Friday, September 19, 2008

Link to real-time voting

Results of the West Michigan Regional Policy Conference real-time voting session can be seen here: 

This information will be reviewed and prioritized by the Grand Rapids Area Chamber of Commerce in collaboration with the West Michigan Chamber Coalition leadership. This is the first step toward setting a core list of final policy recommendations, which will be made public in the next 45 to 60 days.

Delegates challenged to act

The West Michigan Policy Conference is now history. The delegates voted to select their five top policy positions (from a list of many possible positions). A Conference report will be presented by the Chamber at an upcoming Economic Club event.

By far, the top two priorities selected by the delegates to move Michigan’s economy forward were:

1) Repeal and/or major revisions to the newly enacted Michigan Business Tax

2) Making Michigan a “Right to Work” state.

Neither was a surprise as the tone was set by opening speaker Robert Genetski, who used facts he had gleaned from hundreds of factual studies. And evidently, the delegates agreed with his assessment and call for action.

As the West Michigan Policy Conference wound down, after all the votes were tabulated, delegates were challenged by co-chair Doug DeVos to “take the process personally and act to keep the agenda alive. We will need your help.”

He added, “We will compile the scorecard, and keep you informed. This is just the beginning, but we know what your top priority is, and we will need your help to make it happen.”

The Business Journal staff did a great job of keeping readers informed on the conference progress.

We enjoyed the process and look forward to any feedback on our coverage.

Next Conference will be in September of 2010.

John Zwarensteyn, publisher

Downtown transit system comments

At Thursday's West Michigan Regional Public Policy Conference, Carol Coletta, pesident of a national network of urban leaders known as CEO's for Cities, talked about how cities can attract the next generation workforce - those in the 24 to 34 age group.

Coletta spoke about the characteristics of cities that that age group finds alluring. A member of the audience asked whether it was important for the core city to have dedicated transit system serving just the downtown area.

"Absolutely not," she replied.

Upon hearing that remark, a few people in the audience glanced toward Peter Varga, CEO of The Rapid transit system, and Jennifer Kalczuk, spokeswoman for The Rapid, who were both in attendance.

Varga said the Colletta's comment didn't concern him much because he didn't think people really understood what she was saying.

"What she was saying was that urban areas don't really need a small downtown transit system: What they need more is a robust regional transit system. I don't think she understands our context here, but if she did understand I think she would say that we have the transit system we need."

Anne Bond Emrich, reporter

Regional Policy Conference overview

During voting audience members were given the opportunity to tally their opinions on the following three themes and seven subject areas. They voted on intensity of each subject and ranked which were most important. Here are the final results by subject areas:


  • Economic Growth
  • Attraction and Retention of Businesses
  • Improve Government Functions

Seven Subject Areas:

  • Governance
  • Workforce of the Future
  • Michigan’s Education System
  • Investing in Higher Education
  • Health Care and Life Sciences
  • Attraction and Retention of Talent
  • Manufacturing and Design for the Future


  • Government Collaboration
  • Reform State Spending and Revenue Streams
  • Reform the structure of Michigan’s legislature

Governance topic rankings in descending order of intensity:

  • Reform State Spending and Revenue Streams
  • Government Collaboration
  • Reform the structure of Michigan’s legislature

Ways to reform state spending and revenue streams:

  • Eliminate the MBT with corresponding spending cuts: 75 percent of the vote
  • The state employee health care and retirement costs to an incentive plan based on the economic performance of the state: 21 percent
  • Reduce state spending across all budgets by 10 percent: 4 percent

Workforce of the Future:

  • Incentivize retraining of workers
  • Eliminate artificial wage setting
  • Remove mandatory union membership requirements

Topic rankings:

  • Remove mandatory union membership requirements
  • Eliminate artificial wage setting
  • Incentivize retraining of workers

Ways to remove mandatory union membership requirements:

  • Implement a right-to-work status for Michigan: 77 percent of votes
  • Oppose union efforts to remove secret ballot votes: 14 percent of votes
  • Prohibit striking by public employees: 9 percent of votes

Michigan’s Education System:

  • Incentivize school consolidation
  • Align Michigan’s curriculum with the needs of emerging industries
  • Institute public school spending reductions

Topic Rankings:

  • Align Michigan’s curriculum with the needs of emerging industries
  • Incentivize school consolidation
  • Institute public school spending reductions

Ways to align Michigan’s curriculum with the needs of emerging industries:

  • Align Michigan’s graduation requirement for a foreign language with emerging global markets: 30 percent of votes.
  • Provide financial incentives to school districts which offer industry specific academies: 40 percent
  • Expand required teacher continuing education credits to include in-site training with employers: 30 percent.

