Tuesday, June 23, 2009

Where's the startup action in Michigan?

MEDC leader calls on firms getting state funds to invest faster in local companies

Louis Aguilar / The Detroit News

The head of the Michigan Economic Development Corp. says venture capital and private equity firms given tens of millions in state money are taking too long to invest in local companies.

The Michigan 21st Century Investment Fund was set up three years ago with $109 million from Michigan's tobacco settlement revenue. Its goal is to help jump-start the state's new economy by giving the money to investors to fund Michigan startups.

But those investors have distributed only $35 million to a dozen Michigan businesses so far. The Michigan 21st Century Investment Fund dispersed its final $35 million to four more firms Monday, including one private equity and three venture capital firms. Eight previous investment firms and one company, Microposite Inc. of Auburn Hills, have received money from the fund.

"Given our economic situation, we would like to see more action," said Greg Main, CEO of the MEDC, which promotes economic growth. "I don't hear anyone saying to me that a deal isn't around. The deal flow is here."

State data show that the pool of venture capital funding in Michigan reached $1 billion in 2008, a $100 million increase from the previous year, and that $246 million was invested in Michigan businesses in 2008, a $141 million jump. More here.

Mich. finally gets good news with small car plant


ORION TOWNSHIP, Mich. (AP) — Michigan has snatched back a few of its fast-disappearing auto jobs, winning a high-stakes competition with two other states to build General Motors Corp.'s next-generation subcompact car.

The news is a bright spot in an otherwise gloomy Michigan economy that has seen unemployment hit a nation-leading 14.1 percent, lots of housing foreclosures, unpaid furlough days for state workers and uncertainty for thousands of others worried about whether they'll still be getting a paycheck in the months ahead.

GM said Friday it would use an idled midsize car plant in Orion Township, about 40 miles north of Detroit, to assemble small and compact cars. The automaker also had considered plants in Janesville, Wis., and Spring Hill, Tenn.

GM said it expects to start retooling the Orion assembly plant in late 2010, and run two shifts there by 2011, producing 160,000 vehicles annually. The move will save 1,200 jobs.

"We're delighted," Oakland County Executive L. Brooks Patterson said. "I think the impact of reopening that plant and making the small car here will have a huge long-term effect not just on Oakland County but southeast Michigan and help us address some of the real serious employment issues that we have in this region."

A spokesman for Wisconsin Gov. Jim Doyle said GM Manufacturing Vice President Tim Lee told the governor Friday morning that the automaker chose Michigan. More here.

Study is being sought for a crossing between Port Burwell and Ohio

Both Ohio senators in Washington have urged the Ontario government to fund a feasibility study for a Lake Erie ferry that could create a new border crossing at Port Burwell.

Senators George Voinovich and Sherrod Brown have asked the ministry responsible for rural economic development to favourably consider the request from the municipality of Bayham.

The senators said a proposed ferry from the Mentor area east of Cleveland would provide a new economic corridor between Ohio and Ontario which have $88 million in trade daily.

The $550-million proposal for six modern high-speed ferries to carry transport trucks, cars and passengers would alleviate road and border congestion, reduce pollution and provide a new link between two auto-reliant economies. A downturn in the auto sector has battered both jurisdictions which could benefit from new linkages. More here.

Michigan's wind energy biz gets big lift: $100 million GE investment

General Electric Corp. CEO Jeffrey Immelt and Gov. Jennifer Granholm today unveiled the details on a $100 million advanced manufacturing, technology and software center in Van Buren Township.

The GE facility will initially employ about 1,200 employees. It will help scientists and engineers develop next generation manufacturing technologies for GE’s renewable energy, aircraft engine, gas turbine and other technology products, Immelt said at a press conference.

Work at the facility will include developing new composites, machining, inspection, casting and coating technologies.

The work will be done in a 100,000-square-foot facility to be constructed on vacant land at the Visteon Village campus in Van Buren Township.

GE software and IT employees will be housed in some of the current Visteon Village buildings and new construction will mostly house an advanced manufacturing technology lab, Immelt said.

“We’ll be putting both machinery capability and technologies to really develop the next generation of manufacturing technology that helps us be productive and have higher quality,” Immelt said.

Granholm said at the press conference that the new facility helps Michigan diversify its high-tech industry and will provide a much needed boost to the state’s economy. She said GE’s decision to locate the facility in Michigan shows how much the state has to offer high-tech firms.

“We’ve got more engineering talent that’s hungry and ready to go than anywhere in the world, and you can’t have found a better place to be able to make it a success, and quickly,” Granholm said. GE plans to begin filling positions for the new facility by the end of 2009, Immelt said.

