economy

amyway.com

Amway plans to spend up to $81 million to build a new facility in West Michigan.

The direct-sales company says it received a $1.6 million grant from the Michigan Economic Development Corporation for the project. The new facility will manufacture and process vitamins and supplements for Amway's Nutrilite brand.

From their press release:

This investment includes a new $81 million nutrition plant at the company's Spaulding Avenue site in Ada, Michigan, near Amway World Headquarters. The new plant is expected to create 200 jobs over the next three years.

The Michigan Economic Development Corporation (MEDC) today approved a $1.6 million Michigan Business Development Program incentive from the Michigan Strategic Fund (MSF) to support construction of this nutrition products manufacturing facility for Access Business Group LLC, an affiliate of Amway.

Amway says it employs 4,000 people in Michigan. Amway was started in 1959 by Rich DeVos and Jay Van Andel.

Small business owners and hopeful entrepreneurs are in Detroit today to get advice on  starting or improving a business.

The Urban Economic Forum, held by The White House Administration, hopes to help entrepreneurs in Detroit connect to resources and network with other business leaders.

The White House Administration said it is committed to supporting the Detroit area’s small businesses.

CBS Detroit reports:

Among the topics of discussion were the resources available to minority and urban entrepreneurs who are trying to access capital for their businesses. Mentors were also available to provide advice to business owners.

In a press, release the White House Administration wrote that other Urban Economic Forums will be held in Chicago, Illinois, and Columbus, Ohio.

There are people who lose their jobs during the best of times, and those who are wildly successful even during a depression.

But what really matters is the overall trend. When you look at that, and at a flurry of new numbers that came out yesterday, it seems clear that Michigan is in fact doing better than a year ago.

Michiganders are becoming more optimistic about the economy and that positive thinking is adding a bit of extra shine to Gov. Rick Snyder's image.

That's according to new results out today from Michigan State University's State of the State Survey.

An MSU press release says state residents haven't been this positive about the economy since 2005, with 54 percent of survey participants  characterizing their financial situation as "good" or "excellent" and 61 percent expecting things to get even better in the year to come.

More from MSU:

"The Michigan economy has added 150,000 jobs since the job market bottomed out at the end of 2009," said Charles Ballard, MSU economics professor and director of the State of the State Survey. "The improvement in the economy is reflected in the brighter mood in our latest survey."

The findings are based on the latest quarterly phone survey conducted from Feb. 14 to April 15. A total of 963 Michigan adults were questioned in the survey which has an error rating of +3.16 percent.

In the fall 2011 survey, conducted from mid-September through early November, only 46.2 percent of those answering the survey called their financial situation "excellent" or "good."

Gov. Snyder's approval ratings also improved amongst those surveyed, rising to 33 percent compared with 19.3 percent last fall.

- John Klein Wilson, Michigan Radio Newsroom

Every quarter, Michigan State University releases its State of the State survey. The survey questioned 963 Michigan adults about issues such as the economy, taxes, and Michigan’s financial future.

Charles Ballard is Michigan State University Professor of Economics. He said Michigan residents are more optimistic about the economy.

Those responding to the survey, 54% said their current financial situation was excellent or good. And, 61% of  said they believe they will better off a year from now.

When people are feeling better about the future, Ballard said “they are more likely to make an investment, they’re more likely to spend money and that can have a positive effect on the economy.”

But according to Ballard, trust in government is not so good.

“State government – 16% said that they think they can trust the state government all of most of the time. Twelve percent said they could trust the federal government all or most of the time. It’s a little better for local governments, it’s up in the 30’s, but still those numbers for all levels of government have trended downward, which I think is a reflection of some dissatisfaction at grid lock in Lansing and in Washington.”

Learn more about the approval rating for Governor Snyder and President Obama here.

The findings are based on the latest quarterly phone survey conducted from Feb. 14 to April 15. A total of 963 Michigan adults were questioned in the survey which has an error rating of +3.16 percent.

Michigan State Capitol
Jimmy Emerson / Flickr

A UM economic forecaster is predicting moderate economic growth for the state until 2014.

