General Motors is closing its hydrogen fuel cell research center near Rochester, N.Y., and shifting the work to its engineering center in Pontiac, Mich.
The majority of the Rochester operation's 220 salaried employees will be offered the chance to transfer to Pontiac, GM spokeswoman Kim Carpenter said Friday.
GM's lease at the facility in Honeoye Falls, N.Y., was to expire in early 2013.
"The business reason behind this is there's significant advantages related to the synergy of bringing that technical expertise to one location. There's also some cost advantages," Carpenter said. "We have space in our engineering headquarters."
The news comes as some industry experts have questioned the viability of hydrogen-powered vehicles. The industry faces technical hurdles, cost concerns and infrastructure issues in getting hydrogen vehicles to the market.
GM adviser Bob Lutz, the automaker's former vice chairman, said two weeks ago at an event in Dearborn that "not many people in this room will be alive" when hydrogen fuel cell vehicles become affordable.
But several foreign automakers have recently announced plans to introduce hydrogen fuel cell vehicles within a few years.
Honda, which currently offers the hydrogen-powered FCX Clarity for lease at $600 per month in southern California, said last month that it would introduce a new hydrogen fuel cell vehicle in the U.S., Japan and Europe in 2015.
"One of the targets is significant cost reduction," said Steve Ellis, Honda's manager of fuel cell vehicle sales and marketing.
University of Michigan Transportation Research Institute analyst Bruce Belzowski said hydrogen fuel cell technology has improved, but the price needs to come down and drivers need refueling options.
"It's still waiting for the infrastructure to catch up with the technology," he said. "But the infrastructure just has not caught on."
Carpenter said GM's decision did not reflect a pullback in fuel cell work. She also said the business environment in New York compared with Michigan was not a factor in the decision.
"We're continuing to develop this technology," she said.
Mark Peterson, president and CEO of Greater Rochester Enterprise, said he expected that many of the employees at the Honeoye Falls plant would stay in the Rochester area.
"It was a done deal when we found out," he said. "From my perspective, it's a consequence of the global economy. GM is a global company. They have to consolidate their assets. I still think they're committed to fuel cells and other advances in engineering. But they're looking at bringing back their assets to Michigan."
More Details: Hydrogen fuel cell debate
Automakers have long debated the viability of hydrogen fuel cell vehicles. Five recent statements:
General Motors adviser Bob Lutz in Dearborn: "Not many people in this room will be alive" when fuel cell cars are affordable.
Honda hydrogen vehicles marketing manager Steve Ellis: "There's no turning a key and flipping a light switch and all of a sudden seeing hundreds of thousands or millions of fuel cell vehicles out there. It will be evolutionary."
Hyundai fuel cell vehicle group managing director Tae Won Lim: "After several years of testing, we have identified ways to maximize fuel efficiency without compromising driving experience and powertrain range."
Toyota Group Vice President Chris Hostetter: "Building an extensive hydrogen refueling infrastructure is a critical step in the successful market launch of fuel cell vehicles."
Ford Executive Chairman Bill Ford on previous talk of a hydrogen superhighway: "Who is talking about that now?"
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