Grand Rapids business leader Doug DeVos explains how the New International Trade Crossing will help businesses in West Michigan and across the state.
GRAND RAPIDS, MI — Don’t think of the New International Trade Crossing as just a bridge between Detroit and Windsor, Michigan Gov. Rick Snyder urges.
Think of it as an essential link for international business and a symbol of shared peace and prosperity between two friendly nations, the Republican governor writes in the following guest column.
And think of it as a key economic boost to West Michigan.
“Multiple and efficient border crossings are vital to the continued transport of West Michigan products like automobile parts, office furniture, vitamins and agricultural commodities,” the governor writes.
While the new bridge, called the New International Trade Crossing (NITC) will be built in Detroit, I cannot overstate its importance to the West Michigan economy. Economic studies have concluded that one in seven jobs in West Michigan is connected to trade with Canada.
That fact was top of mind when the The Right Place and Grand Rapids Area Chamber of Commerce went on record in support of the bridge. The chamber concluded the NITC would support 109,000 jobs in West Michigan.
Multiple and efficient border crossings are vital to the continued transport of West Michigan products like automobile parts, office furniture, vitamins and agricultural commodities. For instance, Michigan ranks third nationally in asparagus production, and much of that is grown in West Michigan and shipped to Canada.
In a broader sense, a second crossing is vital to North America. Some 37 states count Canada as their top trading partner. Further, the U.S. exported some $280 billion in goods to Canada in 2011, up 13 percent from 2010, and up 59 percent from 2000.
The NITC will create thousands of private-sector — emphasis on private sector — construction-related jobs in the near future and aid long-term growth for Canadian and Michigan companies large and small.
That’s why the NITC has the backing of Michigan’s top business leaders, including West Michigan CEOs Brian Walker (Herman Miller), Doug DeVos (Amway), Jim Hackett (Steelcase) and Mark Murray (Meijer).
More profoundly, this project has spawned an unprecedented alliance between business and labor leaders. The NITC enjoys the support of the Michigan State AFL-CIO and the Canadian Auto Workers.
The U.S. endorsement of a plan to build a second crossing in partnership with the Canadian government and a host of private businesses fits a broader model of how modern government should support commerce. Governments in both countries will enable the private sector to create thousands of jobs during construction of the bridge and heed creation of thousands more in the long term by accommodating the vital trading needs of corporations that demand more border-crossing capacity.
That’s why Canadian Prime Minister Stephen Harper joins me in his strong support of the new bridge. That’s also why the NITC enjoys the support of each of my living predecessors — William Milliken, James Blanchard, John Engler and Jennifer Granholm.
A number of factors helped shape the opinions in support of the bridge for key business and government leaders on both sides of the border:
- The bridge will not cost Michigan taxpayers a cent. The Canada-U.S. agreement allows private and Canadian investment in Michigan infrastructure without exposing Michigan taxpayers to any risk. The project enables user-fee financing with the Canadians repaid through tolls.
- The new crossing will reduce border delays, which cost big money. In an age where just-in-time delivery is the norm, border delays matter. One economic study concluded that with auto components crossing the border five to seven times during assembly, delays can easily add $800 per vehicle to the cost of production.
- A second crossing is vital to security. A second, “redundant” crossing a safe distance from the other bridge is essential to insuring that goods continue to move if one bridge were to be closed due to unforeseen events. With one bridge, such an event would shut down factories and cripple economies in Michigan and Canada.
- The Ambassador Bridge enjoys no freeway-to-freeway connections in Canada. That means trucks in Canada travel more than seven miles on a commercial street, encountering some 18 stop lights, the only stop lights between Montreal and Mexico City.
- The bridge allows Michigan to leverage up to $550 million in Canadian funds to match more than $2 billion in federal highway dollars. Even if you think the bridge won’t affect you, your highways and bridges will benefit.
A second crossing operated by private industry will add more capacity for the transport of commerce and ensure free-market competition.
Just 41 nautical miles southeast of Detroit stands the tallest U.S. national structure between the Washington Monument and the Gateway Arch in St. Louis. Perry’s International Victory and Peace Memorial, dedicated in 1931, now commemorates 200 years of peace between the U.S. and Canada.
