Automotive Supplier Diversification and Conversion Playbook Deployment - Industrial Training & Assessments Centers Program

Electrification of the transportation sector offers the opportunity for the U.S. to lead the development of how vehicles are manufactured and used, the infrastructure needed to maintain them, and the jobs associated with their assembly and maintenance.  As industry continues to invest in electrification across this supply chain, many “upstream” and “downstream” effects are likely, including shifts in supply chain processes and industries (e.g. electrical components), as well as induced changes in interconnected industries (e.g., battery manufacturing – although this is beyond the scope of this solicitation).

This solicitation seeks applications for teams to identify small and medium-sized manufacturers (SMMs) within the current automotive supply chain that are poised to expand or transition towards manufacturing components for electric vehicles or other clean energy technologies and provide technical assistance to guide these SMMs in that transition.  These teams will participate in an exercise to draw on and inform a practical set of technical, financial, and strategic guidance – a playbook – specifically targeted at these SMMs to help identify opportunities to expand or transition their operations,  to pressure-test the business case for doing so, and to understand workforce and financing considerations and how to address them.

Of course, the playbook cannot envision or provide step-by-step guidance on every possible opportunity, so it is expected that many manufacturers will benefit from additional technical assistance to help translate the guidance in the playbook into practical action and business plans. This solicitation is intended to identify teams who can provide that technical assistance, using the playbook as a resource.

The playbook, prepared by Argonne National Laboratory (ANL), and supported by the DOE, is expected to be completed in an initial form in or around June of 2024.  It will build on an analysis by ANL on the automotive supply chain and is supplemented by private sector expertise on the engineering, business strategy, workforce, and financing aspects of transitioning from the manufacturing of components for internal combustion engine (ICE) vehicles to electric vehicle (EV) components –or potentially to other clean energy-related products entirely. Examples of potential product lines being explored in the development of the ANL playbook include:

• Manufacturing of EV components that can be made on similar equipment as is being used for ICE vehicle manufacturing, such as battery cases or cooling systems;
• Manufacturing of components used in electric or clean-fuel autos, heavy trucks, off-road equipment, or recreational products that are currently imported but could be profitably returned to domestic production due to increases in regional value content, and that are readily produceable by many manufacturers currently making ICE components;
• Manufacturing of products used in growing industries that may support clean energy and other supply chains, such as for heat pumps, transformers, water systems, semiconductors, and some defense industries;
• Manufacturing process revisions to support fuel systems manufacturing relevant to fuel cells and hydrogen storage; and
• Modification of exhaust systems to capture fine particles from brake wear or other sources of PM2.5 than combustion or modified for air filtration products.

This deployment effort will explore the transferability of existing automotive component manufacturing equipment, processes, and workforce capabilities to enable new production lines for the most promising market opportunities, as well as new equipment, processes, or workforce capabilities and considerations to support electrification and decarbonization efforts across the economy.

The objective of this solicitation is to establish teams of technical assistance providers that will identify interested SMMs and work directly with those SMMs to test and deploy the initial version of the playbook. The technical assistance providers will assist SMMs implement playbook guidance in transitioning or converting all or a portion of their existing manufacturing processes within the ICE vehicle supply chain to the EV supply chain, or to entirely new product lines that are complementary to their existing expertise and/or production facilities.  Feedback from the technical assistance teams will inform revisions to the playbook, that will ultimately be made publicly available to benefit all interested SMMs. The Objective Strategic Session that will be held roughly a week after this solicitation’s release (see below for dates) will include an update from ANL on the playbook’s work in progress, as context for application teams.

Purpose

DOE, in collaboration with its Partnership Intermediary, ENERGYWERX, intends to establish 3-5 teams of technical assistance providers affiliated with an institution of higher education, trade school, or union training program-based industrial research, assessment, or deployment program, along with their partners. Prospective teams will be composed of U.S. Department of Energy-supported Industrial Training & Assessment Centers (ITACs) or other entities eligible to serve as ITACs (i.e., universities, community colleges and systems, trade schools, and union training programs) and are encouraged to include partners such as:

• U.S. Department of Commerce-supported Manufacturing Extension Partnerships (MEPs),
• National Laboratories,
• Trade associations, and
• Other private, nonprofit, and public sector supported entities.

The ideal teams will include a range of expertise, including:

• Engineering and manufacturing process expertise,
• Automotive industry and supply chain expertise,
• Business strategy and financing expertise,
• Workforce development, worker retention and re-skilling, and job quality expertise, and
• Community and Labor engagement expertise.

