The Detroit Regional Partnership (DRP) will use $52 million from the EDA to transition legacy automotive industry into a globally competitive advanced mobility cluster. The Global Epicenter of Mobility (GEM) coalition will do this through a new Supply Chain Transformation Center and Mobility Accelerator Innovation Network that will bolster existing pillars of support in their ecosystem.
Maureen Krauss is the President and Chief Executive Officer of the Detroit Regional Partnership. In December, 2022 Maureen testified at a House Science, Space, and Technology subcommittee hearing on Building Regional Innovation Economies. You can find her testimony here. Christine Roeder is the Executive Vice President of the GEM coalition and has over 20 years of experience with economic development and the automotive industry across Michigan. She previously held various senior leadership roles at the Michigan Economic Development Corporation (MEDC).
This interview is part of an FAS series on Unleashing Regional Innovation where we talk to leaders building the next wave of innovative clusters and ecosystems in communities across the United States. We aim to spotlight their work and help other communities learn by example. Our first round of interviews are with finalists of the Build Back Better Regional Challenge run by the Economic Development Administration as part of the American Rescue Plan.
Ryan Buscaglia: Could you tell me a little bit about the history of your coalition and how it came together in Detroit?
Maureen Krauss: We represent a region of five and a half million people. That is not a federal formula region or state formula region. It is a self chosen region where people/communities have decided they want to work together. So that always makes things a little easier. We’ve been doing this for a long time in economic development. And when you look at our seven clusters that we focus on, the mobility cluster—advanced mobility—right now is responsible for about 70% of our workload. So it’s one that we’re immersed in. Everyone knows Detroit as the auto town, the auto region. Michigan—the auto state. We have been seeing this transformation everyday from ICE to EV (internal combustion engine to electric vehicle) but it’s really more than auto right? It has to do with aerospace and defense and a lot of other industries that are here on how the mobility industry is changing.
So it was interesting when we first convened regional partners who work in this space. We actually didn’t pick mobility. We said: ‘What should it be? What topics should it be?’ And we were really pleased when people got back to us on that: 19 out of 20 said mobility. So that was a clear sign that this was a space we needed to really focus on.
The one other thing I will say, Christine and I worked together back in 2009 and 2010 when our auto economy imploded, and we learned a lot from that. We did not want that to happen again. Our global epicenter of mobility approach is to proactively embrace this change and ensure that our talent and our small and medium sized companies and our entrepreneurs can keep pace with the global shift, with the big original equipment manufacturers (OEMs), with the huge tier-one suppliers, and make sure they have access to the resources and the research that they need to make the transition. At one point I said to the EDA: we don’t want to ever come back to the federal government for a bailout. We want to show that we’re proactively recognizing this change and doing something about it. Christine, I don’t know if you want to share any other insight around that on how people got involved in it [the coalition].
Christine Roeder: My prior work for 20 plus years was with the state level economic development group doing business development. And so a lot of my time—if not 90 plus percent of my time over that couple of decades—was spent on automotive projects in Southeast Michigan.
Knowing this ecosystem of players of workforce development and entrepreneurs and the different incubators we have, the work we have with these research institutions like University of Michigan and Wayne State— we’re really fortunate in this region. To the DRPS credit, when they were pulling this application together. It was not a situation of “well this is the group we have and this is how we’re moving forward.” It was “how can we make the table bigger?” I’ve heard Maureen say that a number of times, how can we make the table bigger? And who else is missing and how can we bring them to the table?
So I’m really thrilled about the work we’re doing within these different pillars of projects for the EDA, because they have brought together groups that never have even worked together their whole time doing workforce development or economic development in the Detroit metro region. We’re building trust across different organizations and educating these organizations about what the capabilities they each have.
You mentioned the historic roots of this coalition coming out of the incredibly tough period of 2009 and 2010. Could you talk about the lessons from that period and how that informed the projects and coalition that you’re working on today?
Maureen: There were some really significant programs that came out of that period of time. Some did not work out. They didn’t pan out, they weren’t needed. But we had to really take a look and say— okay, we’re very grateful for this auto industry here, what would we be without it? It provides great jobs, great quality of life, and jobs across the spectrum from manufacturing to technical research and development. We have these assets, what else can we do with them?
So what happened as this coalition was building: we saw the different components be created to address very specific needs, and our approach on this EDA grant was we don’t want to invent something new. It was funny how the EDA asked us in all the meetings, well, is there a construction project? Or are we building a new thing? No, we have some existing pillars that are quite strong! We want the funds to accelerate their work, and make sure that historically excluded communities (HECs) will be able to have access.
We looked at a very broad definition of HECs not just from a racial lens, but for instance, our region is very urban and suburban and rural. So how do we ensure that a successful program in Ann Arbor or Detroit can reach companies and people in the rural areas of our region too? So it was really, as Christine said, expanding that table and not creating yet another program.
