As difficult as it might be to imagine today, there was a time when people worried the domestic auto industry was giving the University of Michigan too much money.

Anna Bakeman/ Daily

It was 1923, less than two decades after the founding of the Ford Motor Company, and the pioneers of Michigan’s booming automotive industry had already begun pouring money into their state’s flagship university.

Upton Sinclair, an eminent muckraking journalist of the day, nicknamed the University of Michigan “the University of Automobiles” — suggesting that the influence of the auto industry could corrupt the academic independence of the University.

“The University of Michigan is another of these huge educational department stores,” he wrote, “a by-product of the sudden prosperity of the automobile business.”
Indeed, two of Ford’s initial shareholders, James Couzens and Horace Rackham, were two of the University’s biggest benefactors.

Couzens gave the University $600,000 in 1923 for the construction of a dormitory — Couzens Residence Hall — on what was then the campus’s northeastern fringe. A decade later, Rackham’s wife Mary gave the University $2.5 million for the construction of the Rackham Building and another $4 million for graduate-level research, providing the foundation for the University’s Rackham School of Graduate Studies.

Auto industry money helped grow the University to its current size and prominence. The University’s Dearborn campus was created in 1956 after the Ford Motor Company donated Henry Ford’s 210-acre estate and $6.5 million to the University, and a donation from C.S. Mott, an auto industry pioneer who was once GM’s largest shareholder, helped turn Flint Junior College into a four-year program administered by the University.

“The legacy of Ford is evident in almost this whole campus,” said Mary Lynn Heininger, director of corporate relations at the Dearborn campus. “They have contributed to who we are.”

And yet, as much as the wealth of the auto industry shaped the University through the last century, the relationship rarely went beyond philanthropy. Despite their close proximity, the auto industry and the University of Michigan typically struggled to establish lasting research relationships.

But the University’s relationship with the auto industry has undergone a fundamental shift in the past decade. Michigan’s struggling carmakers have reset their priorities, spending millions of dollars on new collaborative research institutions while cutting back long-standing philanthropic support.

While philanthropy from the three companies averaged a combined $4.8 million per year between the 2003 and 2008 fiscal years, donations to the University are on pace drop by about 60 percent during the current fiscal year.

Meanwhile, the Detroit Three gave the University about $5 million for research last year — about 90 percent of all auto industry research funding. The trend has continued this year, with GM investing heavily in University research to develop electric vehicles like the hotly-anticipated Chevrolet Volt.

Industry-funded research continues to makes up a small fraction of the University’s total research budget — last year, it was $876 million, with the federal government footing most of the bill — but both the Detroit Three and the University have discovered that the partnership’s value goes beyond money, offering the opportunity to exchange ideas, technology and talent.

Daryl Weinert, director of the University’s Business Engagement Center, said the Michigan auto industry’s philanthropy over the past century helped transform the University into a “reservoir of interesting ideas” and one that can now help Detroit’s automakers solve their long-term challenges.
“This is a place where new ideas get formed, and the auto industry right now, they need that,” Weinert said. “If they’re going to find a way out of the current situation, it’ll be through innovation, and therefore, our research interactions are really a win-win for both sides.”

MISSED OPPORTUNITIES

University professors and students have conducted research on automobiles since the early days of Michigan’s auto industry — although not always with the level of productivity that could have been hoped on either side.

“In the past, the University was not always easy to work with,” said John LaFond, a retired Ford engineer who served as the company’s development director at the University. “There was a lack of proper communication. It was difficult for the University to see the needs of Ford, for one, and it was difficult for Ford as an automotive company to get the responsiveness of the University.”

In the late 1920s, the University’s automotive engineers worked in a leaky annex to the engineering lab — a wooden shed. For much of the century, research projects were scattered among faculty and departments, with few long-term projects and little central coordination.

Examples of the divide between academia and industry can be found in the dusty archives of the University’s now-defunct Engineering Research Institute, formed in 1948 to coordinate externally funded research.

In 1955, Mechanical Engineering Prof. R.G Folsom and GM engineers developed a plan to build a cutting-edge wind tunnel where Folsom and colleagues could perform research on vehicle aerodynamics.

GM’s budget committee had already approved the project, but in June 1955, a letter arrived from an attorney in the company’s patent division. The research proposal had been rejected.

The attorney cited a clause in the contract that allowed the University to publish research without explicit permission from GM. The research was of a sensitive nature, he wrote, and the company didn’t want University faculty spilling trade secrets.

Folsom, also the director of the Engineering Research Institute, suggested that the contract be changed so GM would have the authority to reject the publication of research.

He met opposition from administrators, including College of Engineering Dean G.G. Brown and University President Harlan Hatcher, who acknowledged that taking a hard line on contracts would hinder industry relationships but said the University shouldn’t allow a sponsor to censor the publication of research for the benefit of science.

Negotiations stalled, and General Motors moved on.

Folsom continued to seek an explanation from GM, and in early 1957, one of the company’s researchers sent him a friendly letter explaining what had gone wrong. Disappointed, but without a hint of bitterness, Folsom wrote back.

