Category Archives: U.S. Auto Industry

Brookings: Great Lakes Metros Should Boost Exports

USA-ECONOMY/TRADE

The folks at Brookings released a report Monday on the importance of exports to the economies of Great Lakes cities.

Among the findings:

– Exports support 1.95 million jobs in Great Lakes metros

– Cities in this region have some of the highest volumes (dollar-wise) of exports and the greatest reliance on exports. Out of the nation’s top 100 metro areas, Chicago ranks third and Detroit ranks ninth in total dollar volumes of exports. Minneapolis, St. Louis, and Indianapolis all rank in the top 20, the study states.

How does your city compare?

“Now is a particularly critical time for Great Lakes areas to be smart about their export strategies,” the report’s authors write.

“There is new national attention to increasing the volume of US exports.  In his 2010 State of the Union Address, President Obama called for a doubling of US exports in the next five years.  Administration officials have also cited greater exports as a way to bolster the condition of the hard-hit manufacturing communities in the US.”

It’s part of a larger Brookings report on how the nation’s cities can lead export growth.

What conclusions should we draw?

“The metropolitan areas of the Great Lakes region are among the most globally engaged metros in the country,” says the report.

“They produce goods and offer services that are in demand around the world, particularly in rapidly emerging markets like Brazil, India, and China.  A national effort to double exports in the next fi ve years holds great promise for these metros that are already fairly export-oriented.  But this opportunity may be squandered if Great Lakes metros do not focus intensely on innovation, both in terms of expanding the range of products and services that they offer and in their specific product and service lines.  A legacy of success in exports does not guarantee future dominance, a lesson that Great Lakes metros should have learned through rough experience.”

What do you think?

-KG

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Filed under Economic Development, Featured, Good Ideas, regionalism, U.S. Auto Industry

From Colorado to Michigan

Editor’s note: This piece was contributed by Ivy Hughes, a Lansing, Mich.- based journalist. Read more about her on our contributors page. -KG

Five years ago my husband and I moved from Colorado to Michigan — by choice — for a job in the mortgage industry. We knew we were taking a huge risk, but at the time we had no idea we were venturing into a storm of opportunity we would have missed had we stayed in an economically thriving state.

Michigan is the underdog the media loves and the public, for varying reasons, hates. But how can a state most distinguished by its unemployment rate change course if its residents accuse new people, such as my husband and myself, and new ideas, of unforgivable naivety? Nearly every time I tell someone about my decision to swap states, they say, with unparalleled indignation and hopelessness: “Why would you ever move to Michigan?”

Moving to a state written off by everyone, including its residents, is wearing. My excitement about the move quickly dissipated and I feel into a rut of complaint and disaffection. But then I saw what many Michiganders no longer have the capacity or the desire to acknowledge: a tremendous undercurrent of energy. Outside of government, outside of the state’s old and dying entitlement structures lies a phenomenal strength in innovation and entrepreneurship.

During the last five years three technology incubators opened within five miles of my house; one of the most advanced superconducting cyclotron facilities in the world invested $550 million in Michigan State University (MSU); and Lansing became home to the world’s first building project to achieve double platinum Leadership in Energy and Environmental Design (LEED) designation. That’s to say nothing of the region’s existing successes, none of which are tied to the auto industry. Neogen, a publicly traded company that develops food safety and animal products, that produces more than $50 million in goods in Lansing every year, continues to add employees and increase both its regional and international presence. Liquid Web, a web hosting provider started years ago by a 17-year-old entrepreneur, made Inc. magazine’s 5,000 fastest growing companies in 2007 and recently opened a 90,000 square foot cloud computing center in Delta Township.

Lansing residents are well aware of these larger successes, but hundreds of small business owners from varying industries are fervently kicking down Michigan’s dilapidated wall of self-pity with successes of their own. Not one of these entrepreneurial endeavors is tied to the auto industry. Every single one of them is wrapped tightly in determination and held together by a sense of responsibility to create something cataclysmically transformative for Michigan. All of these ventures were started by entrepreneurs who saw potential in nothingness.

Some tag this energy Young Smart Global, a loose moniker that’s provided a networking resource for some of Lansing’s most innovative thinkers, but it’s more than a label, it’s a movement.

In less than a year, this movement has helped launch the Hatch, which provides enterprising MSU students incubation space and access to established local talent. Three Hatch graduates recently launched Spartanicity, a company that delivers food, books and other goods to dorm rooms. These same entrepreneurs also created Spartan Solutions, a non-profit offering $1,000 tuition scholarships and $500 books scholarships to college and university students throughout the state. This energy has also created mentorship programs, connecting students to local entrepreneurs and their networks, an invaluable resource for those looking to launch after graduation.

So what?

Because the students are connecting with entrepreneurs, they’re graduating and starting businesses HERE instead of in Colorado, California or New York and in turn, these young entrepreneurs are revitalizing the old ones, shooting a cocktail of desire, rejuvenation and hunger into successful veins unconsciously nearing collapse. They’re changing minds.

