Maximizing Region’s Global Trade and Jobs

Dome Magazine

by Rick Haglund

As mayor of Lansing in the late 1990s, David Hollister led the state’s capital city to an improbable and stunning economic victory.

Faced with the prospect of General Motors Co. closing its operations there, Hollister pulled together a blue ribbon committee of local business, education and community leaders that not only convinced GM to stay, but also to invest hundreds of millions of dollars in two new assembly plants.

Now, as the vice president of strategic initiatives of the Prima Civitas Foundation in Lansing, Hollister is championing an even more ambitious effort to revitalize the state’s economy by integrating its air, rail, water and highway systems with Canada’s transportation infrastructure to maximize global trade.

Various groups have predicted that tens of thousands of new jobs could be created by convincing shippers to transport goods from Europe and Asia through deep-water ports in Halifax and Montreal.

From there, cargo would arrive by rail in Michigan. The state would serve as a logistics hub to distribute finished goods throughout the Midwest. Parts that arrive here would be manufactured into automotive and other products.

“The larger issue is how do we stop the freight arriving here and add value to it?” said Doug Smith, senior vice president of strategic partnerships at the Michigan Economic Development Corp.

The MEDC recently named Peter Anastor, director of policy, program management and governmental affairs at the agency, to coordinate various transportation and logistics projects proposed in the state.

Among them are a rail tunnel under the Detroit River linking Windsor with Detroit, and several plans to connect Michigan to ports in Halifax and Montreal through rail connections.

Positioning Michigan as a transportation hub also would allow the state to boost exports of agricultural products and durable goods throughout the world.

“We’re trying to figure out how we can leverage these assets,” Hollister said. “With companies insourcing jobs and pulling their supply chains back into the United States, we can put Michigan on the map as a major transportation and logistics center.”

Formed by Michigan State University in 2006, Prima Civitas initially concentrated on economic and talent development in mid-Michigan. It expanded its focus statewide last year.

Hollister, who was the first chief executive officer of Prima Civitas, stepped down last year to focus on major new initiatives.

Among the biggest he’s helped put together is the I-69 International Trade Corridor, which would move goods through a transportation system using the Blue Water Bridge between Port Huron and Ontario, rail lines, the I-69 freeway and Bishop Airport in Flint.

Five counties and 34 local communities in the corridor recently applied for a Next Michigan Development Act designation that would allow the corridor to offer a variety of tax incentives to companies locating there.

Gov. Rick Snyder recently approved an interlocal agreement between the state and counties needed to move the project along. The trade corridor proposal is awaiting final approval from the Michigan Strategic Fund.

Bishop Airport would serve as the corridor’s “aerotropolis,” which places an airport at the center of an urban development. A similar project has been approved under the Next Michigan act to develop an aerotropolis surrounding Detroit Metro and Willow Run airports.

“This could be more significant over time than what we did in getting General Motors to invest in the Lansing area,” Hollister said. “This is the most sophisticated deal I’ve been involved with in my 40 years of public service.”

Prima Civitas also worked with Business Leaders for Michigan in developing a “Gateway to the Midwest” transportation and logistics element in BLM’s update Michigan Turnaround Plan, announced on January 24.

Hollister said Michigan’s near economic collapse during the past decade has prompted government and business groups to collaborate like never before.

“Regional collaboration efforts in the past were all about turf, turf, turf,” he said. “But communities have been so shaken by the recession that they really see cooperating on increasing trade as a hopeful opportunity to create jobs.”

Last October, more than 130 leaders from the public and private sectors in Michigan and Canada came together in a “Great Lakes International Trade and Transport Hub” summit at Michigan State University to discuss how the state and Canada could boost trade.

Hollister chairs the hub’s steering committee, which is focusing on the following areas: promoting greater collaboration among businesses and industry, integrating the state transportation and logistics assets, educating citizens for careers in global trade, marketing Michigan as a transportation hub and helping companies develop supply chains so they can boost exporting.

Even though Michigan and Canada are neighbors and do more than $60 billion a year in two-way trade, Hollister said Michiganders aren’t nearly as informed about Canada as they should be.

The hub report recommends greater education about Canada in the K-12 system and making students more aware of job opportunities related to trade between Michigan and Canada.

“Canada does a much better job than we do in terms of covering the United States in their school curriculum,” the report said. “International relations study is important to our students’ futures.”

Michigan has a rare opportunity to provide a secondary shipping and logistics alternative to Chicago, but must act quickly, experts say.

“Everybody knows there are delays in Chicago,” Hollister said. “Those delays are money. We need to offer a value proposition for companies to come here. That’s what we’re working on.”

But other Midwest metropolitan areas, including Columbus, Indianapolis and Louisville, also are working to develop logistics hubs that would serve as alternatives to shipping through Chicago.

Some say a major threat to Michigan is a $175 million CSX Transportation intermodal train terminal built last year in North Baltimore, Ohio, south of Bowling Green.

Ohio Lt. Gov. Mary Taylor told the Toledo Blade in June that the project has the potential to create about 2,000 spin-off jobs in logistics and warehousing. She said the terminal “symbolizes to the rest of the world that Ohio is open for business.”

Hollister and others say Michigan’s advantage is its manufacturing base that allows components shipped to the United States to be built into finished products.

The state’s manufacturing and agricultural assets could be combined to make Michigan a major player in the “green economy,” he said.

Seats, steering wheels and other automotive components can be manufactured from soybeans and other agriculture products. An improved transportation system here would allow those products to be shipped around the world.

“We haven’t taken advantage of our strategic assets,” Hollister said. “We need more out-of-the-box thinking.”