And then we looked at what are shared components that we can all benefit from. That’s the strength of one of our components called GEM-Central and the whole research piece. Entrepreneurs, small-medium sized companies—they can’t hire high end McKinsey or Boston Consulting Group firms to do their research, but there’s a lot of shared information there. So we wanted to strengthen that and have that available to all.
And then very importantly in the DEI space, we’re a very diverse region, and it’s very authentic here. But we want to ensure that our small and medium sized companies also understand how to be more diverse, how to really embrace all of the cultures that are here in the Detroit area. You know, a lot of these smaller firms barely have an HR person, let alone a DEI officer. So that’s one of our activities. We want to make sure that small and medium sized companies understand how to incorporate DEI into their companies to provide greater opportunities for all because we do believe that we have a great talent pool here. Sometimes you just have to look in different places than the traditional sources. And that really encompasses a lot of our DEI work and allowing access to those findings and those paths for companies that might just have a part time HR person doing payroll.
How are you bringing people to the table trying to be inclusive in the process of developing this future oriented cluster? Did it look like weekly meetings or did it look like town halls? Did you go to people in the community?
Maureen: Our diversity here is very authentic. So it’s not like we had to one day say, who can we call that represents black entrepreneurs or whatever. We work with these people every day. It was really as Christine said. We met every week for I don’t know how many weeks we typically had about 80 people on each call. We never met in person, either. Remember, this all started during COVID. We never met in person. But we had these meetings and we invited a big group of everyone we knew. Who was who was the black business Chamber of Commerce here? Get them in. Detroit Future City? Get them in. Our rural areas’ economic development partners and others? Get them in. It never seemed that it was forced, but it was just making sure they were in the conversations and there was that representation. It was the weekly mantra—who’s not here? Tell your friend, tell us who we can include on an invite.
We have the second largest Arab population outside the Middle East in the Detroit area. There’s a very strong Hispanic Chamber of Commerce here. So Ernst and Young (EY) helped us bring all those people together and have those conversations. We did two sessions with them to really listen to what their thoughts and ideas and approaches would be to make sure that we were inclusive. I don’t think any of us feel comfortable that we’ve solved this issue. Right? But we’re gonna work super hard to be better and more inclusive in everything we do. And then Christine, if you want to talk about the global initiative as well and how they were engaged?
Christine: As this project came together we split it up into different pillars of activities. The talent pillar includes Global Detroit, which is an organization that works day in and day out bringing immigrants and the world community to Michigan, and specifically Southeast Michigan for job opportunities, entrepreneurship opportunities, and to become part of our ecosystem. As well as standing up for those groups that are already here in Detroit. As Maureen mentioned, we have a very strong Arab American presence here. We have a growing Bangladeshi population in Hamtramck. It’s wonderful to see and the integration of that into our community is really important, especially with the need to help them to build businesses and hire people.
The entrepreneurship program at Global Detroit is one of the funded partners of the EDA under our umbrella of GEM. Whether it’s with that group or, for example, yesterday and the day before here in downtown Detroit at our large convention center the Michigan Minority Business Development Council had their annual minority procurement conference. So they had hundreds of companies and hundreds of exhibits on the floor and we had two of our partners that had exhibited there. One of them being the group that’s reaching out to the legacy companies, the ICE companies that Maureen mentioned, as well as our talent and workforce pillar. So we had two of our pillars represented there, reaching out into the minority business community and talking about GEM. We’re looking to do things differently and dig way deeper into these historically excluded communities to make sure that they’re part of the solution.
I know that a conversation people are having is around the struggle of trying to link up a series of small and mid sized manufacturers who may or may not be able to plug into different OEM supply chains at different places. So hearing that you’ve connected that with the talent piece is wonderful, hopefully creating a value chain that is inclusive, and meets all the needs of a globally competitive market at the end of the day. Is that initiative connected with the new supply chain transformation center that is a critical part of your project?
Christine: The Supply Chain Transformation Center is the legacy company component, and they were there yesterday. So yes, it’s tied into that and working with those companies, particularly new companies that they’ve never worked with before in more rural areas and/or minority owned. All of those companies have components and products that are at risk of being extinct in the next 20 years. One of the lessons that Maureen and I learned back in 2008 and 2009 was that when companies that only made one part for one or two customers, when those customers filed bankruptcy, they suddenly had no idea what they were going to do.
Diversifying those companies into other products is what the supply chain transformation pillar is really doing. It is identifying those companies working with them on what is the product, where else could it be applied? What’s your machinery like? What else could it make? What’s your talent like? What can we upskill them into doing? And then how do we make sure that company continues to be a company as the product line that they’re currently making is shrunk into a handful of suppliers that will continue to build those or produce those parts. ICE is not going away, it’s going to take decades for those all to come off the roads, right? But we’re not going to have as many of them, there’s not going to be as many produced at the large scale. So how do we help those companies to find other customers to build their parts?
