Raised in a General Motors Family, Jason Forcier Driving Growing Auto Battery Biz for A123 Systems
[Updated and corrected, 5/4/10, 1:15 pm ET] Jason Forcier was raised in Flint, MI, a city whose economic woes have been tied to the decline of the U.S. auto industry. Now he’s grown up and heading efforts at a growing company called A123 Systems to make advanced batteries for a new generation of energy-efficient cars and trucks. The vehicles hold promise for revving up the future of the auto sector in his home state and around the country.
That might sound like the first page of a Hollywood movie script, but Forcier and A123 Systems’ ambitious plans in the auto industry are real. Last summer, Watertown, MA-based A123 (NASDAQ:AONE) hired Forcier to be its man in Michigan, where the company plans to expand production of lithium-ion batteries for automobiles at plants in Livonia and Romulus. Batteries like the ones A123 produces power electric and hybrid-electric vehicles, and the company aims to grow its sales to automakers as the popularity of such autos grows.
Despite deals it has already secured with Chrysler, BMW, and other major industry players, A123 still has much work to do to succeed in the competitive auto battery sector. Forcier says that the company’s engineering group is working on boosting the energy capacity of its batteries to make them more attractive to automakers from both cost and performance standpoints. The company, which does most of its existing manufacturing in China and Korea, is also counting on its increasing production capacity in Michigan to ensure steady battery supplies to its auto customers.
Like many others from Flint, Forcier, 38, has deep roots in the auto industry. His father, his grandfather, and most of his uncles were all employees of General Motors, he says. While studying engineering at Kettering University in Flint, he was in a co-op program that put him to work as an intern in multiple departments at GM. So he’s been closer than most Americans to the endangered U.S. auto industry and its devastating impact on the economy in Michigan. [Editor's note: A previous version of this story mistakenly said that Forcier once worked for GM as an industrial engineer. His father was actually an industrial engineer at GM. We regret the error.]
“The economy here in Michigan has been in a bad state of affairs due to the decline in the auto industry,” Forcier, vice president of A123′s automotive group, says. “But there’s a lot of integrity around here and support for what we’re doing.”
At A123, Forcier is in a unique position to help lead the expansion of a growing company in a growing industry in his state. The company, a 9-year-old spinout of MIT, was employing between 150 and 200 people in Michigan as of March. While such a work force figure is modest, the company planned to begin recruiting people last month for jobs at its manufacturing operation in Livonia, which is slated to begin production in June. (He says the A123 website gets thousands of resumes per month for jobs in the Wolverine State and Massachusetts.) Forcier didn’t provide exact figures on how many jobs the company is adding in Michigan, but he placed the number in the hundreds for this year.
Michigan has a lot riding on the success of A123. Last spring the state awarded the company $100 million in refundable tax credits to support its expansion in the state. Later in 2009, the company won a $249.1 million grant from the U.S. Department of Energy, which provides a 50-cent match on every dollar the firm invests in expanding its manufacturing operations in Michigan, Forcier says. Still, it could take a while before next-generation battery companies like A123 provide the kind of economic boost the state needs to recover from jobs lost in the auto sector, according to one industry expert.
“I think the view is, yes, longer term it is going to be major,” says Dave Cole, chairman of the Center for Automotive Research in Ann Arbor. “This is not going to be something that is going to be an economic driver in the short-term. Really, higher volume [of battery production] is five-plus years down the road.”
Cole is a member of the board at the Michigan Economic Development Corporation, which administers programs like the $800 million Advanced Battery Credits initiative to entice companies like A123 to expand in the state. Those efforts are baring fruit, and A123 has plenty of company in the state’s emerging energy storage sector. Milwaukee-based Johnson Controls is opening a plant in Holland, MI, to manufacture lithium-ion batteries. Also, Dow Chemical is working on a similar lithium-ion battery plant through a joint venture with TK Advanced Battery in Midland, MI.
A123 is tackling the auto industry after gaining early traction in the handheld tools market through a supply deal with Black & Decker. Yet lithium-ion batteries, which have been commonly used in mobile phones and laptops for years, haven’t become mainstream energy packs for cars. Early lithium-ion cells and their combustible chemistries were thought to be too dangerous to on the scale needed in autos. The nano-phosphate chemistry used in A123′s lithium-ion batteries, however, is supposed to be less flammable than those used in previous lithium cells. The company’s battery chemistry, which was initially developed in the lab of MIT professor Yet-Ming Chiang, also provides longer battery life and greater power than traditional lithium packs, according to the company.
Vehicle makers are recognizing the capabilities of A123′s battery systems. The German automaker Daimler already uses A123′s batteries in its hybrid-electric buses. In March, the company landed a supply deal to provide batteries for Warrenville, IN-based Navistar’s electric commercial trucks. A123 is also investing in and collaborating with the Irvine, CA, startup Fisker Automotive, which plans to use the company’s batteries in its hybrid-electric cars, including the Karma, a luxury plug-in hybrid that is due to begin production this year. The firm reported that its total transportation revenue rose 359 percent to $45.3 million in 2009, accounting for more than half of its $91 million in total annual revenue. (The company also provides large battery systems for stabilizing power supplies in the electric grid.)
Such market traction doesn’t mean it is clear sailing for A123, however, as numerous competitors are at various stages of figuring out how to make lithium cells safe enough and powerful enough for cars. The firm lost a very high-profile contest to the Korean electronics powerhouse LG Chem to provide lithium-ion cells for the Chevy Volt, GM’s electric car. LG is among several big companies in the battery business—including Dow, Johnson Controls, and Panasonic—that have much deeper pockets than A123. Yet A123 has been successful in raising cash to fund its ambitious plans, and last September the firm’s high-flying initial public offering brought in more than $380 million.
Forcier doesn’t seem like one to back down from a challenge, however. “We see the [auto battery] market is expanding quite quickly,” he says. “So we’re hopeful to be participating in that growth, and cost and energy density are the keys to being successful in that marketplace.” [Editor's note: A previous version of this story mistakenly said that Forcier once played football for Indiana State University. It was actually his father that played at ISU. We regret the error.]