Brick by Brick: Strengthening companies, creating jobs, building a region one step at a time

The Right Place, in collaboration with The Michigan Economic Development Corporation (MEDC) and Cascade Charter Township, announced today the approval of a $350,000 Michigan Business Development Program incentive from the Michigan Strategic Fund (MSF) that will enable one of West Michigan’s most well-known family-owned companies to move forward on a $31.9 million expansion that could generate 120 new jobs for the area.

Lacks Enterprises – $350,000 incentive from the MEDC for $31.9m expansion; 120 new jobs projected

The incentive will allow Lacks Enterprises to proceed with the development of a new manufacturing plant in Cascade Charter Township. The plan will be used to manufacture and warehouse trim systems, wheel trim systems and plastic plating for the automotive industry.

Michigan was chosen over competing sites in Kentucky, South Carolina and Virginia.

“Lacks is a vitally important player in our automotive supply chain with more than 2,200 employees here and their decision to expand in Michigan says much about our improved business climate,” said MEDC President and CEO Michael A. Finney. “Our flexible incentive program, Michigan’s simplified business tax structure and our new efforts to connect employers with talented workers, are propelling us to one of the best business climates in the country.”

“The Lacks family is pleased to be able to provide additional premium employment opportunities for West Michigan residents and to continue to grow in West Michigan, as they have since 1961,” said Jim Green, Executive Director of Human Resources for Lacks Enterprises. “We were actively pursued by other states and based on the quality and caliber of the available work force in West Michigan, the business climate and cooperation from all of our business partners from the State of Michigan and The Right Place it was an easy decision to continue to grow in our own backyard.”

“When most new jobs in West Michigan are created by existing businesses, it’s that much more important to have a strong retention strategy. This announcement demonstrates the success of our business retention strategy, keeping companies like Lacks Enterprises growing in the region,” said Birgit Klohs, President and CEO, The Right Place, Inc.

Cascade Charter Township is supportive of this project and plans to approve tax abatements for Lacks.

“We commend Lacks for choosing to expand in West Michigan instead of other states that were pursuing this opportunity. The Right Place is committed to ensuring that our region’s companies continue to thrive, and through collaboration with our state and local partners like the MEDC and Cascade Charter Township, we are making it happen,” Klohs added.

Signed into law by Snyder in December, the Michigan Business Development Program provides grants, loans and other economic assistance to qualified businesses that make investments or create jobs in Michigan, with preference given to businesses that need additional assistance for deal-closing and for second stage gap financing.

The MSF will consider a number of factors in making these awards, including: out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs, and net-positive return to the state. Business retention and retail projects are not eligible for consideration of these incentives.

The Michigan Business Development Program replaces the state’s previous MEGA program that was a feature of the Michigan Business Tax that was eliminated under business tax restructuring legislation approved and signed into law by Snyder in May 2011.

(left to right) Mike Finney, Michigan Economic Development Corp. (MEDC), Aurora Battaglia, Comerica; Maria Gabriella Zignone, Banca Sella Spa; Giuseppe Gradi, Intesa San Paolo S.p.a.; Governor Rick Snyder; Massimiliano Iguera, J.P. Morgan; Birgit Klohs, The Right Place; Mark Kinsler and Maureen Krauss, MEDC promote Michigan during a mission trip to Italy and Germany.

During its first day of a six-day mission trip, Governor Snyder and the economic development leaders comprising the trade mission team met with the Turin Chamber of Commerce, as well as meetings with area companies. During lunch, it joined local corporate and economic representatives for a U.S. Commercial Services / Consul General Briefing with the American Consul General, Kyle Scott. The briefing covered Italy’s political and economic status, as well as the new Monti government.  A more detailed discussion of the country’s northern region and economic opportunities available there were also discussed.

The lunch was followed by a bank roundtable discussion of the changes to Michigan tax law, economic opportunities for investment, and the potential for Michigan exports to Italy.  The day concluded with afternoon meetings with area companies and a reception.

Trade missions to other countries have been a successful marketing strategy for The Right Place for over 25 years, and we were pleased to use that experience and contacts when asked to lead the planning and execution of  the trade mission to Germany and Italy announced earlier today.

On the behalf of Governor Snyder and the Michigan Economic Development Corporation,  The Right Place (RPI) arranged a reception for the Michigan team in Stuttgart, and secured meetings for Snyder with top-level German executives.

RPI also provided significant support in planning and securing speakers for a forum between the Michigan delegation and the Fraunhofer Institute for Chemical Technology. The event includes discussion of advanced electrification technologies and how they are transforming the auto industry. Michigan’s presentation will focus on advanced electric storage due to Michigan’s industry leadership position in North America. Private industry leaders recruited by RPI to speak during the forum include Ulrich Alkemade, Corporate Research, Robert Bosch GmbH as well as Jack Hall, Vice President & General Manager, Power Solutions EMEA, part of Johnson Controls Advanced Power Solutions.

Right Place President Birgit Klohs and Vice President, Business Development Therese Thill will be traveling with the Governor and other economic development organizations during the trade mission. While there, they will attend and host mission events as well as represent West Michigan exclusively during separate calls on Italian and German prospect companies.

Like the U.S. and Canada, there was a time when Mexican manufacturers belived that China would overrun them. Today, that belief is changing.

According to a recent Area Development article, Mexican manufacturers are experiencing the same rebound as their northern peers with OEMs re-examining the true cost of moving manufacturing to China.

The article sites an August 2011 study published by the Boston Consulting Group, which notes:

“After China’s entry into the WTO in 2001, however, maquiladora industrial zones bordering the U.S. suffered a large loss in manufacturing. Now that has changed. By 2010, Chinese workers were earning only two-thirds as much as their Mexican counterparts. By 2015, BCG forecasts that the fully loaded cost of hiring Chinese workers will be 25 percent higher than the cost of using Mexican workers.”

Success stories like Terryberry’s Pandora bead partnership, and lauds for American Seating’s success from Vice President Biden are just a couple of examples of how West Michigan companies are combining efficiency, reasonable cost and  manufacturing skill to bring jobs back from China as well

As quoted in Corp! Magazine, Deb McDermott, vice president of marketing at American Seating, noted. “When the vice president’s advance team visited they were initially focused on our transportation seating but they were amazed at the breadth of what we do,” she says. “When I told them that we had done the seating at the Washington Nationals stadium, as well as the Eisenhower Theatre in the Kennedy Center, they were surprised.”

The Michigan Corporate Relations Network (MCRN) is soliciting proposals for its Small Company Innovation Program (SCIP). The SCIP will provide cost-sharing grants to foster collaboration between MCRN universities and small-to medium-size companies on research projects for new commercial products or services.

The six universities that make up MCRN are Wayne State University, the University of Michigan, Michigan State University, Michigan Technological University, University of Michigan-Dearborn, and Western Michigan University. Each member university maintains an office that connects businesses to university resources and faculty that can assist research needs. Companies interested in applying for the SCIP will be paired with the appropriate faculty principal investigator (PI) to outline a project and submit a proposal.

The resulting collaboration will give small companies the opportunity to meet research needs that may not otherwise be affordable. The SCIP will also stimulate talent retention in Michigan by creating relationships between small companies and university graduate student researchers.

Individual SCIP projects are funded at $20,000 to $40,000 and require one-to-one matching funds from the sponsoring company. MCRN member universities will supply funds to cover all their indirect costs. Additional information is available at http://michigancrn.org/scip/. The deadline to submit a proposal is May 1, 2012.