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By Business Facilities Staff
From the July/August 2014 issue
In this year’s Metro Rankings Report, we’ve taken note of the crucial role exports are playing in the Recovery for many locations by charting their success in two of our rankings categories, Exports Growth Leaders and Exports Recovery Leaders. We also configured our Renewable Energy Leaders category to rank the metros that are using the most renewable energy, with some surprising results (hint: the top-ranked metro is the home of the oil bidness). (To read about the 2014 state rankings, visit this link.)
Austin, TX: On Top, Still Rising
For the past couple of years, Austin, TX and Baton Rouge, LA have been duking it out for the top ranking in our flagship metro Economic Growth Potential category. The Texas capital edged the Louisiana capital for this year’s growth prize, but the outlook in both of these cities is so robust we’re tempted to retire the category and declare these two locations permanent winners.
The thriving high-tech industry in Austin has made Texas the second-largest semiconductor job market after California, according to the Semiconductor Industry Association. Austin is now one of the nation’s top emerging high-tech cities, with more than 120,000 people employed by around 4,400 technology firms. Semiconductor companies in Austin include chip designers Intel, IBM, and Advanced Micro Devices (AMD) and chip manufacturers Freescale Semiconductor, Samsung and Spansion. Together, they employ thousands.
Samsung Electronics Co., the world’s second largest chip maker, is nearing completion of a $4-billion plant expansion at their Austin Semiconductor facility. The expansion includes retrofitting their main fab to logic chips to supply mobile and tablet production. Samsung’s overall investment in Austin is one of the largest single investments by a foreign company in the nation and is the largest fab in the U.S. This is Samsung’s only location in the world outside of South Korea that manufactures chips for the electronics giant.
Along with new renovations, Samsung’s Austin Research Center also grew its presence with about 200 engineers dedicated to design and development of the latest technologies for mobile application processors.
“Our ongoing, multi-billion dollar investments in Austin will expand our footprint as a comprehensive semiconductor hub and demonstrate our strong commitment to manufacturing, research and development in the United States,” said Woosung Han, president of SAS.
Austin wouldn’t be a hub or a center for semiconductor development without the presence of the University of Texas (UT) at Austin, which has one of the largest university semiconductor research programs in the world, the Microelectronics Research Center (MRC).
The MRC offers opportunities for students to participate in cutting-edge R&D, while receiving the training and experience to successfully pursue a rewarding career in microelectronics. The MRC has developed programs which have been utilized by major integrated circuit manufacturers throughout the U.S.
The Austin Chamber of Commerce has played an active role in the city’s success. The chamber led Opportunity Austin, a five-year effort launched in 2004 to promote investment resulting in job creation. Its aim was to create 72,000 regional jobs. At year-end 2012, 190,900 jobs had been added with wages totaling $9.9 billion. Austin 3.0—the next five-year phase—will focus on eight industries, including clean technology, data centers and digital media.
Apple’s selection of Austin as the site for its new $304-million Operations Center was the Bronze Award winner in Business Facilities’ 2012 Economic Development Deal of the Year competition. The new facility, which will increase Apple’s workforce in Austin to more than 6,700, will serve as the primary operations nexus for the company in the Americas outside of Apple’s global headquarters in Cupertino, CA, centralizing accounting, human resources, sales, marketing and finance.
State, county and local agencies came together to put together a package for Apple that sealed the deal in an intense site-selection battle for the operations center. The Austin Chamber of Commerce, Travis County and the Governor’s Office of Economic Development and Tourism were key players in bringing the project to fruition.
The state of Texas awarded one of the largest grants from the Texas Enterprise Fund in the history of the program—$21 million—which together with a property tax abatement from the City of Austin and Travis County provided for a total incentive package of $35 million for the operations center. Apple gave candidate locations a three-month window in which to make their proposals.
The new 1-million-square-foot campus in Austin will directly create 3,635 jobs generating about $273 million in new wages over the next 10 years. The Apple facility in Texas will become one of four global operations centers for the tech giant outside of its California HQ.
Baton Rouge, LA has had great success in executing its strategy of bringing together business and higher education in innovative public-private partnerships that spur initiatives in new high-growth sectors. Traditionally known as the “Creative Capital of the South,” Baton Rouge has established itself as a thriving high-tech hub for IT/software development and digital media while continuing to be an attractive location for corporate headquarters, relocations and traditional manufacturing. With a dynamic new riverfront development, a cutting-edge IBM tech center and some of the hippest digital media studios in the nation, we expect great things from Baton Rouge for years to come..
