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Pete Bigelow · Midwest Memo: UAW Reaches Chrysler Deal, Wisconsin Democrats Begin Effort to Recall Gov. Scott Walker
October 12th, 2011
Three stories making news across the Midwest today:
1. Chrysler and UAW reach deal. Eight days after reaching a tentative agreement with Ford, the United Auto Workers announced today it had reached a tentative agreement with Chrysler. As part of the deal, Chrysler has agreed to add 2,100 jobs by 2015 and invest $4.5 billion in its U.S. plants. “This tentative agreement builds on the momentum of job creation and our efforts to rebuild America,” UAW president Bob King said in a written statement. Chrysler’s 26,000 UAW members will vote on the deal in the coming days and weeks.
2. Democrats commence Walker recall effort. Next month, Democrats in Wisconsin will begin efforts to recall first-year Republican Gov. Scott Walker. Mike Tate, chairman of the state Democratic Party, announced the decision to pursue a recall Monday night during an MSNBC interview. Organizers must gather 540,208 valid signatures, one quarter of the votes cast in last fall’s election, within 60 days of commencing their efforts on Nov. 15, according to The New York Times. If those efforts are successful, Walker would be required to run for his office again.
3. Columbus-area tax incentives brought jobs. Six Franklin County, Ohio, companies received property-tax breaks in exchange for a promise to create 298 full-time jobs over the past seven years. They delivered more than county executives anticipated. Those companies created 665 jobs and added $32.8 million in new payroll, according to a report released Tuesday night by the county’s Tax Incentive Review Council. Leading the way, according to The Columbus Dispatch, was TS Tech North America, a seat supplier for Honda that created 310 more jobs than promised in 2004. TS Tech had received a 10-year, 50-percent tax break on taxes worth $829,000. “This is proof our staff knows what they’re doing,” county commissioner John O’Grady told the newspaper.
Steve Jobs’ death last week has reminded everyone firsthand the notion that everyone has ideas, and very few become actual products. That’s because ideas need a push – and in some cases, a big one, from from science, to become reality. It sounds obvious, but when we’re talking about actual products, that translates into actual jobs, and actual economic activity, it’s something worth exploring. That’s why I was so interested to learn more about Battelle Memorial Institute.
Columbus, Ohio – Innovation can strike in a variety of ways.
Take Emery OleoChemical in Cincinnati. The company started making candles in 1840. Today, it uses the same tallow to make things like glycerin, which goes into soap, detergent and makeup. And it uses technology that mimics what happens in a lightning strike to make the stuff. Mark Durchholz, one of the company’s regional business directors, explained how it works:
“We discharge electricity at very high voltage across oxygen and we make ozone gas,” he said.
A few years ago, the company realized it could use this same technology to branch out into a whole new business. By adapting this technology, the company has created three new product lines – now they’re making materials that make foam, not just from crude oil, but from soy.
The idea for all of this was basically handed to Emery – by Battelle Memorial Institute.
If you’ve never heard of Battelle, not to worry. Neither had Emery OleoChemical – despite the fact that both have been around for more than 100 years, and Batelle is just 100 miles away in Columbus, Ohio.
Battelle has a tradition of silence about the work it does.
“We actually respect the privacy of our companies,” said Battelle’s Spencer Pugh, when I asked him to provide me examples of some of its clients. “I really can’t tell you the names of companies we work for.”
Pugh can talk about a few of the things Battelle does takes credit for: the technology behind the bar code, cruise control, compact discs – and even Xerox copies.
Battelle’s a nonprofit. Companies hire Battelle because all it does is scientific research. Last year, its research and development budget was $6.5 million. Battelle has 22,000 employees in 130 laboratories around the world.
It uses this network to help its clients perfect technology. Sometimes, it gets share of the profits – like it did, back before Xerox went public. That’s how it funds the rest of its research.
Battelle’s Columbus campus is just across the street from Ohio State University. Across 50 acres and in 20 buildings, scientists are trying to improve military jet fuel efficiency, perfect underwater robots and develop a new fuel source out of things like sawdust.
Because Battelle has developed a prototype to create fuel out of sawdust, so they wouldn’t let me take a picture of it. I can describe the contraption as invoking my childhood memories of Mike Mulligan’s Steam Shovel, minus the steam.
“Our technology is focused on going from biomass all the way to a fuel that can be blended directly with gasoline that all of us use during the normal course of our days,” said Zia Abdullah, who is leading Battelle’s bioenergy program and the sawdust project.
Abdullah plans to have a system that is commercially viable, and available for widespread use, by 2015. That’s pretty fast in the scientific world, and represents several million dollars of investment – much of which is coming from a U.S. Department of Energy grant.
The problem with research and development for experimental products like this is that it takes time, and investment – something many companies simply can’t afford to do anymore.
“You don’t always know when you start out which ones will pay off and which ones won’t,” said Pugh, when I asked him why he enjoys working at Battelle, where they have the time and energy to devote years of investment into figuring out what works. “Here, there’s a lot of investment in ideas and a very rigorous weeding out process as we find ideas that work and will be successful in the marketplace.”
