Maria Thompson: Michigan is best in U.S. for battery research and manufacturing
Michigan’s venture capital industry is still too small to provide funding for a capital-intensive industry like battery manufacturing.
Maria Thompson readily admits that.
Nonetheless, Michigan is still the best place in North America to research and manufacture new battery technologies. Thompson, who recently retired from leading A123Systems’ Ann Arbor operation, is convinced of that, too.
That explains why A123Systems - a firm nurtured and cultivated in the fast-paced, capital-rich entrepreneurial atmosphere defined by the Boston region - has embraced Michigan as the main catalyst for its growth.
Here’s a little secret in the tech world. Boston and Silicon Valley are still great places to get a company off the ground, find talent and secure funding. But once a company has advanced beyond startup phase, that firm is wise to consider seeking a home in a state that boasts a legendary work ethic and high quality of life at a fraction of the cost of coastal living.
A123 grew up in Massachusetts and, in 2006, acquired 15-year-old Ann Arbor-based nanomaterials startup T/J Technologies.
In the four years that followed that acquisition, T/J co-founder Thompson gradually convinced A123 that its future was in Michigan - not in Massachusetts or foreign manufacturing markets.
Thompson, honored Thursday night as the keynote speaker at the Michigan Celebrates Small Business event in Lansing, recently retired from A123 to spend more time with her family and pursue other interests.
But her leadership in nurturing A123 into a Michigan company is not be forgotten. She’s not ashamed about singing the state’s praises. She secured political support to help A123 win a $249.1 million federal grant in August, not to mention more than $130 million in tax credits from the Michigan Economic Development Corp. to support its growth here. Now, the company plans to hire 3,000 to 5,000 workers at battery manufacturing operations in Livonia and Romulus.
When Thompson became president of A123’s Ann Arbor division after the T/J acquisition, “they were not thinking about producing in Michigan,” she said.
But she aggressively promoted Michigan’s manufacturing workforce and argued that A123 should invest in domestic battery production to keep the U.S. competitive in this crucial market.
“They accused me of working for the MEDC,” she joked.
That facetious suggestion might actually sit well with MEDC CEO Greg Main.
He said Michigan has secured some $6 billion in battery plant expansions, including major companies like Johnson Controls, LG Chem and Dow Chemical. And A123, of course.
“The worst thing that could happen is if we traded our dependence on foreign oil for a dependence on foreign batteries. And that’s in danger of happening if we don’t nurture and grow this industry,” Main said. “We’ve got a great start. We’ve got lots of commitments.Â
A123, it seems, is committed to domestic manufacturing operations. And committed to Michigan.
In fact, I asked Main, shouldn’t A123 just move its official headquarters to Michigan? The vast majority of its employees are here, so why not the headquarters?
“Well, we’ve suggested that to them,” he said. “But we’re content with getting all their manufacturing activity, as well.”
Comments
Hot Sam
Tue, May 4, 2010 : 5:42 a.m.
"""The worst thing that could happen is if we traded our dependence on foreign oil for a dependence on foreign batteries.""" Where does Mr Main think the minerals for these batteries come from? When is the last time the state of Michigan opened up a new nickel mine? I'll give you a hint: the same country that owns our finances, does most of the mining. If we want to be truly dependent, just create a system based on batteries...and learn to speak Cantonese...
Nathan Bomey
Mon, May 3, 2010 : 1:39 p.m.
Mick52, A123 is producing lithium-ion batteries for use in electric vehicles and electrical grid applications. Electric cars get most of the attention from the press, but grid operators will also need batteries to store excess power produced by renewable sources. For example, the wind blows the hardest at night, when electricity demand is soft. If the grid operators -- firms like Novi-based ITC Holdings -- can find a way to store that energy efficiently, it could be distributed to customers when demand is high.
runbum03
Mon, May 3, 2010 : 6:47 a.m.
"The worst thing that could happen is if we traded our dependence on foreign oil for a dependence on foreign batteries." Main seems not to be paying attention much as every one of these projects has a foreign partner, if not majority partner. Good grief.
Mick52
Sun, May 2, 2010 : 7:08 p.m.
Interesting article, its good to see some jobs coming to Michigan. I do have some questions that never seem to be answered or addressed in articles like this. First, what type of batteries? For autos or just batteries for everything? If this is in pursuit of electric cars, I wonder about the viability of the industry. What are the projections for battery operated cars? Is it expected that with R&D batteries will be as efficient as gas powered cars? Last for 300 miles and recharge as fast as you can fill your tank? How about cost. At a local Chevrolet dealer, I asked a sales man if the Chevy Volt is really going to cost $40,000. He said maybe the car would only cost $30k but you will have to by your $12k battery separately. The Honda Prius is minimally $25k. A Toyota sales woman told me that you do not make up the cost in fuel savings per a study by Toyota when gas cost $3.85/gal. These alt fuel cars seem to be very expensive, for the rich. Will the prices come down? SURE they will. Finally, these companies seem to be getting govt grants and tax abatements for funding. What about investors? If the industry is believed to become profitable, why aren't investors funding these rather than tax dollars. I guess my concern is that unless we can prove these companies are going to be profitable and generate affordable products, how do we know these efforts will succeed? Two main reasons I question this. First, I read or heard, recently that investors are not biting on these companies. Sorry I do not have a source. Second, a few years back a movie came out, "What Happened to the Electric Car?" In it a reporter or some auto company engineer said, "If they could build a car that ran on "pig ----" (droppings) and was profitable, they would build it." Seemed to make sense.