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.
Three stories we think you should know about as you start the week:
Borders a test for Chicago real estate market? With Ulta, Michaels, and Home Goods eyeing 15 Chicago-area spots vacated by Ann Arbor-based Borders Group Inc., currently in liquidation, Crains Chicago Business says it’s a sign of how the retail real estate market is doing in Chicago.
Michigan teachers leaving the state. Hundreds of public school teachers thoughout the state are moving to places where there are jobs, the Associated Press reports. Since its peak in 2004-2005 school year, the state has lost almost 10,000 jobs, or 9 percent, of its public school teachers.
Illinois braces for fallout from S&P downgrade. With stock markets roiling over the Friday night announcement by Standard & Poor’s of its downgrade of U.S. credit rating, Illinois-based business and analysts provide their opinion of what this means in this Chicago Tribune story.
Three Midwest economic stories to end your week with:
Manufacturers take aim at policy makers. The U.S. Chamber of Commerce and the Manufacturers Alliance/MAPI are starting a new initiative aimed at highlighting the potential the manufacturing sector has to create jobs and economic growth. The Chamber, which says it is the world’s largest business federation, says its effort will be aimed at policy makers, and will including sharing research, expert opinions and findings on the state of American manufacturing.
President Obama set to talk job numbers in Midwest next week. The stops on President Obama’s Midwestern jobs tour have yet to be announced, but partner station Michigan Radio reports at least one stop, in west Michigan, looks certain. On his tour, the President is expected to discuss strategy for creating additional jobs. He will also likely talk more about employment numbers, out today, showing the U.S added jobs, but not enough to signal robust economic growth.
General Motor’s earnings up, stock down. The U.S government continues to look for a good time to sell its remaining 26% share in the car giant, and will need to wait a little longer. GM yesterday announced a quarterly earnings report that showed GM has is doing better at any point since declaring bankruptcy, making $2.5 billion in the last three months. As the Detroit Free Press reports, these numbers weren’t enough to counter the larger uncertainty in the stock market over the last few days and GM stocks, at publication time are down almost to year low levels.
Midwest in the midst of a tech hiring boom?According to Bloomberg Business Week, Cleveland is adding more tech jobs than any other city in the nation. Detroit and Cincinnati follow Cleveland. A word of warning, though: The ranking measures the percentage increase in tech jobs over last year, meaning these cities aren’t necessarily seeing a big increase in the actual numbers of jobs being added.
Detroit home prices on way to record lows. Home prices in Detroit continue to fall. The average home price is now 80% lower than in 2005, when prices hit their peak. Partner station Michigan Radio reports prices have fallen steadily this year and the outlook is for more of the same. More than half of the available properties in Detroit are foreclosed properties, making a near term rise in the average home price unlikely.
Kraft Foods splits in two: The Northfield, Illinois-based company has announced it will now be running separate companies to focus on domestic and international markets. Crain’s Chicago reports one company, considered to have high growth potential, will focus on bringing American “snack food” like Oreos, chocolate and Tang to emerging markets. The domestic grocery company on the other hand, will focus on North American sales of items like Kraft cheese, Oscar Mayer meats and Maxwell House coffee. The change is expected to take about a one year to complete.
That’s a question we posed to you all through our Public Insight Network last week. We were asking because I just finished a story about the Chicago chapter of the Awesome Foundation, a group of ten people who each month give out $1,000 in cash to people to make their city. (Here’s the story and here’s the question.)
Cleveland’s Tracy Moavero had a simple idea to engage teens and tweens in downtown Cleveland:
“I’d work with a a local nonprofit like City Prowl to have a youth scavenger hunt in downtown Cleveland,” she wrote into our network. “The age-appropriate scavenger hunts would require kids to talk to people at bus stops, behind shop counters and other places to get answers to questions about the city and its people.”
“We need to engage them and help them feel ownership of the city core in order to reverse the worst effects of sprawl in Northeast Ohio,” said Moavero, who added she would focus on kids who live in the outer suburbs specifically because they’re not as likely to have spent time downtown.
Three must-read stories from around the Midwest today:
Crysler CEO says to temper expectations for U.S auto sales: The Detroit News reports Sergio Marchionne remarked the troubled economy will likely keep U.S auto sales from hitting 13 million units for the year – a goal the industry has been touting as a signal of U.S auto recovery. In the same speech to auto executives, Marchionne also said his company’s preliminary talks with the United Auto Workers Union are going well. Labor negotiations between the two begin in earnest next month.
Ohio’s collective bargaining ban drama continues today: Efforts to repeal SB5, an Ohio law that, among other things, reduces the collective bargaining power of the state’s public employees, are at a crossroads. According to the Cleveland Plain Dealer, the Ohio Ballot Board is deciding today how the measure to repeal the ban will be worded on the November ballot. The ballot language has been contentious. Opponents have argued the current ballot language is confusing to voters.