Last year, IBM unveiled a new 800-job technology center in downtown Baton Rouge that will provide software development and maintenance services to clients in the U.S. The new tech center will provide IBM’s clients in the U.S. with services that address the increasing demand for flexible software to keep up with Big Data, cloud and mobile requirements. IBM Services Center: Baton Rouge will deliver technology services including application development, application management and system integration.
Baton Rouge has put itself in the forefront of a burgeoning IT sector being driven by the compelling need of businesses to avoid getting overwhelmed with Big Data, and we expect this sector to grow exponentially.
A central element of the public-private partnership that secured the IBM center is the construction of a mixed-use, riverfront complex that will be developed by Commercial Properties Realty Trust (CPRT), a real estate investment trust that manages and develops property holdings of the Baton Rouge Area Foundation (BRAF). The riverfront complex is being built on the old Advocate newspaper site.
Mobile, AL rounds out our top three in Economic Growth Potential. Mobile landed a crown jewel of the commercial aircraft sector with Airbus’ decision to put its A320 final assembly line in the city. Construction officially started on the $600-million facility in April 2013 and aircraft assembly is planned to begin in 2015, with a targeted 2016 delivery of its first A320 jetliner. At full capability, the assembly line and associated facilities will employ 1,000 highly skilled workers. The facility is slated to build four airplanes a month, but could expand to eight planes a month eventually.
Airbus is the largest customer of the U.S. aerospace industry, with over $14 billion in purchases from U.S. suppliers.
Your eyes weren’t deceiving you when you saw Detroit, MI sitting at No. 10 in our Economic Growth Potential metro ranking. Yes, we know that Detroit became the largest city in history to file for bankruptcy protection, a process the city is expected to emerge from this year. But loyal readers of the BF Blog know that we’re bullish on Motown’s recovery.
JPMorgan Chase, the nation’s largest bank, recently announced it will provide $100 million to help Detroit with housing repairs, blight removal, job training and economic development projects over the next five years. This comes in the wake of another five-year program, announced by JPMorgan Chase in December, that will provide $250 million to Detroit and other large U.S. cities for job-skills training.
“The city’s challenges remain significant—unprecedented, in some regards—but JPMorgan Chase believes that Detroit has the ingredients and intrinsic strengths to reshape and rebuild a dynamic modern economy and make the city a great place to live, work and invest. We are committed to helping make that future a reality,” the bank said.
The bank will direct half of the $100 million in loans and grants to community projects. It will give $25 million to groups including the Detroit Land Bank Authority and the Detroit Blight Removal Task Force, which have begun a campaign to demolish most of the city’s estimated 78,000 vacant structures. Other allocations include $12.5 million for workforce training, $7 million for small-business assistance and $5.5 million toward economic growth projects (including a new streetcar system). JPMorgan Chase’s investment comes on top of a $300-million commitment last fall from the federal government and an infusion of funding from private institutions.
Some heavy business hitters also are placing huge wagers on Detroit’s recovery, most prominently Quicken Loans founder Dan Gilbert, a native son of Michigan, has spent more than $1 billion to acquire 3 million square feet of real estate in the heart of downtown Detroit. Gilbert is aggressively moving forward with a daring plan to revive two square miles of property with a variety of commercial enterprises, including hotels, casinos and retail stores.
In 2008, Chrysler rolled the dice and told the world it would invest $1.8 billion in its Jefferson North plant on Detroit’s dilapidated East Side. At a time when many analysts were busy preparing obituaries for the U.S. auto industry, Chrysler made a bold commitment to continue building its most profitable and recognizable vehicle in the city that long ago put cars on the map. The Jefferson North facility seemed an unlikely candidate in 2008 for this largesse. Five years ago, the workforce at the factory had been reduced to 1,300 survivors who were producing less than 100,000 Jeeps per year in an aging, 2.7 million-square-foot plant.
The 2008 announcement by then-owner Cerberus Capital Management that it would upgrade Jefferson North and expand its capacity by another 285,000 square feet almost immediately hit a huge bump in the road to recovery. Cerberus, an equity player who had acquired a majority stake in Chrysler from German auto giant Daimler-Benz in 2007, went into bankruptcy in 2009. It took a federal bailout and the acquisition of Chrysler by Italy’s Fiat to keep the third-largest U.S. automaker from going the way of the dinosaurs.
