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