Two cheers for the Big Three

An historic $2.1 billion total investment by companies in Michigan -- including some $850 million from Ford -- is expected to create more than 6,000 new jobs for state workers while retaining more than 216,000 others.

It's all part of a package through which tax-break czars at the Michigan Economic Development Corporation are aiding the growth of 16 companies and one brownfield redevelopment project. Included are major investments by Ford, General Motors and Chrysler, which analysts say bolsters the auto industry's long-term future in Michigan. Combined, the projects are expected to create 6,182 total new jobs, retain 216,420 jobs and generate $2.1 billion in new investment in the state.

Governor Granholm's perspective: "This historic investment means thousands of new jobs for our state and the retention of tens of thousands more. Our continuing efforts to bring new investment and jobs to Michigan are paying dividends."

MI perspective: Two cheers for the Big Three, their fight to return to solvency and new investment in Michigan. Why not three cheers? First, because the "Big Three" clearly ain't what they used to be, and what they used to be wasn't so great anyway. Victims of their own mismanagement but also buffeted by flighty consumer trends ("We want our gas guzzlers! No we don't! Yes we do!") and international political conflicts (e.g., oil crises), these companies have survived largely with mercy from a $17.4 billion government bailout, foreign investment (e.g., Fiat) and union concessions. Congrats for their new attention to advanced engineering and hybrid cars, though "fuel efficiency" still doesn't roll smoothly off their tongues. Second, it must be noted in context that Michigan lost more than 790,000 jobs in past 10 years, and the new auto industry investments do nothing to lessen the importance of the state's diversification into new areas such as life sciences, homeland defence, advanced engineering and entertainment.

Still, the new investments are great news for The Great Lake State. Here are some of the MEGA-approved incentives to win the following projects for Michigan over competing states and countries:

Cequent Performance Products Inc. - The designer, manufacturer and marketer of a broad range of aftermarket accessories for the transportation industry plans to invest $3.4 million to broaden its research and development and sales operations in Plymouth Charter Township. The project is expected to create up to 115 total jobs, including the potential for as many as 60 directly at the company. The MEDC estimates the increased economic activity created by this program has the potential to create an additional 55 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $896,963 over six years to convince the company to expand in Michigan over a competing site in Indiana. http://www.trimascorp.com/performance.htm

Chrysler Group LLC - The company that designs, manufactures and assembles cars and trucks under the Chrysler, Jeep, Dodge and Ram Truck brands is considering a $1 billion investment in its Sterling Heights Assembly Plant and the Global Engine Manufacturing Alliance (GEMA) in Dundee to produce future models predicated on receiving inducements from the state as well as local governments. The project is expected to retain up to 92,920 total jobs, including up to 20,000 directly at the company. The MEDC estimates the increased economic activity created by the project has the potential to retain an additional 72,290 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.3 billion over 20 years to encourage the company to expand in Michigan over a competing site in Ohio. The city of Sterling Heights is considering an abatement to support the project. http://www.chryslergroupllc.com

Creative Foam Corporation - The designer and manufacturer of foams and plastics for customers in the automotive and medical industries plans to invest $1.5 million in an expansion in Fenton to manufacture materials to supply the renewable energy market, with the final product being a core kit that is used in the production of wind turbine blades. The project is expected to create up to 144 total jobs, including 63 directly at the company. The MEDC estimates the increased economic activity created by this program has the potential to create an additional 81 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $362,386 over five years to encourage the company to expand in Michigan over a competing site in Colorado. http://www.creativefoam.com/

Dematic Corp. - The designer and manufacturer of automated material-handling systems plans to invest $10.9 million to expand its R&D, administrative services, sales and in-house production in Grand Rapids. The project is expected to create up to 910 total jobs, including 505 directly at the company. The MEDC estimates the increased economic activity created by this program has the potential to create an additional 405 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $3.2 million over five years to encourage the company to expand in Michigan instead of competing sites in Kentucky and Utah. http://www.dematic.com/na/Home/Dematic-North-America/page30322.htm

