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Changing Gears
10:16 am
Thu July 28, 2011

Road Trip: Norwalk saves its company (Part 4)

Saving Norwalk Furniture means about 150 locals have jobs again.
Dan Bobkoff Changing Gears

When a company bears the name of its hometown, it can be hard to separate the two. Such is the case with Norwalk Furniture and the town of Norwalk in Northern Ohio. Sue Lesch is the town’s mayor.

“It really is our flagship company,” said Sue Lesch, Norwalk’s mayor. “It’s the company we’re proud of. We’re known for furniture all over the country.”

For more than a hundred years, Norwalk Furniture made custom-order sofas and chairs in its Ohio factory. For a long time, it was the biggest business in town, employing about 700 in this town of 17,000.

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Economy
6:53 am
Thu July 28, 2011

Rating agency moves state’s economic outlook from ‘stable’ to ‘positive’

In the midst of a heated debate in Washington D.C. over the U.S. debt limit and with the country facing a possible credit downgrade, Michigan’s economy is getting a pat on the back. Fitch Ratings has revised its outlook for Michigan bonds from ‘stable’ to ‘positive,’ the Associated Press reports. From the AP:

The New York ratings agency left the state's overall bond rating unchanged Wednesday at AA-, an investment-grade rating that's three steps below the top AAA rating.

Gov. Rick Snyder met with analysts at Fitch, Moody's and Standard and Poor's on June 13 to discuss the state's growing economy and how the 2011-12 budget eliminates ongoing deficits without one-time fixes.

Fitch took note of the budgeting changes. It says its positive outlook also reflects efforts to put away more in the state's rainy day fund and "grow reserve levels."

The state lost its top AAA bond rating from Standard and Poor's in 2003.

As the Detroit News reports, on Tuesday Governor Snyder told reporters that, "Lawmakers in Washington should look to Michigan 'as a good role model for success' as they try to resolve a battle over raising the national debt ceiling that is approaching a crisis."

Economy
1:01 am
Thu July 28, 2011

Michigan cities seeing foreclosure filings decline

(photo by Steve Carmody/Michigan Radio)

The number of foreclosure filings dropped significantly in cities across Michigan during the first six months of the year.   Daren Bloomquist, with Realty Trac, says this not necessarily good news.  

 “We’ve probably seen the peak of foreclosure activity in this cycle.  But it may take a while to really to clear the decks and get all the foreclosures that have built up over the last few years sold on to the market.”

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Economy
6:29 pm
Wed July 27, 2011

Whole Foods to open in Detroit in 2013

Fresh vegetables and fruit
Jennifer Guerra Michigan Radio

Whole Foods is coming to Detroit.

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Michigan History
5:48 pm
Wed July 27, 2011

A look back: UAW, Detroit auto workers and labor relations

UAW History
Screenshot from UAW website www.uaw.org

Once again Michigan Radio’s political analyst Jack Lessenberry unleashes his knowledge of Michigan history. This time we get a historical perspective about negotiations between the United Auto Workers and Detroit automakers.

Contract talks have already started between the UAW and General Motors, Chrysler and Ford. But these talks are a little different this time around.

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Economy
1:50 pm
Wed July 27, 2011

Delta profit falls, 2,000 taking buyouts

Delta Airlines is cutting back.
Andrey Belenko Flickr

Delta Air Lines says some 2,000 workers have taken voluntary buyouts. In a cost-cutting move in response to high fuel prices, it will scale back its flight schedule more than planned this year.

The high cost of jet fuel was the main reason Delta's second-quarter net income fell by 58 percent compared to a year ago. It earned $198 million, or 23 cents per share. Fuel costs were up 36 percent.

At the same time, revenue rose 12 percent as Delta raised fares to try to pay the increased fuel costs.

Delta would have earned 43 cents per share if not for one-time items including severance costs and reducing its facilities. On that basis, profit was below forecasts.

Auto/Economy
12:43 pm
Wed July 27, 2011

GM CEO says European division Opel is not for sale

GM sells the Opel Corsa GSi in Europe. General Motors CEO Daniel Akerson says the company's European car business is not for sale.
GM Europe Flickr

Reports have swirled that GM plans to sell its European division, Opel, for more than a month:

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Commentary
11:04 am
Wed July 27, 2011

State Employee Unions and Contract Negotiations

There are many fewer state employees now than there were thirty years ago, but the total is still nearly fifty thousand. Most of them are union members, and contract talks are now underway between their unions and the Snyder administration.

