Three business leaders with different perspectives all seemed to agree this week that Michigan is looking at major economic and job expansion through ‘rose colored glasses’ and failing to recognize harsh realities that put the state at a disadvantage in competing with other states for big new industrial plants that will be built in this decade.
The three—one from the major construction field, one from the auto industry and one representing the state’s major employers– gathered with dozens of business stakeholders and economic reporters in a virtual session organized by BridgeMI, the online non-partisan, non-profit news source covering Michigan State Government.
The panel consisted of :
Jeff Donofrio, President/CEO of Business Leaders for Michigan
Carla Bailo, President/CEO of Center for Automotive Research
John Rakolta Jr, Chairman of Walbridge, a Michigan-based construction firm involved in all phases of major industrial plant development
The three experts all agreed that Michigan has been taking a short-term perspective after a couple of recent announcements of electronic vehicle plants or EV battery production. They suggested there’s been too much congratulation and back-slapping about the plant announcements, while Michigan actually trails other states in many measures of how plant-locators will choose the best places for their massive new Electronic Vehicale Assembly and Battery plants, employing thousands of workers in each facility.
Rakolta, the construction company executive, said “Michigan gets a ‘B’ for right now, but an ‘F’ for the future.” He charged that there are few, if any, potential plant sites in Michigan that truly compete with sites in several other states, most in the mid-South and Southeast United States. He said “Shovel ready sites with an available work force are the ones that win.”
Rakolta said Michigan’s potential plant sites are usually too small and lack the amenities of competing states: affordable electric rates, available talent, strong work ethic. If those are present, Rakolta said ‘incentives’ then come into play, often from local and state government, to seal the deal. However, he said incentives alone can’t deliver a decision in Michigan’s favor.
Michigan colleges and universities, as well as the State’s K-12 schools came under criticism from both Bailto (auto industry) and Donofrio (major employers). Bailto said Michigan campuses try to be “everything”, rather than being ‘exceptional’ in particular fields that potential employers are looking for.
Donofrio said Michigan public schools are lagging behind those in other states in highly competitive math, science and communication curriculums that employers think are critical. He charged “Every Michigan school district underperforms its counterparts across the country.”
Rakolta pointed out that the best of Michigan’s graduates still often leave the state in what he termed a ‘talent drain.’ He also warned that 46,000 jobs in Michigan are directly tied to the production of internal combustion engines—which are expected to become obsolete in 15-20 years. He said Michigan must understand ‘The Battery Boom’, the shift to electric vehicles, and totally re-orient its job creation focus. Rakolta charged that the state really has no strategic plan ‘to remain the Automotive Center of the World’.
The hour long discussion wasn’t all gloom and doom. Donofrio pointed out that the pandemic has led to many people questioning their priorities and placing ‘quality of life’ higher on their list. That’s resulted in the many positive factors of living in the Great Lakes State to cause workers to choose Michigan companies or locations. “Pure Michigan isn’t just a slogan, it’s a way of life that people can choose,” he said. And he pointed to examples of what he termed “choosing Ann Arbor over San Francisco.”
The three panelists agreed that for Michigan to compete in the post-pandemic, EV-driven economy there needs to be greater strategic cooperation between the state’s ‘Big Three’ economic interests: Major Industry, Organized Labor and Government.
