Tuesday, July 20, 2010

Bittersweet Whirlpool

Big announcement out of Benton Harbor today. Whirlpool, armed with MEGA credits that landed Michigan this investment over competing sites in Chicago and Atlanta, is consolidating its global headquarters in the area, spending $86.8 million to build a new campus building and condense 15 other facilities in two older buildings, giving them a total of three main facilities that will retain "up to 2,336 total jobs, including 868 directly at the company".

Good thing, right? Keeping those jobs here, when they would have gone to Illinois or Georgia? Can you imagine the caterwauling that would have taken place had Whirlpool packed up and left the state altogether? The screeching would have been fierce from the naysayers, and you know it. But once again, the Governor is of course damned if we do and damned if we don't, and found herself in the insane position of having to defend keeping these jobs here in Michigan. Unreal.

Flanked by executives of the affected companies, Granholm added, “The folks standing behind me would not be choosing Michigan if we didn’t have the economic tools to make a good business case for them.

“Every state is competing, and we cannot lay down our arms. So anyone on either side who says we should be eliminating the Economic Development Corporation or reducing our incentives does not understand how things are playing out globally, that we must compete if we’re going to keep these job providers here.”

Rick Haglund called out the gubernatorial candidates for their duplicity yesterday, predicting that whoever wins the race will keep these credits in place. He calls it the "dirty secret of gubernatorial campaign" - but it really isn't so secret to those that are paying attention. Republican complaints about tax credits are just so much noise designed to both attack the strengths of the current administration and to avoid being specific about their own fiscal plans.

Whether tax incentives are an effective method of creating jobs and business investment is almost irrelevant.

The states are playing the incentives game at such a competitive level that they have conditioned businesses to expect a big break for adding jobs.

“Before we all start talking about doing away with incentives, every candidate should be doing some research on what other states are doing,” said Birgit Klohs, president of The Right Place, a regional economic development agency based in Grand Rapids. “Our competitors are offering more, and we can keep up or get out of the game,” she said.

This is the world we live in. This is the reality of today. We play, or we die. Michigan has been doing a pretty good job of attracting these businesses, another 6,272 jobs (1,530 direct new jobs) and $177.5 million in investment from 14 other projects announced along with Whirlpool today. Some of them may do better than expected, some of them may never pan out, but the fact that we landed them over states like Texas, Ohio, North Carolina, Louisiana, Tennessee, Wisconsin, Virginia, Massachusetts, and others shows that we are competitive with ALL the various low to high tax and/or wage states. The MEDC is doing a good job - that is why the Republicans attack it.

Here comes the bittersweet part though. While we rejoice that we have kept Whirlpool's HQ here, and the company is poised to grow in the future, it is partly coming at the expense of American manufacturing jobs and workers once again. Replace "Whirlpool" with "Electrolux", and "Evansville" with "Greenville", and you know what just happened in Indiana, as the final 650 shift workers were laid-off from Whirlpool’s Evansville plant at the end of June as production has moved to Mexico. They even had a final cookout to get together and say goodbye, just as Electrolux workers did here. Some workers are angry, others are looking to the future and new opportunities, city leaders are looking at new businesses to come to the community, and the story reads identical to what happened in Greenville - and in many other cities and towns and states across the country in the past few decades. While we can be angry about the loss of these jobs and feel great empathy for these workers and this town, and, although politicians keeping making promises, no one has moved to stop it yet...

At a time when the nation’s economy is struggling to gain momentum, Whirlpool’s decision is an unwelcome step backward. It continues a trend in which the nation has lost nearly six million factory jobs over the past dozen years, representing one in three manufacturing jobs.

As long as we, as a nation, do not address the idea of fair trade, and the importance of maintaining a strong manufacturing base, those jobs are going to continue to leave. No tax breaks, tax cuts, tax anythings, can compete with $1.57 an hour labor in Mexico, period, ever. Even conservative darling Mitch Daniels, and the (supposedly) low-tax state of Indiana, could not keep Whirlpool manufacturing jobs in Evansville. Mexico itself starting losing these jobs to China, and even China is starting to see jobs go to other low wage countries. Maybe the global economy will someday find a balance, but it's not going to happen in our lifetime.

Bottom line: These jobs are gone. They're not coming back. The best we can do, absent a strong (but fair, not protectionist) national trade policy, is to keep fighting for the jobs we can create or retain here in Michigan, as we have with the MEGA credits above. Any talk of removing them is at best nonsense, and at worst suicide.

So the story of Whirlpool is certainly bittersweet. We should be grateful they chose to stay in Michigan and thank MEDC for putting together the package. If certain Republicans had been allowed to follow their own rhetoric, these jobs announced today would be lost as well. And that would have been a whole 'nother post... and while it might have been fun to do to the Republicans what they have done to this governor, let's just take the jobs instead, and keep working towards a brighter future for Michigan and its people.