The Detroit Free Press reports that George Fulton, director of the Research Center on Quantitative Economics at the University of Michigan, gave the forecast at today's revenue estimating conference at the state Capitol.

From the Freep:

Private sector job growth will continue in 2013 and 2014 but at a more moderate pace than the rapid growth seen in 2011 and the early part of 2012, Fulton said.

"We see a sustained but moderately paced recovery from now until 2014," he said.

The revenue estimating conference is part of finalizing the state's 2013 budget.

Officials try to reach consensus on how much revenue the state can expect in the coming years.

MPRN's Rick Pluta is covering the conference and will have more for us later.

Detroit Venture Partners, LLC / YouTube

New technology jobs are coming to Detroit.

Quicken Loans founder and chairman Dan Gilbert has been buying buildings and looking for technology tenants as part of a business he co-founded with Earvin "Magic" Johnson, and  Brian Hermelin called Detroit Venture Partners LLC.

In a promotional video, Detroit Ventures Partners say their goal is to transform Detroit.

"This is our time to turn a crumbled city into a new beacon of hope."

But the self-proclaimed "creative business builders" and "street-fighters" are having a tough time finding talent in Michigan.

The Detroit News reports today Quicken Loans and other tech companies are looking to fill positions with people from out of state.

Online mortgage company Quicken Loans Inc., looking to fill more than 300 information technology positions, has taken its search outside Michigan to find qualified candidates. The Detroit-based company recently launched a website aimed at recruiting laid-off Yahoo workers.

GalaxE.Solutions, a project management firm known for its "Outsource to Detroit" banner on its Woodward Avenue building, has stumbled trying to fill 500 IT jobs.

"There is a shortage nationwide of good IT talent," said Ryan Hoyle, director of global recruiting for GalaxE, which has 150 IT workers in Detroit and hopes to add 350 in the next few years. "There just aren't a lot of top students going into IT."

Michigan's Bureau of Labor Market Information & Strategic Initiatives lists several IT jobs on its Michigan's Hot Jobs List. These are "high demand and high wage" careers in Michigan that are expected to continue to be in demand through 2018.

GRAND RAPIDS, Mich. (AP) - Hostess Brands Inc. has notified state officials it may have to lay off about 380 Michigan workers as part of its plan to get out of bankruptcy. Possible cuts include 70 jobs in Detroit and 65 in Troy. Hostess filed for Chapter 11 protection in January.

Despite a tough state economy, people in Michigan are better able to move up the economic ladder than people in almost every other state. That's according to a report released by the Pew Research Center today.

The study found overall economic status doesn't change much over people's lives.

Erin Currier is from the Pew Center. She says the study did not look at why certain states did better than others. But she says there are some general lessons.

“Certain drivers of mobility are extremely powerful and those drivers include things like educational attainment, savings and asset building, and neighborhood poverty during childhood among others,” Currier.

The study found states with the most economic mobility are New York, New Jersey and Maryland.

There’s a phenomenon that happens sometimes after a major stock market crash which is known by the ghastly name, “Dead Cat Bounce.”  We saw a lot of that back in the fall of 2008.

The Dow Jones averages would plunge 500 one day. The next day, they’d recover, say, 50 points, before falling even further later in the week. What was that brief rally all about? Well, it wasn’t about any real improvement in the market.

A French auto parts maker says it plans to buy a parts plant in Saline, Michigan. Faurecia SA says the interior components plant will be part of a joint venture.

From the Associated Press:

Faurecia and Rush Group announced Thursday that they're creating Detroit Manufacturing Systems, a joint venture to build and automotive interior components in Detroit.

The companies say the venture expects to employ about 500 people in Detroit within the next three years and will make parts at first for Ford Motor Co.

Here's more from a Faurencia SA press release:

Faurecia will acquire the Saline business, which generates $1.1 billion annual sales supplying cockpit modules, instrument panels, door panels and center consoles for 12 vehicle programs assembled at eight Ford plants throughout North America. With this acquisition, Faurecia’s objective is to create a new operation that is optimized for efficient production, in line with the Faurecia Excellence System.

