Michigan and the North American Automotive Industry February 9, 2009 Kim Hill Director Automotive Communities Program Associate Director Economics and Business Group Center for Automotive Research Ann Arbor, Michigan Communities working together

74% 69% 63% 78% 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 RankStateEmployees 1California Texas Florida New York Massachusetts Pennsylvania Virginia Michigan Arizona Illinois14910

Industrial Engineers Source: May 2007 Occupational Employment Statistics, BLS Industrial Engineers RankStateEmployees 1Michigan California Texas Ohio Pennsylvania New York Florida Illinois Minnesota Massachusetts8530

Mechanical Engineers Source: May 2007 Occupational Employment Statistics, BLS Mechanical Engineers RankStateEmployees 1Michigan California Texas Ohio Pennsylvania New York Wisconsin Virginia Indiana Illinois9630

Communities working together SEC “Advanced Technology Vehicles Manufacturing Incentive Program” (b) ADVANCED VEHICLES MANUFACTURING FACILITY.—The Secretary shall provide facility funding awards under this section to automobile manufacturers and component suppliers to pay not more than 30 percent of the cost of— (1) reequipping, expanding, or establishing a manufacturing facility in the United States to produce— (A) qualifying advanced technology vehicles; or (B) qualifying components; and (2) engineering integration performed in the United States of 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 MOTOR VEHICLES. ‘‘(a) ALLOWANCE OF CREDIT.— ‘‘(1) IN GENERAL.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed in service by the 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 battery capacity in excess of 4 kilowatt hours. ‘‘(b) LIMITATIONS.— ‘‘(1) LIMITATION BASED ON WEIGHT.—The amount of the credit allowed under subsection (a) by reason of subsection (a)(2) shall not exceed— ‘‘(A) $7,500, in the case of any new qualified plugin electric drive motor vehicle with a gross vehicle weight rating of not more than 10,000 pounds, (16kwh battery necessary)