Investing in Higher Education:

  • Increase student diversity
  • Improve coordination among higher education institutions and secondary education systems
  • Create philanthropic and partnership incentives

Topic Rankings:

  • Improve coordination among higher education institutions and secondary education systems
  • Create philanthropic and partnership incentives
  • Increase student diversity

Ways to improving coordination among higher education institutions and secondary education systems:

  • Consolidate Michigan’s public universities: 16 percent of votes.
  • Allow college credit for high school student technical certifications: 32 percent
  • Create additional incentives for high school students entering dual enrollment programs: 52 percent.

Health Care and Life Sciences:

  • Align medical payment rates with provider performance and costs
  • Decrease the rising cost of care
  • Incentivize new research and product development technologies

Topic Rankings:

  • Align medical payment rates with provider performance and costs
  • Decrease the rising cost of care
  • Incentivize new research and product development technologies

Ways to align medical payment rates with provider performance and costs:

  • Increase Medicaid payments to physicians to improve access: 9 percent of votes.
  • Standardize cost recovery payments to all hospitals who provide uncompensated care: 19 percent.
  • Increase funding for providers with effective prevention practices: 72 percent.

Attraction and Retention of Talent:

  • Re-prioritize local governments development plans
  • Enhance investment in state transportation infrastructure
  • Coordinated campaigns to attract professionals to the region

Topic rankings:

  • Enhance investment in state transportation infrastructure
  • Coordinated campaigns to attract professionals to the region
  • Re-prioritize local governments development plans

Ways to enhance investment in state transportation infrastructure:

  • Support the creation of regional transit systems: 32 percent of votes.
  • Increase connectivity through stronger regional airports: 28 percent.
  • Update funding mechanisms for transportation infrastructure: 40 percent.

Manufacturing and Design For Future:

  • Create a tax structure to reward capital investments
  • Incentives for energy innovation
  • Streamline the state regulatory environment

Topic Rankings:

  • Streamline the state regulatory environment
  • Create a tax structure to reward capital investments
  • Incentives for energy innovation

Ways to streamlining the state regulatory environment:

  • Streamline the permitting process within state government: 45 percent of votes.
  • Remove visa barriers to attract and retain foreign skilled workers: 42 percent.
  • Effective “business ombudsman” from the private sector for state departments: 13 percent.

Action needed Now: Results of the voting

Here are the directives coming out of the Regional Policy Conference, in the order of importance:

1.The state government must eliminate the Michigan Business Tax and implement corresponding spending cuts.

2. Implement Right-to-Work in Michigan.

3. In health care, increase funding for providers who offer effective prevention practices.

4. To improve manufacturing/design for the future, streamline the state government permits processes.

5.To attract and retain talented employees to Michigan, “update funding mechanisms for transportation infrastructure.”

It's the MBT

Number one priority coming out of the West Michigan Policy Conference: Fix it, get rid of it -- just do something.

"It's hurting a lot of people and needs to be addressed," said Doug DeVos.

Pete Daly, reporter

Top five issues selected

Attendees at the Regional Policy Conference voted early this afternoon, identifying the top five issues to come out of the conference:

1. Eliminating or revising the MBT
2. Making Michigan a Right To Work state
3. Increasing certain types of funding in the Health Care sector
4. Streamlining the permit process
5. Attracting and retaining a young and talented workforce

Van Andel comments on health care

While the Van Andel Institute directly impacts health care, what researchers do at the institute is still a mystery to many people, David Van Andel said during a panel discussion at the regional policy conference this morning.

The work of VAI researchers will ultimately affect the cost of health care because the VAI is beginning to push medicine down to the personalized level, he said. That will translate into lower health care costs, he said, because treatments for individual patients will be highly targeted -- and money won't have to be wasted on trying a number of drugs before hitting on the right one or the right combination.

Van Andel said there are issues at both the state and federal levels that impact the VAI and its work At the federal level, there's the Food and Drug Administration and the long, arduous process of going through all the FDA channels to get approval for a new drug.

"If I make a discovery it can take 20 years and $850 million before I can bring that discovery to the market place," he said.

Van Andel noted that with the security measures put in place after the terrorist attacks of Sept. 11, 2001, restrictions tightened on green cards and that has made it more difficult to recruit scientists from other countries. This country is decades away from growing its own scientists, he said, so the institute has to recruit from other countries.

At the state level, he said, there's the Small Business Tax, which presents a barrier to start up companies -- companies that might want to spin off new discoveries made here -- and sends the message that Michigan is not really open for business.