Dokka Fasteners Inc. - The new-to-Michigan manufacturer of hot-formed bolts primarily for the wind industry plans to invest $21 million to establish a manufacturing, coating and distribution operation in Auburn Hills. The company is expected to create up to 168 total jobs, including 90 directly by the company. The MEDC estimates the increased economic activity created by the project may create an additional 78 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.5 million over seven years to convince the company to expand in Michigan over competing sites in Missouri and Illinois. The MEDC is also supportive of EDJT funding in the amount of $60,500 and a State Education Tax abatement valued at $28,000. http://www.arvidnilsson.com/DOKKA-FASTENERS.aspx?ID=245

Dynamic Captioning LLC - The provider of broadcast-quality captioning, encoding and subtitling services to media companies within the film and television industries plans to invest $554,000 to establish a service center in Grand Rapids. The project is expected to create 56 total jobs, including 40 directly at the company. The MEDC estimates the increased economic activity has the potential to create an additional 16 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $169,629 over five years to encourage the company to permanently locate in Michigan over a competing site in New York.

EnovateIT LLC - The manufacturer of computer workstations for the health care industry plans to invest $4 million to expand its design and production operation in Canton Township. The project is expected to create up to 387 total jobs, including 160 directly at the company. The MEDC estimates increased economic activity created by the project has the potential to create an additional 227 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.1 million over six years to help convince the company to expand in Michigan over a competing site in Ohio. http://www.enovateit.com/

Eovations LLC - The new-to-Michigan venture will commercialize a new, next-generation composite building material called EoTek. The company plans to invest $16 million to establish an R&D and production center in Bay City. The project is expected to create up to 64 direct jobs at the company within the next five years. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.3 million over seven years to convince the company to expand in Michigan over a competing site in Ohio.

Ford Motor Company - Ford plans to invest $850 million to secure global product platforms and operational activities statewide. The project is expected to create 1,200 new jobs and retain up to 115,400 total jobs, including 28,000 directly at the company. The MEDC estimates the increased economic activity created by the project has the potential to retain an additional 88,600 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $909 million over 15 years to encourage the company to expand in Michigan over competing sites in India, South Africa, Europe and Asia. This MEGA credit will replace three MEGA credits that were previously awarded to Ford Motor Company. http://www.ford.com

General Motors LLC - The automotive OEM plans to amend the global MEGA incentive it received in June 2009 to add a Hybrid Electric Vehicle battery and vehicle engineering and development operation at the existing battery development center at the Warren Technical Center. This new addition is expected to generate an additional $112 million investment, and could create up to 900 additional jobs at the Warren Technical Center and retain an additional 8,100 jobs statewide. This investment and additional jobs are dependent upon the development of a successful, competitive business case. http://www.gm.com

GM Subsystems Manufacturing LLC - The wholly owned subsidiary of GM plans to amend a Retention MEGA credit it received in February 2009 to expand in-house support for battery module and pack assembly at its Brownstown facility. The expansion is expected to generate an additional $39.7 million investment and retain 150 additional jobs. This investment and additional jobs are dependent upon the development of a successful, competitive business case. http://www.gm.com

Mountain Valley Recycling LLC - The new-to-Michigan recycler of plastic waste into sustainable, post-consumer resins plans to invest $29.5 million to establish a facility that will incorporate new, state-of-the-art green technology in Sterling Heights. The project is expected to create up to 1,303 total jobs, including 396 directly at the company. The MEDC estimates the increased economic activity created by the project has the potential to create an additional 907 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $5.1 million over seven years to encourage the company to expand in Michigan over competing sites in Oregon, Arizona and Nevada. http://www.mvrecycling.com/

P3 North America Inc. - The Troy-based provider of professional management services and engineering solutions for alternative power train and advanced vehicle technologies plans to invest $332,000 to expand in the areas of product development and management services for electric device technology and laboratory testing for infotainment systems and other connected vehicle technologies. The project is expected to create up to 129 total jobs, including 65 directly at the company. The MEDC estimates the increased economic activity created by the project has the potential to create an additional 64 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $485,958 over five years to convince the company to expand in Michigan over a competing site in New Jersey. http://www.p3-group.com/northamerica/enn