Negotiations aren’t likely to be easy. The governor wants a new contract that will save $265 million dollars, or about six thousand dollars per worker. The administration says we can’t afford to maintain the level of benefits they’ve been getting.

The unions sharply disagree. So -- who is right?

For many years, the great bargain has been that public sector workers traded high salaries for secure jobs with good benefits.  A few years ago, a former student of mine talked to me about her husband, who just then was getting an advanced degree in economics. He was a very intelligent and capable man.

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Auto/Economy
8:16 am
Wed July 27, 2011

White House says a deal on fuel economy is close

The Obama administration says it's close to a deal to boost fuel economy with automakers
Scott Ableman Flickr

The Obama administration says it's close to a deal with automakers to boost fuel economy.

Officials familiar with talks between the White House and automakers say recent changes to make it easier for light trucks to become more fuel efficient have lowered the proposal to 54.5 miles per gallon by 2025. Last month, the administration floated a 56.2 mile-per-gallon target.

Michigan lawmakers in a letter to the president last week called the higher proposal "overly aggressive." Automakers have said they'd work to get vehicles averaging 42.6 to 46.7 miles per gallon.

An administration official not authorized to speak about the negotiations said feedback from many manufacturers is positive and discussions are wrapping up.

In 2009, automakers agreed to raise fuel economy standards to 35.5 miles per gallon by 2016.

Changing Gears
8:00 am
Wed July 27, 2011

Ishpeming: Where iron ore built a city (Part 3 - with photos)

The Empire Pit began production in 1963.
Photo courtesy of Cliffs Natural Resources

Our Changing Gears project is on the road, bringing you stories of towns where one company still affects everybody’s lives. Today we head north, to Michigan’s Upper Peninsula. That’s where North America’s biggest supplier of iron ore has been blasting the earth, and creating jobs, for more than 160 years. 

Our destination is the city of Ishpeming. It’s small.  Basically, you can’t throw a rock here without hitting a miner.

Take Steve Carlson. After high school, he worked 37 years for the mines.

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Economy
1:10 pm
Tue July 26, 2011

List of Post Offices in Michigan being studied for closure

The USPS says customer habits have made it clear that they no longer require a physical post office.
DeWitt Clinton Flickr

UPDATE  1:45pm

The leader of thousands of rural mail employees says she’s worried about a U.S. Post Office proposal that could close many small town post offices.  The national postal officials say they need to make cuts to reduce red ink.  The postal service lost eight billion dollars last year.  

Cindy Opalek is the president of the Michigan Rural Letter Carriers Association.   She says closing small town post offices will hurt rural communities. 

“The people who work there get a little more connected…a little more bonded with the people that they serve.   That will be a shame if they lose that.    Does the (U.S.) Post Office care?   I couldn’t tell you." 

ORIGINAL POST: 1:05pm

The U.S. Postal Service has released a list of 62 Post Offices in Michigan that they're studying for closure.

The potential closures could affect smaller cities like Kingsford, Baron City, and North Star. And they could also affect bigger cities like Grand Rapids, Detroit, and Lansing.

In a statement, Postmaster General Patrick Donahue said closed offices could be replaced by "expanded access locations" - similar to how some pharmacies are now located in your grocery store:

“Today, more than 35 percent of the Postal Service’s retail revenue comes from expanded access locations such as grocery stores, drug stores, office supply stores, retail chains, self-service kiosks, ATMs and usps.com, open 24/7. Our customer’s habits have made it clear that they no longer require a physical post office to conduct most of their postal business.”

The U.S. Postal Service currently operates 32,000 retail offices (the largest retail network in the country). It's studying the potential closure of 3,700 offices.

The USPS suffered $8.5 billion in losses in 2010.

Is your city on this list? How would you feel if your local post office was closed?

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Economy
12:21 pm
Tue July 26, 2011

Michigan businesses to receive boost from new public-private program

Governor Rick Snyder is expected to announce details of a public-private grant program aimed at small to medium sized businesses.
Russ Climie Tiberius Images

UPDATE 4:30 p.m.

