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Snyder urges international investment to bolster auto industry growth in state

Crain’s Detroit Business: September 25, 2013
By Dustin Walsh

 Now is the time to “double down” on auto investments in the state, Gov. Rick Snyder told auto industry representatives at today’s Michigan Automotive Summit, hosted by MichAuto at Cobo Center.

Snyder said the challenges the industry faces today include a changing culture, noting the industry has far too long held onto its “glory days.”

Snyder urged looking at international investment to bolster the domestic automotive market in Michigan. Snyder returned from a trade mission to China earlier this month.

“If they are going to look to go global, wouldn’t we want them to look at Michigan as a place to do business?” Snyder said. “We should be leveraging our strong supply base and experience with making things.”

Jay Baron, president and CEO of Ann Arbor-based Center for Automotive Research, said Michigan’s auto industry is rapidly growing.

Of the $29 billion in recent investments, $21.5 billion was invested in the Great Lakes region and more than $12 billion in Michigan, Baron said.

While the Southern U.S. states are vying for a stronger position in the industry, Baron said Mexico continues to hinder that region’s growth.

“The automotive South is wrestling with growing their automotive (industry) while competing with Mexico, which offers much lower wages,” Baron said.

The industry as a whole is tied to 8 million jobs in the U.S, with more than $70 billion in personal tax revenue to the country.

Technology, jobs

Baron said Michigan will need another 100,000 workers to meet technology goals and regulations in the near future. The federal government’s CAFE standard of fleets reaching 54.5 mpg by 2025 and the National Highway Traffic Safety Administration’s quest for safety is causing a surge in new technology, Baron said.

John Rakolta Jr., chairman and CEO of Detroit-based construction firm Walbridge Group, said the push for connectivity is what led his firm to propose a new connected vehicle center in Ypsilanti Township.

Earlier this month, Walbridge proposed to redevelop the majority of the 332-acre former General Motors Co. Willow Run plant.

“We’re not the only region in the world in capturing all the jobs in this sector; who knows what can spin off from this (technology),” Rakolta said. “This is about whether the state, and this audience, can cohesively come together and offer the most competitive model here.”

The center is expected to include a large urban-environment test track as well as an advanced R&D testing facility.

Jeffrey Owens, chief technology officer and executive vice president at Troy-based Delphi Automotive plc, said the supplier’s research and development capabilities in Michigan far exceed its other centers around the world. But it could do more.

Owens urged state government to pass a bill regulating autonomous, or driverless, vehicle testing.

The Michigan Senate was expected to vote on SB 169 in May, but the bill never made it to the floor. Owens said the delay is giving other states the upper hand in economic development.

“We have to be one of the most welcoming (states) for this technology,” Owens said. “The legislation is being considered, but we should be making it an environment where this work can be done.”

Delphi would perform more autonomous work here if the legislation passed, Owens said.