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.
Detroit Mayor Dave Bing, who outlined an emergency plan two days ago, isn’t wasting any time taking action. Today, Bing said the city will lay off 1,000 employees, or about 9 percent of the city’s payroll, by Feb. 25.
Layoff notices will be delivered starting the week of Dec. 5, the mayor said. The cutbacks are aimed at saving about $14 million. The city faces a $45 million shortfall by the end of its fiscal year in June, and a report recently said the city could be out of cash by mid-summer.
The mayor also ordered an immediate hiring freeze for civil service jobs, except in the Detroit Water and Sewage Department, where the city must comply with a court order allowing hiring to continue.
Bing said the layoffs would be “strategic” to protect core services like police and fire protection as much as possible. He also is pushing unions to make cuts, but thus far, they have resisted.
Detroit’s Plea: As we reported yesterday, Detroit Mayor Dave Bing is laying out his plan to keep his struggling city solvent. But a key step — getting a $220 million from the state — is getting a cool reception. While Michigan Gov. Rick Snyder hasn’t rejected it, he’s not embracing it either,
according to our partner Michigan Radio. Sara Wurfel, a spokeswoman for the governor, said Snyder is “focused on how to best help Detroit move forward in tough economic times.” But Wurfel added Detroit is free to plead its case with the state legislature.
Steelmaker Expands Training: Three years ago, global steel company ArcelorMittal started a training program in Indiana to get young adults prepared for jobs in the industry. And now, the Cleveland plant says it’s partnering with Lakeland Community College to offer the training in Ohio, according to our partners at ideastream in Cleveland. The Steelworker for the Future program is due to start in January, and involves two-and-a-half years of college coursework and a twelve week paid internship. At the program’s end, students walk away with an associates degree in electrical or mechanical technology.
Wisconsin Mining Controversy: Mining is making a comeback in the upper Great Lakes, but not everyone is happy about it. Eleven Indian tribes across the region have come out in opposition to a plan to a new open-air pit, iron ore mine, according to WBEZ’s Front and Center project. Proponents say the mine would create 700 jobs paying $50,000 a year. However, opponents are concerned about the impact on the environment. They met with Wisconsin Gov. Scott Walker this week.
Detroit faces a bleak fiscal future and needs to change. In a hurry.
That’s the message Mayor Dave Bing delivered in a speech about the city’s grave financial condition. Detroit faces a cash-flow shortfall of $45 million as soon as April, at which time it would be insolvent. Without immediate changes, the state of Michigan will likely appoint an emergency manager whose power exceeds the mayor and city council.
In order to stave off a move that would be unprecedented for Michigan’s largest city, Bing has proposed a variety of fixes: an across-the-board 10 percent pay cut for city employees, increasing employees’ share of health-care premiums by 10 percent, a not-quite-1-percent tax increase on city businesses, the privatization of the city’s lighting and transportation departments and retiree pension reforms.
He also requested $220 million from the statehouse, a give-back for cuts in revenue sharing (a request that almost certainly will not be granted).
Is Bing’s overall plan enough to thwart state intervention? Reviews are mixed.
Three stories making news across the Midwest today:
1. Michigan’s unemployment rate drops. Michigan’s unemployment rate fell a half-point to 10.6 percent in October from 11.1 percent in September, according to numbers released Wednesday from the Michigan Department of Technology, Management and Budget. It was the second straight month the state’s rate declined. The decline came “due primarily to a reduction in the number of unemployed individuals actively seeking employment,” Rick Waclawek, director of the Bureau of Labor Market Information & Strategic Initiatives, said in a statement. Nationally, unemployment claims fell to a seven-month low Wednesday, according to our partner station WBEZ. The four-week average fell to 396,750, the first time the average has been below 400,000 in seven months.
2. Indy Plant Eschews Coal For Natural Gas. A plant that generates steam for heating some of Indianapolis’ biggest downtown institutions will convert its coal-burning boilers to natural gas. Citizens Energy Group CEO Carey Lykins tells the Indianapolis Star the project will “mean cleaner air for downtown Indianapolis and provide significant savings for our customers compared to continued use of coal.” The conversion could be completed as early as 2014 and save the company $5 million in annual operating costs. The Perry K plant heats many downtown businesses and institutions, including Lucas Oil Stadium and the Indiana University-Purdue University Indianapolis campus.
