Granholm Seeks And Gets An Earful

October 31, 2003
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GRAND RAPIDS — Michigan Gov. Jennifer Granholm’s show last week with representatives of West Michigan’s manufacturing community was a nimble tightrope act.

In a town meeting format, the governor paced with a wireless mike in front of a panel of industrialists and a small audience. She sought and received straightforward comments about Michigan’s pluses and minuses as a place to do business.

Granholm seemed to broadcast sympathy concerning Michigan’s taxes and health care costs, but was merely congenial about serious concerns related to the Big Three. She asked the businessmen what they would do if they were governor.

She stressed the need for government and industry collaboration to reverse the flow of jobs from Michigan and she asked if the panel agreed that the recent and fairly amicable settlement of UAW-Big Three contracts didn’t auger well.

The panel, composed of members of the Manufacturers Council of The Right Place Inc., seemed unreceptive.

When one member became pointed about labor union attitudes in Michigan, Granholm pulled a surprise by quickly inviting counterpoint from a UAW member.

The interlude seemed calculated to signal that while the governor acknowledged the manufacturers’ criticism of certain Michigan policies — and that the manufacturers are immersed in fierce and weighted global competition — nobody can ignore the concerns, or the political strength, of unions in Michigan.

At Granholm’s prompting, several manufacturers indicated they had serious problems with the Single Business Tax. They also bought into her suggestion that targeted tax credits might help.

The panel consisted of representatives of small and giant firms and private and public companies.

Brian Harris, of H&H Metal Source — a modest-sized sheet metal production operation — said that if the state’s tax structure were different, he’d be able to start a second business to put more people to work.

But Harris, whose firm is an automotive supplier that never does layoffs, also alluded to a sore spot with other automotive suppliers: the Big Three.

Harris said he’s being begged to establish a plant in Texas. Potential automotive clients want him to build there, he said, and he noted that those automotive clients aren’t GM, Ford or DaimlerChrysler.

Jim Zawacki, of GR Spring & Stamping, was much more pointed.

After telling the governor he voted for her because he believes conciliation and bipartisanship is critical to Michigan’s economic future, he added, “I’m hiring.”

Then he added, “And I’m also opening a new plant — but in Florida.”

Granholm asked why, and Zawacki explained that whereas 90 percent of his business formerly was with the Big Three, now 90 percent of the firm’s work is for Japanese automakers sited in Florida.

Moreover, he added, it’s not so much that he has left the Big Three, but that the Big Three have stiff-armed him and other suppliers.

He said the Detroit Big Three have imposed extraordinary price demands upon domestic suppliers while simultaneously outsourcing a great deal of work to suppliers in mainland China.

He urged the governor to use her clout with the Big Three. While the governor conceded that the Big Three have lost something like 13 percent of their market share, she did not allude directly to their outsourcing. She was critical of China’s trade and monetary policies.

If Zawacki was critical of the Big Three, a Grand Haven industrialist was witheringly so.

Jerry Scott, of Grand Haven Stamped Products, asserted that price seemed to be the sole motivator of the domestic OEMs and alleged that they have used unethical and even illegal practices to hammer concessions out of domestic suppliers.

He said the state of Michigan has taken no cognizance of those practices.

Too, he said pointedly, there’s a reason that the Big Three’s Japanese competitors have built their plants outside Michigan.

He said his own firm is doing well not only because it has gone beyond lean practices to flexibly lean practice, but also because it has developed many innovations, which he recently paraded through the European manufacturing community.

Scott also said his travels overseas and here have revealed nothing like the best practices cooperation — even between competitors — here in West Michigan.

As far as the panel was concerned, innovation and lean practices seem to be the future for manufacturing.

Fred Keller, of Cascade Engineering — the nominal moderator of the session — opened the discussion by saying manufacturers need to focus on innovation, competence and fairness.

The last contributor, Win Irwin, of Irwin Seating  — the meeting’s host site — said that lean practices and innovation are critical to his own company, which is healthy and growing.

Granholm told the panel, which included members of the Manufacturers Council of The Right Place, that the session was the first in a series of what she termed high-level summits she plans to hold around the state as part of her administration’s Manufacturing Matters Initiative.

The governor said she also is urging a parallel series of meetings with governors of the other big manufacturing states, urging them to undertake similar initiatives at home and to work together to give the federal government a unified wake-up call.

“Keeping manufacturing strong in Michigan requires strong leadership and nonpartisan collaboration,” she said. “We don’t want to see jobs going to China, or India or Mexico. We want those jobs to stay here.

“Since the year 2000, about 190,000 jobs have been lost — lost from Michigan.

“And engaging in open discussion and proactive thinking as displayed by the Manufacturers Council plays a critical role in ensuring the future of the industry.”

She invited remarks from Congressman Peter Hoekstra, R-Holland, who agreed with her summation that part of West Michigan’s problem is a number of counterproductive federal policies.

“It’s pretty clear the federal government doesn’t get it,” he said, “but I think the governors could help and I think the new manufacturing undersecretary will help.”

The two questions that popped up immediately after the discussion concerned whether the panel’s comments actually impressed the governor and, if so, whether she has enough political strength to act upon them.

The governor indicated that she wanted to know what tools manufacturers needed to compete and win, and wants to support manufacturers that provide quality workers’ benefits.

She also stressed that leveling the playing field in the global marketplace is critical.    

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