Showing posts with label manufacturing. Show all posts
Showing posts with label manufacturing. Show all posts

13 August 2012

Wind Energy in Michigan 'On the Edge of a Cliff'

Story first reported from freep.com


With the auto industry on the verge of collapse in 2008, former Michigan Gov. Jennifer Granholm and other state officials were eager to diversify the economy and create thousands of jobs by making a big push into alternative energy.

To capitalize on the state's strengths, they focused in particular on the manufacturing of parts for wind turbines.

But four years later, the drive to grow a new sector built on clean energy has lost momentum with little to show, the victim of turbulent industry conditions, Washington politics and what some critics would call misguided government policies.

Several high-profile projects have encountered significant delays and have yet to launch full-scale production. They include a manufacturing plant for large wind turbines in Saginaw, a new foundry in Eaton Rapids to make iron parts for wind turbines and an innovative ethanol plant in the Upper Peninsula.

In late June, one of the state's major solar industry players, United Solar Ovonic, was liquidated.

Even some of the wind turbine parts suppliers that have successfully launched production have seen a sharp drop in orders because of uncertainty over whether a production tax credit that expires at the end of December will be renewed. Ventower Industries in Monroe started building giant wind turbine towers late last year in a new factory, but its business would be three times larger if the tax-credit situation was resolved, said Scott Viciana, the company's vice president.

"The wind industry is on the edge of a cliff," said Matt Kaplan, associate director of IHS Emerging Energy Research, a consulting firm in Cambridge, Mass. Although, wind turbine repair companies are doing well compared to manufacturing companies, because repair is less costly than replacement.

He and other experts predict that 2012 will be a record year for the installation of wind turbines as companies rush to take advantage of the tax credit before it ends. On the flip side, however, the number of installations could plummet to record lows next year, Kaplan said.

The tax credit isn't the only headwind facing wind turbine parts manufacturers. Just like in the solar industry, the wind industry has too much production capacity, which is driving turbine prices lower. That's good for the growth of wind energy but puts pricing pressure on turbine parts suppliers. Kaplan forecasts that the industry is on the verge of consolidation.

In Michigan, the alternative energy industry lost a key proponent when Granholm left office at the end of 2010. She tried to transform the state into a manufacturing hub for wind and other renewable-energy industries, providing millions in grants, tax credits and other incentives to entice companies to the state. A team of economic development officials worked to grow green jobs.

Today, Michigan has 35 wind-related manufacturing plants, according to the American Wind Energy Association. In 2010, the state had nearly 80,000 green jobs, which accounted for 2.1% of its total employment, a U.S. Bureau of Labor Statistics study found.

The growth of the alternative energy industry has always been dependent on government subsidies. Critics, such as the Mackinac Center in Midland, have long opposed this assistance, arguing that these business ventures should be based on market forces.

Under Gov. Rick Snyder, programs specifically designed to spur the growth of the alternative energy industry no longer exist. The state revamped its economic development strategy with the goal of treating all industries equally.

"We're doing what we can to help all industries in Michigan be competitive," said Steve Bakkal, director of the state's Energy Office. He contends that successful companies will be those that are supplying products for multiple industries, not just wind or solar.

But at the moment, several projects that are trying to break new ground in the alternative energy field have run into difficulties.

Two years ago, Northern Power Systems announced plans to manufacture large wind turbines, something that had never been done in the state. So far, the Vermont-based company has made and sold only two prototypes of its next-generation turbines to a wind farm in the Upper Peninsula.

The uncertainty over the future of the production tax credit has caused customers to delay placing new orders, said Douglas Prince, Northern Power's chief financial officer.

The company's leased facility in Saginaw is "kind of in standby mode right now," Prince said. "We're hopeful the market will recover."

In central Michigan, a plan to make iron parts, which are called castings, for wind turbines at a new foundry in Eaton Rapids has also been delayed. The foundry was supposed to open at the end of 2011, promising lower-cost and higher-quality castings. But it ran into management, financing and other problems.

Eaton Rapids Castings hopes to start production this fall but still needs to find additional investors, said Lennart Johansson, the company's CEO and one of its owners.

To offset the uncertainty in the wind business, the foundry plans to make castings for other industries. It has scaled back its initial production volumes.