Today, we’re very pleased to report that new Jeep Grand Cherokees are rolling off the assembly line at Jefferson North at a higher rate than ever before. Annual production at the facility has tripled since 2008. The 4,600 workers currently employed at the plant are producing nearly 300,000 vehicles this year, generating an estimated $2 billion in annual profits. So the last remaining auto assembly plant within the city limits of Detroit is now perhaps the most modern and successful vehicle production facility in the world.
In addition to the revived Jeep plant, the burgeoning demand from tech-savvy consumers for “connected” vehicles is fueling the growth of a blossoming IT/software industry in Detroit’s urban center. According to several recent reports, young techies are establishing Motown’s version of Silicon Valley, filling empty office space with dynamic entrepreneurial enterprises that are creating automotive apps for the latest touchscreen offerings found on the dashboards of new cars.
Hagerstown, MD, Lexington, KY are Rapid Recovery Leaders
Since we created a Recovery Leaders category for our state rankings that showcased the states that made the biggest comebacks during the Recession, its only fair that we do something similar for our metro rankings.
For our metro Recovery Leaders ranking, we took a look at the MSAs that have had the most impressive surges in job creation, wages and salaries in the past year. Hagerstown-Washington County, MD-Martinsburg, WV, Lexington-Fayette, KY and Spokane, WA were our top three.
Washington County’s government, business, and community organizations partner to help diversify the local economy by providing specialized support to industries that have been identified to benefit from the area’s assets. As a result, advanced manufacturing, aviation/aerodefense, and biotechnology/life science sectors are becoming a larger part of our industrial mix.
Located an hour from Washington, DC’s biotech corridor and less than 30 minutes from well-known national biodefense resource Fort Detrick in Frederick, MD, Washington County is an affordable place to do business with close proximity to local metropolitan areas. About 25 percent of Fort Detrick’s employees live in Washington County, MD and the activities at Fort Detrick generate more than $1.7 billion in economic activity in the region.
Washington County boasts a regional life science community with more than 11,000 professionals living in the area; a supportive community college with a successful biotech program and Fort Detrick internship agreement; and a high-tech business incubator. The Technical Innovation Center (TIC) at Hagerstown Community College (HCC) has 4,000 square feet of wet lab space with 5 startup research and production firm lessees. The entrepreneurs found Hagerstown from the suburban Washington, DC area and as far away as South Carolina.
A key component to stimulating Lexington, KY’s high-tech economy is realized through a partnership with the University of Kentucky and Lexington’s Commercialization and Innovation process. This is the process of turning great ideas for research, software and program development into businesses..
In addition, through the Bluegrass Business Development Partnership, a study of the High-Tech Environment for Entrepreneurs was conducted by the Institute for Workplace Flexibility. Lexington has partnered with the Institute for Workplace Innovation (IWIn) on several workforce development initiatives, including When Work Works and the Bluegrass High-Tech Entrepreneurial Environment Study.
Lexington is a diversified growth engine for health and educational services, technology, retail trade, and manufacturing. Boasting a highly educated population, an outstanding quality of life, and amenities found in much larger cities, Lexington has been a magnet for growth.
In late 2013, Gov. Steve Beshear announced a $37,500 grant to help supply vital resources to local entrepreneurs in the Lexington area. The funding, provided by the Cabinet for Economic Development’s newly created Office of Entrepreneurship, was awarded to Commerce Lexington Inc. to support the new Awesome Fellowship program, which will help local startup companies get off the ground.
“By promoting innovation and helping entrepreneurs early in their process, we can improve Kentucky’s competitive position in the world and enhance job creation at the same time,” said Gov. Beshear. “Entrepreneurs need our help in launching their ideas and growing their businesses. Through the efforts of our Office of Entrepreneurship and its many partners across the state, Kentucky can become a leader in developing and growing a vibrant and robust entrepreneurial community.”
The Awesome Fellowship program, which is run by Lexington-based Awesome Inc., provides support to very early-stage ventures that focus on web and mobile software, software-as-a-service and data solutions. Services offered to these developing companies include work space and access to experienced mentors, programming and design. Awesome Inc. receives support from the Lexington office of the Kentucky Innovation Network and Commerce Lexington.
