Tough times for Michigan

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"Staking out the next battlegrounds: McCain, Romney bank on Mich."
By Michael Levenson, (Boston) Globe Staff, January 10, 2008

GRAND RAPIDS, Mich. - With their rivals focused on other states and the race for the Republican nomination still unsettled, John McCain and Mitt Romney battled each other in Michigan yesterday, turning their attention to the state's suffering economy and its crucial presidential primary on Tuesday.

Both men are chasing history, with McCain trying to reprise his victory in the 2000 Michigan primary and Romney his father's success as a three-term governor. Several hundred cheering supporters gave Romney a big welcome in an upscale shopping village in Grand Rapids yesterday afternoon, with one man yelling: "Gold, Mitt! Gold!"

"I've watched with concern as I've watched Michigan go through a one-state recession," the former Massachusetts governor said, standing on a chair and yelling without a microphone. "It's just not right, and we need to have somebody who cares very deeply about this state - and I do."

McCain also zeroed in on the economy. Noting that Michigan's unemployment rate is nearly 3 percentage points above the national average, the Arizona senator floated a plan to use community colleges to retrain workers.

"I'm aware of the economic difficulties here in the state of Michigan," McCain said at a rally in Grand Rapids, just a few hours before Romney arrived. "I am aware that you have high unemployment. I'm aware that the state of Michigan has lost jobs and that there are tough times, tough times here in the Heartland of America."

For McCain, Michigan presents an opportunity to keep alive the momentum from his campaign-saving victory in New Hampshire on Tuesday.

For Romney, the state is close to a must-win after he planned for months - and outspent his rivals - to win Iowa and New Hampshire, but came in second to Mike Huckabee in Iowa and to McCain in New Hampshire. In a sign of how much his campaign is banking on a win, Romney has decided to pull his advertising from South Carolina and Florida, but continue running ads in Michigan, as he has for weeks.

Huckabee, who finished third in New Hampshire, is in the top tier with McCain and Romney in recent polls in Michigan, where he hopes to establish himself as a national candidate. He launched a new TV ad in the state yesterday, focusing on jobs. In the ad, Huckabee says that he knows what it is like to struggle financially while growing up, and then boasts of his record as governor in Arkansas in cutting taxes and "achieving record job growth."

The rest of the GOP field is ignoring Michigan; the candidates are cherry-picking states where they believe they can win. Former senator Fred Thompson of Tennessee rolled yesterday across South Carolina on a bus tour, hoping his Southern roots and conservative platform will give him a make-or-break win in the Jan. 19 primary. Rudy Giuliani stumped yesterday in Florida, where he is staking his candidacy on its Jan. 29 primary.

Giuliani unveiled a tax-cut plan that the conservative Club for Growth - which has run ads against Huckabee - praised as "a bold and innovative proposal that will reward hard work, encourage investment, and promote economic growth for Americans across the economic spectrum." The plan would extend President Bush's tax cuts, lower corporate tax rates, and eliminate the federal estate tax, among other measures.

All the Republican candidates, except Duncan Hunter, will be in South Carolina tonight for another debate, the third in six days.

Before leaving for Michigan, Romney tried to reassure key fund-raisers at a Boston phone-a-thon that he is in the race for the long run, despite his disappointing finishes in Iowa and New Hampshire. Chief campaign strategist Alex Gage sought to reinforce the point with a memo titled "The Path to Victory," in which he argued that Romney has received the most votes of any Republican, that the race is "wide open," and that Romney is the best candidate to beat the Democratic nominee.

The Romney campaign said late yesterday that 500 volunteers from across the country had raised about $5 million in the phone-a-thon, less than the $6.5 million generated by a similar event in January 2007. Only $1.5 million of the total can be used for the primary race, however, the campaign said.

Romney is counting on winning in Michigan to keep his campaign alive.

He emphasized yesterday that he was born in Detroit, the son of an auto executive who served as governor from 1963 to 1969, and that he worked on his father's campaigns and his mother's unsuccessful campaign for US Senate in 1970. He recalled that he worked as a security guard at Chrysler after high school and returned after graduate school to work in Chrysler's marketing division.

"I always thought someday I'd be in the car business," Romney told the crowd in Grand Rapids yesterday. "Well, now I think I could do more to help the car business and to help Michigan by becoming president than by going to a job in the car industry."

Romney attributed Michigan's economic woes, in part, on the state's Democratic governor, Jennifer Granholm, saying taxes are going up in the state and unemployment is rising. He pledged to invest more heavily in science and help Michigan's public research universities.

"If I'm president, that one-state recession is over," Romney said to applause at an "Ask Mitt Anything" event held at Grand Valley State University in Grand Rapids. The crowd applauded when Romney recalled his father's service as governor. One man in the audience told Romney, "Welcome home."