“I believe this is very regrettable, in view of our close geographical location and a desire on both our parts to cooperate for our mutual advantage,” he wrote. “I hope this unfortunate experience will not deter either of us from exploring possibilities of mutual research activities in the near future. Thank you for your continued interest in the University.”

By the next year, Folsom had accepted an appointment at Rensselaer Polytechnic Institute in Troy, N.Y., which had a more flexible research relationship with the auto industry.

“I was very happy to hear that there are excellent relationships between Rensselaer and General Motors and it is my hope that this cooperation will continue to grow and prove of mutual benefit,” he wrote.

At the time, schools like Rensselaer Polytechnic Institute and Cornell University did more to placate corporations. GM had signed a contract for the wind tunnel with Cornell, which agreed not to publish the research for five years after the end of the contract without permission.

Michigan’s automakers poured their wealth into the University’s buildings, schools and symphonies, but when it came to research, they largely sought more flexible partners elsewhere. The University was content, thriving on the robust appropriations made possible by the state’s strong economy.
All that has changed in the past couple decades, LaFond said.

“It wasn’t the highest priority for the administrations of the University and the Ford Motor Company to grow these relationships,” LaFond said. “But over the years at the University and Ford, the people who controlled these organizations began to see the value of them.”

INVESTING NOW TO SURVIVE TOMORROW

On a snowy afternoon last week, dozens of students fiddled at computer consoles as engines hummed behind closed doors at the University of Michigan’s Walter E. Lay Automotive Laboratory.

In this industrial hallway are the innovative young engineers who will develop the technologies of tomorrow — or so companies like Ford and GM hope. Within the past decade, both companies have begun funding long-term collaborative research projects, spending more than $20 million combined since 1998.

Many of the students on the Lay Laboratory’s first floor work for the University’s Collaborative Research Laboratory in Engine Systems Research. Funded by GM and led by Mechanical Engineering Prof. Dennis Assanis, the laboratory aims to develop engine technologies that increase fuel economy and reduce emissions — innovations Assanis called “the new DNA of the automobile.”

The engine systems lab, one of 12 GM-sponsored Collaborative Research Laboratories (CRLs) worldwide, grew out of the GM/UM Satellite Research Laboratory, created in 1998 to oversee joint research between the two institutions.

Ford followed suit in 2006, creating a partnership called the Ford-UM Innovation Alliance. The company has given the University $5 million for ongoing research since the start of the partnership.

Todd Fansler, a group manager at GM’s combustion systems research laboratory and co-director of the University’s GM-sponsored engine systems lab, said the close proximity between the University and GM’s headquarters has fostered a strong research relationship between them.

He said GM engineers try to meet with their project groups at least once a month, but because Ann Arbor is less than an hour away, researchers can get together to discuss projects more frequently.
“Internet meetings and teleconferences are great, but there’s nothing like sitting around the table in one conference room and seeing one another face to face on a regular basis,” Fansler said.

Last year, the three CRLs based at the University received about $2.5 million, up from the $1.1 million originally allocated for the original satellite laboratory ten years earlier. Because the CRLs are meant to function as partnerships, about half of GM’s money goes toward research suggested by GM and the rest funds research proposed by University faculty and students, Assanis said.

“The students have the best ideas,” he said.

Assanis’s lab has used its expertise in engine modeling and simulation to help develop GM’s homogeneous-charge compression ignition engine (HCCI), a fusion of diesel and gasoline engine technology that increases fuel economy by about 15 percent and reduces emissions.

But because the engine is highly sensitive to temperature and pressure, it only works under a very specific set of circumstances.

Last week in Assanis’s lab, four engineering graduate students crowded around a control panel to monitor an HCCI engine running in the next room. GM provided the engine and the funding for the research project, an effort to devise valve-timing schemes that expand the range of conditions in which the engine works.

GM demonstrated the technology last summer using a Saturn Aura concept car. Several carmakers are developing the engine, but none have yet announced plans to market it in a vehicle.

Despite the strain of growing debt, GM recently renewed contracts with two of the labs, promising $6 million over the next five years. This year, the company must decide whether to extend its contract with the third laboratory, which studies smart materials.

Fansler said GM’s decision to continue the partnership despite the company’s financial duress shows faith that the University will help the company attain the technology necessary to stay competitive.

“That we renewed the two CRLs late last year, at a time when our finances were not looking very good and when we were under a lot of public scrutiny, is a mark of how much value we place on the research relationship with the University of Michigan,” he said.

STUDENTS OF INDUSTRY

Ask anyone who lived through the Great Depression — when times get tough, people squeeze their pocketbooks a little harder, but they also realize the value of the things you can’t account for in dollars and cents.

As philanthropy has become increasingly difficult, many large auto industry firms have withdrawn some or all of their funding of student organizations like the Michigan Formula SAE and Michigan Baja Racing teams.

But team leaders said automotive firms’ struggles to find room in their budgets for sponsorship have led them to step up collaboration with student organizations, contributing their expertise, facilities and supplies instead of cash.