The Spokane regional economy is diverse and has opportunities for a number of industries. From the aerospace companies on the West Plains, to the tech and health sciences companies in Spokane, to the manufacturing companies in Spokane Valley and Liberty Lake, to the agribusiness companies throughout the region, there’s a place for businesses large and small in the area.
The region’s Certified Sites program allows land to be certified as shovel-ready for any company looking to break ground on new development. Spokane’s Small Business Council is committed to working with area municipalities to streamline the permitting process for expansions or relocations to the region.
Youngstown, OH: Exports Engine
Our new Exports Growth Leaders category ranks the locations that have fueled their recoveries with exports. While the appearance of exports behemoths like New Orleans and Houston in the top 10 are not surprising, some may raise their eyebrows when they see Youngstown, OH at the top of the chart and Toledo, OH in the top 10. Well, all of the economic obituaries written about the Rust Belt during the Great Recession were totally offbase: manufactured goods produced in the Youngstown metropolitan area are being shipped around the globe.
According to a study by the Brookings Institute, the Youngstown MSA actually has led the nation in export growth for several years. The value of products exported from the Youngstown-Warren-Boardman region soared by 22 percent from 2009 to 2012, reaching a value of $4.7 billion. The Brookings study found that the Mahoning Valley is sixth in the nation in the “export intensity” of its economy. About one quarter of the goods and services produced in metro Youngstown are exported to the world.
Metal products account for one third of Youngstown’s exports while motor vehicles accounted for another 14 percent, according to Export Nation 2013, a report released by the Brookings Institution Metropolitan Policy Program as part of its Global Cities Initiative.
According to the U.S. Export Assistance Center in Cleveland, surging exports are a statewide trend in Ohio. The Cleveland-Elyria-Mentor metro area saw exports grow by eight percent over the past three years, to reach a value of $14.5 billion. Chemicals, machinery and motor vehicle parts are the leading the exports surge in Cleveland.
The port of Toledo has been shipping abroad coal and petroleum products, auto parts and glass products. Metro Toledo saw exports grow by 12 percent since 2009, the ninth highest growth rate nationally, the Brookings study found. Like Youngstown, Toledo is on track to see exports double between 2009 and 2014.
Metro Detroit’s recovery from the Great Recession wasn’t simply a side effect of the resurgence of the U.S. automotive industry. Like neighboring cities in Ohio, the recovery in Metro Detroit was largely fueled by surging exports.
The International Trade Administration’s report on the highest-volume exporters by metropolitan areas showed that Detroit exports exploded by 55 percent during 2009 and 2010, the most improved growth rate in the country.
In 2012, the Detroit region ranked as the fourth largest export market in the U.S., with regional Detroit businesses shipping more than $55 billion in goods and accounting for nearly 73 percent of Michigan’s exports. Exports from the Detroit region have enjoyed double digit growth over the past several years, experiencing growth of more than 12 percent or $5.5 billion over 2011-2012.
Top export destinations for the Detroit region in 2012 were Mexico ($20.2 billion), Canada ($16.8 billion) and Saudi Arabia ($4.1 billion). Mexico and Canada alone account for more than two-thirds of the Detroit region’s exports. Canada is also the largest trading partner to the U.S. and second largest export market for the Detroit region.
Top products exported from the region were transportation equipment, machinery, except electrical, computer and electronics, and electrical equipment, appliance and components. Leading counties for total exports within the region are Wayne ($27.7 billion), Oakland ($22.0 billion) and Macomb ($4.7 billion).
On average, 11,000 trucks crossed regional Detroit’s borders daily, with about 4 million trucks crossing annually.
With climate change moving to the top of the global agenda, everyone is paying more attention to efforts to increase the use of renewable energy. So we’ve revamped our Renewable Energy Leaders ranking to throw our spotlight on the metros-and a couple of entities within metros-that are walking the walk as well as talking the talk.
According to the U.S. Environmental Protection Agency, the top 30 metros in terms of renewable energy use are consuming more than 2.8 billion kilowatt hours (kWh) annually, which is equivalent to eliminating the amount of carbon dioxide generated by the electricity use of more than 270,000 American homes.
Houston, the top-ranked metro in our Renewable Energy Leaders category, is contracting for about 623,000 kWh of wind power to meet about 48 percent of its electricity needs.