The jobs will pay about $100,000 per year, Granholm said. More here.

German Renewable Energy Company Chooses Indiana

VAT-Getriebetechnik (VAT), an international manufacturer of wind turbines and renewable energy-powered lighting systems, announced today the company's plans to locate its U.S. headquarters and first North American manufacturing and service facility here, creating more than 120 new jobs by 2011.

The company, a provider of vertical vane wind turbines and solar-and-wind powered street lighting for municipal or neighborhood use, will invest $3.3 million to locate its North American headquarters in Park One Business Park in Muncie-Delaware County. Initially, the marketing, installation, service and maintenance operations will locate in an existing Park One building as new construction and existing buildings are considered for the future operations.

"Finding ways to be more energy independent has become increasingly necessary in today's worldand I can't think of a better place than right here in Indiana to launch the newest developments in alternative energy," said Governor Mitch Daniels. "We are celebrating today as another global leader in renewable energy innovation has chosen to plant its North American roots in our state."

VAT will split its lines of business into VAT-Service, LLC, a service and maintenance division for wind turbine gear boxes, and VAT-Energies, LLC, a manufacturing division which will specialize in vertical vane wind turbine and solar-and-wind powered street lighting production. The company's vertical vanes and unique street lighting systems are installed in locations around the world including Green Point Stadium in Cape Town, South Africa, host of the 2010 FIFA World Cup.

"We see, in the U.S. marketplace, great opportunity based on our expertise in wind technology and renewable lighting alternatives for both commercial and community applications. The 20 years of expertise we bring from Europe has enabled the VAT-Group to succeed globally. We anticipate the same success in the U.S. marketplace," said Oliver Viehweider, president of VAT-Getriebetechnik.

The German company currently employs more than 130 employees in Germany and other parts of Europe. The company will begin hiring engineers, service technicians, logistics managers and administrative staff later this year.

The Indiana Economic Development Corporation offered VAT up to $1 million in performance-based tax credits and up to $100,000 in training grants based on the company's job creation plans. Delaware County will purchase $1.5 million in solar-and-wind powered lights and a vertical vane windmill from VAT at the request of Muncie-Delaware County Economic Development Alliance-Vision 2011.

"We are excited about the opportunity to bring VAT to Delaware County. Increasing the presence of alternative energy companies is a strong component of our community's economic development effort. These are the type of high-paying, high tech companies that we want to bring to our community," said Todd Donati, president of the Delaware County Commissioners.

VAT is the second group of companies specializing in wind and renewable energy components production to select Indiana for its U.S. headquarters in the past year. Last fall Brevini announced plans to locate its North American wind turbine gear box manufacturing facilities in Delaware County, creating 450 jobs and adding millions in new capital investment.

In a report released this week by The Pew Charitable Trusts, the number of clean energy jobs in Indiana grew by nearly 18 percent between 1998 and 2007, ranking the state first in the industrial Midwest in overall job growth in the clean energy economy.

Farmers Insurance Investing $84 Million to Expand Michigan Facility

Farmers Insurance will invest $84.4 million to expand its campus in Caledonia, Michigan, according to the Michigan governor's office. The company plans to create 1,600 new direct jobs and approximately 1,100 construction jobs with the project, which will include the construction of two new buildings that the Associated Press says will total 275,000 square feet. One building will house offices, a training facility, and a call center, while the other will be used for printing and distribution operations. Construction on the new space is scheduled to begin in the fall, with the buildings opening in the spring of 2011. "We're excited about the future and what it can mean for us in this location," says Robert Woudstra, Farmers' CEO, a native of nearby Grand Rapids. Farmers is a subsidiary of Zurich Financial Services of Switzerland. The governor's office says the state has offered Farmers a tax credit valued at $62.5 million and an employee training grant of up to $335,000; local governments are also considering tax abatement.

Michigan Commercial Bakery Investing $60 Million for Expansion

Roskam Baking Company, a producer of cereal, snacks and dry baking mixes for major food companies, will invest $60.5 million to expand its facility in Kentwood, Michigan, according to the Michigan governor's office. The project is expected to create at least 1,500 new direct jobs and approximately 1,600 construction jobs over the next five years; the Grand Rapids Press reports that the direct jobs will pay an average of $12.73 per hour plus benefits. The company plans to add new production lines to accommodate increased manufacturing contracts with new and existing customers. The state is offering Roskam a $20.1 million tax credit over the next 10 years; the Press reports that the company must invest at least $25 million and maintain a minimum of 1,000 new jobs by the sixth year of the deal in order to retain the tax breaks. The city is also expected to provide property tax abatements.

