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    And in other news... September 19, 2007


    By Nick, Section News
    Posted on Wed Sep 19, 2007 at 07:15:40 AM EST

    While so much attention is rightly focused on the Michigan Democrats failure to compromise and continued insistence on a nearly $1.8 BILLION tax hike out there in Lansing there are reminders of just how important the tax debate is all over the news this morning and none of them directly reference the current budget impasse.  

    One could certainly draw a few conclusions, though.  

    Lets start with the good news!  The Free Press reports that a Spanish firm will be coming to South East Michigan and brining some aerospace jobs.  By the end of 2008 they expect to have created 200 new jobs and project doing even more in the years that follow.  

    Grupo Aernnova, which designs and makes aircraft parts, chose Pittsfield Township, just south of Ann Arbor, as the site of its first U.S. operations. It chose Michigan over pitches from Atlanta and Austin, Texas, among other suitors.

    Wow.  We won as a state over Georgia and Texas!  What was it they liked?  Well, if you listen to the administration or the company's PR people, the availability of engineers was fantastic.  Now, translate their pretty little talking points into English and what they're saying is "there are so many highly skilled workers on the unemployment line in Michigan it'll be easy to fill our positions."

    But the availability of a well trained, hyper-qualified and woefully unemployed engineering class was only one piece of the puzzle.  And here's the Governor's dirty little secret:

    Grupo Aernnova's new engineering center is one of eight projects that won state tax breaks Tuesday.

    And there it is.  Tax breaks.  Surprised, aren't you?  If you'd been listening to the rhetoric coming out of the Granholm, Dillon and Schauer offices this last month you'd think that the only way to attract jobs would be to automatically raise taxes on the companies looking to invest.

    Read on...

    Some of the other projects getting tax breaks to create jobs include (according to Gongwer):

  • Azure Dynamics Corporation of Canada, which builds electric and hybrid drive trains, will relocate its headquarters ad some development facilities to Oak Park, creating 125 direct and 126 indirect jobs for a $1.7 million, seven-year abatement.

  • Credit Acceptance Corporation will expand its Southfield headquarters, adding 506 direct jobs and 602 indirect jobs for a $4.6 million, seven-year credit.

  • Granvic Investments LLC, a plastics company, will expand its Standish operation, creating 75 direct and 61 indirect jobs for a $388,000, seven-year abatement.

  • MARS Advertising Prize Logic LLC is a new Internet-based promotions company that will be headquartered in Southfield, creating 150 direct and 43 indirect jobs for a $1.9 million, 10-year abatement.

  • Sysco Food Services of Detroit will expand its Canton facility, adding 130 direct and 69 indirect jobs, for a $2.2 million, nine-year abatement.

  • Thunder Bay Development LLC will purchase and upgrade the former Thunder Bay manufacturing plant in Alpena, adding 150 direct and 218 indirect jobs for a $1.8 million, seven-year abatement.

    Millions and millions and millions in tax breaks.  A guy might get the wrong idea and start thinking that lower taxes, not higher taxes, actually help attract jobs, investment and economic growth.  Now where exactly is the disconnect in Lansing?  They know enough to approve these giant incentives for businesses but they want to stick it to everyone else?

    Leaves a thinking observer with one conclusion.  The Governor's trying to buy headlines.  She gives away $2 million here and $1.8 million there and she gets her name splashed across a newspaper headline and if she's really having a good day even gets to hold a press conference with her campaign staff dressed in t-shirts bearing the name of the company coming to Michigan.

    Either that or the woman suffers from a split personality disorder.  Talk about Jekyll and Hyde.

    For Michigan's sake I'm hoping she's more human and less monster as the budget negotiations continue.  So are 700 workers at one of Delphi's plants in Saginaw who'll have a new boss in 2008 and cling to their jobs as long as humanly possible.  The AP reports:

    Under the pact, which is subject to U.S. Bankruptcy Court approval, TRW Automotive would manufacture brake assembly components including modules, calipers and rotors for General Motors Corp. vehicles, said TRW Automotive Spokesman Manley Ford. TRW hopes to be running the plant by Jan. 2, 2008, Ford said...