Anne Emrich, reporter

Invest in higher education

Michigan is unwilling to invest in higher education, despite the indicators that an educated, creative, innovative and diverse workforce is crucial to the state's economic future: That's the message Grand Valley State University President Thomas J. Haas, who is leading the Presidents' Council of the State Universities of Michigan, brought to the West Michigan Regional Policy Conference this morning.

"I believe there is a culture of disinvestment in higher education in the state of Michigan," Haas told the West Michigan Regional Policy Conference this morning. "Is a degree a public good or just a commodity? We need to look at a degree as a public good."

Haas was joined on the "Investing in Higher Education for Michigan" panel by Ferris State University President David L. Eisler, Northwestern Michigan College President Timothy J. Nelson and Kalamazoo College President Eileen B. Wilson-Oyelaran. They spoke to business and political leaders who will be voting this afternoon on policy initiatives they would like chambers of commerce in West Michigan to pursue in Lansing.

"I think we need to look at the outcomes, the results that we desire. In a way, maybe it's time for a similar Marshall Plan for higher education, where we look at all the different parts of the system and look at what we can do together with our state leaders and others in the business community," Haas said. "In order to have an effective policy, I do think we do need to have a rational, predictable and sustainable investment policy with the state, and I think maybe those tax incentives can go along with it. All of us in higher education must be held accountable in our fiscal responsibilities. Financial aid needs to be a part of it."

Among other comments during the session:

  • Private colleges in West Michigan enroll 26,500 students, or 19 percent of all local college students, Wilson-Oyelaran said. "We are intimately involved in the preparation of talent in this area," she said.
  • Ferris State University's career-oriented curriculum brings the college in close contact with business through industry councils, Eisler said. "We help connect students with great careers," he said.
  • Because of the lack of diversity in northern Michigan, Northwestern Michigan College, a community college in Traverse City, must search out ways to connect its homogenous student body with a diverse world to make sure students are prepared to compete in the global economy, Nelson said. "We believe the economy in this state will develop on a regional basis. The northern Michigan economy will develop differently than the West Side of the state," Nelson added.
  • "When you think about internships, think more broadly than just a student who comes to work in your business or industry," Eisler said. "Think about support and advice where you become a member of one of our advisory councils, you become an extension of our university in terms of helping that student be successful in the career, and we form these partnerships that help drive our economy forward."
  • "It's not just the state legislature.... All of us together in business and higher education need to come together to attract and retain our talent here," Eisler added.

After the session, Michigan State University President Lou Anna Simon and Haas announced a new program to provide a "pathway" to allow up to five GVSU pre-med students to move seamlessly into MSU's College of Human Medicine. Haas said the arrangement is similar to one he forged while working in New York.

Elizabeth Slowik, reporter

Why health care industry is sick

From underfunded Medicaid to a payment system called "perverse" by Metro Health Hospital CEO Mike Faas, health care leaders today told Regional Policy Conference attendees what is making their industry sick.

In a session moderated by Michigan State University President Lou Anna Simon, Faas was joined by Spectrum Health President & CEO Rick Breon, Mercy Health Partners President & CEO Roger Spoelman and Van Andel Institute CEO David Van Andel.

Among the topics the hospital executives identified for those voting this afternoon on policy issues: Low payments from Medicaid that cost West Michigan hospitals hundreds of millions of dollars annually; term limits that boot legislators out of office just as they are beginning to understand health care issues; workforce development, such as recruitment and training; the shortages of nurses; and a system of payment that pays providers "to do something to people, not for them," as Faas put it.

The men -- including Breon, whose organization owns Priority Health, which is one of two dominant insurers in West Michigan -- said they recognize that business owners and their employees are nearing a breaking point of affordability for health insurance. Breon said he expects that many more people in the future will be sent out into the individual insurance market. He called for a thorough "vetting" of issues on any legislative reform in the insurance market. Priority Health vigorously opposed legislation proposed last year by Blue Cross Blue Shield of Michigan to reform the individual insurance market.

"There is no plan for changing health care, and that has to change," Breon added.

Opening the session was BCBSM President & CEO Daniel J. Loepp, whose nonprofit company was a major sponsor of West Michigan's first-ever policy conference.

Additional comments from this morning's session on The Business of Health Care and Life Sciences:

"This is a taxation you've not voted for which you are paying for," Breon said of the gap between Medicaid payments and the health care costs, which are passed on to employers via premium increases.

"One of the reasons we haven't had comprehensive reform in this state is term limits," Breon added.

