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July 1st, 2011
The Great Lakes region has always been known as a center of advanced manufacturing. But with auto jobs disappearing, that title may be up for grabs. Now, the mayors of Louisville and Lexington, KY, want to nab it.
Greg Fischer, the mayor of Louisville, and Jim Gray, the mayor of Lexington, announced in Chicago on Thursday that they will team up for an 18-month, $250,000 study of how to turn their region into a “cluster” of advanced manufacturing expertise.
In doing so, the Kentucky cities hope to attract new investment, adding to the auto jobs the state has landed in recent years. The study, to be done by the Brookings Institution, was unveiled at the Clinton Global Initial America, where both mayors were on hand.
The two cities, which sit about 75 miles apart on Interstate 64, have gained thousands of automobile, auto parts and other manufacturing jobs over the past quarter century.
Louisville is home to a Ford assembly plant, while Toyota’s largest North American complex sits just a few miles from Lexington in Georgetown, KY, which opened in 1986.
“Louisville and Lexington, like America itself, need to ask what are our assets, what are our strengths and weaknesses, what can we leverage in new and inventive ways to create jobs and growth in a global marketplace,” Gray said.
Georgetown, and Kentucky itself, have become a model for other cities and states trying to attract investments from U.S.-based companies and international firms alike.
On Thursday, professor Michael Porter of Harvard University said regions such as the Midwest will have to find solutions to expand employment, rather than seek federal help.
“What we have in America is a collection of very different regional and local economies. The fundamental drivers of competitiveness are regional and local, they’re not in Washington,” Porter said.
He said regions had to capitalize on their “innate strengths” and build clusters, like the one the Kentucky mayors are trying to create, in order to attract jobs. Said Porter: “Regions that do this are regions that can succeed.”
July 1st, 2011
As former President Bill Clinton brought his two-day CGI America conference to a close on Thursday in Chicago, he announced an impressive sounding list of pledges by those who took part.
The conference secured 51 commitments from its participants to implement ideas that could affect 2.7 million people, Clinton said.
When fully funded, these commitments would create or fill more than 124,000 jobs, provide more than 364,000 people with access to job training, and provide entrepreneurs with $265 million in investments or loans, the former president said. “I hope that their efforts will inspire others to take action to revitalize their own communities.”
The commitments will have an impact across the region, from micro funding for small businesses in Detroit, to an emphasis on teacher training programs in Chicago. Read the full list here.
But Clinton said more would need to be done. In particular, he told an audience in Chicago, he was concerned about help for Americans in the middle of the economic spectrum, and pledged to take a deeper look over the next year.
And Treasury Secretary Timothy Geithner told the former president that the mortgage situation, which has hurt so many people in our region, still needed to be resolved. Said Geithner: “Most of what feels so hard and bad are the unavoidable aftershocks of that financial calamity.”
June 30th, 2011
Kevin Horkan from Euclid, Ohio is well-trained for an emergency. Next year will be his 30th as a firefighter. He’s a firefighter for the Cleveland Heights Fire Department, a paramedic and was a part-time policeman for 10 years. Horkan is one of several thousand public employees at the center of the collective bargaining firestorm breaking out all across the Midwest. He’s understanding about people’s animosity towards unions, and pessimistic about their future.
Horkan, 53, is openly disapproving of Ohio Governor John Kasich. But, he says he thinks he knows firefighters and police officers who voted for him. “Democrats gave us what we have, collective bargaining, workers comp…, But, I think a lot of police officers tend to be pretty conservative.
Ohio residents are likely to vote this fall on whether to keep or kill SB5, the new state law limiting a union’s ability to bargain collectively. “I don’t think we’ll have the votes,” Horkin said. “I don’t think there’s enough support to get rid of the law.”
Horkan thinks economic pressure and conservative politics are pushing unions out, but he says he sees it as “a natural swing of the pendulum.”
“Sure, you see union officers being indicted, you read about union members who, back a few years were getting paid really well and not making a very good product,” he said. “And people are struggling. People get tired of it. Attitudes are ‘I want a house too, I want a job too, I want to feed my children’.”
As reflective as Horkan is about the forces that may have sapped union support, he does get a little worked up when asked how a lack of public support makes him feel, personally. “We risk our lives every day for people we don’t even know,” he said. “I would like people to know how my wife feels when I leave the house in the morning. I make $62,000 a year, and I have stability and a pension. Is that too much for what I do every day?”
Jobs, jobs, and more jobs has become a mantra for recession-battered states around the Midwest. The solution? Get involved in helping businesses create them.
