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Manufacturing has been at the center of the Midwest’s long-term decline, shedding some 8 million jobs over the past three decades. More recently, it has been at the forefront of the region’s economic recovery.

In October, manufacturing was the leading sector in the Midwest Economy Index, which measures economic activity in the region. It was, in fact, the only sector to make a positive contribution to the index, produced monthly by the Chicago Fed.

Changing Gears reporters Kate Davidson and Dan Bobkoff examined the current state of manufacturing in the Midwest recently for American Public Media’s Marketplace. They found that today’s successful Midwest manufacturers look “more like startups than smokestacks.”

In the first of two parts, Bobkoff profiles Cleveland-based Thogus Products, a once-traditional manufacturer that made money through mass production. Now it’s producing specialized orders and creating prototypes, services that are harder to accomplish from China.

“I don’t consider us a manufacturing company,” Thogus owner Matt Hlavin said. “We’re a technology and services company.”

In the second piece, Davidson examines “lights-out machining,” the practice of programming milling machines to continue running long after workers have left for the day. There aren’t statistics that quantify how many manufacturers utilize the practice, but industry experts see a growing trend.

“There’s really an explosion of lights-out machining in the small-and-medium-sized manufacturers,” says Debbie Holton with the Society of Manufacturing Engineers. “They’re using this to compensate for the fact that they’re having trouble finding skilled workers. They need to get more from less, and they’re increasing their productivity with this technology.”

 


Three stories making news across the Midwest today:

1. Mining company lays off 600 workers. A mining company in Michigan’s Upper Peninsula will temporarily shut down part of its operations and lay off approximately 600 employees. Cliffs Natural Resources, which operates the Empire Mine in Marquette County, said production is expected to drop from 4.6 million tons in 2011 to 2.7 million tons in 2012, according to the Marquette Mining Journal. The drop comes because steel producer ArcelorMittal will take a blast furnace down for maintenance in the second quarter. A company spokesperson said the layoffs will last “several months” until the furnace goes online again.

2. Historic Cleveland property has new owner. One of Cleveland’s historic downtown landmarks was purchased today by a Canadian hotel and resort company during a foreclosure auction. Skyline International Development Inc. was the sole bidder for the Arcade, and purchased it for $7.7 million – the minimum bid, according to The Plain Dealer. The current site was renovated a decade ago for $60 million, but went into foreclosure in April 2009 when its Chicago-based owner defaulted on a $33.3 million mortgage. An attorney for the new owners said this is Skyline’s first U.S. real estate holding, but did not comment on the firm’s plans for the Arcade. With the property selling for the minimum, its creditors, including Bank of America, the city of Cleveland and Cuyahoga County, will not recoup any of their investments.

3. Chinese students Milwaukee bound. Hundreds of Chinese students could attend the University of Wisconsin-Milwaukee in coming years thanks to a recruiting agreement the school’s chancellor signed today in Beijing. An agreement with a Chinese education network will boost the university’s international profile and help lure Chinese companies to Milwaukee, according to the Milwaukee Journal Sentinel. It would also boost the school’s out-of-state tuition coffers. China is the city’s third-largest trading partner, according to the newspaper. The agreement runs for five years. “You could think of myriad ways these students could connect to help Milwaukee employers in China,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.


In 1969, the Cuyahoga River was so overrun with oil and industrial pollutants that a spark from a passing rail car ignited a blaze across the water’s surface. Firefighters extinguished the flames in less than two hours, but the image cemented in dubious city lore. Critics called Cleveland the “Mistake On The Lake.”

Things have only gotten worse from there.

For decades, city leaders have watched the city’s industrial base vanish, the population plummet and poverty grow. In recent years, they have sought to reinvent Cleveland according to 21st century urban principles, envisioning a city built on health care, higher education, entertainment and mass transportation.

Now they have a tangible foundation. The New York Times profiles a massive reclamation project throughout the city that has ignited job growth and stoked talk of a small-scale comeback: In Cleveland, the downtown has shifted uptown.

Within a square mile of the city’s University Circle are: Case Western Reserve, Cleveland Institute of Art, Cleveland Institute of Music, University Hospitals, Cleveland Clinic, Cleveland Orchestra, Museum of Art and Museum of Natural History.

Millions have been spent on building and renovating those civic institutions, and they’ve formed “a distinct economic microclimate that has fostered the highest growth in job numbers, income and residents,” in a city that lost 81,000 residents from 2000 to 2010, according to The Times.

An urban planner from the University Circle Inc., which helped plot the area’s development along Euclid Avenue, tells the newspaper 5,000 jobs have been added in the uptown area since 2005, and that 50,000 work there overall.

Amid an overall population loss of 17 percent in the past decade, the number of residents in the uptown area grew by 11 percent.

