Brainpower And Technology Are Keys To Future

August 1, 2008
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GRAND RAPIDS — One goal The Center for Michigan has for the state’s economic future is to “create a business climate reliant on innovation and technology that encourages new business startups.”

Two assets the Ann Arbor-based center feels can help Michigan reach that goal are “innovation and technology” and a “strong manufacturing brainpower.”

But when The Center for Michigan’s president, Phil Power, speaks to the manufacturing brainpower residing in the state, he isn’t talking about the top-level executives that have directed the Big Three automakers into their respective weak financial positions. Or any other corporate CEOs, for that matter. His focus is on the lower, but highly skilled, rungs of the hierarchy.

“The installed user base of engineers, designers, computer technicians and researchers associated with manufacturing — whether it is furniture, automobiles or anything else — is world class and very large. There are automotive engineers and engineers working in Michigan today that are the sum of all automotive engineers around the world,” said Power, who founded the “think and do tank” two years ago after a career in journalism.

“The issue there is not, are you going to engage in vanilla-flavored manufacturing where per-unit labor costs are important, which has now become an international commodity and races to the bottom of the wage. But rather, I want to convert Michigan to a high-value added, high-wage economy. So what you see going on is the stuff around Ann Arbor,” he added.

Ann Arbor is surrounded by research labs. Foreign automakers such as Hyundai and Toyota are there, as is an aerospace firm. Then there is the “automation alley” in Oakland County. Power said these firms offer “serious jobs” that pay well and have good benefits. He said these companies can’t be involved in ordinary manufacturing because they couldn’t afford the labor costs needed to do that, but he did say that the firms provide the state with the foundation to do other things and eventually make Michigan a manufacturing leader again.

How? First, Power said, these companies can invent new products and new product lifestyles. Second, they can develop sensible, high-output manufacturing facilities.

Power pointed to the Global Engine Manufacturing Alliance facility in Dundee as his example of a sensible, high-output plant. A joint venture between Chrysler and Mitsubishi on a 275-acre site, the GEMA facility produces fuel-efficient four-cylinder engines. It won the Shingo Prize for Operational Excellence earlier this year and has a total work force of 595.

“To get hired at that plant, you have to have a community college associate’s degree or more. You work four days, 10 hours a day at two job classifications instead of 36. That plant is highly productive and very profitable, and represents the future of manufacturing in Michigan, whether it’s furniture or anything else,” said Power.

As for the state of technology in Michigan’s manufacturing industries, Power said it was a mixed bag, as some industries are more advanced than others.

But how high-tech each trade is right now doesn’t seem to be a major concern for him — at least not as important as shaking up the state’s business culture, a downsizing of Michigan’s decades-held mindset that bigger is always better.

“You are going to have a thriving economy not by having a mono culture of automobiles or furniture. You are going to have a thriving economy with a whole bunch of entrepreneurs starting little companies and growing them. It’s the difference between smokestack chasing and gardening,” he said.

“And for that you need a bunch of people who are willing to accept risk. This is very hard to do. It’s a cultural matter. We haven’t succeeded in drawing a whole lot of entrepreneurs because of a built-in cultural bias.”

Power also noted that more than manufacturing brainpower and innovative technology will be needed to return Michigan to the economic powerhouse position it held before globalization became the 800-pound gorilla in the corporate boardroom. He was convinced that other factors will have to play equally important roles if the state is ever going to climb to the top again.

“The state’s economic future depends on understanding and exploiting our true, distinct, comparative and competitive assets — namely, our great universities — and extend that into our educational system. Two, the undeniable quality of our natural resources and the places where people live: We have 20 percent of the world’s drinkable water. We have a good quality of life at one-third of the price of what you can get on the West Coast or the East Coast,” he said.

“(We have) a fantastic work ethic, fantastic natural resources. That’s where we need to go. That will draw the students and the smart people.”

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