Yesterday, it was announced that auto supplier Metaldyne in Middleville has decided to shut down for good, citing the Chrysler bankruptcy, the uncertainty of GM's situation, the overall recession - and this key point - the tight credit market, as their reasons for closing. 110 jobs will be lost as of August 31st, just a small sample of the layoffs that are occuring in the automotive and manufacturing sector across the state, the layoffs that have added up to Michigan having the highest jobless rate in the country.
The day before that, the MEGA board at MEDC announced another round of tax credits that will attract and retain the businesses that show the best potential for growth, and in that release was a company named WJG Enterprises...
The plastic-injection molding company producing low-volume service parts for the automotive industry will diversify into production of new high-tech medical devices used in MRI and lab equipment through GE Healthcare Supplier Diversity Initiatives lead by Michael Lucas and Raphael Strosin. This has been made possible through the development of a strategic plan created by Christopher Baskel of Spectrum Health in Grand Rapids. This plan includes the mentorship of minority-owned companies to enter into the complex world of healthcare with the assistance of Donna Clutter and Lamont Robinson.
That is expected to create 251 total jobs, 109 directly at the company - which is strangely coincidental to the number that Metaldyne is losing. The circumstances are different; Metaldyne being a part of a larger, major coporation and WSJ being locally owned (as far as I can tell), but this illustrates the direction that auto suppliers need to take if they want to stay around. Diversify your product line, and your chance of survival greatly improves.
Efforts are being made to entice auto suppliers to grow into alternative energy, defense, and medical manufacturing; seminars are being held, credits being offered, as evidenced above. One problem companies are running into lately has been the lack of credit, and the Michigan Economic Development Corporation has now taken steps to facilitate that money getting into their hands.
A $12 million fund was launched by the state today to purchase participations in bank loans sought by auto suppliers working to diversify into growth industries.
The Michigan Strategic Fund board voted today to allocate $12 million for the program, called the Michigan Loan Participation Program, to ease the restrictions to lines of bank credit faced by suppliers.
“Stabilizing suppliers in Michigan is paramount to our economic diversification strategy,” Michigan Economic Development Corp. CEO Greg Main said in a statement. “Using these funds to loosen credit markets will allow many potential diversification projects to proceed, which will in turn bring jobs and investment to our state.”
Patrick Anderson's protests about tax credits aside (and you have to just love a study that calls three areas of credits "ineffective" simply because there wasn't any data to study for them. How can you know it is "ineffective" then? And by the way, the MEA is officially on my list now. You guys want to suck up to people who want to destroy your union, you get what you deserve), this is exactly what we need to be doing - focusing on the diversification of the companies that are already here and are in danger of going out of business due to auto fallout. Helping retain these jobs and the companies that want to diversify into high-growth areas has to be a lot easier than starting something fresh from the ground up, or fighting with other states to attract new jobs and investment.
We keep the base, the companies and employees, and we have a much better chance to keep growing from there. We let them go at our own peril.