economy

user brother o'mara / Flickr

Extension of unemployment benefits

Congress might debate whether to extend unemployment benefits this week. It's a decision that could impact tens of thousands of Michigan residents.

From the Detroit Free Press:

Unless Congress acts to continue extended unemployment benefits, it could be a grim holiday season for nearly 160,000 Michiganders.

An end to the extended benefits would immediately impact 61,000 state residents who are getting this federal aid after exhausting their 26 weeks of state-funded assistance.

Another 98,743 people who are receiving state benefits would no longer get additional help if they are still jobless after 26 weeks.

Experts worry about future of U.S. battery manufacturing

Some experts worry about the longevity of battery manufacturing in the U.S. In Michigan, battery manufacturing is seen as a new economy in the state. The companies have enjoyed investments from private and government entities. But can this type of green manufacturing compete? The Wall Street Journal reports on the current state of some battery manufacturers:

So far, the results have been disappointing. Some high-profile battery makers have stumbled, burdened by high manufacturing costs, strong competition from Asian rivals and a slower-than-expected rollout of electric vehicles. Now the companies are responding by cutting costs, scaling back production and trying to tap other markets, such as large-scale storage for the electricity grid.

State plans to consolidate office space for workers

State officials are hoping to save money by moving workers out of leased offices and into state-owned buildings. According to the Detroit Free Press:

In the last 10 years, the state has shed close to 20% of its workers, but hasn't made similar reductions in its office space. What's more, use of laptops, cell phones and other mobile technology means far fewer state employees need their own office space.

The paper reports leases cost the state around $90 million a year.

Auto sales are booming, but don't expect this to be a continuous growth period.
Lester Graham / Michigan Radio

It could be time to crack open a modestly-priced bottle of champagne.

Analysts say, like the recent good news about retail purchases, November auto sales "may have run at the fastest pace in more than two years."

From Bloomberg News:

Light-vehicle deliveries in November, to be released Thursday, may have run at a 13.4 million seasonally adjusted annual rate, the average of 14 analysts surveyed by Bloomberg. That would top the 12.3 million pace of a year earlier and October's 13.3 million rate, which was the best month since sales were helped by "cash for clunkers" in August 2009...

"November was a good retail environment for consumers overall," Erich Merkle, Ford's sales analyst, said . Consumers have been "sitting on the sidelines for quite some time. Black Friday provided that reason to get out there."

The head of Toyota's U.S. sales unit said there's a lot of pent up demand among consumers, "it's starting to push industry sales regardless of whether the economy is flat or going up."

Courtesy of Walter P. Reuther Library / Wayne State University

There may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1 in Flint, Michigan. It’s one of the factories sit-down strikers occupied in the 1930s. The plant made tanks during World War II. It was later closed, gutted and reborn as a GM design center. But GM abandoned the site after bankruptcy and the new occupants don’t make cars. They sell very expensive prescription drugs.

There’s one group of experts who can always tell you the history and significance of an old factory. They’re the guys at the bar across the street.

Five students from Albion College believe they know how to fix the U.S. economy. The team will share their ideas tomorrow in Washington, D.C. at the national College Fed Challenge finals.

Albion will compete against the four other regional finalists: Harvard University; Rutgers, the State University of New Jersey; Lafayette College; and the University of North Carolina at Chapel Hill.

If you think about it, class is a tricky word. What does it even mean? How do you define it?

Michigan Radio reporters and producers take a look at how social class impacts our lives - from the way we plan our cities and neighborhoods, to the way we’re treated in a courtroom.

We also hear from folks around the state as they share their thoughts on class.

Part 1

This idea of class – class warfare, class resentment. It’s everywhere. And yet, how are we defining class?

The nation's road to economic recovery will be a marathon, not a sprint. That's according to an economic forecast released today from the University of Michigan's Research Seminar in Quantitative Economics.

