Anyone running a business today in Michigan had better be a cheerleader for the state. (I know I try!) Minus the pom-poms, one of the finest arguments I've heard for the future of Michigan was put forth by Bobby Taubman, Chairman, President and CEO of Taubman Centers in his second quarter earnings conference call.
Michigan is now in its sixth year of negative GDP growth, as it has been working through a long and difficult restructuring of the auto industry. According to the Bureau of Labor Statistics at the end of June, employment in automotive vehicle and parts manufacturing is now down to only 2.4% of nonfarm jobs in Michigan, a remarkable change from about 7% in 2000.We're proud to serve as one of Taubman Centers' advertising agencies. We're also proud to share a strong positive outlook on Michigan. Now, off to the mall ...With the ripple effect commonly associated with the loss of manufacturing jobs, it’s not surprising our state recently reported 15% unemployment. That’s the highest in the nation and unfortunately, we believe that it will get worse before it gets better. Nonetheless, we are encouraged that a protracted bankruptcy of GM and Chrysler has been avoided. The companies are now able to stabilize and position themselves to begin growing again once the national economy improves.
Our state, the eighth most populous state, has about 10 million people. It has great resources and significantly more diversity in employment than is recognized. The R&D and high-tech sectors that were originally built around the automotive industry are morphing into countless other industries. Today’s southeastern Michigan has over 8,000 tech establishments and there are more engineers per capita than any other state in the U.S.
This leads to the second highest overall R&D expenditures of any state. With this growing knowledge base in place and favorable cost of living, the state has become a hub for advanced technologies. Numerous entities from battery research to clean technologies to defense research are already located here. Others have announced investments to take advantage of the available talent pool.
In June, General Electric announced it will be opening its Advanced Manufacturing Technology and Software Center in southeast Michigan in late 2009. They will be investing $100 million in a former Visteon automotive parts plant and eventually will employ 1,100 people. Announcing the facility, chief executive Jeff Immelt told reporters, “we can be low cost and still access a great work force in Michigan.”
