• Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues


Auto Manufacturers Go Full Throttle on Green Energy

Auto manufacturers are plugging in to green energy for next-generation vehicle production.

September 2010
The Area Development Frontline series offers insight into the innovative strategy being taken by businesses that are succeeding, intelligence on locations that are deploying winning policy to attract investment and talent, and reports on the industry trends that are affecting and shaping the global business climate now and into the future.
When Alabama began attracting automotive manufacturers 15 years ago, it was the genesis of a southern car corridor that made national headlines.

Now, with Mercedes-Benz, Toyota, Honda, and Hyundai producing hundreds of thousands of vehicles there each year, Alabama is helping its auto suppliers improve economic, energy, and environmental performance.

Dubbed Alabama E3 (Economy, Energy, Environment), the initiative coordinates technical assistance programs offered at the federal, state, and local levels that help companies maximize energy efficiency, reduce pollution and greenhouse gas emissions, and train employees in "green" manufacturing practices.

"In this challenging economy, we must use innovation, collaboration, and all available tools to help our manufacturers gain a competitive advantage," says Alabama Governor Bob Riley. "This will make Alabama stand out as a leader among states in this new era that demands economic and resource efficiency."

The program initially focuses on 15 automotive suppliers around Huntsville, Montgomery, and Tuscaloosa. Experts will assess the production processes of suppliers in these cities, implement projects that reduce energy consumption and increase productivity, and train workers.

"The response so far has been encouraging," says Chris Franklin, a spokesperson for the Alabama Technology Network, an organization that provides technical assistance and training to improve the state's business and industry. "The savings that will result from our assessments will not only be economically positive for the companies involved, but by promoting sustainability in the manufacturing sector, the entire state will see impacts in terms of economics, energy, and the environment, which is what E3 is all about."

Although the governor's office is sure E3 will help draw new investments to the region, it's still too early to see fruit from the program. But Alabama can look up to the success of Ontario, Canada, and its clean energy initiatives.

Auto Cities Compete
The Canadian province of Ontario is positioning itself as a leader in electric car manufacturing. The provincial government aims for one of every 20 vehicles driven there to be electrically powered by 2020. In June, GM announced a $245 million investment in its St. Catharines powertrain facility. GM will expand production of fuel-efficient six-speed transmissions in early 2012. The company will also invest $235 million in St. Catharines to support next generation engine production beginning in 2013. The projects will bring 800 new jobs to Ontario.

But competition is rising on the clean energy front. Michigan, synonymous with auto manufacturing, has a growing green energy sector. In August, Ford partnered with Detroit Edison, Xtreme Power, and Michigan to establish one of the largest solar power generation systems in the state at Ford's Michigan Assembly Plant.

The renewable energy captured by the project's primary solar energy system will help power production of fuel-efficient small cars, including Ford's new Focus and Focus Electric going into production in 2011, and next-generation hybrid vehicles and plug-in hybrid vehicles coming in 2012. Ford will save an estimated $160,000 in annual energy costs.

"With this solar energy system, we will be able to gain vital understanding about the integration of renewable power, smart-grid technologies, and energy storage at an industrial facility," says Jim Tetreault, Ford vice president of North America Manufacturing. "This project is a part of the transformation of Michigan Assembly from a large SUV factory to a modern, flexible, and sustainable small car plant."

Exclusive Research