Made-In-USA, GM Volt Battery Pack, with Ex-GM CEO Rick Wagoner. Image credit:EVBeat
Michigan’s sagging manufacturing base is getting a big employment boost from makers of lithium-ion batteries. The four Li-O car-battery making operations taking root in the state illustrate how instrumental supply chain management and government incentives can be in "home sourcing" significant numbers of green jobs. Environmental Leader covered the story in:- Four Lithium-Ion Battery Makers Setting Up Shop in Michigan . Money quote follows.
On April 14, four companies said they will invest nearly $1.7 billion in Michigan manufacturing plants, with the assistance of nearly $550 million in tax breaks, according to CleanTech Brief.Analysis. It takes a major manufacturer with purchasing power leverage over suppliers to mandate that contract suppliers, such as battery makers, locate operations close to US assembly plants. Breaking US car makers up, with parts sold to the highest bidders, possibly to foreign owned companies, could compromise this promising development. Tax breaks for foreign firms: not likely to be supported by already overtaxed US citizens.
Viewed from the international perspective, it only gets more complex.
State and Federal Stimulus packages will keep government vested in the big picture policies that affect electric vehicle success in America.
Trade policy and foreign affairs are key to making PHEV's succeed in the USA
Two South American nations are the world's principal source of lithium salts needed for these batteries. A favorable trade relationship with, say, Peru, can give US car makers a production cost advantage over Chinese battery makers. China knows this, of course. Sparks are going to fly if trade "fairness" becomes an issue.
Immigration reform and border policy looms.
Do suppliers to Detroit car makers want to put battery component assembly plants in a drug cartel-led war zone? Unless they are intent on "not-in-time" becoming a manufacturing paradigm, I think not.
Expect some industries to lobby for Mexican border programs and policies they think will best protect their sunk costs and profit margins at south of the border operations.
And, expect populist support for policies that will instead bring more operations and jobs to Michigan citizens. Border area security, organized labor, and anti-immigrant sentiments have both overlapping and clashing interests in this. Bound to be dicey.
The US/Mexican border dynamic could be transformational of industrial and security policy if Congressional delegate see and act on the linkages.