Customer Service Company Opening Call Center, Hiring 1,000+ in Ohio

PlusOne Communications, a new provider of customer care services to the healthcare and communications industries, will open a call center in Akron, Ohio, according to city officials. The company plans to begin operations at the beginning of next month with an initial work force of 30 employees, with plans to grow to 200 employees by fall and to more than 1,000 over the next 18 months. The Akron Beacon Journal reports that the center will be housed in the former Firestone Bank, renamed the Verge Building; the property is owned by Jill Bacon-Madden, wife of PlusOne Communications president Robert Madden. The building was purchased for $2 from the city in 2007, and Madden tells the Journal that the company has invested more than $5 million in renovations and equipment, with contributions from the city of approximately $1.5 million to improve sidewalks, lighting, parking, and landscaping. According to the Journal, company salaries will range from $20,000 to $30,000 per year for representatives, with mid-level managers earning $35,000 to $40,000 per year and upper managers earning $60,000 to $100,000 per year; employees will also receive benefits including medical insurance. "We have a great labor work force here," says Madden, quoted in the Journal. "We have people who are disciplined. They show up for work on time. They work hard when they are working."

Biotech Company Relocating Headquarters to Wisconsin

Exact Sciences Corporation, a molecular diagnostics company that is working on new methods to detect colorectal cancer, will relocate its corporate headquarters and R&D operations to Madison, Wisconsin, according to the Wisconsin governor's office. The company expects to create up to 150 jobs over the next five years as it commercializes its research.

The company is currently located in Marlboro, Massachusetts. "We are grateful to Governor Doyle and the Department of Commerce for their support of Exact Sciences Corporation's relocation to Wisconsin," says Kevin Conroy, the company's president and CEO. "The assistance provided by the governor was a critical part of our relocation decision. We know from past experience that Wisconsin, and the Madison area in particular, is a great place to build a biotechnology company."

Conroy is a former president of a biotech company that has operations in Madison. The state will provide a $1 million loan to Exact Sciences to help with working capital and the purchase of new equipment. The governor's office did not provide information regarding the dollar amount of company's financial investment.

Monday, June 22, 2009

Grant helps explore alternative energy farming

Staff Writer

WOOSTER -- A $250,000 grant for the Ohio Agricultural Research and Development Center will allow researchers to begin assessing the potential for farmers in Northeast Ohio to grow crops, not just for consumption, but also for purpose of alternative energy.

The grant, approved by members of the Fund for Our Economic Future, is the next step in the group's efforts to expand Northeast Ohio's $8.2 billion agriculture industry.

"We're trying to improve our overall business, and what we're doing is looking at what we can do in the agriculture sector," said Chris Thompson, director of marketing and communications for the Fund. "What can we do to shift from more commodity agriculture to more specialty or value-added agriculture? Or from locally grown foods to growing crops for biomass? The Fund understands the critical role agriculture plays in the vibrancy of our region. In Wayne County and other areas, protecting and enhancing agricultural land is a top priority for communities, and we want to find ways of helping them achieve that goal.

According to an FFEF release, there are more than 2,200 farms in Northeast Ohio and about 40 percent of the region's land is used for agriculture.

Much of that land, though, is limited to commodity products, and each year more land is lost to residential and commercial development.

Fund member Lud Huck said there are currently several individuals doing research work around Northeast Ohio, and part of the grant will be used to tie those researchers together.

"This is going to touch everybody in Northeast Ohio," said Huck. "This is a strong move into the development of agriculture both for food purposes and commercial purposes in the area of alternative energy. This is a research module for a year that will put the tools together and develop a method of communicating information amongst all interested agriculture people in the region."

Huck said crops, such as Russian dandelions, which produce latex that can be used in natural rubber, and the jatropha plant, which has nuts that produce larger amounts of oils that can be used in ethanol, would be prevalent alongside traditional plantings like corn and soybeans.
"There are 15,000 vacant lots in Cuyahoga County alone where products like these could be grown that have commercial industrial value," Huck said.

Fund members concur that expanding the region's specialty agriculture production would result in higher incomes and job growth, and would also preserve the region's natural assets.

"Agriculture is a critically important industry to the economic future of our region, and this research will identify options to accelerate its growth," said Peter Meisel of the Meisel Family Foundation and co-chairman of the Fund committee that recommended the grant.

Dr. Casey Hoy, an entomologist at OARDC with a focus on agroecosystem health, will oversee much of the research, which is scheduled to be completed by next summer.

Hoy has already been working to build local sustainable food networks in the region, which is backed by a $2.5 million U.S. Department of Agriculture grant.