In conjunction with the Saline acquisition, Faurecia will enter into a new joint venture with Rush Group Ltd., one of the Rush Group of companies that together comprise one of the largest Native American and woman-owned businesses in North America. The joint venture, called Detroit Manufacturing Systems (DMS), will do injection molding, assembly and sequencing of interior trim components from a new facility in Detroit. Rush Group will hold the majority of the capital and the management of DMS, while Faurecia – with 45% of the capital – will bring its technology and manufacturing expertise to the joint-venture. As a result, the Saline plant will focus in the future on core technologies such as injection molding, skin manufacturing and foaming operations with annual revenues of nearly $400 million.

There’s an old Russian saying that, even, if you covered the world with asphalt, eventually a crack would form.

And in that crack, grass would grow. I was reminded of that yesterday by an Italian businessman my age, a man who is betting on green shoots coming through a town caked with many layers of asphalt. His name is Sergio Marchionne, and he is the CEO of a company called Fiat. Three years ago, he did something many at the time thought stupid. He took over a dying bankrupt company.

Mark Brush / Michigan Radio

The Dart will help make Chrysler a full-line auto company once again. It's a compact car, or so-called "C-segment," car.

It's the first vehicle to combine a U.S. design with a Fiat chassis or platform.  The last small car Chrysler made was the Dodge Caliber and that was not very successful.

Chrysler and Fiat CEO Sergio Marchionne thinks the Dart will do much better.

"We are looking forward to a successful launch of a C-segment sedan, which is a piece of the market that we've been absent from for a long period of time, so we're expecting great volumes in terms of the Dart for the remainder of the year," said Marchionne.

A version of the Dart that gets 41 miles per gallon is expected later this year.

Josh Eikenberry

Changing Gears is partnering with Michigan Radio to collect stories about how people are planning ahead in light of the recession. 

Josh Eikenberry writes:

Because I got through college, I’ll probably be slightly better off economically than my parents, who only graduated high school.

On the other hand, the generation after me is doomed; college tuition and a rapidly changing economy requiring less workers means no chance to improve or make money, and the (probable) lack of a social safety net just adds to the gloomy picture facing my generation’s kids.

A second income is essential to any household. We have three. I work, my wife works, and on the weekends I work as a photographer. I’m iffy about kids, primarily because I don’t think I could realistically afford them. Maybe someday I’ll have enough saved to buy a house, but I’m not holding my breath. 

All I ever wanted was an office job. I have that now, so now I just want to pay of my debt and enjoy my life with my wife.

 

This story was informed by the Public Insight Network. If you want to learn how to be a part of our network, click here.

Ford Motor Company

U.S. auto companies are faced with pent up demand from consumers at a time when their supplies for parts and materials are getting squeezed.

The Associated Press reports the shortages could limit the number of vehicles companies can sell, and squeeze a historic turnaround for the U.S. auto industry.

The most immediate problem — a shortage of a crucial plastic resin, caused by an explosion March 31 at a plant in Germany — could surface in a few weeks. And later this year or beyond, automakers could be confronted with an even bigger crisis, running short of parts simply because there aren't enough factories and people to make them.

The AP points out that the new process for manufacturing makes automakers vulnerable to these kinds of disruptions because auto suppliers don't stockpile parts the way they used to.

Instead, to hold down warehouse and inventory costs, they rely on a "just in time" system in which parts are delivered just days or hours ahead of when they are needed.

Forty square miles.  That’s how much of Detroit lies vacant, nearly a third of the city.  You could fit Miami or San Francisco inside all that emptiness.  At least, that’s what we’ve heard for years.  The thing is, it might not be true.

This is a story about a number – an estimate, really — and how it became a fact illustrating Detroit’s decline. I’ve read about 40 square miles in the Detroit Free Press, the Detroit News, ForbesThe Wall Street JournalThe Guardian and The Washington Times. I’ve heard it on Fox and I’ve said it on the radio.

That’s when Margaret Dewar called me out.

“Wait, this can’t be true.”

Changing Gears is partnering with Michigan Radio to collect stories about how people are planning ahead in light of the recession. You can read more stories about how Midwesterners' expectations are changing at the Changing Gears tumblr blog, http://chgears.tumblr.com.

