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Three stories making news across the Midwest today:

1. Kasich downplays Sears hopes. Gov. John Kasich says he “wouldn’t bet on” Ohio’s chances of convincing Sears to relocate its headquarters within its borders, The Plain Dealer reported today. During a visit to the Ford Assembly Plant in Avon Lake, he said Ohio remains in the running, but that it would be hard to pry Sears away from its long-time Chicago-area home. Last week, news outlets reported that Ohio had offered $400 million in tax incentives to bring the company and its 6,100 employees to Columbus. Illinois lawkmakers had rejected a proposal to give Sears $100 million in incentives.

2. Delays ahead on Detroit-Chicago rail line. Faster service is coming along a 135-mile stretch of train tracks between Dearborn and Kalamazoo . It’s just going to take a while. Construction will begin on a series of improvements in May or June, officials said yesterday, but the project will not be completed until 2015 or 2016. In the meantime, passengers can expect more delays. The Detroit Free Press reports today the project to fix tracks, cross ties, grades and crossings will cause further disruption. In four years, Amtrak expects new locomotives, new cars, smoother tracks and better signaling along the route. The improvements were funded as part of $403.2 million Michigan received from the federal government.

3. Indy community protests gas station development. The difference between refurbishing a dilapidated building and continuing a community eyesore? It’s largely in the eye of the beholder in one Indianapolis neighborhood, where residents of Northside are fighting the rebuilding of a gas station on the corner of 16th Street and Central Ave. In a lawsuit filed last week, opponents say the gas station no longer fits the area, and that they want something more friendly for pedestrians, such as shops or outdoor cafes, according to the Indianapolis Star. The newspaper reports the suit underscores the area’s progression from a “fixer-upper to up-and-coming.”


Kate Davidson

Kevin Garcia is a "blotter" in Detroit

Remember our series on empty places? Well, our friends at NPR took an interest in the experiences of Detroit’s “blotters” — residents who annex vacant lots around them, creating block/lots.  You can listen to the NPR piece here. It includes the story of Kevin Garcia (above) who tried for years to buy the lot next door. He wants Detroit to cut down on the bureaucracy involved. City officials want that too, since Detroit currently manages more than 60,000 parcels of land, most of it vacant.


Three stories making news across the Midwest today:

1. Bing defiant over looming Detroit takeover. A state takeover of Detroit and its ruinous financial situation has seemed imminent for weeks, if not months. On Thursday, Michigan Gov. Rick Snyder told Mayor Dave Bing he would initiate a 30-day review of the city’s finances, a precursor to the appointment of an emergency manager. Bing then gathered the city council and other leaders and declared his opposition. “We are Detroit,” he told the Detroit Free Press. “Detroit needs to be run by Detroiters.” Free Press columnist Rochelle Riley wonders whether the unified front is too little, too late. She asks, “Why does it always take a crisis?” before city leaders finally work together.

2. Milwaukee mayor China bound. Milwaukee Mayor Tom Barrett leaves Sunday for his second trade mission to China. He’ll spend a week visiting Beijing and the growing port of Ningbo, which already has an informal sister-city relationship with Milwaukee, according to the Milwaukee Journal Sentinel. Barrett tells the newspaper he’ll pitch the city’s strengths in manufacturing and industries related to water, food and beverages in hopes of luring more jobs and investment. He’ll also talk to Ningbo police commanders about purchasing Harley-Davidson motorcycles for officers. The Metropolitan Milwaukee Association of Commerce’s China Council will pay for the trip. In a related item, Chinese officials tell the Associated Press they want to convert some of the country’s U.S. government debt into investment in renovating American roads and subways.

3. U.K. investigates Groupon practices. Chicago-based Groupon Inc. is being investigated by Britain’s Office of Fair Trading over concerns about unfair promotions and exaggerated savings, Bloomberg reports today. The investigation commenced in July and expanded after receiving a complaint. “Given Groupon’s track record, we have serious concerns about its ability to adhere to the advertising code,” the U.K.’s Advertising Standards Authority said in a statement. In a written response, Groupon said it is “constantly evolving business process” and cooperating with the probe.


