I think the importance of the industry is not being oversold. I definitely think this is a critical industry to both Michigan and the upper Midwest," says Hurst.
Hurst says the bad news is if you're sitting in a town in the Midwest and you haven't heard about a new battery plant in the works, you probably won't.
The industry that didn't even exist three years ago is now firmly set.
It's in Holland.
It's in Detroit.
And it's in Indianapolis, around the EnerDel plant, but that doesn't mean everyone else is just giving up.
Tapping other advanced battery opportunities
In Northeast Ohio, the economic development office called Nortech has developed a roadmap for tapping into the new advanced battery industry. Batteries for electric cars play only a small role in the roadmap.
Instead, officials are focused on much larger batteries that can store excess power created by windmills and solar panels.
Nortech estimates $49 million has already been invested in the region.
And Illinois is playing a key role in battery research. The federal government's Argonne National Laboratory, along with universities in Illinois, have developed much of the technology that goes into lithium ion batteries.
Matthew Summy of the Illinois Science and Technology Coalition says he doesn't mind if most of the jobs from that research have gone to other Midwestern states.
"We need all parts of this region to function and to outperform so that we're producing the kind of innovation that just 50 years ago, or even 25 years ago, the Midwest was known for," says Summy.
*All this week, our Changing Gears team is taking a look at Magic Bullets - the big ideas that we've been told will transform the Midwest.