Economic Policy Institute

A report by the Economic Policy Institute looked at the growing trade deficit between the U.S. and China and its effect on jobs.

The group found the trade deficit with China has been a "prime contributor to the crisis in U.S. manufacturing employment."

From the report:

Between 2001 and 2010, the trade deficit with China eliminated or displaced 2.8 million jobs, 1.9 million (69.2 percent) of which were in manufacturing. The 1.9 million manufacturing jobs eliminated or displaced due to trade with China represents nearly half of all U.S. manufacturing jobs lost or displaced between China’s entry into WTO and 2010.

The report finds that the number of Michigan jobs displaced by the trade deficit with China totaled 79,800. That accounts for 1.75 percent of total employment in the state in that time period.

Despite being a heavy manufacturing state, Michigan was not the hardest hit state by the trade imbalance.

From the report:

Jobs displaced due to growing deficits with China exceeded 2.2% of total employment in the 10 hardest-hit states (i.e., jobs lost or displaced as a share of total state employment): New Hampshire (19,700, 2.84%), California (454,600, 2.74%), Massachusetts (88,600, 2.73%), Oregon (47,900, 2.71%), North Carolina (107,800, 2.61%) Minnesota (70,700, 2.61%), Idaho (17,400, 2.54%), Vermont (7,800, 2.37%), Colorado (55,800, 2.30%), and Rhode Island (11,800, 2.24%).

The report concludes, "the U.S.-China trade relationship needs a fundamental change. Addressing the exchange rate policies and labor standards issues in the Chinese economy are important first steps."

Dan Bobkoff / Changing Gears

Depending on who you ask, American manufacturing is either the way out of our bad economy, or it’s dead.

Whatever you think, there’s no denying that manufacturing has changed.

That’s the story of Thogus Products in Avon Lake, Ohio.

This manufacturer has changed so much, its President calls it a 61 year-old startup company.

Wisconsin Historical Society

What’s different about our factories? How are things changing in the Midwest, from the way people are trained to what’s being produced?

This month, Changing Gears’ regular Wednesday reports will be devoted to the future of manufacturing.

The days are long gone when all you had to do to get a factory job was know someone. These are not the same places your dad or mom or grandfather worked in. And the expectations of what employers need from you have changed, as well.

We’ll kick the series off tomorrow with a report from Dan Bobkoff. Meanwhile, we’d like to pick your brain.

What kind of factories do you think we’ll be seeing in the Midwest? Which industry will be next to catch hold here?

We’re looking forward to exploring our manufacturing future with you.

Jeff Kubina / flickr

The head of the Environmental Protection Agency, Lisa Jackson, is in Michigan today. She’s visiting for a ribbon cutting at Ventower Industries in Monroe. It’s a company that will be making towers for wind turbines.

The Monroe facility will serve as Ventower's main U.S. operation.

35 employees will start work this week, and as many as 300 could eventually work there.

Scott Viciana is the company’s vice president. He says the plant is built on the site of a former industrial landfill.  So first, they had to clean up the land.

“We stumbled across less (sic) concerns in the end than we thought potentially we could.”

Ventower got state and federal tax credits to clean up the brownfield site.

EPA Administrator Lisa Jackson says that makes it a double win for the environment.

"What we see here today is a return to use. A return to use for a site that will preserve green space, but also support a clean energy economy."

Ventower officials say the Monroe site is ideal because it can ship parts by road, rail, and a Great Lakes port.

Dr_Bob / MorgueFile

Michigan is playing a starring role in a new federal initiative designed to spark the creation of new manufacturing jobs as part of the Advanced Manufacturing Partnership. The federal government will spend $500 million to jumpstart manufacturing research and development projects.

President Obama says the government played an important role initially in projects that led to the creation of the internet, cell phones, and companies like Google.  He says this investment can do the same for manufacturing.

Midwest manufacturers heard good news about U.S. trade at a conference in Chicago.

A record number of exports are helping to shrink the trade deficit, and conference organizers are optimistic about the future of Midwest manufacturing.

Economist Bill Strauss, with the Federal Reserve Bank of Chicago, likes to use a tennis ball as an analogy to explain what’s going on in manufacturing.

"The sectors that fall the hardest tend to bounce back the strongest," said Strauss. "And we are definitely seeing that with regard to manufacturing where it was automotive and it was primary metals that fell the most during the downturn and they are coming back the strongest at this point."

This morning, Strauss and others told the  Chicago Council on Global Affairs they’re optimistic. They point to data like a 7 percent increase in manufacturing over the past 22 months.

Now for the bad news.

That doesn’t translate into more jobs, because manufacturers have gotten better at producing more with less people.

Debbie Stabenow maintains a lead over Pete Hoekstra in a new Michigan poll.
Office of Senator Stabenow

Michigan U.S. Senator Debbie Stabenow says the future of the Michigan economy depends on a strong auto and manufacturing base, as well as agriculture:

“You can’t have an economy in this country unless you make things and grow things. And the fundamental part in making things really is the auto industry and manufacturing. ”

Business owners and politicians are trying to figure out how to make Michigan a manufacturing hub for things like advanced batteries, wind turbines, and solar panels.

They’re gathering at the Clean Energy Manufacturing Workshop in Ann Arbor today and tomorrow. The workshop is being put on by the U.S. Department of Energy’s Office of Energy Efficiency & Renewable Energy along with Ann Arbor SPARK.

Steven Busch will be paying pretty close attention.

He’s with Energetx Composites Company in Holland. It’s a spin-off company of Tiara Yacht. Before the economy went south, their main business was building high end yachts. Now, they make blades for wind turbines.

“The basic manufacturing process is very similar. We have the expertise on how to handle large, big, bulky things.”

He says they’re planning to stay in Michigan.

“Michigan offers the best engineering and manufacturing skill set probably in the world. Geographically, the Great Lakes are a great opportunity as a place to be able to ship products over the water.”

Busch says he’d like to see more training programs at universities and community colleges – and more retraining programs for former auto workers who want to get into the business.

Lindsey Smith / Michigan Radio

A 2-million-square-foot former General Motors stamping plant in the Grand Rapids suburb of Wyoming will be demolished this year. Monday night Wyoming’s city council approved plans to destroy the 75-year-old building and redevelop the site.

Marelco Power Systems, Inc. told the Livingston County Daily Press & Argus that is will stop production at its plant in Howell.

The company makes transformers, inductors, and control systems, among other things, for the auto companies and other manufacturers.

From the Associated Press:

The head of Michigan-based Whirlpool says the United States is a smart place for the appliance giant to invest.

The company announced last year that it planned to sink $1 billion into its United States operations over the next four years. CEO Jeff Fettig says since then, he’s fielded lots of questions about why and how the company planned to do that.

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:

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.

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:

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.

kvanhorn / Creative Commons

Grand Rapids office furniture maker Steelcase says it will close three manufacturing plants in North America. 400 workers will be laid off at a plant in the Grand Rapids suburb of Kentwood.

The Changing Gears team has put together a one-hour special Reinventing Our Cities.

It airs today at 2 pm eastern and 1 pm central. You can hear it on Chicago Public Radio, Michigan Radio and Cleveland's Ideastream, or, you can click this audio link to take a listen:

Here's how the team describes the one-hour special: