economy

Rich Allosi / Flickr

The national economy added 49,000 manufacturing jobs in January. That’s more new jobs than in health care, retail or any other major sector of the economy.

It’s good news for the Midwest, where thousands of manufacturing workers are expected to be hired over the next few years.

The number of students enrolled in manufacturing training and engineering courses is on the rise at two year colleges. But some employers say they still have a hard time finding qualified candidates.

Michigan Radio’s Changing Gears project is looking at the economic future of the Midwest.

Michelle Kanu filed this report from Cleveland:

Rich Evenhouse / creative commons

Profit-sharing checks to GM's 45,000 workers are expected to break a record. The news comes as GM is tallying its profit numbers for 2010. The company will release the amount of the checks soon.

The Wall Street Journal reports:

General Motors Co. is planning to pay its hourly workers in the U.S. at least $3,000 each in profit-sharing payouts, the largest amount ever, after the company's return to profitability in 2010, people familiar with the matter said...The auto maker is trying to tow the line between fiscal prudence and expectations that it will share recent gains with workers as the company heads into labor negotiations with the United Auto Workers.

Other U.S. automakers are also sharing the wealth.

Ford Motor Company paid hourly workers more than $5,000, "more than the company was required to pay under the profit-sharing formula in its contract with the UAW," according to the Wall Street Journal.

And Chrysler gave their workers $750 despite the company's losses in 2010.

The Detroit Free Press reports that the checks are expected to be handed out in the months ahead, and the size of the checks could help the automaker in its negotiation with the United Auto Workers union. From the Freep:

The Detroit Three, which will negotiate new labor contracts with the UAW this year, may be giving higher-than-required payments to autoworkers as part of a strategy to convince the rank and file to keep labor costs flat in return for bigger profit sharing in the future, labor experts previously told the Free Press.

Steven Depolo / Flickr

Appointed officials in Grand Rapids agreed to scale back the wage increases they recently received.

In a press release, the City officials said they were "responding to Governor Rick Snyder's call for realigning public employee compensation."

City Manager Gregory Sundstrom, City Attorney Catherine Mish, and City Treasurer Lauri Parks said they will return to their salary levels that were in effect in 2009.

City Treasurer Albert Mooney agreed to return 2% of his salary increase.

The Grand Rapids Press reports that if their request is granted:

Sundstrom's pay will fall back to $142,000; Mish's pay will return to $114,092; Parks' pay will go back to $93.731; and Mooney's pay will fall to $108,755.

The officials said in 2010, "appointed officials again led by example, voluntarily accepting an additional 10% reduction in overall compensation." This included turning down a 2.5% pay increase that was scheduled to take effect on June 30, 2010.

The Grand Rapids officials say the the 2.5% pay increase was "received, and is still being enjoyed today,  by all of the City's unionized workforce."

The city is in the middle of re-negotiating it's collective contracts with the City's unionized workforce. And the negotiations are "difficult" as Mayor George Hearwell said in his State of the City address last Saturday.

As Michigan Radio's Lindsey Smith reported, Heartwell said:

The city’s financial future depends on city employees taking further concessions in pay and benefits.

"There’s no doubt in my mind that unless we tackle this problem today, we cannot be sustainable over the long term," says Heartwell.

The vast majority of the city's workforce in Grand Rapids is unionized.

I called up City Attorney Catherine Mish, one of the officials taking the pay cuts. I asked her whether she and the others are sending a signal to the city's unionized employees:

"I would have to say 'yes.' We're hoping the unions agree to similar concessions."

Mish said the unions are under current contracts that run from July 1, 2010 to June 30, 2013.

Rebecca Bolwitt / Flickr

After a ten-month investigation, the results are in.

From the Associated Press:

A government investigation into Toyota safety problems has found no electronic flaws to account for reports of sudden, unintentional acceleration. Transportation officials and engineers with NASA say two mechanical safety defects previously identified by the government - sticking accelerator pedals and gas pedals that can become trapped in floor mats - are the only known causes for the reports of runaway Toyotas. Both issues were the subject of large recalls by Toyota.