McCain also campaigned on his political history in Michigan.

"This state can again play a key role," McCain said at his rally. "We won it in 2000 - and we will win it again in 2008."

Romney talked about reviving the auto industry, but McCain said some Michigan industries cannot be resurrected.

"I've got to give you some straight talk: Some of the jobs that have left the state of Michigan are not coming back," he said. "They are not. And I am sorry to tell you that."

He proposed a new system to educate and retrain workers.

"We cannot abandon them in the name of progress, in the name of information technology revolution," he said. "We are a Judeo-Christian-valued nation and we cannot leave these great Americans behind."

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Material from the Associated Press was also used in this report. Michael Levenson can be reached at mlevenson@globe.com.

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"Look to Michigan for good workers"
The Berkshire Eagle - Letters
Thursday, January 17, 2008

It's great to read in The Eagle how the plastics industry (and others) in Pittsfield are doing so well. However, the shortage of local, qualified manufacturing workers has become a problem.

I'd suggest the city of Pittsfield actively market the growing manufacturing climate and great quality of life in this area to the very qualified manufacturing workforce in Michigan. Michigan has the highest unemployment rate in the country, the majority being highly skilled, hard-working men and women who have spent their whole life working for GM and its subsidiaries. They now find themselves out of work, or with no job security in a declining automobile manufacturing environment.

If I was in this situation in Michigan, I would jump at the chance to relocate to Pittsfield and work in a fast growing manufacturing sector, in an area with all the great things Pittsfield has to offer. These "Michiganders" would bring their families and friends, buy houses, work hard, spend money and be a positive addition to the Pittsfield community.

DAVID POTTER
West Stockbridge, Massachusetts

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"McCain giving up Michigan"
Posted by Foon Rhee, deputy national political editor, October 2, 2008, 4:06 PM
By Sasha Issenberg and Brian C. Mooney, Boston Globe Staff

John McCain is giving up attempts to swing Michigan into the Republican column in November, officials with the McCain campaign and Republican National Committee told the Globe.

The Associated Press and Politico this afternoon are reporting that McCain has canceled a trip to the state next week, plans to stop running ads on TV after this week, and is dispatching staffers to states where he has a better chance to win.

While Democrat John F. Kerry won Michigan by three percentage points in 2004 and Democrat Al Gore won the state by five percentage points, McCain had targeted the state's 17 electoral votes. But the economic crisis, which hit Michigan earlier than other states, is proving to be unfriendly terrain for McCain, who trails Democrat Barack Obama in polls in voters' confidence in fixing the economy.

The decision to withdraw from Michigan was made by campaign officials on Wednesday night after polling showed McCain losing ground among independent voters, according Chuck Yob, McCain's co-chairman in the state.

"I see where they're coming from," said Yob, a Republican National Committee member. "The economy is so bad here and Obama's promised them the world. McCain has given them a much more sensible approach."

When McCain was considering Mitt Romney as his running mate, one of the factors recommending the former Massachusetts governor was his ties to Michigan -- his father George was a popular governor -- that Romney's supporters said could help McCain in the state.

A McCain campaign official said his efforts forced Obama, who hit the jobs message hard in two appearances today in Michigan, to play defense in the state.

The McCain effort there was "a map-spreading move for a Republican candidate this year," the official said, likening it to the Obama campaign's recent reallocation of resources from Georgia, North Dakota, and Alaska, all traditionally Republican states. "We will be moving resources to Pennsylvania and Wisconsin, and will be starting television ads in Maine, the McCain aide said.

McCain trails Obama in recent polls in all three of those states, which lean Democratic. Maine is one of two states, however, that apportion electoral votes by congressional district, and George W. Bush's campaign made an unsuccessful effort there in the past two presidential elections, particularly in the more conservative Second Congressional District in the northern part of the state.

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"He's talking to you, Pookie"
The Boston Globe Online, Posted by Scott Helman, Political Reporter, October 2, 2008, 4:26 PM

EAST LANSING, Mich. -- With Monday the final day to register to vote in Michigan this fall, Barack Obama made sure that the more than 18,000 people who came to see him today at Michigan State -- along with their oddly named relatives -- would be on the rolls.

"No excuses," he said.

"If you were willing to stand around for two or three hours -- six? -- then I know you guys are going to be registered," Obama said. "But you gotta go get cousin Pookie and Ray Ray, who's sitting on the coach loafing around. You've gotta get them registered and out to vote as well, all right?"

No word on whether Pookie and Ray Ray are concerned more about universal health care or the war in Iraq, or whether they'll be watching tonight's debate between Sarah Palin and Joe Biden. Given today's surprise news that rival John McCain is ceding Michigan to the Democrats, it might take a little extra effort to get Ray Ray off that couch.

