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2014
COMPETE I INVEST I GROW
Compete
Invest
GRoW
From 2000 to 2010, when the U.S. lost
2 million jobs, roughly half of those
jobs were from Michigan. Today, the
state is back on track with more than
Michigan companies
pay on
average
more in
“total business costs”
250,000
new jobs created
Michigan has
2,875 units of local
government which
is the 12th most in
the nation
Michigan is a strong innovator
with a ranking of 10th in the nation
for university R&D spending.
Only 21%of Michigan’s high school
graduates are college or career ready
38%of all major roads in Michigan
are rated poor or mediocre quality
Michigan’s metros account for 87%
of the state’s exports
About Business Leaders for Michigan
Business Leaders for Michigan is a private, non-profit executive leadership
organization whose mission is to develop, advocate and support high-impact
strategies that will make Michigan a Top Ten state for jobs, personal income
and a healthy economy. The organization’s work is defined by the Michigan
Turnaround Plan, a holistic, fact-based strategy developed to achieve our
Top Ten goal. Serving as the state’s business roundtable, Business Leaders for
Michigan is composed of the chairpersons, chief executive officers, or most
senior executives of Michigan’s largest companies and universities. Our
members drive over 25% of the state’s economy, provide over 325,000 direct
and 820,000 indirect jobs in Michigan, generate over $1 trillion in annual
revenue and serve nearly one half of all Michigan public university students.
1 Letter from the Chairman and the President
2 A Glance at Michigan’s Economy
4 Times Have Changed
6 Michigan’s Competitive Position
10 The Winning Strategy – Michigan Turnaround Plan
20 What’s Been Accomplished
22 Business Leaders for Michigan Board of Directors
Copyright © 2014 Business Leaders For Michigan, All Rights Reserved.
Michigan is turning around.
Michiganders want progress, and we have all worked hard to create new jobs and
compete in a world that’s very different than it was just a few years ago. As a result,
our economy is growing faster than it has in over a decade.
At Business Leaders for Michigan (BLM), we are committed to helping accelerate our
state’s transformation. This updated edition of the Michigan Turnaround Plan (MTP),
originally introduced in 2009, continues to have a goal of making Michigan a Top Ten
state for jobs, personal income and a healthy economy. But it’s been modified to
reflect the gains we’ve made as a state, as well as new challenges on the horizon.
Thanks to state policy makers, business and community groups, and citizens and
stakeholders who have rallied around the Michigan Turnaround Plan, the state has
advanced in meaningful ways. Michigan’s growth now outpaces that of many other
states, but we can’t declare victory yet. We are still making up for ground we lost
during the Great Recession, and our competitors in other states and regions of the
world aren’t standing still.
We need to keep up our momentum and work from a shared playbook that helps us
move forward together to grow a stronger Michigan. We believe the Michigan
Turnaround Plan provides the ideas and strategies we need to help build what’s next
for the Great Lakes State.
Now, more than ever, it’s time for teamwork and resolve.
Michigan’s future is waiting. Are you in?
Sincerely,
Jeff M. Fettig Doug Rothwell
Chair, BLM Board of Directors President & CEO
Chairman & CEO Business Leaders for Michigan
Whirlpool Corporation
A LetteR fRom the ChAIRmAn And the pResIdent
1
2014 Michigan Turnaround Plan2
“We’re serious about creating more good jobs, higher
income, and a healthy economy. We’ve got a pro-business
climate, a great location and a talented workforce.”
Sounds great, right? Unfortunately, the above statement is made by
virtually every state in our nation, not just Michigan. Everyone is
competing to create, attract or retain more good jobs.The only way to
win is to be faster, better, and more productive than the competition.
Here in Michigan, we’ve made progress during the last several years
rebuilding our position in the worldwide jobs race.
A GLAnCe At
mIChIGAn’s
eConomy
3
ouR pAst
Prosperous State - Per capita personal income was 14% above the national average in the 1950s.
ReCent deCAdes
Relative Decline - Michigan’s economic troubles began in the 1960s and accelerated rapidly in the
decades that followed as global competition increased. As a result, Michigan became poorer,
smaller and less competitive relative to other states.
neW GAIns
Reversing Course - Michigan is currently experiencing one of the nation’s strongest recoveries.
About one-third of the Michigan Turnaround Plan (MTP) has been implemented with good results. State
government finances are more stable.The tax system is fairer. Long-term debt has been reduced.
Unnecessary regulations have been eliminated. In short, our business climate is more competitive.
todAy
Turnaround Underway - Michigan continues to recover faster than most states, but has more
ground to make up. Our employment, GDP, and personal income have grown faster than most peers
since 2009, but employment GDP and income levels are still below where they were before the
Great Recession.
futuRe
Michigan Turnaround Plan - A holistic plan building on Michigan’s strengths to make Michigan a
Top Ten state for jobs, personal income and a healthy economy. The MTP offers strategies to help
us compete, invest and grow.
2014 Michigan Turnaround Plan4
A half-century ago, the U.S. led the
world in creating good jobs and a
healthy economy, and Michigan
was a leader among the states.
Michigan enjoyed a reputation as the world’s automotive
center, the Arsenal of Democracy and the birthplace of
assembly line manufacturing technologies. In 1953
Michigan was in the Top Ten for per capita personal
income, with per capita GDP levels that would grow to
the nation’s 5th highest over the next decade.
But in the decades that followed, both the U.S. and
Michigan had begun to experience the full impact of
global competition.
Times Have
Changed
5
1950s
US World
Top 10
US
1990s
US World
2008
US
MI
World
US
Flash forward to 2009.
The American economy was in the midst of the Great
Recession, and Michigan was suffering more than any
other state. A poor tax and regulatory environment,
regional and political divisions, and mixed priorities
contributed to Michigan becoming less and less
competitive relative to its peers across the U.S.
• Michigan lost roughly half of the 2 million jobs lost in
the nation from 2000 through 2010.
• Personal income in Michigan fell by nearly 14%
during the same decade.
• Between 2000 and 2010, Michigan was the only
state to lose population.
Michigan had to get competitive again, and fast.
In 2009, Business Leaders for Michigan (BLM) released
the Michigan Turnaround Plan (MTP). The MTP is a
comprehensive, fact-based plan that lays out a series of
achievable, measurable goals that everyone in the state
can get behind to help turn the state around. The state’s
progress on the MTP is benchmarked annually by BLM
and updated as necessary to ensure Michigan stays on
track.
Five years later – and thanks to the shared efforts of
state, local, community and business leaders in every
corner of the state – one-third of the MTP has been
implemented. State finances are managed better.
Long-term debt has been reduced. Regional divisions are
fading and cooperation is rising. The result is more than
250,000 Michigan jobs have been created. Income and
GDP levels are on the rise. The conditions are right to
foster growth – but now we need to go further.
The 2014 MTP is designed to lay out what’s next for
Michigan. It identifies areas where we can compete,
invest and grow in order to make our state stronger for
generations to come.
Avg.
Top 10
Avg.
Top 10
Avg.
MI
MI
US
2014 Michigan Turnaround Plan6
Michigan’s
Competitive
Position
Michigan continues to recover faster than most
states, but we have more ground to make up.
Our employment, GDP and personal income have
grown faster than most peers since 2009, but per
capita GDP, income levels and employment are still
below where they were before the Great Recession.