3. Milwaukee Streetcar Support Swells. Supporters of a Milwaukee Streetcar project outnumbered its detractors by a 2-to-1 margin at a public hearing held Wednesday night on the planned streetcar line’s environmental impact. Supporters said the streetcar project will improve city transportation and stimulate economic development along the line. Opponents believe the cost is one the city cannot afford. City alderman have already voted to approve the project and move ahead with engineering, according to the Milwaukee Journal Sentinel, but have withheld final approval “until more details are fleshed out.”
The wait is finally over for Tupelo, MS, which must feel like the Kate Middleton of car towns. Today, Toyota chief executive Akio Toyoda was set to join Mississippi Gov. Haley Barbour to finally open a $1.3 billion factory in Blue Springs, just outside Tupelo. The dedication is taking place two years after the factory was originally set to open.
Delay or not, many Midwest governors must wish they were in his shoes. While our region has a few foreign car plants, as well as engineering centers, it has only gotten one of the big factories announced in past few years, the Honda plant in Greensburg, Ind.
Other states have beat out their Midwest rivals, like Georgia, which landed Kia, Tennessee, which got the newly opened Volkswagen plant, and Toyota, which picked Mississippi.
That state came up with $294 million in incentives, or $148,000 for each of the 2,000 jobs the plant is set to provide. About 1,300 people have been hired thus far, earning a starting wage of $15 an hour, rising to $21 after five years.
For more than four years, he taught art to kids in kindergarten through 8th grade. The layoff came a few days before the start of the school year and Busse, 27, didn’t have time to get another teaching job. So he put the business plan he had worked on that summer into action.
Busse had been saving for a downpayment on a house. Instead, he used that money to start Penguin Foot Pottery in Chicago’s Logan Square neighborhood. Busse says the business wouldn’t be possible without help from his friends and family, a bank and a nonprofit.
“They were happy to help,” he said. Busse grew up in the Chicago suburbs, where his father works in construction. As a gift to his son, he paid for the materials and supplied some the labor to get studio space in working order. Then, Busse’s mother, father, uncle and sister helped tear out the ceiling, refinish and paint walls, put in a new floor and do some general “cleaning up.” Busse estimates he would have paid around $10,000 for the work on the open market. Continue reading “Your Story: A Business Proposal for Friends and Family”
On Wednesday, the White House formally issued a proposal to nearly double automotive fuel efficiency standards by 2025. The proposal to boost the standards to 54.5 miles per gallon – a jump from the 27.3 mpg required today – comes on the heels of an agreement President Obama reached this summer with automakers.
Here’s a glance at five responses to the news:
Dan Becker, Safe Climate Campaign
“It is not every decade that a president does something to simultaneously help the environment, consumers and the auto industry. President Obama has done just that. These standards are the biggest single step any nation has taken to fight global warming. They will slash our oil addiction.”
Rahm Emanuel has only been in office since May, but today he scored his first major political victory. Chicago’s city council voted 50-0 in favor of a budget plan that calls for fee increases, layoffs and major changes in the way the city does business.
That isn’t to say all the aldermen liked it. During two hours of debate, there were complaints about aspects of the plan that will close libraries and close six mental health clinics.
But there also was praise for Emanuel for working closely with city council members on his proposal to address a $635 million deficit. Ed Burke, considered the city’s most powerful alderman, said the budget process was the most cooperative he had seen in 42 years.
While he was working on the plan, Emanuel, the former White House chief of staff, said he was no longer going to “kick the can down the road” on the city’s problems — a veiled reference to his predecessor, and political mentor, Richard M. Daley. (I looked at Emanuel and Daley in this story for Atlantic Cities last month.)
In Wednesday’s debate, Alderman Richard Mell told the mayor, “It’s obvious that when you we’re a kid, you never learned the game of kick the can. Everybody felt the pain. The only way you are going to make the gain is to feel the pain.”
With his city’s financial fortunes sinking, reports say Detroit Mayor Dave Bing tonight will propose
privatizing the bus system and its electrical system in a bid to save $100 million.
Bing is set to speak at 6 pm ET, in a speech his office says will offer “solutions to long-standing service problems.”
A recent financial audit showed the city could run out of cash by July, even if it cuts 2,200 jobs.
The Detroit Free Press says that includes a plan to find private managers for the city’s bus system, and to find outside operators for Detroit’s electrical system. Earlier this month, bus drivers staged a brief sickout to protest what they maintain is an unsafe system. Meanwhile, the city’s electrical system has failed several times in recent years, leaving downtown offices in the dark.
Catherine Phillips, a union negotiator, told the Detroit News that the privatization of the Detroit Department of Transportation is estimated to yield $30 million in savings.
The paper says the city could seek outside managers for the bus system as soon as Dec. 1. Watch Bing’s speech tonight and let us know what you think of his proposal.