Powertrain Integration LLC and New Eagle LLC - Powertrain Integration, the Madison Heights-based provider of a broad range of systems, engine components and services for niche auto OEMs, plans to issue a contract to New Eagle, located in Ypsilanti, to generate a unique software code for use in an automotive engine control module. Powertrain Integration will invest $2 million to commercialize the only large-bore, spark-ignited engine available to the on-highway market, which will create up to 41 jobs. Based on the MEDC's recommendation, the MEGA board today approved a state Technology Collaboration tax credit valued at up to $300,000. http://powertrainintegration.com/

Roush Clean Tech LLC - The developer of alternative energy solutions to fleet vehicles plans to invest $2.1 million to establish an R&D center in Plymouth Township. The project is expected to create up to 85 total jobs, including 54 directly at the company. The MEDC estimates the increased economic activity created by this program has the potential to create an additional 31 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.1 million over seven years to convince the company to expand in Michigan over competing sites in North Carolina, Florida, Nevada, Oregon, Minnesota, Texas, Ohio, Indiana and Wisconsin. http://www.roushcleantech.com/

Yanfeng USA Automotive Trim Systems Inc. - The manufacturer of components for major U.S. auto OEMs plans to invest $17 million to expand to accommodate additional work in Harrison Charter Township. The company is 51%-owned by SAIC (China's 3rd largest automaker) in partnership with Visteon. The project is expected to create up to 466 total jobs, including 131 directly at the company. The MEDC estimates the increased economic activity created by the project has the potential to create an additional 335 indirect jobs. Based on the MEDC's recommendation, the MEGA board today approved a state tax credit valued at $1.1 million over seven years to encourage the company to expand in Michigan over a competing site in Missouri.

"From new-to-Michigan companies to automotive leaders who have called Michigan home for decades, our innovative economic development toolbox is providing a framework that makes a strong business case for future investments," said MEDC President and CEO Greg Main.

Economist: Jobs picture to brighten

Michigan's economy is growing and will add jobs next year, according to the latest analysis from Comerica Bank's chief economist.

Dana Johnson cautions, however, that the state's growth is only in the 1% to 2% range and is being driven by the recovery in manufacturing, including auto production.

"There has been a partial recovery in Michigan," Johnson told some of the bank's customers during a luncheon at the Livonia Marriott on Thursday. "It's not a brilliant outlook, but it's certainly a lot better than what we have been seeing."

He said the growth will continue as long as the national economy expands. However, the rate of growth for Michigan will be about 1% slower than the rest of the country because many residents are leaving to find jobs in other states, Johnson added.

The jobless rate in Michigan has fallen but is still in the double-digits, inching down to 13% in September. But Johnson forecasted that the state's unemployment rate will come down sharply next year. Johnson also had a positive outlook for the national economy, predicting growth of 3% next year.

Small business lending gets new injection

Governor Granholm and the U.S. Treasury Department today announced allocations expected to deliver some $792million in new small business lending through innovative local programs that help entrepreneurs expand their businesses and create jobs.

Seed money for the public-private partnership dubbed the State Small Business Credit Initiative is a central component of the Small Business Jobs Act President Obama signed into law last week to help unlock credit and provide targeted tax cuts for small businesses.

"Today's announcement that Michigan will receive $79.2 million [under SSBCI] is welcome news for Michigan's small businesses," said Granholm. "Federal support for successful public-private partnerships like the Michigan Supplier Diversification Fund will lead to new private sector investment that will create jobs."

Under the SSBCI, states are offered the opportunity to apply for federal funds for programs that partner with private lenders to extend greater credit to small businesses. States are required to demonstrate a minimum "bang for the buck" of $10 in new private lending for every $1 in federal funding. Accordingly, the $79.2 million funding commitment that the federal government will make in Michigan for this program is expected to support $792 million in additional private lending. Nationwide, the program is expected to support $15 billion in additional private lending.