Getting Ready for the Big Ships
When the Panama Canal expansion is complete next year, supersized post-Panamax ships from Asia will be able to traverse the canal and, for the first time, have direct all-water shipping access to ports on the Gulf of Mexico and the East Coast. For years, these megaships docked on the West Coast, sending cargo to U.S. markets via train or truck. However, a wider and deeper Panama Canal is giving shipping companies less expensive options for shipping to Gulf and East Coast ports.
The Panama Canal expansion project is expected to alter global trade routes. As older, smaller ships come offline, they are being replaced with Super Post-Panamax cargo ships, some of which are three-and-a-half football fields wide. These ships can carry over twice the amount of cargo (12,500 TEUs or 20-foot containers) compared to the Panamax ships that hold no more than 5,000 TEU. Bigger ships and more cargo can result in economic windfall for a port.
As a result, Gulf and East Coast ports are vying to attract the bigger ships and all of the economic benefits that come with them. However, the ports have to be post-Panamax ready (PPR). This means ports must have both a 50-foot channel depth with sufficient channel width and turning basin size, cranes capable of loading and unloading Post Panamax ships, and terminal docks engineered to handle the new, bigger cranes required for such vessels.
As indicated by our annual ranking of leading Post-Panamax Ready Ports (East Coast), currently, the Port of Virginia (in Norfolk) and the Port of Baltimore are the only East Coast ports that can accommodate the large ships. However, the competition is heating up as other ports build up their infrastructure and dredge their channels to get ready.
The Port of Virginia in Norfolk is the first port on the U.S. East Coast to be ready to handle the newer, bigger post-Panamax ships. The Port has had 50-foot-deep channels since 2006 and all of its berths are at 50-feet. As a result, the port is engaged in other projects to market itself as not only the deepest shipping channel on the East Coast, but the most attractive.
The Port is home to eight Suez-class rail-mounted gantry cranes and 14 Panamax rail-mounted gantry cranes in the harbor. The combined berth is more than one-and-a-half miles. Nearly 50 shipping lines connect the Port of Virginia to the world’s primary ports.
The Port also contains the APM Terminals in Portsmouth—the most technologically advanced container terminal in the world. Construction of Craney Island Marine Terminal is underway at the Port, while dredging began last fall and will continue for the next eight to 10 years.
The Craney Island Marine Terminal is a long-term project that will more than double the existing throughput capacity of the Port. The present effort in this part of the project is to develop 600 acres that will be the foundation of Virginia’s fourth, deep-water marine terminal. The first phase of the terminal is scheduled to open in the 2025-2028 timeframe. In 2012, more than 1 million cubic yards of recycled dredge material was deposited in the development of the terminal.
In February 2013, the project reached an important milestone when the two southernmost dikes needed for the development of Craney Island Marine Terminal became visible above water-level as the massive structures began poking through the Elizabeth River’s low-tide line.
“This is an important milestone as we can now truly see the progress; it was hard to get an image of what we were talking about when everything was still underwater,” said Rodney W. Oliver, interim executive director of the Virginia Port Authority (VPA). “As this project has now become something tangible, so too has the reality of The Port of Virginia becoming the East Coast’s cargo gateway. When Craney Island is finished, this port will have more capacity than any of its peers on this coast.”
The effort to divide Portsmouth Marine Terminal (PTM), the Ports second largest terminal, into parcels for multiple users continues. The first commitment is ecoFUELS, which will export wood pellets to the European market. Construction on that facility began last fall.
With 3,540 feet of wharf, three berths, and 6 cranes, PMT is able to handle container, break-bulk and RO/RO cargo. PMT also has direct access to both CSX and NS railways, and will soon connect to the Commonwealth Railway. Its key feature is highly automated 30+ lane transfer zones and automated live e-gates. In addition, the Port’s continued growth of its largest rail carrier, Norfolk Southern. The Port currently has service by two Class I railroads, Norfolk Southern and CSX—both offer double-stack service to critical manufacturing and population centers.
The Port of Baltimore has had a 50-foot deep channel since 1990. Under a public-private partnership (P3) agreement with Ports America Chesapeake, a 50-foot deep container berth was constructed in 2012. In January 2013, four Super Post-Panamax cranes became operational on the new container berth. The cranes were also part of the agreement.