"Agriculture is certainly one of the biggest industries in Ohio, and Northeast Ohio leads the pack in that whole area," said Dr. William Ravlin, assistant director at OARDC. "The idea is rather than shipping in produce from Florida, California, Mexico or somewhere else, what is the potential to produce food locally and distribute it? And what is the potential to do so with a solid product that efficiently links food production with consumers and builds the local economy as a whole?"

Huck said the $250,000 grant not only has the support of the Fund, but also the Wayne Economic Development Council and Wayne Growth Partnership.

In addition to Hoy, Brian Gwin and Rod Crider from the WEDC, Jim Currie from the OARDC and Adam Briggs from the Shoolroy Foundation have also been instrumental in moving the project forward.

Reporter Bryan Schaaf can be reached at 330-287-1645 or bschaaf@the-daily-record.com.

Cleveland Students AIM for Manufacturing Careers

Cleveland, OH (PRWEB) Friday, June 19, 2009 - In Cleveland, Ohio there is no lack of enthusiasm among students who are interested in learning about careers in manufacturing. This week, 50 students began a 5-week career exploration camp at Cleveland's Max S. Hayes Career and Technical High School. Competition to attend WIRE-Net's Accelerated Introduction to Manufacturing Camp was steep with over 270 applicants vying for the 50 slots.

Those selected for "AIM" camp will enter 9th or 10th grade this fall. They were chosen based on demonstrating a minimum grade point average of 2.5, a B average or higher in math, and the recommendation of their school math teacher. WIRE-Net hopes that the camp will help build the pipeline of students who will want to attend Max Hayes, the only high school in the Cleveland Metropolitan School District that teaches academic and technical skills in manufacturing related trades.

According to Jessica Walker, WIRE-Net's AIM Camp Program Coordinator, students will learn marketable skills. "Over the course of the 5 weeks, students learn fundamental skills such as measuring, reading blue prints, basic machining, shop safety, and applied math, science, technology, and life skills. They also will tour a local advanced manufacturing plant so students see the connection between what they learn in the classroom and the skills they need for success in advanced manufacturing."

AIM Camp will operate Monday through Friday beginning June 15th through July 16th with morning and afternoon sessions. Tuition for the camp is free to students. The camp provides students with the opportunity to earn a stipend based on behavior, performance, timeliness, and attendance. AIM Camp is funded through several sources including: U.S. Department of Labor MAGICC grant to the Cleveland/Cuyahoga County Workforce Investment Board, MYCom (part of the Youth Development Initiative of Cuyahoga County and is partially funded through Cuyahoga County Board of County Commissioners and Starting Point), as well as corporate and private foundations.

Michigan cities scramble to recycle auto plants

Louis Aguilar / The Detroit News

Plans by General Motors Corp. and Chrysler Group LLC to shutter Michigan auto plants will dump 25 million square feet of industrial land onto a struggling commercial real estate market and have sparked a race against time in communities unsure what to do with vast, vacant sites.

In addition to the loss of an estimated 10,000 factory jobs in the next two years, the host communities will lose millions in property taxes they can sorely afford to forfeit: GM already has taken steps to slash as much as 80 percent of its tax liability in some municipalities.

"If you look at the history of closed plants, it's not encouraging" said Kim Hill, director of the Automotive Communities Program at the Center for Automotive Research in Ann Arbor. "They are unique facilities. I can't give you percentages of closed plants that get reopened, but in the past, it's been small."

The combined square footage of the nine plants on the pending GM and Chrysler closure lists is larger than a dozen Great Lakes Crossing shopping malls. It's double the size of the Cedar Point amusement park, or half the footprint of Grosse Pointe Shores.

While smaller plants have been reborn as other businesses, most of the nine GM and Chrysler will mothball are far bigger and more difficult to market. GM's Willow Run transmission plant, for example, is a mile long.

The targeted auto plants, including Chrysler's Conner Avenue plant in Detroit and GM's Wyoming Metal Stamping in western Michigan, are in dense urban surroundings, and cities want them razed in order to market vacant land. But demolition and environmental cleanup are enormously expensive.

"There's really been two options in the past: Convince an automaker to utilize it, or tear it down," Hill said. More here.

Monday, June 15, 2009

Regional economic development organizations' links with Michigan's universities to play influential role in state's economic recovery

Posted by Nathan Bomey Michigan Business Review June 04, 2009 06:50AM

Stephen ForrestRelationships between regional economic development organizations and Michigan's top universities are poised to play an increasingly influential role in helping the state's economy recover from its devastating economic crisis.

Central to Michigan's evolving economic development model is the tightening partnership between the University of Michigan and Ann Arbor SPARK.