But that’s the very principle Battelle was founded on back in 1929.
During World War I, Steel tycoon Gordon Battelle was frustrated with how long it took for inventions to go from the lab to the battlefield. When he died young – at age 40, after a routine appendectomy – he left money in his will to found a nonprofit organization dedicated to scientific research.
Today, the only company that’s won more major R&D 100 awards – insiders call them the “Oscars of innovation” – is G.E.
Pugh says Battelle will work with any company, no matter what its size. He said something I heard often at Battelle – that inspiration and innovation isn’t so much about the idea, or when inspiration strikes. It’s more about the role science plays in getting an idea out of someone’s head – to the manufacturing floor – and into our economy.
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October 11th, 2011
Four weeks ago, a small group of demonstrators began protesting the grim state of the U.S. economy in New York City with little fanfare.
Now, a growing movement based on the Occupy Wall Street protests has spread throughout the country, including demonstrations in several Midwest cities.
Separate groups protesting the role of big banks in the U.S. foreclosure crisis marched Monday and Tuesday through Chicago, meeting at the Art Institute of Chicago, where the Mortgage Bankers Association was holding its annual conference.
“People are mad as hell at these financial organizations that wrecked the economy, that caused this whole mess,” Catherine Murrell, a spokeswoman for Stand Up Chicago, a coalition of approximately 20 Chicago community organizations, told the Chicago Sun-Times. “They broke the economy. They played with it like it was a toy.”
Protestors held training sessions on how to deal with the police, distributed press releases and chanted throughout the day Tuesday, according to our partner station WBEZ. On Monday, approximately 7,000 people participated in the protests, disrupting traffic across the city.
Elsewhere in the Midwest, protests were smaller, but sustained. In Columbus, Ohio, about 100 protestors marched in front of the Statehouse on Tuesday morning, railing against corporate greed, student-loan debt and the media. The group intended to show solidarity with the Occupy Wall Street protests in New York, according to The Columbus Dispatch.
In Madison, Wisc. protests occurred over the weekend. A crowd estimated in the dozens marched throughout downtown, settling in Reynolds Park until Sunday evening. In Milwaukee, religious leaders gave the movement traction in their Sunday sermons.
“I’m not against capitalism, but a capitalist society run amok takes care of the people at the top, and the people at the bottom are crushed,” Rev. Willie Brisco told the Milwaukee Journal Sentinel.
Protests were in the planning stages in Detroit on Sunday. The South End, the student newspaper at Wayne State University, reported that hundreds of people met at the Spirit of Hope Church on Monday night to plan protests slated to begin on Friday. Event organizers said that approximately 1,000 people attended the meeting.
October 11th, 2011
Three stories making news across the Midwest today:
1. First UAW rejects Ford deal. UAW Local 900, which represents workers at three Detroit-area auto plants, has narrowly rejected a tentative contract agreement with Ford, the Associated Press reported today. Local 900 was the first to vote on the agreement reached last week, and 51.1 percent of 2,582 voters nixed the deal. More votes are scheduled this week and next week. Bill Johnson, bargaining chairman of the Michigan Assembly Plant, tells the AP that workers are angry the contract does not restore some items lost in previous concessions.
2. Michigan State creates economic development center. The U.S. Economic Development Administration has given Michigan State University a $915,000 grant to create an economic development center that will focus on innovative ways to generate Michigan jobs. MSU will partner with other colleges, local and regional governments, private businesses and other groups to identify innovative ideas and practices. Rex LaMore, the head of the initiative, said many economic development practices have become outdated in what has become a knowledge-based economy.
3. Construction begins on Chicago rail project. Fourteen Amtrak, 78 Metra and 46 freight trains vie for rail space each day near 63rd and State Street in Chicago. On Tuesday, workers broke ground on a $133 million project aimed at breaking that bottleneck. U.S. Senator Dick Durbin tells our partner station WBEZ that the project allows for expanded Amtrak service around the Midwest, and will create more than 1,500 jobs. But one union laborer who watched Tuesday’s groundbreaking was skeptical of that number. “They say they’re going to hire from the community, but I’ve been hearing this for years,” Bob Israel tells the station. “It’s just a dog-and-pony show. Trust me.” The project, called the Englewood Flyover, is due to be completed in 2014.
October 11th, 2011
The Midwest’s persistently high unemployment rate isn’t expected to fall anytime soon.
But as our Kate Davidson reported, temporary employment agencies across the Midwest can’t seem to find enough people to fill all the open factory jobs they have waiting. These agencies are busier than they’ve been in years, because manufacturing has more open jobs than candidates willing or able to fill them.
Now, another industry finds itself in a similar position: agriculture. It’s a big business all across the Midwest. In Michigan, agriculture is said to be the state’s second largest industry and is still growing.