According to Maryland Gov. O’Malley, this project is putting the Port of Baltimore in an excellent competitive position for when the Panama Canal expansion is completed in 2015.
“This new 50-foot-deep berth and these cranes were absolutely critical to the long-term future of the Port of Baltimore, enabling Maryland to retain existing business and jobs while allowing us to accommodate new business and create new jobs that will come aboard the larger ships that are on the horizon,” said Gov. O’Malley. “Through our collaboration with Ports America, we’re moving the Port of Baltimore forward, creating jobs and connecting our State with cities and ports half a world away. This project puts the Port of Baltimore in an excellent competitive position when the Panama Canal expansion is completed in 2015—a project that will literally change the face of the maritime shipping business.”
The P3 project is a 50-year agreement between the Maryland Port Administration (MPA) and Ports America Chesapeake to lease and operate the 200-acre Seagirt Marine Terminal. Under the agreement, Ports America Chesapeake has daily operational control of Seagirt, but the state continues to own the facility.
The 50-foot deep container berth was completed in 2012, two years ahead of its original schedule. Each of the four supersized cranes, known in the maritime industry as Super Post-Panamax, are 400-feet tall with the boom fully raised, can reach 22 containers across on a ship and can lift 187,500 pounds of cargo. Each crane weighs 1,550 tons and is fully electric so it emits no diesel emissions.
“This new investment in port infrastructure is an important step forward to help grow our local economy and to secure the Port of Baltimore’s future for years to come,” said Baltimore Mayor Rawlings-Black. “Combined with other private, state and city port-related infrastructure investments, our port will be poised for major growth, new jobs and surging economic activity in the Baltimore region.”
Over the next 50 years, the P3 project is expected to generate up to $1.8 billion in total investment and revenue for the state of Maryland and to create a total of 5,700 jobs.
A massive, $300-million Delaware River dredging project is helping the Port of Philadelphia get post-Panamax Ready. The project, which began three years ago and is expected to be completed by 2017, is more than halfway done after workers finished dredging an 11-mile stretch, known as Reach D.
U.S. Names Innovation Hubs
The Obama Administration is moving forward with an aggressive federally funded program, first announced by the president in his 2013 State of the Union address, to create advanced manufacturing hubs in emerging growth sectors. The first two hubs—the National Additive Manufacturing Innovation Institute in Youngstown, OH and the Next Generation Power Electronics Manufacturing Innovation Institute at North Carolina State University, are already up and running. The Youngstown facility is backed by $30 million in federal funding and the North Carolina hub received $70 million from the feds.
Earlier this year, President Obama announced two new manufacturing innovation institutes led by the Department of Defense supported by a $140 million Federal commitment combined with more than $140 million in non-federal resources: A Detroit-area headquartered consortium of businesses and universities, with a focus on lightweight and modern metals manufacturing; and a consortium of businesses and universities in Chicago that will concentrate on digital manufacturing and design technologies.
Obama also launched a competition for a new manufacturing innovation institute to build U.S. strength in manufacturing advanced composites, the first of four new competitions to be launched this year.
In May 2013, the Administration launched competitions for the three institutes with a Federal commitment of $200 million across five agencies—the Departments of Defense, Energy, Commerce, NASA, and the National Science Foundation, building off the success of a the pilot institute in Youngstown. In January, the first of these three institutes was announced, the new Department of Energy-led Next Generation Power Electronics Manufacturing Innovation Institute in Raleigh, N.C.
With the opening of the competition for the next manufacturing innovation institute on advanced composites, the Administration is closing in on fulfilling the president’s pledge to four institutes this year, bringing the total to eight.
Each institute serves as a regional hub, bridging the gap between applied research and product development by bringing together companies, universities and other academic and training institutions, and federal agencies to co-invest in key technology areas that encourage investment and production in the U.S. This type of “teaching factory” provides a unique opportunity for education and training of students and workers at all levels, while providing the shared assets to help companies, most importantly small manufacturers, access the cutting-edge capabilities and equipment to design, test, and pilot new products and manufacturing processes.
The long-term plan envisions a full national network of up to 45 manufacturing innovation institutes, which will also require additional legislation and appropriations from Congress.