Transportation Secretary Ray LaHood says the department's 10-month study has concluded there is no electronic-based cause of unintended high-speed acceleration in Toyotas.

Toyota has recalled more than 12 million vehicles globally since fall 2009 for a series of safety issues. The company has denied that electronics are to blame.

Dani Davis

We put together our stories about arts and the economy in the state to create an hour-long documentary called The Cost of Creativity. On today's podcast, we'll hear the second installment of the doc.

And because Artpod is about all things Michigan, all the music you'll hear on The Cost of Creativity is by Michigan artists. The musicians featured on today's podcast Luke Winslow-King and The Red Sea Pedestrian.

The "Imported from Detroit" commercial stirred a lot of pride around these parts, and on Michigan Radio's Facebook page.

We posted it last night and the "likes" and comments about pride started flowing:

  • "Gave me chills and made me proud to be a born in Detroiter."
  • "This is the kind of thing we need for our area. This commercial gave me goose bumps."
  • "Great commercial! I'm proud to be from Michigan!"
  • "Chills...I almost started crying! But, I have had almost 14 beers."

Just up I-96, the profs at MSU's Department of Advertising, Public Relations, and Retailing, who release an annual ranking of Super Bowl commercials, put the Chrysler ad in third place – tied with the ads from Audi, PepsiMax, Hyundai, and Bud-Light.

First and second place went to German car-maker Volkswagen (first went to the Darth Vader ad, and second went to the VW Beetle ad).

When I asked them, "why third?"  MSU instructor and the organizer behind the MSU rankings, Bob Kolt, said the margin between 1st and 3rd was quite small, "If a few professors had changed their ranking of the commercial slightly, it could have easily been put in the top spot."

Michigan Radio

Michigan Senator Debbie Stabenow plans to introduce legislation that would change government incentives for buying electric cars.

Right now, the incentive for the purchase of an electric car comes when you file your taxes in the form of a tax credit.

Stabenow's legislation, the Charging America Forward Act, would give consumers a rebate of up to $7,500 at the time of purchase.

The Senator says a rebate would do more to spur consumers to adopt electric vehicles. From Stabenow's statement:

"Michigan is already a leader in emerging hi-tech battery and electric car production. Other countries are acting to develop their own advanced vehicle markets because they realize the tremendous economic potential this new technology represents.  These initiatives will allow Michigan innovators to continue to out-compete the world and create new jobs here"

Naturally, GM spokesman Greg Martin says the company likes the rebate idea, saying "we are pleased to see Senator Stabenow's legislation that integrates all of the components necessary for successful acceleration of electric vehicles in the marketplace.  We look forward to working with Congress on legislation that leads to widespread adoption of electric vehicles."

The Associated Press says Stabenow also wants the incentives to go beyond just consumers:

Stabenow also wants tax credits for investments into electric vehicle recharging stations and for businesses that buy hybrid trucks. It also seeks more funding to develop the nation's advanced battery industry.

And the Detroit Free Press says this bill supports the Obama Administration's plan to get 1 million "plug-in or advanced-technology" cars on the road by 2015. The Freep says it's a goal that "can be reached only if it is supported by aggressive government incentives that also spur the development of infrastructure."

Michigan Radio's Tracy Samilton is following this story, and will have an update later today.

Homeowners are starting to get their property tax assessments in the mail. A few organizations are hosting workshops for people who think their home’s value might be over-assessed.

Rose Bogaert is chair of the Wayne County Taxpayers Association:

"Going to the Board of Review and saying 'my taxes are too high' will get you nothing. You have to have information that justifies your contention that your house is over-assessed."

Bogaert says her organization’s workshops educate homeowners about things like how to analyze sales in their neighborhoods. Information about the Headlee Amendment and Proposal A – which govern property tax assessments in Michigan – is also part of the workshops.

Oakland County officials are also hosting a series of sessions about tax assessments through early March.

