In the Center of Auto Country, Adapting to an Uncertain Future
Friday, May 8, 2009
GRAND RAPIDS, Mich., May 7 -- Inside a beige, concrete warehouse -- slightly smaller than the size of a football field -- 10 workers toil to assemble rotors for $11,000 wind turbines that go on top of houses. It is the sort of work that city and state officials hope one day will provide a new vein of manufacturing jobs to replace those that have steadily disappeared from the local auto industry.
Ed Montgomery, President Obama's point man on helping communities hit hard by the auto crisis, visited Cascade Engineering on Thursday as part of a two-day tour of Michigan to talk with auto union leaders, business owners, community leaders and politicians about what the government could do to help Grand Rapids, a city of 193,000 about 2 1/2 hours west of Detroit, and places like it.
In Grand Rapids, Montgomery announced that the Environmental Protection Agency has set aside $10.3 million to help Michigan reuse old industrial plants. And he said a federal small business program will be expanded to help steer loans to auto parts makers and dealers.
"These are just two steps along this road," Montgomery said. "We are committed to working with state and local officials to bring back, revitalize and keep strong the Michigan economy."
Behind the niceties and plant tours, however, there is harsh reality. Replacing a major employer such as General Motors or Chrysler is no easy task, especially in this economy. It would take a number of smaller companies such as Cascade to even come close.
Grand Rapids and the neighboring town of Wyoming, population 70,000, once supported three GM plants employing about 6,000 workers. Now there is one GM plant with 1,500 workers. And it is expected to close by the end of the year.
In addition, Wyoming's city manager said he's worried that a Delphi parts plant, which has already cut its workforce from 1,400 to 700, could be in danger of closing if GM files for bankruptcy.
Officials are trying to attract new companies to offset the cutbacks, which combined with a dramatic slowdown in the office furniture manufacturing business -- another major industry here -- have pushed the area's unemployment rate to 10.5 percent.
Still, Grand Rapids has weathered the downturn better than other parts of the state. Several wealthy businessmen, including the founders of Amway and the Meijer retail chain, and an heir to one of the families that started office furniture maker Steelcase, have invested in the town, financing a new sports and entertainment arena, art museums and other facilities. A $1.4 billion construction boom tied to medical research, training and patient facilities is expected to create another 2,000 jobs on a mile-long strip known as Health Hill.
But there are limits to the transformation.
"Our health care development is helping our city," Grand Rapids Mayor George Heartwell said. "But it generally doesn't help the tool-and-die worker who was making $23 an hour and has lost his job."
City officials are trying to attract "green" manufacturing businesses. A company from Barcelona recently said it would set up a shop to manage the logistics of creating a wind turbine, coordinating work among different parts manufacturers. But the mayor expects the number of new jobs would be small.