Fuel-Efficiency Impact Goes Beyond Detroit
As a public comment period closed earlier this month for new proposed federal fuel-economy standards, a major expansion project was underway in Davenport, Iowa.Alcoa Davenport Works, which rolls aluminum sheets and plates for the aerospace, defense and automotive industries, is spending $300 million to expand its facility.
The reason: rising demand from automakers for lightweight vehicle materials.
Alcoa announced the expansion in September. The project is expected to create 150 construction jobs, followed by an additional 150 permanent, full-time jobs at the plant.
The aluminum factory’s investment is an example of how the economic benefits of rising fuel-economy expectations spread across the Midwest and well beyond Detroit.
“People tend to think of these standards and advanced vehicles affecting the big automakers,” says Zoe Lipman, senior manager for transportation solutions at the National Wildlife Federation’s Climate and Energy Program.
“What people tend to forget is that the auto industry is a huge industry that includes hundreds of companies across the country and many dozens, probably hundreds, in the Midwest that make a wide range of components, materials, and electronics, and really are at the heart of rebuilding innovation and competitiveness in the American economy.”
The proposed rules would require makers of cars and light-duty trucks to have an average fleet efficiency of 54.5 mpg by 2025. Automakers are hiring engineers to help meet the challenge, but the push to greater fuel-efficiency also stands to benefit suppliers that make materials and technologies that can help meet the targets.
“Practically every [automaker] in the world has come to us to discuss how our leading technology solutions can help them make their cars stronger, lighter and more fuel efficient,” Alcoa executive vice president Helmut Wieser said in a press release.
Automakers are expected to increase their use of aluminum from 327 pounds per vehicle in 2009 to 550 pounds in 2025, according to a study by Ducker Worldwide.
The new fuel-economy targets wouldn’t kick in until 2017. The U.S. Environmental Protection Agency, in its draft regulatory impact analysis, estimates the policy’s impact on employment at automakers and parts suppliers “to be positive and on the order of a few thousand in the initial years of the program.”
Phyllis Cuttino, director of Pew’s Clean Energy Program, says the Midwest should be the first and biggest beneficiary of those jobs. When companies are innovating new products, they generally want suppliers and manufacturing nearby so that they can more easily make adjustments.
“You’ve got to have innovation and advanced manufacturing together,” Cuttino says.
That innovation is already on display auto shows. Lipman recently attended the Detroit and Washington, D.C. auto shows, where she observed that “40 is the new 25.” Automakers that just a few years ago touted 25 mpg cars now have 40 mpg models.
“When you walk through the auto shows this year, there really is a renaissance happening in the auto sector,” says Lipman. “We’re seeing a whole host of innovation across all kinds of vehicles.”
The National Resources Defense Council recently inventoried some of the numerous suppliers that are playing a role. They range from 3M, which makes insulation materials in the Twin Cities used in plug-in electric vehicles, to BorgWarner, which makes makes fuel-saving transmission components at a factory outside Chicago.
In Cleveland, GrafTech International is conducting fuel cell research. In Mount Vernon, Illinois, Continental Tire is manufacturing low-rolling resistance tires, which minimize energy waste.
General Motors announced last summer that it would invest $20 million in its Kansas City assembly plant for equipment that would let it build a Buick LaCrosse that’s 25 percent more fuel-efficient than the current model.
President Obama highlighted the connection between fuel efficiency and jobs in a visit to Alcoa Davenport Works last July:
“[W]e brought people together and set the first new fuel-mileage standards in more than 30 years. And that means fewer trips to the pump and less harmful pollution. And this plant has something to do with it, because I was just seeing some doors and some hoods made right here — more lightweight, more efficient, saves on fuel economy. And that means your business is improved as well. Everybody wins.”