U-M Vice President for Research Stephen Forrest, SPARK's new chairman, said in an interview at the Mackinac Policy Conference that one of his top priorities is spreading SPARK's model across the state. He was elected chairman of SPARK after founder and possible Republican gubernatorial candidate Rick Snyder opted not to seek reelection.

Forrest suggested that regional economic development organizations could drive economic activity throughout the state.

"We shouldn't be that concerned about it being in Ann Arbor," Forrest said. "It should be something that's good for the state and good for the region, because we're all in this together.

"So my ambition is to expand our concept of partnership and to really get these various organizations that historically might be separate to work together in a cooperative way."

Whether a shift of power to organizations like SPARK and Southwest Michigan First could lessen the role of the Michigan Economic Development Corp. is unclear and likely dependent on the outcome of the 2010 elections. MEDC CEO Greg Main could not be reached for comment.

Forrest's comments came as Michigan business leaders repeatedly suggested on Mackinac Island that the state should adopt more cooperative economic initiatives and partnerships. The concept of increased economic development collaboration appears to be gaining momentum.

"We really are one Michigan," said Ron Kitchens, CEO of Southwest Michigan First. "We can talk about regions, and regions are important - they're part of who our culture is. But our problems are endemic to the entire state."

Jeff Mason, a former MEDC official and new executive director of the University Research Corridor, said Michigan's universities are the lynchpin to the state's success. But he suggested that the URC - a coalition among U-M, Michigan State University and Wayne State University - would have to collaborate with other organizations to jolt the economy.

"Economic development is a team sport. It's a collaboration amongst universities, government and the private sector," Mason said.

Michael Finney, SPARK's president and CEO, said his organization has been working closely with Wayne County economic development officials to explore new avenues for collaboration.

SPARK and Wayne County struck a deal in 2008 with Esperion Therapeutics founder and Lipitor co-discoverer Roger Newton to establish the Michigan Life Science Innovation Center in Plymouth Township. The biotech incubator has space for some 10 companies, including anchor tenant Esperion and U-M startup Lycera - drug discovery firms that have collectively attracted nearly $60 million in venture capital.

The Wayne County incubator is outside of SPARK's traditional Washtenaw County boundaries, but Finney said it was a natural fit.

"We don't really view any place in the state of Michigan as competition to us. We view the rest of the state as partners," Finney said. "If there are things that we can do or things that we're doing that will allow the rest of the state to improve at a more rapid pace, we think it's in our best interests to do it. We think as the rest of the state gets better, the Ann Arbor region gets better."

Forrest said SPARK's economic development initiatives - which include incubator space, business accelerator activity and talent enhancement programs - could serve as a model for the state.

"And it's not out of line with the other regions that economically function within the country. You go to the Bay Area or Massachusetts, there's a very tight relationship between academia, the business sector and the government," Forrest said.

Keith Cooley, CEO of Detroit-based economic development group NextEnergy, said Michigan's tendency to provoke regionalism is counterproductive. He suggested that the trend toward cooperation was overdue.

"It's about time," Cooley said. "We're one state."

Contact Nathan Bomey at (734) 302-1725 or nathanb@mbusinessreview.com.

Urgent work for Rock County economic development

JANESVILLE — They typically fly well below the radar, working the phones and Internet, quietly meeting with prospects or handing out information at trade shows.

Doug Venable and James Otterstein are selling Janesville and Rock County as a prime location for companies to expand, relocate or start up.

With a local economy devastated by plant closings and job losses, their work has a sense of urgency.

As employment evaporates, the citizenry wants to know what its government—federal, state and local—is doing to bring relief.

The answer, at least at the local level, is as much as it can, said Venable, Janesville’s director of economic development, and Otterstein, Rock County’s economic development director.

“People get frustrated because of the loss of jobs, but James and Doug are out there every day,” said Rock County Administrator Craig Knutson. More here.

Sunday, June 14, 2009

Detroit Suburbs Beckon Fiat Executives With $1,595 Sandals

June 8 (Bloomberg)

Some people in Birmingham, Michigan, can’t wait for the Italians to take over Chrysler LLC.

Karen Daskas, owner of a women’s fashion shop called Tender, said she carries Chrissie Morris high-heeled sandals -- original price $1,595; now $795.50 -- that might appeal to Italian expatriates from Fiat SpA. A few doors away, jeweler Gary Astreins said that “new blood” should bring new jobs to an ailing economy. Next year, students at a local public high school may be able to study Italian.

“I’m preparing to work for the relocation of Fiat’s executives,” said Carolyn Bowen-Keating of Weir Manuel Realtors in Birmingham. “I’m organizing a presentation of our services at the Italian consulate in Detroit.”

