Detroit--Yes, Hard-Hit Detroit--Is Becoming a Poster Child for Green Jobs

Last Updated Jan 7, 2010 12:06 PM EST

When Energy Secretary Steven Chu announced $2.4 billion in advanced battery and electric drive grants back in August, he chose to speak from Elkhart, Indiana. The "RV Capital of the World" had been hard-hit, just like Detroit, by the recession. People weren't buying RVs, and they weren't buying SUVs, either. Unemployment went to more than 18 percent in Elkhart County, at the same time it was over 15 percent in Michigan.

President Obama obviously sees Elkhart as some kind of recessionary poster child, because he's been there four times recently. But things are looking up slightly in Elkhart, where unemployment has declined to 14.5 percent and the Norwegian battery carmaker Think has just announced it will be producing its City car there. Indiana Governor Mitch Daniels, a Republican, shared a podium with Richard Canny, the Australian-born CEO of Think.

And now it's Wayne County, Michigan's turn for dignitaries on the podium. I recently wrote a story identifying five cities that will be green job magnets, and one entry got a lot of attention--Detroit. I certainly know that Michigan is hurting, and the state has experienced 15.3 percent unemployment--worse than Elkhart. Between 1998 and 2007 the state lost 3.6 percent of its jobs. But Michigan had also created 22,000 clean-tech jobs in that same period, and started 1,932 clean businesses. Many more are to come, because Michigan was a primary recipient when Chu announced that $2.4 billion in funding to 48 companies.

Brownstown, Michigan was doubly blessed, winning not only $249.1 million (split with Romulus) for A123 Systems battery manufacturing, but also $105.9 million for GM to built battery packs (using LG Chem cells) for the forthcoming 2011 Chevrolet Volt (which uses a gas engine to supply electricity to the electric motor that drives the car). And it was to Brownstown today that a plethora of state dignitaries (almost all Democrats) trekked to see the unveiling of the very first Volt battery pack. The first finished Volts will start trickling out of Michigan later this year.

It's hardly surprising that rare good economic news brings out the political cadres in the Midwest. But there are reasons beyond the pork barrel for green-tech to locate here. Canny told me the tax breaks he got from Indiana were nice, but more important was the proximity to Detroit and Indiana's own rich base of laid-off auto workers. It's not just Detroit itself--the city is ringed with auto-savvy suppliers built up over 100 years of manufacturing dominance.

The emphasis on the podium was on green jobs in Michigan. Chairman and acting GM CEO Ed Whitacre pointed out that GM had invested $43 million of its own taxpayer-controlled money in the plant, which occupies 160,000 square feet. The company is investing a total of $700 million in Volt-related production, all of it in Michigan. The Detroit-Hamtramck (Whitacre couldn't pronounce the last part of that, revealing his Texas roots) plant that will produce the Volt gets $336 million, and the rest is going to suppliers in Grand Blanc (tooling), Bay City (camshafts and connecting rods) and the engine generator (three plants in Flint).

"Can you imagine how hard it is to develop batteries for something as complex as the Volt?" Whitacre asked. The investment, he said, "is a sign of our commitment to our state, and to our customers who want clean and efficient vehicles."

Michigan Governor Jennifer Granholm praised Chu, without whose efforts "I don't know if we'd be looking at a restructuring or a liquidation." She cited a Michigan State survey that estimated battery production could bring 40,000 jobs to the state. "This is the beginning of the remaking of Michigan's future," she said.

Chu put the Volt funding in context as part of Obama's goal of putting a million plug-in cars on the road by 2015. "America should be leading the world in clean energy technology," he said. "When we rev up our innovation machine we can surpass any other country."

Congressman John Dingell, the auto industry's staunchest defender in Congress (but not historically a friend of clean car development), said that Chu was welcome whenever he comes to Michigan with "a couple of loose billion." He also declared, "We are going to show those foreigners how we make cars here in the U.S. You ain't seen nothing yet."

Senator Carl Levin made a good point. American carmakers, he said "are not competing with industries in other countries; we are competing with governments that support those industries." It's true that some Chinese carmakers, for instance, are actually owned by the state, but lately that's also been true of GM and Chrysler.

Photo: General Motors