"We need to do more coordination of all services so we can recruit and train the medical professionals this region needs," said Spoelman. Recruitment, particularly of specialists, was a major issue in the April merger of Hackley Hospital and Mercy General Health Partners that created Mercy Health Partners, owned by Trinity Health. "We do a good job of recruitment and training, but don't do a good job of retaining."

"Without moving to universal coverage, I'm not convinced health care is going to be able to reduce costs," Faas said.

Breon defended Spectrum Health's construction binge, and said the system may spend another $700 million over the next decade. "If you look at the actual amount of premium cost associated with all the building, it's 3 percent," he said. Faas, who presided over last year's move of Metro Health Hospital from Grand Rapids to a new $160 million facility in Wyoming, agreed that health care costs are far more connected to the personnel than the bricks and mortar.

"One of the things we haven't done is raid each other's nurses in a bidding war," said Faas. They noted that the biggest bottleneck in educating more nurses is providing enough qualified instructors.

"We can make changes in Medicaid and you don't have to add one dollar to the system," Breon said. "Just look at who is the most efficient, who makes it work and copy those things."

Elizabeth Slowik, reporter

MSU, GVSU announce partnership

Michigan State University President Lou Anna Simon and Grand Valley State University President Thomas Haas Friday announced a new partnership that will funnel GVSU pre-med students into MSU' s medical school.

"We're thrilled to bring an announcement of a significant agreement that provides a pathway for GVSU students in the pre-med program directly to the medical college at MSU," Haas said. "We want to keep our talent here."

Simon said the details are not yet clear, but Haas said five slots will be reserved at the MSU medical school for GVSU students who have completed requirements of the program.

"It's a great relationship ensuring some of the best and brightest students in West Michigan are ensured access from Grand Valley to MSU." Haas said.

Higher education requires a commitment to invest in the workforce in Michigan, Haas earlier said at Friday morning's session at the Regional Policy Conference, sponsored by the Grand Rapids Area Chamber of Commerce and other West Michigan chambers.

On the panel, Ferris State University President David Eisler, Northwestern Michigan College President Timothy J. Nelson and Kalamazoo College President Eileen B. Wilson-Oyelaran joined Haas, who leads the group representing presidents of the state's 15 public universities. "I believe that emphasized the importance of private and public colleges in moving Michigan's economy forward.

"I believe there is a culture of divestment in higher education in the state of Michigan," Haas told the political and business leaders gathered at the breakfast event. "We need to look at a college degree as a public good."

"I do believe this is just a positive note of collaboration between our two institutions," he added. "We are looking at ways to advance our institutions and ways to advance this region and our state."

Elizabeth Slowik, reporter

George Will blends humor and anger

Using his knowledge and love of baseball, lifelong Chicago Cub fan George Will wowed the Chamber’s Regional Policy Conference dinner audience Thursday with his irreverent views on the political situation in Washington, the economy, baseball and the Presidential race. He managed to add some harsh words for both President Bush and John McCain.

He had fun with his baseball anecdotes, especially with the success of the “Chicago Cubs’ 100 year rebuilding effort finally paying off,” and “You know that every team can have a bad century.”

McCain was cited by Will for the “honorable” positions he frequently takes when discussing his views and positions, which make it difficult for anyone to have serious policy disagreements with anything he says without seeming dishonorable. Will suggested this characteristic display of righteous indignation by McCain will contribute to more polarization in Washington, not less as promised, should the McCain-Palin ticket win in November.

He called George Bush "the most liberal President in the history of the US," due to the growth of the federal government under his watch, especially taking on the debt of huge corporations. Will admitted, in spite of his lifelong conservative credentials, he was angry with the Bush administration for all these recent huge bailouts and other federal power grabs. He expressed concern that this will only lead to more efforts by corporations to get similar bailouts. So the policy implications of all this are “profits are viewed as private, but losses are public.” That is not a good policy for this country.

The danger, of course, from all this mountain of debt is the only way (or, the usual way) the federal government reduces debt is to encourage inflation. This is not a good prescription for our country.

More on the conference in Monday's GRBJ.

John Zwarensteyn, publisher

DeVos cites leadership qualities

People sometimes ask Amway co-founder Rich DeVos how he and his longtime friend and co-founder, the late Jay Van Andel, built their business. His response:"We went to work every day."

Their work ethic and their ability to lead and motivate people were key to their success.
DeVos shared with participants in the regional policy conference this afternoon the characteristics he believes makes for great leaders:
  • A leader sets the tone, attitude and atmosphere in his community, business and home.
  • A leader has the ability to communicate well
  • A leader motivates people
  • A leader is a giver
  • A leader is a builder
Businesses aren't coming to Michigan because the atmosphere in this state is not good, DeVos said, and he said that's due to a lack of leadership on the part of Gov. Jennifer Granholm. The atmosphere in West Michigan, however, is favorable because people in this region work together to get things done: We have a more welcoming, nourishing atmosphere here, he said.
DeVos said future growth in West Michigan will be generated by the people who live here, as it has been in the past.