Here’s a look at our competitive position, and what
we can do to make Michigan stronger.
todAy’s
mIChIGAn
7
GRoWth oCCuRs
WheRe theRe Is hIGh
vALue, fAIR Cost
Economic growth occurs in places that offer the
most benefit relative to costs. The Michigan
Turnaround Plan is based on this understanding,
and our state is making real progress toward
becoming a high value place to create jobs.
mIChIGAn’s CompetItIve
posItIon todAy
Our state’s positives are getting more attention now
that we’ve fixed some competitive weaknesses;
however, we still have a long way to go to becoming a
Top Ten state.
A stAte on the RIse
One-third of the way through implementation of the
Michigan Turnaround Plan, we see real progress.
The chart at right shows where we were during the
worst of the Great Recession, where we are in 2012,
and our goal of becoming a Top Ten state. We’re
rising in the rankings, but still have more to do.
COST
• Total Costs
• Taxes
• Labor
• Incentives
• Energy
• Government
• Business Climate
VALUE
• Talent
• Quality of Life
• Innovation &
Entrepreneurial
Environment
• Geographic
Location
POSITIVES
• Talent Production
• Technical Talent
Base
• Innovation
Environment
• Geographic
Location
+
NEGATIVES
• Regulatory
Climate
• Education
Attainment
• Infrastructure
• Urban Vitality
–
2008
Population
GDP
Income
Jobs
2012 2020
50 44 10
38 36 10
40 38 10
8 9 10
Source: Bureau of Labor Statistics, The Conference Board Total Economy Database, Bureau of Economic Analysis,
and the United States Census Bureau
2014 Michigan Turnaround Plan8
RAnks hIGh In InnovAtIon
but LoW In entRepReneuRIsm
Michigan is a Top Ten state for R&D and patent activity,
and has a growing supply of venture capital.
Our university R&D is among the Top Ten in the nation,
and Michigan ranks 13th in the number of patents
awarded. Our state’s entrepreneurs are supported by
a 60% increase in venture capital investment, which is
now 19th highest in the nation.
peRCeptIons ARe
ImpRovInG
National business leader perceptions of Michigan’s
business climate are improving.
Site Selection magazine has named Michigan the 8th most
competitive state for achieving success in job creation and
economic development, up from 16th in 2011.
busIness tAxes ARe
ImpRovInG
Michigan’s corporate tax climate has improved to 9th
best in the nation from 2nd worst and our overall tax
environment has risen to 14th best in the nation.
While our tax system has seem dramatic improvements,
nationally we still rank poorly for the cost of doing
business and business incentives in Michigan may
be less competitive compared to other states.
Corporate Tax Climate
2011 2014
Michigan
in # of
patents
awarded
13th
most
competitive
state for job
creation
8th
!
9
InfRAstRuCtuRe
needs WoRk
Michigan’s aging Infrastructure impedes our global
competitiveness.
All forms of our physical infrastructure, including
roads and bridges, need investment to ensure
Michigan’s people and products can access global
markets.
Less eduCAted WoRkfoRCe
Michigan’s talent production is good, but college
attainment is low.
While Michigan confers a large number of degrees and
awards more “critical skills” degrees than most of our
peers, the percentage of Michigan’s population with
an associate’s degree or above is lower than Top Ten
states. What’s more, degreed individuals aren’t moving
to Michigan, leaving us with an overall talent deficit.
GeoGRAphIC LoCAtIon
Our state’s unique geographic advantages can be
leveraged to increase exports and attract foreign
direct investment.
Michigan is one of the largest U.S. air hubs to Asia,
a center link of the NAFTA highway and the closest
entry to the Midwest from the Halifax port. The state
can capitalize on the growth of just-in-time delivery
and congestion of other midwest ports.
STRENGTHS
#1 InternationalLand Crossing
14th
Air
Passenger
Volume
18th
Air Cargo
Tonnage
WEAKNESSES
42nd
Water Port
Tonnage
26th
Broadband
Penetration
45th
Interstate
Condition
of the 50
states for educated
workforce
30th
2014 Michigan Turnaround Plan10
Today, our state is more competitive.
In a fast-paced global economy, it’s not enough
just to compete. Michigan needs to win.
Our work needs to be about both controlling
costs and adding more, positive benefits.
Michigan must become a more responsive place
with better talent and stronger assets. We must
be a more connected and welcoming place than
our competitors. We must leverage assets we
already have to drive growth and be recognized
as a center of innovation.
the WInnInG
stRAteGy
11
COMPETE
• Create an economic environment that is better than competitor states
• Strengthen Michigan’s fiscal stability and reduce future financial uncertainty
• Create a regulatory environment that’s more responsive than competitor states
• Provide stronger economic development services than competitor states
• Provide better local government services than competitor states
• Support federal policy changes that enhance Michigan’s competitiveness
INVEST
• Connect Michigan to the world through strong infrastructure
• Ensure every Michigan child is ready to learn and advance
• Increase the number of workers with education and training beyond high school
• Achieve Top Ten community college and university affordability by increasing
performance-based funding
• Improve the connection between education and careers
GROW
• Grow a New Michigan economy by leveraging assets with the greatest potential
to meet future global economic needs
• Grow Detroit into a thriving central city by attracting new investment, improving
city services and repopulating neighborhoods
• Make Michigan an aspirational destination by being a welcoming place to all
• Reclaim Michigan’s reputation as a center for innovation by advancing a
holistic strategy
2014 Michigan Turnaround Plan12
Compete
Goal
Michigan is more attractive than competitor
states as a place for job providers to start or
grow a business
Why it’s important
Because there are a virtually unlimited number
of places where business can locate in a global
economy, Michigan has to at least be average
or better on most business climate factors
compared to competitor locations
Indicator of success
Top Ten state as a place to do business
13
Create an economic environment that is better than competitor states
• Annually benchmark Michigan’s economic competitiveness to Top Ten states
• Continue to modernize Michigan’s tax system to reward production and
reflect changes in the composition of the economy
° Phase out the personal property tax without negatively impacting communities
• Maintain competitive energy costs
Strengthen Michigan’s fiscal stability and reduce future financial uncertainty
• Adopt a 10 year state strategic plan
• Require annual performance-based budgeting
• Reduce corrections costs to the Great Lakes average
• Continue paying down state unfunded liabilities
• Grow the Budget Stabilization Fund to 5% of annual operating revenues
• Adopt fiscal notes for all legislation
Create a regulatory environment that’s more responsive than
competitor states
• Issue permits in Top Ten timeframes
• Change the regulatory culture to be customer-centric
Provide stronger economic development services than competitor states
• Deliver Top Ten economic development customer service
• Offer competitive economic development incentives
• Act cohesively to attract and grow more good jobs
Provide better local government services than competitor states
• Benchmark and encourage local governments to adopt fiscal best practices
• Benchmark local government competitiveness on key site location factors
• Strengthen local governments and school districts and encourage service sharing:
° Align state and federal program boundaries with regional economies
° Preserve the Emergency Financial Management Act
° Limit local debt service to 10% of local operating expenses
° Preclude local governments from offering defined benefit retirement
plans and retiree health care benefits to new hires
° Provide regions the ability to identify and fund regional assets
Support federal policy changes that enhance Michigan’s competitiveness
• Engage leaders on tax reform, workforce policies, immigration reform, etc.
fastest
GDP
growth
4th
more3%
most units
of government
12th
in 2011 & 2012
To reach Top 10 by 2020,
income must increase
in “total business costs”
MI companies
pay on
average
per
person
$18,000
25 workforce development regions,
17 adult education,
14 planning and
19 arts regions,
none align with each other
Invest
Goal
Michigan has more talent and is better
connected to the world than competitor states
Why it’s important
To fill the jobs of today and tomorrow, Michigan
needs to fill its pipeline with an educated and
skilled workforce.A globally connected
infrastructure is needed to move our people and
products around the world to better serve global
customers
Indicator of success
Top Ten state for talent and global connectivity
(air access, international trade, etc.)
