MEDC CEO Michael Finney talks about the job of creating jobs in Michigan
When he started his new job as CEO of the Michigan Economic Development Corp. earlier this year, Michael Finney said he found out something strange.
The MEDC had protected the Pure Michigan tourism brand so much, Finney said, that other state departments shied away from it.
"As we were out selling other state departments on using Pure Michigan … we discovered that we had in fact told people that they couldn't use it," he said. "So we're trying to fix that now."
Michael Finney
"We think the brand is so good that we really ought to extend it to everything that we do," he said. "So we've really adopted it as a business brand in addition to just being a tourism brand."
Finney, the former Ann Arbor SPARK CEO, gave credit to Gov. Rick Snyder and the Republican-controlled Legislature for slashing business taxes by $1.8 billion this year. He said that sends a strong message about the state's commitment to the business community.
"An 86 percent reduction in our business taxes in this state, that's huge," Finney said. "It's something that no other state has done in the past several years. In fact, many of our neighboring states are actually looking to increase the cost of business by increasing taxes."
Finney said nearly 100,000 businesses in Michigan no longer pay a business tax at all now, and that's a good step forward as the state brands itself as flexible and pro-business.
Instead of luring new companies into the state with tax credits, Finney said the MEDC is focusing on nurturing existing companies and finding ways to help them grow.
"Just think about the 100,000 companies that are no longer subject to the Michigan Business Tax," he said. "If those 100,000 companies could each add one or two jobs, we start to make a lot of impact on the 800,000 jobs that we've lost over the last decade or so."
But just reducing business taxes won't grow all the jobs Michigan needs, Finney said. He stressed the importance of developing business-to-business connections within the state.
"That's one of the things that we're doing now," he said. "I was amazed when I got to MEDC that there was no effort under way or interest in making business-to-business connections."
Finney said the MEDC started talking to companies like DTE Energy and Consumers Energy about ways to encourage them to buy more goods and services from Michigan-based companies. He said that led to a $500 million commitment from those two companies.
"My back-of-the-envelope calculation says that for every $100,000 to $200,000 of new sales to any business, that represents one new employee," he said. "So at $500 million, do the math and think about how many new employees that represents. Just because two companies have decided they're going to spend $500 million more with Michigan-based companies."
Finney said the question now is: What would happen if that gets extended to more and more businesses throughout the state?
"And by the way, we're out selling this as one of our tools that we'll have in our tool kit, and we've got a number of companies we're in negotiations with now to sign up," he said.
Finney said the state, for too many years, ignored the fact that it wasn't able to pay its bills, and so he respects the governor and Legislature for taking action to balance the budget.
"Michigan, for the first time in many years, is clearly on solid financial ground as a state," he said. "I think that actually positions all of our local units of government and other taxing jurisdictions — schools or otherwise — to actually be in a much better position going forward."
Finney said the automotive industry is still a part of Michigan's future.
"We want to take every automotive opportunity we can get, but we also have to tell the world that we can make other things," he said. "We can make aerospace, we can make medical device, we can make machine tool, we can make general industrial, and the list goes on. But somehow we've got to make sure that we're selling that as our capability."
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.
Comments
Townie
Sat, Oct 15, 2011 : 7:48 p.m.
Love the 'Michael Finney stated also: "My back-of-the-envelope calculation says that for every $100,000 to $200,000 of new sales to any business, that represents one new employee," That's the only kind you'll EVER see from MEDC or SPARK: made up, never backed up, fact checked or audited numbers. Isn't it great that we back up a nearly $2 BILLION dollar investment (paid for by the poorest and oldest citizens of our state) with 'back of the envelope' calculations? Did he tell you that they created the bill with no way to check it BY DESIGN? Because that's all they are and AA.com and the rest of the media hacks allow this sort of lie to continue (of course, they're part of it). Wouldn't we all like to work in a wonderful place where you can lie to your heart's content about how well you did your job?
Ann English
Sat, Oct 15, 2011 : 7:46 p.m.
I remember reading months ago that Snyder's slash in business taxes goes into effect in October; it's too early to comment on most effects; I can see how knowing about it months ago would affect investors, but definitely not the jobs report.
hut hut
Sat, Oct 15, 2011 : 5:46 p.m.
Finney's little more than a highly paid cheerleader.
say it plain
Sat, Oct 15, 2011 : 4:52 p.m.
that's great that the State has managed to get our utility companies to commit to buying MI-based businesses' products! If Snyder is able to get that sort of simple business-encouragement thing done, while the prior administration didn't consider doing such a thing, then he surely represents an important improvement to our economy. Just the idea that as a powerful player, the government can strong-arm--I mean, encourage ;-) --businesses that the state regulates/oversees etc. to buy from MI-based companies is a good one, and one I don't generally associate in principle with Republicans and their alleged deep commitment to free markets ;-) But good for them! I hope there are tactics in place to keep those newly busy businesses selling things to DTE based in MI; that would also be wise! And I hope that they produce hard and fast numbers to show how new jobs get created too, including ones they claim will be created by all the tax-break monies. I think those have been elusive to show correlations on, over the years. Working out arrangements to increase business for MI companies is *not* the same as drastically cutting corporate taxes and hoping it results in new jobs. If they are hoping that "pure michigan" branding for business might be deeply necessary as a supplement to the tax breaks, that looks a little funny for their arguments about how obviously and quickly effective the tax breaks will be in moving our economy forward!
