Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
The economic transformation of the industrial Midwest will continue to be a principal reality in the communities served by our stations, WBEZ, Michigan Radio, and WCPN ideastream, and the coverage of that change will continue to be our priority.
But change, as our project name implies, is inescapable, and we are not immune. This blog will continue to be a repository for coverage about this topic, However it will not continue to be updated with the frequency it has for the past two years.
You’ve been reading our stories of Changing Expectations. Now, join us Monday for a live chat, and come armed with your questions about planning for the future.
Our guest will be Mickey Meece, a veteran editor and writer for The New York Times, who blogs on consumer issues at Forbes.com. Meece, who also teaches college journalists, will take your questions.
We’ll also talk with some people who’ve been featured in our stories, and members of the Changing Gears team will join us.
So, are you thinking about how to pay for college? The kind of job you’d like to get? Are you dealing with mortgage issues, or rethinking your retirement? Stop by at 3 pm ET/2 pm CT. Meg Cramer, our Public Insight Analyst, will be hosting the chat.
Today, Chrysler, which is based in Auburn Hills, Mich., said it earned $473 million in the first quarter, its best results since the SUV-profit fueled first quarter of 1998, and almost four times what it earned in the same period last year. Chrysler’s revenue in the quarter was $16.4 billion, up 25 percent from a year ago.
The Chrysler earnings keep it on track to reach its goal of earning $1.5 billion for 2012, and $25 billion in revenue. The results are the best since Chrysler began reporting quarterly profits again after its bailout.
The strong results mean that Chrysler’s 26,000 U.S. hourly workers will get bonuses of $1,750 each for 2011.
Big cities around the country are finally seeing the bottom for their dropping house prices, according to Zillow, Inc. The only problem is that it isn’t happening in two of our big cities —
Chicago and Cleveland.
Zillow, a real estate forecaster, says it doesn’t expect home prices in either of those two places to bottom out in 2012. That’s even though home prices nationally rose 0.5 percent, according to the Zillow Home Value Index.
Nationally, Zillow says home prices remain 25 percent below their levels in 2007. It doesn’t expect much of an increase in prices nationally this year. You can read a Bloomberg story about the Zillow forecast here.
Chicago and Cleveland are among 11 cities that are still seeing home prices fall. Others are San Francisco, Charlotte, Seattle and Atlanta. Places where home prices are rising include Phoenix and Miami, according to Zillow.
Home values are one of the things that are prompting people to adjust their expectations about the future. Read our Changing Gears Tumblr on Changing Expectations.
Rahm in charge Chicago Mayor Rahm Emanuel won approval from City Council yesterday to move ahead with his $7.2 billion infrastructure plan. The vote wasn’t even close, which prompted the Chicago Tribune to say the mayor is “firmly in control.”
Throughout the past two years, Changing Gears has looked at the role that newcomers play in the Midwest. This afternoon, we’ll be talking about them — and talking with you.
Join us at 3 pm ET/2 pm CT for “Hidden Assets,” a call-in show airing on WBEZ Chicago, Michigan Radio and ideastream Cleveland. We’ll also be holding a live chat here at ChangingGears.info.
WBEZ’s Steve Edwards will host with a variety of scheduled guests, including Michigan’s governor, Rick Snyder, and Changing Gears reporter Niala Boodhoo. The Changing Gears team will chat with you here during the show.
The data is in, and the Midwest economy seems to be on the path of recovery. Our long, regional nightmare still isn’t over for many workers, but there are plenty of signs for optimism. Businesses are hiring, productivity has increased.*
All of this got us thinking: What will happen to the transformation of the Midwest economy when we do finally recover from this horrendous recession? Will we go back to our our old ways, or will we continue to change?
It is not hard to find examples of change in the Midwest. You stumble upon it everywhere you go.
So this week, I met with an economist named Paul Isely, at Grand Valley State University. And to see an example of change, we just walked across the street from his current office in downtown Grand Rapids, Michigan. We went to a huge construction site, where the economics department will move next year.
Isely’s new office will be where a factory used to be. The factory sat empty until GVSU tore it down last year to build the new business school.
In one sense, this kind of change happens all the time in cities: old buildings get torn down or rebuilt. New uses are found.
