The Sick Man of the Midwest

[ModSquad]

[url= Sick Man of the Midwest Michigan

[einsteinrig]

thoughts? yeah, i have thoughts.

i don't think this is the place for political screeds, and i hope this doesn't become a trend here.

[suydam]

Here's my thought: THe auto industry is sick. Really really sick. Are unions part of the problem? Maybe (probably). Are they the entire problem? Absolutely not.

If you fix the auto industry, Michigan isn't having a recession. Don't forget it's not just GM and Ford (and now Chrysler based on recent news). It's all the suppliers that get squeezed every time the Big 3 have a downturn.

If you fix the auto industry then you stop hearing about Michigan's problems and the only manufacturing bleed-out is in West Michigan...which is not a liberal utopia....it's a national republican stronghold.

In the end, it's not a conservative or liberal agenda that's killing Michigan's economy. It's the fact that unlike the other 49 states, we are (or were) almost entirely a manufacturing economy. Politics won't fix that. The only thing that will fix that problem (and it is a problem...not just a downturn) is a shift to the new economy. That takes time and the shift isn't finished yet.

Oh, by the way...we may be #1 for move-outs as per United Van Lines, but there must be people moving back in with UHauls or something because the population is still growing here. Yes, it's slower growth than Arizona, but it's growing...not shrinking. Don't believe the hype.

[snoogit]

Did someone hijack Dave's account? the Dave I remember knew better then to post something like this.

[ModSquad]

Here's my thought: THe auto industry is sick. Really really sick.

If you fix the auto industry, Michigan isn't having a recession. Don't forget it's not just GM and Ford (and now Chrysler based on recent news). It's all the suppliers that get squeezed every time the Big 3 have a downturn.

If you fix the auto industry then you stop hearing about Michigan's problems and the only manufacturing bleed-out is in West Michigan...which is not a liberal utopia....it's a national republican stronghold.

In the end, it's not a conservative or liberal agenda that's killing Michigan's economy. It's the fact that unlike the other 49 states, we are (or were) almost entirely a manufacturing economy. Politics won't fix that. The only thing that will fix that problem (and it is a problem...not just a downturn) is a shift to the new economy. That takes time and the shift isn't finished yet.

I can really resonate with your comments. The symbiotic relationship between our State economy and the auto industry cannot be overestimated. I also did not like the link the "liberal" label given Michigan by the writer. I do agree, however, that because we are so tied to the auto industry unions have to be a part of the solution or they are adding to the problem.

Did someone hijack Dave's account? the Dave I remember knew better then to post something like this.

Just because I posted the article does not mean that I agree with it. There are some pretty radical ideas of our State in this article.

[ModSquad]

I can really resonate with your comments. The symbiotic relationship between our State economy and the auto industry cannot be overestimated. I also did not like the link the "liberal" label given Michigan by the writer. I do agree, however, that because we are so tied to the auto industry unions have to be a part of the solution or they are adding to the problem.

Just because I posted the article does not mean that I agree with it. There are some pretty radical ideas of our State in this article.

I also hate the label "liberal."

[tamias6]

No. Its not just the need to fix the auto industry. Michigan needs to bring in other industries to diversify its economy. Why? This state depends way too much on the auto industry for economic strength. Thus when the automakers do well Michigan does well. When the auto makers make crappy cars and thus get the snot beat out of them by foreign competitors so does Michigan. If this state had a more diverse economy, other industries would pick up the slack left by the waning auto industry thus acting as a safety net for this state to fall back on. In short a diversified economy will alwaysd win out over a monolithic economy. A diverse economy is what Michigan needs.

[peaceloveunderstanding]

Oh, by the way...we may be #1 for move-outs as per United Van Lines, but there must be people moving back in with UHauls or something because the population is still growing here. Yes, it's slower growth than Arizona, but it's growing...not shrinking. Don't believe the hype.

There are still more births than deaths, and international migration (immigration) is on the rise. But the problem is that many people are moving out of Michigan to other states and very few are moving in to Michigan from other states (internal migration).

Between 2000-2005, the Detroit-Warren-Flint CMSA lost 151,000 to internal migration, the Grand Rapids CMSA lost 3,000. The two metros had population growth, but only because of reproduction and international migration.