Joel A. Levitt
Sat, Oct 15, 2011 : 12:34 p.m.
Mr. Finney credits Governor Snyder with reducing taxes while some of our neighboring states are increasing them. Perhaps, our neighbors think that there are things that cost real money that business needs and wants more than lower taxes. Business needs: > a happy and peaceful environment – requiring supporting our unemployed and underwater neighbors, > public services – requiring more funds for water, fire and police departments, > an educated and talented work force – requiring more funds for an improved preschool-through - college educational system, > the ability to get supplies to factories and products to market – requiring improved roads and railroads, and > the states help securing funding for expansion.
Dr. Rockso
Sat, Oct 15, 2011 : 12:34 p.m.
Hey Michael Finney think about the thousands of dollars Rick's policies stole from the hundreds of thousands of elderly people. Think about the increased hardships that Rick's policies have placed on 10's of thousands of the children of the poor. Think about the increased classroom sizes for millions of children thanks to Rick's policies. Think about all the money that 100,000 business will pocket with out creating a single job. Hey Michael Finney think!
Veracity
Sat, Oct 15, 2011 : 12:22 p.m.
Michael Finney stated: "Just think about the 100,000 companies that are no longer subject to the Michigan Business Tax," he said. "If those 100,000 companies could each add one or two jobs, we start to make a lot of impact on the 800,000 jobs that we've lost over the last decade or so." Unfortunately, job creation is not occurring as Finney wishes it would. Since Governor Snyder slashed the business taxes unemployment has increased and we have now more than 500,000 unemployed in Michigan. Michael Finney stated also: "My back-of-the-envelope calculation says that for every $100,000 to $200,000 of new sales to any business, that represents one new employee," Since each new employee's average salary is likely to be $50,000 the MEDC CEO is saying that companies will not hire a new employee unless a three-to-one profit return can be anticipated. Such productivity is very unusual and, if it is the rule for hiring across industries, explains why Michigan's unemployment rate is not declining. The $1.8 "billion" dollar reduction in business taxes is a failure at job creation and would not be expected to be successful since only an increase in consumer demand for products and services will justify new employment.
A2comments
Sat, Oct 15, 2011 : 10:56 a.m.
I love his back of the envelope job creation numbers. How about proof?
alan
Sat, Oct 15, 2011 : 12:29 p.m.
He's from SPARK. There is no proof.
Stephen Lange Ranzini
Sat, Oct 15, 2011 : 10:49 a.m.
I like the buy made in Michigan concept that MEDC has launched with a few mega firms based in the state, but how about extending that to the rest of the businesses in the state? If web sites focused on selling products for left handed people can make a profit, why not a website for products made in Michigan? For each manufacturing job, seven other jobs are created. I would pay a premium to buy Michigan made products and many others would too, because we realize that every time we spend money on a product made overseas, we lower the value of our homes and cut the money circulating in our own economy, producing those local jobs. the burden of taxes then falls on fewer heads. The Internet is really our only hope of buying made in Michigan products consistently because the big box retailers will sell out Michigan manufactured goods for a nickel a unit and sell Chinese (or other countries') made products instead. Many Michigan manufacturers cannot pay for "shelf space" at major retailers, cannot afford sales reps or direct to consumer marketing efforts. A simple website and some Google search engine advertising is all you need to prove the concept. Then scale it up. I am willing to assist any group that wants to take this challenge on, but it would be best if MEDC took the lead.
say it plain
Sat, Oct 15, 2011 : 4:42 p.m.
It would have to be an internet campaign, I think, because if they want to extend the "Pure Michigan brand" to advertise how 'business-friendly' they now are, that wouldn't work well with any sort of manufacturing focus. It seems to me that given Finney's rhetoric about how "unprecedented" it is for us to have cut business taxes by 86%, then the "pure Michigan" branding must be appropriating the "ah, pure lake air and sand dunes plus cherry pie!" dreamscape of the lovely tourism our state has to offer to indicate what a 'breath of fresh air' the no-taxes-on-businesses policies represents ;-) Probably the Tourism Dept branding people didn't want any of the other marketing departments to use the slogan/campaign-theme, because given the (old) reputation of MI for being labor-friendly, if it had been used to promote business attraction it would have taken on a less positive semantic association!