All across the Midwest, cities and suburbs are tackling the problem of Empty Places. Throughout November, Changing Gears took a look at some of the challenges and solutions involved in transforming property from the past.

In Flint, Mich., Kate Davidson found there may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1.  It’s one of the factories that was occupied by sit-down strikers in the 1930s.  The plant made tanks during World War II.  It was later closed, gutted and reborn as a GM design center.  But GM abandoned the site after bankruptcy and the new occupants don’t make cars.  They sell very expensive prescription drugs.

In suburban Chicago, Tony Arnold reported that  as companies adjust to economic conditions, many in the region have been re-evaluating the basics – including where they’re located. Cities and states bend over backwards to create jobs, and they’re left with some big challenges when a company decides it no longer wants its headquarters there.

For many people, the most threatening emptiness isn’t a shuttered factory.  It’s the abandoned property next door.  But in Detroit, some residents are using that emptiness to quietly reshape their neighborhoods.  They’re annexing vacant lots around them, buying them when they can or just putting up a fence. They’re not squatters, says Davidson, they’re blotters.

Baby tilapia growing in the basement of The Plant, an urban farm inside a former meatpacking plant on Chicago's South Side. (Niala Boodhoo)

There are vacant factories all over the Midwest. But where some people see blight, others see opportunity. One example: a former Chicago meatpacking plant has been transformed into a vertical farm, as Niala Boodhoo discovered.

Barry Van Dyke and his two siblings told us their story of turning Jack’s Liquor Store in Grand Rapids, Mich., into a brewery. As he said to Sarah Alvarez, “Over the last three or four years there has been a huge boom of people re-occupying buildings and putting work into them. It’s great to be a part of that in Grand Rapids. I think the general public sees that, and they are just bending over backwards to be supportive.”

But there’s plenty more work to  be done across the Midwest. In fact, there are 3,000 empty buildings alone in Northwest Indiana. Take a look at the work that’s going on there.

Any thoughts on our Empty Places series? Let us know if you’re working to transform an abandoned place in our region.

 

.

 


LIVONIA, Mich. – A recovering U.S. auto industry should add more than 150,000 new jobs by 2015, and most of them will be located in hard-hit Michigan.

Analysts from the Center for Automotive Research in Ann Arbor said Tuesday that gains sales and market share, as well as savings reaped from recently concluded UAW contract negotiations, will allow Detroit’s automakers to expand their workforces.  The Big Three are projected to add approximately 30,000 new jobs over the next three years.

American Landscape, by Sheeler

But that’s a relatively small share of the overall projected industry growth. Suppliers are expected to account for the bulk of the increase across the country. Estimates say the auto industry employs 590,000 today and will employ 756,800 in 2015, a 28.2 percent increase. That year, sales of light vehicles are expected to hit 15.5 million units.

“They’re going to grow,” said Kristin Dziczek, assistant research director at CAR. “They’re going to have to.”

Managing that growth is trickier than it may appear. Automakers are fearful that suppliers have promised more capacity than they can actually deliver as demand grows. Many suppliers have been reluctant to ratchet up operations in case the boom never arrives.

At best, the forecast growth will be uneven.

Dave Andrea, senior vice president of the Original Equipment Suppliers Association, said some of the top suppliers are operating at 90 percent of their manufacturing capacity and cannot add more production without adding workers. Sean McAlinden, chief economist for CAR, said automakers are already seeing shortages in areas such as integrated stamping and casting.

But other suppliers are running closer to 70 percent and see the current market as unsteady.

“This is where the complexity of the industry and working with suppliers is,” he said. “They have so many question marks, that they’re really balancing, particularly through 2011. So we haven’t really had the luxury of a steady climb.”

If and when the job boom materializes, these experts say Michigan will be the major beneficiary.

Nearly all the job growth from the Detroit automakers will take place in the state, which already is home to two-thirds of the three companies’ 171,742 U.S. employees. The Big Three are expected to add 33,000 jobs in the state, according to CAR, and should have a Michigan workforce of 135,000 by the end of 2015.

