General Session:Conversation with the GovernorLive on WWJ Newsradio 950
Session Sponsor
Jennifer M. GranholmGovernorState of Michigan
The Honorable:
Michigan’s Economic ChallengeMichigan Manufacturing Employment
Since June 2000: 333,200 Jobs Lost; 36% Decline
June 2000913,700
Jan 1992771,800
Mar 2008580,500
500
600
700
800
900
1,000
1990 1994 1998 2002 2006
Source: Michigan Department of Labor and Economic Growth Non-seasonally adjusted data
Mo
nth
ly E
mp
loym
ent
(100
0s)
Michigan’s Economic ChallengeBig 3 Market Share
US Sales of Cars and Light Trucks
59%
63%
69%70%
45%March 2008
40%
50%
60%
70%
80%
1990 1995 2000 2005
Sources: Automotive News, Detroit Free Press
Next Steps For Progress That Unites Us
Create a Skilled, Educated Workforce
Diversify Our Economy to Create Jobs
Lower the Cost of Government
1. Education and Training for AllCherry Commission - Strategic Plan to Double College Grads
All High School Students Must Now Meet Tough High School Graduation Requirements (Rated in Top 3 in US)
All High School Students Take College Entrance Exam
All High School Students Have Access to a $4,000 Michigan Promise Scholarship
More MI Students Going to College Than Ever Before
No Worker Left Behind Overhauled job training to meet employer needs
Goal – Train 100,000 workers for jobs in demand
Next Step for Creating a Skilled, Educated WorkforceReplace Large High Schools that Fail with Small High Schools that Work
Small, rigorous, relevant, relationships
School prepares kids for jobs
Site-based management, labor-management cooperation
Already 6 in Michigan
21st Century School Fund could create 100 more
No new tax dollars
2. Economic Diversification: New Tools to Attract, Grow Jobs
21st Century Jobs Fund−$2 Billion, Most Aggressive in Country
New Tax Incentive Tools−MEGA expanded to be more flexible and cover
more businesses −Alternative Energy and Agricultural
Renaissance Zones−Anchor Company Tax Credits
2. Economic Diversification: New Tools to Attract, Grow Jobs
Venture Capital and Private Equity Programs−Venture Michigan Fund - $95 M −21st Century Investment Fund - $109 M −Angel Investor Tax Incentive− Invest Michigan Fund - $300 M
Overseas Investment Missions−37 companies & 9,000 jobs
Alternative EnergyHemlock Semiconductor, 1,152 jobs , $1.1 billion invested in Thomas
Twp
United Solar Ovonic, 563 jobs, $120 million invested in Greenville
Adaptive Materials, 187 jobs, $2.8 million invested in Pittsfield Twp
Compact Power, 298 jobs, $18 million invested in Troy
Ricardo, 48 jobs, $2 million invested in Van Buren Twp
Sakti3, 230 jobs, $1 million invested in Ann Arbor
Thunder Bay Development, 368 jobs, $15 million invested in Alpena
Dowding Machining, 358 jobs, $7 million invested in Eaton Rapids
Danotek Motion Technologies, 313 jobs, $7.8 million invested in Pittsfield Twp
Cobasys, 122 jobs , $1.5 million invested in Orion Twp
Hybrid Development Center, 437 jobs, $344 million invested in Troy
Marysville Ethanol plant, 35 jobs, $95 million invested in Marysville
US Bio Energy Ethanol plant, 37 jobs, $57 million invested in Woodland Twp
Andersons Ethanol plant, 55 jobs, $95 million invested in Sheridan Twp
Great Lakes Ethanol, 62 jobs $94 million invested in Riga
Michigan Ethanol, LLC, 41 jobs, $52 million invested in Caro
Dow Chemical (Building Integrated Photovoltaic), 22 jobs, $50 million invested in Midland
Tesla Motors, 76 jobs, $48 million invested in Rochester Hills
Edgewater Automation, 97 jobs, $1 million in St Joseph
Tellurex Corporation, 20 jobs, $1.7 million invested in Traverse City
Integrated Sensing Systems, 738 jobs, $1 million invested in Ypsilanti
Life Sciences
MPI Research, 6,600 jobs, $330 million invested in Kalamazoo