Here's what some Midwesterners are saying:

"I wanted to be a stay at home mom, but we couldn’t have just one source of income and raise a family. Our fix? I opened a day care in our home. I treat it as my small business – which it is - and raise our child along with 3 others in her age range." -Ella Bensen

Chrystal Foxx / wikimedia commons

WASHINGTON (AP) - Federal regulators are proposing cars be required to have throttle override systems to prevent runaway acceleration in instances where the driver steps on the gas pedal and brake at the same time.

The National Highway Traffic Safety Administration said Thursday that it's proposing changing safety standards to require brake-throttle override systems in all vehicle models regardless of size, including trucks and buses. The systems automatically brake while overriding the accelerator when both are pressed.

Many car models already come equipped with such systems.

The proposal is an outgrowth of investigations two years ago into claims that mechanical defects had caused unintended acceleration in some Toyota models. Government studies rejected those claims, but the probe uncovered several cases of drivers inadvertently pressing the brake and gas pedal at the same time.

courtesy Riveer Environmental

Riveer Environmental in South Haven will nearly triple in size to accommodate a new $10.4 million contract with the U.S. Army, according to the Kalamazoo Gazette:

Riveer Environmental has been contracted to build 50 vehicle-washing systems that soldiers will use to power-wash everything from Jeeps and Humvees to Abrams tanks.

The systems, which are to be delivered to the Army on June 1 and Sept. 1 (18 and 32 units respectively) are expected to be used in Afghanistan. The company landed the Army contract in late February.

The company says the expansion translates into 10 new jobs - six have been filled.

Measuring the costs and benefits of retraining

Apr 4, 2012
Kate Davidson / Changing Gears

Measuring the success of retraining programs used to be straightforward. You just looked at how many people got better paying jobs. Now the emphasis is shifting from how job seekers benefit to how taxpayers benefit too. That’s because some federal funds for workforce development are shrinking, and local agencies have to do more to make their case.

In the Midwest, we hear a lot about retraining. A lot of the money for retraining and other job services comes from the federal government, through the states, to local programs like this one in Jackson, Michigan.

Ford Motor Co.

After laying-off tens of thousands of employees in 2009, automakers and engineering firms are racing to fill new positions.

Paul Eisenstein writes on The Detroit Bureau that at a recent career fair, job openings weren't in short supply - job seekers were.

Or more precisely, qualified job-seekers.

Eisenstein writes "the real rush is to find trained engineers."

two years ago, Altair Engineering...“had plenty of applications and no jobs.”  A few months ago, they put out the word that “they had 700 engineering slots and no one to fill them.”

This explanation is offered as to why there's a dearth of applicants.

Part of the problem is that the industry now needs to attract a largely new workforce at a time when engineering schools are struggling to fill slots and turn out fresh talent.

The bulk of the engineering employees released by the struggling Detroit makers over the last five years were older workers nearing the end of their careers.  They were often given buyouts that helped nudge them into a less painful retirement.  “And now...they just aren’t interested in coming back.”

And even if older engineers did apply for these jobs, one expert says their skill set might be out of date because changes in technology are happening so quickly.

This shortage of engineering talent is driving up costs for employers - bad for employers, but good for potential employees.

One group is working to change this. David Cole of the Center for Automotive Research has started "Building American's Tomorrow," a non-profit group working to attract young people to the engineering field.

Bryce Hoffman of the Detroit News writes the group is working to improve the image of engineering to young people who "have a dim view of manufacturing and the auto industry in particular."

Building America's Tomorrow grew out of the industry's efforts during the recent economic crisis to educate Washington about the economic importance of the auto sector.

"It's really an outgrowth of all the chaos in the auto industry," said David Cole, chairman emeritus of CAR and one of the founders of the organization. "Everyone was worried about whether we would survive. We did, but now we're not sure where we're going find the talent we need to stay in business."

It's a long term problem. And Cole says "if we don't do something about it, we're going to lose a core part of our economy."

Mark Brush / Michigan Radio

Update 3:44 p.m.

O.k., here's the graph (above).

It's an attempt at a more complete employment picture in Michigan.

