In Small, Gritty, and Green (MIT Press, 2012), Catherine Tumber takes a look into America’s once thriving industrial cities throughout the Rust Belt. Many cities in this region are known for their prevalence in auto manufacturing. This excerpt from Chapter 5, "Making Good," considers how clean technology throughout Auto Alley could contribute to a shift toward low-carbon economy and benefit all levels of the auto industry.
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The Solar Industry in Auto Alley
Today much of what is left of American manufacturing is dispersed throughout the small cities and towns of Auto Alley, an enormous swathe of land grouped between the north-south routes of I-65 (from Gary, Indiana, to Mobile, Alabama) and I-75 (between Flint, Michigan, and Atlanta, Georgia). The now-deconcentrated auto industry is geographically divided roughly between the North and South, with Japanese and other foreign transfer companies predominating in the South and U.S. companies in the North. Thanks to what the industry calls just-in-time sourcing since the 1980s — meaning that parts have to be within a short delivery distance from assembly plants — the more than 3,000 parts suppliers in Auto Alley serve both types of firms. As a result, the auto industry has been shielded from the most extreme forms of offshoring that decimated the electrical and consumer goods industries: three-quarters of the parts destined for U.S. auto assembly plants are made in the United States.
The small industrial cities of Auto Alley and elsewhere, obscured by national media attention given to Detroit’s troubles, can flourish again in new, more sustainable ways. To do so, their supply shops and engineering infrastructure must draw on their strengths to retool and diversify for the emerging renewable energy economy. Even if the automotive industry transitions into clean technology-powered vehicle production, experts say that its supply chain is likely to contract in the face of global competition, making it all the more imperative for its suppliers to prepare for renewables.
Consider, for example, the emerging solar panel industry in Toledo, Ohio (known as the Glass City), about 40 miles south of Detroit. Toledo, along with Elmira, in southwestern New York State, has long been an engineering and production center of blown and pressed glass, glassware, fiberglass, and fiber optics. The metro area still provides a share of the windows and windshields that end up in cars and trucks, but it has lost thousands of jobs to offshoring in auto glass and other glass-related industries. Toledo’s glassmakers began a transition to solar panels, primarily a glass product in the 1980s, when the University of Toledo opened its Wright Center for Photovoltaics Innovation and Commercialization. Its main innovation has been in thin-film solar, which engineers derived from similar technology used to press ultrathin layers of microscopic material into auto glass to minimize shattering or reduce glare. Its biggest success to date, First Solar, went public in 2006, and by 2009 it was the leading American producer of solar panels, with contracts for huge solar farms throughout the United States and Europe. Its advantage lay in a process using cheaper non-silicon-based raw materials and thus an ability to sell at lower cost. Between 2007 and 2010, its production had quadrupled to 1,282 megawatts, or, by one measure, enough to power about 100,000 U.S. homes. By the end of 2010, its costs were 75 cents per watt, down by more than a third of what they had been in 2006 and well on their way to grid parity, or what it costs to buy traditional forms of energy (coal, natural gas, nuclear, and large hydro) from the electric grid.
In 2007, the university received an influx of state, federal, and industry funding for the Wright Center to coordinate research and incubate new solar businesses. As of 2009, it had spun off seven solar start-ups, including two (Xunlight and Solargystics) that incorporate thin-film solar into building materials. Having gotten its glassmaking foot in the solar door, the Wright Center (which partners with other institutions, including Ohio State and Bowling Green) is now researching advances in polymer-based printable or spray-on nanotechnology that can harvest sunlight and can be produced even more efficiently than thin solar. As of 2009, the Toledo area employed 6,000 people in the solar industry, but it was having difficulty hanging on to manufacturing jobs in solar and other renewables. First Solar has relied on the large German market, but there’s potentially a huge untapped market in the United States, too. Although the U.S. market for solar has grown, until it has matured, the industry needs help retooling its manufacturing base. Ohio senator Sherrod Brown 2009 proposed bill for investing in manufacturing progress and clean technology (IMPACT) would provide a statewide revolving-loan program for small-to-midsize companies to do that, but fiscal restraint has made the future of this legislation unclear.
