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Tomorrow, Niala Boodhoo will have the second of our two part series on hidden assets in the industrial Midwest (part one is here). Niala’s story focuses on agriculture. It’s one of the biggest industries in our region, but many older farmers are having trouble finding someone to take over the land once they retire. It’s a problem our colleagues at Harvest Public Media have been tracking closely. Here’s a video they produced about one farmer in Kansas:

There’s a lot more to talk about for the future of agriculture. Be sure to check back here tomorrow to catch Niala’s story, and find out why FFA is growing in popularity, even in cities like Chicago.

It’s hard to find a rock star who speaks more directly to the Midwest than Bruce Springsteen. Over the years, his gritty, blue-collar themed music has highlighted the struggles of the working class in songs like “Youngstown” and “We Take Care Of Our Own” from his newest album, Wrecking Ball.

Bruce Springsteen, 2007, The Palace of Auburn Hills/photo by Micki Maynard

Now, The Boss’ 1982 album Nebraska, considered by critics to be one of his best, has inspired a theater group in Chicago.

Next month, the Tympanic Theater Company debuts Deliver Us From Nowhere: Tales From Nebraska. It’s an evening of 10 short plays from 11 different playwrights and 10 different directors, each inspired by a song from the album. The show runs April 26 to May 20.

Here’s how the company describes it: “The evening is filled with lost souls and terrifying characters such as specters, murderers, and supernatural dogs, as well as an ensemble of musicians performing original music based on the plays themselves, with a different musician playing every weekend of the run.”

Sound like something you’d want to see? You can find more information here.

Meanwhile, do you have a favorite from Nebraska — or a favorite Springsteen song?

Indiana Gov. Mitch Daniels

Welp, looks like Mitch Daniels stepped in it.

The Indiana governor held a press conference on Monday to reflect on accomplishments made in the latest legislative session. He talked about getting approval for full-day kindergarten, a smoking ban and a new agreement to have Amazon collect Indiana sales tax. He also talked about Right to Work, the most controversial, and significant, change in Indiana law in the past year.

Daniels said, after passing Right to Work, three companies have decided to expand their business in Indiana. Only one company, the MBC Group, has been identified publicly. Daniels said even more companies are in negotiations with the state, thanks to Right to Work.

“I probably underestimated how important an addition to our already excellent business climate this was going to be,” Daniels said during the press conference.

There’s just one thing: the one company Daniels named that expanded because of Right to Work didn’t actually expand because of Right to Work.

The Associated Press tracked down the president of MBC Group, Eric Holloway.

“We are not a union shop,” Holloway told the AP. “The effect that this was going to have was not going to affect our decision one way or another.”

Holloways company is planning an expansion that’s expected to create 101 jobs, and include $4.1 million in new investment.

The Right to Work mixup seems to have come from a press release issued from the governor’s office last month. The release included this quote from Holloway:

“With its low tax environment, robust infrastructure, superb logistic support network and ‘right to work’ status, Indiana was a no-brainer location for us.”

Holloway tells the AP he did sign off on the quote, “but probably would have changed it had he noticed the ‘right to work’ language.”

And, Holloway says he personally supports Right to Work.

But with all the controversy about Right to Work, those who support it are eager to point out the benefits. In the case of the MBC Group, the claim was a little ahead of the facts.

The Indiana AFL-CIO was quick to jump on the mistake. On its website, the union said:

While it’s not shocking, it’s disappointing that our officials would stoop to this level in order to deceive the public which they are supposed to represent. It’s equally disgusting that the administration is clearly pressuring businesses that are applicants for or recipients of state economic development incentives into furthering this deception.

This should cast doubt on any future claim made about this legislation’s economic impact.

The gaffe could also have implications beyond Indiana’s borders. As Right to Work becomes an issue in Ohio and Minnesota, you can count on this story coming up again.

A hydraulic fracturing operation near Malvern, Ohio. Credit: flickr user Chiot's Run.