Construction in Detroit reaches busiest pace in more than a decade. Good news for Metro Detroit, which has added more than 6,000 construction jobs this summer – a rate of growth not seen since more than a decade ago. The Detroit News reports growth is the result of several very large construction projects and smaller developments fueled by private investment. Nationally, the unemployment rate for those in the construction trades still stands at over 15%.
Three must reads on the economy from around the Midwest today:
Archer Daniels Midland feeling rising corn prices as quarterly profits fall. Decatur, Illinois-based Archer Daniels Midland announced today that its quarterly earnings had fallen 15%. The Chicago Tribune reports the drop was due to an expected surge in income taxes and the rising price of corn. The company couldn’t offset the price hike by higher selling prices of ethanol, sweeteners, and animal feed. (We just took a look at ADM in our road trip series on Decatur.)
Michigan public private partnership looks to attract people and businesses to Michigan cities. Partner station Michigan Radio reports Governor Rick Snyder has unveiled something called the Office of Urban and Metropolitan Initiatives. The effort is funded entirely by philanthropic dollars and is aimed at attracting people and businesses to Michigan’s cities. No word on how much money is in the pot, but the effort will focus on Grand Rapids, Detroit and Flint.
When will the jobs return? That’s a question Crain’s ChicagoBusiness.com is trying to answer with a once-a-month interactive graphic. This month: a comparison of Illinois government job losses compared to total job losses throughout the state.
Going to college keeps getting more expensive. In 2011 the College Board estimated it would cost $20,000 a year, on average, for students to go to an in-state, public university.
Kim Sapkowski’s family is asking themselves if a college education and the accompanying tens of thousands of dollars in debt are worth it. Her husband is going back to school, her son doesn’t know if school makes economic sense, and Sapkowski is somewhere in the middle. She has a bachelor’s degree and a master’s degree.
“I have to be honest, I’ve been struggling over the last five years, was it worth it?,” Sapkowski said. “I’d say yes, it was worth it,” she pauses as if unsure. “The education was worth it.”
Sapkowski’s husband Tom is an auto technician (a term he prefers to mechanic) at a General Motors dealership in Grand Rapids. He has seen his income fall by about $30,000 annually in five years. Kim Sapkowski worked part-time so she could spend time with her kids, but had to find full-time work to make up some of that lost income. Even with her education it took two years for her to find full-time work.
Despite seeing his wife go through that experience, Tom Sapkowski thinks a degree is critical to his upward mobility. He’s going back to school this fall at Ferris State University to earn a bachelor’s degree. He hopes to use it to move on from work that is physically punishing and continues to be slow.
“Auto technicians at big dealerships get paid by the job. If there’s no work coming in you’re just not getting paid,” Kim Sapkowski said. “He’s looked at other jobs and he knows he’s qualified. He has the experience, but they’re asking for a bachelor’s degree and nothing less.
Her son, 16-year-old Peter, entered the family debate when he alarmed his parents by mentioning he wasn’t sure if it made sense to go to college. He might prefer to start working on a trade now, and work his way slowly through school. After some family discussion he said he’s not sure what he wants to do yet, and that his parents just “freaked-out.”
Three must read economic stories from across the Midwest today.
Manufacturing growth slows to lowest in two years. Bloomberg reports manufacturing gains are slowing down. The sector has been growing steadily for two years, but this month numbers came close to signaling manufacturing is stagnant. The drop in the numbers–bigger than analysts expected–is believed to be caused by consumers holding on to their money and continued parts shortages from Japan. Stocks dropped on the news, erasing an earlier bump from the prospect of a debt-ceiling deal.
Chicago’s gamble on Lollapalooza paying off for city hotels and restaurants. Six years ago, Chicago signed a 10 year contract to host the Lollapalooza music festival. It’s estimated the show will bring in $85 million in local spending this year, Crain’s Chicago reports. That number makes the festival the city’s third largest convention. The deal for the show included an abatement of the city’s 6% tax on ticket sales in exchange for the city’s Parkways Foundation getting a share of the profits. The foundation expects to make more than $2.2 million this year. Still, radiologists have a lot more cash to blow than the average concertgoer. The Radiological Society of North America’s annual meeting is still Chicago’s biggest convention. It generates $120 million in local spending.
Northbrook, Illinois based Allstate insurer says cost of spring and summer tornado’s led to a $620 million loss. Bloomberg reports the loss is the first one for the insurer in over two years. These losses, which come from homeowner’s insurance, were better than expected. Over 1,600 storms have been reported already this year, beating the storm total for all of last year by almost 400. Allstate is the country’s second largest insurer, behind State Farm insurance.