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February 3rd, 2012
Call it the Timex of assembly plants. Chrysler’s Belvidere, Ill, factory takes a licking and keeps on ticking.
On Thursday, the carmaker said it will add 1,800 jobs at Belvidere, in northwestern Illinois, not far from the Quad Cities area. Some of the workers will make the new Dodge Dart, a revival of the 1970s nameplate, which Chrysler unveiled at the Detroit Auto Show. Others will produce the Jeep Liberty and Compass.
For Belvidere, and surrounding Boone County, the jobs are welcome. The area, where one in five people work in manufacturing, had a 14.4 percent unemployment rate in December, far higher than the national average.
Belvidere, which opened in 1965, has 2,700 workers, and has built a wide variety of cars for Chrysler, ranging from the small Plymouth Horizon and Dodge Omni to the big Imperial and New Yorker sedans and the Dodge Neon subcompact.
It lost 1,000 workers in 2008, not long before Chrysler got a bailout from the Obama administration and went through bankruptcy.
At one point, there was a single shift of workers at the factory, which seemed like it might be on the industry’s endangered list.
But Illinois gave the company a $68 million package of tax breaks and other incentives last year, and Chrysler is investing $700 million in the factory for improvements leading up to production of the Dart. New workers at the plant will be paid entry level wages of about $15 an hour, compared with the $28 an hour that veteran workers receive. They are expected to be hired by this summer.
February 1st, 2012
The nation was riveted on Madison, Wisconsin last year when tens of thousands of people protested Gov. Scott Walker’s proposal to dismantle most union rights for state and local workers. Walker was successful. Now, a year later, how have those changes made life different in Wisconsin? Changing Gears has been taking a look at the impact state governments have on everyday life, and I take a look at Wisconsin in the first of two reports.
It’s noon, and on the steps of the Capitol building in Madison, Wisconsin, about 100 people are gathered in a circle, singing labor songs like “If I Had a Hammer” and “Solidarity Forever”. They have a conductor, drummer, someone passing out songbooks and even a cymbals player. It’s been dubbed the Solidarity Sing-A-Long.
People wave signs protesting Gov. Scott Walker as they walk. Some signs call for his recall.
Last Valentine’s Day, when the sing-a-long began, thousands of workers were protesting at the Capitol. They were trying to get legislators to stop Walker’s proposal to take away collective bargaining rights for state workers.
Wisconsin was one of the first states in the country to allow its public workers to unionize. Dues were taken right out of their paychecks, and they were represented by unions that bargained over wages, pensions and health care contributions.
When Act 10 passed last March, the unions remained, but their collective bargaining power was gone. Now, members have to opt into the union, instead of opting out.
Walker declined requests to be interviewed for this story. But in his State of the State address last week, he provided his perspective on what he was facing last year, when Wisconsin’s budget deficit was about $3.6 billion.
Act 10 was referred to as the Budget Repair Bill.
Today, Walker claims Wisconsin has a balanced budget. (Whether or not the budget is actually balanced is controversial in Wisconsin. Walker’s spokesman directed me to this website. But a recent LaCrosse Tribune editorial offers another view.)
Walker was interrupted several times by hecklers during his speech. But he was met with applause and cheers when he noted Wisconsin’s unemployment rate, which has dropped from 7.5 percent to 7.1 percent, is the lowest it’s been since 2008.
“We’re turning things around,” he said. “We’re heading in the right direction.”
State worker Paul Wright sees things differently.
“He turned around and stabbed us in the back,” said Wright, a 24-year veteran of the state’s corrections office. He said he, like most corrections officers, voted for Walker.
Since last July, Wright estimates he has made about $900 less a month because of increased pension and health care contributions.
In his case, the loss in income means Wright’s son is going to a local community college instead of the University of Wisconsin. He hopes his son will eventually be able to transfer to the more-expensive school.