A “Mid-biennium Review” sounds like just about the least exciting thing in the world.

But Ohio governor John Kasich used his “Mid-biennium” budget talk yesterday for a ground-shaking announcement. Among a number of proposals unveiled, the governor announced new taxes for the many companies that are trying to extract natural gas and oil from Ohio shale.

If you haven’t heard by now, Ohio is sitting on an oil and gas bonanza. Up until a few years ago, no one could get at it, because it’s locked away in Ohio’s shale formations. But because of a new drilling procedure you’ve probably heard of called hydraulic fracturing, or “fracking,” all that gas and oil is now available.

As our own Dan Bobkoff reported in December, there is no shortage of hype about the possibilites for fracking in Ohio. The industry says it will create, or sustain 200,000 jobs. $200 billion could be invested over the next twenty years.

Tuesday, Chesapeake Energy announced plans for a $900 million plant to process all the oil and gas it’s pulling out of Ohio’s shale formations. So the boom times have already begun.

And yesterday, governor Kasich said he wants Ohioans to get a cut of all the profits from this new industry.

The Cincinnati Enquirer quoted Kasich:

“If Ohioans aren’t benefiting, then some shareholder in Texas will benefit. There’s gold in them thar hills. How much gold, we’re not sure. But I’d rather be sharing the wealth with Ohioans than investors living elsewhere.”

So, Kasich plans to impose new taxes on oil and gas drilling in Ohio (though small producers get an exemption), and 100 percent of what the government collects will go back to Ohioans in the form of tax breaks. The governor’s office estimates the oil and gas taxes will generate between $900 million and $1 billion in five years. The tax breaks will go to people in every income bracket, though the specifics have yet to be announced.

One complication to the plan is that it means Ohioans’ tax rates will fluctuate year-to-year, depending on how much money the energy companies make.

And, of course, the energy companies don’t like the idea much.

In a statement, the Ohio Oil and Gas Association says:

“Crude oil and natural gas exploration in the state is still in its infancy and increasing the severance tax at this critical juncture will negatively impact the economic future of Ohio and its residents. For this reason, we oppose a tax increase of any kind, particularly one targeting an emerging industry.”

Kasich says the new taxes will be competitive with other states. He’s also proposing new regulations on the industry, to try to address some of the environmental concerns it creates. Among other things, the industry will have to disclose all of the chemicals it uses in the fracking process. And the governor says some areas will be off limits to drilling.

Many of the proposals in Kasich’s “Mid-biennial” review will have to get approval from the state legislature before they go into effect.

It was 30 years ago today that Ari Weinzweig and Paul Saginaw opened the doors to Zingerman’s, a New York style deli on an Ann Arbor, Mich., side street. 

Nobody knew if their concept of high quality, high priced and highly stuffed sandwiches would work. But it did.

Now, Zingerman’s is a $40 million collection of eight businesses with hundreds of people, all based in Ann Arbor, the only place where the company wants to be. And Weinzweig is out with a new book, “Zingerman’s Guide to Good Leading, Part 2: A Lapsed Anarchist’s Approach to Being a Better Leader.”

Packed inside the book are tons of tips to turn employees into energy filled, creative staffers. One of Weinzweig’s ideas is that leaders shouldn’t be the ultimate authorities: they should be servants. How do you instill servant leadership?

The most important thing, Weinzweig says, is to provide an inspiring and strategically sound vision. Detail makes a difference, he writes. “If the staff knows where we’re headed, we can all avoid wasting energy on unnecessary conversation. Staff members feel calmer and more confident when they know what’s going on.”

But staff members don’t operate in a vacuum. In a business like Zingerman’s Deli, or the Roadhouse restaurant, they’re dealing with customers all the time. How do you become servants of your customers? Weinzweig advises:

1) Find out what the customer wants

2) Get it for them

3) Go the extra mile

Find more tips from Weinzweig’s new book here. You can read how Weinzweig feels about Ann Arbor here. And learn to make the Manhattan that’s served at Zingerman’s Roadhouse here. 