Steve Carmody / Michigan Radio

From General Motors adding another shift at the Flint Assembly plant to expansion in the city's medical and echnology centers, Flint's job picture is brightening.

Flint city leaders say their community posted one of the ten biggest drops in unemployment in the U.S. over the last 12 months.

Between December 2009 and December 2010, Flint's jobless rate fell from 16 percent to just under 12 percent.

Flint Mayor Dayne Walling says the city helped create or keep mare than a thousand jobs by encouraging entrepreneurial businesses.

For everybody who's left, there's a project out there that kept a job here too. That?s the other part of the story. It may not be a new job. It's not someone who's newly employed. But there are another 500 or 1000 people who would have left here if these projects wouldn't have been successful.

This all builds on what our president said in his State of the Union, that we need to create jobs and industries of the future by doing what America does best.  Investing in the creativity and innovation of our people.

Walling concedes people leaving Flint also helped improve the city's unemployment rate.

Flint's unemployment rate is still above state and national levels.

The unemployment rate fell .4 percentage points in January to 9.0%.

Keith Hall, the Commissioner of the Bureau of Labor Statistics said today:

In January, employment increased in manufacturing and retail trade, while job losses occurred in transportation and warehousing and in construction.  Employment in most other major industries changed little. Manufacturing employment grew by 49,000 over the month and has increased by 161,000 since a recent low point in December 2009.

The Associated Press reports:

The unemployment rate has fallen by eight-tenths of a percentage point in the past two months. That's the steepest two-month drop in nearly 53 years. But part of that drop has occurred as many of those out of work gave up on their job searches. When unemployed people stop looking for jobs, the government no longer counts them as unemployed.

Officially, there are about 13.9 million people in the country out of work. The AP says "that's still about double the total who were out of work before the recession began in December 2007."

The unemployment rate in Michigan stands at 11.7% as of December. New numbers should be out in the coming week.

Niala Boodhoo / Changing Gears

Parts of the Midwest are still shoveling out after one of the worst blizzards in recent memory.  For some people, they can't see the good in all that snowfall.

But at the Chicago Board of Trade, this blizzard may be a boon for business.

Investors are banking on a futures market based on snowfall that’s the first of its kind in the world.

A study commissioned by a union-backed think tank says reports that state and local government employees in Michigan are overpaid compared to workers in the private sector are wrong.

The study is by the Washington D.C. based Economic Policy Institute.

It says college-educated public employees earn 21% less than private sector workers with degrees.

It also found local government workers were compensated at about the same rate as their private sector counterparts.

Jeff Keefe is the Rutgers University management and labor relations professor who conducted the study:

"So the study concludes that state government employees are under-compensated in the state of Michigan, while local government employees are neither over- or under-compensated in the state of Michigan."

The report takes into account education, salaries, and benefits.

Ethan Pollack, with the Economic Policy Institute, says employee compensation is not the biggest factor behind the state’s budget trouble:

 "Michigan isn't significantly different than the deficits you are seeing all across the country…This is not about over-compensation of public sector workers. This is [about] two things. The cyclical deficit is from the recession, and the structural deficit is health care costs."

The Economic Policy Institute says its seven-state study found growing health care costs, and not employee compensation, are the biggest factor in budget deficits.

Auto workers get bonus checks

Feb 3, 2011
Jeff Wilcox / Flickr

Detroit automakers are preparing to send bonuses to workers around the region. Even some temporary workers will get a share of growing profits.
Terri Houldieson is technically a temp worker, or a "long-term supplemental employee." But she’ll still get a piece of Ford’s $6.6 billion profit from last year.

Workers like Houldieson should receive, on average, about $2,000 each compared to the $5,000 for regular employees.

"We’ve all put work in and it just shows that they respect us too. Kind of like a pat on the back," says Houldieson.

Ford employs a couple thousand long term temps and most work at assembly plants in Chicago and the Twin Cities.

Houldieson said she’ll buy some new clothes for her two boys, and maybe some expensive shoes to protect her feet during those long hours at the plant.