The economists write the U.S. economy has been battered by an oil price spike this past spring, the Japanese earthquake, and the European debt crisis.

Despite that, they say the chances of a double-dip recession are lessening:

From the report:

Economic news has improved a bit this fall, lessening the chances of a double dip. Output growth rebounded in the third quarter to register a 2.5 percent pace. Job gains have picked up a notch, averaging 117,000 since midyear. Consumer sentiment has reclaimed part of the ground lost since May. The economy remains vulnerable, however, as the main problems that have plagued this recovery persist.

The Detroit Free Press quoted U-M economist Joan Crary about the slow addition of jobs to the U.S. economy:

On the positive side, the U.S. economy added 700,000 jobs last year and 1.5 million this year, and the U-M economists predicted that the nation will add nearly 4 million jobs over the next two years.

But that will be enough to bring the unemployment rate down only moderately, from its current national rate around 9% to 8.8% in late 2012 and 8.5% in late 2013.

"The unemployment rate begins to creep down but remains uncomfortably high even at the end of 2013— 4½ years after the official end of the recession," Crary said.

In their report, the U-M economists noted the potential impact of a political stalemate in Washington D.C.:

In the current political environment, it also seems unlikely that Congress will pass any new stimulus measures. We have assumed the payroll tax holiday and investment tax incentives will be held over for another year, but neither of those extensions is a sure thing. We may well end up with a fiscal policy that doesn’t address either our short- or long-term problems.

The group is expected to put out a report on Michigan's economy tomorrow.

United States Census Bureau / Wikipedia

The issue of class has been in the news a lot lately. From the “Occupy Wall Street Movement” which has snowballed across the country, to “class warfare” accusations coming out of Washington, D.C.

We’ve also heard recent reports that show the nation’s middle class is shrinking while the top earners’ salaries have skyrocketed.

Over the next week and a half, Michigan Radio will explore this idea of “social class” and how it impacts our lives.

Lester Graham / Michigan Radio

LANSING, Mich. (AP) - Democrats in the Michigan House are promoting legislation they say is designed to help small businesses hire more workers.

One measure detailed by Democrats on Monday would provide tax credits of up to $4,000 per person for small businesses that hire unemployed workers. The tax credits would be largest for hiring military veterans who have been jobless for a long time.

Other bills are aimed at developing a pool of money to loan to small businesses. The money would come through investments of a small percentage of state trust funds with Michigan credit unions and community banks, which in turn would make loans available to small businesses.

Democrats are in the minority in the House. The legislation could face an uphill climb to gain traction in the Republican-led chamber.

Flickr/jcarter

Michigan could soon expand the lineup of legal fireworks that consumers can buy without special permits.

The state Legislature has approved measures that would allow some consumer fireworks such as firecrackers, bottle rockets and Roman candles to legally be sold in the state. Governor Snyder likely will sign the bill in time for it to become law in 2012.

Cars, agriculture, tourism, it’s all fair game for people who want Michigan to tap into the Chinese market.

But what does that really mean and who really stands to benefit?

Governor Rick Snyder recently led a Michigan delegation to China.

He says strong economic ties between Michigan and what is now the world’s fastest growing economy are essential to Michigan’s economic growth.

Part 1

user brother o'mara / Flickr

Detroit Mayor Bing says city might need emergency manager

In an interview with the Detroit News, Mayor Bing said the city is facing a coming budget crises, and if it comes down to the city being run by an emergency manager, he'd consider the job.

More from the Detroit News:

Mayor Dave Bing on Wednesday said Detroit is quickly running out of cash and may require the intervention of an emergency manager, a role he is seriously considering if the governor asks.

The mayor, in an interview Wednesday, said he is troubled by a confidential Ernst & Young financial report that shows the city could run out of money by February and the fact that employee unions have not been willing to come to the table to renegotiate their contracts.

Bing said he's "got to have a heart-to-heart" talk with himself because he's already overworked and rarely sees his family, but "tough decisions need to be made."

