Rating the recovery: Local execs weigh in on Michigan's economic direction
From left: John McLeod, president of aftermarket automotive instrument manufacturer Classic Instruments; Tom Adams, president of Birchwood Construction in Harbor Springs; Tom Teske, vice president and general manager of EJ Americas, formerly known as East Jordan Iron Works; Paul Keiswetter, president of Petoskey Plastics; and Dudley Marvin, president of Stafford¿s Hospitality. (October 5, 2012)
And as the state’s economy begins to rebound, key executives from several local businesses offered a mix of perspectives as to how strong that recovery is. They also noted a variety of views about what still needs to occur to bring Michigan’s economy back to a robust state.
The News-Review asked a sampling of local executives from several industries for their thoughts on the economic recovery. They included Tom Adams, president of Birchwood Construction in Harbor Springs; Paul Keiswetter, president of Petoskey-based plastic bag and film manufacturer Petoskey Plastics; Dudley Marvin, president of local hotel and restaurant group Stafford’s Hospitality; John McLeod, president of Boyne City-based aftermarket automotive instrument manufacturer Classic Instruments; and Tom Teske, vice president and general manager of East Jordan-based EJ Americas, formerly known as East Jordan Iron Works.
The News-Review’s questions and executives’ responses to them are as follows:
How would you rate the progress Michigan has made in its economic recovery following the 2008-09 recession?
Tom Adams: I feel the recovery overall is still sluggish at best. In the construction sector specifically, I believe much of what you are seeing is pent-up demand being met and not necessarily growth that will continue unabated in the future.
Paul Keiswetter: From a Petoskey Plastics perspective, post 2008-09 we retooled and repatriated our offshore business, which resulted in stable work here in Michigan and has enabled us to expand globally. Since 2009 we have experienced 22 percent growth. Our Petoskey manufacturing facility (is) currently running (24 hours a day, seven days a week) at 100 percent capacity (of which automotive is 25 percent). (The plant is) estimated to produce 30 percent of our 2013 manufacturing volume, as our growth continues in our other plants in Tennessee and Indiana. (The annual rate of U.S. auto sales) is currently running at 14 million cars, up from 9.9 million cars in the 2008-09 time period, but still below the industry high of 17.5 million cars. A significant recovery with room to grow.
Dudley Marvin: Michigan has made many forward strides with business tax reform, budget balancing, staffing efficiency and assistance to troubled economic sectors. Much of this is due to a legislature that has sought compromise, our governor’s administration, citizens who have accepted sacrifices and businesses who have adjusted to falling sales and a difficult state and federal business environment. A good example of this is our area’s success with tourism and the regional clout of the Pure Michigan campaign. Great summer weather has helped tourism, however the drought has wreaked havoc on agriculture, which will curtail our recovery with higher food prices and capital needs for our farms and orchards. We are certainly not out of the woods, but business optimism prevails and we are slowly climbing upward.
John McLeod: Two part answer: In our industry (automotive aftermarket), it has been a slow steady climb in business, but I will add we have seen more competition from other industries and a load of cheap knock-off products. So we are working harder, but seeing results and yes, I will say there appears to be a light and it’s getting brighter. (As for the) overall economy, I’m not an expert, but listening to other owners and how I feel about it is, I think it is improving and I think the overall attitude is too. I think attitude really makes the difference and should come first, then the rest can follow. But yes, overall I see an positive improvement.
Tom Teske: The economic recovery in Michigan has been improving. The rebound of the automotive industry has been positive. The housing industry is starting to see some recovery. The Pure Michigan campaign has had a positive effect beyond tourism. Unfortunately we are one of the only states that has lost population during the economic downturn.
What things(s) do you think still need to occur in order for the Michigan economy to return to a fully healthy position?
Tom Adams: In order for the current growth to continue, concerns over health care, taxes, the potential for higher inflation, and the political turmoil in Washington all have to find a level of certainty and consistency before confidence levels truly return to a healthy state.
Paul Keiswetter: Long term, Michigan’s shale gas, technology industry and resort industry should continue to provide new jobs and commerce to our state. Agriculture could also give the state a boost, especially considering our abundance of fresh water. Solving the housing/mortgage crisis and replacing lost jobs, with equal pay scales, will provide a great foundation for future successes in Michigan. I am very optimistic about the future and am proud of Petoskey’s global growth and our contribution to Michigan’s financial health.
Dudley Marvin: As to the future, Michigan manufacturing needs to re-invent itself, unemployment taxes will burden us for years to come; and the federal government and legislature need to find solutions where the “cure is not worse than the disease.” Perhaps, with the coming election, we can begin to heal the factionalism at the federal level, and find the unity and compromise that will add to and continue the legacy of our United States.
John McLeod: I think we need to get back to the basics, our school system needs to understand that we need people that can work with their hands. Trade schools, co-op, school-to-work programs, we need them back worse than ever ... We need employees that are willing to work, we need to teach people to be passionate and proud of their job and the company they work for. We need to develop a plan to get people back to work, fair wages and sense of pride. We too need college and higher education, but we need a balance.
Control taxes for the businesses. I’m not asking for no taxes, I’m proud to pay my share, but we need to take care of those that are taking the risk to have their own business and make jobs for others. We have seemed to forget these people at all levels of business. We also have to take care of the employees, they are very important, but if we just continue to raise taxes on the business, they will be gone (as we have seen) and the jobs go with them ...
When prices go up, (gas, food, etc.) it goes up for everyone, employees and employers, but it drives raw costs up, too, so the businesses see an increase that is not talked about ... We have to build a plan where it works for everyone, not to continue to make it for one group. They want to put middle class against upper class etc. We need to find a way and work toward a balance. The world needs parts of all the groups and we need to be able to help those that need help — that really need help ...
I’m very proud to be a business owner in Northern Michigan and I have never been denied a thing, I’m blessed to have my business, my employees and for my parents — they are the ones that taught me hard work pays off, and they are correct. I take full responsibility for the outcome of my business and at the end of the day, I really do not have time to listen to those that are complaining about “the economy.” I’m busy trying to find the next sale and how I’m going train my employee to do the same.
Tom Teske: We need to work together with government and educational institutions to create the infrastructure that supports private investment throughout the state. We need to support manufacturing in Michigan. To return to a “fully healthy position” we need an “economic wellness plan.”
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