Dow Chemical released its fourth quarter earnings report today and it was a good fourth quarter for the chemical giant. Its earnings nearly tripled. From the company's website:

  • The Company reported earnings of $0.37 per share, or $0.47 per share excluding certain items. This compares with earnings of $0.08 per share in the year-ago period, or $0.18 per share excluding certain items.
  • Sales of $13.8 billion rose 22 percent versus the same quarter last year.

The Wall Street Journal reports:

[Dow Chemical] has seen sales rebound in recent quarters on volume growth in basic chemicals, agriculture products and other units. Dow, whose chemicals are used in a wide range of products including diapers and products in the auto industry, has been restructuring to focus on higher-margin specialty products from commodities chemicals, which are more vulnerable to energy-price fluctuations.

Bloomberg News says the earnings are more than some analysts anticipated and come "amid increasing profit from caustic soda and plastics."

Danis Davis

The Cost of Creativity

We put together our stories about arts and the economy in the state to create an hour-long documentary called The Cost of Creativity. On today's podcast, we'll hear the first installment of the doc.

And because Artpod is about all things Michigan, all the music you'll hear on The Cost of Creativity is by Michigan artists. The musicians featured on today's podcast: Ben Benjamin and Luke Winslow-King.

user citizenofthedeep / Flickr

Michigan Congressman Fred Upton met with the Kalamazoo Regional Chamber of Commerce this morning during its "Legislative Connection Series" (tickets for the event went for $25 to $50).

The Kalamazoo Gazette reported that Upton talked about the future of energy in the country.

According to the report, Upton said gas prices might hit $4 a gallon by Memorial Day because of political instability and a moratorium on new off-shore drilling.

Higher gas prices, said Upton, will lead to more people buying up plug-in hybrid electric and fully electric cars. Something Upton feels the power grid is not ready for. From the article:

"We're going to need 30 to 40 percent more electricity by the end of the next decade, and we're not prepared," said Upton, Republican of St. Joseph.

Upton said he favors the development of more nuclear power plants and is going to look into why it takes so long to build a nuclear power plant in this country.

Citizen's Guide to Michigan's Financial Health / Michigan Governor's office

Governor Snyder says he wants you to understand the state's budget crisis. He's rolled out a guide to help you do that.

It's called the "Citizen's Guide to Michigan's Financial Health."

Michigan Radio's Morning Edition Host, Christina Shockley, spoke with Lester Graham this morning.

Graham heads up Michigan Watch, Michigan Radio's investigative unit.

Graham took a look at the Guide and gave us his first impressions. You can listen to the audio here:

National Weather Service

Gearing up for snow

People in the state are gearing up for the coming storm that's expected to dump around a foot of snow in the region in less than 24 hours. Survival instincts are kicking in as people flock to grocery stores, gas stations, and hardware stores. The Kalamazoo Gazette reports some plow drivers are getting their sleep now in anticipation of staying up for the next couple of days. Andy Northey, the owner of R & A Lawn Maintenance and Landscaping in Plainwell, said:

"We're not going to be able to keep up with all the snow that’s expected," said Northey, whose company clears snow from residential and commercial properties from Allegan to Kalamazoo to Battle Creek. "Absolutely no way."

The Detroit News reports that Delta airlines is allowing people to change their flight plans without charging an extra fee:

Delta and other airlines encouraged passengers to change their travel dates. Anyone scheduled to fly this week can switch their flight to a time through Feb. 8 without incurring a fee, said Delta. The waiver involved Michigan and 19 other states expected to be hammered by the storm. The states range from Nebraska to Maine, and Wisconsin to Oklahoma.

The National Weather Service has issued a blizzard warning for the southern part of Michigan as the dense snow band travels across the state. The warning takes effect around 5 p.m. for the western part of the state and around 7 p.m. for the eastern half. The warning will last through much of the day tomorrow.

Snyder releases report on state's finances

Governor Rick Snyder released the "Citizen's Guide to Financial Health" yesterday around 3 p.m. The Governor said the report is "a plain-English, easy-to-understand look at Michigan's financial situation and the challenges ahead."

