23 Nov, 2015
By Rachel Duran
Companies considering expansion and/or relocation to Michigan will find an economy that is experiencing significant and promising growth in all of its industry sectors. In fact, two-thirds of Michigan’s businesses describe the state as having a positive business climate.
Highlights of Michigan’s economic transformation include:
*Michigan leads the nation in manufacturing jobs
*The state is recognized as the nation’s sixth most appealing entrepreneurial climate
*Michigan’s unemployment rate, at 5.1 percent, is the lowest it has been in 10 years
*A 32.7 percent reduction in workers’ compensation insurance premiums
*Regulatory reforms have eliminated nearly 2,000 rules
*Since 2009, auto OEMs and suppliers have invested nearly $16 billion in the state, as of the second quarter of 2015
*Michigan has been a right-to-work state for three years
“In May, The Pew Charitable Trust referred to Michigan as the biggest success story since the Great Recession,” writes Steve Arwood, CEO, Michigan Economic Development Corp., in an email correspondence. “We happen to agree with them.”
Arwood says as one of the country’s most economically and culturally diverse states, Michigan’s comeback is a model for how other states can respond to global challenges. Successes can be seen in the expanding agribusiness industry to the expanding manufacturing base to the high-tech startups and entrepreneurial district in Detroit.
In August, Michigan Gov. Rick Snyder met with Chinese agriculture officials in an effort to further expand the state’s footprint in the global agricultural marketplace. Food and agriculture are one of Michigan’s top three industries; Michigan’s exports to China in 2014 totaled more than $62 million, Arwood writes.
He says there is a place for any type of business in Michigan, and that there are responsive programs to assist in the growth of businesses. For example, last fall, Gov. Snyder initiated the largest investment in the nation in the amount of $50 million for equipment/training aimed at preparing and educating students for in-demand jobs in the skilled trades.
Further, Gov. Snyder and Michigan Lt. Gov. Brian Calley have led teams of businesses and economic development leaders on trips to China, Japan, Europe and South America. Since 2011, these trade missions have attracted 351 projects to Michigan, with investments worth nearly $8.59 billion, and with the addition of nearly 30,000 jobs.
This year, a delegation from west Michigan attended the auto show in Frankfurt, Germany, with state officials. “The Right Place has a number of new prospects because of that trip,” says Birgit Klohs, president and CEO, the Right Place Inc., the economic development organization for west Michigan.
Industries and Innovations
Arwood writes that these projects offer a resounding testimony to the state’s attractive business climate, while confirming the state’s strategic location to major auto OEMs and suppliers. He also notes the state’s proximity to Canadian markets.
The advanced manufacturing sector is doing well in the Greater Grand Rapids region, home to 2,200 manufacturing companies. The sector’s activity is driven by office furniture manufacturing and the aerospace industry. “Michigan was named in a PwC study as the No. 2 best location for aerospace,” Klohs says. West Michigan is also well suited to support industries such as food processing, medical devices and information and communications technology companies.
“We have several initiatives in our IT industry,” Klohs says. “It is fast growing and a bit under the radar. Wonderful and interesting companies, a lot of it is web development and other IT-related projects.”
West Michigan is also home to the Kendall College of Art and Design at Ferris State University, and Klohs says design is re-emerging as a commodity in the area as a foundation for talent in the region’s various business sectors. Design was added to the region’s strategic plan as a core competency a couple of years ago. “Not so much to attract a design firm but to support the talent that is available in design in west Michigan, to let the world we know we have this incredible resource.”
In regard to noteworthy expansion projects throughout the state, and there are many, highlights include projects by:
*Ferrous CAL Co.’s new facility at a largely vacant property in Gibraltar in southern metro Detroit. The company is a newly formed affiliate of Ferragon Corp.
*ZF North America, a top-tier transmission company, will expand its Michigan tech center in Northville Township.