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DERRICK Z. JACKSON: "Losing hope in Michigan"
By Derrick Z. Jackson, Boston Globe Columnist, October 4, 2008

WYOMING, Mich.

IT IS NO WONDER John McCain pulled the plug on his Michigan campaign this week when you listen to Scott Laskey. The 42-year-old regional manager for a compressed gas company was laughing at himself at his Wednesday bowling night in this suburb of Grand Rapids. Laskey voted for President Bush both times. The war and the economy has him voting for Democrat Barack Obama.

"What was I thinking?" Laskey said. "How many times do I have to be hit over the head? Bush hasn't done anything."

He said that with gasoline prices and other belt tightning, he had to put one of his three cars in the garage to afford car insurance for his son, and now Laskey, his wife, and their son have to share two cars in the suburbs. "The whole economy is out of control," Laskey said. "I think my insurance was like $45 when I was a teenager."

Another bowler, Gerry Wojtaszek, a 49-year-old district manager for a furniture and appliance rental center, also voted both times for Bush. He, too, says he is voting for Obama.

"The first time, I felt that the economy would step up under him," Wojtaszek said. "The second time, I was supportive of the war. But the economy's a hell in a handbasket. The war is still going on. I thought about voting for McCain on experience, but with all the time he's been in office, what has he done?"

Michigan was assumed to be a battleground state after Democrat John Kerry won here in 2004 by only 165,000 votes out of 4.8 million cast. But with the nation's economic news being the gloomiest here, and September auto sales down over 30 percent at Ford and Chrysler, patience for McCain's experience is wearing thin. After a September where McCain had a small lead in two polls, now three polls show Obama with a double-digit lead for the first time.

The day that McCain's campaign confirmed it was abandoning Michigan, Obama worked this Republican part of the state with an outdoor rally of about 16,000 people in downtown Grand Rapids. Grand Rapids is in Kent County, which Bush handily won. While Obama voters chanted for change, McCain supporters at the bowling lanes and other places wondered how much enthusiasm there was for their candidate.

The Grand Rapids Press this week reported that compared with 2004, when Bush outraised Kerry in Kent County by four-and-a-half times, McCain has outraised Obama by only double.

Three of Laskey's bowling buddies - Tom Buckowing, a 47-year-old office chair maker, Dan Potts, a 53-year-old director of an office supplies distribution company, and Rob Houck, a 46-year-old self-employed painter - are still supporting McCain, but Houck and Buckowing said that could change depending on the economy. Houck said he is now painting two houses for every seven he painted a couple of years ago. Potts recently watched 70 fellow workers, including his son, lose their jobs as his company was swallowed up in a merger. Buckowing has been going back and forth and is leaning toward McCain for his experience, though he is bothered by McCain's choice of Sarah Palin because of her inexperience.

There were two other bowlers at the Laskey table. Scott Verhage, 23, bowls on the team in place of his father, who died four years ago. He is voting for Obama on the economy as he has watched his overtime be eliminated at his job as a gas station cashier. He has suffered many indignities of having people irate at the price of gasoline take it out on him verbally and knock merchandise at his feet. Ken Koster, a 50-year-old division supervisor for a food distributor, has not been a registered voter for 14 years. He says he's registering to vote for Obama.

"I'm tired of killing myself for nothing," he said. "The $700 billion bailout is the final straw. When are they going to bail US out?"

With that, it is easy to see why McCain bailed out of Michigan.
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Derrick Z. Jackson can be reached at jackson@globe.com
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A BOSTON GLOBE EDITORIAL
"Detroit on the brink"
November 15, 2008

A COLLAPSE of the long-troubled American auto industry would be a disaster, especially now, amid the turmoil besetting so many other sectors of the economy. But there is no easy way for the federal government to prevent that without enabling the bad habits that brought the industry to the precipice. This is why, even after weeks of hand-wringing in Detroit and Washington over the excruciations of General Motors, no agreement has emerged to offer further help.

Given that millions of jobs and billions of dollars in tax revenues are at stake, Congress ought to be open to measures that would keep the automakers in business. But lawmakers should not bail out Detroit without imposing conditions that would make castor oil seem pleasant. The industry's problems were well known long before the current economic crisis began, and the goal of any rescue plan for GM should be to force the automaker onto a sustainable course.

Executives at GM have warned that, within several weeks, the company may run out of the cash it needs to pay for its own operations. Bridge loans from the federal government could delay any day of reckoning - but in exchange Congress could demand that the company produce and execute a credible plan to bring itself back to health. And while GM's critics suggest that a bankruptcy filing would allow the company to make the structural changes it needs, a government-facilitated receivership could be a gentler way to achieve similar goals.

