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GM to shift fuel cell program from upstate NY to Michigan

Oct 5 (Reuters) - General Motors Co said on Friday itwill shift its hydrogen fuel cell development program fromupstate New York, and consolidate the operation with its globalpower train engineering headquarters in Pontiac, Michigan.

The move, to be completed by the end of the first quarter of2013, will shift the operations, including research and productengineering, from Honeoye Falls, south of Rochester, New York,said Charlie Freese, the executive in charge of the U.S.automaker's fuel cell programs.

Fuel cells convert a fuel, typically hydrogen, intoelectricity, which can then be used to power cars and trucks.They are a minor player in the industry's efforts to findalternatives to gasoline-fueled engines.

However, some see zero-emission fuel cells one day being aviable alternative if costs decrease and efficiency anddurability increase.

GM's first hydrogen fuel cell efforts began in 1969, butgained steam in the late 1990s.

Freese believes fuel cell vehicles could be commercializedby 2015 or 2016 if the infrastructure to support the technologyis sufficient, and the technology could be cost competitive by2022. Some companies are trying to beat that timeline, saidFreese, who added GM has not announced any programs.

Freese said the industry also needs to cut costs in the fuelcell, including further reducing the use of high-cost preciousmetal platinum.

And the industry will need to boost the sales of suchvehicles after they are introduced to drive down developmentcosts, he said.

"The first generation of these cars won't be profitable,"Freese said. "It's going to take two to three generations beforethat technology cost curve matures to the point that it can be acompetitive technology with some of the other alternative powertrains."

Work on gasoline- and diesel-powered engines andtransmissions is done in Pontiac, so moving the fuel cellprogram will allow more sharing of knowledge and improved workerefficiency across numerous technology platforms, Freese said.

"The ability to take someone that knows how to do a turbocharger on a diesel engine and apply them to the compressor on afuel cell, those kinds of things provide a lot of advantages,"he said in a telephone interview.

With the lease on the New York facility expiring in thefirst quarter of next year, GM will be able to reduce structuraloperating costs, Freese said.

GM has offered to move most of the 220 people employed inNew York to Pontiac.

(Reporting by Ben Klayman in Detroit; Editing by JeffreyBenkoe)

((benjamin.klayman@thomsonreuters.com)(313-416-4071)(Reuters

Messaging: benjamin.klayman.thomsonreuters@reuters.net))

Keywords: GM FUELCELL/