Starkman: Michigan's Future in Peril and Needs Grown-Up Leadership

October 10, 2021, 7:10 PM

Eric Starkman of Los Angeles is a former Detroit News business reporter who blogs at Starkman Approved.

By Eric Starkman

Chicago hedge fund billionaire Ken Griffin last week put the Windy City on notice that his Citadel hedge fund would relocate its headquarters unless local and state leadership got its act together and reduced violent crime.

“Chicago is like Afghanistan on a good day. And that’s a problem,” Griffin said in a remarkably frank speech at the Economic Club of Chicago. In addition to rising violent crime, Griffin also cited “broken” public schools, high taxes, and pension reform as critical issues needing to be promptly addressed.

Chicago is blessed to have a local business leader willing to give notice of his plans to relocate and offer city and state leaders an opportunity to make things right before he pulls the plug. Ford CEO Jim Farley has no such civic pride. Ford struck deals to invest more than $11 billion in Tennessee and Kentucky without so much as even a courtesy call to Gov. Gretchen Whitmer to see if maybe Michigan could make it worth the company’s while to stick around.


Ford’s announcement came in the wake of GM announcing it plans to invest more than $2 billion to build a battery-cell plant in Tennessee. Meanwhile, Tesla CEO Elon Musk announced last week he is relocating his headquarters from Silicon Valley to Austin, Texas.

The writing is on the wall: In a few years, Ford and GM will be compelled to pull a Comerica and relocate their headquarters to a more business-friendly state south of the Mason Dixon Line, arguing they must do so to remain competitive. That was essentially Comerica’s excuse when it flipped Detroit the bird in 2007 and relocated to Dallas.

Whitmer admitted she was caught flat-footed and sounded like a talking deer in headlights. 

"In terms of us having tools that we need to be competitive I'm always looking to make Michigan more competitive," Whitmer told reporters last week. "And (I'm) always eager to put solutions on the table. But we needed a real opportunity to do that. And that really wasn't the case here."

Gov. Gretchen Whitmer in Houghton last August (Photo: State of Michigan)

Playing the victim card is something Democrats do well, but Whitmer owns Ford’s Michigan abandonment. Being governor is akin to being CEO of a company, and its Whitmer’s job to ensure state officials are in regular contact with Michigan’s biggest employers, including Ford and GM. Whitmer should be worried 24/7 about losing Michigan companies because of relocations, mergers, or economic hardship.

Ford’s claim that Michigan didn’t have the shovel ready sites needed for its $11 billion electric vehicle and battery investments sounds bogus. There’s plenty of available land in Michigan, let alone in Detroit, and it takes just a matter of days to demolish property and make it shovel ready. Moreover, Ford isn’t just looking to build electric cars in Tennessee.

Tech training for Tennessee workers

"Christmas Came Early," screamed the headline in Tennessee.

Ford’s new auto manufacturing site in West Tennessee will also house a new Tennessee College of Applied Technology campus. The technical college will train people to make and repair electric vehicles and batteries.

“This partnership between the state and Ford will create another avenue for Tennessee workers to skill up and settle down with a great American company,” Tennessee Gov. Bill Lee said during a press conference.

Trying to put some spin on Whitmer’s ineptitude, her spokesperson emphasized to Fox News that Ford recently pledged to spent $250 million in Michigan and add 450 jobs at three facilities. Ford’s Michigan investment is a rounding error compared to its Tennessee and Kentucky commitments.

In fairness, the Ford family has steadfastly been loyal to the Detroit area, and if the family remains in control the company will likely continue to retain a strong Detroit area presence.  But given the sorry state of Michigan’s schools, its infrastructure, and its clownish leaders, the argument to remain here becomes less compelling every day.

Rep. Rashida Tlaib, D-Detroit

One such leader is Rep. Rashida Tlaib, part of a clique known as The Squad, a group of young congressional women who think they are still in high school. Tlaib’s district straddles Ford’s headquarters, yet she supports a boycott of Israel and recently refused to approve funding for its Iron Dome defense system that protects citizens from continuous missile attacks.