 


Three stories making news across the Midwest today:

1. Chicago budget vote tonight. Chicago Mayor Rahm Emanuel’s first city budget will be voted upon by the city council tonight. It is expected to be easily approved. The budget addresses a $635 million deficit through a series of layoffs, library and mental-health clinic cuts and fee increases. Our partner station WBEZ says the only question now is how the city’s 50 aldermen will vote, citing minimal opposition. “It could be six or it could be a unanimous vote,” Ald. Bob Fioretti tells the station. He said he worried Emanuel’s plan to nearly double fees for water and sewer service over four years will hasten an exodus of residents. But, “My yes or no vote isn’t going to mean anything,” he said. “I believe it’s already decided.”

2. Chrysler brings 1,100 jobs to Toledo. Chrysler announced today that it would invest $500 million at a Toledo assembly plant to build its next-generation Jeep SUV. The investment is expected to create more than 1,100 new jobs by 2013, according to the Detroit Free Press. The Toledo North plant will add a second shift. The plant, which opened in 1997, was the only Chrysler plant in North America operating only one shift, according to the newspaper.The investment comes as part of a $1.7 billion move centered around the Jeep SUV. Remaining funds will be invested at other Chrysler plants.

3. Cleveland biomedical companies eye China markets. There’s growing opportunity for Cleveland-area biomedical companies to meet China’s growing demand for advanced health care. The Chinese government has pledged $100 billion to upgrade its healthcare infrastructure, and “it would be insane not to take advantage of that immense growth,” Eddie Zai, founder of the Cleveland International Group, a business investment consulting firm, tells our partner station Ideastream. Zai’s new venture, the Cleveland Bio-Fund, is partnering with Newsummit Pharmaceuticals in Shanghai, to bring $100 million to U.S. medical device companies. The Plain Dealer endorses the developments, calling it, “an example of the kind of commerce that is the path to jobs and wealth.”


Three stories making news across the Midwest today:

1. New Cleveland lakefront development plan. For more than a century, development along Cleveland’s lakefront has come with “piecemeal action and broken promises,” writes The Plain Dealer. Mayor Frank Jackson presented a plan Monday for changing that, the newspaper reports today. Jackson’s plan included developing the waterfront from the city’s port to Burke Lakefront Airport with offices, restaurants, shops and marinas across a 90-acre space. The plan, according to EE&K architects, could take years to complete and reach $2 billion in value. Money for the project is expected to come from the private sector. Many who have watched similar plans never come to fruition in the past were skeptical at Monday’s press conference, but Jackson said this plan has the backing of key lakefront interests.

2. Detroit-area home sales up. Home sales in metro Detroit increased for the fourth consecutive month in October, according to a report from Farmington Hills, Mich.-based Realcomp II, which reports sales of condominiums and single-family homes jumped 4.8 percent. Median prices rose 7.7 percent to $70,000, according to The Detroit News. Sales were up in three of the metro areas four counties. Oakland, Livingston and Macomb counties all saw increases, while Wayne County sales decreased 3 percent.

3. AirTran cuts central Illinois service. AirTran announced Monday it would end service to five U.S. airports, including one in the Midwest that leaves local officials seeking an alternate air service plan. Central Illinois Regional Airport learned service would not continue, after being an AirTran destination for 15 years. The airline flew 40 percent of passengers from the Bloomington, Ill. facility. Although officials considered themselves an “underdog” for continued service amid airline consolidation, according to The News-Gazette of Champaign, the airport’s marketing director said the official announcement “changes the landscape for everybody.”


Across Ohio, voters are headed to the polls today to determine the fate of Issue 2, a referendum on a controversial state law that limits the collective-bargaining rights of public employees.

Here’s a roundup of ongoing coverage of the vote on Issue 2 from around the Buckeye State:

From The Columbus Dispatch: Issue 2 is expected to drive voters to the polls at higher numbers than other non-presidential election years. Franklin County, which encompasses the greater Columbus area, reached a record number of absentee-ballot requests this year at more than 88,000. The Dispatch reports voter turnout is expected to be far higher than the 31 percent of registered voters that cast ballots in 2009.

From Ideastream: Our partner station in Cleveland examines the advertising campaigns mounted by pro-and-anti Issue 2 interest groups. Depending on the vantage point, Issue 2 will harm education. Or save it. It will bolster police forces. Or ruin them. Ideastream reporter Ida Lieszkovsky reports that the ads bring a lot of emotion to the issue, but little concrete information. “There’s usually some truth in there that they’re hanging it on, but sometimes there’s also quite a bit of reach to get the spin,” Robert Higgs, editor of PolitiFact Ohio tells Lieszkovsky.

