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October 1st, 2011
September 30th, 2011
Over the past decade, the Great Recession has perhaps punched Michigan workers the hardest.
Michigan was the only state in the country to lose population in that time span. More than 300,000 residents fled the state. Its peak unemployment rate of 14.1 percent ranks as one of the highest in the U.S. More than 1 in 5 residents in Detroit, its largest city, remain in search of work.
So it’s inexplicable to many in Michigan that one of the lynchpins in Gov. Rick Snyder’s plan to put people back to work is encouraging an influx of immigrants. Snyder touted those plans in an exclusive Dan Rather Reports segment that aired earlier this week.
“I think it’s important for our future,” Snyder told Rather. “We’ve been in a recession for a decade. How do we really reinvent ourselves? One of the keys to how we build ourselves is immigration.”
It’s been a relevant issue in the state’s past. One century ago, immigrants comprised 33 percent of Detroit’s population during its nascent boom years. For a more contemporary example, Snyder gazes beyond Michigan’s borders toward Silicon Valley, and notes 47 percent of its residents are foreign born.
“I am focused on finding more and better jobs for Michiganders,” he tells Rather. “Encouraging legal immigration for advanced-degree people is consistent with that. They’re job creators.”
A study from the Small Business Administration shows immigrants in Michigan are three times as likely as native-born residents to start businesses, and six times as likely to start high-tech businesses. Snyder, a Republican, would like to tap that entrepreneurial spirit.
Steven Tobocman, author of Global Detroit, a recent report that formed the foundation of Snyder’s immigration policy, writes that 32.8 percent of the state’s high-tech firms over the past 10 years have been founded by immigrants, in a state where 6 percent overall are foreign born.
He’s an unlikely ally for Snyder. Tobocman served three terms in the Michigan House of Representatives, a Democrat representing Detroit’s southwest side.
“Nothing is more powerful for remaking Detroit as a center of innovation, entrepreneurship and population growth than embracing and increasing immigrant populations and the entrepreneurial culture and global connections that they bring and deliver,” he writes.
Many of the immigrants Snyder and Tobocman seek are already within the state’s borders. Approximately 23,000 foreign-born students currently attend the state’s colleges and universities, and the state spends “millions” educating them, according to Dan Rather Reports.
Visa restrictions and more lucrative opportunities elsewhere lure them away after graduation.
“It’s a great opportunity to keep our kids in a wonderful position,” Snyder said. “We already educate so many wonderful students from outside the country. Is there a way to help keep them here? … The other piece I want to do is talk to the communities that we have here that are already ethnic communities, and do they have outreach back in their countries to bring and attract people to Michigan. I think we can all win.”
Can Michigan add auto jobs — or is it destined to lose them to other states and parts of the country?
That topic is on the table Tuesday when Changing Gears joins Crain’s Detroit Business for a breakfast and practical policy discussion.
Senior Editor Micki Maynard will be part of a panel that includes Sandy Baruah, president of the Detroit Regional Chamber; Peter Brown, publisher and editorial director of Automotive News; Neil de Koker, president and CEO of the Original Equipment Suppliers Association, and Doug Smith, senior vice president of the Michigan Economic Development Corporation.
The event begins at 7:30 a.m. at The Henry (formerly the Ritz-Carlton Hotel) in Dearborn, Mich. Find more details here.
Pete Bigelow · Midwest Memo: CME Offered Tax Incentives for Indiana Relocation, John Kasich Begins SB5 Defense
September 30th, 2011
Three stories making news across the Midwest today:
1. Report: Indiana sets sights on luring CME headquarters. Indiana is aiming to land another Illinois company with a tax-incentive package. This time, a big one. Crain’s Chicago Business reports today that Indiana has offered CME Group Inc. $150 million per year to move its headquarters to the Hoosier State. CME CEO Terry Duffy did not comment on the report, but earlier this week, said he expects the headquarters issue “to be resolved by year end.” Indiana’s top economic development official, Dan Hasler, neither confirmed nor denied the report when reached.
