The recent news of the Whole Foods store opening in midtown Detroit seems to have taken a fair number of people by surprise. But it really shouldn’t.
After a bit more than two years of Reinventing Michigan under Governor Rick Snyder, the state has seen swift and wide-ranging business climate improvements, enough so that we now make a strong claim as America’s Comeback State.
Regular Site Selection readers will know that our state finished among the publication’s top ten in both the Governor’s Cup and Competitiveness Award. Our improvements in these scores were not incremental. In the Governor’s Cup, we rose to 4th from 18th and in Competitiveness, 8th from 16th. More signs of strength: our business tax reforms now put Michigan third among the nation’s 12 largest states. And Michigan ranks third in high tech job growth.
These improved measures reflect day-in, day-out work to improve Michigan’s business climate. Business taxes have been reduced by more than 80 percent with more tax savings on the way as personal property taxes are phased out.
Michigan businesses have seen their workers’ compensation premiums decreased by 7 percent in each of the last two years. Ours is the only Midwestern state to reach that high mark. They are also enjoying the turnaround in our Unemployment Trust fund which today shows a balance of $1.5 billion, a substantive improvement over the previous debt of $3.9 billion. The result: every Michigan business is benefiting from elimination of the tax penalty.
We have also gotten the state’s fiscal house in order. Gone today is the state’s $1.5 billion budget deficit. It’s been replaced with a $505 million rainy day fund. The results were accomplished with strict adherence to best practice budgeting and without any accounting tricks. The State of Michigan has operated within a balanced budget for two years in a row and its credit rating is upgraded to AA, the first time it’s been above AA- since January 2011.
Also significant is that Michigan is tackling unnecessary and burdensome regulations and is the country’s newest Freedom to Work state. These improvements have given businesses, both Michigan-based and those from all over the globe, confidence that the state is moving forward in positive ways that were simply nonexistent for the past decade or more.
Our improved business climate only underscores the value of our state’s robust bases in manufacturing, engineering, and research and development. Michigan today ranks at the top of all states in availability of skilled labor, automotive R&D and employment of industrial and mechanical engineers.
These were key factors for SAIC, China’s largest automaker, in its decision to locate its North American headquarters in Birmingham, Michigan. They now operate in close proximity of America’s largest automakers and more than 370 auto R&D and tech centers.
Michigan’s tech advantages also drew Rigaku Innovative Technologies, the subsidiary of a Japanese company. This maker of optical products that are critical in high technology global manufacturing chose Auburn Hills over a site in California for its $50 million investment in a new R&D and manufacturing facility. The facility will create 27 jobs as the company expands into new markets including semiconductors.
Both SAIC and Rigaku have found a welcoming and supportive state, well-suited to their global expansion plans. They are leveraging Michigan’s leadership in industrial research and development and manufacturing as vital elements of their future success. Our three world-class research universities bring them easy access to some of the best young talents in America.
Michigan’s improved business climate has also been matched with a reinvented and reinvigorated Michigan Economic Development Corporation. The MEDC differs greatly from previous years. Economic gardening now defines our operations with programs that offer a greatly expanded range of services to all businesses in the state, regardless of industry sector or size.
Moran Iron Works, with northern Michigan facilities in Onaway and Rogers City, is investing more than $16 million that will create 75 direct jobs to meet growing demands for its custom large metal components fabrication products. MEDC assisted them with a $2 million business development program grant.It was another innovation that shows how we are opening new paths to business growth at very low cost to them or the state’s taxpayers. Thanks to Pure Michigan Business Connect, the MEDC’s business networking program, Moran won a $35 million contract for fabrication of clean air equipment for the state’s two largest utilities, Consumers Energy and DTE. The two energy companies have committed to increase their purchases from Michigan companies by $2 billion through 2015.
In just two years, PMBC has helped more than one thousand Michigan companies access new sales opportunities with the state’s largest corporations, including Ford, GM and Chrysler, and dozens of top automotive suppliers. PMBC also offers our state’s businesses help in finding newly available financing options, and even get start-up assistance from law, accounting and consulting firms.
Another MEDC innovation is enabling Whole Foods to tap the talents of local food entrepreneurs. Shoppers there now find Ruth Bell’s mouth-watering monkey bread regularly available for purchase. It was the MEDC community kitchen program that enabled Mrs. Bell to get her Chugga Bakery off to a strong running start. More important, Mrs. Bell’s is only the first such success story. We’re expanding the community kitchen program with a $1 million investment to provide commercial grade production capabilities for a broadened number of food business entrepreneurs.
While we have broadened MEDC’s scope of service, we never veer from our state’s strengths.
Recent expansion announcements illustrate the vitality of this state and its attractiveness to corporate leaders across many industry sectors. Some of these companies are instantly recognizable and others a bit less so. Jackson National, Perrigo and Whirlpool, are industry leaders who are making significant new investments in Michigan.
Jackson National Life Insurance, widely admired for its industry leadership in customer satisfaction, recently announced plans to add 1,000 new jobs at its Lansing headquarters. This financial industry leader, with corporate locations across the U.S. – New York, Chicago, Denver, Nashville, Santa Monica and Tampa – chose Michigan for a $100 million expansion.
Perrigo makes and markets a host of products you are likely to have bought even if its name is unfamiliar. The company is a global leader in private label pharmaceuticals, infant formulas, nutrition and dietary products for many of the world’s largest retailers. Its operates facilities in Georgia, Minnesota, NJ, NY, Ohio, South Carolina, Vermont, Virginia, along with Australia, China, India, Israel, Mexico and the U.K. And it chose Allegan, Michigan, for a $242 million investment that will create 650 jobs to expand its over the counter production.
Whirlpool is nstantly recognizable as the innovation leader in its industry. Fortune magazine’s “World’s Most Admired Company” in the home equipment and furniture sector for three years running. The company has announced it will relocate 180 refrigeration R&D jobs from Indiana to Michigan. Benton Harbor was chosen over competing sites in Iowa and Mexico by this global powerhouse.
Whirlpool, Jackson, and Perrigo all got their starts some years ago and grew into successes here in Michigan. But it wasn’t hometown pride that won their $360 million in new investments. Each company did its due diligence, conducted a thorough examination and, on a business case basis, determined Michigan to be the one place that best fits their expansion plans.
Their corporate leaders recognize that Michigan today combines great and distinct assets with the state’s new friendliness toward business. MEDC is itself refreshed and bringing more business opportunities to Michigan business as we create new job opportunities for our residents.
The result is that what you see today in Michigan is something very different than what you might expect. We remain a global center of technological advances, a national leader every year in new patent awards and industrial research and development. We are also reenergizing our manufacturing bases in autos, furniture and machinery.
More than this, we are well into Reinventing Michigan with business climate improvements that welcome and support business growth across the full range from start-ups to global players.
If it’s been some time since you looked closely at all that’s here, perhaps it’s time for a visit to America’s great comeback state.
