economy

http://www.house.gov/levin/

A Michigan Congressman says U.S. automakers need more help to sell large numbers of electric and hybrid vehicles.

The Obama administration has set a goal of one million plug-in hybrid vehicles on the road by 2015.

There’s already a federal tax credit of $7,500 to help defray the cost of buying a hybrid or electric car.   But there’s a cap on how many of the credits are available to each automaker. 

Legislation to repeal the Michigan law that requires every item on store shelves to carry a price tag has been introduced in the state House.

Governor Rick Snyder called for an end to the 35-year-old item-pricing law last week in his State of the State address.

He says the law is outdated, and repealing it would send a message that Michigan is a business-friendly state.

user santoshkrishnan / wikimedia commons

The new GM has been turning a corner of late. It posted three profitable quarters last year:

  • $865 million in the first quarter
  • $1.6 billion in the second quarter
  • $2.1 billion in the third quarter

(still waiting on fourth quarter numbers)

Now, in another sign of financial health, the auto company says it will no longer seek government loans to help it modernize factories:

From the Associated Press:

Allan Chatto / Flickr

Sylvia Rector, a Detroit Free Press Restaurant Critic, has a nice little piece in the Freep about a shortage of pizza pans around the state.

The pizza pan of choice for local restaurants is a blue steel pan that was once made in West Virginia.

The pans were never intended for baking. They were designed to hold small parts in factories.

Overtime the pans "became the pan of choice for nearly every big name in Detroit-style pizza" (Rector describes Detroit -style pizza like this "dough for the thick but airy crust, absurd amounts of cheese and ladles of rich, long-simmered sauce").

But the company moved its operation to Mexico, and they haven't been able to get production up and running.

Pizza makers were distraught. They needed the pans. From the article:

Restaurant supply companies here -- and apparently everywhere else -- have been out of them for many months.

Pizza makers' orders for pans are stacking up by the thousands and causing problems for big chains and small independents alike.

"You wouldn't even believe how many pans we have on back order" -- at least 4,000 small and medium sizes and 700 extra larges -- says Patti Domasicwicz at People's Restaurant Equipment in Detroit. She hasn't received a shipment since April.

One pizza maker couldn't wait. So he took it upon himself to start making the pans in Michigan.

Eugene Jett, co-founder of Jet's Pizza, says he found a manufacturer that would do it:

"They're cutting them as we speak...The first thing is for me to get my pans...It took me a long time to figure out how to get them done...But I decided then, I will build my own pans."

Rector writes that if the manufacturer thinks the pans will be profitable, they might put the pans into full production.

Perhaps another sign that Michigan is diversifying it's economy.

Lester Graham / Michigan Radio

Republicans at the state Capitol are working to get rid of a tax credit for working poor people.

But people who support the Earned Income Tax Credit say the money helps poor people keep their jobs.

Without the credit they might have to go back on welfare, an they say that would cost the state more money.

Gilda Jacobs, director of the Michigan League for Human Services, says all lawmakers have constituents who claim the credit:

"We have some districts where 18% to 20% of the people are filers of this, and they’re putting multi-millions of dollars back into small businesses. So we kind of need to ask people to see this up-close and personal and to really be open to understanding what this is all about."

Republican House Speaker Jase Bolger says the state cannot afford the Earned Income Tax Credit right now:

“The Earned Income Tax Credit is very new in Michigan. It didn’t exist a couple of years ago. It was added at a time where I believe we couldn’t afford it. So as we look at how we are going to revamp Michigan and how we are going to move forward, we have to evaluate things that we can maybe no longer afford, however we do have to look at that with a broader tax structure, and we have to understand that the best social program is a good-paying job.”

Bolger says eliminating the Earned Income Tax Credit will be part of a large package of reforms that are expected to be introduced soon in the House.

Supporters of the tax credit say they have a lot of work to do to convince lawmakers that getting rid of it would hurt people in their districts.

user stevendepolo / Flickr

After Newsweek named Grand Rapids as one of its ten "Dying Cities," Mayor George Heartwell sat down to express his feelings about the magazine's designation.

In a letter to Newsweek editor Tina Brown, Heartwell said "the citizens of Grand Rapids were astounded when you declared our city...to be a 'dying city.'"

From the letter:

Dying city? Surely Newsweek must be joking! Would a major medical School (Michigan State University School of Human Medicine) move its campus to a dying city? Would a dying city have seen $1.4 Billion in downtown construction in the past seven years?...Would a dying city have more LEED certified buildings per capita (2009) than any other American city?

The mayor might have been wise to ask whether rapper 50-cent would consider moving to a dying city as well.

