Tom Walsh: New alliances in the works for bridge, auto industry

By Tom Walsh
Detroit Free Press Business Columnist

TRAVERSE CITY — From the battle over a new bridge between Detroit and Canada to the jostling among U.S. states for automotive investment and jobs, it’s a time of interesting role reversals and alliances in the North American auto industry.

The shifting sands were evident in back-to-back presentations Tuesday at the annual Management Briefing Seminars, staged by the Center for Automotive Research.

First up was Roy Norton, Canada’s consul general based in Detroit, who gave a full-throated call for auto industry leaders to support the New International Trade Crossing and defend the project against a heavy campaign to block the proposed span by Ambassador Bridge owners.

With a referendum question on the bridge headed for possible inclusion on the Nov. 6 election ballot in Michigan, Norton exhorted private-sector auto businesses to put advertising dollars where their self-interest lies.

“Whether or not there will be an advertising effort to combat the Ambassador Bridge’s propaganda rests largely in the offices of industry leaders attending this conference,” Norton said.

Noting that Canada has offered to pay $550 million to connect the bridge to Michigan highways, he said, “May I respectfully suggest that the leadership role in combatting the ongoing campaign of lies and distortion against the project rests with Michigan’s private sector automotive industry?”

If having Canada subsidize a big cross-border infrastructure project and then having to nudge its U.S. neighbors to promote it with a few bucks wasn’t strange enough, Gov. Rick Snyder followed Norton to the podium to announce the formation of a National Governors Auto Caucus to help grow the U.S. automotive industry.

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Gov. Rick Snyder: “There is one party that’s a special interest that’s got a bridge that doesn’t want to see another bridge…They’ve spent close to $10 million calling me names and making up stuff.”

Auto caucus to tackle safety, energy issues

The Detroit News

By Melissa Burden

Acme, Mich. — Gov. Rick Snyder said Wednesday that a new national auto caucus of governors may first tackle issues concerning safety, developing a national energy policy and setting regulations for autonomous or self-driving vehicles.

Snyder, who addressed hundreds of people at the Center for Automotive Research’s annual Management Briefing Seminars and spoke at a luncheon before the CAR Automotive Communities Partnership, said the National Governors Auto Caucus will look to the auto industry to establish priorities. The aim of the caucus — founded by Snyder, and Govs. Jay Nixon, D-Mo.; Bill Haslam, R-Tenn.; and Pat Quinn, D-Ill. — is to support policies that boost the U.S. auto industry.

Snyder said he wants to bring insurance industry representatives to the table to develop regulations concerning the liabilities of autonomous or self-driving vehicles.

He also thanked members of the partnership for their support of the New International Trade Crossing. In June, Snyder and Canadian Prime Minister Stephen Harper signed an agreement for the new bridge; Canada has agreed to pay Michigan’s $550 million portion of the span, and the money will be repaid to Canada through bridge tolls.

Snyder, earlier in the day, said there is no controversy surrounding the bridge’s funding.

“There is one party that’s a special interest that’s got a bridge that doesn’t want to see another bridge,” he said referring to the owners of the Ambassador Bridge. “They’ve spent close to $10 million calling me names and making up stuff.”

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New international bridge to bring huge boost to both sides of border

By Todd Spangler and Katherine Yung
Detroit Free Press Staff Writers

Historic day: U.S. and Canadian flags fly outside the Hiram Walker and Sons Distillery in Windsor on Friday, as Michigan Gov. Rick Snyder and Canadian Prime Minister Stephen Harper announced an agreement to build a second bridge between Detroit and Windsor. / PATRICIA BECK/Detroit Free Press

A small army of ironworkers, crane operators, traffic and bridge engineers, designers, inspectors, carpenters, truck drivers, electricians, cement mixers, haulers and more will have to be hired to build a proposed $2-billion span across the Detroit River, injecting a huge dose of economic activity into a metro area struggling to find its footing following the recession.

Perhaps no aspect of the new international bridge Gov. Rick Snyder and the Canadian government agreed to build Friday brings more hope than the promise of thousands of jobs.

The project represents a bigger investment than the construction of Comerica Park and Ford Field combined, and southwest Detroit and Windsor could thrum for an estimated four years after construction begins, with workers delivering materials, hanging steel, building bridge decks and pouring cement for bridge approaches to local roadways.

“It will be a shot in the arm for everybody,” said Jack O’Donnell, business manager for the Iron Workers Local 25 in Novi. He says his 2,000 or so active members have seen work dry up as some sites in metro Detroit sit unfinished — victims of the slack economy.

In Canada, O’Donnell’s counterpart at Local 700, Mark Dugal, said ironworkers have spread out across the provinces looking for work. This new bridge, he said, “is definitely going to bring some guys back home.”

The work will be split between Canada and the U.S. — even though the Canadian government has agreed to pick up Michigan’s $550-million share of the upfront costs — but that still means there will likely be thousands of jobs on the U.S. side of the border, if the bridge is built as planned.

