Great Lakes Great Location: Build Your Future in Michigan
Manufacturing in Michigan—its lifeblood over the past century—is making a strong comeback despite global competition. Since December 2009, Michigan has led the nation with more than 88,000 new manufacturing jobs, according to the National Association of Manufacturers. Stable wage rates and favorable natural gas prices have made the U.S. more competitive for manufacturing.
While substantial gains occurred in Michigan’s resurgent automotive industry, they were also reported in food processing, furniture, medical equipment, pharmaceuticals and defense.
This healthy, diversified recovery is expected to continue, according to University of Michigan economists George Fulton, Donald Grimes and Joan Crary. They expect the next two years to be “largely encouraging and optimistic” and predict an additional 130,000 jobs in all sectors of the state’s economy.
According to business leaders, some of the credit goes to Gov. Rick Snyder, who has balanced Michigan’s budget and improved the business tax climate. He and his legislative colleagues in Lansing eliminated the state’s complex Michigan Business Tax and replaced it with a simple sixpercent flat rate on corporations that exempts most small businesses.
In 2013, Michigan became the 24th state to join the “right to work” bandwagon with a law prohibiting unions from forcing workers to join and pay dues. In August, Michigan voters will be asked to approve a ballot question allowing the state to redirect use taxes in order to eliminate the onerous personal property tax levied on business and manufacturing equipment.
"The government and governor have made things a lot easier in terms of corporate taxes,” says Chuck Hadden, president and CEO of the Michigan Manufacturers Association. “We have cut a number of regulations in the state, maybe more than a thousand, that weren’t necessary. We are moving forward in that area while still having the safety of our public in mind. We are still looking for other ways we can improve, like our personal property tax.”
Hadden also credits Michigan Gov. Rick Snyder.
“He has a relentless, positive attitude about turning Michigan around and tackling the problems we have an not kicking them down the road,” Hadden explains. “We’ve had a balanced budget for the last few years – a real balanced budget, not done by smoke and mirrors. He is focused on making a difference.”
But there’s more to Michigan than making things. The resilient, neversaydie spirit of its people—combined with a Midwestern hard work ethic—has yielded results in unlikely places. Where else could Dan Gilbert take a bruised industry (mortgage lending) in a badly bruised city (Detroit) and pump new life into both?
As local, state and federal officials wrestle with Detroit’s bankruptcy and work on its revitalization, Gilbert has been buying or leasing skyscrapers (more than 40 buildings at last count) in Detroit’s central business district and creating a city within the city. At its core is Quicken Loans, the nation’s largest online lender (and third largest overall behind JP Morgan Chase and Wells Fargo) with $80 billion worth of mortgages during 2013.
Quicken Loans is not your father’s residential mortgage lender. Casual dress and Nerf gunfights mix with speed and efficiency—the lender has won J.D. Power’s award for highest customer satisfaction four years in a row and Fortune magazine recently named it a Top Five Best Place to Work.
Gilbert, who grew up five decades ago in nearby Southfield, MI, hires and trains recent college graduates who are attracted to urban areas. With about 9,000 employees on his payroll, Gilbert is turning the area into a hightech hub complete with restaurants, retail stores, apartments and his own security force. More than 100 small businesses have settled into nearby buildings, some of them startups funded by Detroit Venture Partners, a venture capital company he coowns.
That same entrepreneurial spirit is alive and well 45 miles to the west in Ann Arbor. In an attempt to retain the talented young people who attend the University of Michigan, economic developers are providing the services and support to commercialize innovation.
Less than two years old, a startup called Avegant has designed and engineered a product called the Glyph, a headset that can deliver sound and highdefinition video. The Glyph uses an HBMI input to display content from iPhones, Macs, PCs and gaming systems such as PlayStation and Xbox. It’s currently in the alpha stages of development, with preorders being taken and shipping expected in 2015.
Starting in one of two business incubators operated by Ann Arbor Spark and funded with angel money and venture capital, Avegant recently raised $1.5 million on the crowdfunding platform Kickstarter. Of the company’s nine employees, seven are former U of M students, including CEO Edward Tang and cofounder and lead engineer Alan Evans.
If another Ann Arborbased experiment is successful, people may be able to wear their Glyphs while being transported in driverless vehicles.
