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February 15th, 2012
In many ways, the headquarters for Eastern Floral in Grand Rapids, Mich. is like a factory. It’s in an old building with brick walls. The floor is smooth, cold concrete. A noisy printer rattles off new orders.
But of course, it smells amazing in here. Designers stand at long wooden tables, primping and pruning flowers. Red tulips. White daisies. Yellow roses. And just about any other flower you can imagine.
Bing Goei, the owner, says this work is more like artistry.
“I think you have to be born with that.” he says. “I was not. I admit it.”
Goei says this with a laugh.
But he was born with something else that turned out to be its own asset. He was born with a foreign birth certificate. His parents were Chinese. He was born in Indonesia, then moved to the Netherlands. From there, they moved to Grand Rapids, like a lot of Dutch people before them. Except, they have a Chinese name.
And like many of those immigrants before him, Goei worked hard. He started in the flower business in high school. Now, Eastern Floral has seven locations, about 60 year-round employees – twice that around Valentine’s Day – and the company has over $5 million in annual revenue.
Goei says being an immigrant, and being an entrepreneur, there’s a connection there.
“Almost every immigrant that comes to this country has come because they see America as that land of opportunity,” he says. “So immediately, their drive is to fulfill that dream.”
The data on this backs Goei up.
The Kauffman Foundation reports that immigrants are twice as likely as people born in America to start a business.
Richard Herman is an immigration attorney in Cleveland. Herman and Cleveland Plain Dealer reporter Robert Smith wrote a book called Immigration, Inc.
Herman could go on all day with stats about how entrepreneurial immigrants to the U.S. are.
“Immigrants are filing patents at a two-to-one ratio [compared to] American-born,” he says. “Immigrants are more likely to have advanced degrees than American-born.”
And there’s more:
- In Silicon Valley, half of the tech companies were founded by immigrants. In Ohio, that rate is about 14 percent. It’s 17 percent in Indiana, 27 percent in Illinois and 33 percent in Michigan.
- Nationwide, 40 percent of today’s Fortune 500 companies were founded by immigrants, or the children of immigrants – like Steve Jobs.
Immigration is controversial in this country right now, because of added social service and enforcement costs, and because many believe unemployed American-born people could fill some of the jobs taken up by immigrants.
But in study after study, the data all points in one direction: Immigrants create more jobs than they take.
In the Midwest at least, policy makers are starting to take notice.
“I’m not into the politics of immigration, says Michael Finney, who heads up the Michigan Economic Development Corporation. “The facts of immigration says it’s good any place in the United States. The politics of it, obviously, says something different. And I think there’s just an awful lot of confusion with regard to the kind of immigration that’s really good for the United States.”
Finney says his office does work to increase opportunities for people born here.
“But we’d be remiss if we decided to ignore or work against the immigrant population,” Finney says. “Particularly those that are educated at our universities, and in many cases, they’re earning advanced degrees. And after completing those advanced degrees, we’re requiring them to leave the United States and go back to their country, and compete against us.”
Retaining and attracting immigrants has become a major focus for Finney, and the man who hired him, Michigan Governor Rick Snyder. They’ve started an initiative called Global Michigan.
More programs like it are popping up in the Midwest. In the next story for our series, we’ll look at some of those efforts.
The hope is, investing in immigrants will pay off, like it has many times before in this country.
February 13th, 2012
When the financial crisis hit four years ago, it threatened an ambitious mixed-use waterfront development in Cleveland’s moribund Flats area. Developer Scott Wolstein could no longer find credit.
Then, millions flowed in from an unexpected source: a group of foreign investors using an obscure immigration program called EB-5. The government gives visas to investors who invest in the US economy and create US jobs.
EB-5 was the main incentive for the Cleveland International Fund, which sought foreign investment to revitalize Cleveland. At the helm was A. Eddy Zai, an immigrant himself, who had success convincing others to invest in the Midwest.
Now, Zai is in big trouble. Last week, a federal indictment charged Zai with 34 counts related to bank fraud, according to the Plain Dealer. He’s accused of bilking a credit union of nearly $17 million in bad loans, and contributing to its collapse.
Among the charges: bribery and conspiracy. The St. Paul Croatian Federal Credit Union was liquidated two years ago, in one of the nation’s biggest credit union failures.
Crain’s Cleveland Business reports that Zai’s success was indeed too good to be true. The fraudulent loans funded the rapid rise of Zai’s businesses (whose website is now “under construction“). People who did business with Zai are speaking out, albeit anonymously.
One told Crain’s that Zai talked a good game. Another called him an opportunist. The Cleveland International Fund plans to continue without Zai, but in a region trying to shed a reputation for corruption, Zai’s indictment is perhaps another knock on Cleveland’s image.
Clarification: The Cleveland International Fund and the Flats East Bank project are not involved or implicated in the charges against A. Eddy Zai. He is no longer involved with either. CiF says in a statement: “CiF never sought nor obtained any loan from the financial institutions in question.”
February 10th, 2012
Earlier this month, Indiana became the latest state to go right-to-work. That means unions can’t force non-members to pay dues. It was a different story seventy-five years ago. The United Auto Workers was in its infancy, with little power. Then, workers at a Fisher body plant in Flint sat down on the job. After 44 days, the UAW became the official bargaining agent for auto factory workers. Many credit the protest with ushering in an era of strong unions and a better standard of living for workers.