Bowen-Keating, 57, is trying to win business from the expected arrival of executives from Turin-based Fiat, which would control Chrysler following federal court approval of a sale. Chrysler is based in another Detroit suburb, Auburn Hills.

Should the acquisition go as planned, 100 to 200 executives may relocate to Michigan within 18 months, according to Gerald C. Meyers, a professor at the University of Michigan Ross School of Business and a former chairman of American Motors Corp. A Fiat spokesman, Gualberto Ranieri, declined to comment on how many employees might move.

Chances are those managers will live in or near Birmingham, population 20,000, if the housing choices of other car industry executives are any guide.

‘Green and Beautiful’

During his almost two-year tenure as Chrysler’s chief executive officer, Robert Nardelli used to stay in Birmingham at the Townsend Hotel. Rick Wagoner, General Motors Corp.’s former CEO, lives in the city. His successor, Fritz Henderson, lives a mile away in Bloomfield Hills. Daimler AG CEO Dieter Zetsche lived in Bloomfield Township when he ran the U.S. operations of DaimlerChrysler.

Birmingham is in Oakland County, where much of Detroit’s middle class moved after the city’s riots of 1967, said Robin Boyle, professor of urban planning at Wayne State University in Detroit. Birmingham’s downtown is about 10 miles (16 kilometers) northwest of Detroit, and is within 20 miles of the headquarters of GM, Ford Motor Co. and Chrysler.

“The place is very green and beautiful and conveniently located for those working in the auto sector,” said Stefano Aversa, the Florentine co-president of restructuring firm AlixPartners LLP. “The reputation of Detroit and its surroundings is much worse than it deserves.” More here.

Great Lakes Bay Region has competition when it comes to attracting solar industry

by Jeff Kart The Bay City Times
Friday June 05, 2009, 7:30 AM

In February, more than 100 business and community leaders gathered to celebrate the launch of Michigan Solar Advantage - a tri-county effort to attract solar investment to the Great Lakes Bay Region.

The announcement didn't make national news.

If Bay, Saginaw and Midland counties hope to grow a solar economy in the area, they'll have to get in line.

Numerous other states are running ahead of Michigan in the race for solar manufacturing, based on recent investment announcements and incentives to lure in business and jobs. And globally, most solar panels are made overseas, in places like China and Malaysia.


Reporters Eric English and Jeff Kart look at how solar energy businesses are moving into the Great Lakes Bay Region.

Michigan is definitely a hotbed of activity. But there is competition," said Monique Hanis, director of communications for the Solar Energy Industries Association, a national trade group in Washington, D.C.

In the United States, Ohio, Tennessee, Oregon and Nevada have attracted big solar companies to their states in recent months.

While Michigan is emerging as a hub of U.S.-based investment, thanks to giant solar-material maker Hemlock Semiconductor Corp. in Saginaw County, German and other foreign solar companies have been locating in other states, Hanis said. More here.

Obama Offers 'Rust Belt' Aid to Offset GM Bankruptcy

Secretary Hilda Solis announced plans to provide Michigan with another $49 million to help retrain laid off workers.

By Karen Dybis, Agence France-Presse June 2, 2009

Armed with aid packages and promises of a better future, President Barack Obama's cabinet members fanned out across the U.S. "rust belt" on June 2 to calm concerns in the wake of a bankruptcy filing by General Motors.

The political risks for Obama were high as the government took a 60%stake in the troubled automaker in exchange for providing $50 billion dollars to help finance a restructuring which includes plans to close 14 plants and cut 21,000 U.S. jobs.

The layoffs will hit states like Michigan and Ohio which are already devastated by a decades-long decline in the manufacturing base. Labor Secretary Hilda Solis announced plans to provide Michigan with another $49 million to help retrain laid off workers while touring a GM engine plant in Romulus, Michigan. Some 700,000 jobs have been lost in the state of Michigan alone since the beginning of the decade.

"I know that it's staggering right now, but the Obama administration is fighting like the dickens to turn it around," Solis told a small group of workers.

The fuel-efficient and hybrid engines built at Romulus will help General Motors reshape its business for the 21st century, Solis said, and the administration will help fuel the growth of "green" jobs.

"Traditions change, history changes and it changes us," Solis said. "It's time to step up to the plate and be ready for that change." More here.

Michigan Works to Remake Itself Without King Auto


DETROIT — The former General Motors Centerpoint truck plant in Pontiac, Mich., is another empty building that served for years as a reminder of the declining fortunes of American automakers.

But the day after G.M. filed for bankruptcy, it was bustling with activity.

Ed Montgomery, the Obama administration’s director of recovery for auto communities and workers, was touring the building with camera crews in tow.

