Green Shoots for Michigan

To help temper the discouraging unemployment numbers, UM-Flint professor of economics and finance Mark J. Perry comes to the rescue with a statistical glimmer of hope for Michigan.

Mapping the Economic Mess

The Geography of Jobs is a highly informative animated map that "provides a striking visual of employment trends over the last business cycle using net change in jobs from the U.S. Bureau of Labor Statistics on a rolling 12-month basis."

"The timeline begins in 2004 as the country starts its recovery from the 2001 recession, following the bursting of the dot-com bubble. At first, broad economic growth was apparent across most of the country. Two notable exceptions are the Bay Area — the hub of the tech boom that drove job growth during the prior decade — and several metropolitan areas within the Midwest. The map reveals that much of the industrial Midwest never fully recovered from the previous recession, as manufacturers continue to shed jobs while other parts of the country were adding them in large number."

Go here to view the map.

Thanks to Haskell Community Center's Jim Holbel for passing this along.

Say Yes to Michigan

The doors open at Cobo. This photo by Daniel Mears of the Detroit News is part of a slide show available here. If you think the economic crisis is easing, watch the slide show.

How bad is the Michigan economy when Flint residents drive to Detroit to get help? Charlie LeDuff of the Detroit News reports on the chaos that ensued when desperate crowds gathered at Cobo Center to get applications for rent and utility bill help from the Fed:

Luis Irizarry, 35, drove from Flint for the chance he could get assistance. He later found out only Detroit residents are eligible. He said it was a shock to see this many people in need.

"This is ridiculous," Irizarry said about the thousands who showed up.

Solution to a Flint Fantasy: Inflatable Buildings

The German architecture firm Raumlabor brings Spacebuster to NYC.

I know Flint has enough real worries without having to deal with hypothetical problems. But what happens if the city, in its zeal to downsize, overdoes it? Then, when the Flint economy finally blossoms, we'll be left with a housing shortage. (Let's not speculate on what will prompt Flint's economic miracle; I'm not that much of a visionary.) People from the southwest might flood Flint when their water supply dries up, along with their jobs. If that ever happens, inflatable buildings may be the answer.

A Daily Dose of Architecture has a nice overview of bulbous inflatable structures that bring back memories of John Travolta's 1976 made-for-TV classic The Boy in the Plastic Bubble. At least we have one of the potential problems of an economic boom solved.

A Good Question

Talking Points Memo asks: "Why is Rick Wagoner getting the boot while the management of the big banks remains in place?"

Hot Housing Trend

While Flint tries to figure out how to get rid of unwanted houses, Shantytowns are popping up all over.

Going Out of Business

Anyone looking for a blog that chronicles every business that shuts down in Saginaw? Yes, you say? Well look no further than Saginaw for Sale. It's pretty brutal. When Burger King franchises start going belly up, you know things are bad.

Murder by Numbers

With unemployment levels climbing, it seems the rest of the country is catching on to a reality that Flint residents figured out a long time ago.

Peter S. Goodman and Jack Healy of The New York Times report:

The unemployment rate surged to 8.1 percent, from 7.6 percent in January, its highest level in a quarter-century. In key industries — manufacturing, financial services and retail — layoffs have accelerated so quickly in recent months as to suggest that many companies are abandoning whole areas of business.

“These jobs aren’t coming back,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses.”

Manufacturing losses are bad enough, but many workers settled for retail jobs when their factory work disappeared. Now retail is drying up? Not good.

The Times also provides a depressing county-by-county breakdown of unemployment numbers across the nation. The numbers are bad in Genesee (12.3%) and Wayne (11.7%), but you have to go Up North to get the catastropic percentages: Presque Isle (20.1%), Cheboygan (18.4%), Baraga (20.6%), and Ontonagon (17.2%). But keep in mind you aren't counted as unemployed when you've given up hope of a job and stopped looking. Genesee County's real unemployment rate is easily over 20 percent.