Over the past two years, U of M’s Transportation Research Institute— funded in large part by the U.S. Department of Transportation—is testing “connected vehicles” in an effort to increase auto safety and reduce traffic congestion. In northeast Ann Arbor, 3,000 cars, trucks, buses, motorcycles and bicycles are equipped with vehicletovehicle wireless communications devices. Similar sensors are placed at busy intersections, sharp curves and local freeways.
So far, the pilot effort has tracked four million trips and 25million miles of travel. Plans call for tripling (to 9,000) the number of vehicles in the study. Long term, it’s hoped the results could lead to automated, driverless vehicles—a concept already being tested by Google, General Motors, Toyota and Tesla.
U of M, which receives about $1 billion in research funding each year, is not the only major player in Michigan. Seventy miles up the road in East Lansing, Michigan State University just broke ground on a $700million rare isotope accelerator. The Facility for Rare Isotope Beams (FRIB) already is attracting some of the top minds in nuclear physics research and is projected to pump $1 billion of economic activity into the state.
When it’s completed in 2022, FRIB will be one of the world’s most powerful machines for conducting nuclear science research into the origins of the physical world as well as advancements in medicine, national security and detection technologies.
MSU’s renowned packaging school has produced more than half of all U.S. graduates in that field during its six decades of existence. Originally established in 1855 as the Agricultural College of the State of Michigan, MSU continues to be a leader in agriculture and natural resources.
Food and agriculture—from growing and packaging to retailing and distribution—contributes more than $91 billion to Michigan’s economy. Second only to California in diversity of food products, Michigan leads the nation in 11 different categories from dry beans (in the Thumb) to tart cherries in the Grand Traverse region.
Michigan's 21st Century Incentives
The Michigan Economic Development Corporation (MEDC), the state’s lead economic development agency—working closely with local economic development offices—offers business assistance services and capital programs for business attraction and acceleration. Michigan has revamped of its incentive programs to more effectively align them with critical business needs in today’s ultracompetitive economy.
Two years ago, Michigan replaced three taxincentive programs with the Michigan Business Development Program and Michigan Community Revitalization Program, $100million per year incentivebased initiatives administered through the Michigan Strategic Fund. The Business Development Program focuses on job creation and business investments in Michigan and replaced the 12yearold Michigan Economic Growth Authority jobs credits. A business must commit to providing at least 50 new jobs, or 25 if the jobs are hightech or the business is located in a rural area.
The Community Revitalization Program replaces both the brownfield tax and the historic redevelopment credits, and focuses on urban revitalization in downtowns or commercial centers. To qualify for CRP, a project must be on a site that is contaminated or blighted or has a building that is functionally obsolete or historic.
The State Small Business Credit Initiative (SSBCI) is a federal program modeled after the Michigan Strategic Fund’s successful Capital Access Program. SSBCI provides gap financing to help finance small businesses and manufacturers that are creditworthy but not getting the loans they need to expand and create jobs.
The MEDC works to increase the availability of capital for companies in Michigan at every stage of company development. MEDC can help connect your business with capital providers—federal grants, venture capitalists, banks and others—as well as offer programs that can expand the reach of those capital providers. For more on these capital programs, visit: http://www.michiganbusiness.org/grow/accesscapital/
Customized services are available from a knowledgeable and experienced Business Development Manager for any company locating or expanding in Michigan. Contact the MEDC by calling (517) 3739809 or visiting www.michiganadvantage.org.
A Renaissance In Lansing
Like the state, the capital city of Lansing also is experiencing a renaissance. Ten years after the final Oldsmobile Alero rolled off GM’s Lansing Car Assembly Plant, Cadillac’s awardwinning CTS and ATS cars are being built in the Lansing Grand River Plant. Popular crossover vehicles are made at the Lansing Delta Plant, which runs three shifts.
GM plans to build a new logistics center and stamping plant with the impending move of Chevrolet Camero production. “The end of Oldsmobile wasn’t the end of GM,” proclaims Lansing Mayor Virg Bernero.
Another traditional area of manufacturing exists in west Michigan. Grand Rapids, the state’s secondlargest city, is the unofficial capital of west Michigan. Less dependent on auto manufacturing than southeast Michigan, the west Michigan “Big Three” are office furniture manufacturers Steelcase, Haworth and Herman Miller. Increased demand for their products is predicted in 2015 by the Business and Institutional Furniture Manufacturers Association, which is forecasting 10.4 percent growth with sales topping $10 billion.
Blessed with many philanthropists who remained loyal to their Grand Rapids roots, the benefits of their giving are everywhere—Van Andel Institute, Meijer Gardens and DeVos Place to name three. Van Andel Institute, established in the late 1990s by Amway cofounder Jay Van Andel and his wife Betty, is a biomedical research organization that anchors Grand Rapids’ Medical Mile. The health care cluster includes a medical school and hospital.
Five years ago, Rick DeVos, named after his grandfather and other Amway cofounder Richard DeVos, established ArtPrize, exhibiting the artwork of more than 1,000 artists from around the world in a threesquaremile area of downtown. Artists are connected to a venue— whether it be a restaurant, office building, museum, church or public park—and their works are displayed for 19 days starting in late September.
With approximately $500,000 in prize money at stake, the public determines winners in the various categories. Voters can register at a physical location or by iPhone or Android application. By accessing the ArtPrize website, voters can give pieces of art a “thumbs up” or “thumbs down.” Last year’s event drew nearly 400,000 visitors to Grand Rapids and pumped an estimated $22 million into the local economy.
ArtPrize was one of the reasons given by Lonely Planet Travel Guide for naming Grand Rapids its No. 1 U.S. destination to visit in 2014. The popular international travel website included a 300mile stretch of sandywhite beaches along nearby Lake Michigan as well as the Grand Rapids Art Museum, Meijer Gardens and a variety of craft beer breweries that host festivals throughout the year.
Lake Michigan is one of four Great Lakes that surround Michigan’s two distinct peninsulas. The five Great Lakes account for 84 percent of North American’s surface fresh water and provide drinking water for 40 million people. The Great Lakes, combined with 11,000 inland lakes and 36,000 miles of rivers and streams, make Michigan a top destination for Midwest travelers.
The state’s successful Pure Michigan campaign, narrated by Michigan native Tim Allen, attracts new visitors and contributes to the $17.7 billion tourism industry. Popular tourist attractions include Frankenmuth, Traverse City, Mackinac Island and the picturesque Upper Peninsula.
Michigan’s diverse manufacturing base, skilled and productive workforce, easy access to domestic and foreign markets, worldclass universities, rich cultural and natural resources form a solid foundation for a bright and prosperous future.
Preparing Michigan Workers with the Knowledge, Skills to Compete
Michigan is taking the steps necessary to ensure that workers and employers will be ready for the work demands of the future. With onethird of the state’s 9.9 million population under the age of 25, Michigan is a leader in cyber schools, internships, apprenticeships and higher education.
Employee training and retraining is offered through a network of 28 publicly supported community colleges—often for free—to meet employers’ needs. Nearly onehalf million students are enrolled in Michigan community colleges.
Here is a partial list of education and training programs available in Michigan:
Michigan Technical Education Centers or MTECs work within the community college network to deliver ondemand training. http://www.michiganbusiness.org/cm/files/ factsheets/michigantechnicaleducationcentersmtec.pdf
The Michigan New Jobs Training Program offers up to $50 million of free training each year for employers that are creating new jobs. http://www.mcca.org/content.cfm?id=43
Automation Alley started 15 years ago in Oakland County to address a shortage of technical workers; today it has grown to nearly 1,000 business and educational institutions in eight surrounding counties. http://www.automationalley.com/
Kalamazoo Promise was started in 2005 by a group of anonymous donors who pledged to pay tuition at any of Michigan’s colleges or universities for graduates of Kalamazoo’s high schools. The program is being replicated in eight other Michigan cities. https://www.kalamazoopromise.com/
The Michigan Virtual School offers a wide range of online courses (seven languages, 21 Advanced Placement courses and hundreds of math, science and social studies classes) to all Michigan students. http://www.mivhs.org/
Michigan has about 9,100 apprentices and recently launched the Michigan Advanced Technician Training Program in southeast Michigan based on a German model of education and employer commitment. http://www.mitalent.org/mat2/
Pure Michigan Talent Connect is an online talent bank listing tens of thousands of jobs and workers’ resumes on the Internet. http://www.mitalent.org/
In an attempt to keep recent college grads in Michigan, a young Detroit entrepreneur helped create Intern in Michigan to connect students with employers. http://interninmichigan.com/
Michigan Works! is a statewide network with regional employment centers that provide a variety of services for employers and workers. http://www.michiganworks.org.