Xoran Technologies, 386 jobs, $3.7 million invested in Ann Arbor
Cayman Chemical Company, 525 jobs, $9.7 million invested in Pittsfield Twp
Caraco Pharmaceutical Laboratories, 1,648 jobs, $15 million invested in Detroit
HandyLab, 138 jobs, $3 million invested in Pittsfield Twp
Emergent BioSolutions, 952 jobs, $73 million invested in Lansing
Pureflex, 366 jobs, $7.3 million invested in Kentwood
The Tech Group, 164 jobs, $13 million invested in Walker
Stryker, 165 jobs, $20 million invested in Kalamazoo
NSF, 100 jobs, $23 million invested in Ann Arbor Twp
Kalexsyn, 54 jobs, $4.5 million invested in Kalamazoo
AAPharmaSyn, 20 jobs, $2.4 million invested in Ann Arbor
Avidimer Therapeutics, 13 jobs, $5.4 million invested in Ann Arbor
Biodiscovery, 10 jobs, $2 million invested invested in Ann Arbor
Compendia Bioscience, 64 jobs, $1.9 million invested in Novi
Genetics Squared, 10 jobs, $1.6 million invested invested in Ann Arbor
Meditrina Pharmaceuticals, 18 jobs, $3.8 million invested in Ann Arbor
NanoBio Corporation, 15 jobs, $15 million invested in Ann Arbor
ProNAi Therapeutics, 20 jobs, $12.5 million invested in Kalamazoo
Solidica, 20 jobs, $2.5 million invested in Ann Arbor
Lycera, 34 jobs, $700,000 invested in Ann Arbor
Accuri Instruments, 4 jobs, $10 million invested in Ann Arbor
Afid Therapeutics, 8 jobs, $1.7 million invested in Lansing
IA/Three Fold Sensors, 6 jobs, $2.6 million invested in Ann Arbor
Molecular Imaging Research, 6 jobs, $1.2 million invested in Ann Arbor
Advanced Manufacturing
Chrysler, over $1 billion invested in various locations
Ford Motor Company, over $1 billion invested in various locations
General Motors, over $1 billion invested in various locations
Global Engine Alliance, 1,978 jobs, $375 million invested in Dundee
American Mitsuba, 90 jobs, $11 million invested in Brighton
Dow Corning, 164 jobs, $22 million invested in Williams Twp
Mitsubishi Heavy Industries, 115 jobs, $7.5 million invested in Sterling Heights
Infineon Technologies, 73 jobs, $5 million invested in Livonia
Assay Designs, 238 jobs, $18 million invested in Pittsfield Twp
Toyota Technical Center, 677 jobs, $150 million invested in York Twp
Hyundai America Tech Center, 1,765 jobs, $94 million invested in Superior Twp
AVL Powertrain Engineering, 157 jobs, $4.9 million invested in Plymouth Twp
Gestamp US HardTech, 348 jobs, $74 million invested in Mason
Visteon Regional Assembly, 353 jobs, $35 million invested in Highland Park
BASF Corporation, 648 jobs, $150 million invested in Wyandotte
Siemens VDO, 2,851 jobs, $50 million invested in Auburn Hills
Siemens Water Technologies, 127 jobs, $3 million invested in Holland Twp
FEV Engine Technology, 178 jobs, $4.3 million invested in Auburn Hills
IAV Automotive Engineering, 198 jobs, $18 million invested in Ann Arbor
Hitachi Automotive Products, 205 jobs, $16 million invested in Farmington Hills
LMS North America, 106 jobs, $600,000 invested in Troy
Karl Schmidt Unisia, 353 jobs, $11 million invested in Auburn Hills
Aernnova Engineering US, 1,206 jobs, $10 million invested in Pittsfield Twp
Dearborn Group, 145 jobs, $1.1 million invested in Farmington Hills
Behr-Hella Thermocontrol, 159 jobs, $7.9 million invested in Wixom
Homeland SecuritySmiths Aerospace, 214 jobs, $5.4 million invested in Cascade Twp
Sensicore, 338 jobs, $4.7 million invested in Ann Arbor
General Dynamics Land Systems, 1,649 jobs, $17 million invested in Sterling Heights
Ceradyne, 69 jobs, $2.7 million invested in Wixom
American Systems Technology, 176 jobs, $3.7 million invested in Troy
Second Chance Armor, 160 jobs, $1 million invested in Central Lake Twp
BAE Systems, 1,019 jobs, $58 million invested in Sterling Heights
Patriot Antenna, 56 jobs, $3.5 million invested in Albion