To be sure, the outlook isn't completely bleak. A few ventures are making progress, most notably Energetx Composites in Holland. The company, which has nearly 80 employees, won an order to build more than 200 large wind turbine blades for a customer it cannot name, said David Slikkers, Energetx's chairman.

He and other family members saw blade manufacturing as a natural fit because they have been building boats for decades as the owners of S2 Yachts. "We have been composite fabricators for 50 years," Slikkers said.

And near the Port of Monroe, Ventower expects to have built 15 towers for large wind turbines by this fall. It occupies a new factory on a former industrial landfill and has hired 53 employees. But the industry slowdown caused by the tax credit situation is holding back its growth.

"I would have orders booked through the bulk of next year if the tax credit was not an issue," Viciana said.

More Details: Hitting a Green Wall

Here are some of the high-profile alternative-energy business ventures in the state that have shut down or run into significant delays:

* Northern Power Systems' large wind turbine plant: The Saginaw plant has yet to launch production and is operating with a skeleton crew.

* Eaton Rapids Castings: Foundry to make iron parts for large wind turbines in Eaton Rapids has been delayed. It is still trying to get financing.

* United Solar Ovonic: The maker of solar roofing materials filed for bankruptcy in February and sold its assets at the end of June.

* Mascoma's cellulosic ethanol plant near Kinross in the Upper Peninsula: Groundbreaking was supposed to occur this summer. The company says construction will start at year's end after engineering design work is completed, contracts are awarded and financing is finalized.

* Astraeus Wind Energy: In 2010, company announced plans to make spar caps for wind turbine blades in Port Huron. It is still in the testing phase.

* Danotek Motion Technologies: Was supposed to start making generators for large wind turbines last year. The company says production will begin this fall in Canton. It has 28 employees, down from 45 at the end of 2010.

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06 October 2010

University of Michigan Study Examines State Job Futures

WJRT






For those wondering if the the job market will ever get any better, there are some answers from a new study by University of Michigan economists.

The good news, the economists say, is the job market finally hit bottom this year. And after losing nearly 250,000 jobs in a five-county region over the past decade, the number of jobs will actually start increasing next year.

"It's going to be good for the people who are employed, because there will be less risk that they'll lose their job, but for a lot of people who are unemployed, it's not going to look any better," said economist Don Grimes.

In it's first-ever report to the five-county Economic Growth Alliance Region -- which includes leaders from Genesee, Lapeer, Livingston, Oakland and St. Clair counties -- a team of U of M economists have analyzed the trends and spelled out what lies ahead in the years 2011 and 2012.

"House prices will still be low, and we don't see any improvement in people's 401-K balances, either," Grimes said.

But they do project a net gain in jobs in 2011 -- finally a turnaround from the past nine years, which have seen annual job losses.

The net gain, they say, is less than 3,000 new jobs for this region in 20111 and more than 8,000 jobs added in 2012.

The sectors that will grow include information services, professional scientific private education, construction, medical and health services.

As for the jobs of the future, manufacturing , they say, will continue to be making up its numbers till 2012.

Services like barbershops will have to wait for growth until people stop saving as much and start spending more, but the next few years do not look good at all for government employees and public school jobs.

One other interesting trend is it appears the self-employed sector has been growing as the number of traditional jobs has shrunk.

09 May 2009

Ford Truck Plant Giving State Economy A Boost

Story from the Oakland Press

Ford Motor Co. is giving southeastern Michigan’s economy a $550 million shot in the arm as it moves forward with plans to build small vehicles and electric cars at an assembly plant in western Wayne County.

The automaker said Wednesday it will launch within the next year production of the all-new Ford Focus along with a battery-electric version of the Focus at the Wayne plant.

“The transformation of Michigan Assembly Plant embodies the larger transformation under way at Ford,” said Ford chief executive officer Alan Mulally.

“This is about investing in modern, efficient and flexible American manufacturing. It is about fuel economy and the electrification of vehicles.

“It is about leveraging our expertise and vehicle platforms around the world and partnering with the UAW to deliver best-in-class global small cars,” Mulally said.

The retooling of Michigan Assembly, one of the world’s most profitable auto plants during the SUV boom of the late 1990s, is based on Ford’s plan to use the company’s global assets to bring six world-class small cars to the North American market by the end of 2012, Ford officials said.

