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Published: Friday, 1/16/2009

Michigan charged up over electric-car developments

DETROIT- Suddenly, after months and months of despair, there was a glimmer of good news from the domestic auto industry.

In fact, the largest Detroit automaker, the state's governor, and a key researcher at the University of Michigan each separately proclaimed that they had seen the state's future - and that a major part of it lies in lithium-ion electric batteries.

First, General Motors announced it was going to make the battery for its coming electric car, the much-ballyhooed Chevrolet Volt, in Michigan. "The design, development, and production of advanced batteries must be a core competency for GM, and we've rapidly been building our capability and resources to support this," said General Motors Chairman Rick Wagoner.

Suddenly, after months of scathing criticism, the press was saying nice things about GM and its embattled chairman again.

"This really is a huge development," said David Cole, chairman of the nonprofit, Ann Arbor-based Center for Automotive Research.

The Detroit Free Press states "this could be the start of something big," for Michigan, adding that it couldn't come at a better time, given the condition of the state's - and nation's - economy.

Yet while nobody wants to be a naysayer, there are some indications that the much-ballyhooed announcement may mean less than meets the eye. First of all, nobody has said where the battery factory would be, though GM did say it will select and renovate an existing plant somewhere in southeast Michigan.

Meanwhile, the automaker announced that it had selected a company to produce the lithium-ion cells that make up the main component of the electric batteries. That company, however, is not in Michigan or even the United States. Instead, GM chose LG Chem, a Korean firm with a subsidiary called Compact Power in Troy.

That arrangement will apparently continue. Lost in the congratulatory atmosphere was the real story. The idea is to have the batteries only assembled in Michigan, after the parts are built abroad and shipped here. For now, Compact Power will assemble them.

"They [the Koreans] may even be assembling them after the [battery] plant is up and running," Mr. Cole noted.

There are grumbles and worries from some that GM is putting too many of its eggs in the Chevy Volt basket. The car, toward which the automaker has now committed more than $1 billion, is not even scheduled to go into production until next year.

It is not clear whether the automaker has gotten all the bugs out of the batteries. Nor is it clear how many Volts GM can sell. Nobody knows whether the Volt will indeed be the car of the future, an expensive curiosity, or a total flop along the lines of the legendary Edsel.

GM's Mr. Wagoner left little doubt as to where he stands. Announcing the battery plant earlier this week, he proclaimed, "This is a further demonstration of our commitment to the electrification of the automobile, and to the Chevrolet Volt."

Cynics, however, wondered whether the decision to put the plant in Michigan might also have been a demonstration of GM's commitment to more bailout cash. The automaker has gotten billions in controversial loans from the federal government in recent weeks, in an effort to stave off bankruptcy. Most experts think the automaker will need even more money later this year, as long as the credit crisis persists.

Michigan Gov. Jennifer Granholm has been a big supporter of the bailout process, as has President-elect Barack Obama. But the thought has occurred to some that even they might find it hard to support future bailout money if GM were to have located the battery plant overseas.

Meanwhile, in a separate effort aimed at securing the next generation of batteries, the governor signed a bill to earmark $335 million for luring battery research and development to Michigan.

And in Ann Arbor, Sakti3, a start-up company led by University of Michigan professor Ann Marie Sastry, thinks it is on the verge of a breakthrough that will vastly improve the lithium-ion battery.

The 41-year-old engineering professor founded the business after she and some of her graduate students made what seemed to be a major breakthrough. Her goal is to make electric vehicles both practical and affordable anywhere - and to make Michigan the nation's major producer of batteries to power these vehicles.

Their work has won a lot of praise. The Michigan Economic Development Corp. awarded Sakti3 (the word means "power" in Sanskrit) $3 million, plus additional tax credits. A Silicon Valley venture capital firm threw in $2 million more.

But no one knows when, or even if, Sakti3, which has only ahandful of employees, will have anything to market. Meanwhile, Detroiters are preparing for the annual North American International Auto Show. Stripped a little of its normal glitz, the show, held in Detroit's Cobo Center as always, opens to the public tomorrow.

As it does, 10 million Michiganders will hang on in the state with the nation's highest unemployment rate, waiting for jobs, some of them. Waiting, all of them, for the future to be born.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade's ombudsman, writes on issues and people in Michigan.

Contact him at: omblade- @aol.com



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