2. Kasich begins official SB5 defense. On Thursday night, Ohio Gov. John Kasich made his first official campaign appearance to support Issue 2, a state ballot measure that could repeal Senate Bill 5, a controversial law that limits collective-bargaining rights of public employees. Appearing in Toledo with Mayor Mike Bell, Kasich outlined his defense of SB5 – that it helps local governments control spiraling costs. “I believe in unions, I believe they have a place,” Kasich told The Columbus Dispatch. “I am not out, in any way shape or form, to go after and target anybody.”
3. Michigan airport authority announces cuts. The Wayne County Airport Authority said Thursday it would cut costs and raise fees as part of a plan to reduce its expenses by $20 million over the next 12 to 15 months. The Authority, which runs operations at Detroit Metro and Willow Run airports, approved a budget of $292 million for fiscal 2012 that includes wage and benefit changes for employees. Airport World reports at least 100 employees will lose their jobs. “It’s imperative that we re-engineer Detroit Metro and Willow Run Airports so that they become the most competitive in North America,” said Turkia Awada Mullin, the WCAA’s new chief executive officer, who has drawn attention this week for taking a $200,000 buyout from her previous job as Wayne County’s chief development officer to accept the head position at the airport authority.
September 30th, 2011
Back in June, President Obama came to Pittsburgh to tout something called Advanced Manufacturing. He created a group to work on it, made up of government officials, academics, and industry. The point, the president says, is to promote innovation, make the country more competitive. But, we wanted to know:
What is advanced manufacturing anyway?
“Oh goodness,” said Mike Molnar when asked just that. “That’s one of those questions I should probably have a ready answer to.”
Molnar is the Chief Manufacturing Officer at the National Institute of Standards and Technology. Advanced manufacturing is kind of his focus. But as I found, most people can’t agree on what it is.
It can be about new ways of making things, says Erica Fuchs of Carnegie Mellon University.
“It can be robots; it can be 3D printing,” Fuchs said.
Or, maybe it’s just companies building high tech products for newer industries.
“It could be just that brand new battery company, that brand new sensor company,” Fuchs added.
Some like Ned Hill of Cleveland State have a more flip answer.
“Advanced manufacturing is any manufacturing company that’s survived over the last twenty years,” he said.
Molnar of NIST took a second to come up with his own definition.
“Advanced manufacturing is the ability to make something nobody else can,” he said.
The President offered this definition back in June.
“It means how do we do things better, faster, cheaper to design and manufacture superior products that allow us to compete around the world” Mr. Obama said.
However we define it, advanced manufacturing has become a priority for Mr. Obama. He was speaking in front of a yellow robot at Carnegie Mellon University. The occasion was to announce a new partnership.
“All with one big goal,” he said. “And that is a renaissance of American manufacturing. We’re calling it AMP, A-M-P, the Advanced Manufacturing Partnership.”
The point says the administration, is to find and support new technologies that could create jobs and make American manufacturing more competitive. AMP is made up of engineering schools like Carnegie Mellon, plus industry and government officials. They’re having their first meeting this month.
And, when I visited Carnegie Mellon in Pittsburgh recently, I could see why the President came here to talk about the future of manufacturing.
“At the end of this robot is a projector!” said David Bourne, as he showed me the frame of a military-grade Humvee. He’s a principal scientist at CMU’s Robotics Institute.
An orange, robotic arm equipped with a welding torch, and, yes, a projector sits idly by. But this robot has no intention to replace humans. Bourne says it has a nobler mission: it’s going to help the human workers do what they do better.
“If we can get robots and people to work together,” he said, “then the economies come back into line because it’s easier to program robots to do what they’re good at, and we can project any kind of information onto the product in the right place so the person can go over and tighten something in exactly the right spot.”
Robots still don’t have opposable thumbs.
This friendly robot gets funding from DARPA, the same part of the Department of Defense that helped create the internet. And, like how the internet has grown to pervade nearly all aspects of our life, Bourne sees big implications for his technology.
“We’re going whole hog across the product spectrum, Bourne said. “I’m doing this kind of research for everything from cell phones, to this DARPA project for military vehicles, I’m working with Boeing for airplane wings. Same technology, different uses.”
And, that’s what this advanced manufacturing partnership is supposed to be about: helping emerging technologies that can help lots of industries and companies. Bourne thinks more manufacturers will switch from mass production to mass customization. That means churning out small batches of highly customized products, instead of thousands upon thousands of a single design.