And Wright says he’s actively involved in politics for the first time. He helped collect signatures for the petition to recall Gov. Walker. Under his Packers sweatshirt, he showed me a red “Recall Walker” shirt. He has five of them, so he can wear one every day of the week.
Wright makes $26 an hour. That’s almost twice the average hourly pay for most state, county and municipal workers, according to Wisconsin’s state employees union, AFCSME Council 24.
“We now have folks who utilize food banks, food stamps, are living on the edge, paycheck to paycheck,” said Martin Bell, its executive director, adding the average pay of its members is about $14.50 an hour.
Before Act 10, the union represented 22,000 state workers. Now that workers have to sign up voluntarily, about half have done so. Beil is on the road most of the time recruiting them back into the union.
About 50 miles east of Madison, in Delafield, I stopped by the Wholly Cow Frozen Custard downtown. Delafield is between Madison and Milwaukee. The shop’s closed in the winter – it was 25 degrees when I was there, and owner Jan Stoffer says people don’t eat enough ice cream in the winter to keep it open.
Jan and her husband, Jim run the business together. In the winter, Jim works for the state teaching part-time at Waukesha Community Technical College. Jan is a business consultant. The couple don’t exactly see eye to eye on Walker.
Jim Stoffer applauded the governor’s political will in seeing Act 10 get passed.
“This guy inherited a lot of problems from Gov. Doyle,” he said. “You can’t just continue to spend money forever”.
Jan Stoffer, who used to be a teacher, disagrees. She said her husband’s comment sounds reasonable until you realize that money is being taken away from teachers, while corporations continue to make a lot of money. And she thinks it’s not just teachers – it will only get worse for all state workers.
“When they were trying to push this through, and they said, ‘Oh, don’t worry it’s not going to affect the firefighters and the police officers’. But it’s the old slippery slope. If you’re going to make that be the rule ofr a certain group, it’s going to trickle down to others. How can it not?
Remember the Solidarity Singers who are still protesting in Madison? I’ll be reporting next on police officers and firefighters who were singing, too – even though these changes weren’t supposed to affect them.
*This story was informed by the Public Insight Network. Add your story here.
It’s been a year since people first started filling the Wisconsin capitol building to protest changes in the state’s collective bargaining rules. Every day at noon, a group that calls itself the “Solidarity Singers” gathers at the Capitol. Reporter Niala Boodhoo took this video on a reporting trip there last week. Tomorrow, Niala will have a story looking at what’s changed. For now, though, check out the Solidarity Singers.
Dustin Dwyer · An Indiana Battery Maker Goes Bankrupt, Creating New Questions For A Growing Industry
January 31st, 2012
The name Ener1 may not be familiar to you.
But the company does have some of your money.
Indiana-based Ener1 is one of the major players in the new advanced battery economy that we reported on back in October. Advanced battery manufacturing has received well over a billion dollars in federal, state and local investment. The biggest chunk for Ener1 came in the form of a $118.5 million grant as part of the Obama administration’s stimulus program (the company was called EnerDel at the time).
Not surprisingly, Ener1′s bankruptcy has led to some vigorous finger-pointing in Washington.
But what will the bankruptcy mean for the battery industry in the Midwest, and the jobs it created?
The answer: Not much.
Back in October, when Changing Gears reported on the advanced battery industry, we talked to analyst Dave Hurst of Pike Research.
Today we called him back for a follow-up.
“They did not diversify fast enough to be able to survive,” Hurst says.
Ener1 says it will make it through bankruptcy with all of its divisions and jobs intact. The company says the bankruptcy process is more about restructuring debt obligations.
Still, Hurst says he doubts the company will remain viable in the automotive industry.
“It’s tough to see a strong business-model to be honest,” he says. “Basically they have to find a market that’s here now.”
The problem, Hurst says is the electric vehicle industry isn’t taking hold as quickly as people expected. Ener1′s CEO admitted as much in the press release that announced the bankruptcy.
