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As Michigan’s clean energy industry expands, the state is helping workers with the transition

As Michigan’s clean energy industry expands, the state is helping workers with the transition

Workers do inspections and repairs on Ford F-150 Lightning underbodies at Fords Rouge Electric Vehicle Center in Dearborn. (Sarah Rice/Getty Images)

By Michigan Advance

June 28, 2024

BY KYLE DAVIDSON, MICHIGAN ADVANCE

MICHIGAN—As Michigan sets its sights on 100% clean energy sources, and automakers shift production away from gas-powered vehicles to electric models, a newly established office within the Department of Labor of Economic and Opportunity (LEO) is looking at efforts to help workers bridge the gap between jobs working with fossil fuels, to those working with renewables.

Created as part of the clean energy and climate package signed into law in November, the Community and Worker Economic Transition Office in hopes of facilitating a just transition by retaining and creating jobs in autos, manufacturing and energy.

While the office has not received state funding, it has leveraged federal funding and philanthropic investments to begin retooling manufacturers most impacted by a shift to renewables, support clean energy workforce training and diversify Michigan’s energy supply chain.

In conversations with stakeholders including labor groups, local government officials and business leaders, Jonathan Smith, LEO senior chief deputy director, said the most critical thing discussed was acting before an economic change occurs and brings about negative impacts.

“By the time that has happened, we’ve sort of missed the real critical opportunity to help,” Smith said.

“We know that we’re going to have clean energy transitions that are gonna take us years and decades to fully employ. So what we can do is we can create these opportunities to identify the communities and workers that are most vulnerable to change, and then deliver opportunities to the businesses in those communities so that they don’t ever face that economic harm,” Smith said. 

For example, by looking at small-to-medium sized auto suppliers in communities like Flint or Saginaw that have already seen a decline in auto jobs, the office can help those suppliers retool to produce a product that will be needed by electrical utilities or other customers in the energy space, Smith said.

“If we do that, then you know, that worker never loses his job. That community never faces that loss of revenue, they aren’t stuck with a potentially contaminated brownfield site that needs to be cleaned up before it can be sold to a new owner,” Smith said.

“Trying to intervene earlier, in a more strategic way, rather than just reacting, that’s really what we’re trying to drive towards,” Smith said.

Additionally, with companies like DTE Energy and Consumers Energy on schedule to shutter their coal-fired power plants, these scheduled closure allows the office to work with utilities and communities and examine how to reuse the site in a way that matches the community’s vision for the future.

In 2023, DTE announced it would shut down all of its coal plants by 2032, bringing an early retirement for the company’s Monroe coal power plant.

While Monroe has always hosted a number of manufacturing and energy jobs and will likely want to continue that strategy, the Monroe County Business Alliance’s economic development plan is also focused on outdoor recreation and growing the county’s knowledge economy.

“Some of these sites, if it’s on a waterfront property, maybe what they’re really excited about is not putting another industrial facility there, but to turn that into an amenity for their community that can help them attract new residents and other types of businesses,” Smith said. 

Another one of the office’s key goals is helping suppliers who will need to diversify understand their current capabilities and which adjacent opportunities may be the best fit for them, Smith said.

“There’s going to be a growing market for energy equipment, so that’s a logical first place to look. But we know—whether it’s defense, it could be aerospace—there are lots of other sectors where we’re going to need advanced manufacturing to meet our critical supply chain needs in the country,” Smith said.

As the United States looks at re-shoring manufacturing from other countries following shocks to the supply chain caused by the COVID-19 pandemic, the Community and Worker Economic Transition Office wants to help auto manufacturers identify which ones are best for them, Smith said.

Additionally, the creation of an economic transition office has allowed the state to collaborate with President Joe Biden’s administration and some of the key agencies working on efforts to onshore the supply chain.

Smith pointed to programs announced by Vice President Kamala Harris while visiting Detroit in early May, expanding access to workforce training and providing $100 million for small- and medium-size auto parts manufacturers to expand and retool their facilities.

“All of those programs are really designed to be aligned with the strategy that Michigan has developed for transition. And so we are able to tap into a lot of federal resources that are coming online, thanks to the passage of new laws, like the Bipartisan Infrastructure Law, the CHIPS and science Act, the Inflation Reduction Act,” Smith said.

“Having a strategy that allows us to be very well prepared to draw down as many federal dollars as possible and spend them on our critical needs; that’s a key part of our strategy. That will be significantly enhanced when we get state funding as well to build out a team to do more on-the-ground work directly with companies and workers and communities,” Smith said. “Even in the absence of state funding, we’ve been able to make a significant amount of progress, thanks to these partnerships with the Biden administration.”