The idea is that if America can get good at this high end manufacturing, and push into new materials and technologies, we can continue to have high paying jobs, even if it’s not as many as manufacturing’s heyday.
“It’s instead most likely going to be something where there are fewer people on the manufacturing line itself, but we need those people in order to have the jobs that are in innovation and for our country to continue to stay ahead,” said Erica Fuchs of Carnegie Mellon.
Fuchs’s specialty is engineering and public policy. And, she’s found that when we lose manufacturing, we also lose research and development. She says that’s because they go hand in hand. The person designing something often needs to walk next door to the factory to make sure it all comes together.
“The engineer needs to be there to figure out why the oven isn’t working today,” she said.
In June, the President’s Council of Advisors on Science and Technology said [PDF link] that the US is losing the ability to make things invented here, like LED lights and components for TVs and smartphones. And, something else important: robots.
David Bourne at Carnegie Mellon’s robotics lab noted that the robot he showed me actually came from Switzerland.
“We’ve already done a pretty good job losing the robotics industry,” he said. “We haven’t lost the software part yet. It shows you just how fragile this is. If we fall asleep—this is a crossroads for American manufacturing. If we miss this one, it could be a generation before we have another opportunity like this. This is a big deal.”
And, that’s why those who care about making things are closely watching the President’s Advanced Manufacturing Partnership, hoping something comes out of it that will make the Midwest and America a manufacturing power again.
Pete Bigelow · Midwest Memo: Michigan Banks Receive Funds for Small Businesses, In its Battered Economy, Cleveland Finds a Place for Porsche
September 29th, 2011
Three stories making news across the Midwest today:
1. Porsche’s place in Cleveland economy. Is there something illogical about opening a Porsche dealership in the midst of northeast Ohio’s economic turbulence? Not really, says Mark Naymik of The Plain Dealer. Porsche buyers are faring just fine, according to U.S. Census data. Naymik attended the grand opening of a Porsche dealership in suburban Beachwood, and examines the trickle-down role of such luxury purchases and the complexities of the regional economy — while also providing details on the regal evening.
2. Standard & Poor’s upgrades GM. After reviewing the four-year contract agreement between the UAW and General Motors, Standard & Poor’s announced today that it has upgraded the automaker’s debt rating from BB- to BB+. “We believe the contract will allow for continued profitability and cash generation in North America,” S&P’s Robert Schulz said in a written statement.
3. Michigan banks receive small-business boost. The U.S. Treasury announced today that five Michigan community banks would receive a total of $28.8 million in funding as part of the Small Business Jobs Act that President Obama signed into law. The money, distributed through the Small Business Lending Fund, encourages community banks to help small businesses expand operations and create new jobs. The Treasury said in a release that small businesses account for approximately 60 percent of job creation, but that such businesses are facing “disproportionate challenges in the aftermath” of the credit crisis.
September 29th, 2011
DELTA TOWNSHIP, Mich. – Auto workers at the Lansing Delta Township Assembly plant make some of General Motors’ most popular vehicles.
The GMC Acadia, Chevrolet Traverse and Buick Enclave are all produced inside this 3.4-million square-foot facility on the outskirts of Lansing, which is Michigan’s state capital.
In August, when GM announced an 18 percent sales increase from 2010, GMC led the turnaround with a 40.3 percent increase. Chevrolet had gained 15.8 percent.
So when contract negotiations began last month, the plant’s 3,430 hourly workers expected they’d be sharing in the company’s improved position. But when they saw the proposed deal between the United Auto Workers and GM, many members of UAW Local 602 here felt jilted instead.
They rejected the deal — a rarity for a contract approved by two-thirds of GM workers nationwide.
“The concessions we’ve made were supposed to be concessions, and with the stroke of a pen, they’ve made it all permanent,” said Jan Ward, a long-time employee who voted against the contract. “We did whatever we had to do to make them viable. Now they’re more than viable, and they just snubbed our nose, and said, ‘Too bad for you.’”
The majority of workers here agreed. Among Local 602 members, 66 percent of production workers and 57 percent of skilled trade workers voted against the contract.