2014 Michigan Turnaround Plan14
Connect Michigan to the world through strong infrastructure
• Adopt solutions that support a strong transportation system
• Develop critical rail connections
• Strengthen Michigan’s logistics infrastructure
• Fully develop VantagePort (formerly Detroit Region Aerotropolis)
Ensure every Michigan child is ready to learn and advance
• Increase public awareness of the value of education
• Expand high quality pre-school education
• Maintain competitive academic standards including the Common
Core State Standards and Michigan Merit Curriculum
• Reward schools, teachers and leaders performing at a high level
• Require high school graduation to be based on meeting college or
career readiness benchmarks
Increase the number of workers with education and training
beyond high school
• Increase out-of-state college enrollment to the national average
without reducing in-state access
• Attract educated workers and skilled immigrants to Michigan
• Expand just-in-time, customized worker training programs
• Develop a long-term strategy to ensure Michigan has a Top Ten
community college and university marketplace
Achieve Top Ten community college and university affordability by
increasing performance-based funding
Improve the connection between education and careers
• Increase opportunities for high school and college students to
participate in school-to-work transition experiences
• Require community colleges and universities to track graduate placement
results
15
worst
urban roads
45th
career &
college ready
21%
highest
average debt
per college
graduate
8th
bad bridges
1,354
currently in Michigan
$660,000,000
In 2013, the VantagePort region
benefitted from $660 million worth
of new property investment and the
creation of 974 new jobs.
GRoW
Goal
Michigan is known as a hub of innovation
and as a thriving, welcoming state
Why it’s important
Michigan must cultivate its strongest assets to
ensure lasting prosperity. From our core cities to
our abundant human, technological, and natural
resources, we can make the most of what we do
best to grow a brighter future for our state
Indicator of success
Top Ten state for jobs, personal income, GDP
and population
2014 Michigan Turnaround Plan16
the
rate2X
Top
10
10%
New Michigan opportunity
jobs are growing
of business owners in
Michigan are immigrants
over
of the state as a whole
$31 Billion
per year with
Top 10 performance in
New Michigan opportunities
in R&Dfor
R&D Expenditures
at Universities
Michigan can grow
total economic output
17
Grow a New Michigan economy by leveraging assets with the
greatest potential to meet future global economic needs (see p. 18-19)
• Engineering talent into a Global Engineering Village
• Geographic location into a Gateway to the Midwest
• Automotive industry into a Global Center for Mobility
• Natural resources into a Natural Resources Economy
• Health and medical expertise into a Life Sciences Hub
• Higher education system into a Higher Education Marketplace
Grow Detroit into a thriving central city by attracting new investment,
improving city services and repopulating neighborhoods
• Champion the delivery of the basics: safety, services, ethics, fiscal integrity
• Encourage greater alignment on community priorities
• Facilitate job creation
Make Michigan an aspirational destination by being a welcoming
place to all
• Attract skilled immigrants and facilitate their relocation transitions
• Expand cultural exchange programs
• Prohibit discrimination based on sexual orientation for employment
just like we do for race, color, religion, sex, national origin or disability
Reclaim Michigan’s reputation as a center for innovation by
advancing a holistic strategy
• Become a Top Ten state for the availability of venture capital
• Provide Top Ten entrepreneurship and innovation services
• Remove legal and regulatory barriers to entrepreneurship and innovation
• Promote the automotive and manufacturing industries as engines
of innovation
• Showcase Michigan’s innovation at entry portals to the state –
define visitor and resident perceptions by featuring innovative
Michigan products and services
• Become a convening center for entrepreneurship and innovation
conferences, competitions and research
GRoW
2014 Michigan Turnaround Plan18
ENGINEERING
TALENT
Global
Engineering
Village
Brand the
engineering
sector
•
Grow engineering
education
capacity
•
Grow
engineering
firms
Potentialwaystoleveragetheassets:Opportunities:Assets:
GEOGRAPHIC
LOCATION
Gateway
to the
Midwest
Consolidate
logistics base into
Michigan
•
Scale & aggressively
market the
VantagePort
•
Invest in strategic
trade-related
infrastructure
(e.g., roads, bridge,
tunnel, rail)
HIGHER EDUCATION
SYSTEM
Higher
Education
Marketplace
Strengthen quality,
affordability,
productivity &
economic impact
•
Grow university
enrollment
•
Grow industry &
university
funded R&D
•
Grow commerciali-
zation of R&D
NATURAL
RESOURCES
Natural
Resources
Economy
Grow agricultural
processing and
exports
•
Grow leisure
tourism
•
Lead in alternative
energy
technologies
AUTOMOTIVE
INDUSTRY
Global
Center of
Mobility
Lead in
sustainable
mobility and
multi-modal
systems
•
Lead in vehicle/
infrastructure
technology to
improve road safety
•
Market & grow
the auto industry
HEALTH & MEDICAL
EXPERTISE
Life
Sciences
Hub
Create a
Hub for
bio-pharmaceutical
R&D
•
Become the Center
for research,
testing &
medical labs
•
Grow medical
tourism
A 10-year plan to leverage distinctive Michigan assets to grow a New Michigan economy
Strong base of entrepreneurism, innovation and manufacturing
newmichigan
n
1
Compete
2
Invest
3
Grow
19
The Michigan Turnaround Plan features an aggressive strategy for growing a New Michigan economy.
It identifies opportunities based on Michigan’s unique assets with the highest potential to create
thousands of good paying jobs over the next ten years. The framework for a New Michigan economy
highlights six areas. If leveraged properly, each offers great promise for success. Together, they have
the potential to make our state into a vital economic powerhouse.
Global Engineering Village
Global demand is increasing for high-tech manufacturing industries such as aerospace, medical devices, and
precision instruments.These and other industries rely heavily on quality engineers, who are in abundance in
Michigan. Encouraging the automotive industry to adopt cutting-edge technology, fostering innovation in
advanced manufacturing industries, and embracing start-ups can help Michigan capitalize on this opportunity.
Gateway to the Midwest
The movement of goods and people is crucial to economic growth and success. Michigan’s geographic
location enables it to be accessible by road, rail, sea, or air. Michigan can build on this advantage by
advancing as an integrated, multi-modal hub for trade. Specifically, Michigan has the capacity to
encourage the development of aviation-dependent businesses and international border crossings.
Higher Education Marketplace
Economic growth is being driven by gains in productivity, and gains in productivity are driven by talent and
talent-generated innovation.As a primary source of both talent and innovation, our higher education system
represents a major opportunity to grow Michigan’s economy. In addition, higher education institutions are
drivers of economic growth as they bring students, employers, and additional spending to local economies.
Natural Resources Economy
Today, the demand for natural resources is more pressing than ever. The development of technologies
that maximize the production of scarce resources in a sustainable way is crucial for succeeding in
natural resources markets. Michigan also has competitive advantages in agricultural innovation, and can
leverage its natural beauty to increase its tourism industry.
Global Center for Mobility
Michigan has been a center for automotive innovation for as long as cars have existed. The state has a
unique opportunity to continue to expand with the automotive industry, by transforming the existing
automotive cluster to a hub of a diverse set of industries that meet the demands of global mobility.
Michigan can increase its focus on multi-modal sustainable transportation.