He did invite Newsweek's Tina Brown to visit the city saying, "I'm afraid our timing is off to get you to a Kid Rock concert...that happens tonight. But if you want to see Lady GaGa at our Van Andel Arena there's still time; she's comes this spring."

user dvs / Flickr

For much of the last decade, cities across our region have watched their recent college graduates flee to cities like Phoenix.

It what might be good news for our region, new census data show the recession has significantly changed where young people are moving.

People, especially people in their early twenties, go where the jobs are.

That’s why Michigan is so concerned about being the only state in the census to lose population

And cities like Cleveland and Detroit have been fretting about "brain drain" to other areas.

lehcar1477 / Creative Commons

Organizers of the proposed “River City Bike Week” expect the five-day event will attract between 50,000 and 60,000 people. But some worry the group is overestimating the economic benefits and underestimating the noise, traffic and potential crime they say is associated with biker clubs.

Kyle Davis is an avid Harley rider from the Grand Rapids suburb of Wyoming. He’s been missing the annual biker week in Sturgis, MI and would be thrilled to have something like that in Grand Rapids.

“It’s going to be noisy I can tell you that but for the most part, a lot of the Harley community around here gives back to the community a lot. I know my brother has muscular dystrophy and they do a big huge fundraiser every year. So they’re really misunderstood in my point of view.”

If the city allows the event, River City Bike Week organizer Tracy Holt says part of the proceeds would benefit the Grand Rapids Student Advancement Foundation that helps give Grand Rapids students the tools they need to succeed. She says they'll have bike builders, vendors, stunts, races, and concerts by ZZ Top, the Steve Miller Band and the Doobie Brothers.

Steve Carmody

Retailers say they are more hopeful than they’ve been in many years that Michigan is close to repealing the law that requires them to put a price sticker on every item they sell. But unions and Democrats say they will put up a fight to preserve what they say is a significant consumer protection.

James Hallan is the president of the Michigan Retailers Association. He says store-owners were pleased to hear in Governor Rick Snyder’s State of the State address that he is on their side. And Hallan says retailers hope the Legislature’s large Republican majorities will go along with scrapping the 35-year-old law.

“We have a new administration that is progressive. We have a legislative body that is progressive, and technology has come a long ways from where it was in 1976. Cell phones were not around in 1976. You look at all the new technology, and it’s time we embrace this and not walk away from it."

But not everyone is on board. Chris Michalakis is with the United Food and Commercial Workers union. He says the item-pricing law remains popular with the public.

“What we’re hoping is our Republican governor and our Republican majorities in the House and the Senate will listen to consumers and members of their community and when they look to change this law, do it in a way that voters are comfortable with and do it in a way that protects consumers and protects jobs.”

Employee unions say the law remains popular with the public for a reason and, if anything, the item pricing law should be more strongly enforced.

Lester Graham / Michigan Radio

The state could be headed toward a two-year budget cycle.

Governor Rick Snyder and many lawmakers say they need to start thinking farther into the future when putting together a budget.

However, creating a two-year budget cycle would require an amendment to the Michigan Constitution. The Legislature would have to put it on the ballot for voters to approve.

State Senator John Proos says that could and should happen, but it will take time. He says in the meantime lawmakers can create a two-year projection:

"That’s something that every year instead of scrambling to fix a budget hole and not really telling the whole story about what our budget will look like out into the future, this will give us the time instead to say our revenue picture and expenditure picture is going to look like X. Once we’ve made that determination, then we can say are we actually getting value for the tax dollars that we’re spending."

Proos is expected to introduce a measure that would amend the constitution to create a two-year budget cycle as well as a part-time Legislature.

Proos says for now it’s important to complete work on the budget by Governor Snyder’s May 31st deadline.

Kate Mereand / Flickr

In case you missed it, Newsweek Magazine put out a Top Ten list last Friday. This top ten list was called "American's Dying Cities."

There's nothing like a provocative headline to get people to peek in.

For Michigan, it's the usual suspects: Flint and Detroit.

But many will be surprised that Grand Rapids also made the list.

No doubt about it, there are many urban areas around the country that are in decay. The question is, how do you measure the decay?

The writers at Newsweek said they looked at the latest census numbers (it's difficult to tell who at Newsweek looked at the numbers because there's no byline as far as I can tell):

We used the most recent data from the Census Bureau on every metropolitan area with a population exceeding 100,000 to find the 30 cities that suffered the steepest population decline between 2000 and 2009. Then, in an attempt to look ahead toward the future of these regions, we analyzed demographic changes to find which ones experienced the biggest drop in the number of residents under 18. In this way, we can see which cities may have an even greater population decline ahead due to a shrinking population of young people.

It's also difficult to tell which direction this list goes.