That was the message heard today in Chicago at the Clinton Global Initiative America, during a panel discussion on success stories. Its moderator: former Michigan Gov. Jennifer M. Granholm, whose state was hit hardest by the recent downturn.
Although Michigan has lost 500,000 jobs in the past few years, many of them in the auto industry, Granholm, a Democrat, said she focused on helping develop the next auto industry, namely electric vehicles.
By the time she left office last year, Granholm said Michigan had partnered with 18 companies involved in aspects of the electric vehicle’s underpinnings.
These companies, she said, have promised to create 63,000 jobs by 2010. “It would not have happened without the partnership,” Granholm said.
In Indiana, Gov. Mitch Daniels said his state has been aggressively clearing away red tape to make it attractive to new investment. (His efforts recently paid off, when Indiana wooed away the Michigan headquarters of Fronius USA.)
Daniels, a Republican, said his philosophy has been to create the “best sandbox in America” where business can operate with few obstacles. “We want companies to bet a buck in Indiana, and have a chance of getting it back.”
Every agency of state government, he said, is aligned to put business development first. If the state’s economic development office calls, “that request goes right to the top of the heap,” he said.
Despite the success stories, Granholm said she still had reservations about government involvement in job creation. “I am constantly struggling with how active government can be,” she said. The best view might be as something of a patchwork, she said, in which projects are pieced together with the partners each playing its role.
“If we aren’t afraid to have government as a partner…then I think this patchwork that is America will be a robust economic patchwork,” she said.
June 30th, 2011
Three stories making news across the Midwest today:
1. Mixed news for Midwest economy. The Midwest economy is still growing, albeit not at as fast a pace as previous months. That’s the conclusion of a report issued today from the Federal Reserve Bank of Chicago. The Midwest Economy Index decreased to +0.83 in May from +0.94 in April. It remained above its historical trend for the 15th consecutive month.
2. Chicago mayor: 625 could lose jobs. If unions do not make concessions that help the city of Chicago save $16 to $20 million by tonight, Chicago mayor Rahm Emanuel says 625 city employees could face layoffs. An agreement on labor concessions through the first six months of the year expires at midnight tonight, according to our partner station WBEZ.
3. SB5 opponents deliver signatures to Columbus. Protesters of an Ohio bill that limits collective-bargaining rights of public employees descended upon Columbus on Wednesday. Approximately 6,000 people delivered nearly 1.3 million signatures to the statehouse in hopes of placing a referendum on SB5 on the state’s November ballot, our partner Ideastream reported.
June 30th, 2011
John Fernandez had some blunt words in Chicago Wednesday for a room full of manufacturing experts.
“Let’s be honest about how we got here,” said Fernandez, the assistant Commerce Department secretary for economic development. “We adopted a macro policy that said, ‘invented here, make it here, it doesn’t really matter.’” He added, “Where you make things makes a huge impact.”
Fernandez joined mayors, CEOs, labor leaders, economic development officials and consultants from across the United States at the two-day Clinton Global Initiative America, hosted by former President Bill Clinton and held at the Sheraton Chicago.
Along with hearing from the former president and other VIPs, the participants break into working groups that make recommendations for policy steps.
The Chicago seminar marks the first time that Clinton’s initiative has focused on domestic issues. Clinton’s former economic advisor, Laura Tyson, presented some striking figures on the decline in manufacturing jobs to CGI America’s opening session.
She said manufacturing jobs had fallen 25 percent since 2005. Companies have 3 million job openings, and if all were filled, the nation’s unemployment rate would be cut in half, she said.
Fernandez, the assistant Commerce secretary for economic development, told participants in a manufacturing working group that the nation’s industrial policies — or lack of them — bore some of the blame for the big decline in manufacturing jobs the past decade.
Fernandez also said economic developers have spent too much time looking at big-picture subjects and forgetting the impact that individual investments can have. “We focus so much on the macro that we forget about the micro,” Fernandez said. “Our regions are where we plant the seed corn.”
The Commerce official said it isn’t enough to talk about the future of manufacturing. “We have to think about what America would look like if we don’t succeed,” he said. “We have a tremendous challenge ahead of us, but it can be done.” (Although the working group’s deliberations were off the record, Fernandez gave us permission to use his remarks.)
Today, the conference hears from a variety of speakers including Indiana’s governor, Mitch Daniels, and former Michigan Gov. Jennifer Granholm. Clinton will be joined this afternoon by Treasury Secretary Timothy Geithner, then the conference will announce a series of commitments by cities, companies and others aimed at creating jobs.
June 27th, 2011
Former President Bill Clinton has spent the years since he left office in 2001 holding conferences that look at problems on a global scale. But this week, he’s staging the first Clinton Global Initiative that will explore issues facing the United States, and he’s doing so in Chicago.