Life Sciences Hub
The demand for a higher quality of life persists among developing and developed nations alike. The
search for life sciences solutions is causing health care expenditure growth to outpace GDP growth in
the developed world. Michigan produces a large number of bio-science degrees. This combined with its
high-end medical research facilities, and expertise in bio-pharmaceutical products and medical devices
gives Michigan unique advantages to advance as a Life Sciences Hub.
newmichigan
newmichigan
newmichigan
2014 Michigan Turnaround Plan20
Since the Michigan Turnaround Plan
was released in 2009, significant
actions have been taken or are
underway that align with the plan.
The following shows the progress made
to date— approximately one-third of the
original plan has been addressed.
WhAt’s been
ACCompLIshed
21
Responsibly Manage Finances
• Improved revenue and expenditure forecasts
• Multi-year financial and budget plans
• Citizen friendly balance sheet
• Reduced state debt by one-third
• State agencies required to implement spending plans with a strategic mission, vision and goals
• Improved state bond rating
Effectively & Efficiently Provide Public Services
• Aligned public employee health care premiums with the private sector
• Removed statutory barriers and provided incentives to encourage local service sharing
• Passed public school employee retirement reforms estimated to reduce unfunded pension and
health care liability by $16 billion
• Passed emergency manager law to help locals “fix the basics”
Create a Competitive Business Climate
• Improved Michigan’s corporate tax climate by replacing the MBT with a flat corporate income tax
• Improved Michigan’s regulatory climate by: rescinding over 1,000 obsolete and redundant rules;
and requiring a cost benefit analysis for all proposed rules
• Passed legislation to allow for the gradual phase-out of the Personal Property Tax
• Expanded technical worker training
• Grew venture capital to #19 nationally
• Reformed Unemployment Insurance system
Strategically Invest for Future Growth
• Increased funding for higher education based on performance
• Increased access to early childhood education for underserved students
• Increased funding for transportation
• Reached agreement to build new international bridge
Accelerate the Growth of Cities & Metros
• Adopted Michigan urban strategy
• Increased investments in cities
• Adopted regional economic development model
Leverage Assets to Grow the New Michigan
• Identified Michigan’s six most promising existing assets to accelerate growth
• Developed and implementing strategies for 4 of the 6 assets: Higher Education Marketplace,
Gateway to the Midwest, Global Engineering Village and Global Center of Mobility
progress to date
JEFF M. FETTIG
CHAIR OF THE BOARD
Whirlpool Corporation
TERENCE E. ADDERLEY
Kelly Services, Inc.
KEITH ALLMAN
Masco Corporation
G. MARK ALYEA
Alro Steel Corporation
GERARD M. ANDERSON
DTE Energy Company
DAVID W. BARFIELD
The Bartech Group, Inc.
MARY T. BARRA
General Motors Company
ALBERT M. BERRIZ
McKinley, Inc.
MARK J. BISSELL
BISSELL Inc.
STEPHEN K. CARLISLE
General Motors Company
JOHN C. CARTER
Chase
MARY SUE COLEMAN
University of Michigan
TIMOTHY P. COLLINS
Comcast Cable
ROBERT S. CUBBIN
Meadowbrook Insurance Group, Inc.
WALTER P. CZARNECKI
Penske Corporation
KURT L. DARROW
La-Z-Boy Incorporated
DAVID C. DAUCH
American Axle & Manufacturing
RICHARD L. DeVORE
PNC Financial Services Group
DOUGLAS L. DeVOS
Amway
ALESSANDRO DiNELLO
Flagstar Bank
J. PATRICK DOYLE
Domino’s Pizza
JAMES E. DUNLAP
Huntington
MATTHEW B. ELLIOTT
Bank of America
WILLIAM CLAY FORD, JR.
Ford Motor Company
DANIEL GILBERT
Quicken Loans Inc.
ALFRED R. GLANCY III
Unico Investment Group LLC
DAN GORDON
Gordon Food Service, Inc.
JAMES P. HACKETT
Steelcase Inc.
RONALD E. HALL
Bridgewater Interiors, LLC
RICHARD G. HAWORTH
Haworth, Inc.
CHRISTOPHER ILITCH
Ilitch Holdings, Inc.
MICHAEL J. JANDERNOA
Perrigo Company
MILES E. JONES
Dawn Food Products, Inc.
HANS-WERNER KAAS
McKinsey & Company
ALAN JAY KAUFMAN
Kaufman Financial Group
JOHN C. KENNEDY
Autocam
STEPHEN M. KIRCHER
Boyne Resorts
WILLIAM L. KOZYRA
TI Automotive Ltd.
BLAKE W. KRUEGER
Wolverine World Wide, Inc.
BRIAN K. LARCHE
Engineered Machined Products, Inc.
TIMOTHY D. LEULIETTE
Visteon Corporation
ANDREW N. LIVERIS
Dow Chemical Company
KEVIN A. LOBO
Stryker Corporation
DANIEL J. LOEPP
Blue Cross Blue Shield of Michigan
EVAN D. LYALL
Roush Enterprises, Inc.
BEN C. MAIBACH III
Barton Malow Company
DENNIS MANNION
Palace Sports & Entertainment
and Detroit Pistons
RICHARD A. MANOOGIAN
Masco Corporation
FLORINE MARK
The WW Group, Inc.
DAVID E. MEADOR
DTE Energy
HANK MEIJER
Meijer, Inc.
MICHAEL MILLER
Google, Inc.
FREDERICK K. MINTURN
MSX International
PAUL J. MUELLER
The Hanover Insurance Group
MARK A. MURRAY
Meijer, Inc.
JAMES B. NICHOLSON
PVS Chemicals, Inc.
WILLIAM U. PARFET
MPI Research
CYNTHIA J. PASKY
Strategic Staffing Solutions
ROGER S. PENSKE
Penske Corporation
WILLIAM F. PICKARD
GlobalAutomotiveAlliance
SANDRA E. PIERCE
FirstMerit Michigan
GERRY PODESTA
BASF
CHARLES H. PODOWSKI
The Auto Club Group
JOHN RAKOLTA, JR.
Walbridge
MICHAEL T. RITCHIE
Comerica Bank
DOUG ROTHWELL
Business Leaders for Michigan
ANDRA M. RUSH
Dakkota Integrated Systems, LLC
JOHN G. RUSSELL
CMS Energy Corporation/
Consumers Energy Co.
RICHARD F. RUSSELL
Amerisure Companies
ALAN F. SCHULTZ
Valassis
J. DONALD SHEETS
Dow Corning
BRAD SIMMONS
Ford Motor Company
LOU ANNA K. SIMON
Michigan State University
SAM SIMON
Atlas Oil Company
MATTHEW J. SIMONCINI
Lear Corporation
BRIG SORBER
Two Men And A Truck/International, Inc.
ROBERT S. TAUBMAN
Taubman, Inc.
GARY TORGOW
Talmer Bancorp
SAMUEL VALENTI III
TriMas Corporation
STEPHEN A. VAN ANDEL
Amway
MICHELLE L. VAN DYKE
Fifth Third Bank
JAMES R. VERRIER
BorgWarner Inc.
BRIAN C. WALKER
Herman Miller, Inc.
THOMAS J. WEBB
CMS Energy Corporation
WILLIAM H. WEIDEMAN
The Dow Chemical Company
M. ROY WILSON
Wayne State University
ROGER J. WOOD
Dana Holding Corporation
WILLIAM C. YOUNG
Plastipak Holdings, Inc.
Charter One
Delta Air Lines, Inc.
