Saturday, August 15, 2009

Shuttered factories, shattered lives in US rust belt

By Mira Oberman (AFP) – Aug 2, 2009

DETROIT, Michigan(AFP) — Weeds have not had time to overtake factories shuttered in the wake of recent bankruptcies at General Motors, Chrysler and a host of suppliers, but the signs of shattered lives are spreading as the economically devastated region, dubbed "the rust belt" after its steel industry, fails to absorb the collapse of the auto industry.

Long lines at the unemployment offices. Empty shelves at the food banks. Boarded up businesses. Homes lost to foreclosure, their contents strewn on the street.

Michigan, the birthplace and home of the US auto industry, is the hardest hit.

"There's just no doubt that region has faced an incredible tsunami of events," said Mark Partridge, an economist at Ohio State University.

"It's really tough on the psyche... they've had one failure after another."

In the past ten years, Michigan has lost half its manufacturing jobs as the Detroit Three saw their share of US auto sales slide from 70 to 45 percent.

That's more than 543,000 people forced out of plants where the wages were usually good enough to pay for a nice house, a college fund for the kids and maybe even a cottage.

Most blame management for pumping out ugly, unreliable cars people simply didn't want to buy.

Some blame the union and its gold-plated benefits, while others say it's the government's fault for shifting the burden of healthcare costs to employers.

But simply put, GM, Ford and Chrysler had been losing market share to Asian automakers for decades.

They managed to post record profits in the 1990s by developing gas-guzzling sport utility vehicles, but were slow to match the smaller crossovers introduced by Toyota and Honda.

When fuel prices soared, the Big Three tanked.

The plant closures started in 2005 and the restructuring plans deepened as the economy slowed in 2007. The union made historic concessions. Management got focused on fuel efficiency and quality.

And then -- just when it looked like they might pull through -- the credit crunch and financial crisis hit in the fall of 2008. US auto sales fell to lows not seen in decades.

Ford survived with the help of massive loans it secured before credit dried up, but GM and Chrysler were forced into bankruptcy protection and a 50-billion-dollar government bailout.

Michigan went from having one of the lowest unemployment rates in the country -- 3.3 percent in June of 2000 -- to topping the list every single month for over three years.

More than 740,000 people here were actively looking for work in June as the unemployment rate hit 15.2 percent. An untold number have moved away or simply given up.

"I think there's a lot of hope," said Andy Levin, deputy director for Michigan's department of energy, labor and economic growth.

Governor Jennifer Granholm -- a charismatic and energetic speaker with close ties to President Barack Obama -- has been traveling the globe to pitch the state's resources to prospective employers.

She's making a major push to draw alternative energy jobs, touting the state's experience with advanced manufacturing and engineering its easy access to the shipping lanes and wind power of the Great Lakes.

State officials have also devoted millions of dollars to an innovative retraining program for unemployed and low-income residents and have launched a major tourism campaign promoting Michigan's miles of pristine shorelines.

"It's an incredibly beautiful place and we have all these incredible water resources and our manufacturing process and know-how," Levin said in a telephone interview.

"We can make things cheaper, faster, better than other places because we have the highest concentration of engineering talent."

The success stories fill 12 pages of a website set up by the state's economic development corporation to tout the "Michigan Advantage."

A 2.9-million-dollar investment by a medical device firm (108 jobs). An 84-million-dollar expansion by an insurance company (1,600 jobs). A new, 220-million-dollar plant to build batteries for hybrid cars (498 jobs).

They pale in comparison to the 337,600 jobs Michigan has lost in the past year alone.

"The fallout from the shrinkage of the auto industry -- even in the best scenario -- we will be feeling that for years," said Charles Ballard, an economics professor at Michigan State University.

"The downward trend has been going on for 60 years, so it's not going to be fixed by Thursday. Even if they do the right things it'll take years before they bear fruit."

Copyright © 2009 AFP. All rights reserved.

Healthy Lake Erie means stronger economy

Congress is getting ready to vote on legislation that could pump up to $475 million into funding for Great Lakes restoration.

With blue skies and the temperature in the 80's, this was a perfect day on Lake Erie. At Edgewater Beach in Cleveland, lots of kids were playing in the shallow water near the warm sand.

With 10,000 miles of freshwater coastline, millions treasure the freshwater seas known as the Great Lakes. Patty Palyu and her daughter Christine were walking back to their car after a great day in the sunshine at Edgewater.

"I grew up with the tradition of going to the beach whenever our family had the chance to get to Lake Erie," said Patty. "And it's free, it's close and beautiful."

Christine Palyu added, "the water today was very clean. I just hope people in Washington understand how important this is for all of us."

In downtown Cleveland, U.S. Senator Sherrod Brown talked about the impending vote in Congress to provide $475 million in funding for Great Lakes restoration.

Senator Brown said, "this federal money just makes great sense. Investing in the Great Lakes region is an important way to promote economic development."

The economists at the Brookings Institute think tank estimate that the Great Lakes region would see at least a $2 economic benefit for every $1 invested in restoring Lake Erie and the other Great Lakes.

