Michigan luring Bay State business

“She personally had us on the list to recruit,’’ recalled Mascoma’s chief executive, Bruce Jamerson. “Massachusetts, they knew we were looking to build a plant. It wasn’t a priority for them at the time.’’

But Michigan made Mascoma a priority. Granholm offered the company tax incentives, grants, and promises of federal funding while promoting Michigan’s charms: manufacturing expertise, a workforce loaded with engineering talent, and a population of ready-made clients.

Today Mascoma, which makes a gasoline substitute from wood chips and other materials, is spending more than $200 million to build a factory in Kinross, Mich. Groundbreaking is set for next year.

Michigan is emerging as one of Massachusetts’ fiercest competitors in the race to become a hub for clean technology companies. And Massachusetts, despite being the birthplace of many of these technologies and the companies they spawn, is losing ground to Michigan’s money and determination.

During the last three years, Granholm has persuaded A123 Systems, the Watertown battery company, and Evergreen Solar, the Marlborough-based maker of solar panels, to build factories in Michigan. The projects from A123, Evergreen, and Mascoma combined are expected to create thousands of new jobs and generate millions of dollars in the economically depressed state. Those are jobs and revenue that Massachusetts won’t have.

Governor Deval Patrick acknowledged the competition, saying Granholm “busted my chops’’ over the A123 deal. Massachusetts “just couldn’t match’’ Michigan’s incentives, Patrick said, although he noted the Michigan project is expected to result in 100 new jobs at the company’s Watertown headquarters.

“We’d like it all, to be sure, but this is good for the country,’’ he said, “and we get the bragging rights of being the hometown of a pioneer.’’

Granholm said she’s just doing “what you’ve got to do’’ when trying to go from “the Rust Belt to the Green Belt.’’ She has traveled to California, Germany, and Japan to lure businesses to Michigan, which has the highest unemployment rate among the 50 states.

With the auto industry in decline, Granholm said, Michigan officials several years ago began identifying industries they thought could help diversify the state’s economy. They then created incentives and tax breaks, such as “advanced battery credits’’ for companies that build electric car batteries and an “anchor status credit’’ that rewards businesses whose presence attracts other companies.

Michigan also aggressively markets itself with an advertising campaign that features actor and longtime resident Jeff Daniels in national television commercials. The campaign, run by the Michigan Economic Development Corporation, features slogans like the “Michigan advantage’’ and “Give your business the upper hand.’’

Michigan has an extra advantage right now because the federal government is eager to help the state recover from auto industry losses, said Nick d’Arbeloff, head of the New England Clean Energy Council, which promotes the region’s clean technology cluster.

“The federal government is being very generous with any company or organization that has some means to help Michigan up from its dire circumstances,’’ d’Arbeloff said. For many companies, he added, “the government dollars available make it an offer that they can’t refuse.’’

That was true for A123 Systems. In August, the company won $249.1 million from the US Department of Energy to build a factory in Livonia, Mich., to supply Chrysler Corp. and other customers with electric car batteries as part of $2.4 billion in stimulus aid to boost the auto industry in general and the production of electric vehicles specifically. More than $1 billion of that money went to companies and institutions with projects in Michigan.

Michigan, too, was generous with A123, promising the company a $10 million state grant for a research and development institute and more than $100 million in tax credits.

“Michigan has a lot going there,’’ said David Vieau, A123’s chief executive. But, he said, his company’s expansion there should not be viewed as a knock to Massachusetts. When A123 started trading stock on the Nasdaq exchange in September, Vieau singled out public support from Massachusetts officials as a key to the company’s success, along with the area’s technical talent pool.

“We’re very much a Massachusetts business,’’ he said then. “Our roots are at MIT.’’

Mascoma went to Michigan to be close to the nation’s automotive heart, and to take advantage of the state’s abundant natural resources, the raw material for its biofuel.

The company, which this year moved its headquarters from Boston to Lebanon, N.H., received $23.5 million in incentives from Michigan and $26 million from the federal energy department to build its factory in Kinross.

Add the visit from Granholm, and “it was hard to say no,’’ said Mascoma’s Jamerson. The new factory will employ about 60 people and help create more than 500 related jobs, Jamerson said.

Massachusetts officials have used some of the same tools as Michigan to court companies, including grants, tax breaks, and bids for federal money. And earlier this year Patrick spent a few days on the West Coast visiting technology and energy companies that have a presence in Massachusetts to encourage them to expand in the Bay State.

A champion of clean technology, the governor wants a cluster of such companies here. Last year, he signed a set of so-called green laws meant not only to make the state a renewable energy leader but to spur the growth of such businesses in the state.

Still, some think Massachusetts, with high costs for businesses, including real estate, utilities, taxes, and labor, could do better. Federal Reserve Bank of Boston president Eric Rosengren said the state might be more competitive if it better marketed Western Massachusetts.

“We may not have sold some of our low-cost areas,’’ he said.

Massachusetts is best at bringing new technologies to life and should play to that advantage, said Amy Glasmeier, head of the urban studies and planning department at the Massachusetts Institute of Technology. State officials need to figure out how to promote growth based on breakthroughs from that “font of innovation,’’ she said.

Massachusetts officials do have success stories, particularly at Devens. The Patrick administration persuaded Evergreen to build its first solar panel manufacturing plant in the former Army base by offering more than $76 million in grants, land, loans, tax incentives, and other aid. Some $67 million in similar incentives drew drug maker Bristol Myers Squibb to Devens to build a $1 billion plant and create several hundred jobs.

But betting on an emerging industry can be risky. Facing increased competition and plunging prices for solar panels, Evergreen executives said last week that they would shift some of the work at Devens to China, probably costing some jobs here. The company has 700 full-time employees in the state.

Even as it considers job cuts in Massachusetts, Evergreen is building a factory in Midland, Mich., helped by a $1.8 million tax credit and a 12-year tax break worth $3.9 million. The plant is expected to employ 101 people, and Michigan officials said it will help create 500 jobs.

Evergreen spokesman Chris Lawson said the company chose Midland because it will be close to Dow Corning, a major chemical supplier, and the area has workers with “experience with chemical processes.’’

Ian Bowles, Massachusetts’ secretary of energy and environmental affairs, acknowledged that keeping companies here will be difficult, but said the state will meet the challenge.

“Ultimately, companies start and grow in Massachusetts because of our assets - technological know-how, strong venture capital sector, and highly skilled workforce - and in the case of clean energy, because of our competitive energy market and high environmental standards,’’ Bowles said. “I expect that to continue and accelerate as the nation and the world move toward clean energy solutions.’’

Michigan will continue to compete, too.

“Any other company that wants to take its technology to scale, come on over,’’ Granholm said. “We’re hungry.’’

Erin Ailworth can be reached at eailworth@globe.com.

Correction: Because of an editing error, former MASCOMA company president Colin South was misidentified in a caption with a Page One story on Monday about Michigan's incentives luring business away from Massachusetts.