Teams will ultimately identify and work with several interested SMMs located within their respective regions to test the playbook’s effectiveness in guiding new product line strategies, opportunities, and action plans – with a particular emphasis on Tier 2+suppliers (i.e., suppliers to the suppliers of original equipment manufacturers). This effort will require an extended consultation process between the technical assistance providers and the individual SMMs involving multiple on-site visits or remote discussions over a 2 to 6-month period. If they are not already a part of the ITAC program, selected team leads will formally become industrial research, assessment, and deployment centers as part of the broader ITAC network.

After each consultation phase – which may also include elements of a traditional ITAC assessment of energy cost savings, material efficiency, and waste/pollution reduction -- the teams will organize around table of participating SMMs and other local and community stakeholders (e.g., Workforce Investment Boards, Department of Labor resources) to gather feedback on the playbook’s effectiveness at guiding the SMMs transition efforts. Based on this feedback, the playbook development team at ANL will then revise sections of the playbook and related protocols to improve its effectiveness as well as to help ensure it is digestible and usable for small business audiences. The revision process will consider the following:

• Job types and titles, worker counts, assessment of job quality, and the skills needed for the most promising market opportunities, and how they may draw on, or differ from, current auto supplier workforces. This activity will place a particular emphasis on opportunities to: upskill and retain workers at similar or higher wages; assist in identifying the ease of industry transferability from the workers' perspectives via skills identification/skills matching exercises; and provide an indication of the amount of additional training that will be needed for job types that cannot easily transition and where geographically targeted workforce development interventions can have the largest impacts. This activity will also refine the playbook’s considerations of the worker health and safety imperatives in product line     diversification or transition (e.g., for handling hazardous chemicals or electrically charged components), which are central to workers’ rights/labor management structures and agreements.
• An evaluation of the alternatives to finance or receive technical assistance and/or consulting services to facilitate these production line changes (e.g., including federal grant programs, SBA loan programs, etc.). In this step, the playbook development partner(s) will engage example SMMs to understand their financing needs, challenges, and awareness of various mechanisms; collect and perform due diligence on additional financing sources or mechanisms; and provide example high-level financial modeling, scenario planning, or case study drafts to help SMMs understand financing opportunities and considerations.
• An evaluation of alternatives for assisting firms in entering new markets. SMM transition opportunities may involve new customers. In this step, the playbook development partner(s) -- particularly MEPs due to their expertise in supplier scouting/tools to integrate training, skills and job quality objective – will engage example SMMs to understand challenges, opportunities, and awareness in seeking new commercial opportunities; collect and identify additional means of providing information about and introductions to potential new industries; and provide case study drafts to help SMMs understand new marketing opportunities and considerations.

Following each substantial iteration of the playbook, the technical assistance provider teams will identify a new set of SMMs to further evaluate the feasibility of the newly revised playbook.  This process will continue for at least two iterations (more if resources allow) and ideally until such time as MESC determines it has completed a concise, user-friendly, action-oriented playbook for SMMs. The playbook will be available online at no cost and promoted to firms and their unions via industry associations, consultants, non-profits, and USG convenings.  

How to Participate

1. Review the resources from the Informational Webinar/Objective Strategic Session on April 23, 2024 from 3:00 - 4:00 PM ET
2. Review the resources from the Informational Office Hours session on May 9, 2024 from 3:00 - 4:00 PM ET
3. Download the Solicitation: Click Here to Download
4. Complete submission and upload here: Click Here to Submit (Submissions are due NLT May 23, 2024 by 3:00 PM ET)
   - Narrative application questions are limited to a 500-word limit
5. Please provide a two-year budget containing the prime recipient and all sub-recipients, labor costs, travel cost, other direct costs, and any indirect costs for the proposed scope of work. A template is available here: Click Here to Download Template
   ‍- You may present this budget information using whatever format you prefer; however, a template has been provided as an example.
6. Please submit letters of commitment from all subrecipients. Each letter must not exceed 1 page. Save the letters of commitment into a single PDF using the following naming convention for the title "LeadOrganization_LOCs".
   - Letters of commitment should include sufficient information for DOE to identify the individual/organization. Also include a summary of the extent/level of commitment that will be provided.

Please email info@energywerx.org with any issues or questions you may have regarding the application process.