Kristy Meyer, director of Clean Water Programs for the Ohio Environmental Council said, "we need to send a clear message to Congress. Stand up for the millions of people who depend on the Great Lakes for their jobs, drinking water, and way of life."

Calvin Jefferson was taking his wife Anne and their three children to the lake this afternoon.

Said Jefferson, "I'd pay to get $2 dollars back for a $1 investment if it's something worth it, like the beaches here."

Across Northeast Ohio boaters and fishermen know the treasure that we have with our billions of gallons of fresh water.

Fishing charter captain, Mike Blankenship walked off his dock at the Inner City Yacht Club and said, "Look around. This is the walleye capital of the world. Let's get it together and use it right".

But invasive species like the goby are a constant threat.

Getting rid of them could be part of the federal funding package. The federal restoration plan would include cleaning up the rivers and tributaries that flow into Lake Erie.

Carol Caruso, Vice President of the Greater Cleveland Partnership said, "in terms of jobs, the economy, the lifestyle and the attraction of people to this wonderful city. I can't think of a city that's better positioned to take advantage of this federal funding."

Cleveland understands the need and the priority of restoring the sweet water seas. And many hope that Congress won't miss the boat when the Senate votes on the Great Lakes appropriation in September.

© 2009 WKYC-TV

Dow battery factory will have ripple effect on area's economy

by Eric English | The Saginaw News
Thursday August 06, 2009, 7:15 AM

MIDLAND - Construction of a huge new factory in Midland to make advanced batteries for the automotive industry will break ground in October or early November, a spokeswoman for the Dow Chemical Co. said Wednesday. When completed, the factory will employ an estimated 800 people.

"It's entirely our intention to move quickly on this, to get it up and operational and hire people as soon as possible," Dow spokeswoman Kristina Schnepf said Wednesday.

Dow will build the 800,000-square-foot factory as a joint venture with batterymaker Kokam America Inc., which currently produces batteries used in electric vehicles and by the military, Schnepf said.

The location of the factory will be on Dow property at the corner of Saginaw Street and Bay City Road, near the Genji restaurant in Midland.

Local leaders say the project will help the entire Great Lakes Bay Region's economy.

"The impact is going to be enormous," said JoAnn T. Crary, president of the economic development agency Saginaw Future Inc.

Dow officials were in Detroit on Wednesday to hear Vice President Joe Biden, who announced a $161 million Department of Energy grant to support the proposed battery venture between Dow and Kokam.

The grant was among $2.4 billion in federal dollars awarded for manufacturing and developing advanced batteries for electric vehicles.

The federal money was the last major piece of financing Dow and Kokam needed to start the estimated $665 million project. Dow and Kokam are putting in an amount at least equal to the federal money, Schnepf said.

The Michigan Economic Growth Authority previously approved about $145 million in tax credits for the joint venture. Crary said Saginaw Future worked with other area economic development groups to change state law and lift the $25 million limit on such state credits in order to get the larger amount approved for the Dow project.

The project is likely to create hundreds of construction jobs to build the factory, which Dow expects to be up and running by 2011. That's welcome news to Tom Ryder, president of the 2,000-member Tri-County Building and Construction Trades Council.

"We're very hopeful. We could really use the jobs," said Ryder, adding that each local trade union currently has about 30 percent of its work force unemployed. The Saginaw electrician's local, for example, has 48 of its 130 members out of work, he said.

Ryder said the Dow Kokam project would be the third big employment opportunity, after work at Hemlock Semiconductor in Saginaw County and a planned expansion of Consumers Energy's Karn-Weadock generating complex in Bay County.

Schnepf said Dow hasn't announced any contractors or a bidding process for the new factory. It also isn't taking job applications for people to work at the new plant; more information will be available as the project gets under way, she said.

"It's extremely exciting. This is a huge vote of confidence in Michigan companies, especially Dow," Schnepf said.

The new Dow Kokam factory would replace some of the 400 to 500 jobs Dow is cutting in the Midland area as part of staff reductions announced in 2008.

When completed, the plant will make up to 60,000 batteries a year for electric or hybrid electric vehicles.

"I applaud President Obama and the DOE for helping ensure the next generation of advanced battery technology is developed and built right here in America," said Andrew N. Liveris, Dow's chairman and chief executive officer.

"Dow is excited to begin using our expertise in chemistry to help overcome the technical challenges of developing and commercializing the next generation of advanced automotive batteries," he said.

Kokam America Inc. is based in Missouri and is the U.S. affiliate of South Korea-based Kokam Co.. The company makes a patented product called a Superior Lithium Polymer Battery. Kokam claims its product is one of the highest energy and power density batteries available.

Team NEO's goal: Score with top business site consultants

by By Tom Breckenridge, Plain Dealer Reporter

Experts in matching companies with new locations enjoyed dinner at one of Northeast Ohio's prime sites Thursday evening -- near the 50-yard line in Cleveland Browns Stadium.

It's one of many perks showered this weekend on four of the country's leading real estate prospectors, hosted by Team NEO and the region's top companies.

The four are site consultants, hired by businesses to find spots for growth and relocations. Team NEO is among thousands of business-attraction groups that hope to persuade these influential real estate pros that this slice of the country has a lot to offer.

