Recession What?

These days it's hard to stay up on the news without being subjected to talk of recession this and recession that. Now, there's no arguing that the U.S. economy has fallen on trying times, but it's nice to temper the bad with the good for some perspective. So in the spirit of optimism, I thought it would be a refreshing change of pace to veer away from talk of our "doomed" economy and highlight two recent major investment projects that promise to bring thousands of jobs to those in need.

Well-known for its troubled economy, Michigan has been working hard over the past few years to breathe life into a fresh new economy, one that is much less dependent on its automotive roots and more focused on high-tech and life sciences companies. Progressive incentive programs such as the 21st Century Jobs Fund have been helping with the transition.

In April, Michigan residents had much reason to rejoice when the state scored one of the largest non-automotive deals in MichiganÕs history--at a time when the stateÕs unemployment rate is the highest in the nation at 7.2%. Thanks to a $330 million investment by life sciences company MPI Research Inc., Michigan stands to gain 3,300 new direct jobs and an additional 3,300 indirect jobs over the next 15 years. The company, which provides comprehensive pre-clinical research and development services, plans to more than double its current one-million-square-foot facility in Mattawan, MI, as well as launch new operations in Kalamazoo, MI at two closed Pfizer facilities in downtown Kalamazoo that Pfizer is donating to the city. Assistance provided by the Michigan Economic Development Corporation (MEDC) helped convince the company to choose Michigan over competing sites in the U.S. and China.

Based on the MEDCÕs recommendation, the Michigan Economic Growth Authority board approved a state tax credit valued at $86 million over 15 years for MPI. The MEDC is also recommending the downtown Kalamazoo site receive designation as a tax-free Renaissance Zone and that a $2 million grant previously awarded to Western Michigan University be used instead for redevelopment activities at the Kalamazoo site. Through the transportation economic development fund, the Michigan Department of Transportation will chip in and provide funding for improvements at or near the I-94 interchange that are necessary to accommodate the traffic generated by MPIÕs expansion. In addition, local match requirements will be provided by the village of Mattawan. The city of Kalamazoo is also lending a helping hand by way of $150,000 toward environmental due diligence and infrastructure analysis.

The MPI Research expansion is one of five economic development projects the governor announced in April. In all, they are expected to create and retain a total of 9,013 Michigan jobs.

Meanwhile, down south, the Tar Heel State will soon see 900 new, high-paying jobs as a result of GE-Hitachi Nuclear Energy's recent investment promise. The company, which could receive more than $25 million in state incentives for new job creation, plans to invest $704 million to add manufacturing, training, simulation, and testing facilities at its 1,300-acre campus in New Hanover County, NC, near Wilmington. Part of the expansion could also include a commercial uranium enrichment facility. A joint venture of General Electric and Hitachi, GE-Hitachi Nuclear Energy already employs more than 2,000 people in the county.

While wages for all the new jobs will vary, the overall average wage will be about $85,000 a year not including benefits--more than double the New Hanover County average of $33,226.

Unfortunately, these new jobs won't fix skyrocketing gas and food costs, but it is success stories such as these that will hopefully pave the way to brighter economic times for the United States. These stories also reinforce the need for states, and the nation as a whole, to focus economic development energies (and monies) on transitioning to a primarily knowledge-based economy to help our great nation become great again.

Michigan is Hiring

The Michigan Economic Development Corporation approved state-funded incentives of over $53 million to help seven companies expand or build new projects. Together, the projects are expected to create 3,512 jobs

The projects include a $10 million engineering center in Pittsfield Township, MI,, for which Grupo Aernnova, a Spanish aerospace company, will receive $18.5 million over fifteen years through tax credits. The move could bring 600 new jobs to Washtenaw County. Aernnova considered 15 states before choosing MichiganÑa key factor being the availability of engineers in the Ann Arbor region.

Credit Acceptance Corporation will add a $3.8 million expansion to its headquarters in Southfield, creating 506 jobs. Also in Southfield, MARS Advertising Prize Logic LLC will spend $1.7 million for a headquarters and create 150 jobs. Sysco Food Services will add a 90,000-square-foot, $18 million expansion in Canton, MI, hiring 130 workers. Azure Dynamics Corp. will relocate its Canadian headquarters to Oak Park, MI, spending $2.5 million and creating 125 jobs. Grandvic Investment, a plastics company, will create a $2.7 million expansion in Standish, MI, adding 75 jobs. The Thunder Bay Development LLC will purchase a $15 million manufacturing plant and create 150 new jobs in Alpena, MI.