Amid all the grim auto news, it was as good a photo op as he could have hoped for — the building was the future home of the Motown Motion Picture Studio.

The state, with the help of incentives, lured 25 film crews to Michigan last year to shoot movies like “The Day the Earth Stood Still” and “Gran Torino,” from Clint Eastwood, and officials are hopeful about a new growth industry.

“I’m very optimistic about the project,” said Mr. Montgomery, adding that the studio could create 3,000 new jobs. “That’s an excellent start.”

But any promising starts in Michigan are overshadowed by the brutal reality of the state’s economic plight. Just across the street from the building Mr. Montgomery was touring, workers at a huge G.M. truck plant learned the day before that their factory would be closing, one of seven more Michigan plants the automaker plans to shut down.

G.M. has promised to use its tour through bankruptcy to become a more nimble and competitive company, but Michigan faces an even tougher task in reinventing itself.

For all the talk of California’s economic woes, the distress in Michigan is greater. About 800,000 jobs have been lost in the state — about one in every six — since 2000, and its unemployment rate has reached 12.7 percent, higher than any other state.

The fallout has been even worse in heavily populated southeastern Michigan. Manufacturing jobs in the seven-county region that includes Detroit have fallen 51 percent since the beginning of the decade, and auto-related positions have fallen 65 percent.

The economic crisis has been so severe that Michigan, with a $1.4 billion budget shortfall, is closing eight prisons to save money. It is also canceling more than 130 road and bridge repair projects because the state cannot come up with enough money to get matching federal funds.

“Movie studio jobs are going to be measured in the hundreds,” said Don Grimes, an economic forecaster at the University of Michigan. “It’s nowhere near the replacement numbers for what’s going on.”

On a broader level, the troubles of the auto industry are having a profound impact on the overall United States economy. The industry — with Michigan as its center — now accounts for only 1.5 percent of the nation’s economic output, down from 3 percent in 2007 and 5 percent at its peak in the 1950s.

The automakers have historically played a big part in ending recessions. Car companies, in the past, would increase production and add workers to satisfy pent-up consumer demand after a downturn. But now, the industry’s troubles may be prolonging the misery.

“If not for the problems in the auto industry, this recession would have been much milder,” said Ben Herzon, an economist at Macroeconomic Advisors, in St. Louis.

In Michigan, the state’s leaders are hoping to build on what’s left of the once-mighty Big Three automakers, and attract new jobs tied to the alternative-fuel vehicles of the future.

The state has authorized tax credits to support a new battery manufacturing plant for G.M., and similar assistance for three other proposed battery projects. The jobs created will number in the hundreds at first, but state officials are hopeful that Michigan will be at the center of battery development nationwide.

Still, battery production has a long way to go to match the jobs being lost. On Monday, G.M. opened a new battery lab at its Warren, Mich., technical center that will be used by an existing team of about 1,000 engineers. On the same day, the company said it would cut an additional 400 union jobs by shutting down medium-duty truck production in Flint.

Michigan is also pursuing wind-power technology, solar-panel manufacturing, even production of railroad cars — any viable industry that might be interested in hiring the thousands of engineers who used to work in the auto industry.

“This community still has a lot of things going for it,” said Senator Carl Levin, Democrat of Michigan. “This is the heart of the automotive research capital of the world, and there’s a strong structure to build on.”

The bankruptcies of G.M. and Chrysler have, if nothing else, kept both of the automakers alive for the foreseeable future. The state has thus avoided its worst nightmare — that G.M.’s headquarters in Detroit and Chrysler’s sprawling technical center in Auburn Hills would be added to the list of vacant buildings along the Interstate 75 automotive corridor.

The research and development campuses at the Detroit automakers, as well as new operations occupied by Toyota and Hyundai, are the foundation for growth in new technologies like lithium-ion batteries.

But those operations cannot replace the tens of thousands of manufacturing jobs that G.M., Ford, Chrysler and their suppliers have shed in recent years.

White-collar positions have also steadily decreased at all the automakers and their suppliers. In response, Gov. Jennifer Granholm started a retraining program in 2007 — “No Worker Left Behind” — to provide up to two years of free tuition to unemployed workers. So far, more than 60,000 people have signed up.

Providing education for laid-off workers is a priority for Governor Granholm, who joined Mr. Montgomery last week on his tour of the Pontiac movie studio.

“We are not interested in looking in the rearview mirror,” she said. “We need to be able to play both offense and defense.”

Retraining is essential to broaden the skills of factory workers and others in the hardest-hit segments of the economy. “The recession is just crushing industries that tend to employ people with less education — construction, manufacturing, retail stores,” said Mr. Grimes.

Classrooms at community colleges across the state are jammed with former auto industry employees trying to prepare themselves for a new career.