From the Cincinnati Enquirer: The respective campaigns for and against Issue 2 and its legislative predecessor, Senate Bill 5, have taken perhaps an interesting turn in the final hours. Union opponents of the bill boldly spoke of defeating the referendum at a union hall in Hamilton County. “We are going to shove Senate Bill 5 down the throats of John Kasich and his ilk,” said Howard Schaitberger, president of the International Association of Firefighters.

In a speech to 300 Tea Party supporters in Eastgate, Gov. Kasich spoke for an hour Monday night. He didn’t mention Issue 2 until the final two minutes of his speech, according to The Enquirer.

From The Plain Dealer: The U.S. Justice Department has sent election observers to Lorain County today to ensure that county officials keep a commitment to provide Spanish-language ballots.  Last month, the county’s Board of Elections agreed to provide the ballots as part of a lawsuit settlement with the DOJ. The Plain Dealer reports bilingual ballots and bilingual poll workers will be provided in targeted precints.

From Politico: Democrats were stung in Ohio in the 2010 elections, losing the governorship and five congressional seats. This year? They’re planning on using traction from the Issue 2 as a springboard into the national 2012 elections.  James Hohmann writes, “Obama is still polling badly in Ohio, but his campaign has capitalized on perceived Republican overreach to bring recalcitrant liberals back into the fold.”


This week, Changing Gears kicks off a look at Empty Places across our region. During November, we’ll be looking at empty buildings, empty property — and how we can fill things up again. In the first part of our series, reporter Dustin Dwyer explores the economic and social cost of emptiness. Things may be better in some neighborhoods, he says, but problems still abound.

Vacant homes in Detroit. Photo: Mary's Detroit Photoblog

GRAND RAPIDS, Mich. — There is no one number that tells the story of all the empty houses, storefronts, offices and factories in the Midwest. But there are many numbers that tell part of the story.

Like this: One out of ten. One out of ten homes in Illinois, Indiana, Michigan, Ohio and Wisconsin was vacant in 2010. That’s according to the U.S. Census.

Or these numbers:  Twenty-two percent of office space in the Cleveland area is empty. Chicago offices are 19 percent empty. Metro Detroit: almost 27 percent.

Those numbers are from the real estate firm Grubb & Ellis. Fred Liesveld from the firm’s Detroit office says those numbers have actually been getting better for almost a year. He said of the 27 percent vacancy figure: “We haven’t seen that in a decade. That’s just great news.”

And really, there’s a lot of good news in the Midwest. In every city there’s at least one neighborhood that used to be a lot worse.

Where I live in Grand Rapids, that neighborhood is Heartside. Heather Ibrahim has worked in Heartside for more than a decade, at a non-profit called Dwelling Place. I met up with her during an art event on what used to be one of the neighborhood’s worst blocks.

“Just looking down the street and seeing how many buildings have been revitalized, it’s just amazing,” she said. “It amazes me the changes that have happened.”

Ibrahim says when she first started working in Heartside, maybe half the buildings were falling apart. Now, she estimates 80 percent of the neighborhood has been restored.

But even in Heartside, Ibrahim believes 20 percent of the buildings are still in bad shape. Windows are boarded up. Storefronts are empty.

Now let’s look at Detroit. Last year, a collection of groups called The Detroit Data Collective did a survey of the entire city. What they found is that more than a quarter of the city’s residential space is now completely vacant. We’re not talking about a row of empty houses. We’re talking about an urban prairie.

Jeff Horner, of the urban studies department at Wayne State University in Detroit, has lived in the area all his life. He says he’ll take the prairie over what used to be there.

“You never get used to seeing the same house you drive past that was lost in a fire and here’s still this burned out hulk that just sits there for years,” he said.

And for those who want to just think of this kind of a thing as a Detroit problem, it’s not.

In many ways, Chicago is the shining example of what can go right in the Midwest economy. But after the 2008 real estate crash, the emptiness has been creeping there as well. And, like everywhere, it has a devastating impact.

And now we’re talking about things that can’t be measured in numbers.

“The urban environment has a profound impact on psychological functioning,” said Lynn Todman, an urban planner who works at the Adler School of Professional Psychology. Last year, she did a mental health study in the city’s Englewood neighborhood. The area has been devastated by foreclosures.

Todman says she spoke to one man who had to go into the abandoned houses for his job. The man told Todman about dogfights, squatters and runaway kids.

“I tried to get a little more information out of him about the kinds of things and activities that took place, perhaps things that weren’t widely reported in the news. And he said, ‘you don’t want to know,’” Todman recalls.

Todman says crime-ridden neighborhoods would have crime even if there wasn’t a bunch of vacant buildings. But when there is, the crime can spread. It can affect the people living in the homes that remain.