As you can see, the unemployment rate has been falling in the state since the fall of 2009, but it also shows the drop in the state's overall labor force.

The labor force is the overall number of employed people plus unemployed people.

The labor force has been plummeting since the end of 2006, and it has only nudged upward in the last two months. (See that little tail at the end of the blue line?)

From the Michigan Department of Technology, Management, and Budget:

Michigan’s workforce rose for the second month in a row in February, however it continues to be down over the year. From February 2011 to February 2012, Michigan’s labor force decreased by 28,000 or 0.6 percent. In general, the state’s labor force has been receding since 2006.

2:46 p.m.

Michigan's unemployment rate fell to 8.8 percent, and the state's total workforce grew by 14,000, according to the Department of Technology, Management, and Budget:

Michigan’s seasonally adjusted unemployment rate in February continued its downward trend, declining over the month by two-tenths of a percentage point to 8.8 percent, according to data released today by the Michigan Department of Technology, Management & Budget (DTMB). Total employment rose by 22,000 in February as the number of unemployed declined by 8,000. The state’s workforce grew by 14,000 over the month.

Director of the Bureau of Labor Market Information and Strategic Initiatives Rick Waclawek said "the professional and business service sector in Michigan has recently displayed significant momentum, adding jobs in February for the seventh consecutive month."

I'll post up the graph that shows the trend lines in unemployment and the state's total labor force since January of 2001 once I double check the numbers.

A123 Systems Inc.'s battery manufacturing facility in Livonia, Michigan. The company filed for bankruptcy on Tuesday.
A123 Systems Inc. / Facebook

A123 Systems Inc. has announced it will replace battery modules and packs that could contain defective parts made at the company's Livonia manufacturing facility.

In a press release, the company said they began making replacement modules and packs and expect to ship them to affected customers this week.

The company said the defective parts are not a safety concern.

From their press release:

"Recently, A123 has discovered that some prismatic cells made in our Livonia facility may contain a defect which can result in premature failure of a battery pack or module that includes a defective cell. We have isolated the root cause of the defective cells and we are confident that we have pinpointed the source of the defect and corrected it..." said David Vieau, CEO of A123 Systems. 

MLive.com reports:

A123 most recently made headlines for its nearly $260 million loss in 2011 and a Fisker Karma, which the company supplies the battery for, dying during testing by Consumer Reports.

Company officials say prismatic cells made at another A123 facility are not impacted, and "the cylindrical cells we make at our facilities in China for a number of other transportation programs, as well as the majority of our grid energy storage systems and commercial applications, are also not affected by this defect."

The Ann Arbor based company Tecumseh Products, which makes compressors for refrigerators and air conditioners, experienced a tough 2011.

Yesterday, Crain's Detroit Business reported shares of Tecumseh "were at $3.93 late this morning, the lowest since their all-time low of $3.75 in March 2009."

The price ticked upward, and stands at $4.35 as of this posting.

Nathan Boomey of AnnArbor.com reports that there are concerns the company is too big, and that could mean layoffs for Tecumseh Products employees.

CEO Jim Conner said the company worked to reduce overhead and employee numbers in 2011, but "these actions alone were not sufficient to offset the lower sales, and additional restructuring actions may be necessary."

From AnnArbor.com

Connor...attributed the tough 2011 to "higher raw material costs, lower volumes and unfavorable changes in mix as a result of weak demand in the second half of the year."

The company said sales of compressors for commercial refrigeration and aftermarket devices fell 5.4 percent. That segment accounts for 58 percent of its total sales.

One positive sign for Tecumseh Products is sales increases in Latin America, where air conditioning is becoming more common in the home.

Tecumseh Products had about 7,300 employees as of July.

2005 Ford Taurus / wikimedia commons

Update: March 13, 2:35pm

The National Highway Traffic Safety Administration has expanded its investigation to include some Murcury Sable models in addition to Tauruses.

The investigation now includes vehicles from the 2001-2006 model years and could affect as many as 1.9 million cars.

--------

DETROIT (AP) - Federal safety regulators are investigating complaints of throttles sticking in some Ford Tauruses.

