Notes from the Opening of A123Systems’ Michigan Manufacturing Plant

9/15/10

Under cloudless blue skies in Livonia, MI, many of those at the forefront of electrification of vehicles gathered on Monday to celebrate the opening of A123 Systems’ lithium ion battery manufacturing plant. From political leaders to business executives and scientists, an array of notable speakers highlighted new and important progress on advanced batteries and vehicle electrification in the United States—even as they acknowledged how much more work needs to be done.

A123Systems CEO Dave Vieau welcomed the attendees to the largest lithium ion battery plant in North America. Then we heard from executives from BAE Systems, Navistar, Shanghai Automotive, AES Energy Storage, and General Motors, as well as federal, state, and local political leaders. All of them are intensely focused on advancing the electrification of vehicles. The resounding theme was the importance of public/private partnerships to further American innovation, followed by implementation and manufacturing of those innovations by U.S. companies.

Here are some observations from the day:

—U.S. Senator Carl Levin (D-MI): Manufacturing is critically important to our economy…it is worth fighting for. We are competing not just with other companies, but with other countries and governments. We must create partnerships between an active government and a committed private sector.

—U.S. Congressman Sander Levin (D-MI and Carl Levin’s older brother): Battery manufacturing is vital to America’s competitiveness. Other countries are no longer content to just compete, they want to lead. In America, we are debating whether we should have these private/public partnerships; other countries are not debating this question, they are acting. We somehow lost the notion that it was important to build it in America. We help invent advanced technologies, we must devote ourselves to becoming the leader in their implementation and manufacture.

—U.S. Secretary of Energy Steven Chu: Under no circumstances should the United States cede manufacturing. He called for a new industrial revolution, reiterating the importance of public/private partnerships in making that happen and freeing the United States from its dependence on foreign oil.

—President Barack Obama: He teleconferenced into the assembly to congratulate A123 on the important milestone of opening its factory in Michigan. He trumpeted the birth of an entire new industry in America and reminded the attendees that in 2008 only 2 percent of lithium ion batteries were manufactured in the United States. By 2015, he said, that figure should be 40 percent.

—Admiral Dennis Blair, former Director of National Intelligence: Advanced batteries are important to national security. Lithium ion batteries and the electrification of vehicles is the only practical way to end the country’s dependence on foreign oil.

—Michigan Governor Jennifer Granholm, U.S. Senator Debbie Stabenow (D-MI), and U.S. Congressman John Dingell (D-MI) also provided remarks. It was clear to me that Michigan leaders are working in a coordinated fashion on many levels to advance their state as a manufacturing center for clean technology, and that A123 is a leading part of this charge. I realize that Michigan is under siege, but I wonder just how much more could be accomplished throughout the United States if local, state, and national leaders and representatives in other states, including Massachusetts, worked so closely together to further public/private partnerships.

[Editor's note: A123Systems and Xconomy are clients of the author.]

John Chory is a corporate partner in the Boston office of Latham & Watkins. His practice focuses on the representation of early-stage and venture-backed technology and life sciences companies. Follow @

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