The thing I worry about in Michigan is the depletion of the tax base mentioned in this article. For example, I know of a small town that is losing a Delphi plant. That Delphi plant was 40% of their tax base, and that little town had so many services for its size and provided the town with a high level of per capita income. The town will die. Michigan is going to lose much of its tax base going forward and I don't see how it will support the things that are necessary for a rebound - like its very large higher education system. I hope for the best for the state, but from what I see, it doesn't look too pleasant.

[Rizzo]

I was under the assumption that Michigan has a high retention rate for natives...and that the moving van philosophy wasn't at all an accurate barometer. I was told that The State of Wyoming had some job fairs in Metro GR, to which they weren't well recieved. I believe at each event only a handful of locals took advantage of the situation.

[peaceloveunderstanding]

No. Michigan is one of the worst states in the Union for retention of its natives. That's what this article is talking about, but they didn't use the best barometer - they could have proven the same thing with census numbers and estimates.

I just showed the numbers for metros which is possibly misleading because they can include people moving from metro to metro. Those numbers are useful as they show the decay of Detroit but these numbers I am about to post are more telling.

For state as a whole the numbers look as follows:

Internal migration 2000-2004: -116,477

International migration 2000-2004: +103,785

That said there are states where these numbers are worse. New York lost around 771,000 during the same time period, California, 415,313, Mass. -173,062, Illinois -304,775; Ohio, -133,416; New Jersey, -135,483.

[egrguy]

Being at the bottom means that eventually we can only get better.

[snoogit]

I still stand by my guns and say our biggest problem is one that can't be fixed by taxcuts, or even union crushing.

The biggest problem affecting the auto industry isnt wages, its the cost of healthcare. Theres no good solution to reducing the cost of healthcare, but there are solutions to lessen the burden on the companies who pay for it.

Just because I posted the article does not mean that I agree with it. There are some pretty radical ideas of our State in this article.

I know, but I also remember you as a stabilizer, and a comforter, not neccisarily(sic) a lighting rod, and a wedge

[peaceloveunderstanding]

I edited my previous post with a bit of feel good. Michigan is not at the complete bottom. Other states in the North are seeing problems with keeping population as well.

New York lost around 771,000 during the same time period; California, 415,313; Mass. -173,062; Illinois, -304,775; Ohio, -133,416; New Jersey, -135,483

[sparky05]

Probably a good topic for the coffehouse...

[GRDadof3]

No. Michigan is one of the worst (if not the worst) states in the Union for retention of its natives. That's what this article is talking about, but they didn't use the best barometer - they could have proven the same thing with census numbers and estimates.

Moonshield, why do you only come around the Grand Rapids forum when there are negative things to be said about GR or Michigan? If life is so grand down South, then I would think you'd be totally occupied in your own glee.

National Review is a completely ultra-conservative publication. It doesn't even come close to pretending to be down the middle. Come on, Larry Kudlow, Rich Lowry, Newt Gingrich (hello), all those guys are 150% conservative, and they all show up on the trash cable "news" shows as the counterpoints to their liberal opponents. Lowry is just using Michigan's current situation as an opportunity to write an article. I don't listen to or trust anything from the fringes on either side.

And the comment about being lonely? Yeah, with almost 10 Million people, there's not a soul around for miles.

Here's a better editorial regarding the current state of the auto industry:

http://www.detnews.com/apps/pbcs.dll/artic.../609160316/1148

[peaceloveunderstanding]

Moonshield, why do you only come around the Grand Rapids forum when there are negative things to be said about GR or Michigan? If life is so grand down South, then I would think you'd be totally occupied in your own glee.

That's not the case, aside from life being grand that is.

As a former resident of Michigan, it's a state that I know much about and something I can make a comment on. I like to keep up-to-date with what is happening there, and when interesting topics come up on the recent posts page, I like to post. I go to Michigan every year, and visit several of my relatives. They live across the state in both rural and urban areas and I can see, and hear, what is happening.

I didn't present anything but the facts in this case. I didn't present it in a matter that was necessarily biting or gleeful. To declare the Michigan is in a peachy state would be counterproductive. Wallowing in one's self misery is less than productive, but the state does need to make significant changes and the problems have to be identified.

--

Now for the article itself. Personally, as a libertarian, I don't respect the National Review. It's a warmongering, neoconservative garbage magazine. But the article did make some interesting points on the unions and anti-business climate of the state. Those two issues are among the biggest problems that should be corrected going foward.

