Friday, June 04, 2010

Last Speech on the Island

Governor Granholm, in what was billed as the last major policy speech of her tenure...

Governor Granholm's Address from Alan Languirand on Vimeo.

This is only six minutes of a long speech; WWJ has the best write-up on the entire thing. It was a review of where we have been and where we need to go next, and what happened at Electrolux in Greenville is held up as the poster child for the story of the transformation of the Michigan economy...

Then, in November 2003, Granholm said she got a call from the Michigan Economic Development Corp. Electrolux, a Swedish company, said it was moving a 2,700-job refrigerator factory in Greenville to Mexico.

"Okay, another crisis, we'll fix this one too," Granholm said of her initial response to the news. "So we went into a war room with the mayor, the president of the community college, the head of the work force agency, the UAW, and we said, 'What can we do to keep Electrolux here?' We put everything together, shook out our pockets, put all our chips on the table. Zero taxes for 20 years. We will find a way to build you a brand new refrigerator factory. The UAW put unprecedented concessions on the table."

The response?

"The managers of Electrolux looked at our pile and said, 'Thank you, that is really generous, but we're going to have to turn you down, because there is no way you can compensate for the fact that we are going to be able to pay people $1.57 an hour in Mexico,'" Granholm said. "We were like, 'What?' We were really floored. I realized this was a different kind of crisis, one of those defining-moment kinds of crises that tells you the world has really changed.

"And I think that is the most important lesson for me and all of us to get. What we have been experiencing this decade is a structural change to Michigan's foundations. Despite the growth that is projected next year ... what has happened in Michigan is a complete and utter transformation of our economy. We have to change too. This cycle is not a cycle."

$1.57 an hour, assuming a 40 hr week, works out to $3,265 a year. The last time that was the average American wage? 1954. New houses were $10,000, new cars were $1,700, average rent was $85, and gas was 22 cents a gallon. And Mexico itself has been losing jobs to lower-cost China. Tell ya what, Newt, maybe instead of dropping wages, we get businesses to drop the price on their products down to 1954 levels. Whaddaya say? No? Didn't think so.

And don't miss the very important point here about Electrolux - no taxes. None. All these candidates that promise the world if we just cut taxes are either economically incompetent, or they're lying out of a blind service to a failed ideology. Maybe a little of both. Manufacturing as we knew it, the economic foundation of our state's economy for over 100 years, is gone. And it's not coming back. Not as it was, anyway. A different type of manufacturing is taking its place; high-tech, efficient, robotic, computerized. Never the same amount of jobs in the field again - so we must keep on the path of diversifying our base. Period.

And we are getting there, thanks to the efforts of this governor. Mark my words, you will see it in time. The Crash of '08 was the final catalyst towards this new economy, and we are already on the way.

I wish I could have seen this speech. It's hard to be so emotionally connected to something, and yet be in this ambiguous place of belonging neither here nor there. But, if all that I have written has helped in any little way, well, being able to lend a hand in the effort will go down as the greatest honor of my life. The decade has been like none other that we've ever seen or are likely to see again, and I, for one, feel this state has been very, very blessed to have such a person of warmth, grace, vision, intelligence and genuine heart to guide us through.