Policymakers can help GM in other ways: Amid fears that no one will buy cars from a company at risk of failure, the government could consider shoring up the company's warranties, so that potential customers know they won't be left in the lurch.

Critics on the left blame short-sighted management, while those on the right cite unworkable labor agreements. Both are right. All three major US automakers have suffered from their codependent relationship with the United Auto Workers. Contracts that were sustainable when GM, Ford, and Chrysler dominated auto sales became unworkable as foreign competition increased. The fad in high-margin, gas-guzzling SUVs gave the companies a reprieve, but Detroit didn't anticipate that fuel prices or consumer tastes would ever change.

Instead, the automakers seem to have assumed that their influence and the UAW's would shield them from adverse consequences. Sure enough, outside a small, hard core of laissez-faire purists, there is great unease about abandoning automakers and their employees to their fate. Detroit needs help. But offering it with no strings attached would be a waste of money and time.

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The Boston Globe, Op-Ed, MATTHEW F. PAWA
"Saving Detroit - from itself"
By Matthew F. Pawa, November 16, 2008

CONGRESS IS poised to enact a massive taxpayer bailout of GM, Chrysler, and Ford. Congressman Barney Frank is charged with crafting the emergency legislation. Our leaders apparently believe they have only two bad choices: do nothing and let the domestic automobile industry die, or postpone the inevitable by throwing good money after bad.

There is a third option: a government takeover of these companies with a mandate to make the green cars of the future. Only the creation of a government corporation with the power to take these companies over, shake up their management, unshackle them from their pension and healthcare liabilities, renegotiate union contracts, and give them a clear mission to produce the ultra-efficient, green cars of the future will save the American automobile industry.

I have seen firsthand the "can't do" attitude of these companies' leaders in a series of lawsuits GM and Chrysler filed against state greenhouse gas laws. Last year, the first of these cases went to trial in Vermont. I and others on the legal defense team were stunned by the pessimism of Detroit's leading executives and engineers. Even as the evidence of numerous breakthrough automobile technologies piled up in the courtroom and the price of gasoline spiked outside it, GM and Chrysler's executives contended, with straight faces, that they would go out of business if they could no longer rely on gas guzzlers for their profits.

GM and Chrysler lost the Vermont trial. A federal judge in California also rejected a parallel lawsuit they filed there. Undaunted, GM and Chrysler have appealed and are pressing another case against Rhode Island's greenhouse gas law. These lawsuits demonstrate not only bad corporate citizenship but Detroit's utter and continuing blindness to the own companies' best interests.

Detroit is woefully behind the times. While the European Union will achieve fuel economy of 49 miles per gallon by 2012 and Japan 47 miles per gallon by 2015, GM, Chrysler, and Ford say they need $25 billion in loans in order to reach the modest goal of 35 miles per gallon by 2020 now required by US law. And they want another $25 billion or more just to stay in business.

The government should not provide taxpayer money to companies whose leaders remain hostile to the massive fuel economy improvements and greenhouse gas emissions reductions that are vital to our energy and environmental security. Detroit is going broke because of a consistent history of bad decisions, bad management, and bad attitude. The only way to change that culture is to fire the management.

Letting these companies die also should be off the table. They employ more than 200,000 people. These workers, their company towns, the dealerships nationwide, and millions of other workers reliant on the automobile industry would face economic catastrophe if the companies fail. Taxpayers would likely pick up the costs of pensions and other liabilities. The social costs would be enormous.

If taxpayers spend billions on a company like GM, which currently has a market value of $1.8 billion, we should have ownership. Congress should create a government corporation, charge it with buying a controlling stake in struggling, domestic automobile manufacturers, and give it a clear mission to shake up these companies and produce the clean, green cars of the future.

A government-run automobile company could draw on the best minds and innovations in the country. Small companies that already have developed breakthrough technologies but lack the money to mass produce their vehicles could be brought into the enterprise. Broad legal authority could be granted to renegotiate union contracts. America could get out of the back seat on fuel economy and take a leadership role in producing the green cars of the future. And eventually, the government could sell off its stake piece by piece.

There is precedent for successful government corporations. Volkswagen was wholly government-owned for over a decade and even now remains partially government-owned. For over 70 years the Tennessee Valley Authority has met President Franklin Roosevelt's call for "a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise."

The challenges America now faces are comparable to those we faced in the Great Depression. And they call for similarly far-reaching and visionary measures. The taxpayers should rescue the domestic automobile industry from itself.
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Matthew F. Pawa, a lawyer in Newton, is an adjunct professor at Boston College Law School.
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"4 states see double-digit jobless rates in January (2009)"
By Jeannine Aversa, AP Economics Writer, March 11, 2009

WASHINGTON --Four states -- California, South Carolina, Michigan and Rhode Island -- registered unemployment rates above 10 percent in January, and the national rate is expected to hit double digits by year-end.