Hurst says, if EnerDel is to survive, it’ll have to win business outside the auto industry, in things like energy storage for the electric grid or small batteries for power tools.
And he says Ener1 isn’t the only battery company that could be in trouble.
“Not all the ones that are out there now are going to survive,” Hurst says. “There’s just too much battery capacity for how many vehicles are coming.”
One of Ener1′s competitors, A123 Systems, laid off hundreds of workers in Michigan last year.
But ultimately Hurst believes these are just the growing pains of a new industry. There may be bankruptcies. There may be mergers and consolidations. But he says, battery manufacturing isn’t going away.
“As plants start to ramp up,” Hurst says, “You’re going to see a lot more growth.”
Indiana Gov. Mitch Daniels is on the verge of achieving the top item on his agenda. Indiana’s Senate is expected to cast a final vote tomorrow on Right to Work legislation, and Daniels most likely will sign it soon after
Right to Work laws prohibit a union from collecting mandatory dues at a workplace, even if they are representing the employees. Both houses in Indiana have already approved a Right to Work measure, but one house is required to agree on the other’s bill.
This morning, there were protestors at the Indiana State Capitol, singing “Solidarity Forever” as Democratic lawmakers prepared last-minute amendments to the bill, said the Indianapolis Star.
One would seek a statewide referendum on the issue. The other would let companies choose whether to continue mandatory dues.
Neither proposal is expected to be successful, because Republicans have a strong grip on the Indiana Senate.
Indiana is set to become the 23rd state to adopt Right to Work legislation, and the first since Oklahoma in 2001.
January 31st, 2012
Talking Points Memo, an influential political blog, is estimating that as much as $100 million could be spent on the recall fight involving Wisconsin Republican Gov. Scott Walker.
It quotes analysts saying spending could be two or three times the $44 million that candidates and their supporters spent during state Senate recall races last year. Walker, at least, is getting ready for a pitched battle. He raised $4.5 million in just over a month, and has more than $2 million on hand, according to TPM.
But, given the state of our economy, that got us thinking: what else could $100 million pay for in the Midwest? We found all kinds of things that carry that price tag.
Detroit Schools’ Deficit. A year ago, the Detroit Public Schools were $327 million in the red. Now, the deficit has been reduced to $89 million, according to Roy Roberts, the district’s emergency manager.
But it wouldn’t be handing us back any change. The steps the district took to reduce its shortfall means it has to pay about $20 million a year in interest, so it will have a use for the money left over from the $100 million.
Loans in Cleveland. Last week, the The Cuyahoga County Council launched a $100 million fund designed to build businesses and create jobs.
According to the Cleveland Plain Dealer, the county is offering 11 types of loans. Five types of loans, including those to attract investors for start-ups, redevelop properties and to lure large companies, will be accepting applications immediately. The others are expected to start over the next four months.
A Bunch of Robots. Ford Motor Company is spending $100 million to install laser vision robots at three factories, including the Michigan Assembly Plant in Wayne and the Chicago Assembly Plant.
The robots are meant to give the company a more accurate reading of the way its parts fit together, helping it improve quality and reduce wind noise.
Turkeys in Indiana. Farbest Foods of Huntingburg, Ind., may spend that much to build a turkey processing plant in Vigo County, as well as a feed mill and a brooding hub.
Before it can make the investment, though, it needs to sign contracts with 60 to 70 farmers in central Indiana and east-central Illinois.
Your turn: how would you spend $100 million in the Midwest?
So far, three Midwesterner governors have delivered their state of the state addresses. The image above is a word cloud created from the prepared texts of the speeches in Indiana, Michigan and Wisconsin. As usual, the speeches offer optimistic visions of what each governor has accomplished in the past year, and what they’re capable of accomplishing this year. We’ll be tracking what the rest of the Midwest governors say in their speeches. And, as we parse through what’s been said and unsaid in the speeches so far, we want to know: What do you think of your governor’s speech? Were you surprised by anything, or did it all sound like what you’ve heard before? Let us know in the comments.