"The main thing to do is stop thinking that somebody is going to come in and build a big factory here and create a lot of jobs," he said. "We're going to do it. Growth is going to come from us and our children."

David Van Andel comments on health care

While the Van Andel Institute directly impacts health care, what researchers do at the institute is still a mystery to many people, Chairman and CEO David Van Andel said during a panel discussion at the regional policy conference this morning.

The work of VAI researchers will ultimately affect the cost of health care because the VAI is beginning to push medicine down to the personalized level, he said. That will translate into lower health care costs, he added, because treatments for individual patients will be highly targeted -- and money won't have to be wasted on trying a number of drugs before hitting on the right one or the right combination.

Van Andel said there are issues at both the state and federal levels that impact the VAI and its work At the federal level, there's the long, arduous process of going through all the Food and Drug Administration channels to get approval for a new drug.

"If I make a discovery, it can take 20 years and $850 million before I can bring that discovery to the market place," he said.

The security measures put in place after the 9/11 terrorist attacks led to tightened restrictions on green cards, and that has made it more difficult to recruit scientists from other countries. This country is decades away from growing its own scientists, he said, so the institute has to recruit from other countries.

At the state level, he said that the Small Business Tax presents a barrier to start up companies that might want to spin off new discoveries made here -- and the tax sends the message that Michigan is not really open for business.

Anne Bond Emrich, GRBJ Reporter

Discussions, DeVos and decisions

Grand Rapids Area Chamber of Commerce Regional Policy Conference, entering its second and final day after lengthy sessions on Thursday, planned to present divergent points of view and provide multiple discussion points on a number of issues facing the state and regional economy.

Attendees will vote this afternoon to determine which of those issues should become part of a long initiative marshaling resources from throughout West Michigan for resolution. Sessions today will include investment in higher education, and the business of health care and life sciences.

Amway co-founder Rich DeVos is the keynote speaker during the luncheon. He is expected to focus on leadership and partnership topics. And the votes from more than 600 participants are expected immediately after.

Grand Rapids Business Journal reporters will continue to provide updates today as the conference continues.

Carole Valade, editor

Thursday, September 18, 2008

Session Chooses Five Changes For Government

Perhaps the biggest omission at the Thursday session on government at the Regional Policy Conference was that the panel didn't include a current public official.

No mayor, city manager, township supervisor, state lawmaker or county administrator was at the table to tell the audience about the difficulty of running a unit, the feasibility of consolidating services, or the probability of merging with another unit of government  -- which were key points of discussion during the two hour session that was moderated by former Senate Majority Leader Ken Sikkema. Although plenty of local public officials attended the session. But what Phil Power of The Center for Michigan, Michael Shea of Government Strategies LLC, and Louis Schimmel of Municipal Financial Consultants, the panelists, did say led the audience into choosing the following five changes that need to be made for the state and the region to get back on track.
  1. Remove the barriers and create rewards for local governments to consolidate services. The key state barriers to doing so are three laws that require the highest established pay scale to be enacted when services are consolidated, and eliminate Public Act 312 of 1969 that calls for binding arbitration when a unit reaches a labor impasse with public safety employees, such as police and fire.
  2. Repeal and/or modify the state term-limits statute
  3. Elect only honest, courageous and visionary leaders to state and local government posts.
  4. Set a benchmark for public pay and benefits packages.
  5. Eliminate the Michigan Business Tax and cut state spending.

"If we keep doing what we've done, we will keep getting what we got," said Power, who paraphrased former General Motors CEO Roger Smith.

David Czurak, reporter

Education panelists offer divergent solutions

For National Heritage Academies chairman and business J.C. Huizenga, competition will cause all education boats to rise and improve the quality of graduates.

Frank Fuller of Florida State University is a proponent of close cooperation with industry to produce graduates with skills of value in the global marketplace.

Reeths Puffer Public Schools Superintendent Steve Cousins wants to see more ways to reach students of all abilities, including the 17.74 percent in his district with disabilities.

The three panelists presented three divergent solutions to the malaise they see besetting public education in Michigan and across the U.S. at the first-ever West Michigan Regional Policy Conference being sponsored by the Grand Rapids Area Chamber of Commerce today and Friday at DeVos Place.

The conference is drawing 400-plus attendees that include a Who's Who of West Michigan business and political leaders.