    The remainder of the huge brake facility in Saginaw may have some Delphi work for a while after the deal goes through, but it eventually will become vacant, Jackson said.

    Even a new buyer couldn't save the entire operation.  Delphi, you'll remember, is the company that came under intense fire in the media from the Granholm administration while they were exploring consolidation options.  Not surprisingly they consolidated to Indiana when their Governor put on a full court press to try to attract them.  What's the old adage about honey and vinegar?

    And a little vinegar seems to go a long ways as Michigan families continue to hurt in the aftermath of the manufacturer's decision.

    Meanwhile, the UAW continues it's marathon talks with GM but progress isn't coming along quite as well as they'd hoped and the possibility of a massive strike becomes more and more real every hour of the day.  According to the Detroit News:

    On Monday, the top UAW bargainer told union members that an agreement is still not yet in sight. In a letter e-mailed to UAW locals across the country, UAW Vice President Cal Rapson said "there are several major issues separating the parties that must be resolved."  He added that the union may consider setting a firm deadline to reach an agreement.

    The industry is watching closely as GM works to craft a pattern-setting deal for U.S. automakers. Executives at Ford and Chrysler are receiving periodic briefings on the status of negotiations, though they are not privy to the full details of those talks, according to people familiar with the conversations.

    But that's about all that Ford and Chrysler are receiving right now.  Word out of the union yesterday is that the deal the UAW reaches with GM may not fly at the remaining companies, a signal of potential catastrophe on the horizon.  

    Whether you're a giant right-to-worker or you always look for the union label, a strike at any of the automakers would be catastrophic for a Michigan economy already hooked up to life-support.  

    Besides, take that many employees and sit them on a picket line and I half expect the Governor, Andy Dillon and Mark Schauer to start asking for an extra couple hundred million in tax hikes to offset the "lost revenue" that'd dry up when thousands of autoworkers stop receiving income.

  • < Headline: Michigan Republicans Win Back House, Pick Up Seats in Senate | A joke for you >
    Display: Sort:
    ROLL CALL ON WHO VOTED TO RAISE TAXES (none / 0) (#1)
    by apackof2 on Wed Sep 19, 2007 at 08:58:07 AM EST
    House Bill 5194 (Substitute H-1)
    AND House Bill 5198 BOTH passed last night

    CAN WE GET A ROLL CALL OF WHO VOTED YES

    Legacy Building? (none / 0) (#2)
    by Shell on Wed Sep 19, 2007 at 09:02:30 AM EST
    I think you're righting about your "buying headlines" theory.  She's term limited (boy, are we grateful for that) and is probably thinking about her legacy and a book.  She wants to leave office on a high note even if she has to manufacture one for herself.

    In other news, Reuters.uk is reporting:

    British Airways said on Wednesday it would suspend its daily flight between Detroit and London's Heathrow Airport in March, citing the changing nature of the U.S. auto industry.

    The aircraft will be used on other, more profitable routes, the airline said.

    British Airways has operated the route for more than 50 years, but was not able to make a reasonable level of profit and sees no possible upswing, the carrier said.

    "Detroit was a route very dependent on the auto industry, and the changing nature of this sector made it a very challenging market to be in," Robin Hayes, British Airways executive vice president Americas, said in a statement.

    It keeps piling on.

    Shell,
    The Conservatrarian

    Remember, those were both shell bills (none / 0) (#3)
    by Nick on Wed Sep 19, 2007 at 09:17:36 AM EST
    In other words, they didn't raise taxes... they passed them so that they could lay over in the Senate for five days and then be cleaned up later to add in the Dems $1.2 BILLION tax hike.

    That said, here's the roll call:

    VOTES ON HB 5194

    DEMOCRATS VOTING `YES' (52): Accavitti, Angerer, Bauer, Bennett, Bieda, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Dean, Dillon, Donigan, Ebli, Espinoza, Farrah, Gillard, Gon-zales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meisner, Melton, Miller, Polidori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Spade, Tobocman, Vagnozzi, Valentine, Warren, Wojno and Young.

