I have decided not to subject you to any more blather on our latest manufactured crisis from Washington called sequester. If you are like me, you’ve had your fill, so I am going to spare you.
Leave it to say, the business community is not pleased with the current political climate, which certainly inhibits future investment. The private sector yearns for at least a modicum of stability for purposes of planning, but the politicians are too caught up in a blame game on why they cannot or will not govern. I am so tired of them.
It appears that the ability to get things done now resides on the state level, where partisan politics will often take more of a back seat. That’s not always true. There have been some bruising political fights in Wisconsin, Indiana, and Michigan, where governors there have taken on organized labor and largely won.
As a site selection consultant, I have had corporate clients who have insisted that the search area for new operations be limited to right-to-work states. Typically, those are states in the Southeast, the Southwest and parts of the West. States in the industrial Midwest and the Northeast, where a legacy of organized labor exists, have rejected the right-to-work mantle. At least until recently.
The Big Difference
Unions can form and do exist in right-to-work states. The same federal laws pertain as to the legality of forming a union, with a process overseen by the National Labor Relations Board. The big difference is that in a right-to-work state, workers are not required to join a union (and pay dues) even if their workplace becomes unionized.
And while right-to-work status may weaken the union movement, it doesn’t put it out of business. I can tell you from firsthand experience that the United Mine Workers of America and the United Steelworkers of America had political if not actual muscle in Alabama, a right to work state, during the 1980s when I was a business reporter for The Birmingham News.
When I would cover meetings at USW Local 1013 union hall in Fairfield, Ala., a short distance from a U.S. Steel mill, I made sure to park my Toyota blocks away, as I have always preferred to drive with a windshield and inflated tires. The steel workers didn’t play around. Nor did the Mineworkers, who I found to be even more prone to, let’s just say, excitement. Anybody who works underground and then gets upset above ground, well, I will give them wide berth.
But I did get some valuable insight covering those industrial unions. And I understood the union/lunchbucket mentality to some degree, as I had previously worked in several grey-iron foundries before I decided that I needed to become a college boy.
Witnessing Courageous Leadership
While they may have donned this masculine “don’t mess with us” attitude, I realized over time that there were certain enlightened union leaders who sensed that the world beneath their feet was shifting and that they (and their membership) had to essentially adapt or die.
I actually came to respect certain union leaders as I watched them move their membership to accept things that would have been unacceptable just a short time prior. In essence, they showed courage and leadership. And I can also tell you from firsthand knowledge that senior management with some companies respected them for it.
Jobs were saved as a result, as the howling hotheads were kept in check. There is no doubt in my mind that some of these union leaders who I watched work to save their membership from themselves would have made excellent CEOs.
The U.S. Bureau of Labor Statistics reported last month that union membership fell in 2012 to its lowest level since 1916. And last year Michigan, yes Michigan of all places, became the 24th right-to-work state in the country. It did so by following Indiana, another bastion of Midwest manufacturing, earlier in the year.
I have been thinking a lot about Michigan lately. A group of Michigan economic developers recently visited with me in Dallas. This is not an uncommon occurrence. I frequently meet with gaggles of economic developers from different parts of the country. They come to Dallas to call on gaggles of site selection consultants.
The message is always similar, no matter from where they come. It goes something like this: “Hey, things are looking up here in (insert state, city or region). We got this, this and this. Please consider us if and when the time is right for a project.”
I have yet to hear this: “You know, there are probably better places than ours for capital investment.” Then again, I haven’t met many economic developers from California. I’m sorry, that was a low blow. Really uncalled for. Well, kinda. (Gov. Perry, let’s do lunch.)
I actually find these meetings with economic developers quite useful, as it gives me not only a face or faces of people whom I may work with in the future, but it also gives me a sense of what is important to them and what assets they may have on the ground. I focus on the real and tangible – what do you actually have existing that might make a difference – rather than on some ethereal notion of your brand.
“Accordion music capital of North America? No kidding. Well, that’s nice. Now tell me about that new robotics program that was started last year at your community college. And what’s the status of that interstate bypass on the north side of town? ”
Now I know what you are thinking and you are right — I get too caught up in provincial matters, when I should be thinking polka, polka, polka.
One Tough Nerd
But like I said, I’ve been thinking a lot about Michigan lately, where the Cedar Polka Fest will be held July 4-7 for all those so inclined. More importantly, I have been thinking about Gov. Rick Snyder, who I just might lump into that courageous leadership category. (It matters not to me if you are liberal or conservative to win my respect. I take notice of those who act and make a positive difference.)
Gov. Snyder currently does not enjoy particularly high approval ratings in his state. About half of those polled in a recent survey said his push to make Michigan a right-to-work state was a bad move. Kurt Weiss, a spokesman for the governor, said Snyder is focused on fixing Michigan, not poll results. “He campaigned as ‘one tough nerd,'” Weiss said. “It wasn’t political. He wanted to put Michigan’s house in order and create an environment for job growth.”
Even if Snyder’s actions result in him becoming a one-term governor, I think he will leave a lasting legacy. Not only has he transformed this once union bastion into a right-to-work state, but he has also eliminated the widely despised and wildly complex Michigan Business Tax. It was replaced with a simpler 6 percent corporate income tax that exempts most small businesses. As a result, the Tax Foundation now ranks Michigan 7th lowest or best on corporate income taxes, compared to the previous ranking of 49th.
Detroit Can’t Wait
On Friday, Snyder took on the proverbial weak link in the chain, that something in the punch bowl – Detroit. Standing beneath a banner at Wayne State University that read “Detroit Can’t Wait,” Snyder announced the state would be taking control of the city’s finances. My visiting economic developer friends from Michigan said this would likely happen. And it did.
Now I could write an entire blog on the good things that are happening in Detroit and there are good things happening there. The automotive industry is rebounding and showing growth. A young, creative class is moving in. Conversely, I could probably write several blogs on why Detroit can be viewed as a miserable, broken and dangerous place.
If you are secretly drawn to watching races to see the wrecks, then you might be a candidate for “ruin porn.” Believe it or not, there are tourists who actually come to Detroit to gape at and photograph once magnificent buildings and structures that are now essentially fallen timbers. Little do they know that 16 percent of all homicide victims are visitors.
Detroit, facing $14 billion in long-term debt, has struggled to maintain its tax base and services as its population has plunged. Since 1970, the Motor City’s population has been halved, from 1.5 million to less than 700,000 in 2012, and more than one-in-five lots in the 139-square-mile city is vacant. Michigan was the only state to lose population between 2000 and 2010, when the nation gained population by 10 percent.
Solve These Problems
“A lot of the things we’re talking about today could’ve been done in the last decade or even two or three decades in some cases,” Snyder told The Daily Beast. “Now, it’s to the point where an emergency manager is really what’s needed. We do need to solve these problems.”
No doubt the governor’s latest actions will not endear himself to a majority of voters in Detroit, as a racial gulf exists between the city, with more than 80 percent of its residents black, and what could be viewed as a heavy white (Republican) hand emanating from Lansing. I understand those concerns.
The most important thing that the governor can do now is to choose the right person for the job as the emergency manager. Whoever he chooses, that person must be a tough, effective and yet a reasonable diplomat, willing to listen and build bridges. Blessed are the peacemakers.
I’ll see you down the road.
Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm in Plano, Texas — www.barberadvisors.com He can be reached at 972-767-9518 or at email@example.com