The new hires are expected to be comprised of hourly and salary workers, while forecasters see a dip of about 4,000 skilled-trade workers ahead.

More broadly, many more of the 150,000 jobs added by suppliers should occur in Michigan, although CAR experts did not pinpoint a specific number. “We’re definitely seeing a concentration in Michigan,” Dziczek said.

The news is good for a state pummeled by the recession. Michigan’s unemployment rate reached 14.1 percent in August 2009.

But the news is also bittersweet. In 1999, the state employed 316,000 in motor vehicle and manufacturing. Now, it’s 73,700.

And the three Detroit automakers employed more than 1 million across the country in their peak year of 1978. Even with the growth projections over the next three years, they’ll employ less than 200,000.


Members of Detroit’s city council conceded today that state intervention is “likely” in the city’s looming financial crisis. Nonetheless, they are still hoping to corral the city’s $45 million budget shortfall themselves.

The council finalized a list of proposed budget cuts that now goes to Mayor Dave Bing for vetting. Steps outlined by the council are considered even more severe than the ones Bing outlined last week.

They include: layoffs for 500 public-safety employees at a time the city’s murder rate is the highest in the country, reduced salaries for other public employees, increased transportation fares, possibly selling some government property and more. A joint committee with the city’s chief operating officer will be held Tuesday to determine the viability of some of the proposals.

Under state law, Michigan Gov. Rick Snyder could implement a financial review of Detroit’s finances and then choose to appoint an emergency manager, who would have authority to make decisions without the input of the mayor and council and terminate existing employee contracts. The council has bristled at the prospect of losing power.

“We’re willing to push and make sure the folks who people elected to do this are the ones who are going to do it,” council president Charles Pugh told The Detroit News today. “We’re all frustrated.”

Alternatives are being sought. While some groups are contesting the legality of the state’s emergency manager law, members of the council have floated a trial balloon of sorts. Some members told the Detroit Free Press they prefer a compromise position: a consent agreement which would “heighten the authority of the council and mayor to devise a plan – subject to state approval – to save the city from insolvency.”

Such a plan would ensure existing stakeholders have a place in negotiations, but still would give the state the final say.


Three stories making news across the Midwest today:

1. Detroit’s fiscal crisis looms. The amount of time Detroit has to address the city’s looming financial crisis is “relatively short,” Gov. Rick Snyder tells the Detroit Free Press, before he must decide whether to commence a financial review of the city under the state’s controversial emergency manager law. The city could be insolvent as soon as April, according to reports. In response, the city council issued a proposal that was more far-reaching than Mayor Dave Bing’s earlier this week, proposing a 20-percent income tax increase and 2,300 layoffs, among other items. “We are running out of time,” councilman Andre Spivey tells the newspaper.

2. Groupon stock sharply declines. Shares of Chicago-based Groupon are “getting pummeled” for the third consecutive day, reports the Chicago Tribune this afternoon. They are now trading 15 percent below the initial public offering price of $20 on Nov. 4, and down 35 percent since Friday’s closing price of $26.19. Groupon had cautioned investors that trading could be volatile because it offered only a 5.5 percent stake in its IPO.

3. Shale boom could miss Ohio. Shale gas may not create the economic prosperity across Ohio that Gov. John Kasich has touted as a jobs creator, warns a new report. The problem? The gas industry has been too successful. There’s so much natural gas supply across the U.S. that prices are falling. And no one is quite sure how much actually lies beneath the Buckeye State, reports The Plain Dealer. The jobs gain, once predicted to number as many as 200,000, “will happen on some scale,” Andrew Weissman, executive director of Energy Business Watch, tells the newspaper. “But the question is whether it moves quickly or whether it moves slowly so that it only has a modest impact on Ohio’s economy.”