The U.S. Labor Department's report on state unemployment, released Wednesday, showed the increasing damage inflicted on workers and companies from a recession, now in its second year. Some economists now predict the U.S. unemployment rate will hit 10 percent by year-end, and peak at 11 percent or higher by the middle of 2010.

In December, only Michigan had a double-digit jobless rate. One month later, four states did and that doesn't count Puerto Rico, which saw its unemployment rate actually dip to 13 percent in January, from 13.5 percent in December.

California's unemployment rate jumped to 10.1 percent in January, from 8.7 percent in December, as jobs have disappeared in the construction, finance and retail industries.

Michigan's jobless rate jumped to 11.6 percent in January, the highest in the country. The second-highest jobless rate was South Carolina at 10.4 percent. Rhode Island was next at 10.3 percent, which marked an all-time high for the state in federal records dating to 1976. California rounded out the top four.

Forty-nine states and the District of Columbia registered unemployment rate increases. Louisiana was the only state to record a monthly drop. Its unemployment rate fell to 5.1 percent in January from 5.5 percent in December.

The U.S. unemployment rate, released last week, rose to 8.1 percent in February, the highest in more than 25 years.

Employers are laying off workers, holding hours down and freezing or cutting pay as the recession eats into sales and profits.

Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to shrink their work forces. It's a vicious cycle in which all the economy's problems feed on each other, worsening the downward spiral.

And more layoffs are on the way. National Semiconductor Corp. said Wednesday it will lay off 1,725 employees, more than one-quarter of its work force, after third-quarter profits fell 71 percent.

Industrial conglomerate United Technologies Corp., which makes Otis elevators and Sikorsky helicopters, said Tuesday it will lay off 11,600 workers, or 5 percent of its work force. Dow Chemical Co. on Monday said it would cut 3,500 jobs at chemical company Rohm & Haas Co. as part of its $15 billion buyout of the company.

President Barack Obama has urged Americans to be patient, saying it will take time for his economic revival and job-creation programs to bear fruit.

Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts, a revamped bailout program for troubled banks and a $75 billion effort to stem home foreclosures.

Nationwide, the recession has claimed a net total of 4.4 million jobs since December 2007, and has left 12.5 million people searching for work -- more than the population of Pennsylvania.

The state unemployment report also showed that North Carolina and Oregon -- along with South Carolina -- notched the biggest monthly gains of 1.6 percentage-points each.

North Carolina's rate soared to 9.7 percent in January, from 8.1 percent in December, while Oregon jumped to 9.9 percent, from 8.3 percent.

Meanwhile, Georgia's jobless rate climbed to 8.6 percent in January, an all-time high on federal records.

On a brighter note, Wyoming continued to register the lowest unemployment rate -- 3.7 percent.

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"Gov. Deval Patrick addresses Michigan Democrats"
By Associated Press, Saturday, April 25, 2009 - www.bostonherald.com - Local Politics

BOSTON — Massachusetts Gov. Deval Patrick is in Michigan to headline a fundraiser hosted by that state’s Democratic Party.

The governor will be the keynote speaker at the Jefferson-Jackson Day Dinner on Saturday.

During the event at Detroit’s Cobo Hall, Patrick will speak about the life sciences initiative in Massachusetts and other political and governmental topics.

A Patrick spokesman says the governor was invited to speak by Michigan Gov. Jennifer Granholm.

Party dinners are often a stopping point for potential presidential candidates, but Patrick — who has close ties to President Barack Obama — says he’s committed to seeking re-election next year.

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"Why Michigan's Unemployment Rate Could Be Worse"
By Liz Wolgemuth, U.S. News & World Report

It would appear that Michigan, the state with the highest unemployment rate in the nation, could have a higher unemployment rate were it not for its dwindling workforce.

Michigan's workforce makes up about 3 percent of the nation's total. Over the past 12 months, Michigan's workforce shrank by 92,555 workers (not seasonally adjusted), or 1.8 percent. Jobless workers tend to drop out of the workforce in an especially lousy job market, and Michigan has had just that in this recession. The national workforce fell by 490,000 over the same period, or 0.3 percent. (The unemployment figures are not seasonally adjusted to allow for more accurate comparison).

That means that while Michigan's workforce makes up 3 percent of the national labor force, the decrease in the state's workforce accounts for nearly 20 percent of the entire nation's workforce drop over the past year.

That's quite a decrease given how high Michigan's unemployment rate now reaches. Note: Labor force figures in the U.S. include both employed and unemployed workers. The unemployment rate is a measure of the number of unemployed workers as a percent of the labor force, rather than, say, the whole population. The size of the labor force can therefore affect the unemployment rate--more people giving up their job search and taking themselves out of the workforce can push the rate lower, while more people popping back into the workforce to look for jobs can push the rate higher.