One of the more controversial parts of the report said that state employees are over-compensated compared to their private sector counterparts. Many state employees and union members are disputing the numbers in the report. The Detroit Free Press said that Snyder called the report a 'call to action':

"Here are the facts; let's solve the problem," he told 430 people who attended the Business Leaders for Michigan Summit in Lansing. "Now we can have an intelligent discussion about what we need to have to put the state on the road to success."

Snyder is expected to release his budget proposal for the state's next fiscal year on February 17th.

Red Cross looking for blood

Bad winter weather has hampered the Red Cross' blood supply. They've made pleas before, and now with a big storm bearing down on the Midwest, they're renewing those pleas. Monica Stoneking, communications manager for the American Red Cross, was quoted in today's Bay City Times:

"Those who live in the path of the storm are asked to schedule a donation time when it is safe to travel," Stoneking said. "All blood types are needed, but there is a special need for donors with O-Negative and B-Negative blood."

The Red Cross says 18,000 expected blood donations have gone uncollected over the last several weeks due to bad winter weather.

Legislators are looking for places to trim the budget as they stare at a $1.8 billion budget hole.

Reducing state employee compensation is on the list.

Michigan Governor Rick Snyder released a report today that says public employees are making more than twice their private sector counterparts.

The Detroit Free Press says the "Citizen’s Guide to Michigan’s Financial Health," may be sending a signal about "one way the new governor expects to address...the budget shortfall." From the Freep:

He said the overall compensation of the average private sector workers fell 13% from 2000-09 while rising 19% for state employees and 13% for local government workers. For state workers, the average annual compensation -- $53,453 in salary, $31,623 in fringes and $13,000 for insurance-- was more than twice that of the private sector, the report said.

The governor was quoted as saying, "I'd be careful about over generalizing on this data but it does show an important trend that needs to be addressed."

Rick Pluta from the Michigan Public Radio Network reports:

Public employee unions and advocates for human services question some of the data used in the report. They also say they’d like to see Snyder’s plans for investing in schools and infrastructure, as well as protecting people hurt by the economy.

The Pure Michigan campaign will run out of money mid-year without an infusion of more funds.

A state House committee will hold its first hearing tomorrow on a plan to tap into a state-operated venture capital fund to keep the Pure Michigan campaign on the air for the rest of 2011.

Earlier efforts to come up with an acceptable fee or tax to pay for the campaign have failed.

Michigan Main Street Center

Four Michigan communities are changing their downtown identity with help from the Michigan Main Street Center.

The Center hopes to help each city market their unique characteristics to residents and future visitors.

Laura Krizov manages the program for the Michigan Main Street Center. She says the four cities to receive rebranding services - Boyne City, Clare, Grand Haven, and Niles -  have a downtown presence, but wanted to cultivate one that was more readily identifiable with their community.

Six communities applied for the program, but Krizov said the four were chosen because they demonstrated the need and the ability to benefit from the program:

"We feel that they will be able to pull this off and in the end, we’ll be able to give them a great brand, telling the community who they are and what they want to do."

Each community will get a logo and website that is meant to help them build a cohesive brand.

-Bridget Bodnar, Michigan Radio Newsroom

Governor Snyder will roll out a citizen’s guide to the financial troubles facing the state, local governments, and school districts before a meeting of business leaders in Lansing this afternoon.

The governor is a retired investor and certified public accountant. He says the guide will give the public an easy-to-grasp outline of the condition of government finances in Michigan.

Governor Snyder says the state’s official financial report runs more than 200 pages and is too big and complicated, and it’s filled with too much bureaucratic jargon for most people to understand.

Snyder says his administration has picked what he considers the most critical information, such as the state’s revenue-to-expenditures, its reserves, and long-term obligations such as pensions, and put it into an easy-to-follow 13-page briefing:

“So I think this will be a big help in terms of the stage for a more-informed discussion, where all the public can participate because we’ll all have better facts to work off of and we’ll see how far beyond our means we’ve actually spent.”

