Used to be 400 business people showing up for a “CEO Summit” like the one Business Leaders for Michigan sponsored Thursday at the Westin Book Cadillac Hotel would be laced with the same old tired laments:
Michigan’s labor image is killing business. Regulation and the worst business tax in America are killing business. The inability to compete is killing business. Detroit’s chronic dysfunction and financial incompetence are killing business. Self-pitying negativity is killing business and driving young college graduates away, never to return to the place of their birth.
That’s all so 2009, when Detroit, the industry that defines it and many of the people who built companies here wore the synonym “Loserville” with the collectively slumped shoulders of inevitability. For perhaps the first time since I started covering business in this state more than 15 years ago, optimism is clearly overtaking pessimism — even with Detroit on the verge of financial collapse.
The reckoning and steady revival of Detroit’s automakers, the unwinding of state tax and budget policy by a (finally) financially literate governor, even the inevitability of an adult-like plan for Detroit’s fiscal mess, are all contributing to a kind of optimism this state’s business community hasn’t seen in a long time. Why? Because facing problems head-on is a precondition to solving them, a fact of life that eluded too many corporate, union and political leaders in this state for way too long.
One hundred years ago, Taubman Centers Inc. CEO Bobby Taubman said, the gathering of the state’s chief executives likely would have included Henry Ford and Louis Chevrolet, Herbert Dow and W.E. Upjohn, Frank Gerber and W.K. Kellogg — all innovators whose companies each came to define their industries and to overcome obstacles.
“Instead of complaining, these Michigan entrepreneurs turned adversity into opportunity and never looked back,” Taubman said. “All this could happen again right here in Michigan. What has not changed, and will never be irrelevant, is the power of ideas and optimism.”
And resilience.
Detroit’s automakers are charting different paths back to profitability with new leadership, smaller workforces, smarter product portfolios and more robust balance sheets (albeit, in the case of General Motors Co. and Chrysler Group LLC, with an assist from American taxpayers). Tech-based entrepreneurs like Pete Karmanos’ Compuware Corp. and Dan Gilbert’s Quicken Loans Inc. are adding jobs and changing the image of Detroit as a place to do business.
Dow Chemical Co. leads its worldwide industry from headquarters in Midland. Whirlpool Corp. operates around the globe from headquarters in Benton Harbor. Altogether, Michigan ranks seventh among the 50 states in being home to the most Fortune 500 companies — and that doesn’t include private companies associated with names like Ilitch, Gilbert, DeVos and Meijer.
The past four years “have been the most difficult economic environment in everyone’s working career,” Whirlpool CEO Jeff Fettig said. “The one constant is we’ve all adapted to change. Many of us wouldn’t be here if we weren’t globally competitive or becoming globally competitive.”
Exactly. Change or die — adapt or go bankrupt, acquire or be acquired, match spending and revenue or face failure, become competitive or lose. More than any other sector in corporate Michigan, Detroit’s automakers and the United Auto Workers learned that lesson the hard way.
Economics will not be denied. At least not so long as decision-making ultimately rests with individuals making individual choices on how to spend their money, not some central government bureaucracy operating under the belief that it knows better, always.
Which may explain why the looming confrontation between Gov. Rick Snyder and Detroit Mayor Dave Bing over the city’s acute fiscal crisis appears to be less concerning to business than a continuation of the status quo — weak management overseeing inept managers as problems worsen, excuses pile higher and “fixes” go undelivered.
If business people know one thing, they know numbers that don’t add up eventually precipitate a crisis that delivers a solution. In Detroit, that could be a consent agreement between the state and the city; it could be an emergency manager who could make financial and operational decisions independent of the mayor and City Council; or it could be a federal bankruptcy under Chapter 9.
Anyway it goes, there will be a solution — and another of Michigan’s old laments will begin passing into history, where it belongs.
Daniel Howes, Detroit News