Indeed, between the third quarter of 2008 and the second quarter of 2009, Michigan ranked highest among states for its average rate of unemployed plus discouraged workers, as well as its rate of unemployed plus all marginally attached workers (including discouraged). Marginally attached and discouraged workers are those who have given up looking for work and are not counted in the labor force.

The Labor Department reported last week that Michigan has a 15.2 percent unemployment rate--well above the 9.7 percent national average. If workers had not dropped out of the workforce, however, it would appear that the state's unemployment rate has the potential to be significantly higher.

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Jobs are disappearing faster than Governor Jennifer Granholm of Michigan can create them. In the past decade, Michigan has lost 870,000 positions. (Carlos Osorio/ Associated Press)
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"Michigan governor struggles to bring in new jobs: State’s industries especially hit hard"
By Dana Hedgpeth, Washington Post, October 11, 2009

LANSING, Michigan - If the future of American manufacturing lies in green industries, the Michigan governor’s pursuit of jobs offers a cautionary tale.

Four years ago, Jennifer M. Granholm set out to remake her state, which took an exceptional walloping with the decline of the auto industry, as a pioneer in creating environmentally friendly jobs. Today, however, jobs are still disappearing much faster than she can create them, raising questions about how long it will take Michigan and other hard-hit states to find new industries to employ their workers.

Since taking office in 2003, Granholm has created 163,300 positions, her office says. She expects that a recent infusion of more than $1 billion from the Obama administration aimed at nurturing car battery and electric-vehicle projects will generate 40,000 more positions by 2020.

In the past decade, however, as the auto industry has grown smaller, Michigan has lost 870,000 jobs - about 632,000 of them during Granholm’s tenure. The number is expected to reach 1 million by late next year, the end of her term.

In her effort to attract employers, the governor has taken up the latest arms in the economic arsenal - tax credits, loans, Super Bowl tickets, and a willingness to travel as far as Japan for a weekend to try to persuade an auto parts company to bring more jobs to Michigan. She has won solar and wind energy, electric car batteries, and movie production jobs. About 10,800 of the new positions came from overseas companies, according to her office, the fruits of visits to seven countries.

“We have great bones as a state,’’ she said. “We know how to build stuff. We will build on that strength and diversify this economy. We will lead the nation in creating jobs in renewable energy. We’re not going to be viewed as Luddites.’’

In a state hit so hard by the recession, though, securing every new job has required enormous effort: mobilizing the state bureaucracy, negotiating tax deals with a politically divided legislature, dispelling impressions that Michigan is a prounion state and inhospitable to business.

Granholm’s confidence was severely tested three years ago when appliance maker Electrolux closed its century-old refrigerator plant in Greenville, 160 miles northwest of Detroit, and moved to Mexico, taking 3,000 jobs from the town of 8,000.

As Granholm told the story in her office, overlooking the state Capitol, tears welled up in her eyes. She had spent months calling, e-mailing, and meeting with city and state officials trying to sway the company to take a package worth about $70 million in tax breaks to stay in Michigan. Electrolux left anyway.

Granholm visited with workers at an orchard near the plant within days of the last refrigerators coming off the assembly line, and the employees ate a “last supper’’ of boxed lunches while a band played. Her staff had scheduled 45 minutes. She stayed three hours, listening to workers’ stories.

“I went to say, ‘I’m sorry,’ ’’ Granholm said. “We couldn’t save it. I can’t even say it now. I stayed until the last guy left.’’

A 48-year-old man who had worked at the plant since high school described how his grandfather and father had worked there, too.

“He told me: ‘I don’t know anything else. Who is going to hire me?’ ’’ the governor recalled.

Granholm remembered coming home and telling her husband, “I just don’t know what to do for people.’’

A $37 million tax package helped persuade Michigan-based United Solar Ovonic to build a solar panel production plant on the Electrolux property instead of pursuing a South Carolina offer.
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www.boston.com/news/nation/articles/2009/10/11/michigan_governor_granholm_meets_frustration_in_quest_to_bring_jobs/?comments=all
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"Michigan luring Bay State business: Incentives, breaks on tax raise ante"
By Erin Ailworth, Boston Globe Staff, November 9, 2009

Two years ago, Michigan Governor Jennifer M. Granholm visited alternative fuel maker Mascoma in Boston with one goal: to persuade the company to build a factory in her job-hungry state.

“She personally had us on the list to recruit,’’ recalled Mascoma’s chief executive, Bruce Jamerson. “Massachusetts, they knew we were looking to build a plant. It wasn’t a priority for them at the time.’’