Estimates peg the state’s budget shortfall for the coming fiscal year at about $1.8 billion.

The governor will present his plan to balance the budget later this month.

Governor Snyder makes no bones about wanting to get rid of the Michigan Business Tax. Some details of his plan were revealed today.

But by getting rid of the business tax, the state will be left with $1.5 billion tacked onto its existing projected deficit for the next fiscal year.

Today, the Governor spoke to the Michigan Press Association at the Detroit Marriott. In his speech, he addressed how he plans to make up the shortfall.

From the Associated Press:

Gov. Rick Snyder says he wants to include most tax breaks in the budget rather than burying them in the tax code...Snyder says it's imperative to get rid of the Michigan Business Tax, which he considers "a dumb tax." To make up the revenue lost by having a lower corporate income tax, he wants to look at existing tax breaks and get rid of those that aren't moving the state forward. The governor says tax breaks should be included in the budget so they can be debated and weighed on their merits.

The Detroit Free Press reported on Snyder's speech as well. The Governor said that one of the "biggest tasks as the chief executive of the state is to find the elusive “they” in state government." From the Freep:

Snyder said his first days in office were a revelation. “The IT guys were in hooking up my computer and I had a square screen,” he said, explaining that it didn’t make sense because the larger, landscape computer screens are better and less expensive. “They told me ‘It’s been 10 years and they said that’s what we had to do,’” Snyder said the IT guys told him. “Almost on a daily basis, I hear about ‘they’ and they tend to have a different opinion that I have. I need to find out who they are and where they reside.

gophouse.com

Governor Snyder has said he wants to do away with the complex, "job-killing" Michigan Business Tax, and replace it with a more simplified flat tax for businesses in the state.

Some republicans in the Michigan legislature are beginning their push for a repeal of the state's Earned Income Tax Credit (EITC).

It's a credit that bell-weather conservatives, like Gerald Ford and Ronald Reagan, have supported on the federal level.

Library of Congress

The idea of an Earned Income Tax Credit, giving people who have low-income jobs a bit of a tax break, has been around for a while.  In 1975, a Michigan Republican, Gerald Ford, signed the first federal credit into law while he was president.

Tooshed4 / Flickr

Ford Motor Company announced this morning that it had its best annual performance in more than a decade. Ford earned $6.6 billion last year as sales jumped by 20 percent. Revenues rose 3 percent to almost $121 billion.


UPDATED:  11:40 a.m.  Ford CEO Alan Mulally says salaried and hourly workers will share in the good news in the form of profit-sharing checks.  Hourly workers will get average payments of $5,000.



"To be able to share the wonderful work, the wonderful success of this, with everybody's that's worked on quality, on fuel efficiency, on safety -- it's a tremendous day for all of us," says Mulally.


Ford made $7.2 billion dollars in 1999, but it sold nearly twice the number of vehicles to get that result compared to 2010.  Mulally says the company is benefiting from what he calls a "home improvement loan" of $23-billion, taken out in 2006, that financed the company's effort to slash operating costs and improve quality.



"You think about back then (1999) and now, this is a complete transformation of Ford," he says.


Mulally says the biggest challenge this year is not specifically a Ford problem.  He says the U.S. needs to exercise sound fiscal policy so the economy continues to recover.


Ford Motor Company is forecasting higher profits in 2011 than 2010. 


The company's stock dropped Friday morning, however, as investors reacted to Ford's fourth quarter results.  The company's profits were lower than expected because of costs associated with restructuring some debt.


Mulally says the company has made swift progress in paying off that "home improvement loan."  Debt was reduced 43% in 2010.


The Cost of Creativity

Part 1

Part 2

Part 3

Thanks to the following Michigan musicians, whose songs are featured in the documentary:

Ben Benjamin, Luke Winslow-King, Midwest Product, and The Red Sea Pedestrians.

Proposals for different ways the state delivers payments to local governments for services are bubbling up at the state Capitol.

A bill in the state Senate would distribute revenue sharing payments to cities, townships and villages based on population.

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