Veridian, 366 jobs, $39 million invested in Ypsilanti
Evigia Systems, 9 jobs, $9 million invested in Ann Arbor
Burtek, 30 jobs, $1.8 million invested in Chesterfield Twp
Ace Electronics, 60 jobs, $1.2 million in Troy
Advanced Photonix, 105 jobs, $2.2 million invested in Ann Arbor
Solidica, 5 jobs, $2.5 million invested in Ann Arbor
Spartan Chassis, 1,056 jobs, $7.3 million invested in Charlotte
Lapeer Industries, 36 jobs, $2.3 million invested in Lapeer
Demmer, 300 jobs, $12 million invested in Lansing
Parker Hannifin, 100 jobs, $3 million invested in Richland/Otsego
Overseas Investment Missions
Karmann USA Inc., 251 jobs, $22 million invested from Germany
Eberspacher Group, 40 jobs, $10 million invested from Germany
Robert Bosch Co., 475 jobs, $66 million invested from Germany
Facton Incorporated, 93 jobs, $1 million invested from Germany
Kostal of America Inc., 203 jobs, $14 million invested from Germany
MBTech Autodie, LLC, 422 jobs, $5 million invested from Germany
MS Automotive LLC, 106 jobs , $23 million invested from Germany
EDAG, 140 jobs, $9.5 million invested from Germany
FT Techno of America LLC, 56 jobs, $30 million invested from Japan
Denso, 250 jobs, $36 million invested from Japan
Tokai Rika, 230 jobs, $50 million invested from Japan
Stanley Company Inc., 720 jobs, $32 million invested from Japan
Hitachi Automotive, 100 jobs, $16 million invested from Japan
Nippon Piston Ring, 40 jobs, $13 million invested from Japan
A&D Incorporated, 100 jobs, $20 million invested from Japan
Hi-Lex, 208 jobs, $68 million invested from Japan
Konica Minolta Holdings, 262 jobs, $35 million invested from Japan
SECO Tools, 25 jobs, $19 million from Sweden
Atlas Copco, 30 jobs from Sweden
Economic Diversification: New Tools to Attract, Grow Jobs
Rebranding Our State – Travel, Business Ads−$60 Million Investment, Biggest Ever
Film Incentives−Most Aggressive in Country
Next Step for Diversifying Our Economy to Create JobsPass Comprehensive Energy Reform
Energy regulatory reform
Renewable portfolio standard
Energy efficiency standard
Create a new energy sector of Michigan’s economy
Create tens of thousands of jobs
Ensure adequate energy supply
Reduce reliance on out-of-state fossil fuels
America’s Energy Problem is Michigan’s Economic Opportunity
Michigan Uniquely Positioned to Capitalize on the Coming Green Industrial Revolution
Wind
Wood
Water
Wheels…and batteries
Waste
Workforce
W…Solar
Economic Diversification: Michigan Needs an RPS
Wind Manufacturing Facilities Follow Wind Installations
National Renewable Energy Lab
Total Cumulative Manufacturing Jobs Created by Scenariothat Meets 20% of U.S. Electricity Needs from Wind (2007 – 2030)
With the Right Policies . . .We Can Create Thousands of New Jobs
3. Government Reform – Making Government Cost Less
Cut more out of state government than any Governor in Michigan history
Fewer state employees than any time since 1973
Michigan ranks 46th among all states in government employees per capita
Government Reform –Making Government Cost Less
Just last year, we enacted 26 reform measures, including:
Public School Employee Benefit Reform− School districts can shop competitive health insurance
plans
− Tightened vesting requirements
− Increased teacher contributions
State Employee Benefit Reform − 2003 - $300 million in pay concessions
− 2007 - $300 million over 3 years in health benefit concessions
− Eliminated benefit loopholes – no double dipping
Government Reform –Making Government Cost Less
Permitting Reform – Cutting Through Red Tape
−60% reduction in air quality permitting times
−Over 200 permits available online
−Online tax registrations – 6-8 week process now takes less than 5 days.