In California, some of my journalism students have been conducting brief interviews with people about how the recession is affecting them and their families. They've also asked students how much debt they'll have at graduation and how they plan to pay it off. The profiles aren't exactly uplifting:

Name: Nick Arb

Major: Marketing
Year: 2010
Debt: $50,000 and Rising
Deep thoughts on debt: "I have to start paying back six months after I graduate, so I need to find a job and live within my means and not necessarily put a whole lot away. Just pay off the debt as soon as possible. I'm applying for internships this summer and I'm going for the same position as grad students, so I know when I graduate, with or without an MBA I'm going to be going against people with better degrees and more qualifications. I'd like to (pay it off) within 15 years of graduation, hopefully less. The sooner the better. I know there will be something out there. It might not necessarily be your dream job, but you gotta get paid."

Saab Story

Saab, a subsidiary of G.M., declares bankruptcy. (Photo Courtesy of saabhistory.com)

Collared by the Economy

After years of blue-collar job cuts, the economic crisis is exacting a toll on white-collar workers, especially in Michigan.

Bill Vlasic and Nick Bunkley of The New York Times report:

"G.M., Ford and Chrysler have eliminated a total of 120,000 manufacturing jobs in the last three years. And now the cuts are drastically thinning the ranks of white-collar professionals, turning the once-bustling office towers of the companies into half-empty monuments to better days.

"G.M. delivered another blow last week when it said it would reduce its global salaried work force by 14 percent, or 10,000 workers this year. In the Detroit area, that could mean an additional 3,000 workers will be out of a job by May 1. G.M.’s next round of white-collar cuts will not include buyouts. Chrysler has not said whether it plans more cuts.

"The Detroit area housing market, already deeply depressed, has plummeted since the buyouts. In January, the foreclosure rate increased 102 percent from the same month a year earlier in Oakland County, Mich., home to a huge number of G.M. and Chrysler employees.

"The state’s unemployment rate was 10.6 percent in December and continues to climb. Job fairs routinely create mob scenes, drawing thousands of out-of-work employees of the Big Three and their suppliers."

How Bad Is It?

Even Toyota is losing money.

Settling Scores

Care to take a peek at the Senate Republicans' internal strategy memo? It seems dealing a blow to organized labor was a bigger concern than dealing with the economic crisis when it came to loaning money to the Big Three.

A Chicken in Every Pot...or Something Like That

Barack Obama is winning praise for his economic team, but there's one "expert" the president elect has not called on for advice — Flint Mayor Don Williamson. But don't worry, The Don is sending the city administrator to Washington with a plan that will solve all our problems.

Joe Lawlor at The Flint Journal reports:

"Just about every household in America would be in line for a a voucher to purchase a new car if Mayor Don Williamson has his way.

"Williamson is sending City Administrator Darryl Buchanan to Washington D.C. next week to tout his big idea to save the auto industry as part of the Mayors Automotive Coalition lobbying Congress for the Detroit Three's $34-billion loan.

"Williamson said under his idea, each household with a registered voter would receive a $5,000 voucher to purchase a new car. He hasn't calculated how much the plan would cost taxpayers."

With brilliant — and costly — moves like this, it's hard to figure out why Williamson is facing a recall election.

Bad Deal

It's pretty obvious: As the Big Three suffer, the auto dealers trying to sell the Big Three's cars also suffer.

Clifford Krauss of The New York Times reports:

"The National Automobile Dealers Association predicts that roughly 900 of the nation’s 20,770 new-car dealers will go out of business this year, and automobile analysts say the number of failed dealerships could rise into the thousands next year.

"Even if Ford, Chrysler and G.M. survive, many believe a comeuppance is inevitable among dealerships; indeed, for years the nation has had more dealers for domestic brands than warranted by the sales volume of the Detroit automakers.