Sources: Globe St., The Detroit News, The Detroit Free Press

Looming Pink Slips

@ A "shift in product demand and consolidation of facilities" has led to the closing of a Fruit of the Loom plant--and a loss of 800 jobs. The company announced today that the Jerzees de Choloma plant in Choloma, Honduras will close within the next few months. Fruit of the Loom also announced that it would help employees find other jobs.

@ The H&H Tube and Manufacturing Plant in Cheboygan, MI, will be closed within nine months, company officials announced today, laying off 50 workers. The company was bought by Sunspring North America in June, and will consolidate H&H manufacturing operations at the other plant in Vanderbilt, MI.

@ On Monday, Sanmina-SCI, a global contract manufacturer in various fields, announced plans to close its Fountain, CO, manufacturing plant, eliminating 319 jobs. The company's Rapid City plant remains open, although earlier this month around 100 workers were reportedly laid off. The Associated Press reported:

ItÕs not unusual for Sanmina-SCI to cut back its Rapid City work force to match the ebb and flow of contracts for electronics work. Over the years, the company has regularly laid off workers and called them back.

Sources: Reuters, The Cheboygan News, The Rapid City Journal via AP,

Hire Local, Cash In

According to the Michigan Department of Labor & economic growth, the state's labor force has continued to shrink--falling by 64,000 (1.3%) from January to July. Since July 2006, the state has lost 27,000 payroll jobs in manufacturing, 17,000 in construction, 14,000 in government, and 13,000 in trade, transport, and utilities.

A new economic development bill proposed by Democrats hopes to address this issue-- giving extra incentives for hiring Michigan workers. Hire Michigan First would create a sliding scale in which a company employing 100% Michigan workers is more likely to get a tax break than one employing 80% local workers. The bill would also make sure that companies hiring illegal immigrants would not receive contracts or incentives.

State Rep. Robert Dean summed up the proposal at a news conference on Monday: "Tax incentives and other benefits that come with economic development projects should be awarded only to companies that put Michigan workers first."

Sources: Grand Rapids Press, Lansing State Journal, Forbes via AP

Green Machine

When I think of summer the first three things that come to mind are Saturdays at the beach, ice cream, and...higher gas prices.

Being a big fan of the whole push towards a "greener," cleaner energy culture, I was delighted to hear last week that Toyota's global sales of hybrid vehicles have hit a record 1 million as of the end of May. Of those, nearly 345,000 hybrids were sold in Japan, while 702,000 were sold abroad, according to a statement released by the company last week. Sales of Toyota hybrids have climbed from just 18,000 in 1998 to 312,500 last year. Concern over gas prices, global warming, and pollution have all helped to drive the demand for hybrids.

The Prius is the clear winner when it comes to hybrids, with a total of 757,600 units sold since its 1997 introduction in Japan. Toyota began selling the Prius in North America, Europe, and other places in 2000. Last year, the model made up more than 40% of hybrid sales in the U.S.

And on another green energy note:
State Reps. Kate Ebli, D-Monroe, and Kathy Angerer, D-Dundee, unveiled a plan this past Monday aimed at making Michigan a leader in the renewable energy production arena, which should help attract cutting-edge industries and boost the state's economy.

The plan involves increasing tax incentives for alternative energy, offering tax breaks for individual households employing the alternatives and protecting the Great Lakes and Michigan's other natural resources. Some of the ideas are similar to those proposed earlier in the year by Governor Granholm or Michigan Public Service Commission leader J. Peter Lark.

"With our highly skilled workforce and our outstanding universities, our state is in an ideal position to become a key player in the renewable energy sector," Rep. Angerer said. "Michigan gave birth to the auto industry, and Michigan will pave the way for this renewable energy economy."

House Democrats' 21st Century Renewable Energy Plan will:
¥ Require that renewable energy sources (such as solar, wind, hydroelectric and biomass-based power) account for 10% of the state's energy production by 2015. The plan sets a goal of 25% by 2025.

¥ Foster more "alternative-energy renaissance zones" across the state by including solar and wind generation and fuel-cell technologies among those who qualify for renaissance zone tax abatements.