On Thursday, the Ann Arbor-based Center for Automotive Research (CAR) released a study showing an economic ripple employing 5,000-6,000 people in Michigan in each of the four years the bridge is being built. Another 2,000-3,000 people a year would be employed outside of the state in the U.S. as a direct or indirect result of the bridge, the group said.

That’s during construction alone, said Kim Hill, one of the report’s authors. But $2.2-billion in federal highway funds that will be leveraged for other transportation projects in the state by the Canadian investment could be worth 6,000-7,000 jobs a year for four years, he said. Some 1,400 direct or indirect permanent jobs also would be created by the operation of the new bridge, and new private investment attracted to the area could create thousands more in related services, retail and more.

“All of this sends a very positive message,” Hill said. “If you build a second bridge — or even say you’re going to build a second bridge — you’re sending a message to the business community.”

Sharing the prosperity

The groups proposing the new bridge have suggested 10,000 or more Michigan construction workers could be hired and that an additional 25,000 jobs in the state would be supported through the project, though those estimates were reached by adding the number of jobs supported each year of the project. The CAR report was intended to draw a more accurate idea of the number of jobs supported each year.

It’s not possible to pinpoint how many of each kind of worker would be hired for this project, or when those jobs might be available, however. And although new hires are almost certain, many of the jobs will come from existing pools of workers for companies hired to perform specific duties. Much of the work also will be farmed out to Canadian companies — for instance, it is expected a Canadian company will be hired as the project’s general contractor.

The Toronto Globe and Mail newspaper reported Friday that steel for the project will come from either of the two nations, and Canadian firms will likely produce the plate and concrete reinforcing bar for the bridge, with the main structural support beams most likely coming from U.S. manufacturers.

But the economic effect will ripple across both countries, with work crews, fabricators, design firms and engineers being hired in either country or both. That could be good news for American companies. In the mid-1990s, PDM Bridge of Eau Claire, Wis., was hired to fabricate sections of the second span of the Blue Water Bridge connecting Port Huron and Sarnia. They got $15 million for the job, and that helped support 200 workers over 17 months, said Rick Daniels, a vice president for PDM. The pieces were ferried across Lake Michigan aboard the steamship S.S. Badger from Manitowoc, Wis., to Ludington, then trucked to the site.

Ironworkers — who stand to make $58 an hour in Wayne County, according to the state’s prevailing wage charts — might account for only 100-125 employees at a bridge site, as they did at the second span of the Blue Water Bridge.

Bobbi Welke, who was the Michigan Department of Transportation’s manager on the project and is now MDOT’s regional engineer in southwestern Michigan, said as many as 6,000 people were directly involved in the project.

“The local and regional economic impact of such a construction project is huge,” she said. “It changes the local economy during the construction process.”

That means the hiring — potentially — of thousands of skilled tradesmen, unskilled laborers and machine operators. It would come at a time when the construction business is down nationwide and in Michigan, where the industry shed 85,000 jobs — 41% of its total — from 2000 to 2011, according to the state Bureau of Labor Market Information & Strategic Initiatives.

Brian Raff of the National Steel Bridge Alliance trade group that represents steel producers and bridge fabricators said the project “could do nothing but help our economy in terms of jobs.”

Meanwhile, Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure and Transportation Association, said there are a dozen bridge builders in Michigan that could do a significant portion of the work, either as prime contractors or subcontractors.

John Hamilton, general vice president and business manager for the International Union of Operating Engineers Local 324, said a couple of hundred of his local’s 16,000 members across the state are out of work.

“It’s huge for us,” he said.

Fight for jobs has begun

Alison Black, chief economist for the American Road & Transportation Builders Association in Washington, D.C., said the standard formula used by the federal government suggests $1 billion of transportation infrastructure spending supports about 28,000 direct and indirect jobs.

The total cost of more than $2 billion for the new span, its approaches, connections and customs plazas is about the industry average — about half that amount, about $1.3-billion, would be spent on the U.S. side.

There are other projects under way nationwide, some of which are much bigger. The new San Francisco-Oakland Bay Bridge is expected to cost more than $6 billion. The new Detroit span would still be a significant project nationwide, however, especially at a time of uncertainty over the next national transportation authorization.

“Our industry is still in recession,” Black said.

But there are already concerns that jobs will go primarily to people outside the city. On Friday, a coalition of groups representing minority businesses and Detroiters called for tracking local job creation. In the past, however, contractors have complained they couldn’t hit local hiring targets because of a lack of residents with the needed skills and certifications.

There’s still time to work out any issues regarding local employment, but however it is settled — or not — a project of this size is certain to have a huge local impact as workers on the bridge site visit restaurants, casinos, supermarkets and other retail operations. Purchases — on and off the construction site — spur the local economy.