Education session moderator, former Republican Lt. Governor Dick Posthumus, said he'd like to see the idea of aligning high school curriculums with marektable industry certifications brought before chamber members for a vote Friday afternoon.

Posthumus noted that while Michigan test scores lag in math and English, the state is ninth in science, and he wondered whether the factors producing that brighter showing could translate to the other subjects.

Cousins described Reeth Puffer's Transitions Academy, which targets middle students for additional reinforcement in math instruction.

"We believe we've found the secret sauce," Huizenga said. "Only through privatization comes competition. Competition works in business. It drives us to our personal best. Anything the government can do, the private sector can do just as well or better at half the cost."

Fuller led an effort to revamp the high school curriculum to meet globally recognized certifications and test results, such as certifications in technology and manufacturing as well as Advanced Placement and International Baccalaueate. "Your solutions have to be done regionally and cannot be done through incumbent state agencies. You're just going to have to find a pathway to lead these incumbent state agencies to your outcome, not theirs."

Elizabeth Slowik, reporter

Future Workers

Three people got together to debate the best way to move forward with Michigan's workers and Right to Work. Those three workers were Birgit Klohs, president and CEO of The Right Place Inc.; Stan Greer, project director, National Institute for Labor Relations Research; Bill Black, legislative and community affairs director, Michigan Teamsters...and it only got a little scary.

The group discussion continually came back to three main points of education, unions, and retraining members of the workforce who have lost their jobs and have no other skill sets.

Klohs pointed out that when people make decisions about where they live, a major determining factor is the workforce. She also pointed out that manufacturing is still alive in West Michigan, but the way it is executed is changing. Baby boomers are retiring soon and when that is combined with a low educated workforce, the outlook can be scary.

When it comes to Right to Work, the debate heated up. The major issues around unions came from job classifications. The arguments against Right to Work include: bad for manufacturing workers; bad for women; creates lower wages, poor health care and unsafe job sites. In defense of Right to Work, job growth was consistent and rapid.

Jake Himmelspach, reporter

Questions raised at Regional Policy Conference

As I entered the Regional Policy Conference room in DeVos Place, a lot of questions were raised by people at my table.

Doug DeVos opened the conference by presenting the main objectives. He introduced Robert Genetski, who presented a dire case for Michigan's future unless it changes course. "Michigan's economic environment is not conducive to serving either manufacturing or service sectors," he said. "The Michigan Business Tax represents a poor process of governance. We need to align Michigan's policies with Michigan's performance."

He said classic economic principles are important to Michigan's future: 1) low taxes 2) free markets 3) protect individual property rights 4) stable currency.

To emphasize his point, he said, "As far back as the Old Testament, God only asked for 10 percent of our income. So if God can only ask for 10 percent, how can our government ask for more?" This got a lot of applause.

He added, "The State of Michigan and its governing officials should be rewarded on the basis of good performance. Some services government performs should not be performed by government at all. Good performing states put limits on taxes and spending."

His other comments:

  • Tinkering with the Michigan Business Tax is not a solution. Michigan needs
    to eliminate the new MBT.
  • Michigan spends significantly more than other high performing states in two
    major areas: education and health care.
  • If you have big problems you need to make big changes.

Basically, Genetski suggested Michigan's problems are too severe to make modest changes. "We need to scrap our current system," he said, "and develop an entirely new system of governance in order to compete."

Lunch speaker Carol Coletta said the No. 1 objective for Grand Rapids is the need to attract talent. She said "place" drives the decision of where people want to live and work. "Creating distinctiveness is important."

