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3 CEOs tout plan to save Michigan's economy
date: December 15, 2009
SOURCE: Detroit News
Brian J. O'Connor / Detroit News Finance Editor
Detroit -- Without fundamental changes to the state's budget and economic priorities, Michigan is headed for more pain and even bigger troubles, three of Michigan's leading business executives warned a Monday meeting of the Detroit Economic Club.
The Cobo Center meeting unveiled a five-point "Michigan Turnaround Plan" from Business Leaders for Michigan, the new statewide version of the Detroit Renaissance corporate leadership group.
The urgency behind the plan was presented in a panel discussion featuring three heavy hitters of the local business community: John Rakolta Jr., CEO of Walbridge construction company; Anthony Earley Jr., CEO of DTE Energy; and David Brandon, CEO of Domino's Pizza. All are members of Business Leaders for Michigan.
In presenting a broad outline of the plan, the three men placed the lion's share of blame for the state's ongoing financial woes on what they called a the lack of leadership and will in Lansing.
"We have a plan," Brandon said. "I spend a lot of time up in Lansing and they don't have a plan."
The panel emphasized long-range planning -- such as adopting a budget that would span two years or more, as opposed to the current year-to-year blueprint -- and a fundamental review and restructuring to bring state government and public spending in line with its resources.
The CEOs also emphasized that the state must reorganize its economic priorities to make job growth the priority.
Rakolta pointed to years of endless squabbles and last-minute patches to the state budget as a symbol that discourages companies from locating in Michigan. "Just the fact that we can't balance it is enough," Rakolta said.
His own company once did 90 percent of its business in the state, but now Michigan work accounts for less than 10 percent.
At the same time, Rakolta estimates that taxes and the business climate of being headquartered in Michigan adds $2 million a year to his costs.
"I could make the case right now that we should be out of here," he told the audience of 400.
Earley said term limits in state government foster short-term thinking, instead of the kind of comprehensive five- and 10-year plans most businesses create.
"If we want long-term solutions, we need people who are going to be there for a while," Earley said. "Term limits were absolutely the worst thing to happen to this state."
The panel members emphasized that many of the solutions outlined in the plan -- available at www.michiganturnaroundplan.com -- had been recommended many times by many analysts and researchers. Instead, they said, reforms and restructuring don't happen because of the lack of will and ability to turn those reforms into reality by Lansing's elected leaders.
"There have been meetings up there where I thought what they really needed was adult supervision," Brandon said.
Many possible fixes, from pooling purchasing for cities to combining functions of school districts, already are in place in other states, the panelists said, if Michigan voters and elected leaders will reconcile themselves to putting changes in place and making them work.
"We don't need to reinvent the wheel; we just have to look for success and emulate it," Rakolta said. "We just don't have the will as a society to make the tough decisions."
In the coming months, the CEOs said they would review their involvement with candidates for office and their foundations and other support groups, and predicate their support on whether those running for office support the turnaround strategy.
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