Howes: Michigan needs to act like the Big 3

No excuses for LansingHow is Lansing restructuring the state bureaucracy to a) woo new investment and b) prepare the state for a smaller corporate community providing fewer semi-skilled manufacturing jobs for fewer people? Is Michigan benchmarking its cost-of-doing business against the best in the country, not the middle of the pack, and doing something about it? Like now, not after the 2010 election. And are Gov. Jennifer Granholm and the Legislature learning a valuable lesson from GM, for one? Namely, that the No. 1 automaker took less than two weeks to craft the most aggressive restructuring plan in the automaker's history -- halving its U.S. brand portfolio, closing plants, cutting jobs, reworking the debt-laden balance sheet? Two weeks, meet no excuses. If a financially distressed GM can do it, so can the state of Michigan. Unless, that is, its leaders are seeking yet one more reprieve from increasingly inevitable (and hard) economic choices, this time the prospects of an Obama administration stimulus package. 'Nothing has happened,' says Detroit Renaissance Chairman David Brandon, CEO of Ann Arbor-based Domino's Pizza Inc. 'They're not getting in the room and addressing the problem. Nobody wants to go do the hard work because they know it's going to be painful -- bold, painful change.' Renaissance has been shopping its structural reform agenda in Lansing -- transition public school teachers to defined contribution plans, reform corrections operations, modify health benefits for state employees, adopt two-year budgeting, eliminate binding arbitration -- but it's mostly going nowhere. 'Simply uncompetitive''We're falling behind,' says Doug Rothwell, president of the business group. 'We can't even utilize the talent we are producing' because it's graduating from the state's colleges and universities and decamping for jobs elsewhere. Says the study: 'We are simply (as) uncompetitive in knowledge-based industries (40 percent of the economy) such as finance and information as we are in manufacturing industries (only 19 percent of the economy) such as automotive.' Why? The cost of doing business is too high, as measured by comparatively higher average wages, higher business taxes, personal property taxes and local taxes. The strength of talent is sporadic, concentrated in engineering, for example, but overall the state's work force is less well educated than peer regions vying for knowledge-based talent. A stock response to all this would be to heap blame on the governor and Legislature, which might be directionally correct. But it's not even close to sufficient. Michigan's malaise, certain to get worse before it gets better, is deeply rooted in an under-educated, factory-first culture that is ill-equipped for the 21st century. It's also less willing to embrace change until it is absolutely necessary -- which, as more and more are unfortunately learning, often is too late. Daniel Howes' column runs Tuesdays, Thursdays and Fridays. He can be reached at (313) 222-2106, [email protected] or detnews.com/howes.

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