[RustTown]

You are talking about immigration as if it doesn't matter, at all. Michigan is growing very slowly, but it's still growing in spite of the move out of the state. It's not a good trend to have outward migration like we have, but these people are being replaced, and international immigration to the area is only increasing. IMO, the outward migration is soon to slow down, as I really do believe we've hit rock bottom, or are very close to hitting it.

[civitas]

Here's a better editorial regarding the current state of the auto industry:

http://www.detnews.com/apps/pbcs.dll/artic.../609160316/1148

"With so much bad news coming from Detroit these days, the overwhelming temptation is to conclude that the only future in the American auto industry is one of decline.

But that's not true -- certainly not for Detroit's foreign-owned rivals and it doesn't need to be for Detroit, either.

"One of the messages here," Cole said, "is you've got a crisis. Use it well.""

Unfortunately we've been reading this since the Japanese first started selling cars in America (what year was that?). The American auto industry has been extremely slow to change and the changes have never been enough. I hope for the best, but can it ever return to the glory days given the state of the competition and the union control?

[suydam]

No. Its not just the need to fix the auto industry. Michigan needs to bring in other industries to diversify its economy. Why? This state depends way too much on the auto industry for economic strength. Thus when the automakers do well Michigan does well. When the auto makers make crappy cars and thus get the snot beat out of them by foreign competitors so does Michigan. If this state had a more diverse economy, other industries would pick up the slack left by the waning auto industry thus acting as a safety net for this state to fall back on. In short a diversified economy will alwaysd win out over a monolithic economy. A diverse economy is what Michigan needs.

Absolutely. I don't disagree. But you have to be realistic. The size of GM+Ford+Visteon+Delphi alone (not including all the other suppliers based here) is larger than the entire economy of many states that look to recruit their cast-offs (e.g. Wyoming).

So diversify yes...but don't forget that even with all the people fleeing Michigan, we're still the 8th largest state in total population, the 4th largest in high-tech employment and the 3rd largest in R&D Expenditures. I'm pointing this out because if you really want Automotive to be, say, 33% of Michigan's economy instead of 75% you need to either turn Michigan into California (i.e. grow the entire economy into something bigger than most countries) or allow Ford/GM/Chrysler to dissolve (which would obviously benefit nobody). While I would jump at the chance to grow the economy into something on the California scale, we need to be realistic.

The way to diversify is to attract new business. But remember, you need the equivalent of 3 corporations, employing over 300,000 people world wide and bringing in tens of billions of dollars in income just to equal Ford/GM/Chrysler (at which point our economy would still be heavily vested in the auto industry).

Rather than looking at the auto industry as an anchor dragging our state down, I think we (and they) should be looking for ways to fix things within the industry have at the same time we attract new businesses. I'm hoping they are, but who knows...I don't work anywhere near that industry.

Finally, don't forget that the overwhelming majority of businesses that are HQ'd in Michigan started in Michigan. So, if we want to diversify to the point of non-dependence on the automotive industry, we need the next Ford/GM/whatever to start here in Michigan. We're not going to get that overnight, so for the next 25 years we'd better work hard to fix what we have (all the while attracting something new).

Just as an example: Microsoft employs 44,000 people in the US and 27,000 people outside the US. General Motors by comparison employs 327,000 people worldwide. I didn't see a number for US employees, but you can bet it's an order of magnitude larger than Microsoft. I point this out, not to say that we cannot fix Michigan's economy through diversification, but to remind people that our largest companies are larger than we think and the task is dramatically larger than anyone wants to admit (DeVos, Granholm or anyone else).

[GRDadof3]

That's not the case, aside from life being grand that is.

As a former resident of Michigan, it's a state that I know much about and something I can make a comment on. I like to keep up-to-date with what is happening there, and when interesting topics come up on the recent posts page, I like to post. I go to Michigan every year, and visit several of my relatives. They live across the state in both rural and urban areas and I can see, and hear, what is happening.

I didn't present anything but the facts in this case. I didn't present it in a matter that was necessarily biting or gleeful. To declare the Michigan is in a peachy state would be counterproductive. Wallowing in one's self misery is less than productive, but the state does need to make significant changes and the problems have to be identified.