John Zwarensteyn, publisher

Taxes, Talent, Energy and Sustainability

In southeast Michigan, the Big Three have long had a lot of clout in Lansing and are (or were) always heard. But there's a Big Three on the other side of Michigan, too. Steelcase, Herman Miller and Haworth account for a large chunk of all the office furniture made in the world, at 40 to 50 percent of all U.S. production, so their economic clout in Michigan cannot be ignored.
So what ideas do the leaders of these key companies have for fixing the economic woes of the ailing Automotive State?
  • Taxes and talent are a good place to start, said Brian Walker of Herman Miller. The MBT is flawed and favors some industries over others. It needs to be less complex and it needs to encourage investment in business into Michigan, not drive it away. The "root problem" behind business tax decisions in Michigan has been the government's "persistent budget shortfalls."
  • Talent is what Michigan needs to grow a strong economy. Highly educated employees are "critical to success" at Herman Miller, said Walker. The problem is our federal government is too restrictive on work visas it offers each year. In two unrelated cases, foreign nationals who worked at Herman Miller after receiving higher educations in the U.S. weren't allowed to stay and work here -- so Herman Miller assigned both employees to the company's operations in the UK, which isn't so restrictive in immigration.
  • The state's energy policy is a problem, said Dick Haworth. The Michigan Legislature is about to re-regulate the energy supply, to chose our suppliers for us, rather than leave it open to competition.
  • "We need to make this a Right to Work state," said Haworth.
  • Education in Michigan is "a failure," added Haworth. "We need to increase the level of education results "at a reasonable cost."
  • Michigan needs to look in a mirror to see where it's not fit, said Jim Hackett of Steelcase. Our education system would be "love handles," he said, noting that in India the daily newspapers have a regular section on education to celebrate the kids' academic accomplishments in school -- and some of those schools are located in very poor areas. The Indians highly value education, to their benefit.
  • All three of the West Michigan Big Three see a great opportunity in sustainability in manufacturing and business. Hackett said the office furniture industry "got ahead of the rest of the world" in practicing sustainability early on. Haworth noted that in the last 30 years, the big driver in business and the economy was information technology. "Sustainability is going to be the biggest driver of change in the next ten to twenty years," said Haworth.
  • "If we lead in sustainability, that gives (Michigan) a competitive advantage," said Walker.

Pete Daly, reporter

OUR Big Three, Thoughts On The New Economy

The state of Michigan has more than just three big companies, often overlooked are the Big Three of the west side: Herman Miller, Haworth, and Steelcase -- global leaders in furniture. OUR Big Three had their Big Dogs speak on a variety of topics through a panel discussion.

Brian Walker of Herman Miller on "taxes and talent":

On taxes...

The MBT favors some industries over others and hurts many businesses. The root cause of the state's financial problem is the cost of running the state government. While Herman Miller does well under the new MBT, Walker doesn't agree with it's principles. He believes we need a tax system that is less complex, more transparent, and encourages new businesses and growth.

On talent...

It is the lifeblood and critical to the success of Herman Miller. While looking for talent, regional companies need to recognize that it is not limited to simply Michigan, or the U.S., but spans around the globe.

Dick Haworth of Haworth on state policies:

Four policy isues to look at...

  1. Tax policy for business is broken and not attracting or retaining business.
  2. Educational policy needs to be delivered at a higher level at a more reseaonable cost.
  3. Energy policy is also broken.
  4. The labor environment, as a state, needs work. The one thing he thinks could make progress is to make Michigan a Right To Work state. Labor unions will hate it, but it will make a positive impact for many if done correctly.

A few points on what makes good policy...

  1. Free people are not equal and equal people are not free
  2. What belongs to you, you take care of. What belongs to nobody gets neglected
  3. If you encourage something you get more of it; if you discourage something you get less of it
  4. Liberty makes all the difference in the world

Overall, Haworth said, our new policies are not any better than our old policies and the state needs to get the economics of the state right to set off the rebuilding of the surrounding issues.

Jim Hackett on how Michigan competes:

  1. Networking, including technology.
  2. Understanding that West Michigan is the center of understanding how people work effectively.
  3. The need for such physical things as an airport. It's not helpful when people are forced to go on a 20-minute airplane ride to be stalled for three hours at another airport.
  4. The relationship between government and business.
  5. "The education system is like lovehandles," said Hackett. "You know it needs work, but you never do anything about it."

Jake Himmelspach, reporter

How to attract and retain young professionals

The question of "What's Next?" has occupied the minds of many top CEOs in the area -- including Jim Dunlap, regional group president of Huntington Bank. Dunlap and Huntington sought out urban expert Carol Coletta, president of CEOs for Cities, to give insight on how to transform the region and attract the next generation workforce -- those in the 24-34 age group.
Coletta was the keynote speaker at Thursday's luncheon, her talk titled, "Attracting and Retaining the Millenial Generation."

"If you want to move the needle in the Michigan economy I have one recomendation for you," she said. "Produce more college graduates -- and keep them here in Michigan."

Here are some key points from Coletta to attract talent and be successful cities:

1. City must be clean and attractive.
2. City must be safe.
3. Millenials want to live how they want.
4. Millenials want an affordable place to live but NOT an affordable living community.
5. A sustainable focus.
6. City makes new talent feel welcome.
7. City that residents can be proud to live in.
8. Intellectual capital.
9. Culturally diverse: "Culture eats strategy for lunch," said Coletta, adding that without the right culture, communities will not succeed.
10. An innovative mindset.

The How-To's

1. Grow your own (K-12).
2. Connect the 52,000 area students to the city and business community.
3. Invest in the urban core to make it a vibrant live-play area.
4. Have a deep understanding of the region's distinctiveness.
5. Connect this market to larger markets offers more opportunities.