The cities are listed in their scrolling widget in one direction, and in their "view all" list in the opposite direction. So, for what's it's worth, here's the list (from their "view all" view):

  1. Grand Rapids, Michigan
  2. Flint, Michigan
  3. South Bend, Indiana
  4. Detroit, Michigan
  5. Pittsburgh, Pennsylvania
  6. Cleveland, Ohio
  7. Rochester, New York
  8. Hialeah, Florida
  9. Vallejo, California
  10. New Orleans, Louisiana
Steve Carmody / Michigan Radio

Update 11:30 a.m.:

Steve Carmody called in with this update from the news conference:

GM announced that it will add 750 jobs to its Flint Assembly Plant by adding a third shift. No new hires will be made. The pool of workers will come from two places:

  1. people being reactivated from various layoff pools
  2. workers who would like to return to Flint after they were transferred to another plant

10:21 a.m.:

GM is planning a news conference at 10:30am this morning.

More signs that China's economy is growing.

The Associated Press reports:

General Motors says it sold more cars and trucks in China last year than it did in the U.S. for the first time in its 102-year history.

The company sold 2.35 million vehicles in China. That's about 136,000 more than it sold in the U.S.

The AP report says GM sold 2.35 million vehicles in China - 136,000 more vehicles than it sold in the U.S. in 2010.

The country's population is 4 times bigger than the U.S. population (according to World Bank numbers):

  • China's population: 1,331,460,000
  • U.S. population: 307,006,550

In the world of corporate business, bonuses, perks and cash incentives rule the day. They're used to drive productivity.

Governor Snyder, a former corporate president, is bringing that mentality to Lansing.

Now, he says he wants to reward local governments that find better, cheaper ways to provide services.

Rick Pluta, of the Michigan Public Radio Network, says Snyder's budget proposal will call for cash incentives that encourage cities and townships to innovate.

Rick filed this report saying the Governor's announcement was a small bit of welcome news to local officials bracing for more budget cuts from the state:

Governor Snyder outlined his idea at a drop-by with local government officials meeting in Lansing.

He says local governments provide most of the services that people use, and the state should reward the ones that find ways to consolidate, cut costs, and innovate:

"So it's really to create an environment to say, here's a positive incentive to be the very best...so people first and foremost in Michigan and then people around the country and the world will look at Michigan are going to look and say, these people have their act together, this is the place to be, this is the place to have your kids grow up and succeed."

The governor provided few details.

He says those will wait for his budget proposal next month, and a special address on government reform that he will deliver in March.

Lindsey Smith / Michigan Radio

The federal department of Housing and Urban Development announced this week its granting $56 million dollars to Michigan to prevent homelessness. The money funds 269 separate programs all over the state.

Christopher Matson / Flickr

Price tags? We don't need no stinkin' price tags.

In his State of the State address last night, Governor Rick Snyder said the legislature should get rid of or modify "antiquated laws."

One law he used as an example was the state's "Item Pricing Law." The law, he said, is an undue burden on retailers. From Snyder's State of the State outline:

"Requiring 'stickers' over other forms of price-marking costs Michigan’s economy over $2 billion dollars a year. Let’s use the technology we have to protect customers."

Michigan Radio news intern, Sarah Alvarez, filed a report on the state's Item Pricing Law.

Dow Chemical

The CEO of Dow Chemical, Andrew Liveris, met with President Obama and China's President Hu this afternoon along with leaders from 17 other businesses in the U.S. and China.

President Obama says he's stressing the importance of  increasing exports to China and increasing investment in the United States, "both critical to supporting millions of American jobs." 

President Obama and President Hu made statements to the press before their meeting. From the press pool report:

Lindsey Smith / Michigan Radio

The annual West Michigan Economic forecast was held today in Grand Rapids. Hari Singh is an economist at Grand Valley State University. He expects employment will increase 2% in the region this year .

flickr - user harry_nl

The Michigan Manufacturers Association (MMA) says Michigan is getting it's "butt kicked" when it comes to taxes.

In the Detroit Free Press, the MMA's vice president for government affairs, Mike Johnston, was quoted when talking about personal property taxes on equipment.

From the article:

Two communities in West Michigan are trying an online coupon program to help spur the economy. The program called ‘Try it local’ is similar to Group-on.

La Shish Restaurants were once famous in Michigan for good middle eastern cuisine. But the restaurants closed when La Shish's owner got into legal trouble and fled the country.

Now, Jeff Karoub reports for the Associated Press that the La Shish name will come back to Dearborn:

Restaurateur Carmel Halloun said Friday that he's acquired the rights to use the La Shish name and plans to open a restaurant in March in the former chain's first location in Dearborn.

The name doesn't come without baggage. The La Shish chain of restaurants closed when the former owner, Talal Chahine, fled the U.S. Karoub writes that in 2005 Chahine "was charged with multiple counts of tax evasion and citizenship fraud."