Ford is converting three truck and SUV plants to car plants — Michigan Assembly, Cuautitlan Assembly in Mexico and an assembly plant in Louisville, Ky., which will be converted to produce small vans and other vehicles from Ford’s global Focus platform beginning in 2011.

The Cuautitlan plant will be used for building the subcompact Ford Fiesta, which Ford also plans to sell in the U.S.

“We’re changing from a company focused mainly on trucks and SUVs to a company with a balanced product lineup that includes even more high-quality, fuelefficient small cars, hybrids and all-electric vehicles,” said Mark Fields, Ford’s president of The Americas.

“As customers move to more fuel-efficient vehicles, we’ll be there with more of the products they really want,” Fields said.

The zero-emission battery-electric Focus vehicle, which is being developed in partnership with Magna International, features a high-voltage electric motor powered by a high capacity lithium ion battery pack and charged by plugging in to a 110-volt or 220-volt outlet.

Ford also plans to use its new agreement with the United Auto Workers to reduce job classifications and minimize the union work rules in the retooled factory.

Joe Hinrichs, group vice president for global manufacturing and labor affairs, said the new practices will enable the plant to operate at a high level of productivity while producing best-inclass quality products in a safe work environment.

“The UAW is a key partner in enabling us to build these worldclass vehicles competitively in the United States,” Hinrichs said.

“This agreement will allow the workforce to build on their quality commitment while improving productivity at the plant.”

The state of Michigan, Wayne County and the city of Wayne contributed more than $160 million in tax credits and grants to support Ford’s expansion opportunities.

“Ford is investing in both the future of the American auto industry and the state of Michigan by bringing together world-class products, advanced technology applications and strong partnerships with the UAW to build the next generation of vehicles that will help end our nation’s dependence on foreign oil,” Gov. Jennifer Granholm said.

“In these challenging economic times, we applaud and appreciate Ford's commitment to Michigan and to our talented workforce,” she said.

17 April 2009

Battery Manufacturing Plant to Open In Holland

Story from BizJournals.com

Johnson Controls Inc. announced plans Tuesday to build its first U.S. manufacturing facility for lithium-ion hybrid batteries.

Subject to final state and local incentives, the company, through a joint venture with France-based Saft SA, will use an existing Johnson Controls facility in Holland, Mich.

“Battery technology is strategically important to the future of the U.S. automotive industry and the economy at large,” said Alex Molinaroli, president of the power solutions business for Glendale-based Johnson Controls.

The plant will have about 500 employees.

Johnson Controls-Saft is a global provider of hybrid battery systems. The company opened the world’s first lithium-ion manufacturing facility for hybrid electric vehicles in 2008 in Nersac, France, where it is currently in production for the Mercedes S-Class hybrid, which will be available to consumers later this year.

Johnson Controls-Saft also will supply the lithium-ion hybrid battery system for the BMW 7 Series ActiveHybrid available in 2010, Azure Dynamic’s Balance hybrid electric for commercial vehicles available in 2010, and Ford’s first plug-in hybrid electric vehicle available in 2012.

“This Michigan facility will allow us to serve our strategic global customers and specifically the production contracts we have with Ford and Azure Dynamics. It will also allow us to serve other important customers as the hybrid and electric vehicle industry continues to gain a foothold in the United States,” said Mary Ann Wright, who leads the Johnson Controls-Saft joint venture and is vice president and general manager of Johnson Controls’ hybrid business.

The cost to renovate the Holland, Mich., facility for lithium-ion automotive battery production is approximately $220 million. It will have an initial capacity of 15 million lithium-ion cells.

Johnson Controls-Saft will receive a combination of tax credits and incentives from the state of Michigan totaling $148.5 million as part of the state’s strategy to become the “advanced battery capital of the world.” Michigan Gov. Jennifer Granholm announced that the Michigan Economic Growth Authority has awarded Johnson Controls-Saft a package in support of lithium-ion battery cell manufacturing.

“Johnson Controls is an important Michigan employer with a successful long-term relationship with the automakers,” Granholm said in a statement.

Johnson Controls also plans to apply for a grant through the federal American Recovery and Reinvestment Act.