*This list represents the board members
at the time of printing. For a current list,
visit businessleadersformichigan.com.
Business Leaders for Michigan - 2014 Board of Directors
2014 Michigan Turnaround Plan22
Michigan is our home. Business Leaders for Michigan
members work, live and raise their families here.
We are the companies that you and your neighbors
have worked for, shopped at or been served by for years.
We are committed to Michigan and show that commitment
every day by reinvesting in our state. We are convinced that
our state has a bright future ahead. We invite you to join us
in driving strategies that accelerate Michigan’s turnaround.
Research for the 2014 Michigan Turnaround was conducted by Business Leaders for Michigan and Anderson Economic Group,
a research and consulting firm with expertise in economics, public policy, finance, and industry analysis.
The data presented in this report come from several sources, most of which are publicly available.
For a detailed list of the sources, please see Appendix A at: www.businessleadersformichigan.com/MTPappendix
www.BusinessLeadersForMichigan.com

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The 2014 Michigan Turnaround Plan

  • 2. Compete Invest GRoW From 2000 to 2010, when the U.S. lost 2 million jobs, roughly half of those jobs were from Michigan. Today, the state is back on track with more than Michigan companies pay on average more in “total business costs” 250,000 new jobs created Michigan has 2,875 units of local government which is the 12th most in the nation
  • 3. Michigan is a strong innovator with a ranking of 10th in the nation for university R&D spending. Only 21%of Michigan’s high school graduates are college or career ready 38%of all major roads in Michigan are rated poor or mediocre quality Michigan’s metros account for 87% of the state’s exports
  • 4. About Business Leaders for Michigan Business Leaders for Michigan is a private, non-profit executive leadership organization whose mission is to develop, advocate and support high-impact strategies that will make Michigan a Top Ten state for jobs, personal income and a healthy economy. The organization’s work is defined by the Michigan Turnaround Plan, a holistic, fact-based strategy developed to achieve our Top Ten goal. Serving as the state’s business roundtable, Business Leaders for Michigan is composed of the chairpersons, chief executive officers, or most senior executives of Michigan’s largest companies and universities. Our members drive over 25% of the state’s economy, provide over 325,000 direct and 820,000 indirect jobs in Michigan, generate over $1 trillion in annual revenue and serve nearly one half of all Michigan public university students. 1 Letter from the Chairman and the President 2 A Glance at Michigan’s Economy 4 Times Have Changed 6 Michigan’s Competitive Position 10 The Winning Strategy – Michigan Turnaround Plan 20 What’s Been Accomplished 22 Business Leaders for Michigan Board of Directors Copyright © 2014 Business Leaders For Michigan, All Rights Reserved.
  • 5. Michigan is turning around. Michiganders want progress, and we have all worked hard to create new jobs and compete in a world that’s very different than it was just a few years ago. As a result, our economy is growing faster than it has in over a decade. At Business Leaders for Michigan (BLM), we are committed to helping accelerate our state’s transformation. This updated edition of the Michigan Turnaround Plan (MTP), originally introduced in 2009, continues to have a goal of making Michigan a Top Ten state for jobs, personal income and a healthy economy. But it’s been modified to reflect the gains we’ve made as a state, as well as new challenges on the horizon. Thanks to state policy makers, business and community groups, and citizens and stakeholders who have rallied around the Michigan Turnaround Plan, the state has advanced in meaningful ways. Michigan’s growth now outpaces that of many other states, but we can’t declare victory yet. We are still making up for ground we lost during the Great Recession, and our competitors in other states and regions of the world aren’t standing still. We need to keep up our momentum and work from a shared playbook that helps us move forward together to grow a stronger Michigan. We believe the Michigan Turnaround Plan provides the ideas and strategies we need to help build what’s next for the Great Lakes State. Now, more than ever, it’s time for teamwork and resolve. Michigan’s future is waiting. Are you in? Sincerely, Jeff M. Fettig Doug Rothwell Chair, BLM Board of Directors President & CEO Chairman & CEO Business Leaders for Michigan Whirlpool Corporation A LetteR fRom the ChAIRmAn And the pResIdent 1
  • 6. 2014 Michigan Turnaround Plan2 “We’re serious about creating more good jobs, higher income, and a healthy economy. We’ve got a pro-business climate, a great location and a talented workforce.” Sounds great, right? Unfortunately, the above statement is made by virtually every state in our nation, not just Michigan. Everyone is competing to create, attract or retain more good jobs.The only way to win is to be faster, better, and more productive than the competition. Here in Michigan, we’ve made progress during the last several years rebuilding our position in the worldwide jobs race. A GLAnCe At mIChIGAn’s eConomy
  • 7. 3 ouR pAst Prosperous State - Per capita personal income was 14% above the national average in the 1950s. ReCent deCAdes Relative Decline - Michigan’s economic troubles began in the 1960s and accelerated rapidly in the decades that followed as global competition increased. As a result, Michigan became poorer, smaller and less competitive relative to other states. neW GAIns Reversing Course - Michigan is currently experiencing one of the nation’s strongest recoveries. About one-third of the Michigan Turnaround Plan (MTP) has been implemented with good results. State government finances are more stable.The tax system is fairer. Long-term debt has been reduced. Unnecessary regulations have been eliminated. In short, our business climate is more competitive. todAy Turnaround Underway - Michigan continues to recover faster than most states, but has more ground to make up. Our employment, GDP, and personal income have grown faster than most peers since 2009, but employment GDP and income levels are still below where they were before the Great Recession. futuRe Michigan Turnaround Plan - A holistic plan building on Michigan’s strengths to make Michigan a Top Ten state for jobs, personal income and a healthy economy. The MTP offers strategies to help us compete, invest and grow.