The new owner of the La Shish name says he thinks enough time has passed. From Karoub's article:

Halloun said he knows people loved the food and is willing to take a chance. He said he wouldn't reopen at La Shish's first location without the restaurant's original name. "I want people to come back," he said.

Roger Hart / Auto Week

Editors at Auto Week perused the offerings at the 2011 North American International Auto Show and named their top picks.

Executive Editor of Auto Week, Roger Hart, said the show had more than two dozen new models on display, and most had one thing in common:

 "There were no fancy, pie-in-the-sky, dreamlike concept cars. Nearly everything billed as a concept looked as if you could buy one tomorrow at your local dealership and drive it home."

Here are their picks:

BEST IN SHOW: Porsche 918 RSR Concept

Flickr - Ruthanne Reid

The headlines for the Michigan-based Borders Group Inc. have not been good lately:

And my personal favorite speculative headline:

It seems everyone has been on a death watch for the bookseller.

Today, Julie Bosman writes in the New York Times Borders may be close to a financing deal that might help the company reorganize. From the article:

Borders executives told publishers that they were close to securing refinancing from GE Capital and other lenders, these people said, speaking only on condition of anonymity, and that the company intended to reduce costs, improve liquidity and expand marketing efforts, as well as sell some assets.

Earlier this month, we  posted on a Reuters report that said Borders was working with publishers to work out a deal. Borders is in debt to the publishers for past shipments and the company reportedly wants to restructure that debt as a loan.

Meanwhile, the company is cutting costs. The Detroit News reported yesterday that Borders is closing a big distribution center in Tennessee:

Borders will consolidate the processing and delivery of books, movies, music and other products to two distribution centers in Carlisle, Pa., and Mira Loma, Calif. It is part of a long-term effort to cut costs and make the distribution of products to bookstores more efficient, Borders Group said in a statement.

So will borders survive? What would your future headline say?

Steve Carmody / Michigan Radio

At the Detroit International Auto Show, domestic automakers are celebrating a comeback of their industry. GM and Ford both saw profits last year, and the car makers are expecting a good year this year.

As more proof of the comeback, Bill Vlasic and Nick Bunkley report in the New York Times about profit-sharing checks that are expected to go to GM and Ford workers:

The two big Detroit carmakers will announce profit-sharing checks this month for their hourly workers, perhaps the largest in a decade, company officials and industry analysts say.

The checks are expected to top out at $5,000 at Ford, less at GM.

They report these checks "would be the biggest payout since the $8,000 checks that Ford handed out in 2000." Chrysler, the report says, is not expected to issue bonus checks this year.

Lindsey Smith / Michigan Radio

Motors Liquidation, the official name of “old General Motors”, has a buyer for its 2-million-square-foot former GM stamping plant in the Grand Rapids suburb of Wyoming.

United Van Lines

One sign of a tough economy is the sight of a big moving truck out in front of the neighbor's house.

And according to one moving company's study, Michigan has seen more of those moving trucks leaving the state than entering the state.

In it's 34th annual "migration" study, United Van Lines says Michigan ranked second in outbound traffic in the country.

user dgtmedia-simone / wikimedia commons

Chrysler made the case for its self-proclaimed "resurrection" at the North American International Auto Show.

The company put on an optimistic show as it debuted 16 new Chrysler products. The automaker had only a bare-bones presence at the auto-show last year.

Sergio Marchionne is Chrysler's CEO. He said the display shows the company is once again a viable competitor in the North American car market:

The Wall Street Journal and the Detroit Free Press are reporting that Ford plans to announce the creation of 7,000 more jobs at today's auto show. From the Wall Street Journal:

Ford Motor Co. on Monday is expected to announce it will hire 7,000 workers in the U.S. over the next two years, according to a person familiar with the matter. Ford President of the Americas Mark Fields is expected to confirm the news at the auto maker's presentation before the North American International Auto Show in Detroit, this person said.

flickr - photodu.de

The Grand Rapids Press reports that AT&T plans to cut 110 union jobs in West Michigan. The paper reports:

The West Michigan job losses are part of a total of 371 jobs being eliminated by the telecommunications giant in Michigan, said Ryan Letts, president of the Communications Workers of America Local 4034.

Letts is quoted as saying they saw the job cuts coming because the telecommunications industry is changing:

flickr - brewbooks

Sales at Borders Book stores have been slipping for several years as more buyers go to places like Amazon.com to find their titles, and as more people move into the digital reader market. Last month, the company reported that its third quarter sales were down 17.6% from the same period a year ago.

So the company is struggling to find a way to pay its bills. One way it's trying to preserve cash is to suspend its payments to publishers.

Pages