It can lead to stress, which leads to learning problems for young kids. Heart problems for adults. Drug use.

Add it all up, and Todman says this less-measurable impact of empty buildings – it will go on even after the economy improves and the buildings fill back up.


Three stories making news across the Midwest today:

1. Michigan governor wants infrastructure investment. In a speech to the state Legislature today, Gov. Rick Snyder said Michigan can no longer delay investment in its transportation infrastructure. He proposed a $120 registration fee hike per year on passenger vehicles that would generate $1 billion in annual revenue. Snyder also wants to replace the state’s 19-cents-per-gallon tax on gasoline with a wholesale tax on fuel, according to our partner station Michigan Radio. “By investing in the means to move people and products with speed and efficiency, we can compete with other states and countries for business and jobs – and we can win,” Snyder said in written remarks.

2. Cleveland school board makes cuts. Over the protests of residents and teachers who packed a high school auditorium, Cleveland’s school board voted to make $13.1 million in budget cuts Tuesday in order to comply with a state requirement to balance its budget. Among the cuts: preschool, spring sports and busing for high school students. Board members said the cuts came as a result of a decrease in state aid and the rehiring of 300 teachers this fall. “Do we have the ability to print money? I don’t think we do,” board member Eric Wobser told The Plain Dealer.

3.Groupon overhauls sales staff. On Wednesday, Groupon CEO Andrew Mason told investors the Chicago-based company is replacing the bottom 10 percent of its sales staff of 4,800 employees. The goal is to win stronger deals from merchants and ensure continued growth, according to the Chicago Tribune. The move comes as Groupon readies for an initial public offering expected to raise $10 to $11.4 billion. Analysts have grown concerned that the company has failed to win enough repeat customers. Repeat customers increased in the second quarter, but numbered 16 million among 143 million subscribers, according to a regulatory filing with the Securities and Exchange Commission.


Three stories making news across the Midwest today:

1. Michigan governor wants infrastructure investment. In a speech to the state Legislature today, Gov. Rick Snyder said Michigan can no longer delay investment in its transportation infrastructure. He proposed a $120 registration fee hike per year on passenger vehicles that would generate $1 billion in annual revenue. Snyder also wants to replace the state’s 19-cents-per-gallon tax on gasoline with a wholesale tax on fuel, according to our partner station Michigan Radio. “By investing in the means to move people and products with speed and efficiency, we can compete with other states and countries for business and jobs – and we can win,” Snyder said in written remarks.

2. Cleveland school board makes cuts. Over the protests of residents and teachers who packed a high school auditorium, Cleveland’s school board voted to make $13.1 million in budget cuts Tuesday in order to comply with a state requirement to balance its budget. Among the cuts: preschool, spring sports and busing for high school students. Board members said the cuts came as a result of a decrease in state aid and the rehiring of 300 teachers this fall. “Do we have the ability to print money? I don’t think we do,” board member Eric Wobser told The Plain Dealer.

3.Groupon overhauls sales staff. On Wednesday, Groupon CEO Andrew Mason told investors the Chicago-based company is replacing the bottom 10 percent of its sales staff of 4,800 employees. The goal is to win stronger deals from merchants and ensure continued growth, according to the Chicago Tribune. The move comes as Groupon readies for an initial public offering expected to raise $10 to $11.4 billion. Analysts have grown concerned that the company has failed to win enough repeat customers. Repeat customers increased in the second quarter, but numbered 16 million among 143 million subscribers, according to a regulatory filing with the Securities and Exchange Commission.


Back in April, we did a story on the untapped potential in the Midwest’s music industry. Today, we have a better sense of the state of Cleveland’s music industry. For the first time, researchers have conducted a comprehensive study on employment and spending in the sector.

First, the economic impact number: $840 million. That’s how much the study says the music industry contributes to the Cleveland area economy.

But that impact comes from relatively few workers. In Northeast Ohio, about 6000 people work in the music industry. That includes everything from orchestras to record shops. In Cuyahoga County just 2700 work in music. That’s less than half a percent of the workforce.

“We weren’t entirely surprised,” says Kristin Puch, research manager at the Community Partnership for Arts and Culture. That organization advocates for the industry and conducted the study.

“It’s really quite remarkable how small but mighty the industry really is,” she said.

Puch says there’s a lot more potential here. Cleveland has a music reputation: for its Rock and Roll legacy and the Cleveland Orchestra. And, she thinks the music scene could benefit more from the region’s traditional industries: manufacturing and healthcare. Making musical instruments and music therapy are two areas for growth, she says.

The study is considered the first comprehensive look at the industry.  It used a combination of surveys and labor data. And, while the total employment numbers are tiny, the report found that the music industry’s employment was actually more stable than the workforce on the whole.