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Holland in line for $450 million jolt to economy; JCI gets $299 million
8/5/2009
By BEN BEVERSLUIS
The Holland Sentinel
Posted Aug 05, 2009 @ 10:40 PM
Holland, MI — With Michigan garnering more than $1 billion in federal grants to develop next-generation electric vehicles and batteries and the Holland area in line for up to $450 million of that, this area could become an epicenter of the auto tech industry shake-up.
Department of Energy announcements Wednesday revealed that, along with the Johnson Controls Inc. battery project announced this spring, Holland is in the running for a second facility.
Holland, St. Clair and Pontiac are possible locations for the second project, in which Compact Power Inc., a subsidiary of LG Chem, will be building lithium-ion polymer battery cells for the GM Volt.
The DOE awarded that project $151.4 million in advanced vehicle grants.
On Wednesday, it also awarded $299.2 million to the Johnson Controls-Saft joint venture in the Meadowbrook plant on Holland’s south side. The company said Wednesday it hopes to have in operation before the end of 2010 the facility to build lithium-ion cells and hybrid battery systems. It projected about 500 jobs when it announced the project this spring.
If Compact Power project joins the JCI project in Holland, Wednesday’s announcement would mean nearly $450 million of federal investment in the area
“To have an investment on this scale in the top new technology in the automotive world will put us on the global map,” said Randy Thelen, president of economic development agency Lakeshore Advantage.
JOBS FOR MICHIGAN
• $1 billion to Michigan
• 11 Michigan manufacturers and research facilities will receive grants
• $299 million to JCI for lithium-ion cells and hybrid battery systems
• Holland up for $150 million more for lithium-ion battery cells for GM Volt factory
• 500 jobs by 2010 at JCI Meadowbrook
• The Detroit Three will receive more than $400 million to manufacture thousands of advanced hybrid and electric vehicles
• Projected to create about 30,000 Michigan jobs by 2020 — 6,800 within 11⁄2 years
“Every automotive president, every leader in the industry, is talking about how cars needs to transition to a different power system. And hereis, soon to be produced in Holland.”
He called the money “a great big shot in the arm for the economy,” noting the JCI project and possible Compact Power Inc. project provide a whole new market for area suppliers.
Vice President Joe Biden announced in Detroit Wednesday the funding that will send, in all, more than $1 billion to Michigan. He spoke of building on Detroit’s rich automotive past to help the state and national economic recovery.
The DOE announcement revealed Compact Power as the long-rumored possible second battery plant for West Michigan.
Compact Power is a subsidiary of LG Chem, a member of the South Korean conglomerate LG Group. Its CEO in January hinted the company might build battery cells in Michigan.
In late winter and early spring, the Michigan Economic Development Corporation asked for possible sites for the LG Chem project. The company toured the area in the spring.
Thelen cited a number of factors in the Holland-area’s favor, including the experienced advanced manufacturing workforce, a high degree of engineering capability and an “industrial grade” infrastructure of utilities, highway and airport.
He also noted the workforce training available at Grand Rapids Community College as well as engineering programs at Hope, Calvin and Grand Valley.
“Obviously, we’re competing hard for it,” he said.
Gov. Jennifer Granholm said the federal money creates “a whole new sector within the auto industry.” Michigan earlier this year created $700 million in battery tax credits.
In Wednesday’s announcement, the Obama administration said 11 Michigan manufacturers and research facilities will receive grants. Overall, 48 projects in 25 states will create or retain tens of thousands of jobs, it said.
Michigan and Indiana combined receive the largest portion of the 2.4 billion in grant money. Along with battery makers, General Motors Co., Ford Motor Co., Chrysler LLC and Dow Chemical Co. are receiving grants.
The Detroit Three will receive more than $400 million to manufacture thousands of advanced hybrid and electric vehicles as well as batteries and electric cars.
Besides JCI, A123 Systems Inc. in Romulus will receive $249 million to manufacture advanced batteries. And in addition to Compact Power, a Dow joint venture called KD Advanced Battery Manufacturing in Midland will get $161 million for making battery cells and materials.
The University of Michigan, Wayne State University and Michigan Technological University in Houghton will receive more than $10 million for education and work force training.
“There’s no reason why ... the United States of America cannot lead and will not lead the 21st century in the manufacture of automobiles again,” Biden said. “You can do it. We can help you get there.”
Granholm said an independent analysis performed by Michigan State University estimates that if the primary companies and facilities who received grants are successful in their development plans, they could create about 30,000 jobs by 2020 — 6,800 within 1 1/2 years.
“It’s not the only answer, but it’s an important step for the diversification of Michigan,” she said.
— The Associated Press contributed to this report
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