"There's just no short cuts on this talent thing," Coletta said. "It's long hard work."

Jake Himmelspach, reporter

Genetski: Three fixes for Michigan's economy

So the Michigan economy is broken. Robert Genetski was preaching to the choir: The hundreds of Michigan business executives in the audience this morning already know that. But what to do about it? That's where Genetski, a classical economist and member of conservative think-tank Heartland Institute in Chicago, followed up with some specific recommendations that he hopes the policy conference acts on.

The problem, he said in a nutshell, "is Michigan," which has "very poor governance" that leads to "poor policies" and "poor decisions," like the Michigan Business Tax. Some states with "good governance":

  • Determine what functions are properly a role of government.
  • Make a tentative budget for each function.
  • Compare that tentative budget to an independent assessment of the state's revenues, which then requires "tough choices" if the government really is going to live within its budget.

"Corporate Welfare" is not a legitimate role of government, said Genetski. Incentives to lure a particular type of industry to Michigan -- such as renewable energy -- are done at the expense of other industries already existing in Michigan, and at the expense of the Michigan taxpayer. And he said that "three, maybe four or five years down the road," renewable energy "may be passe" due to technological changes.

Genetski's three major policy changes for Michigan are:
  • Don't punish business for doing business in Michigan. Eliminate entirely the Michigan Business Tax, which he called "the third highest business tax in the country for certain types of businesses." For some businesses, only New York and California would tax them higher.
  • Perform government functions in Michigan at least as efficiently as other states. He gave an example: The State of Illinois sold the Chicago tollway. Another example: Michigan spends significantly more on education than other states. Private schools operate much more efficiently than public schools in Illinois, he noted.
  • Promote a free market for workers so wages reflect worker productivity. "Our labor market is inflexible. It doesn't respond to market pressures," Genetski said. He suggested the power of unions may have played a role in weakening the Michigan economy, and he called for a Right-to-Work law in Michigan. But it won't be easy: there will be a lot of opposition with 22 percent of the Michigan workforce unionized, and "huge war chests" held by the unions.

"I believe we have to take this issue straight on," he said, referring to the fixes required for the Michigan economy. "We need to start now by getting the word out to all people of Michigan about how the Michigan economy got this way and what it will take to fix it."

Pete Daly, reporter

Serious horsepower...

So say government leaders attending the Grand Rapids Area Chamber of Commerce Regional Policy Conference this morning. "Things will get done here today," said Kentwood Mayor Richard Root. "This room is filled with serious horsepower."

GR Chamber President Jeanne Englehart indicated that attendees "came from outside the state of Michigan ... and the UP."

Muskegon Chamber President Cindy Larson is especially pleased with the partnerships underscored among chamber members throughout the region, many of those being members of multiple chambers.

Conference co-chair Doug DeVos said the strength of the conference is the show of more than 600 attendees. The interest of out-of-state media is considered another plus - "forward progress for Michigan."

Will this conference change things? "It will help," said Detroit Renaissance President Doug Rothwell.

Carole Valade, editor

Policy, Not Politics

The Grand Rapids Area Chamber of Commerce Regional Policy conference opening this morning has been met with high expectations by the business community -- but only feigned interest from Gov. Jennifer Granholm, who chose instead to be part of a trade mission to Japan this week.

"Indignation" is the only word to describe the regional reaction to the governor's "snub," as participants prepare to discuss topics ranging from education and employee recruitment to taxes. More than 600 participants are in attendance, from across the state and especially the West Michigan region.

The policy conference attendees munching on breakfast this morning speculated as to whether Republican Presidential nominee Sen. John McCain and his running mate, Sarah Palin, would make an appearance at the conference. The pair stayed overnight in Grand Rapids after a town hall meeting with party faithful Wednesday night.

Chamber President and CEO Jeanne Englehart said this morning she had not been notified one way or another if they would visit the conference, but indicated McCain's schedule today was likely too tight to fit an appearance with the largely GOP contingent of attendees.

"This conference is about policy, not politics" she emphasized, adding compliments to those making presentations today. "I am really very impressed with how much people put into these presentations. The depth of the programs is awesome."

Presentations today include a segment on Design and Manufacturing for the New Economy, marking the first time all three leaders of the world furniture industry will be on stage together.

Amway co-founder Rich DeVos is the expected speaker during lunch on Friday, in a spot originally anticipating Gov. Granholm. Contrast? DeVos will speak on leadership and partnerships.

Grand Rapids Business Journal staff will continue to blog from sessions all day Thursday and Friday.

Carole Valade, editor