In national voting, the percentages were nearly reversed: Sixty-five percent of UAW production workers and 63 percent of skilled trade workers approved the agreement, which was ratified Wednesday. Of the 81 UAW locals participating in the voting, Local 602 was one of only three to vote against the contract.
As first-shift workers at the Delta Assembly plant departed Wednesday afternoon, they cited a variety of reasons for the local departure from national sentiment. Some said concern over local union issues had spilled into voting on the national vote. (Local 602 president Bill Reed could not be reached for comment).
But the most-cited reason for the negative swing in Lansing was a feeling by veteran workers that they gained nothing from the contract.
“We’re really disappointed that GM didn’t give more back to us after all we’ve given to them,” said Larry Larner, employed by the company for 35 years. “They’ve always said they don’t like the adversarial approach. If they don’t like it, why don’t they come to us and say, ‘Look, we realize you gave up a lot, and we’ll try to give back to you.’”
Veteran workers got no raises, although there are raises in the contract for recently hired workers, known as “two-tiers.” Cost of living allowances, which were lost as part of the GM bailout, remain a thing of the past.
Larner said he reluctantly voted in favor of the contract. After years of union concessions in bargaining, he said, “We managed to keep what we had.” But his weariness in the face of those continued retreats mirrored the demeanor of many workers who voted no.
“We’re getting beat up,” said one 30-year employee who requested his name be withheld. “I don’t believe the union bargained in good faith. They’re looking out for themselves. GM is looking out for itself. And we’re not getting any help from either side.”
Veteran workers, their numbers diminishing, felt squeezed.
In 2005, GM had 110,000 hourly production workers, according to a presentation by CEO Daniel Akerson to Wall Street analysts Wednesday. Today, GM has approximately 49,000 hourly workers, less than half from six years ago.
The UAW said in a written statement the new deal will create 6,400 new jobs in the United States. But under terms of the contract, up to 25 percent of GM’s workforce can now be comprised of “two-tiers,” entry-level workers who will make about $8 less per hour than veteran counterparts. Now, two-tiers comprise 4 percent of the overall workforce.
Veteran employees at Delta Assembly fear a gradual wave of two-tiers, a slide in their own standard of living and a reduced vision of whatever comes next.
“ I don’t see where we gained anything in this, really,” said Tammy, a 26-year veteran who only gave her first name. “I thought maybe they’d get our cost of living back for us. That didn’t happen.”
She continued. “It only catered to the entry-level workers. The union let them agree to it. So where do you think we’ll be in a few years? We’re going to be dinosaurs.”
September 29th, 2011
There may be no joy in Boston or Atlanta, but there is plenty among baseball fans in the Great Lakes. The Detroit Tigers and Milwaukee Brewers are headed to division playoff series in the American and National Leagues, respectively.
The Brewers have a leg up on their neighbors across Lake Michigan: they’ve clinched home field advantage in the best of five series. They play the Arizona Diamondbacks on Friday and Saturday at Miller Park in Milwaukee.
The Tigers face the New York Yankees those same days at Yankee Stadium in New York, then return to Comerica Park on Monday.
Both teams have been big economic drivers for their home towns, and both cities will get another economic boost from post-season games, which could last all this month, depending on how far each team goes. That’s good news for everything that benefits from a sports team: restaurants, parking lot attendants, hotels, souvenir sales and the guys who hawk peanuts.
Milwaukee did not raise season ticket prices for 2011, and has offered inexpensive deals such as a $14 combo ticket to a baseball game and the Wisconsin State Fair.
Aside from baseball, Brewers’ principal owner Mark Attanasio remains optimistic about the economy in general. Last month, the long-time investment manager said he expected the country to avoid a double-dip recession, despite doom surrounding financial markets.
In Detroit, the Tigers drew 2.6 million fans during the regular season, good for 13th place among major league teams. All year, they’ve had the drawing power of Justin Verlander, the American League’s likely Cy Young Award winner and candidate for most valuable player.
As far back as June, the Tigers drew 5,000 more fans per game when Verlander pitched than on an ordinary night.
Although the Tigers failed in their goal to get home field advantage, Verlander provided an economic gift to the Metro Detroit area, at least in one way: magazine sales. He made the cover of Sports Illustrated earlier this month.