    DEMOCRATS VOTING `NO' (4): Brown, Corriveau, Griffin and Simpson.

    DEMOCRATS NOT VOTING (2): Cushingberry and Meadows.

    REPUBLICANS VOTING `YES' (25): Acciavatti, Ball, Booher, Calley, Casperson, Caswell, Caul, Emmons, Gaffney, Hansen, Hildebrand, Hoogendyk, Rick Jones, Moolenaar, Nitz, Nofs, Opsommer, Pearce, Proos, Rocca, Schuitmaker, Shaffer, Walker, Ward and Wenke.

    REPUBLICANS VOTING `NO' (22): Brandenburg, Garfield, Green, Horn, Huizenga, Hune, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moore, Moss, Palmer, Palsrok, Pastor, Pavlov, Robertson, Sheen, Stakoe and Steil.  

    REPUBLICANS NOT VOTING (5): Agema, Amos, DeRoche, Elsenheimer and Stahl.

    VOTES ON HB 5198

    DEMOCRATS VOTING `YES' (51): Accavitti, Angerer, Bauer, Bennett, Bieda, Brown, Byrnes, Byrum, Cheeks, Clack, Clemente, Condino, Constan, Coulouris, Cushingberry, Dean, Dillon, Donigan, Espinoza, Farrah, Gillard, Gonzales, Hammel, Hammon, Hood, Hopgood, Jackson, Johnson, Robert Jones, Lahti, K. Law, LeBlanc, Leland, Lemmons Jr., Lindberg, Mayes, McDowell, Meadows, Meisner, Melton, Miller, Poli-dori, Sak, Scott, Sheltrown, A. Smith, V. Smith, Tobocman, Warren, Wojno and Young.

    DEMOCRATS VOTING `NO' (7): Corriveau, Ebli, Griffin, Simpson, Spade, Vagnozzi and Valentine.

    DEMOCRATS NOT VOTING (0)

    REPUBLICANS VOTING `YES' (6): Ball, Calley, Emmons, Gaffney, Hildebrand and Ward.

    REPUBLICANS VOTING `NO' (44): Acciavatti, Amos, Booher, Brandenburg, Casperson, Caswell, Caul, Elsenheimer, Garfield, Green, Hansen, Hoogendyk, Horn Huizenga, Hune, Rick Jones, Knollenberg, LaJoy, D. Law, Marleau, Meekhof, Meltzer, Moolenaar, Moore, Moss, Nitz, Nofs, Opsommer, Palmer, Palsrok, Pas-tor, Pavlov, Pearce, Proos, Robertson, Rocca, Schuitmaker, Shaffer, Sheen, Stahl, Stakoe, Steil, Walker and Wenke.

    REPUBLICANS NOT VOTING (2): Agema and DeRoche.


    Aerospace Workers (none / 0) (#4)
    by B Post on Wed Sep 19, 2007 at 09:22:34 AM EST
    Two things that bother me about this news.  One is that I'm an aerospace worker here in Michigan myself.  It almost seems like an oxymoron.  But the point is that even though the pool of unemployed engineers may be large, we still have a hard time here filling openings at my place of work.  The problem is that most of those engineers can't easily make a transition from automotive to aerospace.  It's a whole different world for many of them.  Secondly, it's nearly impossible to attract out of state engineers to come into the state.  They either are deathly afraid of Michigan winters, or also that Michigan is perceived as not a great place to live because of all of the state's woes.

    One other comment here about the "bought" publicity: is it only me or does it bother others too about the magnitude of the bribes, er tax breaks, necessary to bring jobs here?  Many of the amounts Nick cites above are paying around $7000 per job to bring them here.  Even with high paying jobs the payback period for the state's investment is pretty long term.

    blame (none / 0) (#5)
    by case3030 on Wed Sep 19, 2007 at 01:03:14 PM EST
    Don't blame me I voted for Devos!!!

    • Preach! by Nick, 09/19/2007 01:16:05 PM EST (none / 0)
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