Greg Cortis, 36, had been a contract worker at G.M.’s huge technical center in Warren, Mich., for three years before he was laid off in October. He is taking courses in carpentry, electrical work and other construction skills in Oakland Community College’s facilities management program.

Leaving the auto industry behind, after a total of 15 years in the business, was difficult, he said, but a fact of life in today’s Michigan. “You’ve got to work,” said Mr. Cortis. “I don’t want to be on a two- or three-year unemployment extension.”

Indiana: A hobbled march forward

From The Economist print edition

Finding new things to do in the depths of the rustbelt

STEVEN CHU, the energy secretary, who specialises in atomic physics, travelled on June 2nd to Fort Wayne, Indiana, which specialises in pickup trucks. General Motors (GM) had declared bankruptcy the day before, and Mr Chu was one of many cabinet members sent to cheer up the rustbelt. He toured a local firm that makes geothermal heat pumps, then announced $50m to promote such technology. On the far side of town Orval Plumlee, the president of the local United Auto Workers, was too busy to leave the union hall. Panicked workers had been calling him non-stop.

As a manufacturing giant topples, Indiana finds itself in an odd position. GM’s bankruptcy will devastate Michigan, the rustbelt’s feebly beating heart, and Indiana will suffer too. The state had about 80,000 workers in the car and parts manufacturing industry in 2007, the most recent numbers from the Bureau of Labour Statistics. But Indiana is not typical of the region. Before the recession the state was bustling, its unemployment rate was below the national average.

Mitch Daniels, the governor, may have to tap state reserves to pass a budget, but on June 1st he insisted that “Indiana remains in vastly better shape than most states and any of our neighbours.” Its economy has made progress, with one foot stuck in the past and a toe dipped in the future. It is a promising stance, though a wobbly one.

Indiana is still a laggard in many areas. Only 21% of those aged 25 and older have a college degree, compared with 28% across the country. Hoosiers’ average income has failed to keep up with America’s, sliding from 32nd place among the states in 1997 to 40th a decade later.

Indiana’s economy is more dependent on manufacturing than any other state. But as the Big Three’s clout has waned, Indiana has evolved accordingly. Less powerful unions and ample foreign investment make the state what Morton Marcus, a prominent local economist, calls “the middle finger of the South thrust into the North.” Indiana’s output of car and parts manufacturing grew by 31% from 1997 to 2007. Michigan’s shrank by 20%. The day before GM’s chief executive first asked Congress for a bail-out, Indiana celebrated the dedication of a Honda factory. More here.

Wednesday, June 3, 2009

Where are Wisconsin business incentives?

JANESVILLE — When a company looks for a site for a new facility, the discussion often starts with geography, moves to labor costs and ends with state incentives.

In 2005, Janesville lost on the first and last elements in the battle to land a $100 million Lowe’s distribution center and its 500 jobs.

Lowe’s decision to build 1.4 million-square-foot facility in Rockford, Ill., was based on two factors. Rockford is only 45 miles from DeKalb, which Lowe’s said was the geographic center of the area to be served by the facility.

And Illinois officials brought a $26.1 million incentive package to the table. Janesville was able to muster only $15.6 million from state and local sources.

The lessons learned in 2005 take on more importance now as Janesville works to recover from the loss of thousands of auto industry jobs.

The Lowe’s project is not unique.

Wisconsin communities routinely find themselves on the short end of recruitment battles with neighboring states that are more freewheeling with incentive dollars and tax abatement programs.

When they’re not losing companies to foreign countries, Midwestern states are increasingly seeing companies relocate to or expand in other U.S. regions. More here.

Local officials consider impact of GM bankruptcy

by Tom Tolen The Livingston Community News
Tuesday June 02, 2009, 3:52 PM

General Motors, the once-mighty corporate giant whose brands were household names and its plants the lifeblood of many U.S. communities, filed its Chapter 11 petition in New York this week, marking the fourth-largest bankruptcy in U.S. history and the largest for an industrial company.

It's hard to gauge what the impact will be on Livingston County, but it's not good, according to local automotive and economic experts.

While the county does not have any auto assembly plants, it is home to many suppliers, several of which have closed their doors in recent months, putting hundreds out of work, said Livingston County Economic Development Council Director Fred Dillingham.

Auto supplier, Metaldyne, which has a facility employing about 100 people in Hamburg Township, also filed for Chapter 11 bankruptcy protection last week.

A company spokesman said it's unclear if this move will affect the Hamburg plant.

"We have a number of companies with as much as 90 percent of their business from GM; we have an awful lot of trickle-down effect from GM," Dillingham said. More here.