But it also represents some of the bigger, structural changes in our economy – where once this site was part of our manufacturing economy, now it will do something else. These changes were happening before the last recession. And Isely says they will continue after the recession.
But he says there are limits to the change. For example: the auto industry. Two years ago, politicians in Michigan bemoaned how dependent the state is on the auto industry. But Isely says, it’s an industry that creates a lot of value.
“So it’s very very hard to go away from that to something that creates less value,” he says. “There’s just not a lot of reason to do it. We’ll suffer the ups and downs.”
And since we seem to be headed on the way up again, Isely says there are new risks for all of our manufacturing companies to slip back in the old way of doing business.
“The problem is, as you come out of a recession, you often have all your resources start to be used making the stuff you made before,” he says. “And if you’re busy all the time, you don’t have time to think about, ‘How do I change all this?’”
The risk of falling into complacency, it’s not just for companies, but for everyone involved our economy.
“I remember even in the early 90s, people were saying, ‘Wow, look, our employment is growing, output is growing,'” says economist Ziona Austrian. She heads the Center for Economic Development at Cleveland State University’s College of Urban Affairs. “We forgot to compare ourselves to the rest of the country. They were doing so much better than us.”
Part of the problem, according to another economist, is that when Midwest leaders do make comparisons, it’s the comparison of one Midwest state against another. Our neighbors are seen as our competitors, when, in fact, we’re incredibly connected.
“I mean, $500 billion worth of goods and services move between Wisconsin, Illinois, Indiana, Ohio and Michigan,” Hewings says. “And yet most of the governors look upon each state as a balkanized entity.”
And whenever he hears about a governor who’s trying to lure business across the border, or hears someone cheering for another state’s bad news, Hewings cringes a bit. He says anything bad that happens in one Midwest state is bad for all Midwest states.
A lot of things have changed in the Midwest economy over the past decade. But Hewings says the lack of cooperation is one thing that hasn’t.
“I get a little jaundiced about the ability of our politicians and policy-makers to see this bigger picture,” he says.
But it’s not just up to them to work together. We’ve already been through a lot of change as a region. Some changes happen to you. Some changes, you have to make happen.
GE Adds Jobs, Faces Protestors: General Electric said Tuesday it is adding 300 jobs in Van Buren Township, Mich., at an advanced engineering center that it announced in 2009. That’s on top of 850 jobs for which the company is still hiring. But GE chief executive Jeffrey Immelt faced protests at a meeting of the Society of Automotive Engineers in Detroit. Members of the 99% Spring movement are planning to protest Immelt’s pay and other issues at GE’s annual shareholders meeting, which will be held in Detroit on Wednesday. Read our coverage of the 99% Spring here.
Nobel Laureates In Chicago: Former presidents, activists and actors are in Chicago for a three day meeting of the world’s Nobel Laureates. It’s one of the high-profile efforts by Mayor Rahm Emanuel to stake Chicago’s claim as a world-class city. On Monday, students in a Chicago classroom got a visit from former Soviet president Mikhail Gorbachev, one of many visits paid by the laureates to Chicago schools.
Obama Campaign Blankets Ohio: The president was just at Lorain County Community College in Elyria, Ohio last week, talking about job retraining. Now, Barack Obama’s campaign plans to blanket the state in coming weeks, with the auto bailout as a main topic. Bob King, president of the United Auto Workers, says the number of auto workers in Ohio has increased from 105,000 to 120,000 since the administration rescued General Motors and Chrysler. However, Ohio’s biggest automotive employer is Honda, which has announced a series of new investments in the state.
Changing Gears Live Tomorrow: Make sure to mark your calendars tomorrow for a Changing Gears live call-in show and chat. It’s at 3 pm ET/2 pm CT. Read more here.
The city of Detroit, which recently reached a deal for the state to oversee its finances, is
proposing a budget that cuts more than 2,500 jobs in an effort to reduce its annual expenses by $250 million.
The Detroit Free Press says the 2,500 layoffs would be on top of 1,000 job cuts Mayor Dave Bing sought earlier.
The proposed budget, laid out for city council’s review, also calls for the Detroit Department of Transportation, the city’s troubled bus system, to be privatized. It would transfer operations of the city’s lighting department to an independent authority.
Many homeowners have complained about broken street lights and problems with Detroit’s power grid, which is separate from the rest of the area.