I was excited to move to Michigan, but that feeling quickly drained. Not because the mortgage industry collapsed — we were surprising calm when it happened — but because the people here made me feel as if I’d moved to the last place on earth, the one scorpions flick their tails upon.

At first we failed. We started and abandoned business ventures that didn’t work. After having a thriving career in Colorado, I worked as a waitress at a sports bar where I played the roll of old, objectified hag (I was in my early 20s). My husband was unemployed for several months. We failed again and again and so has Michigan. But it’s not that we have failed; it’s what we’ve done with those failures. I own a company and have more opportunities, I believe, than I would have had in Colorado. There’s less of a market to penetrate and in an environment where journalism jobs are as contagious as polio, I’m a successful working freelance journalist. My husband has created a niche within his own industry that he likely wouldn’t have been able to create in Colorado.

We created these opportunities ourselves and other young, enterprising people are doing the same.

Yeah, failure sucks. Michigan winters suck. Coming from Colorado, the lack of sunshine here is debilitating. It’s challenging, but so is life.

My question to Michigan natives is, “If you hate this state so much, why don’t you leave? And if you stay, why wait for a door to open when you have the opportunity to build the house?”

-Ivy Hughes

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Filed under Brain Drain, Economic Development, Editorial, Good Ideas, Green Jobs, regionalism, Rust Belt Blogs, The Media, U.S. Auto Industry

“Reverse Redlining” Reversing Black Progress

The New York Times is carrying an interesting article about the city of Memphis and the shrinking ranks of the local black middle-class.

As a result of predatory lending and job loss, residents the majority-black city have seen decades of economic progress reversed, The Times reports. The article focuses on the role played by Wells Fargo, and outlines the mortgage lender’s targeted efforts to sell high-interest loans in black neighborhoods. The results are hallowed out neighborhoods and declining wealth for blacks and latinos in metro Memphis.

According to the article, the weath gap between white families and black families is growing. For every $1 the average white family has in wealth, the average black or latino family has only 16 cents.

I wanted to highlight this article because this is very clearly happening in Cleveland and Youngstown and Detroit. The difference is, many black families have been suffering economically in Rust Belt cities for 30 years. This foreclosure crisis only compounds the problem.

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-AS

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Filed under Featured, Race Relations, Real Estate, The Media, U.S. Auto Industry, Urban Poverty

The Last Truck

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Has anyone seen the HBO Movie The Last Truck: Closing of a GM Plant?

It looks like it came out last year, so I’m a little late on this one. It is focused on the last few months of a plant in Moraine, Ohio (near Dayton).

-KG

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Filed under Economic Development, Labor, The Media, U.S. Auto Industry

The State of Metro America

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Editor’s note: This post was written by Alex M. Parker, a Washington, D.C.-based journalist. Parker is very familiar with the industrial Midwest, having written for The (Lorain, Ohio) Morning Journal and The (Toledo) Blade. You can read a recent analysis of Ohio politics he wrote for Salon.com here. -KG

A native of Indianapolis, I could always tell that there was a difference between my hometown and Cleveland, where I lived for several years. Both were Midwest, working-class types of towns, but Indy was more suburban, less dense, kind of like Cleveland without the hard edges.

According to a recent report from the Brookings Institution, The State of Metropolitan America, understanding the differences between Indy and Cleveland — or Columbus, or Pittsburgh, or Minneapolis — is a crucial part of understanding each city’s individual fix. The 172-page report, which already has received praise from mainstream pundits such as David Broder, compiles data from the U.S. Census Bureau’s American Community Survey to paint a demographic portrait of the United States, focusing on the 100 largest metropolitan areas.

The report also creates new categories to define cities, and supplant the regional definitions — Rust Belt, Midwest, etc. — that we’ve grown so used to over the years. The Midwest is carved up into three metropolitan types — the New Heartland, the Skilled Anchors, and the Industrial Cores.

New Heartland cities are actually mostly in the South, but they include Midwest cities such as Des Moines, Columbus, Indianapolis, Kansas City, and Minneapolis. With service-based economies, they have high growth, sort of through self-selective middle-class migration. So, their citizens are generally wealthier and better educated, but have less diversity, especially when it comes to Hispanics or Asians.

Next you have the “Skilled Anchors,” which haven’t seen the type of growth as the New Frontier cities, but have developed new post-industrial economies which attract high levels of education. These cities include Akron, Pittsburgh, Milwaukee, St. Louis, along with east-coast cities like Baltimore, Boston, and Philadelphia.

Then you have the “Industrial Cores”—the Youngstowns, Clevelands, and- Detroits — as well as some northeastern cities such as Providence, R.I. These cities have been hit with the triple-whammy — their populations have decreased, they remain less educated and diverse than other metro areas, and their residents are getting older. Despite massive population drops, their outer suburbs continued to grow.

On top of all that, you have Chicago, a “Diverse Giant”—basically, a mega-city like New York or L.A., which continues to attract large populations of immigrants, but has seen an overall drop in its growth over the past decade. (If you’d like to see more examples of the different categories, check out the report.)

