Published in Economic Development

Economic developer: Time for Michigan to ‘punch back’ on competitiveness

BY Monday, December 20, 2021 11:01am

Economic development leaders and elected officials have mobilized in recent months to attract major advanced manufacturing projects after Ford’s announcement of $11.4 billion in battery and assembly projects in Kentucky and Tennessee. The Right Place Inc. President and CEO Randy Thelen called it the “straw that broke the camel’s back,” foreshadowing multiple new economic development efforts statewide. Thelen recently discussed potential new incentives, as well as labor market forces that are shaping his outlook for the year ahead.

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Given the economic development mobilization we’ve seen statewide over the past few months, what kind of a catalyst was Ford’s announcement to invest in Kentucky and Tennessee?


From an economic development standpoint, that decision was the straw that broke the camel’s back. That was the ‘this is real’ kind of moment. But this isn’t a surprise. There have been signs of the move toward electrification for a number of years. Next year, virtually every OEM around the world has indicated battery investment plans totaling in the tens of billions of dollars.

But Ford is a company near and dear to our heart in the state. That was a decision that really jolted everyone into action. It’s too bad it took that kind of punch, but now Michigan is gearing up to punch back.

The Legislature just moved quickly to approve major economic development funds and incentives. What’s your response to criticism that called the proposed programs “bribery” and a misuse of public funds to compete with states?

On incentives, if we just stay with automotive investments — where they have been concentrated over the last 40 to 45 years — Michigan time and time again has found itself on the losing end of those decisions. To me, it looks like Michigan has decided to take a southern strategy, to fight fire with fire and have a more level playing field. You don’t want to win business or a project because you have the best incentive package in the world, but you don’t want to lose because you’re not competitive. We have a tremendous business climate here. We have assets to build from, but there are times on certain projects where it does come back to that competitive landscape.

The Right Place recently expressed a generally strong economic outlook for the region, but are there aspects that the region needs to focus on to compete?

It’s fundamental that we’ve got to see this as an opportunity for 2022. Between unemployed people plus the number of people who have left the workforce altogether, we’re looking at 32,000 people who are unemployed and 33,000 who have left the workforce (in greater Grand Rapids). We’ve got to find a way … to get more of those folks back to work. That’s going to be the big test for us as a region. We have the highest number of job postings currently than we have in history.

What strategies are there for bringing people back who left the workforce?

If you look at the 33,000 people who’ve left the workforce, we know a good portion have taken early retirements. Finding ways to get those people back might mean two- or three-day work weeks. Or more flexible work-from-home options for those particular employees. For parents, and particularly women, who have left: Could a job share model work where one works three days and a partner works two days? 

Those flexible approaches are a big piece of it. A number of employers have moved wages up to try to entice people back. That’s an element of it.

Is there anything about your 2022 outlook that you hope is proven wrong?

It’s not just me, but I hope all economists: We just saw 6.8 percent inflation year over year. That type of inflation particularly has a heavy impact on lower-income workers. As food and gas prices go up and a higher percentage of income is going to things, it leaves less money for rent, utilities, and quality of life types of things. Inflation is just an awful, awful force within the economy that we have to try our best to avoid. I would hope our economists are wrong, but I don’t think they are: We will see inflation next year that will be tough.

— Interview conducted and condensed by Andy Balaskovitz

Read 1752 times Last modified on Tuesday, 21 December 2021 08:39