When the NITC is complete, the structure will join the Perry Memorial and other magnificent icons in Canada and the U.S. that symbolize the peace and prosperity shared by these two great nations.
That ongoing peace has fostered the greatest international trading relationship in history. The NITC will ensure that Michigan continues to be a vital contributor and beneficiary of that partnership.
By Chris Knape | The Grand Rapids Press
At Amway’s sprawling Ada complex, pallet after pallet of Nutrilite supplements are shuttled onto outbound trucks. Their destination: South America, Europe, maybe even Japan.
Across West Michigan, manufacturers are pumping out an increasing number of products headed out of the U.S.
It’s true: Globalization has cost thousands of jobs as some companies sought to lower labor costs and sell into closed markets such as China.
But it also is creating a much larger customer base for nimble U.S. manufacturers able to capitalize on a much larger playing field — particularly in niche fields.
Amway joined dozens of other Michigan companies supporting the recently passed free trade agreement with South Korea and the now-stalled government-sponsored Detroit-Windsor bridge because company officials said they simply make doing business easier, less-expensive and more viable for U.S. companies.
“People don’t realize it, but the U.S. is the largest manufacturing economy in the world,” said Richard Holwill, vice president of International Affairs at Amway. “They think we’ve lost, but we haven’t. We’re on the verge of doing much better. We need to look at these trade agreements for what they are and try to make the most of what they can be.”
With sales of more than $9 billion — $8 billion of which were in international markets — Amway is an exporting juggernaut. Last year, it exported 9,700 shipments of nutritional supplements, cleaning products and cosmetics from facilities in Michigan and California.
Products made in Ada were part of the $44.7 billion worth of merchandise exported from the state last year by more than 12,000 Michigan companies.
Last year, Michigan exports jumped 37 percent from 2009, according to government data, due to a global recovery by the auto industry and other manufacturers.
Tomas Hult, director of the International Business Center at Michigan State University, said he is confident Michigan’s export numbers will continue to rise as the automotive sector recovers and more small businesses utilize resources like those offered by MSU and Grand Rapids’ Van Andel Global Trade Center.
Bucher Hydraulics recently hired two international sales representatives whose primary function will be securing new customers in international markets. The former Monarch Hydraulics was purchased by the much-larger Bucher Industries, of Switzerland, in 2007, opening up many new markets for the factories in Grand Rapids and Newaygo.
“We ship components to Europe, India and China for final assembly and deliver to customers there,” said Dan Vaughan, president of Bucher. “We’re seeing a lot of customers in North America want one supplier who can deliver products throughout the entire world. From our perspective, that’s our next area of big growth, international.”
The company has about 160 employees with about 15 percent of products made here being shipped outside the country.
“We have a plant in China and we export to China,” Vaughan said. “We actually fill the boat going the other way. We’d like to see more free trade with China. We are committed to Grand Rapids and Newaygo but we can export and add jobs.”
The opportunity international markets represent is good reason for projects such as the proposed Detroit River International Crossing and free trade agreements, said Birgit Klohs, CEO of economic development group The Right Place Inc. in Grand Rapids.
What some people don’t realize is the agreements have the potential to have a positive impact on the local economy, she said.
As businesses grew leaner and more specialized in recent years, U.S. manufacturers became far more productive and cost competitive in many arenas.
Getting rid of trade barriers lifts one of the largest remaining barriers.
“Trade barriers don’t really help,” Klohs said. “From a global perspective, free trade agreements send the message that the United States is not going out of the business of importing or exporting.
“When I go to Europe, I always get the question, ‘Are you guys interested or are you not interested in foreign markets?’”
Shipping office furniture
Herman Miller and West Michigan’s other major office furniture suppliers clearly are interested. While all of them have offshore manufacturing operations, they also ship products from West Michigan around the world.
At Herman Miller, international sales make up about 25 percent of sales. About 11 percent of its $1.6 billion in sales are exports. The rest is made in overseas factories to more efficiently fill orders or due to trade policies of countries, such as China, that require companies to make products within their borders.
U.S. manufacturing serves all of Herman Miller’s customers in Latin America, Mexico, South America and Canada, plus some in the Middle East and Asia.