If you’re in Ann Arbor today, Zingerman’s is offering all kinds of discounts to mark its 30th birthday. Check out this list. 

A rendering of the proposed Kewadin Lansing Casino. Photo courtesy of Sault Ste. Marie Tribe of Chippewa Indians.

Next week, the city council in Lansing, Mich. is expected to vote on a proposal for a $245 million casino for the city’s downtown.

The proposal is just the latest in what’s starting to look like a casino-boom in the Midwest. Both Toledo and Cleveland have new casinos opening in May. The Detroit Free Press reported last week that there are no fewer than 22 casino proposals in Michigan right now. And Chicago mayor Rahm Emanuel is still holding out hope for Illinois leaders to approve gambling in his city.

At first glance, it’s easy to see why casino gambling is such a hot topic right now. Casinos bring hundreds of millions of dollars in new investment, including construction jobs and long-term jobs for dealers, waiters, cooks and others.

Also, research has shown that regions in economic stress are more likely to use gambling as an economic development tool. Here in the Midwest, there’s been plenty of economic stress.

But it’s not exactly a settled issue whether casino gambling actually creates economic development.

So why all the interest?

First, consider the research. Casino gambling can be a contentious issue, and, as with all contentious issues, there is a lot of conflicting information on both sides. But it seems clear that casinos can create economic development. Just look at Las Vegas.

But not every region that gets a casino turns into Las Vegas. Just look at Gary, Ind.

The Federal Reserve Bank of Boston took a look at this issue in 2006, as New England states were considering more casinos. The bank concluded:

In general, whether a casino will benefit or harm a local economy hinges on whether the casino is likely to attract tourists to the region … Casinos that cater to a local market generally do not bring outside money into the economy through the spending of their patrons. In fact, such casinos may have no net ancillary economic impacts. Residents patronizing such casinos may simply substitute gambling for other goods and services.

This is a huge point to consider. If everyone who spends money at a casino would have otherwise spent that money at a local restaurant or movie theater, then there’s no real economic benefit from the casino. It’s just moving entertainment spending – and jobs – from one place to another.

It’s the out-of-towners who make the difference.

So, to really get a sense of whether casinos can improve the Midwest economy, you have to consider not just how much money is being spent at the casinos, but where that money is coming from.

The answer, in many cases, is that the money is just coming from other Midwest cities.

When our own Dan Bobkoff looked into the plans for a new casino in Cleveland, he found that business leaders weren’t hoping to take tourists away from Las Vegas. They were hoping to keep their own residents from going to Detroit and Pittsburg.

And, as partner station WBEZ has reported, Chicago mayor Rahm Emanuel is very clear about why he wants a casino in the Windy City: to keep Chicagoans from spending their gambling dollars in Indiana.

“I can’t continue to afford Chicago to have gambling … in Hammond, Ind. and lose 20-25 million a month,” Emanuel said, according to WBEZ.

This helps explain why you hear mayors talk about casinos a lot more than governors. Thirty years ago, if people in Lansing wanted to gamble, they’d go to Las Vegas or Atlantic City. Now they can go to Detroit or Mt. Pleasant. Chicagoans can go to Indiana.

And it’s a lot more irritating for mayors to see that money going right next door, instead of all the way across the country. Casinos in more cities means more cities want casinos.

The mayors and city council members that are backing casino proposals in the Midwest aren’t really trying to build a tourist empire. They’re just sick of seeing money leave the city.

They’re trying to hold on to what they got.

It doesn’t make a difference if they make it or not.

They’ve got [their own residents] and that’s a lot [for economic development].

They’ll. Give. It. A. Shot.

OHHHHHHHH …

Instructor Steve Henkelman programs a CNC machine at Grand Rapids Community College. Credit: Dustin Dwyer

This month, we’re taking a look at some of the hidden assets of the industrial Midwest – the parts of our economy that don’t often get noticed when we talk about our strengths.