*Alcoa Power and Propulsion, a coating services company for aerospace and power generation companies, will expand operations in Whitehall.
*Clemens Food Group will make a $255.77 million capital investment in its pork processing operation in Coldwater Township.
Talent and Education
Klohs says the Grand Rapids region is home to more than 82,000 college students. “We have an unbelievable education system,” she says. “Most people don’t think of us as a university community. We are heavily engaged with the community colleges in regard to training, and apprenticeships for various high-tech jobs.
In addition to a boost in collaborative efforts with the education system, The Right Place is also working closely with Michigan Works! on talent initiatives. What’s more, “we just completed an initiative called Discover Manufacturing, trying to get young people interested in the manufacturing sector,” Klohs says.
Michigan’s workforce is also highly productive and innovative. The presence of and proximity to 63 of North America’s top auto suppliers, as well a comprehensive automotive supply chain (R&D facilities, OEMs, ancillary services) creates high levels of productivity and ample opportunities to collaborate. Arwood writes 76 percent of all auto-related research and development is conducted in Michigan’s 370 R&D centers. In addition to the state-of-the-art automotive factories and facilities, Michigan ranks first nationally in high-skilled job concentrations of electric, mechanical and industrial engineers.
In Lansing, businesses will find almost any transportation mode to meet their logistics needs. Infrastructure assets include a seaport, air cargo facilities and rail access through the Capital Region International Airport, and Port Lansing, which is based at the airport.
What started out as a once a week consolidated shipping service will become a three times a week service. German-based TOC Logistics International’s ocean container consolidation program consolidates shipments from across Europe into single containers and ships them to Port Lansing, where the containers are broken down and distributed.
Reverse flow consolidations are taking place, making use of Lansing’s geographic advantages to consolidate containers for export to Europe and China.
“We established a container freight station in our logistics warehouse,” says Bob Selig, president and CEO, Capital Region Airport Authority/Port Lansing. “It is side by side with the foreign trade zone in the warehouse. Everything is co-located so it is easy to move shipments from one area to another. There is no real transportation involved and it makes things more efficient for the customer.”
In regard to air cargo services, Amerijet International found they could beat the costs and ground handling times of Detroit and Chicago by bringing in 767 charters from Mexico and South America filled with parts for auto assembly to the Capital Region International Airport. “That went on for a few months, and has slowed down a bit,” Selig says. “This appears to be an annual reoccurring situation. The news is spreading and other charter cargo operators are contacting us to request quotes.”
Selig’s organization also manages the 110-acre Port Lansing Global Logistics Centre, which is fully infrastructured. The park is also designated as a Next Michigan Development Corp. site, which means the site is ready for development and offers tax incentives for locating to the site, Selig says. Incentives range from up to 50 percent or up to 100 percent for a certain period of time for qualifying projects. “The acres are located literally across from the air cargo facilities,” Selig says. “And they are sandwiched between the air cargo facilities and the CSX mainline.”
He says the nice thing about getting into the international business as an airport later in life is that the organization has the ability to start with a clean slate and co-locate all of those critical services needed for international and global logistics in proximity of one another.
According to www.michiganbusiness.org, it doesn’t matter what the season; there are hundreds of activities to keep you busy all year round. From professional sports to participating in outdoors sports, to participating in a rich tradition of the arts, residents have many activities to choose from. Arts-related assets include the Detroit Institute of Arts, the Frederik Meijer Gardens and Sculpture Park, the Greenfield Village and the Henry Ford Museum, and the Motown Museum.
And, Michigan is home to 100 wineries and is one of the top 10 best craft beer states in the United States. In 2013, Grand Rapids was voted Beer City U.S.A.
“The governor calls us the ‘Comeback State,’” Klohs notes. “We are not done yet … clearly we have work to do. But we have come a long way in the last five years and it shows.”
Cover Image: UPS Operations at Capital Region International Airport in Lansing. Photo: Gary Shrewsbury Photography