One hundred thirty million will be available to Michigan businesses as part of a new grant program. The money is the first of the Small Business Association’s Impact Investment Initiative. The goal is to help grow and create jobs through public-private partnerships. The InvestMichigan! fund is a partnership between the SBA, Dow Chemical Company and state funds.

Karen Mills is with the SBA. She says Michigan was the perfect place to start the program.

“Michigan has great assets. It has one of the highest engineers per capita for any state. It has a well-trained workforce, it has great universities and it has extraordinary entrepreneurs,” Mills said.

The program will distribute 1-point-5-billion-dollars to businesses nationwide throughout the next five years.

- Amelia Carpenter - Michigan Radio Newsroom

ORIGINAL POST: 12:21 p.m.

Details on a public-private grant program aimed at helping small to medium sized businesses in Michigan will be announced during a press call at 1 p.m. today.

Governor Snyder will discuss the new program along with Karen Mills of the U.S. Small Business Administration, Andrew Liveris, Chairman and CEO of Dow Chemical Company, State Treasurer Andy Dillon, and Kelly Williams of Credit Suisse's Customized Fund Investment Group.

Andrew Dodson of Booth Mid-Michigan reports that Dow Chemical's investment in the program is expected to facilitate investment from the federal and state government:

According to a source close to the information, the program's impact will be "quite substantial." Dow Chemical is expected to provide funds and help facilitate bringing federal and state funds to bear upon local markets."It's meant for businesses who need financing, but can't get loans or financing right now," the source said.InvestMichigan! is a group with a series of funds focused on growing the next generation of Michigan companies, according to its website, and is one of the partners involved in today's announcement. It's federal counterpart, ImpactAmerica, is also involved.

Amelia Carpenter in the Michigan Radio Newsroom will be on the call and will have more for us later.

Economy
11:00 am
Tue July 26, 2011

Talks fall through to buy 30 Borders stores

A deal to sell the leases and assets of 30 Borders Book stores to Books-a-Million has fallen through.
Ruthanne Reid Flickr

NEW YORK (AP) - Bookstore chain Books-A-Million Inc. says its last-minute talks to buy the leases and assets of 30 Borders bookstores out of bankruptcy have fallen through.

Borders Group Inc., which filed for bankruptcy protection in February, received court approval last week to liquidate its 399 stores. The chain said at the time it was talking to Books-A-Million about buying 30 store leases and inventory.

But Books-A-Million said Tuesday those talks were unsuccessful.

A group led by liquidation firms Hilco Merchant Resources and Gordon Brothers Group are now holding going-out-of-business stores at all Borders stores.

Birmingham, Ala.-based Books-A-Million operates 231 stores in 23 states and the District of Columbia. Borders is based in Ann Arbor, Mich.

Commentary
10:49 am
Tue July 26, 2011

The UAW and the Changing Auto Industry

Most of us understand that the auto industry isn’t what it used to be. Especially, what we think of as the domestic auto industry. For one thing, it is much smaller, both in terms of market share and in number of people employed. Some time ago, the national media stopped using the term “the big three.“

Now, they mostly call them the “Detroit Three.” Technically, it would be more accurate to say, “the Detroit Two, and the Detroit-based subsidiary of an Italian firm.”  And one of the two, aka General Motors, sells more Buicks in China nowadays than in America.

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Changing Gears
8:40 am
Tue July 26, 2011

Road Trip: Decatur, The Heart of Illinois Agribusiness (Part 2)

Corn being grown across the street from Archer Daniels Midland Co. headquarters in Decatur.
Niala Boodhoo Changing Gears

Our Changing Gears road trip continues. Yesterday, I was in Kohler, Wisconsin. Today, I went down state in Illinois to Decatur.

Driving south from Chicago, it only takes about 25 miles to hit the corn fields. For the next 150 miles to Decatur, it’s a sea of yellow corn tassels, a head tall.

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Auto
7:44 am
Tue July 26, 2011

Profits at Ford drop but beat Wall Street expectations

Toolshed4 Flickr

Ford Motor Company announced its second-quarter earnings this morning. And, although profits dropped slightly, the automaker did beat analysts' expectations. The Associated Press reports:

The company earned $2.4 billion, or 59 cents per share, down 8 percent from $2.6 billion, or 61 cents per share, in the second quarter of 2010. It was Ford's ninth straight quarterly profit. Worldwide sales rose, but the company spent more on materials and product development.