We found one hidden asset right smack in the middle of our manufacturing sector. It’s a machine that’s in literally thousands of factories across the Midwest. And, though, you might not have heard of it before, the CNC machine – and the people who operate it – are at the core of our economy.

CNC stands for computer-numerically-controlled. And what the computerized machine does is it machines things. That sounds ridiculous unless you know that machine is not just a noun. It’s also a specific manufacturing process.

It’s when you cut away a material. It’s basically commercial sculpting.

“Machining is at, or very close to, the foundation of manufacturing,” says Peter Zelinski, senior editor at Modern Machine Shop magazine.

Zelinski says, even if you’ve never heard of it, CNC machining is essential to your life.

“Any product you pick up and touch, it’s not too many steps away from a machining process,” he says.

Most of the parts in your car engine come from a CNC machine. Your kitchen cabinets – CNC machine. Your computer case, your iPhone earbuds – well, no. But the mold that created them – CNC machine.

Zelinski says the growth of these machines represents the biggest change in manufacturing over the last 20 years.

The people who run them are factory workers. But they also have to be computer programmers.

CNC machinists are factory workers. But they need to be computer programmers too. Credit: Dustin Dwyer

Steve Henkelman is a teacher at Grand Rapids Community College. He points to a computer keypad, hanging off a big gray box, and tries to explain to me the programming code for CNC machines.

Trent Ohren is one of the students in Henkelman’s class.

Ohren says he has friends who do other, more traditional, manufacturing work. CNC machining is nothing like it.

“They’re in more of the automotive,” Ohren says. “So going to the bar right after they get out of work, as opposed to when I do, it’s night and day difference.   They’re covered in oil, and I smell like daisies.”

And the pay’s not too bad either.

Trent could come out of this 18-week class and get a job that pays close to double the minimum wage. More experienced machinists can make $50,000 – $60,000 a year. And they don’t need a four year degree to get there.

Right now, manufacturers are desperate for these workers.

Mike Hellman is one of the people looking for a skilled CNC machinist. He’s head of human resources for Display Pack, a company in Grand Rapids, Mich. Display Pack makes that impossible-to-open clear plastic packaging. The molds for the packaging are made on CNC machines.

Hellman’s been looking for a machinist for three months with no luck. A few years ago, machinists were getting laid off. Now no one can find them.

“People that I know that are in the industry, they’re back to work sometimes in a week,” Hellman says. “If they just put in the effort, start going and walking into the tool and die shops, they’re going to find somebody that’s in the same boat we are, where they’re looking for somebody.”

Last year, The Manufacturing Institute surveyed companies, and found that as many as 600,000 jobs are going unfilled in this country, because there aren’t enough good workers.

And the biggest chunk of that number is for skilled production workers, including CNC machinists.

Peter Zelinski from Modern Machine Shop magazine, says it’s one of the biggest problems U.S. manufacturers face.

“It wouldn’t be competition from China,” he says. “The number one concern right now is finding skilled people.”

And that’s really what the future of manufacturing in the Midwest is about. Smarter workers. Smarter machines. With computer numerically controlled machines at the heart of it all.

Previously, Changing Gears’s Kate Davidson reported on “lights-out machining,” a process that uses CNC machines. Niala Boodhoo reported on the high demand for high-skill workers, Dan Bobkoff asked “What is advanced manufacturing?” and we blogged about the soaring sales for machine tools, which includes CNC machines. 

Until now, Right to Work laws have been the subject of legislative debate. But in Minnesota and Ohio, the issue faces the prospect of being put before voters this fall.

Map Courtesy EasterdayConstruction.com

Right to Work laws prohibit unions from collecting dues in a workplace, even when they represent its workers. Earlier this winter, Indiana became the first state in the Great Lakes to adopt a Right to Work, and the 23rd in the nation to do so.