Maureen: We’re trying to create a path for the customer journey, and connect all the different components of GEM to ensure that all of these really strong pillars that we have—we do hate to call them pillars, but ‘co-recipient’ sounds very government-like, so we haven’t found the perfect phrase—but you know, we have six of them. How do we make sure that they are aligned? So it’s almost like a handoff. So your company’s going to make a new part at your legacy company and you’re going to transition but then we have to talk about the talent and what do we do with your existing talent so they don’t just get left behind, but that they have the skills to make that. We really are trying to be thoughtful about making sure these programs are also connected, talking to one another and sharing this customer journey. And in the end our customer is our people, right? Whether they represent individual talent or small or medium sized companies. We just need to ensure that all the pieces flow together nicely.
How have you been navigating this transition from people thinking of Detroit as the auto town, and Michigan the auto state, and moving from that vision to the next 10-20 years as people make this transition from ICE to EV? I’m wondering how you tell the story of that transition to people and if you ever get pushback from people who might want to double down on the historic focus on ICE automobiles.
Maureen: You’re always going to have naysayers. I never got my late parents to use a cellphone properly, and that was frustrating. Bless them, but it just didn’t work. I do think our people are very resilient. We’ve learned about change before and we learned what happens when you don’t embrace that change in the right way. There’s still going to be the naysayers “oh we will never have enough charging stations, oh who is going to supply all the hydrogen?” Those things are going to be a part of the conversation.
That’s why our research component is so important so we have the right data to show it’s not either or. There’s not going to be one date in the future where we switch from ICE to EV. We have to transition. It’s happening very quickly. We just had a big announcement in DC this week with Secretary Raimondo about a project that’s coming to Michigan with 600 jobs in the hydrogen electrolyzer space, they’re called NEL. So this is happening in a big way, but we want to be sensitive to the fact that change is hard.
Christine: I would just add that what’s going on with the government, federal regulations coming down that the companies need to meet in a short amount of time doesn’t leave any chance that this transition is happening. We are going to do what we can to save as many jobs and save as many companies as we can. And continue to attract companies in this new supply chain as maureen just mentioned this week’s announcement in the hydrogen space. It’s not just electric vehicles that run on batteries, it is hydrogen too. There are many other ways that our mobility companies are going to wean us from fossil fuels and move us towards more renewable choices. There’s going to be naysayers but we need to follow where the puck is going, not just follow the puck.
Maureen, you testified to the House Science, Space, and Technology Committee Research and Technology Subcommittee last December. How did it feel to stand up on such a stage and speak up for your region like that?
Maureen: I’m extraordinarily proud. I grew up here, it’s my home. Five years ago they wouldn’t have asked Detroit to testify for this. It meant so much that they were asking us. I had Congress people from around the country asking me “how did you do this? How did you work together and avoid somebody going rogue?” I’m proud our region realized the strength of working together. Five years ago we would have had five different applications from this region and none of them would have been strong enough to be successful. It was interesting when you saw who called us initially to tell us DRP needed to lead this. It was our council of governments, SEMCOG, somebody from Ann Arbor, from Automation Alley, these were all mature organizations who recognized: “why would we apply individually? Let’s do this together.”
Those of us who are here know the great innovation that happens here. We tour the facilities and it’s a marvel. For a long time our story got overshadowed by other issues: bankruptcy or crime or vacant buildings. Now to be recognized as an example of innovation is, not to be sappy, but it made me very proud to tell that story on a national scale.
If you’re successful in doing what you proposed, what’s your hopeful vision for what Detroit will look like in 10-15 years?
Maureen: You’ve probably seen a shirt somewhere that says ‘Detroit vs Everybody’. It was done a few years ago when the city got beat up quite a bit. Really where we’re at today is so different, it’s such a different place. But it takes a while for a community to go down. Takes a while for it to get back. When I tell my future grandchildren what grandma did I want to show them the amazing people and companies that chose to come here because they saw it as an opportunity to be innovative and to be their best selves and be successful. People from all over the country and the world.
Christine: Ten years from now the seeds we are planting will grow into a recognized entrepreneurial ecosystem. That’s an area where Southeast Michigan—because of the jobs available in the auto industry—has not been an area nurturing entrepreneurship and bringing new ideas to market. Ten years from now I hope we’re seeing headlines of incubators bustling and companies that we put into the funnel as an idea raising their series A in venture capital to grow jobs and keep them in Michigan. Use our talent that will be training through GEM. Working with universities to make sure commercialization is happening here and we are able to grow. Again these new business owners. We adore and support our automakers and all the supply chains through it. For my daughters who are teenagers right now I would love for my children to be able to have that choice of coming out of school, and if they have an idea for something they want to create they can do it here in Detroit, they don’t have to go to a coast to do it. The GEM coalition, the entrepreneurship startup piece especially, I would like to see the work we’re doing in that area have a real impact.