Manufacturing Losses Termed Grave

April 14, 2003
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GRAND RAPIDS — Why is the prospect of losing manufacturing jobs so alarming to the Manufacturers Council of The Right Place Program?

According to council member J. Daniel Hess, the worry arises from the fact that Grand Rapids has the highest concentration of manufacturing jobs in the country for a community of its size — and that erosion of manufacturing is sure and certain erosion of the community’s economic base.

“We’re unique,” Hess said.

“More than 26 percent of all jobs here are in manufacturing. And these are high-paying, good quality jobs.” He said the national average salary in manufacturing is $44,700.

When one considers, he added, that every manufacturing job supports four to five other jobs, that means about 75 percent of all family incomes in this community depend directly or indirectly upon manufacturing.

Moreover, he pointed out, manufacturing employment is not merely critical to the local economy, “but it drives our long-term economic growth and it forms our tax base.”

“Manufacturing also is the most important industry in the state,” he added, “and its contributions are vital for national defense, internally and externally.”

He said the local council’s concerns rapidly raised alarms in Detroit and Lansing, too, because the multiplier effect of automotive jobs is substantially greater than ordinary manufacturing.

“If you’re talking about automotive jobs,” Hess added, “the multiplier effect is 7.5 as opposed to greater to a multiplier of four to five jobs,” he said.

Thanks to that, he said, further research disclosed that manufacturing accounts for 93% of all exports from Michigan.

“You can see why this is a source of concern,” he said.

And he said that while the United States as a whole is not as manufacturing-heavy as Michigan or West Michigan, 16 percent of the country’s gross domestic product does fall in that category.

“And when you figure in the multiplier,” Hess added, “you can see that manufacturing supports almost half the U.S. economy.”

He described the council as 20 larger manufacturing companies that meet regularly with a mission to further business interests, expand business growth, and keep business in the Grand Rapids area, and to help each other improve through shared best practices.

“About a year ago,” he said, “we got the feeling that manufacturing was really being threatened not only here but also in the State of Michigan and, really, in our country.

“So we started doing some research,” Hess said, “and discovered that in the last two years over a million jobs have gone overseas and we have started to lose companies here in G.R. and have certainly lost them in the state.

“Then one of the guys said, ‘Darn it, let’s do something about this.’”

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