Team NEO sponsors several of the whirlwind, red-carpet tours yearly. In keeping with a "jock'' theme, site consultants from New York, Chicago and Dallas will be squired today to dinner for inductees to the Pro Football Hall of Fame in Canton. On Saturday, they'll check out the World Golf Championships-Bridgestone Invitational at Firestone Country Club in Akron.

John Kuntz/The Plain DealerDennis Donovan, principal for WDG Consulting in New Jersey, runs onto the field at Cleveland Browns Stadium Thursday evening as Robert Ady, left, of Ady International Co. in Illinois and Jay Foran, right, Team NEO's senior vice president-business attraction, form a tunnel. Browns President Michael Keenan, second from left, watches.

In between, they'll hustle through numerous visits, including to the Goodyear Tire & Rubber Co. headquarters in Akron and to Stark State College's fuel cell center in North Canton. Cleveland Browns President Michael Keenan pitched the region's assets during Thursday's four-course dinner.

Team NEO has sponsored the red-carpet tours for two years. Other regions have been at it much longer. It's hard to measure the tours' impact. Team NEO says it has generated some three dozen solid leads for new business through the site consultants it targets. Just a handful of those will pan out, the nature of the business-attraction game.

Team NEO and its business partners in the region kick in tens of thousands of dollars for the tours. They're crucial in the competition for new business, and aim to let site consultants know that the region is eager to help, said Team NEO spokeswoman Carin Rockind.

"We want them to know if they recommend this community, their clients will be taken care of, whether its real estate needs or building business relationships,'' Rockind said.

Friday, August 14, 2009

Lake St. Clair Initiative plans lake marketing efforts

By Chad Halcom

A nonprofit organization in Macomb County expects to launch a Web site within weeks to help foster tourism businesses and economic development for Lake St. Clair, one of its organizers and directors said.

Harrison Township-based Lake St. Clair Initiative Inc., a 501(c)(6) business organization also known as The Lake St. Clair Tourism Initiative, hopes to have the Web site active by mid-to-late August, said Stephen Remias, a founder and board member of the initiative and president of MacRay Harbor Inc.

Remias and Eric Foster, owner of rival marina company Belle Maer Harbor in Harrison Township, are both directors on the initiative board.

Other directors in the initiative include representatives of the Macomb County Department of Planning and Economic Development and the Michigan Boating Industries Association.

The Lake St. Clair Initiative, incorporated last October, hopes to use the Web site along with promotional events and other programs to foster business development on or near the lake. No URL address is selected as yet for the new site, Remias said.

“But even if you Google local boat companies, or places to rent a Jet Ski- style watercraft, you can’t always find them,” Remias said. “Some of that is just a limited number of those services, and we want to help with that too, but there’s also a visibility issue.”

Remias said the initiative will try to foster both tourist attraction and related businesses on the lake such as personal watercraft and parasailing operations, and recreational boating. Later, some general business development will follow in communities along the lake.

Cooperation Lands Call Center, 500 Jobs

Aug. 13, 2009 7:02 a.m.
By George Nelson

YOUNGSTOWN, Ohio -- Rapid growth is driving VXI Global Solutions Inc. to open a new inbound call center downtown this fall that’s expected to employ 500 workers within its first year, possibly twice that number, depending on the needs of the company.

Mayor Jay Williams and U.S. Rep. Tim Ryan were joined Wednesday by political and development leaders to announce that VXI Global Solutions of Los Angeles would establish a new global fulfillment center at 20 Federal Place where InfoCision Management Corp. operated a call center until earlier this year.

VXI plans to spend $4 million to modify the space for its needs, officials said.

In the midst of the worst recession since the Great Depression, Williams observed, the city “is constantly proving itself as knowing how to get things done.”

During the press event at City Hall, the mayor said VXI plans to open its call center Oct. 1, starting with 150 employees, including some 100 inbound sales agents for “a major satellite television provider,“ information technology and human resources staff, and local management. The company then plans to hire 50 additional employees each month, for a total of 500 in the space, he continued. VXI has the option of leasing an additional floor, possibly bringing total employment to 800 jobs. More here.

PM launches economic agency to help southern Ont.

Prime Minister Stephen Harper announced on Thursday the launch of a new agency to boost economic development in southern Ontario.

Harper said the Federal Economic Development Agency for southern Ontario, which will be headquartered in the city of Kitchener, will support economic development, innovation and diversification. The creation of the agency had been previously announced in the federal budget.

"This new agency will help southern Ontario's communities, workers and businesses position themselves to take advantage of exciting new economic opportunities when the recovery eventually and inevitably takes hold," Harper said.

Harper said Minister of State Gary Goodyear will be responsible for the agency and will embark on a tour of the region in the coming weeks.

The agency will have a $1-billion budget over five years.

The agency joins other federal economic development programs that help out regions, including the Atlantic Canada Opportunities Agency, the Canada Economic Development Agency for the region of Quebec, Western Economic Diversification Canada and the Federal Economic Development Initiative of Northern Ontario.

Harper said Kitchener was chosen because the government wanted a central Ontario location, but not one in the Greater Toronto Area.