Analysis
The headline of this story implies that what has happened to Delphi will effect the whole of Michigan’s economy. The article in many ways is a continuation of the story from June 22 that focuses on the new DeVos economic plan and the new Granholm ad. The rest of the article cites several economists making claims about the state of Michigan’s economy. The first economist cited is Dana Johnson from Comerica Bank, the W.E. Upjohn Institute for Employment Research, and Sean McAlinden, an economist with the Center for Automotive Research. No context is provided for each of these source, but after reading the online references for each, these sources seemed to be industry supported and therefore not independent entities. Despite the focus on what the Delphi job loss impact has had, no labor voices are heard in this story like Soldiers of Solidarity who have been challenging Delphi’s actions.
Article Text
The expensive campaign for governor is focusing on one question: Is Michigan’s economy on the way down or up?
With what one economist called the “Delphi effect” coloring options about the state’s economy, the candidates are staking out their positions.
After weeks of prodding from Democrats, Republican challenger Dick DeVos didn’t mince words last week in releasing his economic plan. He said Michigan’s “worst in the nation economy is plummeting further in the wrong direction. Michigan has a jobs problem and it’s not getting better.”
In a follow up message to supporters Thursday, DeVos said there can be no spinning or sugar coating a sagging economy “that has badly hurt friends, neighbors and co-workers.”
On the same day, Michigan Democrats unveiled an ad portraying incumbent Gov. Jennifer Granholm and her policies as the “engine” that will propel Michigan’s economy to a brighter future. When an auto consortium wanted to build a new engine plant , it chose Monroe County because “Jennifer Granholm took action, made Michigan’s case, and won,” the ad says.
At the same time, state government is up on the air with a TV and radio campaign featuring Chelsea actor Jeff Daniels portraying Michigan as a terrific place to do business. And without naming Granholm, the ads tout her administration’s economic development efforts as a reason Michigan can give employers “the Upper Hand.”
There are economists who say that after the loss of more than 300,000 jobs since June 2000, the worst is over, and others who say that Michigan has a ways to go before beginning recovery. Whatever happens, they say, has more to do with selling Chevys, Fords and Jeeps than campaign pitches.
Comerica Bank economist Dana Johnson says Michigan is facing a tough year as General; Motors Corp. and Ford Motor Co. work their way through major restructuring efforts that have stalled bonuses, laid off white-collar workers and sent thousands of assembly line workers into retirement.
In its business outlook, the W.E. Upjohn Institute for Employment Research finds employment stability in West Michigan and better job growth there than previously reported. Other economists point to personal income growth and lower unemployment rate as they conclude the state’s decline is over.
When voter pessimism bottoms out could determine how long the contest between Granholm and DeVos remain tied. Granholm will offer hope the worst is over. DeVos is counting on doubts about that to linger until the November 8 election.
A Republican drumbeat against Granholm and an early, expensive TV ad effort by DeVos built on anxiety over the possibility that labor strife at parts giant Delphi Corp. could send GM< itself into bankruptcy.
While the GOP is fond of saying Michigan ranks above only hurricane-hit Louisiana in economic growth, last year Michigan barely trailed neighbors Ohio and Indiana in lack-luster economic activity.
The Delphi debacle has taken its toll. Voter attitudes darkened between September and March surveys that sandwiched worsening Delphi/GM news. Those who believed Michigan was on the wrong track climbed from 62 percent in September to 75 percent in March, according to surveys conducted by Lansing-based Marketing Resource Group.
Sean McAlinden, an economist with the Center for Automotive Research in Ann Arbor, said the “Delphi effect” has had an impact on the economy as well.
It helped create a negative perception that Michigan was a basket case, he said, no longer a desirable place to do business. It has depressed the state’s housing market and payroll employment. Michigan’s young people are as educated as ever, McAlinden said, but the jobs are scare.
Delphi and the threat of GM’s bankruptcy “stopped investment in Michigan. It’s kind of Okie dust belt, super rustbelt thing. It has to have an effect.”
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