According to the report, America got poorer, bigger, more diverse, and more economically divided over the past ten years. But the Midwest saw a different pattern. For the most part, immigrants did not flock to the Rust Belt or the Great Lakes states, and economic growth remained stagnant. While most of America recovered somewhat from the recession in 2001, according to the report, the recession never really stopped in the Midwest. Household incomes continued to dwindle, people (especially African Americans) continued to move out, and the overall population continued to get older. That is, except for the New Heartland cities, which managed to attract a certain type of person due to largely service-based economies.

As the report sees it, the biggest challenge facing New Heartland cities is keeping a well-educated workforce after Americans become less mobile due to the recession. Without an influx of middle-class, college-educated people, those cities will have to grow that talent themselves — and that means creating better school systems in urban and inner-suburb regions.

Skilled Anchor and Industrial Core cities face the opposite problem — keeping an aging workforce working. With a lack of young people due to the famous “Brain Drain,” the report recommends “efforts to keep the boomers connected to the labor market, even as they reach retirement age.” In the meantime, those cities should focus on re-centralizing their communities around core anchors, even though — in the case of the Industrial Cores — that could require “radical land-use interventions.”

The policy prescriptions are interesting, but for the most part have been heard before. And I’m a bit curious to hear how the different cities ended up as they are — why is Cleveland still stuck as an “Industrial Core,” while Pittsburgh has managed to transition into a “Skilled Anchor?” After all, Cleveland has spent millions trying to refashion itself as the medical capital of the Midwest, with the Cleveland Clinic as its anchor. Is it just dumb luck, proximity to Detroit and its auto industry, or are there policy decisions which lead to different outcomes? I suppose those types of “lessons learned” might come in a future report. But please, Brookings, take your time. With nearly 200 pages to pour over here, we’re plenty occupied with this one.

The report spills a lot of ink examining the suburbs, and the way they’ve changed over the past decade. The report strongly implies that our classic image of suburbia — a place where rich white people hide from the poverty of the cities — is out of date. While a suburbanite is still more likely to be white, and more wealthy, than a city-dweller, the picture is becoming much blurrier. Suburbs became more diverse during the 00’s, and they also became poorer. Try to wrap your head around this one — in Cleveland, the median household income of those living in the suburbs was nearly $30,000 more than those living in the city, which is nearly twice the average disparity in the nation. But during the past decade, Cleveland also saw more poverty (i.e., people below the poverty line), in its suburbs than it its urban areas. So did Baltimore, Detroit, Minneapolis, and San Diego.

Since the beginning of the recession, the cities have gained back part of what they lost to the suburbs. But overall, in the Midwest, the past decade is a story of expansive sprawl into metropolitan areas’ outer regions — even when the metro area, as a whole, is shrinking. Take this example: Excluding New Orleans, the metro area with the single largest drop in population last decade was Youngstown, Ohio. The city is also the country’s leader in the percentage of commuters who drive, alone, to work. Go figure. (The city also boasts the nation’s lowest income inequality, a truly perplexing statistic.)

“More than ever, the lines between cities and suburbs—and the long, fruitless history of battles and mistrust between them—must be transcended,” the report states. “Cities and suburbs increasingly share challenges like poverty, growing elderly populations, and influxes of new Americans.”

Unfortunately, most of the report’s policy recommendations — such as increased alignment between transportation planning and housing, reducing the deductibility of mortgage interest to slow the spread of housing, and increasing regionalism in metropolitan areas — are as well-known as they are politically unfeasible. As a policy prescription, it doesn’t cover much new ground. But the work by the Brookings Institution is invaluable as a portrait of how America is changing, and what might be in store for the Midwest.

-Alex M. Parker

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Filed under Art, Economic Development, Good Ideas, Headline, Politics, Real Estate, regionalism, Rust Belt Blogs, sprawl, The Big Urban Photography Project, The Media, U.S. Auto Industry, Urban Poverty

New Ways to Fight Blight?

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From the Flint Journal via Flint Expatriates:

Former Genesee County Treasurer Daniel Kildee is pushing for reforms to allow local governments to sue property owners who don’t take care of their homes- the proposed system would allow the Genesee County Landbank to recover costs of cleaning and fixing up homes, according to Flint Expatriates.

I’m curious to see if this idea goes further. A few years ago, when I was writing stories about vacant properties in Lorain, Ohio, Kildee’s Genesee County Landbank was often cited as a model other cities should copy.

Kildee is now the head of the Center for Community Progress.

-KG


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Filed under Economic Development, Featured, Good Ideas, Real Estate, regionalism, Rust Belt Blogs, The Housing Crisis, The Media, U.S. Auto Industry, Urban Planning

Want to hear some good news about Detroit?

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Here it is, from Aaron Renn at Urbanophile.

Thanks to Rust Wire reader and Detroiter Claudia Raleigh for bringing this to our attention.

What do you think about the points he makes?

-KG

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Filed under Economic Development, regionalism, Rust Belt Blogs, The Media, U.S. Auto Industry