The winning Lightweight and Modern Metals Manufacturing Innovation (LM3I) Institute team, headquartered in the Detroit area and led by EWI, brings together a 60-member consortium that pairs the world’s leading aluminum, titanium, and high strength steel manufacturers with universities and laboratories pioneering new technology development and research. The long-term goal of the LM3I Institute will be to expand the market for and create new consumers of products and systems that utilize new, lightweight, high-performing metals and alloys by removing technological barriers to their manufacture. The Institute will achieve this through leadership in pre-competitive advanced research and partnerships across defense, aerospace, automotive, energy, and consumer products industries.
The winning Digital Manufacturing and Design Innovation (DMDI) Institute team, headquartered in Chicago and led by UI Labs, spearheads a consortium of 73 companies, universities, nonprofits, and research labs—creating a novel partnership between world-leading manufacturing experts and software companies to enable operability across the supply chain, develop enhanced digital capabilities to design and test new products, and reduce costs in manufacturing processes across multiple industries.
The new competition for an Advanced Composites Manufacturing Innovation Institute, led by the Department of Energy, will award $70 million over five years to improve our ability to manufacture advanced fiber-reinforced polymer composites at the production speed, cost and performance needed for widespread use in clean energy products including fuel-efficient and electric vehicles, wind turbines and hydrogen and natural gas storage tanks. This new competition will be the fifth institute launched by President Obama.
Lightweight and modern metals are utilized in a vast array of commercial products, from automobiles, to machinery and equipment, to marine craft and aircraft. These ultra-light and ultra-strong materials improve the performance, enhance the safety, and boost the energy and fuel efficiency of vehicles and machines. For example, lightweight steels are helping American automakers produce cars more fuel efficient than ever before—with some cars today already up to 39 percent lighter and just as strong. For the Department of Defense, lightweight metals will enable the creation of armored vehicles strong enough to withstand a roadside bomb but light enough for helicopter-transport.
There are significant challenges for new lightweight and modern metals to reach widespread commercial production. To aid in overcoming these challenges, in June 2011, the President announced the Advanced Manufacturing Partnership and the Materials Genome Initiative for Economic Competitiveness, recognizing the critical role of materials technologies in the products we produce and the need for a better, faster, more economical way to bring these technologies to market.
The Administration is launching the Lightweight and Modern Metals Manufacturing Innovation Institute to develop and expand the use of technologies at the important intersection of materials, manufacturing, and design. By strengthening emerging capabilities in both advanced metals manufacturing schemes and the design of their end-use components, we will accelerate innovations from lab to market and deliver products to the defense and the commercial sector at significantly reduced weight, time and cost.
For example, a large commercial light truck manufacturer recently eliminated 700 lbs by moving to an aluminum body, made possible by these technologies, in their 2015 model. This national institute will make the U.S. more competitive by expanding domestic markets for products made with lightweight and modern metals such as automobiles, wind turbines, medical devices, engines, commercial aircraft, and Department of Defense systems and vehicles. It will also lead to significant reductions in manufacturing and energy costs. The long-term goal of the LM3I Institute will be to expand the market for and create new consumers of products and systems that utilize new, lightweight high‑performing metals and alloys by removing technological barriers to their manufacture. The Institute will achieve this through leadership in pre-competitive advanced research and partnerships across defense, aerospace, automotive, energy, and consumer products industries. The winning consortium, led by EWI area includes the following members: ABS, AEM, ALCOA Technology, Boeing, Comau, Easom Automation, EWI, Fabrisonic, Flash Bainite Steel, GE, Honda North American Services, Huys, Infinium, Inc., Innovative Weld Solutions, ITW, Lockheed Martin, Luvata, Materion, MesoCoat, MTI, NanoSteel Company, Optomec, Phoenix Integration, PowderMet, RealWeld, RTI International Metals, SaCell, Southwest Research Institute (SWRI), Steel Warehouse Co., ThermoCalc, TIMET, Trumpf, Inc., UTRC and Wolf Robotics.
Nine universities and labs also will participate in the LM3I program, including: Colorado School of Mines, Michigan State University, Michigan Tech University, The Ohio State University, University of Kentucky, University of Michigan, University of Notre Dame, University of Tennessee and Wayne State University. Other organizations involved in the project include: American Foundry Society, American Welding Society, ASM International, CAR, Columbus State Community College, Conexus Indiana, DET NORSKE VERITAS™, Focus Hope, International Association of Machinists & Aerospace Workers, Ivy Tech, Macomb Community College, MAGNET, Pellissippi State Community College, State of Kentucky, State of Michigan, State of Ohio, Southeast Michigan Workforce Intelligence Network.