"I'm giving that serious thought," said Bing, who is more than two years into his first term. "With an emergency manager it gives you, I think, authority and leverage to do some of the things that need to be done.

 Michigan recovery second fastest, but outlook pessimistic  The state is on a path to recovery, but it's not necessarily a rosy path.  The Detroit News reports: 

Michigan's economy is recovering from the recession at the second-fastest pace in the U.S., lifted by reviving carmakers and local manufacturers, according to a new index of state growth.

The home of Motown was topped only by North Dakota, where an oil boom is raising incomes at the nation's quickest rate... [according to] the new Bloomberg Economic Evaluation of States Index...

"In a slow recovery like you have today, it doesn't take all that much growth to stand out," said Mark Vitner, an economist who works for Wells Fargo & Co. in Charlotte, North Carolina.

Michigan Radio's Rina Miller took a look at Michigan's seemingly mixed economic messages. She spoke with Bob Tomarelli, an analyst with IHS who said:

"So while they are getting a nice short-term burst that’s adding to payrolls and creating some jobs, or at least bringing some jobs back, it is not expected to keep up at that pace, and in the long run is actually expected to decline."

Anti-bullying measure passes Senate

The Michigan Senate passed an anti-bullying measure yesterday. More from Laura Weber of the Michigan Public Radio Network:

All school districts in Michigan may soon be required to adopt anti-bullying policies to help protect students from ridicule, humiliation and physical threats.

An anti-bullying bill approved by the state Senate would not, however, protect students from bullying done by teachers, school employees or parents.

The measure also does not protect students from cyber-bullying on home computers, nor does it list the traits or characteristics that are protected from bullying— such as gender, race or sexual orientation.

MLive.com

According to a press release by Booth Newspapers Publisher Dan Gaydou, Booth Newspapers and MLive.com will now operate as one consolidated company, MLive Media Group.

Distribution and administrative operations will move to Advance Central Services Michigan, a newly formed subsidiary company.

The restructuring will most likely mean job cuts as the organization increases its focus on digital content.

From the announcement on MLive.com:

Many of our newspaper employees will have a place in the MLive Media Group and will still work in your local community at the MLive Media Group office. Many others will have a place at Advance Central Services Michigan. While we believe these changes will create growth opportunities for our current employees, the reality is they will also lead to reductions in our work force. We will provide as much notice and consideration to our employees as possible. We’ll strive throughout this process to treat all our employees with the professionalism and respect they deserve.

Gaydou says MLive Media Group will open new offices and hire people to produce content for its online products and its newspapers. Employees affected by the layoffs will be able to apply for those jobs.

Home delivery will be reduced to three days a week for the following newspapers, with daily content available in an online format.

  • The Grand Rapids Press
  • The Kalamazoo Gazette
  • The Muskegon Chronicle
  • The Jackson Citizen Patriot

Other Booth newspapers including the Flint Journal, Saginaw News, Bay City Times, and AnnArbor.com will also move under the MLive Media Group name but delivery changes at those papers are not expected.

John Klein Wilson - Michigan Radio newsroom

The Associated Press reports that an industrial contractor has bought a former General Motors facility in Pontiac with plans to use the 6-acre property for an expansion.

More from a Revitalizing Auto Communities Environmental Response (RACER) Trust press release:

An industrial contracting company has purchased the former GM ACG Penske facility on Oakland Avenue, with plans to expand its business at the six-acre property.

The RACER Trust sold the property, which includes a 32,000-square-foot building with multiple truck bays, to Lee Contracting, headquartered across the street from the ACG Penske facility, at 675 Oakland Ave.

Lee Contracting Founder and President Ed Lee said he plans to expand his more than 200-employee company, and the former ACG Penske property provides a perfect fit. “This was a great opportunity to build upon our business right here in Michigan,” he said. “Having this great site right across from our current facility provides us with a base to continue expanding the business.”