National Industrial Policy for Industry Growth
With a serious national commitment to renewable energy, other smaller cities that contribute to Auto Alley’s second- and third-tier levels of the supply chain stand to benefit as well. Akron, for example, is a research and production center for polymers, a chemical advance over plastics. Once known as the rubber capital of the world, Akron is the historic home to the tire industry and wisely made the transition to polymers more than thirty years ago. Recognizing that big tire makers such as Goodyear and Firestone enjoyed an artificial monopoly of synthetic rubber during World War II, Akron’s industry and civic leaders planned for a soft landing long before the U.S. auto industry began to flag in the 1970s. Working with the state in the 1980s, they established the Edison Polymer Innovation Corporation to help commercialize polymeric research, and boosted the University of Akron’s School of Polymer Science and Engineering and Akron Polymer Training Center. As a result, the Akron area is a world class polymer center, with 400 firms employing some 35,000 people producing everything from tubing and packaging to liquid crystal display monitors. Because Akron diversified and transitioned early, it’s in better shape economically than many other smaller industrial cities — indeed, the Brookings Institution removed Akron from its list of weak market cities in 2007 — but its manufacturing base is still struggling. In 1980, 35 percent of the area’s jobs were in manufacturing; by 2007, that figure had fallen to 16 percent. And as much as the polymer industry as a whole has been good to Akron, the number of manufacturing workers in plastics and rubber fell a full 50 percent between 2000 and 2007. Meanwhile, the city itself has yet to reverse its more than 25 percent population loss since 1960.
Clearly Akron is in a position to contribute polymer-based manufacturing components to domestic renewable energy industries in solar, wind, biofuels, geothermal, and small hydro, as well as the next generation of sensors and batteries. Renewables could provide markets for many other materials and supply businesses. Youngstown and Buffalo, old steel cities, are home to highly skilled precision manufacturing firms. Rockford, Illinois, once led the world in industrial fasteners, and although the field is in reduced circumstances, it could grow again. Given the instability of the auto industry, some suppliers have already retooled and diversified to handle not only renewables but also such industries as aeronautics and military supplies, which are required by law to contract mainly in the United States and to devote a portion of their work to depressed areas. Michigan suppliers have been particularly adept at this. 23 Over the past several years, Lauren Manufacturing, which employs 200 workers just outside Canton, Ohio, has expanded its polymer sealing and sleeve business, which sells to the auto industry, to include solar sealing and water filtration systems. It helps that as the market for renewables grows in the United States, an increasing number of mature companies, mainly from Europe, are moving their assembly operations to American shores to be close to their final construction sites. Brevini, in Muncie, is just one example among many making this transition.
None of this will translate in any significant way into American manufacturing jobs without a multilayered national industrial policy, one that provides market signals for investment in low-carbon industries willing to open shop in the United States. Senator Brown’s proposed IMPACT bill, while important, should be joined with larger federal initiatives, including establishment of national renewable energy and automotive fuel efficiency standards. Meanwhile, if we’re serious about creating living-wage American jobs, the United States should reconsider its trade relationship with China. China was brought into the World Trade Organization in 2001 on the assumption, in part, that it would open markets for American manufactured goods. Instead — and quite wisely, from a forward-looking global economy perspective — China has subsidized its export businesses, particularly in clean energy and other green technologies, while manipulating its currency and keeping wages crushingly low, leading to a massive U.S. trade deficit. As a result, neither Wall Street nor Silicon Valley has been willing to resist the market pull toward manufacturing in China products developed in the United States. Yet neither power center is hospitable to American national policies that could balance the trade deficit and employ American workers. Because most among them resist the merest federal regulatory policy in the United States, they take full advantage of China’s state power — all while proclaiming the virtues of the free market.
As recently as the 2008 presidential election, conventional wisdom held that American manufacturing was dead and that the United States would prevail by securing its rightful place as a knowledge and innovation driver in the global economy. The tables could be turning, however, and they should. As Ohio economist and auto industry analyst Susan Helper observed in a Washington Post op-ed during the heat of the election, “Even the most modern economies cannot thrive without making things. We need manufacturing expertise to cope with events that might present huge technical challenges to our habits of daily living (global warming), leave us unable to buy from abroad (wars) or leave us with nothing to sell that others want.”
Given their recent history as links in the automotive supply chain, small industrial cities are poised to gain from a revival of American manufacturing in a low-carbon economy. To flourish, however, they must find ways of working together as never before.
Reprinted with permission from Small, Gritty, and Green: The Promise of America’s Smaller Industrial Cities in a Low-Carbon World by Catherine Tumber and published by MIT Press, 2012. Buy this book from our store: Small, Gritty, and Green: The Promise of America’s Smaller Industrial Cities in a Low-Carbon World.