Now, unions and other Right to Work opponents are vowing to go directly tio voters to plead their cause. Here’s a look at their strategy: 

Minnesota: The Republican-controlled legislature has begun considering an amendment to the state constitution that would add Right to Work provisions. The step is taking place over the objections of the state’s Democratic Gov. Mark Dayton.

On Monday, Right To Work opponents staged a protest at the capitol, filling hallways outside a committee hearing where the initial work took place. Regardless, a state Senate committee approved the measure, sending it on to a second committee.

It must still pass there, win Senate approval and go on to the House. A similar measure has been stalled in the lower chamber, and it isn’t clear whether the bill could pass. But because the measure would amend the constitution, it requires a referendum in November, so the legislature would not have the final say.

Ohio:The same group that fought Ohio’s law restricting public employee bargaining rights has vowed to take on the Right to Work issue. Our partner station ideastream reported on the efforts by We Are Ohio to keep a Right to Work law from taking effect in the state.

Meanwhile, in Indiana, Gov. Mitch Daniels contends the state’s new Right to Work law is already show results. Daniels told reporters on Monday that three companies have already decided to locate or expand in Indiana since the law was passed. Another 31 companies have expressed interest in coming to the state.

“I probably underestimated how important an addition to our already excellent business climate [right-to-work] was going to be,” Daniels said.

 

 

Michigan’s 15-member congressional delegation doesn’t agree on everything, but it has reached a consensus on one thing: the need to save jobs at the state’s air national guard bases.

The Michigan Red Devils' emblem/via Wikipedia

Democratic and Republican lawmakers joined forces today to ask the Senate and House Armed Services committee to spare the bases, located in Battle Creek and Harrison Township.

The cuts at the outposts would mean the loss of 652 jobs, with 561 coming at Selfridge Air National Guard Base in Harrison Township, according to the Detroit Free Press. That’s the home of the 107th Fighter Squadron, known as the Michigan Red Devils.

A civilian group, the Selfridge Base Community Council, says eliminating the squadron would have a ripple effect on the community. (Beyond that, it has a very cool logo.)

Would you be affected by the base cuts?

Michigan’s Republican governor, Rick Snyder, says a Right to Work law is not a priority for his administration, and a number of Midwest governors agree. But the Michigan legislature has taken aim at a tenet of collective bargaining for the state’s teachers. 

On Wednesday, the Republican controlled legislature sent Snyder a bill that that prohibits public schools from automatically collecting dues from teachers and other school employees’ paychecks. The step affects teachers and employees from kindergarten through high school.

Supporters say the legislation will free up schools from doing the bookkeeping for unions, and require union members to write separate checks, or arrange for the money to be withdrawn from their accounts.

The ability to pay union dues via deduction has long been a method used by organized labor to encourage people to sign up. Labor leaders often have worried that if it’s difficult to pay dues, many people won’t bother.

“It could not have been a worse day,” David Hecker, the president of the Michigan branch of the American Federation of Teachers, said in a email to his members. (Read and listen to Changing Gears’ coverage of the issues facing teachers.)

Hecker said he believed the step was in retaliation for a petition drive that labor groups have launched to keep the state from enacting a Right to Work law.

These laws, like the one that recently took effect in Indiana, prohibit unions from automatically collecting dues from employees, even when the union represents their workplace.

Michigan unions want voters to consider a proposal this fall that would keep the state’s current closed shop status intact. In Michigan and many other Great Lakes states, employees must pay union dues when their work place is organized, whether or not they join the union.

Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., says he expects to see Republican-controlled legislatures try the same tactic as Michigan lawmakers, in the battle over union rights.

Such specific campaigns are easier than trying to strip public employees of all their collective bargaining rights, which worked for Wisconsin Gov. Scott Walker last year, but which backfired in Ohio. Voters there repealed a law signed by Ohio Gov. John Kasich that took collective bargaining rights away from public employees.

The broad efforts “aren’t worth the bother,” Chaison said.