"The economic toll of a mass failure of dealerships around the country has already begun to harm the broader economy. In October alone, 20,000 employees of auto dealerships lost their jobs nationwide, more than half of those who were newly unemployed in the retail trade, according to the Labor Department."

Bailout Blog

With the Big Three hogging all the publicity — and getting all the flak — it's easy to forget just how many businesses are begging for a Federal bailout. Luckily, we have Gimme My Bailout to keep track for us.

French-Style Subsidies Come to Alabama

U.S. Sen. Richard Shelby, R-Alabama, seems to delight in attacking the Big Three. The senior Republican on the Senate Banking Committee favors bankruptcy or worse over a bridge loan to help American automakers survive.

“We don’t need government — governmental subsidies — for manufacturing in this country," Shelby said on Meet the Press recently. "It’s the French model, it’s the wrong road. We will pay for it. The average American taxpayer is going to pay dearly for this, if I’m not wrong.”

Pretty strong words from a politician whose own state rolled out the government subsidies to get a Mercedes Benz plant to open in Alabama. Peter Karmanos, Jr., chairman and CEO of Detroit-based Compuware Corporation, called Shelby on the contradiction in an open letter to the senator.

The Insider Speaks

A reader going by the unfortunate name of Sable Pelt, an obvious insider at one of the Big Three, has been providing some great commentary on the need for a bailout of the auto industry. Even if you disagree with him, it's worth a read. Because he's emailing his thoughts directly too me, I'll provide an excerpt below and you can find the full email in the comment section of this post:

"People can't stand the thought of somebody getting paid $70/hour to properly seat a head gasket. What they don't understand is that $70/hr represents their total pay package - not take home pay. A big chunk of that is benefits and most of that is healthcare. Those costs have gone up like mad in the past few years so shame on the UAW for covering that but it is not the UAW's fault that healthcare has gone up so much. Plus, and I can speak from some experience, I would ask any of those clowns to spend a day in an auto plant shooting rivets and ask them if $15/hr. as a new hire or even $35/hr (estimated take home before taxes is maybe $70K) for a 30 yr. person is worth it. I think it is, those jobs are tough!"

What's the Plan?

Congress takes the novel approach of asking the Big Three just how they plan to spend the bailout money they so desire.

Dingell Gets the Ax

After their dismal performance at recent Congressional hearings, do you think the chief executives at the Big Three can see the writing on the wall?

The New York Times reports:

"Representative Henry A. Waxman of California ousted Representative John D. Dingell of Michigan from his post as chairman of the influential Committee on Energy and Commerce on Thursday, giving President-elect Barack Obama an advantage in his plans to promote efforts to combat global warming.

"Besides seating a committed environmentalist as head of the energy committee, the vote also removes one of the auto industry’s best friends from a key leadership post — further evidence of how much power the American car-makers, whose executives have been pleading for federal money, have lost in Congress."

Jet-Pooling Please

The executives at the Big Three make it so hard to love them...

"The top executives of General Motors, Ford and Chrysler appeared in front of Congress for the second day in a row Tuesday, to make their case for an emergency government loan," CNN.com reports:

"The three CEOs have said they don’t have the cash to operate next year without help and warned that the failure of the industry would have dire consequences for the U.S. economy.

"And yet GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler chief Bob Nardelli arrived for these historic hearings on private jets! That’s right: The men at the helm of an industry so crippled that it has to ask for taxpayer money to survive flew on private jets. And they wonder why the American public is so angry about these bailouts.

"Their choice of transportation dominated Wednesday’s hearing. Representative Gary Ackerman, a Democrat from New York said: '… there is a message here — couldn’t you all have downgraded to first class or jet-pooled to get here? It would have at least sent a message that you do get it.'

"'If you’re gonna streamline your companies, where does it start? And it would seem to me as the chief executive officer of those companies you can’t set the standard of what that future is going to look like, that you are really going to be competitive, that you are going to trim the fat, that you don’t need all the luxuries and bells and whistles … it causes us to wonder.'"