General Motors Co.'s announcement that it was adding 600 jobs to its downtown Lansing plant to build the new Cadillac ATS proves he knows how to bring jobs to the state, Democratic gubernatorial candidate Virg Bernero said Thursday.
"Lansing is already seventh in the state in job growth, and this new development is a major step toward becoming No. 1," Bernero, the city's mayor, said in a statement. "As governor, I'll turn Michigan's economy around just like we've done in Lansing."
Bernero joined Gov. Jennifer Granholm and GM officials for the announcement that the Lansing Grand River assembly plant will build the compact version of the Cadillac CTS luxury car. During Bernero's nearly five years as Lansing mayor, the area has attracted more than 6,000 new jobs, including those in the auto industry.
He acknowledged that the area has had a net jobs loss, but says Michigan and most regions around the state did worse during the auto industry downturn and nationwide recession.
Republican rival Rick Snyder said Bernero's experience as a "career politician" can't match his own experience creating jobs in the private sector. But Snyder's job-creation record is mixed as well.
The Milken Institute, an independent think tank in Santa Monica, Calif., reported last week that the Lansing-East Lansing area ranked seventh nationally in the number of jobs created between April 2009 and April 2010, the only Michigan metropolitan area to gain more jobs than it lost.
That hasn't been the case for Bernero's entire stretch as mayor. Since he took office in January 2006, the area has seen nearly 16,000 non-farm jobs disappear, a drop of nearly 7 percent, according to state labor statistics. That was a smaller drop than the 12.2 percent decrease in jobs Michigan suffered overall.
Michigan's unemployment rate was 6.7 percent at the start of 2006 and peaked at 14.5 percent last December before dropping to 13 percent last month. The Lansing area's rate rose from 6.1 percent when Bernero took office to 12 percent in July 2009. It now is 9.9 percent, second only to the Ann Arbor area's rate of 8.4 percent.
Unemployment within Lansing's city limits rose from 8.6 percent in January 2006 to 14.5 percent in August 2010. But the city limits don't contain the many large employers Bernero has worked with to create area jobs, such as Michigan State University. Within the city limits, Bernero has helped attract new startups such as Niowave, which makes specialty parts for superconducting particle accelerators.
"He's been very good to work with from our perspective," Niowave Chief Operating Officer Jerry Hollister said recently. "He helped us get up on our feet, he's been supportive all the way along."
Bernero said he's ready to roll out the red carpet for more businesses in Michigan. He wants to get rid of the 22 percent surcharge on the Michigan Business Tax, reducing business taxes by more than $500 million. He said he'd create a new state-owned bank to make credit more available to small businesses and move state investments away from Wall Street banks to local banks that agree to help homeowners avoid foreclosure. He's also a fan of using tax incentives to encourage business growth.
Snyder opposes many tax incentives, saying the state needs to stop chasing companies and concentrate on encouraging entrepreneurship.
"We're doing far too much hunting," he has said. "We need to step back and get much more into economic gardening."
Snyder wants to drop taxes on businesses by $1.5 billion by replacing the Michigan Business Tax with a 6 percent tax on corporate income.
A former partner at what was then the Coopers & Lybrand accounting firm, he helped expand computer maker Gateway Inc. into a major player in the 1990s. As a venture capitalist, he had a hand in getting about a dozen startup companies off the ground, most of them tied to research being done at the University of Michigan in Ann Arbor. He wants to make business taxes more equitable by getting rid of many business tax exemptions.
Like Bernero, however, Snyder's jobs-creation record is not without flaws.
Snyder joined Gateway as executive vice president in 1991, when it had fewer than 800 employees. He was promoted to president and chief operating officer in 1996, then in 1997 when the company was moving from South Dakota to California, he left to return to Michigan. At that time, Gateway had 13,300 employees, including 10,600 in the U.S.
The company later moved most of its manufacturing operations to Mexico and countries in eastern Europe and Asia, including China, according to filings with the Securities and Exchange Commission. Snyder remained on Gateway's board through that time, and has said the board wasn't involved in the decisions to move jobs abroad.
When Snyder returned to Gateway for seven months in 2006 as interim chief executive, he returned about 130 jobs to the U.S. and opened a new plant in Tennessee that employed about 100 people. But the company couldn't remain afloat, and was sold in 2007 to Taiwan-based Acer Inc.
Gateway's filings showed Snyder made at least $14 million from selling his Gateway stock over the years. He used that money to start up two Ann Arbor venture capital firms in which others invested: Avalon Investments Inc., begun in 1997, and Ardesta, begun in 2000. Each company invested $100 million in fledging companies, and Snyder estimates those companies have added more than 400 Michigan jobs and 1,200 nationally.
One company, medical devices manufacturer HandyLab, has announced plans to close its offices in Washtenaw County's Pittsfield Township and move around 50 jobs to Maryland. But Snyder points to other successes such as HealthMedia, which was bought by Johnson & Johnson in 2008 and employs about 140 Michigan workers.
For real estate agent Jeff Fuss of Jenison, those credentials are the reason he's voting Republican.
"We haven't had a good business leader in as governor for a very long time," he said. "That's really what we need."