The National Highway Traffic Safety Administration said on its website that 14 people have complained about the cars from the 2005 and 2006 model years, about 360,000 in all. No crashes or injuries have been reported, but the agency says a driver ran a red light and entered an intersection before the car could be stopped.

The agency says the cruise control cable may become detached and hold the throttle open. Drivers have reported that it was hard to stop the car with the brakes, and several said they had to shut off the engine or shift into neutral to stop.

Ford says it is cooperating in the probe. The cars have not been recalled.

Angelique DuLong / wikimedia commons

DETROIT (AP) - A man who claims ownership of one of Detroit's most widely-known industrial ruins says he plans to demolish most or all of what remains of the sprawling facility.

The Detroit Free Press and The Detroit News report Friday that Dominic Cristini, who claims ownership of the Packard plant through Bioresource Inc., is awaiting demolition permits. He says he wants to start demolition within a month. He estimates it will cost $6 million to raze the plant.

Cristini says portions might be saved for historical value.

The plant was built in the early 1900s. The last Packard automobile was built in the mid-1950s. Other smaller industrial businesses have used the facility since. As the years passed, the plant increasingly became the target of thieves, metal scrappers, urban explorers and graffiti artists.

While many states in the South and West passed restrictive laws against illegal immigrants last year, officials in Dayton, Ohio were putting out the welcome mat.

And they’re not alone in the Midwest.

In the second part of our look at immigrants and the Midwest, we’ve found many local governments are trying to attract immigrants as an economic development strategy.

Dayton got attention from all over the world last fall when its city commission unanimously approved a plan called Welcome Dayton to make it an “immigrant-friendly city.” Since then, the town has been inundated.

Dustin Dwyer

In many ways, the headquarters for Eastern Floral in Grand Rapids, Mich. is like a factory. It’s in an old building with brick walls. The floor is smooth, cold concrete. A noisy printer rattles off new orders.

But of course, it smells amazing in here. Designers stand at long wooden tables, primping and pruning flowers. Red tulips. White daisies. Yellow roses. And just about any other flower you can imagine.

Bing Goei, the owner, says this work is more like artistry.

“I think you have to be born with that.” he says. “I was not. I admit it.”

Goei says this with a laugh.

But he was born with something else that turned out to be its own asset. He was born with a foreign birth certificate. His parents were Chinese. He was born in Indonesia, then moved to the Netherlands. From there, they moved to Grand Rapids, like a lot of Dutch people before them. Except, they have a Chinese name.

And like many of those immigrants before him, Goei worked hard. He started in the flower business in high school. Now, Eastern Floral has seven locations, about 60 year-round employees – twice that around Valentine’s Day – and the company has over $5 million in annual revenue.

Goei says being an immigrant, and being an entrepreneur, there’s a connection there.

“Almost every immigrant that comes to this country has come because they see America as that land of opportunity,” he says. “So immediately, their drive is to fulfill that dream.”

The data on this backs Goei up.

The Kauffman Foundation reports that immigrants are twice as likely as people born in America to start a business.

Richard Herman is an immigration attorney in Cleveland. Herman and Cleveland Plain Dealer reporter Robert Smith wrote a book called Immigration, Inc.

Energy Conversion Devices

Energy Conversion Devices, Inc., a technology company based in Auburn Hills, Michigan filed for Chapter 11 bankruptcy protection today.

The company makes thin laminates that convert sunlight to energy and "has manufacturing facilities in Auburn Hills and Greenville, Michigan, as well as sites in Mexico and Canada," according to the Wall Street Journal.

screen grab from YouTube video

DETROIT (AP) - Factory workers at Chrysler are getting $1,500 profit-sharing checks next month, a sign the automaker's turnaround is succeeding.

About 26,000 union-represented workers in the U.S. should get the payments, according to Chrysler's contract with the United Auto Workers union. The profit-sharing figure is based on an Associated Press analysis of company earnings, and the labor contract formula for profit-sharing.

Chrysler would not say how much the workers will get. But the formula in its new four-year contract with the UAW shows that the checks will be about $1,500. The checks are based on Chrysler's $2 billion operating profit for 2011, reported on Wednesday.

Chrysler reported full-year net income of $183 million, its first since 1997.

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