But Michigan made Mascoma a priority. Granholm offered the company tax incentives, grants, and promises of federal funding while promoting Michigan’s charms: manufacturing expertise, a workforce loaded with engineering talent, and a population of ready-made clients.

Today Mascoma, which makes a gasoline substitute from wood chips and other materials, is spending more than $200 million to build a factory in Kinross, Mich. Groundbreaking is set for next year.

Michigan is emerging as one of Massachusetts’ fiercest competitors in the race to become a hub for clean technology companies. And Massachusetts, despite being the birthplace of many of these technologies and the companies they spawn, is losing ground to Michigan’s money and determination.

During the last three years, Granholm has persuaded A123 Systems, the Watertown battery company, and Evergreen Solar, the Marlborough-based maker of solar panels, to build factories in Michigan. The projects from A123, Evergreen, and Mascoma combined are expected to create thousands of new jobs and generate millions of dollars in the economically depressed state. Those are jobs and revenue that Massachusetts won’t have.

Governor Deval Patrick acknowledged the competition, saying Granholm “busted my chops’’ over the A123 deal. Massachusetts “just couldn’t match’’ Michigan’s incentives, Patrick said, although he noted the Michigan project is expected to result in 100 new jobs at the company’s Watertown headquarters.

“We’d like it all, to be sure, but this is good for the country,’’ he said, “and we get the bragging rights of being the hometown of a pioneer.’’

Granholm said she’s just doing “what you’ve got to do’’ when trying to go from “the Rust Belt to the Green Belt.’’ She has traveled to California, Germany, and Japan to lure businesses to Michigan, which has the highest unemployment rate among the 50 states.

With the auto industry in decline, Granholm said, Michigan officials several years ago began identifying industries they thought could help diversify the state’s economy. They then created incentives and tax breaks, such as “advanced battery credits’’ for companies that build electric car batteries and an “anchor status credit’’ that rewards businesses whose presence attracts other companies.

Michigan also aggressively markets itself with an advertising campaign that features actor and longtime resident Jeff Daniels in national television commercials. The campaign, run by the Michigan Economic Development Corporation, features slogans like the “Michigan advantage’’ and “Give your business the upper hand.’’

Michigan has an extra advantage right now because the federal government is eager to help the state recover from auto industry losses, said Nick d’Arbeloff, head of the New England Clean Energy Council, which promotes the region’s clean technology cluster.

“The federal government is being very generous with any company or organization that has some means to help Michigan up from its dire circumstances,’’ d’Arbeloff said. For many companies, he added, “the government dollars available make it an offer that they can’t refuse.’’

That was true for A123 Systems. In August, the company won $249.1 million from the US Department of Energy to build a factory in Livonia, Mich., to supply Chrysler Corp. and other customers with electric car batteries as part of $2.4 billion in stimulus aid to boost the auto industry in general and the production of electric vehicles specifically. More than $1 billion of that money went to companies and institutions with projects in Michigan.

Michigan, too, was generous with A123, promising the company a $10 million state grant for a research and development institute and more than $100 million in tax credits.

“Michigan has a lot going there,’’ said David Vieau, A123’s chief executive. But, he said, his company’s expansion there should not be viewed as a knock to Massachusetts. When A123 started trading stock on the Nasdaq exchange in September, Vieau singled out public support from Massachusetts officials as a key to the company’s success, along with the area’s technical talent pool.

“We’re very much a Massachusetts business,’’ he said then. “Our roots are at MIT.’’

Mascoma went to Michigan to be close to the nation’s automotive heart, and to take advantage of the state’s abundant natural resources, the raw material for its biofuel.

The company, which this year moved its headquarters from Boston to Lebanon, N.H., received $23.5 million in incentives from Michigan and $26 million from the federal energy department to build its factory in Kinross.

Add the visit from Granholm, and “it was hard to say no,’’ said Mascoma’s Jamerson. The new factory will employ about 60 people and help create more than 500 related jobs, Jamerson said.

Massachusetts officials have used some of the same tools as Michigan to court companies, including grants, tax breaks, and bids for federal money. And earlier this year Patrick spent a few days on the West Coast visiting technology and energy companies that have a presence in Massachusetts to encourage them to expand in the Bay State.

A champion of clean technology, the governor wants a cluster of such companies here. Last year, he signed a set of so-called green laws meant not only to make the state a renewable energy leader but to spur the growth of such businesses in the state.

Still, some think Massachusetts, with high costs for businesses, including real estate, utilities, taxes, and labor, could do better. Federal Reserve Bank of Boston president Eric Rosengren said the state might be more competitive if it better marketed Western Massachusetts.

“We may not have sold some of our low-cost areas,’’ he said.