All of the company’s classic lines, such as the iconic Eames Lounge Chair, are exported, as are its lines of furniture geared toward the health care industry.
“We’ve been recognized as a great example of American Manufacturing and our ability to compete successfully with lower labor cost markets,” said Mark Schurman, a spokesman for Herman Miller.
He said government could do more to encourage exporting by supporting projects such as the DRIC bridge and allowing for tax-free repatriation of profits made overseas. Bringing those dollars back to the U.S. could open the door for more investments in domestic operations.
“Many international companies, including Herman Miller, park those profits offshore because we can’t see those profits taxed twice,” he said.
For Bucher and Vaughan, exports aren’t the issue. Serving customers wherever they may be is the priority — that’s what creates jobs.
“I’m just trying to grow the business,” he said. “We treat the business in India the same way we treat the business in Iowa. They’re both good customers.”
KALAMAZOO – Kalamazoo County appears ready to approve a resolution urging state lawmakers to approve the second bridge to Canada over the Detroit River.
The proposed bridge would be a third crossing to Canada from Michigan, along with the Detroit-Windsor Tunnel and the Ambassador Bridge.
Commissioner John Gisler, who wrote the resolution and pressed the issue, said it’s a tremendous deal and he rejects arguments from opponents that the bridge should remain in the hands of the private sector.
Gisler said there is nothing wrong with a little competition, and right now it’s a monopoly, saying the project really only opposed by the owner of that monopoly, billionaire Matty Maroun who has spent millions on TV ads to defeat it.
Several commissioners wanted to approve the resolution last night, but a few commissioners say they wanted to look into the issue themselves first before voting. It will be back in two weeks.
By Jim Harger | The Grand Rapids Press
GRAND RAPIDS – The international bridge that collapsed before it could be built in Southeast Michigan was on the minds of West Michigan business leaders and state legislators who met over breakfast Monday.
State Sen. Dave Hildenbrand, a member of the Senate committee that failed to approve the New International Trade Crossing (NITC) last week, said he favored the bridge project and hopes it will be revived despite last week’s setback.
“You’ve got to sift through all the rhetoric and misinformation,” said Hildenbrand, who said he was skeptical about the project but came to see it as “a great deal for the state of Michigan.”
The NITC project has been attacked by a series of television ads backed by the owners of the Ambassador Bridge, the privately owned bridge that would lose business to the new bridge.
Hildenbrand, R-Lowell, said the NITC project would be privately funded, privately operated and privately owned.
“This is not a government bridge,” said Hildenbrand, one of two “yes” votes on the losing side of the 3-2 vote that scuttled the project last week.
“This is the sort of long-term visionary proposal for the state of Michigan that will impact us for the next 50, 75 to 100 years,” Hildenbrand said.
State Rep. Roy Schmidt, D-Grand Rapids, defended Democratic opposition to the bridge proposal.
Schmidt said he sympathized with residents of the DelRay neighborhood who asked for state assistance because approaches to the bridge would disrupt their neighborhood.
His father’s West Side meat market was adversely affected by the construction of the Ford Freeway in the 1960s, Schmidt said. “If you are doing harm, you need to make sure these people are taken care of,” he said.
During a discussion of the failings of the state’s tax credit program for Hollywood film makers, Schmidt lampooned Senate Majority Leader Randy Richardville, a film credit supporter who failed to deliver the bridge project to Gov. Rick Snyder, a supporter of the project.
“If he (Richardville) had worked as hard on that bridge as he did on the film credits, we would have had that bridge built already,” said Schmidt.
State Rep. Lisa Posthumus Lyons, R-Alto, said she hopes the bridge proposal will be revived.
“I’d like to see a better bridge to Canada given that one in seven jobs in West Michigan results from trade with Canada,” she said.
Legislators also said they would be focused on proposals to reform the state’s personal property tax and Snyder’s upcoming proposal to overhaul funding for the state’s aging highways and bridges.
Schmidt, a former Grand Rapids city commissioner, said he would oppose elimination of the personal property tax until the state finds a way to replace revenue lost by local communities.
“I’d like to see it done, but please, let’s not gut the cities everyone,” Schmidt said.