08 May 2010

Maria Thompson: Michigan is Best in U.S. for Battery Research and Manufacturing

Ann Arbor

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.

"We’ve got to keep it going, because it will eventually migrate off shore if we don’t keep working at it.”

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.”

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