Governor Granholm’s Approach

Michigan’s Governor Jennifer Granholm was in Jackson, MI the same day that I was there doing a talk to a Consumers Energy Conference. I got a chance to sit in on a roundtable discussion that she did with local residents at a downtown coffee shop.

She is very preoccupied with the recent Delphi bankruptcy and its long-term impact upon the Michigan auto industry. I would agree with her as I view auto suppliers, not assembly plants as key drivers for small towns. I didn’t agree with her anti-globalization stance though.

Her solutions to solve Michigan’s 6.7% unemployment rate:

1. Make taxes more competitive for small business and manufacturing.

2. Accelerate state infrastructure projects for next ten years into next three.

3. Give every Michigan resident a $4,000 scholarship for his or her first two years of college. An interesting observation on this point by her, “It’s not in our DNA for us to go to college here in Michigan. Many of us came here for that $5/day wage of Henry Ford’s.”

4. Divide states into 13 regions with an emphasis upon unique job needs for those regions.

5. Set up a $1 billion investment fund from the Tobacco Fund for investment in alternative energy, life sciences, homeland security and advanced manufacturing.

Several of the unemployed workers in the room mentioned that they either were in college or had a strong desire to return to college. Most were focused upon medical careers.

Jim Jansen commented on his needs as a local manufacturer, “I don’t have a problem with the wage differential of other countries. We can compete because we are more productive. However, to stay productive, we have to constantly invest in new capital equipment, which we are taxed on as personal property in Michigan. I don’t object to paying taxes on income but it is a big deterrent for us to pay taxes on these productivity enhancing capital assets.”

Dave Mengebier, VP for Consumer Energy pushed for restoring funding for the State ED group to allow them to reach out to more foreign companies.

We have to take care of the businesses that we have in our towns. The governor’s tax cuts are to be applauded along with an emphasis upon education. I’m not as positive about the government increasing spending and getting involved in making investment decisions. I would rather see the funds go into entrepreneurial endeavors, perhaps with a tax credit for investments in venture capital pools or angel investor networks.