  • 8. 2014 Michigan Turnaround Plan4 A half-century ago, the U.S. led the world in creating good jobs and a healthy economy, and Michigan was a leader among the states. Michigan enjoyed a reputation as the world’s automotive center, the Arsenal of Democracy and the birthplace of assembly line manufacturing technologies. In 1953 Michigan was in the Top Ten for per capita personal income, with per capita GDP levels that would grow to the nation’s 5th highest over the next decade. But in the decades that followed, both the U.S. and Michigan had begun to experience the full impact of global competition. Times Have Changed
  • 9. 5 1950s US World Top 10 US 1990s US World 2008 US MI World US Flash forward to 2009. The American economy was in the midst of the Great Recession, and Michigan was suffering more than any other state. A poor tax and regulatory environment, regional and political divisions, and mixed priorities contributed to Michigan becoming less and less competitive relative to its peers across the U.S. • Michigan lost roughly half of the 2 million jobs lost in the nation from 2000 through 2010. • Personal income in Michigan fell by nearly 14% during the same decade. • Between 2000 and 2010, Michigan was the only state to lose population. Michigan had to get competitive again, and fast. In 2009, Business Leaders for Michigan (BLM) released the Michigan Turnaround Plan (MTP). The MTP is a comprehensive, fact-based plan that lays out a series of achievable, measurable goals that everyone in the state can get behind to help turn the state around. The state’s progress on the MTP is benchmarked annually by BLM and updated as necessary to ensure Michigan stays on track. Five years later – and thanks to the shared efforts of state, local, community and business leaders in every corner of the state – one-third of the MTP has been implemented. State finances are managed better. Long-term debt has been reduced. Regional divisions are fading and cooperation is rising. The result is more than 250,000 Michigan jobs have been created. Income and GDP levels are on the rise. The conditions are right to foster growth – but now we need to go further. The 2014 MTP is designed to lay out what’s next for Michigan. It identifies areas where we can compete, invest and grow in order to make our state stronger for generations to come. Avg. Top 10 Avg. Top 10 Avg. MI MI US
  • 10. 2014 Michigan Turnaround Plan6 Michigan’s Competitive Position Michigan continues to recover faster than most states, but we have more ground to make up. Our employment, GDP and personal income have grown faster than most peers since 2009, but per capita GDP, income levels and employment are still below where they were before the Great Recession. Here’s a look at our competitive position, and what we can do to make Michigan stronger. todAy’s mIChIGAn
  • 11. 7 GRoWth oCCuRs WheRe theRe Is hIGh vALue, fAIR Cost Economic growth occurs in places that offer the most benefit relative to costs. The Michigan Turnaround Plan is based on this understanding, and our state is making real progress toward becoming a high value place to create jobs. mIChIGAn’s CompetItIve posItIon todAy Our state’s positives are getting more attention now that we’ve fixed some competitive weaknesses; however, we still have a long way to go to becoming a Top Ten state. A stAte on the RIse One-third of the way through implementation of the Michigan Turnaround Plan, we see real progress. The chart at right shows where we were during the worst of the Great Recession, where we are in 2012, and our goal of becoming a Top Ten state. We’re rising in the rankings, but still have more to do. COST • Total Costs • Taxes • Labor • Incentives • Energy • Government • Business Climate VALUE • Talent • Quality of Life • Innovation & Entrepreneurial Environment • Geographic Location POSITIVES • Talent Production • Technical Talent Base • Innovation Environment • Geographic Location + NEGATIVES • Regulatory Climate • Education Attainment • Infrastructure • Urban Vitality – 2008 Population GDP Income Jobs 2012 2020 50 44 10 38 36 10 40 38 10 8 9 10 Source: Bureau of Labor Statistics, The Conference Board Total Economy Database, Bureau of Economic Analysis, and the United States Census Bureau
  • 12. 2014 Michigan Turnaround Plan8 RAnks hIGh In InnovAtIon but LoW In entRepReneuRIsm Michigan is a Top Ten state for R&D and patent activity, and has a growing supply of venture capital. Our university R&D is among the Top Ten in the nation, and Michigan ranks 13th in the number of patents awarded. Our state’s entrepreneurs are supported by a 60% increase in venture capital investment, which is now 19th highest in the nation. peRCeptIons ARe ImpRovInG National business leader perceptions of Michigan’s business climate are improving. Site Selection magazine has named Michigan the 8th most competitive state for achieving success in job creation and economic development, up from 16th in 2011. busIness tAxes ARe ImpRovInG Michigan’s corporate tax climate has improved to 9th best in the nation from 2nd worst and our overall tax environment has risen to 14th best in the nation. While our tax system has seem dramatic improvements, nationally we still rank poorly for the cost of doing business and business incentives in Michigan may be less competitive compared to other states. Corporate Tax Climate 2011 2014 Michigan in # of patents awarded 13th most competitive state for job creation 8th !
  • 13. 9 InfRAstRuCtuRe needs WoRk Michigan’s aging Infrastructure impedes our global competitiveness. All forms of our physical infrastructure, including roads and bridges, need investment to ensure Michigan’s people and products can access global markets. Less eduCAted WoRkfoRCe Michigan’s talent production is good, but college attainment is low. While Michigan confers a large number of degrees and awards more “critical skills” degrees than most of our peers, the percentage of Michigan’s population with an associate’s degree or above is lower than Top Ten states. What’s more, degreed individuals aren’t moving to Michigan, leaving us with an overall talent deficit. GeoGRAphIC LoCAtIon Our state’s unique geographic advantages can be leveraged to increase exports and attract foreign direct investment. Michigan is one of the largest U.S. air hubs to Asia, a center link of the NAFTA highway and the closest entry to the Midwest from the Halifax port. The state can capitalize on the growth of just-in-time delivery and congestion of other midwest ports. STRENGTHS #1 InternationalLand Crossing 14th Air Passenger Volume 18th Air Cargo Tonnage WEAKNESSES 42nd Water Port Tonnage 26th Broadband Penetration 45th Interstate Condition of the 50 states for educated workforce 30th
  • 14. 2014 Michigan Turnaround Plan10 Today, our state is more competitive. In a fast-paced global economy, it’s not enough just to compete. Michigan needs to win. Our work needs to be about both controlling costs and adding more, positive benefits. Michigan must become a more responsive place with better talent and stronger assets. We must be a more connected and welcoming place than our competitors. We must leverage assets we already have to drive growth and be recognized as a center of innovation. the WInnInG stRAteGy
  • 15. 11 COMPETE • Create an economic environment that is better than competitor states • Strengthen Michigan’s fiscal stability and reduce future financial uncertainty • Create a regulatory environment that’s more responsive than competitor states • Provide stronger economic development services than competitor states • Provide better local government services than competitor states • Support federal policy changes that enhance Michigan’s competitiveness INVEST • Connect Michigan to the world through strong infrastructure • Ensure every Michigan child is ready to learn and advance • Increase the number of workers with education and training beyond high school • Achieve Top Ten community college and university affordability by increasing performance-based funding • Improve the connection between education and careers GROW • Grow a New Michigan economy by leveraging assets with the greatest potential to meet future global economic needs • Grow Detroit into a thriving central city by attracting new investment, improving city services and repopulating neighborhoods • Make Michigan an aspirational destination by being a welcoming place to all • Reclaim Michigan’s reputation as a center for innovation by advancing a holistic strategy
  • 16. 2014 Michigan Turnaround Plan12 Compete Goal Michigan is more attractive than competitor states as a place for job providers to start or grow a business Why it’s important Because there are a virtually unlimited number of places where business can locate in a global economy, Michigan has to at least be average or better on most business climate factors compared to competitor locations Indicator of success Top Ten state as a place to do business
  • 17. 13 Create an economic environment that is better than competitor states • Annually benchmark Michigan’s economic competitiveness to Top Ten states • Continue to modernize Michigan’s tax system to reward production and reflect changes in the composition of the economy ° Phase out the personal property tax without negatively impacting communities • Maintain competitive energy costs Strengthen Michigan’s fiscal stability and reduce future financial uncertainty • Adopt a 10 year state strategic plan • Require annual performance-based budgeting • Reduce corrections costs to the Great Lakes average • Continue paying down state unfunded liabilities • Grow the Budget Stabilization Fund to 5% of annual operating revenues • Adopt fiscal notes for all legislation Create a regulatory environment that’s more responsive than competitor states • Issue permits in Top Ten timeframes • Change the regulatory culture to be customer-centric Provide stronger economic development services than competitor states • Deliver Top Ten economic development customer service • Offer competitive economic development incentives • Act cohesively to attract and grow more good jobs Provide better local government services than competitor states • Benchmark and encourage local governments to adopt fiscal best practices • Benchmark local government competitiveness on key site location factors • Strengthen local governments and school districts and encourage service sharing: ° Align state and federal program boundaries with regional economies ° Preserve the Emergency Financial Management Act ° Limit local debt service to 10% of local operating expenses ° Preclude local governments from offering defined benefit retirement plans and retiree health care benefits to new hires ° Provide regions the ability to identify and fund regional assets Support federal policy changes that enhance Michigan’s competitiveness • Engage leaders on tax reform, workforce policies, immigration reform, etc. fastest GDP growth 4th more3% most units of government 12th in 2011 & 2012 To reach Top 10 by 2020, income must increase in “total business costs” MI companies pay on average per person $18,000 25 workforce development regions, 17 adult education, 14 planning and 19 arts regions, none align with each other
  • 18. Invest Goal Michigan has more talent and is better connected to the world than competitor states Why it’s important To fill the jobs of today and tomorrow, Michigan needs to fill its pipeline with an educated and skilled workforce.A globally connected infrastructure is needed to move our people and products around the world to better serve global customers Indicator of success Top Ten state for talent and global connectivity (air access, international trade, etc.) 2014 Michigan Turnaround Plan14
  • 19. Connect Michigan to the world through strong infrastructure • Adopt solutions that support a strong transportation system • Develop critical rail connections • Strengthen Michigan’s logistics infrastructure • Fully develop VantagePort (formerly Detroit Region Aerotropolis) Ensure every Michigan child is ready to learn and advance • Increase public awareness of the value of education • Expand high quality pre-school education • Maintain competitive academic standards including the Common Core State Standards and Michigan Merit Curriculum • Reward schools, teachers and leaders performing at a high level • Require high school graduation to be based on meeting college or career readiness benchmarks Increase the number of workers with education and training beyond high school • Increase out-of-state college enrollment to the national average without reducing in-state access • Attract educated workers and skilled immigrants to Michigan • Expand just-in-time, customized worker training programs • Develop a long-term strategy to ensure Michigan has a Top Ten community college and university marketplace Achieve Top Ten community college and university affordability by increasing performance-based funding Improve the connection between education and careers • Increase opportunities for high school and college students to participate in school-to-work transition experiences • Require community colleges and universities to track graduate placement results 15 worst urban roads 45th career & college ready 21% highest average debt per college graduate 8th bad bridges 1,354 currently in Michigan $660,000,000 In 2013, the VantagePort region benefitted from $660 million worth of new property investment and the creation of 974 new jobs.