"Innovative local initiatives that support small business lending are under extraordinary pressure because of state budget difficulties," said Treasury Secretary Tim Geithner. "These funds will provide vital support to successful state-level programs that help local entrepreneurs obtain the credit they need to put more Americans back to work. President Obama fought hard for the Small Business Jobs Act because it will help ensure that small businesses continue to strengthen our nation's recovery and serve as critical engines for job creation."

The SSBCI allows states to build upon existing, successful state-level small business lending programs, including examples such as collateral support programs, Capital Access Programs (CAPs), and loan guarantee programs:

-- Collateral Support Programs for Small Manufacturers: Collateral support programs help viable businesses that are struggling to get credit because the value of the collateral they hold has fallen, often due to the decline in commercial real estate values. These programs - which set aside funds to augment collateral the borrower already holds - provide banks greater confidence in extending credit to these borrowers, particularly in some of the communities hardest hit by the economic downturn.

-- Capital Access Programs: CAPs, which are already up and running in over 20 states, are loan portfolio insurance programs in which states provide a matching contribution to bank loan loss reserves when lenders extend credit to qualified small businesses. These reserve enhancements allow lenders to expand credit to new borrowers at a time when many of these lenders might otherwise pull back.

-- Loan Guarantee Programs: Under loan guarantee programs, states provide partial guarantees on certain small business loans to give lenders greater confidence to extend credit.

If a state does not have an existing small business lending program, officials can establish one in order to access this funding. States must provide plans for utilizing their funding allocations to Treasury for review and approval.

The amount of SSBCI funds a state is eligible to apply for is determined based upon formulas in the Small Business Jobs Act that take into account each state's respective unemployment rate and decline in employment relative to other states.

In addition to the State Small Business Credit Initiative, the Small Business Jobs Act includes a number of important provisions to support small business job creation. The Act includes eight new small business tax cuts that went into effect immediately upon becoming law last week; creates a $30 billion Small Business Lending Fund to help small and community banks provide new loans to small businesses; extends and expands existing Small Business Administration loan programs; and delivers other important benefits for small businesses.

Technology Center opens in Detroit

CIBER Inc. has hired 150 highly skilled information technology professionals to join its expanded Detroit Global Solutions Center (GSC), in Southfield. CIBER is investing more than $8 million in this facility over the next seven years, with a commitment to add more than 700 jobs.

The company was founded in Dearborn, Mich., in 1974, and is now a $1 billion global IT services and management consulting company with more than 8,000 employees.

The new jobs are the direct result of a partnership between the state of Michigan, the City of Southfield and CIBER, responding to needs of clients who want expert consulting services.

"CIBER provides IT services to major corporations, and this center will serve clients not only in Michigan but across the U.S., and potentially around the world," said David Peterschmidt, CEO of CIBER. "These are sophisticated jobs, requiring employees with a deep knowledge of specific technologies and business acumen. With the type of industries historically present here in Detroit, there is a deep base of talent that we are able to tap into."

"We want to thank the State of Michigan, the Michigan Economic Development Corporation and the City of Southfield for working with us in setting up the structures and incentives for both CIBER and our employees," continued Peterschmidt. "We will expand our presence here, and continue to bring additional jobs to meet our clients' needs."

The Michigan Economic Development Corporation (MEDC) recommended and the Michigan Economic Growth Authority (MEGA) Board approved a state tax credit earlier this year to support the project. The City of Southfield also provided incentives.

"These jobs represent the future of Michigan employment - knowledge workers creating value for clients around the globe," said Greg Main, President and CEO of the MEDC. "We're proud that CIBER selected Michigan as the location for this new facility, and congratulate them for being ahead of plan, already bringing 150 new jobs since just the beginning of the year."

The Michigan Economic Growth Authority (MEGA), the state's response to interstate competition for company expansions and relocations, may provide a refundable tax credit against the Michigan Business Tax (MBT) to companies expanding or relocating their operations in Michigan. Since January 2010, more than 71,200 new and retained jobs have been announced as a result of the MEGA program.

The Michigan Economic Development Corporation, a partnership between the state and local communities, promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.