−Center for Digital Government: MI #1 in state government IT since 2004
−Next Step - One-stop permitting shop for businesses - One web portal, One number - piloting late this summer
Government Reform –Making Government Cost Less
Contracting Reform−Ended no bid contracting−State contract savings total $671 million since
2003−Buy Michigan First - 92% of contract dollars to
Michigan companies.
Pew Center on States 2008−Michigan is 4th Best Managed State in the Nation
Prison Population Has Increased 60% Since 1990
Source: State Budget Office
…while the population of the State of Michigan has increased by less than 10%.
50,20051,500
49,40049,500
45,800
40,200
35,100
31,200
38,100
43,800
48,60048,900
30,000
35,000
40,000
45,000
50,000
55,000
1990 1992 1994 1996 1998 2000 2002 2003 2004 2005 2006 2007
Corrections Staffing Has Increased While Overall State Employment has Declined
Corrections staff up three-fold while overall staffing down 14%.
56,400 37,200
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1982 2007
62,080
53,600
5,6805,68016,40016,400
Source: State Budget Office
3 Out of Every 10 State Employees Now Works for the Department of Corrections 2007
Total State Employees: 62,082Corrections Employees: 5,677
Total State Employees: 53,596Corrections Employees: 16,418… compared to less than one in ten 25 years ago.
Source: State Budget Office
1982
91% 9% 69% 31%
Corrections Spending has Grown from 5% of All Discretionary Spending to 20%
Total GF/GP:$4,457,300,000Corrections GF/GP: $215,800,000Corrections spending is almost 9X the 1982 level
Total GF/GP:$9,186,200,000Corrections GF/GP: $1,866,400,000
20071982
Source: State Budget Office
95% 5% 80% 20%
Michigan’s Prison Rate Out of Sync with Midwestern Neighbors
Prison Rates - 2006
250
300
350
400
450
500
550
Michigan MidwestAverage
Illinois Ohio Pennsylvania New York
Source: US Census Bureau, US Bureau of Justice Statistics
Per
100,0
00 R
esi
den
ts
511
395
353
429
358
328
Next Step for Lowering the Cost of Government
Pass Sensible Corrections Reform
Already reduced corrections spending by $560 million through belt-tightening since 2002
Keep citizens safe and lower the cost of government through further corrections reform
Distribute the savings in three ways– 1/3 Higher Education– 1/3 Law Enforcement– 1/3 MBT Surcharge Reduction
Recap: Next Steps to Move Michigan Forward
Create a Skilled, Educated Workforce Pass 21st Century Schools Fund
Diversify Our Economy, Create Jobs Pass Comprehensive Energy Package
Lower the Cost of Government Pass Safe, Cost Saving Corrections Reform
“People know we are in a jam. A large part of the problem is a cynicism, fatalism and negativity – a toxic mix -- shared by people in leadership positions.”
Phil PowerCenter for Michigan
Gone Fishin’
A Simple Sunrise
General Session:Conversation with the GovernorLive on WWJ Newsradio 950
Session Sponsor
Daniel J. LoeppPresident & CEOBlue Cross Blue Shield of Michigan
ChairmanDetroit Regional Chamber Board of Directors
Moderator:
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