A New Digital/Design Hub
The U.S. stands on the edge of a new frontier in manufacturing, where high-tech products are designed and tested largely within a virtual environment and individually tailored for performance. Much like the Internet has transformed the way we engage in commerce, manufacturing is being transformed by digital design. Product development no longer begins on a draftsman’s table, where sketches are turned into physical prototypes and tested again and again to get it right. As a result of increasing complexity of manufactured systems, increasing diversity across the supply chain, and the increasing requirement for low-volume production to meet highly customized needs, there is a growing opportunity to expand our capabilities in digital manufacturing and design to drive U.S. manufacturing leadership. The U.S. already has a long-standing leadership in software development, with 80 percent of the world’s software produced in the U.S. The integrated design, development, and production of highly complex systems, leveraging our existing strength in software, can speed ideas from the lab into commercial production, reduce costs, and shorten production lifecycles.
There are significant challenges to integrate this ‘digital thread’ across different manufactured technologies and across the supply chain. These challenges include establishing true interoperability, the effective and balanced management of intellectual property interests, maintaining network technology and security, workforce skills, and new organizational cultures that embrace and leverage the digital thread. Collaboration across industry, academia and government provides an opportunity to directly address these challenges in a pre-competitive way.
The Digital Manufacturing and Design Innovation Institute awardee has assembled a world-class team of more than seventy organizations from across industry, including leading manufacturers and software developers, government and academia, with both broad and deep experience in all aspects of the product development process from design and prototyping to manufacturing at scale. The combined resources and expertise of the consortium partners will provide a leap forward in digital design and manufacturing.
The winning consortium, led by UI Labs, includes the following members: 3D Systems, ANSYS, Autodesk, Big Kaiser Precision Tooling Inc., Boeing, Caron Engineering Inc., Caterpillar, CG Tech, Cincinnati Inc., Colorado Association for Manufacturing & Technology, Cray, Dassault Systems, Deere & Company, DMG Mori, Evolved Analytics LLC, General Dynamics-Ordnance & Tactical Systems, General Electric, Haas Automation,
Honeywell, Illinois Tool Works, Imagecom Inc. (Aspire 3D), International TechneGroup Inc., Kennametal, Lockheed Martin, Microsoft, MSC Software, North American Die Casting Association, National Instruments, Nimbis Services Inc., Okuma, Palo Alto Research Center, Parlec, Procter & Gamble, Product Development & Analysis, PTC, Inc., Rockwell Collins, Rolls-Royce, Siemens, System Insights, The Dow Chemical Company and UPS.
There are 23 universities and labs participating in the digital manufacturing project, including: Colorado University–Boulder, Illinois Institute of Technology, Indiana University, Iowa State University, Missouri University of Science and Technology, Northern Illinois University, Northwestern University, Notre Dame, Oregon State, Purdue University, Rochester Institute of Technology, Southern Illinois University, University of Chicago, University of Illinois at Chicago, University of Illinois at Urbana-Champaign, University of Iowa, University of Louisville, University of Michigan, University of Nebraska-Lincoln, University of Northern Iowa, University of Texas at Austin, University of Wisconsin–Madison, Western Illinois University.
Other organizations participating in the project include American Foundry Society, Chicago’s Department of Housing & Economic Opportunity, Colorado OEDIT, Commonwealth of Kentucky, Illinois Department of Commerce & Economic Opportunity, Illinois Science & Technology Coalition, MT Connect Institute, Reshoring Initiative, UI Labs.
A $70-million DOE competition will create the new Advanced Composites Manufacturing Innovation Institute. The institute will focus on advanced fiber-reinforced polymer composites, which combine strong fibers with tough plastics to cost-effectively make materials that are lighter and stronger than steel.
While advanced composites are used in selective industries such as aircraft, military vehicles, satellites and luxury cars, these materials remain expensive, require large amounts of energy to manufacture and are difficult to recycle. The Energy Department’s Manufacturing Innovation Institute for advanced composites will be aimed at overcoming these barriers to widespread use by developing low-cost, high-speed, and energy-efficient manufacturing and recycling processes. Through this work, the Institute will focus on lowering the cost of advanced composites by 50 percent, reducing the energy used to make composites by 75 percent and increasing the recyclability of composites to over 95 percent within 10 years.