On Wednesday and Thursday, CGI America will examine economic topics ranging from the future of manufacturing to job creation and education as well as the new rural economy. There is a blue ribbon list of participants including Chicago Mayor Rahm Emanuel, Indiana Gov. Mitch Daniels, Los Angeles Mayor Antonio Villaraigosa, and Treasury Secretary Timothy Geithner. Michigan’s former governor, Jennifer M. Granholm, also is taking part.
Clinton talked about CGI America this past weekend on an unlikely place: Wait, Wait, Don’t Tell Me, the NPR quiz show.
The former president said his goal was to have companies and communities that participate in the session commit to creating new jobs and taking other actions to help the country. As with past CGI sessions, if they don’t make a commitment — or make one and don’t keep it — they will not be invited to a future session.
Said the former president, “The whole purpose of the meeting is to get beyond talking to doing. Once you actually have to put yourself on the line and then you know somebody’s going to know whether you did it or not, it clarifies things quickly, and you really just talk about what will work.”
Changing Gears will be at CGI America, bringing you updates here and on our @ChGears Twitter feed (#CGIAmerica).
If you could go to CGI America, what would you tell all those VIPs? Any special message for the Treasury secretary or the mayor of Chicago?
Northwest Indiana is pinching more than 500 high-tech energy jobs from the state of Michigan. Fronius USA’s North American headquarters will move from the city of Brighton, about 50 miles west of Detroit, to Portage, which lies an hour east of Chicago in Porter County, Indiana.
Michael Puente of our Changing Gears partner WBEZ reported on the story.
Keeping companies in Michigan has been a high priority for Gov. Rick Snyder, who has pushed to cut business taxes as part of his effort to transform the state. Earlier this spring, he tweeted, “During the campaign I met with Gov. Mitch Daniels and he told me the best job creation program in Indiana is the Michigan Business Tax.”
But Fronius announced Thursday that it will lease up to 400,000-square-feet of manufacturing space at the AmeriPlex business park off Interstate 80/94 and Indiana Highway 249. The company says the move will provide Indiana up to 512 jobs within five years.
The state is stepping in with more than $4 million in tax credits. Daniels joined Portage Mayor Olga Velasquez and company officials at a press conference Thursday afternoon. Daniels defended the credits, saying they make sense because the company will invest up to $26 million at the new location.
Austria-based Fronius has more than 4,000 employees worldwide. It specializes in battery charging systems, welding technology and solar electronics. The managing director of the USA division, Wolfgang Niedrist, said Indiana was chosen because it offers educated workers, access to highways and a solid supplier network.
The move to Indiana is the company’s largest investment outside of Austria, a company official said. The firm will keep a sales office in Brighton, where the company opened in 2002.
The bankrupt Borders Group is getting another 10 days to make a deal with a buyer, in hopes of coming back to life. But a judge is not happy with the terms its lenders are demanding.
According to Reuters, Judge Glenn Martin in United States District Bankruptcy Court criticized a $1 million fee that the store is paying to its lenders for the reprieve. “I think you’re getting raped, is the best way I can describe it,
he told Borders’ lawyers at a hearing in Manhattan today. “It’s very close to me just saying no.”
Borders, based in Ann Arbor, Mich., filed for Chapter 11 protection in February. It has closed 226 of its 642 stores, and had planned to shut 40 more. But today’s agreement means those stores, including many at major airports, will remain open for now.
Borders has two interested bidders, according to the Wall Street Journal, including private equity firm The Gores Group, which recently purchased the Detroit Pistons. Under today’s deal, the company has until July 1 to conclude an initial deal, and until July 29 to finalize it. If it can’t meet the deadlines, the company will have to liquidate, its attorneys say, although companies often seek extensions in bankruptcy cases.
Remember the list of Midwest companies we gave you last month that won incentives to stay put? Now, add Sears Holdings to the group that is looking at options elsewhere.
According to the Washington Post, Sears, which is based in Hoffman Estates, Ill., is considering a site in the Washington D.C. area. Sears is the parent of Sears and K-Mart.
It has a new CEO who says he wants to give the 108-year old company more of an online identity. Our Niala Boodhoo looked at Sears earlier this year.
Sears is one of 110 companies with tax breaks from the state of Illinois that are set to expire. At its current headquarters, the Post says, Sears occupies 2.4 million square feet and employs 6,200 people. It has played the incentive game before. About 20 years ago, it announced plans to move its headquarters from the Sears Tower to North Carolina, and wound up with a package that prompted its relocation in the Chicago suburbs.