Lee Contracting is a single-source contractor specializing in complete turnkey solutions for industrial and manufacturing clients.

Terms of the sale were not disclosed.

LANSING, Mich. (AP) - Michigan Gov. Rick Snyder says a state agency is reassessing whether cars and trucks should be counted as assets for people receiving food stamps.

The state Department of Human Services last month began telling applicants with assets of more than $5,000 in bank accounts, second homes or vehicles with market values of more than $15,000 they'd no longer be eligible for assistance.

The Michigan League for Human Services says many people applying for food stamps are recently unemployed and requesting help for the first time.

Applicants say they need their cars to get to school or job interviews so they can get back on their feet financially.

Snyder told reporters Tuesday that criticism of the vehicle limit is a "valid issue" and that DHS officials are reviewing the policy.

Draft Michigan Rail Plan / MDOT

This was an interesting graph I came across in MDOT's draft report, Michigan State Rail Plan.

The miles of railroad we have in the state today, match what we had back in 1880.

The state went from a peak of 9,059 miles in 1909, to 3,900 miles today - a decline of almost 60%.

It makes sense.

The internal combustion engine began competing with rail at the turn of the last century. Trucks and cars began moving more freight and people.

user socialisbetter / Flickr

Chrysler CEO Sergio Marchionne said the two-class pay system currently in place will have to be replaced with a single wage system in the next round of contract talks with the United Auto Workers.

The UAW and Chrysler just approved a 4-year contract with the two-class pay system in place, so the next opportunity to revise the system won't come until the next round of contract negotiations.

More from the Associated Press:

Negotiations for that contract start in 2015.

He says the current system creates two classes of workers. New workers in the bottom tier make about half as much money as longtime UAW members.

Marchionne didn't say how he would come up with one wage. But it's likely he'll try to reduce the pay of top-tier workers. General Motors and Ford could follow and pay could be cut for most of the UAW's 112,000 members.

UAW workers approved a four-year contract with Chrysler on Wednesday. It includes raises for bottom-tier workers.

More on what Marchionne said comes from Changing Gears reporter, Pete Bigelow:

The structure is, “not something that can go on for a long period of time,” he said on a conference call to discuss the company’s second-quarter earnings. Marchionne continued, saying, two-tiers is “not a viable structure on which to build our industrial footprint.”

Changing Gears reporter Kate Davidson provided some insights into the two-class pay system in a piece she produced last year for Changing Gears.

At the time, the starting rate for a "two-tier" worker was $14 an hour. The new contracts have pushed the starting rate for "two-tier" workers above $19 an hour.

Whirlpool

Update 12:45 p.m.

Jeff Noel, a Whirlpool company spokesman, would not give Michigan Radio reporter Lindsey Smith a number. When pressed further about the job losses expected in Michigan, Noel said it would be “a commensurate amount."

10:06 a.m.

In a cost cutting measure, the Benton Harbor-based company Whirlpool says it will cut 5,000 jobs. There's no word yet on how many of those job cuts will be in Michigan.

Michigan Radio's Lindsey Smith is following the story and will have more for us later.

From the Associated Press:

Appliance maker Whirlpool Corp. says it will cut 5,000 jobs in an effort as it faces soft demand and higher costs for materials.

The jobs to be cut are mostly in North America and Europe. They include 1,200 salaried positions and the closing of the company's Fort Smith, Ark., plant.

The company expects the moves will save $400 million by the end of 2013.

Whirlpool also says its third-quarter net income more than doubled to $177 million, or $2.27 per share, from $79 million, or $1.02 per share. Adjusted earnings of $2.35 per share fell short of analyst expectations for $2.75 per share.

The company, whose brands include Maytag and KitchenAid, has been squeezed by higher costs for materials such as steel and copper.

