Due to the University’s reliance on General Motors Corp. for research project sponsorships and job opportunities for graduates, the corporation’s bankruptcy will affect the agendas of many University students and faculty.

According to Sponsored Awards on the Web, a search engine for the University’s database of sponsored proposals and awards, GM sponsors 29 awards, totalling over $25 million in anticipated award dollars. The awards help fund specific research projects at the University including the Multiscale Simulation and Optimization of Batteries in Multimode Drivetrains in the Department of Mechanical Engineering.

David Munson, dean of the College of Engineering, said Tuesday that he has no reason to believe GM will not follow through with any of its promised award contracts.

“We have a lot of research supports from GM, especially in mechanical engineering,” Munson said. “I think we’re going to have to wait and see if GM is going to honor all of those research contracts. We don’t have any info that they won’t (honor the contracts), but that will be up to the bankruptcy judge.”

On Friday, Munson wrote in an e-mail interview that he learned the University was added to GM’s list of “preferred vendors,” a class of vendors designated by the court as “critical.”

“This should greatly lessen any concern that GM support of research at UM could be at risk,” Munson wrote.

Law School Prof. John Pottow, a bankruptcy and commercial law expert, said that because GM designated the University as a “preferred vendor,” it is likely that the University will receive all of its promised awards.

“The general rule (in bankruptcy court) is that everyone gets the same (amount of money),” Pottow said. “But in complex business transactions, courts will designate certain classes of vendors to be ‘critical’ and critical vendors are generally allowed to be paid in full on their claims.”

Sreedhar Bharath, a Ross School of Business assistant professor of finance, said that though GM’s bankruptcy was more complicated than Chrysler’s, he thought the 60- to 90-day range estimated by the Obama administration was an accurate timeframe for GM to emerge from bankruptcy.

“Given the fact that everyone has been anticipating a GM bankruptcy for the last couple months or even more, and the fact that Chrysler filed (for bankruptcy), the 60- to 90-day timeframe may be possible,” Bharath said.

Gm’s bankruptcy also raised concerns among University officials about a recently announced project with the University.

On May 7, GM and the University announced the creation of a joint Institute of Automotive Research and Education, designed to improve vehicle sustainability.

In a May 8 Michigan Daily article, GM Vice Chairman Tom Stevens said, “The institute’s vision will be to develop and deliver world class education with a strategic focus on energy diversity and sustainability to reinvent the automobile.”

Munson said that based on previous meetings with GM, the corporation has no plans to pull out of the collaboration.

“We met with a lot of leadership from GM earlier (last) week and, at least at that meeting, they were optimistic with the new partnership moving forward without a problem,” Munson said. “At this point, everyone’s still optimistic.”

Munson added that he believes that vehicle sustainability — specifically the electrification of vehicles — is the direction in which the automotive market is heading and will create job opportunities in the future.

“On the other hand, there are other jobs available in electrification of the vehicle, plug-in hybrids and all electric cars because that’s the way the market is heading, and that type of automotive work needs expertise,” Munson said.

Don Grimes, senior research economist at the Institute for Research on Labor, Employment and the Economy, said that the automotive market is expanding for new engineering graduates.

“I think (the government) will be increasing pressure to obtain new thinking in terms of the engineering side of these companies,” Grimes said. “The irony is that right now, things may be really hard for people looking for jobs in the auto industry, but when things turn around I think there will be more intensive pressure to hire new blood in (the automotive industry).”

Grimes added that he expects the automotive industry to experience a turnaround within one year from now.

Munson said the College of Engineering is changing its curriculum to accommodate the changing automotive market and the government’s push for renewable energy sources.

“I think we’re going to see more courses developed (that are) related to electric power and vehicle electrification and more courses related to batteries and energy storage,” Munson said. “We’re actively hiring new faculty in those areas.”

Munson said that the College of Engineering is looking to hire approximately 10 new faculty members in the areas of electric power, batteries and energy storage.

He added that students studying these fields, in addition to the field of Energy Systems Engineering, will have no difficulty finding a job in the near future, Munson said.

“(For) students in electric power or ESE, their job prospects in the auto industry are going to be excellent,” Munson said.

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