Partner public, private for EV growth
Editor’s note: Editor Brenda J. Linert’s column will return next week.
When I worked in Mahoning Valley economic development several years ago, I had a conversation with a local political leader regarding the auto industry. He wanted to propose a state bill to incentivize businesses to convert vehicles to run on compressed natural gas, or CNG. I thought it was a great idea, but why not include all forms of alternative fuels, including electric? States like Colorado already had introduced such tax credits, allowing the market to determine which technology is best. The politician thought I was in another world.
As recent news demonstrated, that other world is today’s reality, and the future of the Mahoning Valley’s largest manufacturing facility may be the catalyst for a leap into a new era.
Workhorse, a Cincinnati upstart, may indeed be working to acquire GM’s Lordstown facility to build electric trucks. The reaction was rightfully mixed. Many were hoping GM would “re-allocate” a new model to the plant, or another OEM was going to buy the plant so the former 4,500 employees could stay in the Valley as autoworkers. A part of me wishes this to be the case as well, because it would reverse the forecasted decline in the local economy, and families wouldn’t have to leave support structure by transferring away.
But we know we don’t always get what we want. That’s why the Valley needs to think through possibilities that Workhorse or another upstart electric vehicle, or EV, manufacturer may come here. With the help of Washington and Columbus, maybe something bigger and better can come from this. All we need to do is look to downtown Youngstown for the roadmap on how.
In 2012, when then-President Barack Obama announced Youngstown would house the first of his manufacturing innovation centers with the formation of what is now “America Makes,” many of us thought a new day was dawning. While I was disappointed then-management of America Makes didn’t focus on one of its core responsibilities — accelerating the 3D printing industry in the Valley and the region — two organizations have decided to carry that mantle themselves: Youngstown State University and the Youngstown Business Incubator. Together, the three entities have been successful in giving focus to additive manufacturing to local companies, and promoting the Valley as a hub of the technology to firms around the U.S. and globe.
Maybe it’s the perfect opportunity to scale that idea up for electric and autonomous vehicle technology, using a facility with capacity like Lordstown. As Charged magazine editor Chris Rouff reported last Sunday, the large OEMs like GM and Ford don’t want to write massive checks internally to build out electric trucks because nobody knows when the timing of mass adoption will occur. But they also know if they don’t look to the future, they can open the door to their eager and intelligent competition. This is why Ford invested $500 million into Rivian. And this is why GM may not want simply to sell or lease Lordstown to Workhorse, but invest as well. I’ve been proud of GM’s proactive investing into auto technology firms like Lyft. In fact, recently GM President Dan Ammann left that role to become GM CEO of autonomous driving investment, Cruise (ironic name, isn’t it?). Honda is also an investor in Cruise. Honda also is among the largest investors in the state of Ohio. So, if I am President Donald Trump, Gov. Mike DeWine, Sen. Sherrod Brown or Sen. Rob Portman, I would consider a visit with CEO Mary Barra asking her to turn Lordstown into a public-private partnership incubator for EV and autonomous companies.
I know a German auto supplier that has a venture capital fund. It invests in start-ups in fields akin to theirs. The parent company has first right to invest fully into that start-up. If not, the fund has the right to sell its stake to any willing buyer. GM could set up the same model for Lordstown. In fact, I think the Department of Energy and the state of Ohio even could make available grant monies for companies operating in the facility. Last month, the German government became so fearful its companies were falling behind to Asia on battery technology, it announced it will spend $1 billion in research grants to help its companies play catch up. Japan, Korea and China all do the same. This is why the Valley being an epicenter for EV and autonomous startups is not so crazy.
I would take it a step further. The local UAW has excellent leadership and foresight. Teaming up with also-proactive IBEW, along with YSU and Eastern Gateway, to create a curriculum for training workers on EV and new auto technologies, would give the Valley a substantial competitive advantage.
Bloomberg New Energy Finance has tracked for years the date of which the cost to make an electric vehicle will be the same as an internal combustion vehicle. Their original estimate was 2026. But it has revised that to 2020 for parts of the world. It’s now or never for the U.S. to become a leader in advanced auto technology. I’m all in for EVs. In my garage is an ’89 Pontiac I will convert to electric this summer. The Valley could be all in, as well. Imagine drivers on Interstate 80 passing Lordstown and seeing a banner that reads: “Home of the Electric Vehicle Engineering, Research and Systems Training Center.” That idea is not a summit too high to climb.
Eric Planey is a Mahoning Valley native who is director at a financial institution in New York City. The views expressed are solely those of the author.