DETROIT – The tenuous state of Michigan’s economy was on full display Tuesday with rapid announcements of an $11 billion Dow joint venture with 800 high-wage jobs choosing the state for its new headquarters, General Motors instituting a new round of cuts that targeted high-wage white collar jobs, 13 companies investing $145 million to create 3,045 jobs, five brownfield developments with 753 new jobs and Volkswagen spurning Michigan for a new assembly plant in Tennessee.
The number of GM jobs that will be lost to the state, among the 30,000 it is cutting world wide, is not yet determined, but Governor Jennifer Granholm said that announcement is why the diversification represented by the new investments is so important.
“We have an array of jobs coming in to soften the blow,” she said. “We can’t take any comfort in the GM announcement except that hopefully it will make them stronger and they can come roaring back.”
At the board meeting of the Michigan Economic Growth Authority where the tax credits were approved, Granholm said, “This is a record day for Michigan economic development” and especially important given the GM news.
Asked at a press conference when Michigan will no longer lead the nation in unemployment, Granholm told reporters that the state continues to be affected more than any other by the restructuring of the auto industry. “When the auto restructuring is finished, we will see job growth,” Granholm said.
She said she had talked to Volkswagen executives about their decision to locate in Chattanooga, who told her the decision rested largely on a 500-acre site being cleared and ready for its use. She and Jim Epolito, president of the Michigan Economic Development Corporation, said the state put up a major package in hopes of luring the plant, and were gratified the state remained in the running as VW executives continued to pare the potential sites until Tuesday’s decision.
“We went after them with everything we had,” she said. In a statement she added, “Our highly skilled workforce and an unprecedented incentive package capped a full-court press to bring the company’s investment to Michigan. We will continue going anywhere and doing anything to bring jobs to Michigan. In fact, today we’re heartened by the announcement that Dow Chemical Company has chosen Michigan for the headquarters of its new joint venture, K-Dow that will bring hundreds of jobs to Michigan, and the approval of 13 other new projects in communities around the state.”
A part of the Dow package was $44 million in a bill awaiting the governor’s signature, and Granholm said that money can now be used for other potential economic development.
Nearly all of the projects aided by tax credits through the Michigan Economic Growth Authority benefited by newly-enacted standards, which qualify high-tech projects with fewer numbers of jobs, Epolito said.
K-Dow, the joint venture involving Dow and Petrochemical Industries Company of Kuwait will be located in southeast Michigan’s I-94/I-96 corridor, which company officials say will give it good access to international travel, diverse cultural opportunities – including the state’s large Arab population – and high quality education.
The company seriously considered locations in Louisiana and Texas, where it has substantial manufacturing facilities and which presented advantages of being near the Gulf of Mexico as well as good growth potential. Most of the plastics manufacturing by the new company will be in emerging market countries in the Middle East and Asia.
The joint venture will manufacture what officials describe as advanced material products, such as polyethylene, ethyleneanmines, polypropylene, polycarbonate and other light weight plastics.
Michael Grambrell, Dow executive vice president for basic plastics and chemicals, called the joint venture a significant milestone for the company and for Michigan. “It was not an easy decision but we said Michigan has the ingredients for success for this venture.”
He said establishing the joint venture will be complete by the end of the year, when a specific site for the headquarters could be selected.
Jim Fitterling, the Dow Basic Plastics business group president and CEO of the new joint venture, said the new company will start with 5,000 employees. PIC will pay Dow $9.5 billion for its 50 percent interest in the five Dow companies that will form the joint venture.
‘It’s very important to keep Dow here and grow here,” Epolito said. He said the size of the state incentive package as well as local incentives is not yet finalized.
The Kuwaiti company was among those the governor was scheduled to visit on a trade mission that had to be cancelled in June when she underwent emergency surgery.
It is the fourth joint venture for Dow.
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