America’s Clean Energy Future: Revitalizing Manufacturing in the Midwest

With billions of dollars of new investment and jobs begin added in Ohio, Michigan and other Midwest states, a resurgent auto industry, focused on fuel economy, is a key part of America’s clean energy future. That’s the finding from “Regional Energy, National Solutions,” a new report from the Center for American Progress (CAP) and the Center for the Next Generation (CNG).

The study shows that different regions of the U.S. have unique strengths when it comes to developing cleaner, low-emission energy sources that can power America’s economy while also reducing the threat of global warming.

Wind power is growing off the Atlantic Coast. Solar power is gaining a foothold in the Pacific.

And the industrial Midwest is literally “manufacturing the future,” as detailed in a chapter on the role fuel efficiency has played in the renewal of the U.S. auto industry, authored by Zoe Lipman, Senior Manager for Transportation Solutions at the National Wildlife Federation (and a regular contributor to Driving Growth.org.)

Fuel efficiency improvements in all types of vehicles are helping to drive a surge in sales, production and employment, Lipman writes. In addition, U.S. producers are now taking the lead in the next generation of vehicle technologies, including key components of electric vehicles:

The Midwest is a significant player in many aspects of this technology: batteries, electric motors, hybrid and electric drivetrains and electric drive assembly.

Five years ago, an electric battery or drivetrain industry in the Midwest or anywhere else in the United States was nearly non-existent; these products were nearly all imported from Japan or South Korea. The growth of this sector in western Michigan and elsewhere ‚Äì aided by strategic public investment — has produced thousands of good-paying jobs for American workers.

While the effort to jump-start a new industry on U.S. shores has been an overall success, the electric vehicle battery industry hit a bump earlier this month when A123 Systems entered bankruptcy reorganization. It’s an unfortunate development but it doesn’t negate the fact that government has a strong role to play in helping to establish a clean energy industry.

As NRDC’s Roland Hwang has pointed out, Johnson Controls is planning to acquire A123’s Michigan production facilities and expects to continue advanced battery production. In addition, 30 of the 45 advanced vehicle plants which received support from the U.S. Department of Energy continue to operate, providing jobs for American workers, and producing the next generation of clean, efficient U.S. cars and trucks.

Getting two out of three investments right in a competitive environment characterized by new and rapidly changing technology is a success rate that investors would take to the bank.

Similarly public investments and fuel efficiency standards that helped retool the U.S. auto industry and put it on a more fuel-efficient path are an astounding success.

The CAP/CNG study shows that the resurging auto industry is a significant driver of employment throughout the U.S., with more than 230,000 jobs added since industry hit bottom in 2009.

Thanks to a jump in auto jobs – many of them tied to fuel-efficient, low emission vehicles and their key components – unemployment rates are dropping faster in key auto states like Michigan, Ohio and Indiana than in the rest of the nation.

The formula for adding jobs and reducing unemployment in the Midwest, concludes the CAP/CNG study, features a healthy dose of smart public policy:

Strong and well-developed emission standards pushed the auto companies to innovate; targeted loan and tax policies helped automakers retool and expand to serve these emerging efficient vehicle markets; and state economic and workforce develop­ment programs helped provide the infrastructure the auto sector needed to ensure these products were made in America.

Read the full report here.

Roger Kerson is a Michigan-based media consultant for labor unions and environmental organizations. He was formerly the director of public relations at the United Auto Workers.