“In Michigan,” said Hill, the author of the CAR study, “we certainly see the effects of people having a paycheck or not having a paycheck.”

And if workers have disposable income, he said, “they’re going to spend it.”

O’Donnell said there’s another aspect to the work as well: pride in creating a landmark.

“Even to this day, a guy in his 80s or 90s starts talking about the Mackinac Bridge, their chests go out a little bit further and they stand up a little bit straighter,” he said.

New study estimates the New International Trade Crossing will add thousands of jobs to Michigan’s economy

ANN ARBOR, Mich., June 14, 2012 – The construction of a new bridge connecting Detroit, Michigan and Windsor, Ontario will provide an estimated 12,000 jobs per year for each of the four years of the construction phase according to a recently released analysis published by the Center for Automotive Research (CAR), an Ann Arbor-based nonprofit research organization. Furthermore, the analysis concludes that once the bridge is operational, more than 8,000 permanent jobs will be created in Southeast Michigan.

The study, “Analysis of the Economic Contribution of Constructing the New International Trade Crossing: A New Bridge Linking Detroit and Windsor,” indicates numerous opportunities will be generated from both the construction and operation of the bridge, the New International Trade Crossing (NITC).

“Initially the construction of the bridge itself  will serve as an economic stimulus, providing jobs and tax revenues. Once construction is completed and bridge operations have begun, the region’s additional freight shipping capability could attract private-sector investment, augmenting the gross regional product and creating more employment opportunities,” said Kim Hill, director of Sustainability and Economic Development Strategies at CAR and the study’s lead.

“Additionally, the bridge project will make Michigan eligible to receive Federal matching funds that can be used on other highway infrastructure projects throughout the state, helping to improve Michigan’s highway system and supporting the state’s transportation employment. Clearly, a project of this scale, along with the federal matching funds, will have employment and economic effects that will impact many diverse industries throughout the state,” said Hill.

CAR has significant experience conducting economic impact analyses and has carried out the majority of national level automotive economic contribution studies completed in the United States since 1992.

This report is the product of research performed by the Sustainability & Economic Development Strategies and the Transportation Systems Analysis groups at the Center for Automotive Research. The report was written by Hill, Richard Wallace, director of Transportation Systems Analysis, Deb Menk, senior project manager and Joshua Cregger, industry analyst. Financial support for this study was provided by the Michigan Manufacturers Association and the Consulate General of Canada in Detroit.  Additional support was provided by the Detroit Regional Chamber. The complete study is available at www.cargroup.org.

The Center for Automotive Research’s mission is to conduct research on significant issues related to the future direction of the global automotive industry, as well as organize and conduct forums of value to the automotive community. CAR performs numerous studies for federal, state and local governments, corporations, and foundations. The Sustainability and Economic Development Strategies group offers objective analysis and advice while encouraging collaboration between the automotive sector, academia, and communities, with the goal of long-term sustainability of both the industry and communities.

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Center for Automotive Research to Release Study on Job Creation, Economic Impact of New International Trade Crossing

Representatives of the statewide coalition in support of the New International Trade Crossing (NITC) will gather across the state this Thursday as the Center for Automotive Research releases a study outlining the job creation and economic impact of building the new bridge. The study, “Analysis of the Economic Contribution of Constructing the New International Trade Crossing: A New Bridge Linking Detroit and Windsor,” which will be available for the first time, highlights the opportunities that will be generated from both the construction and operation of the NITC.

DETROIT

Who: International Union of Operating Engineers, Local 324, General Vice President and Business Manager John Hamilton; Center for Automotive Research Director of Sustainability and Economic Development Strategies and Associate Research Director Kim Hill; Ford North America Manager of Supply Chain Management, Material Planning and Logistics Bill Storves; and Detroit Regional Chamber Vice President of Government Affairs Brad Williams.

When: 9:30 a.m.

Where: Detroit Regional Chamber, One Woodward Ave., Suite 1900, Detroit, MI

LANSING

Who: Michigan Manufacturers Association Vice President of Government Affairs Mike Johnston; Center for Automotive Research Director of Sustainability and Economic Development Strategies and Associate Research Director Kim Hill; and Ford North America Manager of Supply Chain Management, Material Planning and Logistics Bill Storves. International Union of Operating Engineers, Local 324, General Vice President and Business Manager John Hamilton.

When: 12:30 p.m.

Where: Michigan Manufacturers Association, 620 S. Capitol, Ave., Lansing, MI

GRAND RAPIDS

Who: Grand Rapids Area Chamber of Commerce President and CEO Rick Baker; International Union of Operating Engineers, Local 324, General Vice President and Business Manager John Hamilton; and Center for Automotive Research Director of Sustainability and Economic Development Strategies and Associate Research Director Kim Hill.

When: 2:30 p.m.

Where: Grand Rapids Area Chamber of Commerce, 111 Pearl St. NW, Grand Rapids, MI