January 27th, 2012
Party like it’s 1998 Ford is reporting its highest annual earnings in over a decade. The Wall Street Journal says the auto industry’s profits are part of its new math: sell fewer cars, make more money (subscription required).
Curiouser and curiouser Keeping track of Wisconsin politics gets more complicated by the day. While the Wisconsin Government Accountability Board is still busy counting recall petitions against Gov. Scott Walker, the Milwaukee Journal Sentinel reports that two of the governor’s former aids have been charged with illegal campaigning. The charges are part of an ongoing “John Doe” investigation of Walker’s staff during his time in county government. Despite the investigation and the recall threat, Walker’s poll numbers are rising.
Meanwhile, in actual economic news, the Wisconsin Assembly voted to ease the way for a proposed Iron ore mine in the state’s northern region. Republicans say it will create jobs. Democrats say the changes could lead to environmental harm.
190 Acres of transformation In Cuyahoga County, Ohio, a 190-acre industrial site represents, in microcosm, the changes facing the Midwest. Officials in the town of Beachwood are hoping to rezone the property as the industrial sector declines and other sectors grow. Officials say they want to see the property used for health care, retail and residential investment.
Obama talks higher ed President Obama will be in Ann Arbor, Mich. today to talk about his ideas for higher education funding.
January 26th, 2012
Although he faces a much-publicised recall effort, Wisconsin voters aren’t negative on Gov. Scott Walker,
A poll by Marquette University shows that Walker’s approval rating is above his disapproval rating for the first time since he took office, according to the Milwaukee Journal-Sentinel.
Voters approve of Walker’s performance 51 percent to 46 percent disapproval. Fifty percent believe the state is headed in the right direction, versus 46 percent who do not.
Walker also has single-digit leads over Democrats who might face him in a recall election.
The governor’s performance ratings bounce around a bit, depend on which organization is conducting the poll, the Journal-Sentinel says.
The most recent nonpartisan public polls on Walker were done last fall. Walker’s approval rating was 38% in a November survey by Wisconsin Public Radio/St. Norbert College; it was 47% in an October survey by Public Policy Polling; 49% in an October survey by Rasmussen; and 42% in an October survey by Wisconsin Policy Research Institute. These polls all have different methodologies, so some variation is normal.
January 26th, 2012
Last year, it seemed unlikely. Now, Indiana looks bound to get a Right to Work law.
On Wednesday, the Indiana House followed the state Senate by approving Right to Work legislation. The action came just a day after Indiana’s governor, Mitch Daniels, delivered the Republican response to President Obama’s State of the Union address.
Both houses have to approve the same bill before it can go to Daniels for his signature. The Indianapolis Star says it’s likely that the Senate will consider the House version, because Republicans are in tighter control in the Senate. After that, Daniels can sign it into law — which he could do before the Super Bowl is played in Indianapolis on Feb. 5.
Right to Work laws prohibit unions from collecting mandatory dues. Labor unions say the laws make it much harder for them to organize, since workers don’t have to support them. Some political analysts say that weakens the unions’ political clout, too.
Indiana would be the 23rd state to approve Right to Work, and the first since Oklahoma approved a Right to Work law in 2011. Indiana also would be the first Right to Work state in the industrial Great Lakes. And, with Republican governors in Michigan, Wisconsin and Ohio, it probably won’t be long before the issue comes up for a vote in at least one of those states.
Earlier this week, we told you why Daniels decided to push for the bill this year. He says he was tired of seeing Indiana lose out on projects just because it wasn’t a Right to Work state. One of the projects the state lost, said Daniels, was the Volkswagen plant that went to Chattanooga, Tenn.
Do you think Right to Work legislation is now likely in other Great Lakes states? What’s your thinking on the issue?