Michigan is also well positioned to make this transition, Smith noting Michigan’s leadership in clean energy jobs and investments.

According to the 2023 Clean Jobs America Report—which was released by E2, a national nonpartisan organization advocating for policies to support the environment and business—Michigan is leading the Midwest in clean energy jobs, with almost 124,000 Michiganders employed by clean energy companies at the end of 2022.

Additionally, a 2023 report from Climate Power, a communications firm advocating for Climate Action, said Michigan was leading the nation in clean energy projects, securing more than $21 billion in investments.

Michigan is also manufacturing the best selling internal combustion engine vehicles in the country — the Ford F-150 and Chevy Silverado, Smith said.

“Our auto workers are busy building these high-quality products and these transitions are going to play out over many years, and those are going to continue to be popular vehicles for many years to come,” Smith said.

This creates an exciting opportunity to leverage the high level of internal-combustion engine production, which is good for workers, and the additional investments in EVs coming online, Smith said.

The goal of the office is to ensure that the transition away from internal combustion engine vehicles to electric vehicles is a smooth one, Smith said. As the production of internal combustion engine vehicles declines and EV production increases, the office wants to make certain communities are prepared and have a plan in place so the whole state can benefit from increased investments.

Michigan’s clean energy standard also ensures the state is first in line for jobs and economic opportunity as the economy shifts towards renewables, Smith said.

“We can be a state that exports, not just our products, but our knowledge about how to do this transition to other states, and other countries all over the world,” Smith said.

“The real exciting opportunity is not just building, you’re not just manufacturing the equipment that is commercially available today, it’s going to be researching and developing the next generation of technologies, tapping into the expertise of our research universities. It’s going to be building workforce and equity plans around the adoption of these technologies, and figuring out how to integrate it with existing infrastructure,” Smith said. 

Having this office under the state’s workforce agency means there is a strong system for identifying new training programs to meet industry needs, he said. However, jobs start with the employer, Smith said.

“You don’t want to train people for jobs that might not exist,” he said.

He pointed to the state’s electric vehicle jobs academy as an examples of a successful model deployed by LEO, where the department sits down with employers and asks them for information about jobs they will have in the future, before going to training partners — which are often community colleges — to update the curriculum to reflects the skills that will be the most in-demand skills for the future and providing access to the training for workers who want to find a job in that field.

“We can create new training programs in any sector, where there’s job growth. What we don’t always have is the funding and the support to pull those employers together to design that curriculum,” Smith said.

“I think a lot of what this office will do will be to use what it knows about the future economy to go find those employers, to bring them to the table to make sure that we’re sitting down with our workforce partners, with labor unions or community colleges, and actually building these collaborative models for workforce training,” Smith said.

When the bills that created the office were under consideration by the Senate Labor Committee, lawmakers discussed the possibility of having the office work to address jobs displaced by artificial intelligence, as well.

“AI is going to impact every industry. So clearly, in our work with the auto sector in the utility sector, we’re gonna have to think about how AI is going to change roles in the future,” Smith said. “We’re gonna need to make sure that workers, as we’re retraining them for next generation auto jobs or jobs in the clean energy sector, AI will be part of that training, because it’s gonna be a tool that all of us are gonna have to use.”

While the Legislature could direct the office to look at additional sectors outside of clean energy and the automotive industry, Smith was wary of taking on additional commitments without receiving state funding.

“I feel a very strong commitment to deliver on the existing mandate for these auto communities and for the folks who are gonna be impacted by energy transitions. So I don’t want to expand our scope without feeling very confident that we’re able to meet the mission we’ve been given,” Smith said, noting that additional resources would be needed should the office expand into other sectors to ensure it doesn’t distract from the office’s work on autos and energy.

Smith also stressed the ambitious nature of the office’s approach. While two other states—Colorado and Minnesota—have an economic transition office, and a handful of states have teams looking at transition issues, the states looking at economic transitions are focused on the utility sector and the impacts on coal mining and coal power plant communities when those plants and mines are shut down, he said.

Michigan’s approach differs in two ways, Smith said. First, Michigan is looking at changes in the auto sector, which makes up 20% of the state’s economy. Second, other states are focused on mitigating harms when a mine or power plant closes, while Michigan is working to empower communities to create opportunities for economic growth.

“That ability to be proactive and to look at growth, that is a huge difference between what Michigan is doing and what some other states are looking at,” Smith said.

READ MORE: Michigan labor unions take stand against Trump

This coverage was republished from Michigan Advance pursuant to a Creative Commons license. 

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CATEGORIES: LABOR
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