WisBusiness: UW-Madison conference stresses automotive innovation as key to new jobs

By Brian E. Clark

For WisBusiness.com

MADISON — The internal combustion engine has powered the automotive industry since its inception in the late 1880s.

And while that greenhouse-gas-emitting motor is evolving, the future belongs to hybrid and electric cars, experts said Thursday at a conference on “Reinventing the Industrial Heartland” and the new automotive industry at UW-Madison. Car assembly plants once employed thousands in Janesville and Kenosha, but automotive parts makers still are fueling the supply chain for assembly plants elsewhere.

The experts said moving toward hybrid and electric cars should not only make transportation cleaner, but also has the potential for creating many new jobs, they said.

“Rising and volatile fossil carbon fuel costs, intensifying urbanization, decaying public infrastructure and the rapidly spiraling costs of building and maintaining the roads and bridges of Wisconsin has effectively pushed us to the breaking point,” said Lee Swindall, vice president of Business & Industry Development at the new Wisconsin Economic Development Corporation, which replaced the Commerce Department.

Swindall said the country needs to adopt a “radically different transportation model and future development path.

“This cannot be a gentle right turn, but a disruptive, 90-degree change of direction and we need to start turning the wheel now.

“We need to marshal all necessary resources, the best science, research and development, as well as viable commercial alternatives to accomplish this end.”

The conference, held at the Fluno Center, was designed to highlight innovations in the U.S. and Germany auto industries and their suppliers. It was backed by the American Council on Germany, the German Marshall Fund of the U.S., the Center for German and European Studies and UW-Madison.

Douglas Fisher, director of the Center for Supply Chain Management at Marquette’s School of Business, reminded the audience that Milwaukee was once dubbed the “toolbox of America” and still relies heavily on manufacturing.

One of the companies that is leading the charge to the switch toward electric vehicles is Milwaukee-based Johnson Controls, a leader in the development of lithium batteries.

“Demand is growing and we are hiring scientists,” said Steve Vielmetti, vice president for strategic supply chain at Johnson Controls during a session dubbed “Auto/Mobility of the Future.”

He predicted that energy storage in batteries will triple in the next decade and that breakthroughs will allow manufacturers to “leapfrog” the current lithium-ion batteries now used in hybrid and electric vehicles.

Though his company recently opened battery factories in Ohio and Michigan, he said its research and development efforts are based in Milwaukee.

Moreover, he said his company also endowed a professorship split between UW-Milwaukee and UW-Madison. The Electric Machines and Power Electronics Consortium is based at UW-Madison and funded by the likes of BMW, Toyota, Nissan and dozens of other companies. The university is also known for electro-motor conversion expertise.

Robert Lorenz, co-director of the power electronics consortium, moderated the panel and lauded the German government for pushing clean energy and for adopting policies to advance electric and hybrid cars.

“The German government made photovoltaic cells happen,” he said. “They had a far-sighted vision because they wanted to reduce reliance on power plants and infrastructure. They are developing long-term expertise that will help drive their economic future.”

Also on the panel was Manuel Sattig, a communications manager at BMW in Munich. He declared his company’s electric cars won’t lack for power, performance or style.

“We won’t have to make concessions in our electric vehicles,” he boasted.

He said BMW doesn’t want to be known as a green car company, but a sustainable mobility enterprise.

“We want to be prosperous in the future, gain jobs and make money,” he said. “To do that, we have had to come up with new designs and a new mindset.”

And while hybrid and electric cars will gain increasing market share around the globe, he predicted there will always be a place for the internal combustion engine in some vehicles.

“It won’t be one size fits all,” he said, predicting that electric vehicles will have as much as 15 percent of the vehicle market share by 2020. “There will be a lot of options, and they’ll be much greener than what you see now.”

Wisconsin Department of Natural Resources Secretary Cathy Stepp also addressed the conference and pushed for what she called a focus on frugality and innovation.

“We all know that economic reality has hit business and government,” she said in prepared remarks. “Each must eliminate every unnecessary step and every excessive cost on the path to a product or service. That applies to how we regulate as well. And so the environmental governance of the future must do what should come naturally to environmentalists – consider every inefficiency as getting in the way of our goal of protecting the environment and maintaining our standards. …

“We need to find ways to support people and firms that have special talent or capacity to help others protect the environment and create sustainable, triple bottom line value. We must leverage the capacity of any business and organization that can help others protect the environment,” she added

“It is fair to say that innovation has not been the watchword of government and even some businesses,” she concluded. “That must change if we are not only to be more efficient at what we must continue to do as regulators but more effective in addressing the list of environmental problems and opportunities that the existing system never got around to.”

University of Chicago professor Gary Herrigel, who has written extensively on the politics of industrial change in Europe and Japan, said a consistent theme for successful innovation is labor and management working together and convincing workers that efficiencies don’t mean lost jobs but more competitiveness.

He said German unions, carmakers and suppliers find a way work toward common interests, including robust employment.

“You do have cooperation among enemies,” Herrigel said, pointing to the conflicts in Wisconsin “That hate each other over there as much as they hate each other in Wisconsin.”