  • 20. GRoW Goal Michigan is known as a hub of innovation and as a thriving, welcoming state Why it’s important Michigan must cultivate its strongest assets to ensure lasting prosperity. From our core cities to our abundant human, technological, and natural resources, we can make the most of what we do best to grow a brighter future for our state Indicator of success Top Ten state for jobs, personal income, GDP and population 2014 Michigan Turnaround Plan16
  • 21. the rate2X Top 10 10% New Michigan opportunity jobs are growing of business owners in Michigan are immigrants over of the state as a whole $31 Billion per year with Top 10 performance in New Michigan opportunities in R&Dfor R&D Expenditures at Universities Michigan can grow total economic output 17 Grow a New Michigan economy by leveraging assets with the greatest potential to meet future global economic needs (see p. 18-19) • Engineering talent into a Global Engineering Village • Geographic location into a Gateway to the Midwest • Automotive industry into a Global Center for Mobility • Natural resources into a Natural Resources Economy • Health and medical expertise into a Life Sciences Hub • Higher education system into a Higher Education Marketplace Grow Detroit into a thriving central city by attracting new investment, improving city services and repopulating neighborhoods • Champion the delivery of the basics: safety, services, ethics, fiscal integrity • Encourage greater alignment on community priorities • Facilitate job creation Make Michigan an aspirational destination by being a welcoming place to all • Attract skilled immigrants and facilitate their relocation transitions • Expand cultural exchange programs • Prohibit discrimination based on sexual orientation for employment just like we do for race, color, religion, sex, national origin or disability Reclaim Michigan’s reputation as a center for innovation by advancing a holistic strategy • Become a Top Ten state for the availability of venture capital • Provide Top Ten entrepreneurship and innovation services • Remove legal and regulatory barriers to entrepreneurship and innovation • Promote the automotive and manufacturing industries as engines of innovation • Showcase Michigan’s innovation at entry portals to the state – define visitor and resident perceptions by featuring innovative Michigan products and services • Become a convening center for entrepreneurship and innovation conferences, competitions and research GRoW
  • 22. 2014 Michigan Turnaround Plan18 ENGINEERING TALENT Global Engineering Village Brand the engineering sector • Grow engineering education capacity • Grow engineering firms Potentialwaystoleveragetheassets:Opportunities:Assets: GEOGRAPHIC LOCATION Gateway to the Midwest Consolidate logistics base into Michigan • Scale & aggressively market the VantagePort • Invest in strategic trade-related infrastructure (e.g., roads, bridge, tunnel, rail) HIGHER EDUCATION SYSTEM Higher Education Marketplace Strengthen quality, affordability, productivity & economic impact • Grow university enrollment • Grow industry & university funded R&D • Grow commerciali- zation of R&D NATURAL RESOURCES Natural Resources Economy Grow agricultural processing and exports • Grow leisure tourism • Lead in alternative energy technologies AUTOMOTIVE INDUSTRY Global Center of Mobility Lead in sustainable mobility and multi-modal systems • Lead in vehicle/ infrastructure technology to improve road safety • Market & grow the auto industry HEALTH & MEDICAL EXPERTISE Life Sciences Hub Create a Hub for bio-pharmaceutical R&D • Become the Center for research, testing & medical labs • Grow medical tourism A 10-year plan to leverage distinctive Michigan assets to grow a New Michigan economy Strong base of entrepreneurism, innovation and manufacturing newmichigan n 1 Compete 2 Invest 3 Grow
  • 23. 19 The Michigan Turnaround Plan features an aggressive strategy for growing a New Michigan economy. It identifies opportunities based on Michigan’s unique assets with the highest potential to create thousands of good paying jobs over the next ten years. The framework for a New Michigan economy highlights six areas. If leveraged properly, each offers great promise for success. Together, they have the potential to make our state into a vital economic powerhouse. Global Engineering Village Global demand is increasing for high-tech manufacturing industries such as aerospace, medical devices, and precision instruments.These and other industries rely heavily on quality engineers, who are in abundance in Michigan. Encouraging the automotive industry to adopt cutting-edge technology, fostering innovation in advanced manufacturing industries, and embracing start-ups can help Michigan capitalize on this opportunity. Gateway to the Midwest The movement of goods and people is crucial to economic growth and success. Michigan’s geographic location enables it to be accessible by road, rail, sea, or air. Michigan can build on this advantage by advancing as an integrated, multi-modal hub for trade. Specifically, Michigan has the capacity to encourage the development of aviation-dependent businesses and international border crossings. Higher Education Marketplace Economic growth is being driven by gains in productivity, and gains in productivity are driven by talent and talent-generated innovation.As a primary source of both talent and innovation, our higher education system represents a major opportunity to grow Michigan’s economy. In addition, higher education institutions are drivers of economic growth as they bring students, employers, and additional spending to local economies. Natural Resources Economy Today, the demand for natural resources is more pressing than ever. The development of technologies that maximize the production of scarce resources in a sustainable way is crucial for succeeding in natural resources markets. Michigan also has competitive advantages in agricultural innovation, and can leverage its natural beauty to increase its tourism industry. Global Center for Mobility Michigan has been a center for automotive innovation for as long as cars have existed. The state has a unique opportunity to continue to expand with the automotive industry, by transforming the existing automotive cluster to a hub of a diverse set of industries that meet the demands of global mobility. Michigan can increase its focus on multi-modal sustainable transportation. Life Sciences Hub The demand for a higher quality of life persists among developing and developed nations alike. The search for life sciences solutions is causing health care expenditure growth to outpace GDP growth in the developed world. Michigan produces a large number of bio-science degrees. This combined with its high-end medical research facilities, and expertise in bio-pharmaceutical products and medical devices gives Michigan unique advantages to advance as a Life Sciences Hub. newmichigan newmichigan newmichigan
