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Industry Insider - Two four-letter words: Rust Belt

Monday, January 24, 2011

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By Mark Lee
Manager of Membership Development
Michigan Manufacturers Association
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Enough already! Why is it that people outside of our state like to call Michigan the “Rust Belt?” Manufacturing and Michigan have both gotten a bad rap and it is about time people realize the truth. First, Michigan’s auto industry is far from dead. Second, manufacturing contributes dramatically more to Michigan’s gross state product than any other sector, making it the backbone of our state’s economy.

In July 2010, Michigan led the country in employment gains. According to the U.S. Department of Labor, Michigan employers added 27,800 jobs. Manufacturers are leading the way and this is certainly due, in part, to the increase in automotive production. But manufacturing in Michigan is more than just auto.

Yes, the Big Three auto manufacturers are here and the great news is they are making new commitments to Michigan, reinvesting in plants and adding new jobs. But we are also home to thousands of other manufacturing companies in industrial sectors like furniture, food products, personal care products, aerospace, defense, plastics, pulp and paper, cement and many others. The majority of manufacturers are small and often family-owned businesses including the important tool, die and mold making sector. In the past few years, we have also seen new industries like solar, wind, battery and life sciences companies move to our state. All of these manufacturing sectors are helping contribute to our state’s turnaround. Now Michigan needs to eliminate barriers to manufacturing and growth to continue attracting new businesses while holding on to the companies that are already here.

Two more four letter words: Over tax’d

If our state taxes the manufacturing sector at a rate higher than most other states, how can Michigan’s industry compete? The competition doesn’t just come from the United States; our manufacturers compete daily with companies from around the world. To be competitive, Michigan’s manufacturers cannot pay higher taxes than businesses in other locations.

Companies looking at Michigan as a possible location to set up shop are asking the same question: if my company moves to Michigan, where the business taxes are higher, how can we compete? Michigan’s answer to this question is to give tax credits, or tax grants, to businesses moving or creating new jobs in the state. These incentives are absolutely necessary for Michigan to attract new jobs and investment. Unfortunately, the incentives have less of an impact on the competitiveness of businesses that are already here. This begs the question: why don’t we just tax manufacturers at a level competitive with other states?

Two additional four letter words: Move over

Everyone is familiar with the quote by Thomas Paine, made famous by Lee Iaccoca: “Lead, follow, or get out of the way.” As the only statewide association dedicated solely to the needs of manufacturers, the Michigan Manufacturers Association (MMA) has always tried to lead the way and move policies forward that help bolster our manufacturing community. In 2011 we are kicking in the turbo boosters.

Michigan has been given a new start. 2011 brings us a new governor, secretary of state, attorney general and the largest freshman class of legislators in Michigan’s history. MMA’s government affairs team is going to have their hands full teaching this new administration the importance of manufacturing to our state’s economy. Then, once they realize that manufacturing is truly the backbone of our state, we need to help them understand that the policies that benefit our vital industrial sector benefit everyone in Michigan.

MMA and the manufacturing community must work closely with the Snyder administration and the legislature to push forth a pro-manufacturing agenda. MMA will be urging policymakers to eliminate the personal property tax and change or eliminate the gross receipts portion of the Michigan Business Tax. Our government must also benchmark all departments and policies, comparing Michigan with other states. This includes comparing our tax structure, our cost of government and the speed with which we move things forward. These reforms can lower costs and reduce the need to put a high tax burden on our manufacturers.

Last four letter words: Grow jobs

Once we make Michigan competitive for manufacturers, companies will again move here without the need for tax incentives. The growth of manufacturing in Michigan, and increasing the competitiveness of companies already here, will bring jobs and prosperity back to Michigan. MMA will help lead the way.

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Columnist Bios

Chuck Hadden
President and CEO
Michigan Manufacturers Association
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Charles “Chuck” Hadden was named president and chief executive officer of MMA on September 15, 2008. He brings to the job over 15 years of experience with the nearly 3,000 member association, having previously served as the public policy officer and lead lobbyist representing manufacturers before the legislature and state agencies on a broad range of issues, including taxation, product liability, employment and insurance. During his tenure, Chuck was instrumental in obtaining passage of significant legislation that will benefit the manufacturing sector for years to come, including restructuring of Michigan’s tax and energy policies.

Hadden joined MMA in 1993 as director of environmental affairs. Previously, he served as account supervisor for Publicom Association Management Services where he served, simultaneously, as executive director of one national, and three state associations.

Hadden is a graduate of Alma College and completed course work in Administrative and Organizational Behavior with Central Michigan University’s Master of Arts Program. He also earned the Certified Association Executive (CAE) designation awarded by the American Society of Association Executives in 2004.

Hadden may be reached at 517-487-8550 or via email

Mike Johnston
Director of Regulatory Affairs
Michigan Manufacturers Association
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As director of regulatory affairs for MMA, Johnston is responsible for advocacy to state regulatory agencies and the legislature in the areas of air and water quality, solid and hazardous waste, wetlands, economic growth issues and electric industry restructuring. In addition to testifying on behalf of the manufacturing industry, Johnston leads several MMA member policy committees, including the MMA Air Quality, Water Quality and Environmental Quality Advisory Committees.

Amy Shaw
Director of Education & Employment Relations
Michigan Manufacurers Association
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Amy Shaw was appointed to the Michigan Manufacturers Association’s newly-created position of director of education and employment relations in 2001. She has more than 13 years of experience in program development and implementation, including eight years in her previous capacity as MMA’s director of education.