¥ Promote energy conservation through updated construction codes and consumer tax credits for energy-efficient appliances.

¥ Provide tax credits for the purchase of solar equipment.

¥ Establish a statewide target of reducing electricity consumption by 1% a year.

House Democrats also will be examining ways to expand programs at community colleges to train workers to maintain new renewable-energy technologies.

A program focused on renewable energy and energy efficiency would create tens of thousands of new jobs and pump hundreds of millions of dollars into Michigan's economy, according to a recent NextEnergy study prepared for the Michigan Department of Environmental Quality.

The House Democrats said the points of the plan will be introduced as bills soon. The Energy and Technology Committee and the Great Lakes and Environment Committee, both of which Rep. Ebli sits on, likely will hear the bills in the next few weeks. We'll keep you posted!

Expansion News and Views: From Iowa to Namibia

- Snap-On Tools broke ground yesterday on a $12 million facility in Algona, Iowa. The investment will add 51,000 square feet to an existing plant, and create 30 new jobs. The state and the Kossuth-Palo Alto County EDC awarded the company $2.8 million for the expansion, and the city offered a $300,000, 10-year loan and $250,000 worth of job training. (The Messenger, Iowa)

- Continental Airlines is trying to decide which airport to throw $45 million at for an expansion. Will it be Newark, Cleveland, or Houston? The expansion could bring up to 700 jobs to the region. And bragging rights. (Cleveland Plain Dealer)

- Those crafty developers from down under are getting set to move into the U.S.! Australia's Macquarie Goodman, the world's second largest industrial property trust, has spent $5 billion over the past 18 months to build its Euro and Asian platforms, and now is looking towards America. The trust would be going head-to-head with their biggest competitor, U.S.-based ProLogis. Look out for themÑthey expect to be a major presence within two years. (Reuters)

- Auto Owners Insurance Group plans to build a $45 million, 96,00 square-foot data center in Lansing, Michigan, adding 80 new jobs. the new facility will be near its corporate headquarters. On Monday, Delta Township voted to sell a half-acre of land to the company for $1. That's right, one hundred pennies. The township is also paying $24,000 in water and sewer connection fees. (The Lansing State Journal)

- First Jamaica Trust Limited (FJT) is seeking $25 million to develop real estate in Jamaica and Central America. On Wednesday, the International Monetary Fund proposed the full loan to FJT. The Trust invests through its property management firm which manages around 750,000 square feet of commercial and residential space in Kingston. (The Jamaica Observer)

- Speaking of Kingston, earlier this month, the mayor of the city, Desmond McKenzie, gave a speech in Massachusetts. He urged Jamaicans living in Boston to invest more of their savings in the country's development, to help restore the country's economic viability. (The Jamaica Gleaner)

- The World Bank approved a $7.5 million loan to support education and training of Namibia's workforce. This is the first part of a program called Namibia's Education and Training Sector Improvement Program (ETSIP1), a five-year, $357 million program to train workers and attract business. I hope it works, because that's a lot of money to pay back.

Weekend Expansions Update

$ Quatro Composites is expected to complete their new Orange City, Iowa, plant expansion by August 2007. Quatro is also moving its Poway, California-based offices to a larger facility in May to accommodate staff and R&D growth.

$ Cobasys, a battery manufacturer, confirmed the addition of 18,860 square feet to its headquarters in Orion, Michigan, to be completed by July. Cobasys is the only North American manufacturer supplying NiMH battery systems for hybrid vehicles, including the Saturn Vue Green Line and the Chevrolet Malibu hybrid.

$ VienTek, a joint venture between Mitsubishi Power Systems Americas and TPI Composites, launched plans to triple the capacity of their wind blade manufacturing operation in Juarez, Mexico. The expansion, to be completed in October, will include two plants with a total of 500,592 square feet of manufacturing space and 800 employees.

$ Air Arabia, the first low-cost airline in the Middle East and North Africa, announced today that it will construct a hotel at Sharjah Airport in Dubai. The 300-room hotel will cost $350 million AED, or over $95 million US dollars.

$ Bell Equipment, a South Africa-based earthmoving equipment manufacturer, is currently embarking on a $40 South African Rand, or about $5.5 million US dollar, upgrade of its Cape Town manufacturing and customer support facilities. The project is due to an expansion of the construction sector in Cape Town and the growth of diamond operations on the west cost of the country.