GM invests $145 million in Buick plant

General Motors announced it will invest $145 million in the Orion Assembly Center plant, Orion Township, to produce Buick's new small car and compact sedan, the Verano. The investment will increase the workforce by 350 employees, to 1,550.

In June 2009, GM identified Michigan as one of three potential locations for its new, small-car assembly project. Rather than submit a traditional incentive package for this single project, the Michigan Economic Development Corporation proposed a "Global Solutions" Michigan Economic Growth Authority incentive that covered all manufacturing investments by GM in Michigan. In total, the incentive package retains 20,000 workers and will generate a total investment of up to $2.5 billion in GM's Michigan manufacturing operations.

"To have a once-shuttered plant operating at full speed again shows what can happen when the public and private sectors partner to create new investment and jobs," Governor Granholm said in a visit to the facility. "Michigan is proud to partner with General Motors as it continues its drive toward a cleaner and greener future."

Besides the Buick Verano, the Orion Assembly Center is also being retooled to manufacture a second small car which will be launched next year. GM will be the only automaker, domestic or foreign, to build small cars in the United States for the domestic market. The Buick Verano, the first compact car offered by Buick in 20 years, will launch in 2012.

Previously designed to build GM midsize sedans, the Orion Assembly Center in its 27-year history has built more than four million cars. The plant also received a Clean Corporate Citizen designation from the state of Michigan, the first GM facility to receive such recognition.

Wellness programs boost productivity

A study of employees at a west Michigan hospital showed some of the most unhealthy workers that University of Michigan researchers had ever seen.

But in four years, the workplace wellness plan at Allegiance Health in Jackson had fueled some of the biggest improvements in employee health that those same researchers had ever witnessed.

The researchers were studying the hospital system to evaluate the health risk changes in employees in the four years after Allegiance implemented a workplace wellness program. The "It's Your Life" program was unique because it included all employees, not just unhealthy ones, said Douglas Wright, a researcher at the U-M School of Kinesiology Health Management Research Center, and lead study author.

Most wellness programs start with a health assessment and only the employees who meet pre-determined benchmarks of poor health qualify for additional assistance, Wright said.

It's Your Life began in 2002, and Allegiance offered employees $200, spread over 24 paychecks, to take a health risk appraisal, be screened, attend three counseling sessions and complete three health learning modules. In subsequent years, the company lowered the incentive to $190 but gave it to employees in the form of a gift card that was filled with small amounts of money each time the employee completed another requirement. Having immediate access to the money earned, rather than waiting for it to show up in a paycheck, appeared to be associated with increased participation.

Researchers collected data from three different employee groups based on the number of times each participated. Over four years, participation increased and the number of high risk employees decreased in all groups, Wright said. The yearly participation rate rose from 38% the first year to 77% by the fourth year. After four years, the four-time participants decreased in 10 of 15 health risks, the two-time participants decreased in nine of 15 risks, and the one-timers decreased in 12 of the 15 risks.

"In the four-time participation group, the percent low risk people went from 51% percent to 64%, that's a huge jump," said Wright. "It's a big deal when you see that much improvement."

Allegiance started with 51% of its employees classified as low risk, which is much lower than normal, and 19% as high risk, which is above average, Wright said. The number of high risk workers fell to about 12% over the four years. Studies have shown that employees who are high risk cost more in health care and lost productivity.

One of the reasons the program was so successful was because it was comprehensive, said Dee Edington, director of the HMRC. Edington has appointments in the School of Kinesiology and the School of Public Health.

In other words, the program helped keep healthy workers from getting sick because it included them in the wellness plan, he said. "It's a lot cheaper to keep employees low risk than to move them from high risk to low risk," Edington said.

The project was designed to be implemented in three stages. The first stage uses Allegiance as the pilot to test the effectiveness of the wellness program. The second phase expands It's Your Life to six of the largest employers in the area, and the third stage expands the program to all employers in the county and any community organizations that want to participate.

A cost analysis is pending to see if the savings are great enough to justify the incentives and the cost of the wellness programs, said Wright.

The study appears in the Journal of Health & Productivity.