Three stories making news across the Midwest today:

1. Detroit bridge project scrutinized. Michigan Gov. Rick Snyder absorbed his first major political defeat since taking office – and it came at the hands of his own Republican party, which refused to green-light the construction of a new bridge between Detroit and Windsor. Expectations are growing, according to the Detroit Free Press, that Snyder will try to circumvent the legislature, a strategy that will raise legal questions about the range of the governor’s executive authority. Last week, Changing Gears senior editor Micki Maynard detailed the skirmish over the new bridge for The Atlantic Cities, and examined forceful opposition from Ambassador Bridge owner Matty Moroun.

2. Ohio foreclosures on the rise. After enjoying their lowest level of foreclosures in five years, Ohio residents saw a foreclosure uptick in the third quarter of 2011, mirroring a nationwide trend. Our partner station Ideastream reports foreclosures in Cuyahoga County increased 17 percent from the previous three-month period. Experts attribute the jump to mortgage lenders resuming the foreclosure process after last year’s robo-signing scandal had halted proceedings. Over the summer, less than 1 percent of Ohio home loans entered the foreclosure process, Ideastream reports. Currently, 9.3 percent of Ohio mortgage holders are late on their payments, according to the Mortgage Bankers Association.

3. Future of Michigan coal plant unclear. The only major power plant in Michigan’s Upper Peninsula is at a crossroads. A coal-fired plant owned by We Energies could be shut down over the next five or six years as new environmental rules go into effect. One alternative would be a switch to natural gas, a conversion being employed by numerous plants across the Midwest. The Milwaukee Journal Sentinel reports the future of the plant is of high concern in Marquette, where We Energies employs 180 workers and plays 17 percent of the city’s property taxes. “A closure would be devastating for our community,” Mayor John Kivela tells the newspaper.

(Clarification: An earlier version of this entry contained dated information. It has been revised to indicate that a Michigan state senate committee defeated a proposal regarding a new bridge linking Detroit to Canada last month.)


Detroit Mayor Dave Bing, who outlined an emergency plan two days ago, isn’t wasting any time taking action. Today, Bing said the city will lay off 1,000 employees, or about 9 percent of the city’s payroll, by Feb. 25.

Detroit Mayor Dave Bing

Layoff notices will be delivered starting the week of Dec. 5, the mayor said. The cutbacks are aimed at saving about $14 million. The city faces a $45 million shortfall by the end of its fiscal year in June, and a report recently said the city could be out of cash by mid-summer.

The mayor also ordered an immediate hiring freeze for civil service jobs, except in the Detroit Water and Sewage Department, where the city must comply with a court order allowing hiring to continue.

Bing said the layoffs would be “strategic” to protect core services like police and fire protection as much as possible. He also is pushing unions to make cuts, but thus far, they have resisted.

 

 

Detroit’s Plea: As we reported yesterday, Detroit Mayor Dave Bing is laying out his plan to keep his struggling city solvent. But a key step — getting a $220 million from the state — is getting a cool reception. While Michigan Gov. Rick Snyder hasn’t rejected it, he’s not embracing it either,

Michigan Gov. Rick Snyder

according to our partner Michigan Radio. Sara Wurfel, a spokeswoman for the governor, said Snyder is “focused on how to best help Detroit move forward in tough economic times.” But Wurfel added Detroit is free to plead its case with the state legislature.

Steelmaker Expands Training: Three years ago, global steel company ArcelorMittal started a training program in Indiana to get young adults prepared for jobs in the industry.  And now, the Cleveland plant says it’s partnering with Lakeland Community College to offer the training in Ohio, according to our partners at ideastream in Cleveland. The Steelworker for the Future program is due to start in January, and involves two-and-a-half years of college coursework and a twelve week paid internship.  At the program’s end, students walk away with an associates degree in electrical or mechanical technology.

Wisconsin Mining Controversy: Mining is making a comeback in the upper Great Lakes, but not everyone is happy about it. Eleven Indian tribes across the region have come out in opposition to a plan to a new open-air pit, iron ore mine, according to WBEZ’s Front and Center project. Proponents say the mine would create 700 jobs paying $50,000 a year. However, opponents are concerned about the impact on the environment. They met with Wisconsin Gov. Scott Walker this week.