But, Jim Byrum of the Michigan Agri-Business Association says agriculture producers can’t find enough people to fill jobs now, and he’s even more worried about the future.
“The industry demand is pretty solid, and it’s an increasingly severe problem,” Bryum says.
A large group within the agriculture industry — white collar workers at agri-business companies — is getting ready to retire soon. His concern is that a new generation of workers is not ready to replace those workers getting ready to leave.
The jobs being overlooked, says Bryum, are on the business side of agriculture, such as accounting, finance, logistics, marketing, and sales. For these jobs, workers don’t need a background in agriculture or experience in the industry.
Larry Zink thinks an image problem is partly to blame for agriculture’s inability to recruit younger workers. Zink works to match students with major agriculture corporations at Michigan State University.
“Young people in general don’t have a lot of knowledge about what agriculture jobs are. They only see the fields,” he said. “They don’t see the business side or the science side. I’d say with 97 percent of the jobs, you’re not getting your hands dirty.”
Several things might be contributing to this lack of knowledge and the aforementioned image problem. Zink said that young people might not want to move to, or work in, rural areas. It’s uncertain how this is going to change, there are no large-scale recognizable efforts to change agriculture’s image among prospective workers.
Byrum, of the agriculture association, also thinks farms and agriculture companies, particularly smaller ones, are making recruitment hard on themselves. He said many could benefit from modernizing their recruitment processes.
Mark Kaltz owns a farm in Columbus, Michigan where he has 35 acres of vegetables and 24 greenhouses for houseplants. Kaltz employs 10 people, five seasonally and five year-round. All of his full-time employees live within a few miles of the farm.
When Kaltz needs to hire a new employee, he doesn’t use an agency or advertise on Craigslist, since his farm doesn’t have an internet connection. Instead, he advertises in the local paper.
Kaltz hasn’t had difficulty finding enough people to hire, but he has heard about others having trouble. Although he has no proof, he speculates other farmers may be converting labor intensive farms like his to cash crops like corn and soybeans, because these are easier crops to harvest with fewer people and more machines.
October 10th, 2011
If owning an NFL franchise has ever been a dream, here’s your chance.
The Green Bay Packers will hold a stock sale by the end of the season to raise money for $130 million in renovations at Lambeau Field. The NFL’s only publicly owned franchise expects each share will cost approximately $200 and include voting rights.
Stock owners can attend annual meetings at Lambeau, among other perks. But the value of the shares would not appreciate and there would be no dividends, according to the Associated Press, which first reported the upcoming sale. The stock sale would be the fifth in the team’s history. Currently, 112,205 shareholders own a total of 4.75 million shares. The Packers have been a publicly owned nonprofit corporation since 1923.
At least among professional sports franchises, the stock sale represents an unorthodox way to raise funds for a new venue or improvements to existing ones.
Across the Midwest, many cities have used taxpayer dollars to finance construction of NFL stadiums. Cincinnati spent $403 million on Paul Brown Stadium, which opened in 2000. Cleveland taxpayers spent $241 million on Browns Stadium, according to The Wall Street Journal. In Chicago, approximately $387 million of public money was used to finance a Soldier Field overhaul that cost $587 million.
That’s one reason that Michael Constantine, a Wisconsin native, approves of the way the Packers are raising money for a Lambeau Field renovation.
“I feel like the American public has spent enough over the last 20,30 years to build and renovate stadiums,” he tells the AP. “I prefer the sale of stock to raising any sales tax.”
October 10th, 2011
The U.S. high-tech industry lost 115,800 net jobs in 2010 that represented approximately 2 percent of the overall high-tech workforce, according to the annual Cyberstates report compiled by the TechAmerica Foundation.
With one notable exception, states across the Midwest reflected the national trend.
Illinois lost 6,400 tech jobs, approximately 3 percent of its high-tech workforce. It was the fifth-biggest decline in the U.S. and the state slipped to eighth place in the country in terms of overall technology jobs. Minnesota lost 2,900 jobs, Wisconsin lost 1,900 tech jobs, Ohio 1,400 and Indiana shed 300.
Michigan, on the other hand, trended in an upward direction.
After eight years of declining numbers, it added more tech workers than any state in the country, according to the report. Michigan added 2,700 high-tech jobs and ranks 15th nationwide in total technology employment.
“The fact that Michigan added more tech jobs in 2010 than any other state may surprise people, including people within the state,” said Ed Longanecker, the executive director of TechAmerica. “But job gains in key sectors like software and research and development have helped the state recover from hard economic times.”
That recovery is, by no means, complete. In 2001, Michigan had 201,800 high-tech jobs according to the report. Even with this year’s growth, Michigan currently employs 155,100 high-tech workers.
Overall, the U.S. high-tech industry employs 5.75 million workers, according to the report. While 115,800 total jobs were lost across the country, the decline was less than half of the 249,500 jobs lost in 2009.
Despite its losses, Illinois still employs more tech workers than any other Midwest state. Here’s how they stack up: