Unions, Unions, Unions

In my last post, I criticized the Governor for not understanding how morbid Michigan's business economy has become. Oh sure, she's talking about our malaise, but she fails to understand that Michigan has NOT caught a cold that will eventually heal itself. Michigan has a cancer that can only be cured by radical surgery.

The most significant point I wanted to make was Governor Granholm's misplaced focus. I continue to argue that economic growth and prosperity must come first. An educated work force and all the other good things the Governor envisions for Michigan will follow growth. The Governor has nothing on her agenda for combating Michigan's anti-business environment. Central to Michigan's anti-business attitude is its labor laws and the UAW. For Michigan to return to prosperity, Michigan must do something radical. For Jennifer Granholm, this means she must take on a core constituent: labor.

Impeding Michigan's return to economic growth is its labor laws. During the late 1970's and early 1980's, many have said the Big Three lost their one true opportunity to combat the UAW and Michigan's labor laws. Many believe to this day, the Big Three should have bit the bullet and forced a cataclysmic crisis with labor in the early 1980's. Only then could the US auto industry hope to create the necessary economic profits to sustain itself and compete with more efficient foreign manufacturers. Well, the opportunity has returned again, and this is GM's and Ford's last chance. Unfortunately for Chrysler, it's too late.

It's time to take on labor. It's time to become a right to work state. It's time for GM and Ford to realize that the UAW must be severally weakened for all time. It's time and it's the last chance.

It's time to do more than fight over balancing the state budget. It's time for Republicans to force significant change, or force a crisis. It's time to connect Michigan's labor laws to the budget process. It time to stand up and fix our anti-business environment, or shut the government down.

Make Michigan competitive, it's time to force significant change to Michigan's labor laws.

Michigan Governor Granholm's 2007 State of the State - One Michigan into Economic Oblivion

Governor Granholm gave her fifth State of the State of Michigan address. There were many ideas that I thought were good ideas; however, I am disappointed. The Governor's priorities will be to continue to treat the economic symptoms instead of tackling the disease. Michigan is not going to attract new business to our state in any meaningful way!

Economic development in Michigan is going to be dismal. Jennifer Granholm made one interesting observation: business taxes are not completely responsible for Michigan's poor job growth. I agree. However, she failed to tell Michiganders why Michigan keeps loosing jobs to other states. Well, there are many reasons. All having to do with Michigan's anti-business climate including: unions, unions and unions.

Face it, Michigan, unions fail us. They don't protect jobs. They don't bring new jobs. They just continue to perpetuate our economic slide that began in 1975. Aren't you tired of this yet? Or, are you just going to move out of the state like so many others.

The Governor also addressed education. Again, I agreed with her. An educated workforce is critical to a successful economy. Problem is, the Governor had her cause and effect backward. Growth attracts the educated, not the other way around. That's why less than 30% of Michigan's college graduates remain in Michigan. As long as Arkansas continues to out grow Michigan, then it will not be long before Arkansas exceeds Michigan in its educated workforce.

Jennifer Granholm gave a strong energetic speech with many interesting ideas, but because she lacked the correct focus and strategy, it just came across as cheesy. "We are one Michigan", heading to the poor house.

Michigan Needs a Crisis!

Toyota is creating manufacturing jobs all over America, except for Michigan. Why?

I could endlessly list the reasons why, but that's a waste of time. Let's just start with the most important reason; Michigan has given up! We've decided that business growth is not necessary to our future. We've also decided that the auto industry is too tough an industry for Michigan, and that the conditions to attract Toyota is too drastic for Michigan's morality and lifestyle. In other words, Michigan is too union sympathetic and too entitlement centric.

Now, I know the MEDC and the Governor would vigorously argue this point, but really, what are they doing new today to change Toyota's mind? I keep reading articles about Toyota's need to build five new plants around America to keep up with growth. What's more unbelievable is Toyota's wages are comparable to other auto industry wages. The fact is, Michigan has given up. The Governor, the Legislature, the MEDC, the Democrats and the Republicans have all conceded Toyota to other U.S. regions. The reason doesn't matter. But if Michigan isn't going to truly compete in Michigan (which is Michigan's only industrial cluster besides government), then the state is truly dead for business.

About two years ago, I represented a Michigan manufacturer before the MEDC. Without going into the specifics, the MEDC was "unable" to help. The "rules" for helping the company prevented the MEDC from really tackling the issues that plagued that employer. Well, that employer continues to make investments and add jobs, but not in Michigan.

The unfortunate reality is, Michigan is so poorly viewed by almost every business executive in the nation, that Michigan can only now turn opinion with radical changes. Can we do it? Yes! Is it possible to forge the will? Only if the "smart" people in Michigan give up on the old notions and embrace the new notions that allow other states to grow. However, I'm not optimistic, and I think we need a real crisis to change minds. Let's start a real crisis with Jennifer Granholm's speech tomorrow.

Jennifer Granholm's State of the State address Tuesday night should be watched by every Michigan citizen. I am more interested in the radical ideas that will make people very unhappy, then I am in the populist issues that everyone seems to agree on. That may seem strange, but I support creating a crisis environment in the state.

As I talk to my neighbors, I am disheartened by their lack of interest in the State's economy. Fewer and fewer Michiganders make a private sector living. More and more work for a government, a university, or the medical industry. The private sector economic woes continue to be a distant conversation, and not a direct threat to their livelihood.

But, that's how Michigan has always behaved. I vividly remember how seriously ill the state's economy became in the late 1970's before any substantive changes were made to revive it. Problem was, those changes were no where near decisive enough to tackle this slow drag to oblivion that Michigan is on today.

Until a crisis is created artificially or naturally, Michigan will continue its economic slide and the remedy will become increasingly bitter to swallow.

Michigan: Stop Digging that Hole

What should Michigan be working on right now:

Michigan has a 21st Century Jobs Fund. Spend $500,000,000 on fuel cell research over the next seven years. Give domestic and private companies access to this technology who participate in the effort. Get each company to invest in the consortium and provide research scientists.

Compliment the research that's occurring elsewhere like the California Fuel Cell Partnership. Start to create an automotive fuel cell research industry cluster right here in Michigan. Why is this research occurring in California anyway?

Ask Michigan's congressional delegation to get the DOE and DOD involved. Get some legislation like this for Michigan: Semicondutor Research - Cooperative Research Program . Get the DOE or DOD to match the Michigan funding in the consortium. After all, isn't oil dependency a national security concern?

Learn from others (like Austin, TX.). Austin succeeded in attracting high paying research jobs when their economy was weak in the mid 1980's (See: Sematech). Michigan needs to look at what's worked elsewhere.

Use these legislative acts to overcome antitrust concerns and get companies working together:

National Cooperative Research and Production Act of 1993

Defense Production Act of 1950, 50 U.S.C. app. § 2158
. . . This Act provides that the President or his delegate, in conjunction with the Attorney General, may approve voluntary agreements among various industry groups for the development of preparedness programs to meet potential national emergencies. Persons participating in such an agreement are immunized from the operation of the antitrust laws with respect to good faith activities undertaken to fulfill their responsibilities under the agreement. . . .