Ford and GM operate significant research and development centers in Israel that both companies say are critical to their futures. Whether Tlaib likes it or not, among those protected by the Iron Dome are Israeli Ford and GM employees whose work has a material impact on her constituents. Given the antisemitic history of the company’s founder, I’m doubtful that Ford is proud or finds it advantageous that a congressperson representing its interests is deemed among the world’s biggest anti-Semites by the Simon Wiesenthal Center.

Decades of Decline

Southeastern Michigan has been on a steady decline for decades, morphing into a regional hub rather than a burgeoning metropolitan area with committed business leaders and a growing economy. The number of publicly traded companies headquartered in Michigan has declined by more than 50 percent in the past two decades. The loss has a multiplier effect because for every headquarters job, the U.S. Bureau of Economic Analysis estimates that 2.5 new jobs are created to support the business, such as accountants, lawyers and other service providers.

Detroit was once a headquarters city for great companies in various industries. National Bank of Detroit was consistently ranked among the best U.S. banks, particularly for technology. Michigan National was once among the most innovative consumer banks and a pioneer in multi-branch banking.

Kmart was a respected retailer, and a good corporate citizen as well. It was among the local companies that opposed the Detroit Free Press and News merging business operations, a move that led to the irreparable journalism decline of both publications and allowed Michigan leaders to operate with limited accountability.

There are many who will say the loss of companies was inevitable and part of a national trend, but one only need look to Ohio and Cleveland to appreciate the benefits of competent political leaders and committed business executives.

When Toledo’s teaching hospital announced plans to explore a sale, Marcy Kaptur, the longest-serving woman in Congress, promptly protested, arguing it was irresponsible to sell a hospital amid a pandemic. Ohio attorney general Dave Yost let it be known that he wouldn’t sit idly by as well. The former mayor of Toledo spearheaded a local coalition to protest the hospital sale. It was dead in the water before any bids were considered.

Yost recently won a landmark $88-million settlement against a pharmacy benefit manager for ripping off the state and its residents. He’s also filed a landmark lawsuit to make Google a public company.

Cleveland has retained KeyCorp, a respected regional banking company. Beth Mooney, CEO of KeyCorp, is board chair of Cleveland Clinic, consistently ranked in the very top tier of best hospital networks in the country.

I’m doubtful Cleveland’s business leaders would sit idly by and let some yahoo from Atlanta come to town and destroy a major hospital or other critical institution, as Metro Detroit’s political and business leaders allowed John Fox to do with Beaumont Health.

Attorney General Dana Nessel (Photo: State of Michigan)

The only local leader who dared speak up was veteran attorney Mark Shaevsky of Farmington Hills, who a year ago wrote a thoughtful letter to attorney general Dana Nessel calling on her to remove Fox and the directors who supported him. Shaevsky warned Nessel about patient safety issues at Beaumont’s flagship Royal Oak campus, which continues to deteriorate. 

Nessel still hasn’t intervened, apparently because bigger issues are weighing on her. Nessel recently mused that Green Bay Packers quarterback Aaron Rodgers made her glad she is a lesbian. Underscoring her attention to detail, she misspelled Rodgers’ name.

That’s the gravitas Nessel brings to the office. And here’s a list of her accomplishments, most of which I consider busywork and nothing approximating what Ohio’s Yost has achieved.

Whitmer has no economic vision for Michigan. According to the Mackinac Center for Public Policy, the state’s business subsidy programs are “ineffective at creating jobs, unfair to the businesses that don’t get them, and expensive to the state budget.” Moreover, few companies are even bothering to apply for subsidies.

“That’s a problem for programs ostensibly designed to create jobs,” said the nonprofit research center in Midland.

Glorified Sweatshops

If Southeastern Michigan’s trajectory remains unchecked, in a few years the biggest companies headquartered in the region might be Rocket Mortgage and United Wholesale Mortgage, which are glorified sweatshops with great perks. The stock prices of both companies are in the toilet, indicating Wall Street isn’t terribly excited about the future of these companies.

These companies could pack up and relocate to Tennessee practically overnight. Fortunately, Rocket is controlled by Dan Gilbert, who needs to keep some people around to fill his tax-subsidized office and residential buildings in downtown Detroit.

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