Michigan and the North American Automotive Industry

February 9, 2009

Kim HillDirector Automotive Communities Program

Associate Director Economics and Business GroupCenter for Automotive Research

Ann Arbor, Michigan

Communities working together

Communities working together

$13.5

$9.9

$12.1

$10.7$10.3$11.1

$12.7

$12.4

$0.0$2.0$4.0$6.0$8.0

$10.0$12.0$14.0$16.0$18.0$20.0

1999 2000 2001 2002 2003 2004 2005 2006

Total U.S. Automotive R & D Spending (billions)

Total Michigan Automotive R & D Spending (billions)

74%

69% 63%

63%

78%

69%69%

*

•Michigan total estimated in 2004

Michigan Share of U.S. Automotive R&D($billions)

Source: National Science Foundation

72%

$18.3 $18.4$16.1 $15.0

$16.9$15.6

$16.6 $16.7

3

The Research, Development and Innovation Hub IS Michigan– $12 billion annual auto R&D

spending – 78% of U.S. total

– Over 275 R&D facilities in MI alone

– Over 50,000 employment

Electrical Engineers

Source: May 2007 Occupational Employment Statistics, BLS

Electrical Engineers

Rank State Employees

1 California 76100

2 Texas 45720

3 Florida 24160

4 New York 23990

5 Massachusetts 21030

6 Pennsylvania 20340

7 Virginia 18150

8 Michigan 15100

9 Arizona 15000

10 Illinois 14910

Industrial Engineers

Source: May 2007 Occupational Employment Statistics, BLS

Industrial Engineers

Rank State Employees

1 Michigan 27170

2 California 24030

3 Texas 21540

4 Ohio 16080

5 Pennsylvania 13040

6 New York 12980

7 Florida 11500

8 Illinois 10890

9 Minnesota 9960

10 Massachusetts 8530

Mechanical Engineers

Source: May 2007 Occupational Employment Statistics, BLS

Mechanical Engineers

Rank State Employees

1 Michigan 28060

2 California 26670

3 Texas 23310

4 Ohio 15300

5 Pennsylvania 13040

6 New York 12040

7 Wisconsin 11190

8 Virginia 11140

9 Indiana 10110

10 Illinois 9630

Communities working together

SEC. 136. “Advanced Technology Vehicles Manufacturing Incentive Program”

(b) ADVANCED VEHICLES MANUFACTURING FACILITY.—The Secretaryshall provide facility funding awards under this section toautomobile manufacturers and component suppliers to pay not morethan 30 percent of the cost of—(1) reequipping, expanding, or establishing a manufacturingfacility in the United States to produce—

(A) qualifying advanced technology vehicles; or(B) qualifying components; and

(2) engineering integration performed in the United Statesof qualifying vehicles and qualifying components.PRIORITY.—The Secretary shall, in making awards or loans

to those manufacturers that have existing facilities, give priority

to those facilities that are oldest or have been in existence for

at least 20 years. Such facilities can currently be sitting idle.

125 percent of the average base year combined fuel economy for vehicles with substantially similar attributes

Authorized: $25 Billion Loan Guarantee

Communities working together

Incentives for plug-ins as part of Emergency Economic Stabilization Act ($700B bailout bill)

‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTORVEHICLES.‘‘(a) ALLOWANCE OF CREDIT.—‘‘(1) IN GENERAL.—There shall be allowed as a credit againstthe tax imposed by this chapter for the taxable year an amountequal to the applicable amount with respect to each new qualifiedplug-in electric drive motor vehicle placed in service bythe taxpayer during the taxable year.‘‘(2) APPLICABLE AMOUNT.—For purposes of paragraph (1),the applicable amount is sum of—‘‘(A) $2,500, plus‘‘(B) $417 for each kilowatt hour of traction batterycapacity in excess of 4 kilowatt hours. ‘‘(b) LIMITATIONS.—‘‘(1) LIMITATION BASED ON WEIGHT.—The amount of thecredit allowed under subsection (a) by reason of subsection(a)(2) shall not exceed—‘‘(A) $7,500, in the case of any new qualified pluginelectric drive motor vehicle with a gross vehicle weightrating of not more than 10,000 pounds, (16kwh battery necessary)