Union workers celebrate the anniversary this week at their annual White Shirt Day. MLive reports 500 people attended the event at Flint’s UAW Local 651 Friday. UAW President Bob King used the occasion to call for new protests and action from his members. Faced with a possible spread of right-to-work legislation to states like Ohio, and what he sees as right-wing Republicans attacking workers’ rights, King said the union will soon train its members to take part in nonviolent, but possibly illegal demonstrations across the nation, according to the Detroit News. No word on whether those protests will involve sitting down on the job, like their forbearers in the 1930s.
February 9th, 2012
When you drive across the Great Lakes to Buffalo, you probably go through the town of Tonawanda — one of the most industrial places in our region. Now, a General Motors engine plant there that’s been closed since 2004 is getting some new life.
GM said Wednesday that it will revive Plant 4 at its Tonawanda engine complex for use as a training center and for production logistics. The move comes as GM is investing $900 million in its other three engine plants there.
The company is hoping the move eventually will lead to several hundred new jobs, according to the Buffalo News. The announcement came at the start of the Buffalo Auto Show.
Plant 4 first came to life during World War II, when it was used to assemble aircraft engines for Pratt and Whitney. Later, the 1.1 million square foot facility assembled big 3.1 liter and 3.4 liter engines, before it was shut down. Since then, it’s been used as a warehouse and for some shop work.
Under GM’s plan, the plant will be put back into use to train workers in the rest of the Tonawanda complex, and also as what’s called a “Logistical Optimization Center” or LOC.
Starting in April, workers will put together kits of the parts needed on the engine assembly line. Pre-assembling the kits means that employees on the engine lines won’t have to pick out the parts themselves. That should speed up production, and clear out space near the assembly line where individual bins of parts are kept now.
Toyota uses a process like this at its Tsutsumi plant, near its Toyota City complex in Japan, and it’s also implementing the LOC idea at its new plant in Blue Springs, Miss.
Robert Coleman, shop chairman for Local 774 of the United Auto Workers told the newspaper that between 100 and 200 people will be hired to staff the LOC over the next two years as it ramps up to three shifts.
The work will be handled by Tier II employees, who are paid a lower rate than veteran union members. (Read Changing Gears’ coverage of two-tier employees.)
At some GM plants, the LOCs are run by vendors who sometimes do the work off site. But Coleman said the UAW negotiated to do the work at the plant, by its members.
Toyota said Wednesday it plans to move production of the Highlander, a mid-sized SUV, out of Japan next year and into its plant in Princeton, Ind.
It will spend $400 million to expand its operations there, and once that’s completed, the plant will supply Russia and Australia along with North America. Toyota also builds the Highlander in China for the Chinese market only, but it says Highlander will no longer be built in Japan after 2013.
The investment will add 400 new jobs at the Princeton plant, which employs 4,800 people. The factory, which is southern Indiana, builds the Highlander, Sequoia SUV and the Sienna minivan. Toyota says it plans to build about 50,000 more Highlanders a year there.
“That’s great news for this region, for our American customers, and for the U.S economy,” Yoshi Inaba, Toyota’s North American chief executive, said in a speech to the Economic Club of Chicago. Every new auto job, he said, creates three and a half “spin off” jobs to support those workers.
February 6th, 2012
On Friday, Caterpillar’s Progress Rail Services said it was closing its 62-year-old Electro-Motive Canada operation in London, Ontario, the subject of a union lock out since the beginning of the year. Now, it looks like some of the plant’s 475 jobs could be headed for Indiana, reports the Globe and Mail in Toronto.
Caterpillar held a jobs fair in Muncie, Ind., over the weekend, that drew thousands of applicants. Some job seekers showed up at 4 a.m., five hours before the company began letting people in the door. In all, about 3,000 people turned out, according to the Muncie Free Press.
The New Year’s lock out of the Canadian Auto Workers union came after the CAW refused to accept deep concessions that would have cut hourly pay in half.
The move comes just as Indiana is implementing its new Right to Work law, signed by Gov. Mitch Daniels last week. The law prevents unions from charging mandatory dues, even if they represent a workforce.
In explaining the shutdown, Billy Ainsworth, the CEO of Progress Rail, said in a letter to employees that all the company’s facilities “must achieve competitive costs, quality and operating flexibility to compete and win in the global marketplace, and expectations at the London plant were no different.”
February 3rd, 2012
Politics is front of mind here in the Midwest. We’re also thinking about what to wear, watch, and where our friends went. Here’s a roundup of our top Changing Gears stories this week.
WiSCONSIN: Niala Boodhoo went to Madison, where she showed us how union members are still protesting a year after Gov. Scott Walker eliminated public employee collective bargaining rights. She reported on how they’re faring.
RIGHT TO WORK: Indiana is now the nation’s 23rd Right to Work state, only two months after Gov. Mitch Daniels made the legislation one of his top priorities. Will Michigan be next?
MIDWEST MIGRATION: Our Public Insight team has been tracking the stories of people who’ve left our states. There’s still time for our exiles to call us and leave messages for the folks back home. Meanwhile, read much more on our dedicated page.
T-SHIRTS: If you seek a Midwest t-shirt, look about you. Dustin Dwyer found our states are chock full of small companies making t-shirts that represent our region.
DIY DETROIT: Have you found that all those documentary films about Detroit are starting to look the same? Dustin offers you a how-to kit for making your own Detroit documentary.
Finally, a shout out to Troy “Trombone Shorty,” who sings the Changing Gears theme. He’s been immortalized by the New Orleans Jazz Fest.
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.
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.”