--

Now for the article itself. Personally, as a libertarian, I don't respect the National Review. It's a warmongering, neoconservative garbage magazine. But the article did make some interesting points on the unions and anti-business climate of the state. Those two issues are among the biggest problems that should be corrected going foward.

So I can expect to see you come around when all the positive developments are being discussed then....?

I have relatives in States all over the country, and frankly, I don't really care what is going on with their respective economies, so I think your intentions are disengenous at best.

Unfortunately we've been reading this since the Japanese first started selling cars in America (what year was that?). The American auto industry has been extremely slow to change and the changes have never been enough. I hope for the best, but can it ever return to the glory days given the state of the competition and the union control?

I actually think the writer was saying that the glory days won't return, and shouldn't return, with the Big 3 having market dominance, but that a new era of smaller, leaner and profitable automakers can emerge.

[WOT]

Lighthouse Dave - Man did you ever start something! Good discussion.

Can anyone here comment on where Michigan is at in developing Hydrogen into the "primary" alternative energy source? It would seem to me that we could use our heavy automotive R&D knowledge to leverage our state as the world leader in that development. I just read a very indepth article on Ethanol and really learned alot on why it can never really make a dent in our oil dependency, but hydrogen might just be able to solve the root cause problem.

Sorry if this might be in the wrong thread, but am curious as to what we are doing in the state to utilize the strengths we do have from the auto industry to propel us further in different diversifications?

[Phizzy]

If you fix the auto industry then you stop hearing about Michigan's problems and the only manufacturing bleed-out is in West Michigan...which is not a liberal utopia....it's a national republican stronghold.

To be fair, West Michigan isn't a separate state. It still has to abide by the State of Michigan's regulations, taxations, etc., no matter how much a of a "national Republican stronghold" it is.

[DSchoon]

I think the writer was using a bunch of random data to attack unions and the "liberal" social policies he mistakingly believes are present here.

Politicizing the economy should earn you a good, swift kick in the junk.

Michigan's legislature is far from liberal, the opposite of it.

This one-state recession talk makes me want to puke. It's a one-industry recession. Everything else is on par with the rest of the country.

[GRDadof3]

On the topic of diversification, Michigan needs to do more to invest in technology companies, and not just the computer technology companies. I just read an article about Arizona, in their NEED to concentrate on water conservation, is heavily investing in water preservation technology and new de-salinization techniques. You can read it HERE. They are now exporting this technology around the globe, which is a market that is expected to explode from $2 Billion today to $70 Billion by 2020 as fresh water becomes more scarce. Couldn't Michigan also foster startups in this rapidly growing area?

Hmmm, what other natural resources are becoming scarce, and what kind of industry does Michigan dominate the world in???? Could all that intellectual capital be redirected to make Michigan again the world leader in transportation systems, and in energy conservation technology, specializing in transportation? If the State makes it a priority, perhaps.

Or what about Michigan's world domination of the agriculture industry, and how could having one of the best agriculture schools in the world be parlayed into expanded technological research and advanced agriculture techniques that can be exported to nations around the world? Again, if the State makes it a priority, maybe.

Technology is going to become more and more important globally, as resources continue to deplete and populations continue to explode. How is Michigan positioning itself in these areas, and not by creating the next IPod that will be obsolete in a year? You don't have to be a "tree-hugger" to see the environmental opportunities that are being presented, and others are taking advantage of.

[end rant]

[Interesting...]

Thanks Dave...

That article is another example of bad information leading to more bad information. Much of that applies to the East Side of the State...not the West. Michigan really has two ecomomies...East & West.

Unions, well yeah the writer has a point here. The Unions due restrict growth. Look who's left town here: Bosch, Electrolux; Siemens etc...all Union plants. However there are several companies from out side our State who've identified WEST Michigan as a place to consider. There are a few big and very serious looker's right now...coming here b/c we have labor, suppliers and a great quality of life! They are looking here and not the East side, this is due to the fact that the West side of the State is primarly non-union...yet still offers highly skilled, hard working labor pools.

Can the State be more pro-active in attracting? Yes...that is a issue with the current administration, not to be labled a Liberal or Conservative issue. Yet again, West Michigan has one of the best Econ Development machines in the Nation. Seriously! The Right Place & Birgit Klohs are top notch and I would put that team up against any other in the nation.

West Michigan is alive, healthy and growing...