Bloomberg News reports that Whirlpool employs 71,000 people around the world "at 66 manufacturing and research sites.":

Whirlpool follows European rival Electrolux AB (ELUXB) with a more muted outlook for the year. The Swedish company said today that it will deepen cost cuts after lowering a forecast for growth in Europe and North America this year. Whirlpool said reductions in Europe and North America account for about 10 percent of all employees in those regions. The company has a global workforce of 71,000 at 66 manufacturing and research sites.

Ricardo Giaviti / Flickr

On the heels of the approval of a four-year contract with the United Auto Workers comes news of a 3rd quarter profit from Chrysler.

The company reported a profit of $212 million for the 3rd quarter (July, August, and September). The company had reported a second quarter profit earlier this year ($181 million for the months of April, May, June).

From Chrysler's press release:

Chrysler Group LLC today reported preliminary net income of $212 million for the third quarter, compared with a net loss of $84 million a year ago, as the Company continues to increase sales and benefit from its alliance with Fiat S.p.A.

In the third quarter of 2011, net revenue was $13.1 billion, a 19 percent increase from the third quarter of 2010, driven by increased demand for Chrysler Group’s 16 all-new or significantly refreshed cars and trucks.

Chrysler CEO Sergio Marchionne said these profits show the company is back on track:

"In the third quarter, Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009. And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler," said Marchionne.

The Detroit Free Press reports the company "predicted it would make between $200 million and $500 million this year."

user nirbhao / Flickr

In a speech today directed toward the Michigan Legislature, Governor Snyder expressed his desire to improve just about every bit of infrastructure in the state.

Roads, bridges, airports, ports, rail, water lines, sewage pipes, and broadband Internet connectivity - it was all on the table, and the Michigan Governor said the state's infrastructure was suffering from a lack of investment.

The Governor said the state's economic recovery is tied to investing in all these bits of infrastructure, and that there is "no time to waste."

user ardee4 / Flickr

Governor Rick Snyder will deliver an address in Southfield tomorrow on improving roads and other infrastructure.

Geralyn Lasher is the governor’s communications director. She said the address will touch on a wide variety of topics that are critical to improving the state’s economy and protecting public health.

user jinglyjon / Flickr

History is filled with searches for Magic Bullets.

Economically speaking, those are quick-fix endeavors that promise to fix sour economies, provide jobs and bring prosperity to communities and regions. Changing Gears reporter Kate Davidson wrote earlier this week that, “Some have soared; many have backfired.”

Communities across the Midwest are employing a new round of Magic Bullets in attempts to rescue themselves from the Great Recession. All sound promising, but which ones stand up under further scrutiny?

General Motors officials said they will "create or retain" 418 jobs with a $325 million investment at a suburban Detroit transmission plant. The company says it will invest "in tools and equipment to support production of future electric vehicle components."

So which is it? Are they creating or retaining the jobs?

According this report in Crain's Detroit Business, 360 jobs will be created at the plant in Warren, Michigan as a result of the new UAW contract:

The company would not say how many of the 418 jobs will be new positions. But a summary of GM’s new four-year contract with the UAW said 360 jobs will be added at the plant for a new transmission that originally was to have been built in Mexico. The union said that the jobs were brought to the U.S. as part of the new contract.

At this point, GM is not revealing the timing for the project.

According to GM, 679 current employees at  the plant in Warren make transmissions for the Chevrolet Traverse, Buick Enclave, GMC Acadia, and the Chevrolet Malibu sedan.

From a GM press release:

“This investment in the future recognizes the excellent work force and operation of this plant,” said GM Manufacturing Manager Gerald Johnson. “While we aren’t sharing many details about this product, I can tell you that this investment demonstrates how GM, working with our UAW partners, continues to innovate and bring new electrification solutions to our customers.”

The 2.1 million square-foot plant, equivalent to the area of 15 city blocks, produced more than 338,000 transmissions in 2010.

“We are very proud of the membership of UAW Local 909 whose hard work and dedication to building quality products is why this new electric drive unit module is being built in the United States,” said Joe Ashton, UAW vice president representing the GM Department.  “These good paying, middle class jobs are very important for the State of Michigan and the Metro Detroit area.  It is the UAW’s goal to increase employment at GM and show the world that we can compete with anyone.”

 NEW YORK (AP) - Standard & Poor's is raising Ford Motor Co.'s credit rating two notches, saying a new contract with auto workers will allow for continued profits at the car maker's North American operations.

S&P said Friday it was upgrading Ford to "BB+" - one level below investment-grade - from "BB-."

Ford shares are up 45 cents, or 3.9 percent, to $12.15 in late-morning trading.

John F. Martin / General Motors

Three years ago, the advanced battery industry in the United States existed only in the imagination.

Plenty of people believed electric cars would be the next big thing, and they would be powered by lithium ion batteries; the same kind of batteries that are in cell phones and laptops.

But in 2008, almost all of the lithium ion batteries in the world were made in Asia.

Randy Thelan heard that might be about to change.

Batteries come to Michigan

Metro Detroit saw a boost in the number of home sales and home prices last month.

The Detroit Free Press reports the September increase came from an active summer selling season:

Sales rose 8.2% in September from 4,222 to 4,568 in metro Detroit, according to Farmington Hills-based multiple listing service Realcomp. The data includes sales from Livingston, Macomb, Oakland and Wayne counties.

Median prices rose 10% from $68,000 last month to $74,900.

Michigan Radio's Steve Carmody reported earlier this month about positive home sale numbers around the state, but housing analyst Alex Villacorta with Clear Capitol expected a decline this winter.

Obama, werewolves and silver…er…magic bullets

Oct 17, 2011
Kate Davidson

While we’re on the subject of magic bullets, please indulge this brief sidebar.

Schisms happen.  There was once a tremendous split between the (now) Roman Catholic Church and the (now) Eastern Orthodox Church.  Today there’s also a Great Schism in the bullet world.

Namely, between those who say magic bullet and those who say silver bullet — both parties referring to an economic quick fix.

On one side, you have President Obama, who may be the highest profile proponent of the term silver bullet. While pitching his jobs plan to a recent joint session of Congress he said, “It should not be nor will it be the last plan of action we propose. What’s guided us from the start of this crisis hasn’t been the search for a silver bullet. It’s been a commitment to stay at it, to be persistent, to keep trying every new idea that works.”

History is full of the search for magic bullets, those quick tickets to jobs and economic prosperity. Cities across our region have put great hopes and resources into magic bullets.

Some have soared; many have backfired.

This week, we’re bringing you stories of magic bullets past and present. We start with this look back.

Magic bullets are kind of like imaginary friends. We all have them in our past, but most people deny they exist.

I drove into downtown Traverse City on Saturday afternoon, and to my surprise, found an Occupy Wall Street demonstration occupying both sides of Front Street, the town’s main drag.

Well, it was actually called an “Occupy Traverse City,” demonstration. The protestors, who numbered perhaps fifty or sixty, seemed more cheerful than angry. The weather was brisk but pleasant; it was a nice day to be outside.

LANSING, Mich. (AP) - Moody's Investors Service has downgraded Lansing's credit rating. The city's rating has gone from Aa2, Moody's third-highest rating, to A1, its fifth highest. City finance director Jerry Ambrose says the downgrade impacts the interest rate Lansing would pay to borrow money.

Niala Boodhoo / Changing Gears

(We're having technical problems with the "audio processing" file above. To listen, please click on the second file.)

Steve Job’s death last week has reminded everyone firsthand the notion that everyone has ideas, and very few become actual products.

That’s because ideas need a push. In some cases, a big push from science to become reality.

It sounds obvious, but when we’re talking about actual products, that translate into actual jobs, and actual economic activity, it’s worth exploring.

That’s why I was so interested to learn more about Battelle Memorial Institute.

Innovation can strike in a variety of ways.

Pages