Massachusetts is best at bringing new technologies to life and should play to that advantage, said Amy Glasmeier, head of the urban studies and planning department at the Massachusetts Institute of Technology. State officials need to figure out how to promote growth based on breakthroughs from that “font of innovation,’’ she said.

Massachusetts officials do have success stories, particularly at Devens. The Patrick administration persuaded Evergreen to build its first solar panel manufacturing plant in the former Army base by offering more than $76 million in grants, land, loans, tax incentives, and other aid. Some $67 million in similar incentives drew drug maker Bristol Myers Squibb to Devens to build a $1 billion plant and create several hundred jobs.

But betting on an emerging industry can be risky. Facing increased competition and plunging prices for solar panels, Evergreen executives said last week that they would shift some of the work at Devens to China, probably costing some jobs here. The company has 700 full-time employees in the state.

Even as it considers job cuts in Massachusetts, Evergreen is building a factory in Midland, Mich., helped by a $1.8 million tax credit and a 12-year tax break worth $3.9 million. The plant is expected to employ 101 people, and Michigan officials said it will help create 500 jobs.

Evergreen spokesman Chris Lawson said the company chose Midland because it will be close to Dow Corning, a major chemical supplier, and the area has workers with “experience with chemical processes.’’

Ian Bowles, Massachusetts’ secretary of energy and environmental affairs, acknowledged that keeping companies here will be difficult, but said the state will meet the challenge.

“Ultimately, companies start and grow in Massachusetts because of our assets - technological know-how, strong venture capital sector, and highly skilled workforce - and in the case of clean energy, because of our competitive energy market and high environmental standards,’’ Bowles said. “I expect that to continue and accelerate as the nation and the world move toward clean energy solutions.’’

Michigan will continue to compete, too.

“Any other company that wants to take its technology to scale, come on over,’’ Granholm said. “We’re hungry.’’
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Erin Ailworth can be reached at eailworth@globe.com.
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In Michigan, state officials dealing with the nation's highest unemployment rate are slashing spending on schools and health care.

Michigan, where two of the Detroit Three automakers filed for bankruptcy protection this year, continues to offer tax incentives even as they take a toll on the state's pocketbook, leading to declining tax revenue. According to the Pew study, Michigan offered $6.3 billion more in total tax exemptions, credits and deductions than it actually collected in taxes in 2008.

On the Web: Pew Center on the States, www.pewcenteronthestates.org

Source: "Report: 10 States Face Looming Budget Disasters: Budget Disaster Could Mean Higher Taxes, Gov't Layoffs, Crowded Classrooms", JUDY LIN, Associated Press Writer; Associated Press writers Bill Kaczor in Tallahassee, Fla., and Paul Davenport in Phoenix contributed to this report. November 11, 2009.

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"Jobless Rate Up in 29 States, Hitting Records in 4 of Them"
By BLOOMBERG NEWS, November 21, 2009
NOTE: In Part; Edited for length; & Changed by Blog Administrator (me).

California, Delaware, South Carolina and Florida registered record rates of unemployment in October, the Labor Department said Friday. In the states reporting record jobless rates, California was at 12.5 percent; South Carolina, 12.1 percent; Florida, 11.2 percent; and Delaware at 8.7 percent. The District of Columbia also set a high with an 11.9 percent rate.

Joblessness rose in 29 states last month compared with 22 in September, the agency said in a monthly state breakdown. Michigan had the highest jobless rate at 15.1 percent, followed by Nevada at 13 percent and Rhode Island at 12.9 percent.

Payrolls declined last month in 21 states, the report showed. New York showed the biggest drop, with 15,300 jobs lost. Florida had 8,500 job losses, followed by Georgia with 7,500 and Virginia with 7,100. Over the last year, California showed the biggest loss of jobs, with payrolls falling by 687,700 workers, the report showed.

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"Michigan's Mess"

Detroit's auto woes have pushed Michigan's unemployment level to 14.6 percent, the highest in the country. The eighth most populated state, Michigan has been forced to partially shut down state government functions twice in the past two years as lawmakers failed to agree on a budget, according to the Pew's study. It currently faces a $2.8 billion budget gap.

When the federal Bureau of Economic Analysis releases finalized 2009 data, Michigan is expected to be among the 10 poorest states, according to Donald Grimes, a senior research specialist at the University of Michigan.

Source: "America's 5 Worst Deadbeat States - Deficits, Political Gridlock, Unemployment: the States Facing the Most Frightening Fiscal Crises" (By RICH BLAKE, ABC News, February 17, 2010).

Link:
http://abcnews.go.com/Business/california-illinois-florida-new-york-michigan-states-financial-crisis-unemployment-poverty/story?id=9856552&page=3

Print:
http://abcnews.go.com/print?id=9856552

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