Thursday, February 17, 2011

Goodbye to the Diverse Blue Sky

For an example of the kind of investments we will lose under Snyder's budget proposal, one only has to look at the MEDC/MEGA credit release from this week. Yes, at this point we are still doling out the business incentives, and cheering about other states/countries we beat as well. 15 businesses, $205 million in investment, over 4,000 estimated jobs. From the release, which seems ironic considering the rhetoric on this morning's budget proposal:

"The MEGA board approved incentives to win the following projects for Michigan over competing states and countries".

And the list:

  • American Broach & Machine Co. - Canada, China
  • Benteler Automotive Corp. - Alabama, South Carolina
  • Faurecia Interior Systems Inc. - Ohio, Mexico
  • Fluid Routing Solutions Inc. - Kentucky, Tennessee
  • Gemini Group Inc. - Texas, Mexico
  • IPC Print Services Inc. - Missouri
  • Kuka Robotics Corp - Georgia
  • MedAssurant Inc. - Maryland, Georgia, Virginia
  • Merit Technologies Worldwide LLC - Indiana
  • Metalloid Corp. - Indiana, Texas
  • Unistrut International Corp. - none mentioned
  • Wabco North America LLC - Indiana, Illinois
  • XG Sciences Inc. - Ohio

  • Anyone think these other states/countries are going to disarm in the war for business? Most of these companies are automotive related, definitely high-tech stuff. There is an interesting brownfield development concerning the Plainwell Paper Mill as well, soon to be on the National Historic Register. Love those projects. They will end, and the land left to rot with its poison, should Snyder get his way.

    The one company that that stands out in this release though:

    Patriot Solar Group LLC — The solar-energy company plans to invest $3.9 million to open a solar mounts, solar systems and antenna mounts manufacturing plant in Sheridan Township, north of Albion. The company expects the project to create up to 193 direct new jobs, resulting in a state tax credit valued at $1.2 million over five years. Michigan was chosen over competing sites in Nevada and Canada. Sheridan Township is considering an abatement in support of the project.

    Nixon tweeted that they will set aside $130 million for "economic development" (Florida is pledging $800 million at last report, with no taxes) - what that means, and how it would be distributed is unclear as of now (winners and losers?), but make no mistake here: Other states are going to be more than happy to take this business from us. Without incentives to continue to diversify our economy, we once again are going to fall back to being reliant on the auto industry. And we have made this mistake before.

    Already I've seen some media chatter to the effect of "Well, it's simple, and everyone is mad, so it must be good!" Which is, of course, complete and utter bullshit. Those media figures who are looking to score points for being center of the road (how brave of you), while ignoring the complexity of competing in a global economy for new industry, are only hurting the future of this state. We won't even get into the cuts to education and how they hurt us when it comes to global competition.

    Enjoy your "simple" governor, Michigan. Other states certainly will. Fingers crossed we have enough forward momentum to keep the batteries and other green technology companies we have landed - they have a choice to keep the current deal, or go to a new tax rate. Will that be enough to keep them here for good?

    UPDATE: The Press has more on brownfield development here.