  • 24. 2014 Michigan Turnaround Plan20 Since the Michigan Turnaround Plan was released in 2009, significant actions have been taken or are underway that align with the plan. The following shows the progress made to date— approximately one-third of the original plan has been addressed. WhAt’s been ACCompLIshed
  • 25. 21 Responsibly Manage Finances • Improved revenue and expenditure forecasts • Multi-year financial and budget plans • Citizen friendly balance sheet • Reduced state debt by one-third • State agencies required to implement spending plans with a strategic mission, vision and goals • Improved state bond rating Effectively & Efficiently Provide Public Services • Aligned public employee health care premiums with the private sector • Removed statutory barriers and provided incentives to encourage local service sharing • Passed public school employee retirement reforms estimated to reduce unfunded pension and health care liability by $16 billion • Passed emergency manager law to help locals “fix the basics” Create a Competitive Business Climate • Improved Michigan’s corporate tax climate by replacing the MBT with a flat corporate income tax • Improved Michigan’s regulatory climate by: rescinding over 1,000 obsolete and redundant rules; and requiring a cost benefit analysis for all proposed rules • Passed legislation to allow for the gradual phase-out of the Personal Property Tax • Expanded technical worker training • Grew venture capital to #19 nationally • Reformed Unemployment Insurance system Strategically Invest for Future Growth • Increased funding for higher education based on performance • Increased access to early childhood education for underserved students • Increased funding for transportation • Reached agreement to build new international bridge Accelerate the Growth of Cities & Metros • Adopted Michigan urban strategy • Increased investments in cities • Adopted regional economic development model Leverage Assets to Grow the New Michigan • Identified Michigan’s six most promising existing assets to accelerate growth • Developed and implementing strategies for 4 of the 6 assets: Higher Education Marketplace, Gateway to the Midwest, Global Engineering Village and Global Center of Mobility progress to date
  • 26. JEFF M. FETTIG CHAIR OF THE BOARD Whirlpool Corporation TERENCE E. ADDERLEY Kelly Services, Inc. KEITH ALLMAN Masco Corporation G. MARK ALYEA Alro Steel Corporation GERARD M. ANDERSON DTE Energy Company DAVID W. BARFIELD The Bartech Group, Inc. MARY T. BARRA General Motors Company ALBERT M. BERRIZ McKinley, Inc. MARK J. BISSELL BISSELL Inc. STEPHEN K. CARLISLE General Motors Company JOHN C. CARTER Chase MARY SUE COLEMAN University of Michigan TIMOTHY P. COLLINS Comcast Cable ROBERT S. CUBBIN Meadowbrook Insurance Group, Inc. WALTER P. CZARNECKI Penske Corporation KURT L. DARROW La-Z-Boy Incorporated DAVID C. DAUCH American Axle & Manufacturing RICHARD L. DeVORE PNC Financial Services Group DOUGLAS L. DeVOS Amway ALESSANDRO DiNELLO Flagstar Bank J. PATRICK DOYLE Domino’s Pizza JAMES E. DUNLAP Huntington MATTHEW B. ELLIOTT Bank of America WILLIAM CLAY FORD, JR. Ford Motor Company DANIEL GILBERT Quicken Loans Inc. ALFRED R. GLANCY III Unico Investment Group LLC DAN GORDON Gordon Food Service, Inc. JAMES P. HACKETT Steelcase Inc. RONALD E. HALL Bridgewater Interiors, LLC RICHARD G. HAWORTH Haworth, Inc. CHRISTOPHER ILITCH Ilitch Holdings, Inc. MICHAEL J. JANDERNOA Perrigo Company MILES E. JONES Dawn Food Products, Inc. HANS-WERNER KAAS McKinsey & Company ALAN JAY KAUFMAN Kaufman Financial Group JOHN C. KENNEDY Autocam STEPHEN M. KIRCHER Boyne Resorts WILLIAM L. KOZYRA TI Automotive Ltd. BLAKE W. KRUEGER Wolverine World Wide, Inc. BRIAN K. LARCHE Engineered Machined Products, Inc. TIMOTHY D. LEULIETTE Visteon Corporation ANDREW N. LIVERIS Dow Chemical Company KEVIN A. LOBO Stryker Corporation DANIEL J. LOEPP Blue Cross Blue Shield of Michigan EVAN D. LYALL Roush Enterprises, Inc. BEN C. MAIBACH III Barton Malow Company DENNIS MANNION Palace Sports & Entertainment and Detroit Pistons RICHARD A. MANOOGIAN Masco Corporation FLORINE MARK The WW Group, Inc. DAVID E. MEADOR DTE Energy HANK MEIJER Meijer, Inc. MICHAEL MILLER Google, Inc. FREDERICK K. MINTURN MSX International PAUL J. MUELLER The Hanover Insurance Group MARK A. MURRAY Meijer, Inc. JAMES B. NICHOLSON PVS Chemicals, Inc. WILLIAM U. PARFET MPI Research CYNTHIA J. PASKY Strategic Staffing Solutions ROGER S. PENSKE Penske Corporation WILLIAM F. PICKARD GlobalAutomotiveAlliance SANDRA E. PIERCE FirstMerit Michigan GERRY PODESTA BASF CHARLES H. PODOWSKI The Auto Club Group JOHN RAKOLTA, JR. Walbridge MICHAEL T. RITCHIE Comerica Bank DOUG ROTHWELL Business Leaders for Michigan ANDRA M. RUSH Dakkota Integrated Systems, LLC JOHN G. RUSSELL CMS Energy Corporation/ Consumers Energy Co. RICHARD F. RUSSELL Amerisure Companies ALAN F. SCHULTZ Valassis J. DONALD SHEETS Dow Corning BRAD SIMMONS Ford Motor Company LOU ANNA K. SIMON Michigan State University SAM SIMON Atlas Oil Company MATTHEW J. SIMONCINI Lear Corporation BRIG SORBER Two Men And A Truck/International, Inc. ROBERT S. TAUBMAN Taubman, Inc. GARY TORGOW Talmer Bancorp SAMUEL VALENTI III TriMas Corporation STEPHEN A. VAN ANDEL Amway MICHELLE L. VAN DYKE Fifth Third Bank JAMES R. VERRIER BorgWarner Inc. BRIAN C. WALKER Herman Miller, Inc. THOMAS J. WEBB CMS Energy Corporation WILLIAM H. WEIDEMAN The Dow Chemical Company M. ROY WILSON Wayne State University ROGER J. WOOD Dana Holding Corporation WILLIAM C. YOUNG Plastipak Holdings, Inc. Charter One Delta Air Lines, Inc. *This list represents the board members at the time of printing. For a current list, visit businessleadersformichigan.com. Business Leaders for Michigan - 2014 Board of Directors 2014 Michigan Turnaround Plan22
  • 27. Michigan is our home. Business Leaders for Michigan members work, live and raise their families here. We are the companies that you and your neighbors have worked for, shopped at or been served by for years. We are committed to Michigan and show that commitment every day by reinvesting in our state. We are convinced that our state has a bright future ahead. We invite you to join us in driving strategies that accelerate Michigan’s turnaround. Research for the 2014 Michigan Turnaround was conducted by Business Leaders for Michigan and Anderson Economic Group, a research and consulting firm with expertise in economics, public policy, finance, and industry analysis. The data presented in this report come from several sources, most of which are publicly available. For a detailed list of the sources, please see Appendix A at: www.businessleadersformichigan.com/MTPappendix