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Efforts Land 4,800 New Jobs in Michigan

July 16, 2008

By Chris Christoff, Detroit Free Press

Jul. 16–LANSING — On a day when Michigan’s industrial future took a hit — more job cuts planned for General Motors and no new Volkswagen plant for the state — Gov. Jennifer Granholm’s economic team served up 4,800 new, disparate jobs Tuesday to soften the blow.

Leading the good news parade was Dow Chemical Co.’s announcement of a joint venture to manufacture plastics with a large Kuwaiti oil firm and build a global headquarters in southeast Michigan with 800 jobs — many of them high-paying.

The $11-billion new firm — K-Dow Petrochemicals — also had bids from Texas and Louisiana.

Hours later, the state approved tax breaks for 13 companies that will build or expand operations, with the promise of an additional 4,000 direct jobs. It was the largest single-day approval of tax credits for the Michigan Economic Development Corp. (MEDC).

One of those companies makes amphibious cars that can reach speeds of 35 m.p.h. in water and 115 m.p.h. on land. The British firm will hire about 250 people, including many engineers, to work in a new research and development operation in Auburn Hills.

Five housing projects were approved for tax incentives in Redford Township, Flint and Lansing.

Granholm said the planned $231 million in new investments shows the state is diversifying its economy. In turn, the state will give out $44.4 million in tax credits. The 13 companies will make — among other things — solar panels, jet engine parts and automotive sound systems.

“Michigan is a great place to do business,” Granholm said, flanked by executives from the companies. “Michigan’s workforce is second to none. It has great incentive tools, and truly, Michigan will give you the upper hand if you compete here.”

MEDC Chief Executive Officer James Epolito said the companies chose Michigan over Alabama, Florida, Ohio, Texas, Indiana, Tennessee and other states, as well as Britain, Germany and India.

Granholm said tax breaks for K-Dow will be considered after the company chooses a location for its headquarters.

It was unabashed cheerleading in the face of bad economic news, but Granholm insisted the state is rebounding with nonautomotive jobs. She said despite the news that GM will slash thousands of salaried jobs, the company will retool for more fuel-efficient vehicles and “come roaring back.”

MEDC officials said in addition to 4,000 new jobs, the 13 companies and the Dow plastics venture would spin off another 3,000 jobs from suppliers, retailers and housing.

Volkswagen had been expected to pass over Michigan for its new, $1-billion plant. The company announced Tuesday it would be built in Chattanooga, Tenn. Granholm said the chosen site was better situated for a new auto plant.

Dow’s joint venture was a patch of blue between economic clouds. Dow will team up with Petrochemical Industries Co., a subsidiary of the Kuwait Petroleum Corp.

Granholm praised the venture as another major commitment to Michigan by Dow, following last week’s announcement that Dow would acquire chemical company Rohm and Haas Co. for $18.8 billion.

K-Dow will manufacture various plastics used in materials for products such as milk jugs, packaging materials, pipes and automotive parts.

Dow cited three reasons for choosing metro Detroit over Louisiana and Texas, including its proximity to an international airport, the quality of public schools and metro Detroit’s diversity, especially its large Arab-American population, said James Fitterling, CEO of K-Dow. Fitterling is currently group president for Dow Basic Plastics.

He said schools with Arab-English bilingual programs would be attractive for Kuwaitis who move to the area.

“The location allows us to create a distinct corporate culture, which is going to be very important to the success of this joint venture,” Fitterling said.

Metro Detroit has the largest proportion of Arab-American residents in the United States, with about 300,000 residents. Dearborn, where Arab Americans comprise almost one-third of the city’s 90,000 residents and many businesses have signs in both English and Arabic, is considered the unofficial American capital for Arab Americans. A high percentage of Dearborn school students speak English as a second language.

K-Dow would be heartily welcomed in Dearborn, said Hebah Alwerfalli, marketing and membership director for the Dearborn-based American Arab Chamber of Commerce.

Hassan Jaber, executive director of the Arab Community Center for Economic and Social Justice, added: “Maybe this Kuwaiti company is only the beginning of … a huge partnership between Michigan and the Arab world.”

K-Dow will employ 5,000 people worldwide, with manufacturing operations that include the Middle East and Asia. The Detroit-area site for the new headquarters will be selected this year.

Epolito, the MEDC CEO, said Granholm helped seal the deal with the Kuwaiti company to invest in Michigan with Dow. It happened, he said, during a low-key dinner June 24 at the governor’s Lansing residence. Two top women who are executives of the Kuwaiti company were impressed with Granholm’s role as governor.

Granholm was to have met with the executives in April during a trade mission to the Middle East. That was canceled when Granholm underwent emergency bowel surgery. Instead, the dinner meeting in Lansing was arranged.

Michael Gambrell, executive vice president of Dow Basic Plastics and Chemicals, said Dow has manufacturing operations in Texas and Louisiana that were attractive. But, he said, “in this great state, this is our home, and this is where we’re committed.”

The Associated Press contributed to this report.

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