Engineering junior Katherine Lapham, the business director for the University’s Formula SAE team, said the organization used to rely on large donations from companies like Ford to build its car and compete in annual events. Although Ford and other supporters have scaled back their donations in recent years, the team has compensated for those losses, often through collaborative efforts that have improved the team’s relationship with sponsors, she said.

“With GM and Ford cutting back with everything, a lot of their suppliers can help us more because they have a lot more free time,” Lapham said. “They can’t give us funding, but they can help us machine, or use their facilities. If we need something, we can ask them.”

Michigan-based automotive firms that have scaled back their monetary donations have instead given the team free parts and technical support, often offering the chance to use new technology in exchange for their feedback. Others, like Pratt & Miller Engineering, a New Hudson-based firm that specializes in performance vehicles, have offered the team access to its facilities after hours, Lapham said.

Dean Guard, the coordinator of GM’s University of Michigan relations team, said he has pushed for the company to continue donating money to the University’s vehicle teams despite the company’s financial struggles. That could change this year because of unprecedented pressure to cut back on costs, but Guard said the company would continue to provide technical support regardless.

“What does the future hold? I couldn’t tell you. We’re obviously in a very difficult time,” Guard said. “But even if we suffer a financial obligations change, there’s still an awful lot we can do with very little money and a lot of our time.”

Automotive firms have continued to lend support to the student vehicle teams and collaborative research labs in part because the programs have become important incubators for future employees, Detroit Three engineers said.

Fansler estimated that General Motors has hired more than a dozen University of Michigan students who worked on GM-sponsored research projects over the past decade.

Many more have come from the student vehicle teams, said Dean Guard, chief engineer of GM’s small-block V8 engine program. He said the automotive teams have been fertile recruiting ground because they allow GM to find engineers with the interest and passion to make them successful in the auto industry.

“There are plenty of good engineers,” Guard said. “We’re not just looking for good engineers. We’re looking for good engineers who are passionate about vehicles.”

Each year, the company offers multiple scholarships to members of the vehicle teams. Engineering senior Andrew Kneifel, who has received one of the scholarships twice, said he has seen auto industry officials continue to recruit on campus even though the slow economy has prevented them from hiring at the usual rate.

“It’s been a great help to my personal educational expenses, but also I see them building these relationships with students, coming back to career fairs,” Kneifel said. “They’re still trying to develop relationships with engineers.”

While some students studying automotive engineering said they had begun looking for jobs in other sectors, many said they remain enthusiastic about working for the auto industry but have acknowledged they might have to wait a little while longer than previously hoped.

Kneifel, a native of Rochester Hills, said he hopes to find a job in the auto industry but wasn’t able to secure a position last semester. He said he plans to remain at the University another year to earn his master’s degree and try again afterward.

Jeremy Spater, a master’s student in mechanical engineering who works on the HCCI research project, said the slowdown in hiring for automotive engineers is discouraging but he doesn’t expect it to last.

“Right now, there are more cars coming off the road than there are being sold,” Spater said. “No, there’s not better public transportation now, and there’s no alternative to cars, so sooner or later, people are going to have to start buying them again.”

RECHARGING FOR THE FUTURE

Car sales fell across the board last year as the economy struggled. But because of their reliance on large, gas-guzzling cars and SUVs, Detroit’s automakers were hit hardest, which demonstrated the importance of new technologies like the HCCI engine.

Fansler, the GM engineer, said the University’s expertise in engine systems analysis will be crucial to the development of alternative systems like electric fuel cells, which many industry analysts expect to become standard for many cars in the near future. Advances like fuel cells will help GM fill the technology “pipeline” it will need to thrive in the 21st century, Fansler said.

“We have to do that, or we might survive a little longer and find ourselves in a similar fix a little farther down the road,” he said.

With GM banking much of its future on the success of the all-electric Chevrolet Volt, scheduled to launch in 2010, the University’s importance as a research partner has grown.

The University’s Collaborative Research Laboratory in Advanced Vehicle Manufacturing, led by Mechanical Engineering Prof. Jack Hu, has begun researching assembly processes for the batteries GM plans to use in the Volt.

And last week at the North American International Auto Show in Detroit, GM extended its research relationship with the University by announcing plans for a five-year, $5 million joint program to research batteries for electric vehicles.

The GM/UM Advanced Battery Coalition for Drivetrains, led by Mechanical Engineering Prof. Ann Marie Sastry, will perform experiments and simulations to help develop the lithium-ion batteries being developed for vehicles like the Volt. Late last year, the University and GM announced plans to enroll 50 GM engineers in Sastry’s master’s program in energy systems research.

Weinert, who is also director of corporate and government relations for the University’s College of Engineering, said these technologies — developed in part at the University — offer the domestic auto industry a chance to turn the corner.

“Clearly, with what’s happening in the auto industry and what’s happening with global climate change and the energy challenges of the country, everyone would agree that electrification of the automobile is a path that needs to be pursued, and pursued rapidly,” Weinert said. “This work, for that very reason, is potentially transformational to this 100-plus-year-old industry. It’s an inflection point. We haven’t had many of those in the industry’s history, but we’re at one right now.”

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