Banks' role in struggles still a contentious topic
It’s not all the banks’ fault. That was one of the points George Erickcek made last week at The Right Place Inc. annual employment and economy forecast for West Michigan.
Erickcek, an analyst with the Upjohn Institute for Employment Research, said what the country has gone through since 2008 was not a normal recession but “a kidney stone recession” that has resulted in “a smaller version of what we were before, in my opinion.”
As to the banks’ role in the problem, Erickcek said the banking system now is holding “a trillion dollars in excess reserves,” and it’s clear the Federal Reserve System’s long-term strategy to get capital flowing again “isn’t working very well.”
The reality is that there has been very low demand for commercial/industrial loans, and we are “only just now seeing improved demand” for those loans, according to Erickcek.
During the Q&A period after the presentations by Erickcek and Birgit Klohs of The Right Place, Erickcek was asked if there was still a crisis in finance, in view of all those cash reserves. He repeated his point about weak demand for business loans and then noted that a recent comment by Ben Bernanke of the Federal Reserve System about what the government might try next made him very nervous. An impetuous move by the Federal Reserve could recklessly trigger inflation, he said.
That was the cue for Jim Dunlap to come out swinging at Uncle Sam. Dunlap is president of Huntington National Bank-West Michigan and chair of The Right Place board.
Dunlap noted that the financial industry was forced into a partnership with the government as a result of the crisis of 2008, and “the government is a very dangerous partner.”
Capital will go where it earns a “rightful return,” despite government attempts to steer it to where it thinks it ought to go, said Dunlap.
After the financial crisis got the government involved in the banking industry, there began “interference” triggered by “good intentions,” he said, which led to the government “playing little games.” Yes, there is plenty of capital, said Dunlap, but the banks’ new partner — Uncle Sam —doesn’t give very clear rules, in his opinion.
Once the government reduces its involvement in banking, “you will see the market take hold again,” he said.
Bouncing to profits
Gymco Sports, a locally owned children’s sports center, was featured Dec. 2 in The New York Times, but that isn’t the only recent national exposure for the growing business.
Gymco owner Doreen Bolhuis has been featured on other national media outlets, including CNN, Fox and CBS, and is scheduled to appear on “The Today Show” this week. Bolhuis has turned her exercises for young children into a company, Gymtrix, which offers a library of videos starting with training for babies as young as 6 months. There is no lying in the crib playing with toes. Talk is also in the air that Gymco has a deal with Sassy Baby, a children’s tumbling mat company. The mats and a Gymco video produced locally by Cynthia Kay & Co. will be sold in Target stores nationwide.
Bolhuis has been listed among the Business Journal’s 50 Most Influential Women in West Michigan and the Top Women Owned Businesses.
New owner at Shawmut
Shawmut Hills, well-known to Honda motorcycle owners from throughout West Michigan since the early 1960s, is now Fox Shawmut Hills.
Last week, Fox Motors added the powersports shop on Lake Michigan Drive in Grand Rapids to its collection of car and powersports dealerships in the Grand Rapids and Traverse City regions. The powersports category includes much more than motorcycles; it’s also motor scooters, snowmobiles, jet skis, ATVs, and even generators and other power equipment. Fox Motors, owned by Dan and Pamella DeVos, has two powersports dealerships in the Grand Rapids region now, and one in Acme, near Traverse City.
“I opened Shawmut Hills 47 years ago,” said Hank Makarewicz. “Although it is difficult to sell a strong business that I started from scratch many years ago, I couldn’t be more pleased to hand the reins over to the Fox team.”
Brian Busscher, director of the powersports division at Fox Motors, said Shawmut Hills — oops, make that Fox Shawmut Hills — employs about 30 people. Terms of the sale were not released, and while Busscher could not divulge annual sales figures for Shawmut Hills, he said powersports dealers, “like everybody,” certainly felt the recession over the past two years.
“And I would say 2010 was not too different than 2009, so we’re looking forward to some gradual growth over the next couple of years.”
There’s a lot of momentum there on the northeast corner of Lake Michigan Drive and Collindale Avenue.
“We’re excited about Shawmut,” said Busscher. “This is just a real brand in the Grand Rapids area and even in Michigan. So for us, from a powersports standpoint, this puts us on the map because of the magnitude of the business here.”
WMEAC all charged up
The West Michigan Environmental Action Council’s headquarters at 1007 Lake Drive SE last week became the first location in Grand Rapids to receive an electric vehicle charging station through the ChargePoint America program. ChargePoint America provides the free hardware, network and associated software for various charging locations throughout nine regions nationwide, including West Michigan (see story page 4).
The program is funded by the American Recovery and Reinvestment Act through the Transportation Electrification Initiative administered by the U.S. Department of Energy and encompasses the goals of promoting electric vehicles to help reduce petroleum consumption and greenhouse gas production while creating jobs.
Fifty charging stations are in the works for Muskegon, Holland and Grand Rapids. Meijer Inc. is installing the stations at its stores, including two currently in place in Holland. Drivers can charge up free of charge.
Marshall Engineered Products Co., a 107-year-old firm that makes steam traps, pumps and other such esoteric essentials for the HVAC and industrial processes markets, has found a new home in Kentwood. Formerly located in Walker, MEPCO had moved there from its original home in Iowa in 2005.
Now MEPCO has bought the plant at 3695 44th St. SE formerly occupied by Tool Ventures International, with financial help and encouragement from the Kentwood Economic Development Corp. MEPCO president Ed Gilde said the company had a little more than a dozen employees when it was in Walker and has since added a couple more machinists and more machinery. The growing company expects it will have doubled its employee roster within a couple of years, if things keep going as well as they are now.
And MEPCO may be staying put for a while, judging from the pain of its last move.
The “major headache” during the move, according to the MEPCO website, was “the phones and e-mail!” The phone service provider had been contacted two months before the move “and they still could not get their act together in time,” according to MEPCO.
“They were three weeks late on getting our phones, e-mail, and internet switched over and online. We had to forward all our calls to a cell phone, we could only get incoming e-mail for a while, and we had to have our faxes sent to a separate computer and then down to us to print. We are very happy that we have been back online for about two weeks now and, yes, we are dumping the phone service provider.”