Revenue rose 13 percent to $35.5 billion. Analysts polled by FactSet had forecast revenue of $32.15 billion. Without one-time items, including $110 million for employee reductions, Ford would have earned $2.9 billion, or 65 cents per share. That beat analysts' forecast of 60 cents per share. Ford paid off $2.6 billion in debt during the quarter.

Economy
6:24 am
Tue July 26, 2011

State to receive small business funds

State and federal officials are expected to announce that Michigan will be the first place eligible for loans to small businesses investing in clean energy or located in economically distressed areas.

U.S. Small Business Administration head Karen Mills, Michigan Gov. Rick Snyder, Dow Chemical Co. chief Andrew Liveris and others are scheduled to announce the impact investment program in a Tuesday afternoon conference call.

The initiative will work with private institutional investors to help identify and provide money to private equity fund managers who invest in targeted companies. Federal funds also will be offered to small businesses that get a share of the private investments.

The program is part of President Barack Obama's Start-Up American initiative aimed at spurring high-growth entrepreneurship and the creation of more jobs.

Auto/Economy
5:06 pm
Mon July 25, 2011

16,000 employees offered cash incentives to move to Detroit

Five Detroit businesses hope to entice their employees to move downtown by offering them cash incentives.
user Bernt Rostad flickr

Several Detroit businesses are paying their employees to move to the city as part of a new incentive program called "Live Downtown."

Employees can get $20,000 dollars toward the purchase of a new home. Those who rent will get up to $3,500 for two years. Even employees who already live in the city can get money to make home improvements.

Here's a list of the 5 companies behind the new "Live Downtown" program:

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Auto/Economy
3:11 pm
Mon July 25, 2011

UAW begins new contract negotiations with automakers

From left - UAW President Bob King, UAW Vice President Chrysler Department General Holiefield, Chrysler Senior Vice President of Manufacturing Scott Garberding and Chrysler Vice President of Employee Relations Al Iacobelli.
UAW

The United Auto Workers formally kicked off negotiations today with Detroit automakers.

Current UAW contracts with Chrysler, GM, and Ford expire in mid-September.

Michigan Radio's Sarah Cwiek reports that Chrysler Group LLC management and the UAW emphasized unity at the press event today:

Scott Garberding is a Senior Vice President for Chrysler. He says the company and the UAW worked together to get Chrysler through bankruptcy. Garberding says it’s important for the new contract to recognize the sacrifices Chrysler workers have made.

"And at the same time, establishing a legacy for our organization to ensure that we remain competitive long-term. And I can’t think of a better team that could collectively come together and craft that type of arrangement. "

Last week, UAW President Bob King said he wanted workers to see the benefits of increased profit sharing. The UAW is also expected to seek wage increases for entry-level workers, and job guarantees. After huge layoffs, King said remaining workers want to count on their jobs:

“They want stability,” he said. “They want to know they’ll be working next week and next year, and that they will be able to send their kids to college.”

Talks are expected to take at least a month, and if things don't go well in negotiations with Chrysler and GM, the UAW is compelled to enter into binding arbitration. The UAW cannot strike under the terms of the government bailouts:

This year, for the first time, the UAW is bound by an agreement that it reached with Chrysler and General Motors in 2009 that requires the two sides to enter into binding arbitration if they reach an impasse.

King said Chrysler and the UAW have formed a committee to set up the ground rules for arbitration, even though he said that is a last resort.

“If arbitration happens … then I would say we haven’t done our job,” King said.

The UAW can, however, strike against Ford Motor Company. Analysts are curious to see if UAW negotiators are able to secure better terms with Ford.

Changing Gears
10:38 am
Mon July 25, 2011

What company towns look like today: Kohler, Wisconsin (Part 1)

The name you see in many bathrooms around the country has its roots in Kohler, Wisconsin.
Niala Boodhoo Changing Gears

From Pullman in Chicago to Firestone in Akron, these employers loomed large in everyone's daily lives.

But what does a "company town" look like today?

The Changing Gears team hit the road to find out.

All this week, we’re looking at how these places are coping with economic change.

For our first story, I visited the village of Kohler, Wisconsin.

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