General Session:

1
General Session

• Conversation with the GovernorLive on WWJ
  Newsradio 950

Session Sponsor
2
Jennifer M. Granholm
The Honorable

• GovernorState of Michigan

3
Michigans Economic Challenge
Michigan Manufacturing Employment
Since June 2000 333,200 Jobs Lost 36 Decline
1,000
June 2000
913,700
900
800
Monthly Employment (1000s)
Jan 1992
771,800
700
600
Mar 2008
580,500
500
1990 1994 1998
2002 2006
Source Michigan Department of Labor and
Economic Growth Non-seasonally adjusted data
4
Michigans Economic Challenge
Big 3 Market Share
US Sales of Cars and Light Trucks
80
70
69
70
63
59
60
50
45
March 2008
40
1990
1995
2000
2005
Sources Automotive News, Detroit Free Press
5
Next Steps For Progress That Unites Us

• Create a Skilled, Educated Workforce
• Diversify Our Economy to Create Jobs
• Lower the Cost of Government

6
1. Education and Training for All

• Cherry Commission - Strategic Plan to Double
  College Grads
• All High School Students Must Now Meet Tough High
  School Graduation Requirements (Rated in Top 3 in
  US)
• All High School Students Take College Entrance
  Exam
• All High School Students Have Access to a 4,000
  Michigan Promise Scholarship
• More MI Students Going to College Than Ever
  Before
• No Worker Left Behind
• Overhauled job training to meet employer needs
• Goal Train 100,000 workers for jobs in demand

7
Next Step for Creating a Skilled, Educated
Workforce

• Replace Large High Schools that Fail with Small
  High Schools that Work
• Small, rigorous, relevant, relationships
• School prepares kids for jobs
• Site-based management, labor-management
  cooperation
• Already 6 in Michigan
• 21st Century School Fund could create 100 more
• No new tax dollars

8
2. Economic Diversification New Tools to
Attract, Grow Jobs

• 21st Century Jobs Fund
• 2 Billion, Most Aggressive in Country
• New Tax Incentive Tools
• MEGA expanded to be more flexible and cover more
  businesses
• Alternative Energy and Agricultural Renaissance
  Zones
• Anchor Company Tax Credits

9
2. Economic Diversification New Tools to
Attract, Grow Jobs

• Venture Capital and Private Equity Programs
• Venture Michigan Fund - 95 M
• 21st Century Investment Fund - 109 M
• Angel Investor Tax Incentive
• Invest Michigan Fund - 300 M
• Overseas Investment Missions
• 37 companies 9,000 jobs

10
Alternative Energy

• Hemlock Semiconductor, 1,152 jobs , 1.1 billion
  invested in Thomas Twp
• United Solar Ovonic, 563 jobs, 120 million
  invested in Greenville
• Adaptive Materials, 187 jobs, 2.8 million
  invested in Pittsfield Twp
• Compact Power, 298 jobs, 18 million invested in
  Troy
• Ricardo, 48 jobs, 2 million invested in Van
  Buren Twp
• Sakti3, 230 jobs, 1 million invested in Ann
  Arbor
• Thunder Bay Development, 368 jobs, 15 million
  invested in Alpena
• Dowding Machining, 358 jobs, 7 million invested
  in Eaton Rapids
• Danotek Motion Technologies, 313 jobs, 7.8
  million invested in Pittsfield Twp
• Cobasys, 122 jobs , 1.5 million invested in
  Orion Twp
• Hybrid Development Center, 437 jobs, 344 million
  invested in Troy
• Marysville Ethanol plant, 35 jobs, 95 million
  invested in Marysville
• US Bio Energy Ethanol plant, 37 jobs, 57 million
  invested in Woodland Twp
• Andersons Ethanol plant, 55 jobs, 95 million
  invested in Sheridan Twp
• Great Lakes Ethanol, 62 jobs 94 million invested
  in Riga
• Michigan Ethanol, LLC, 41 jobs, 52 million
  invested in Caro
• Dow Chemical (Building Integrated Photovoltaic),
  22 jobs, 50 million invested in Midland
• Tesla Motors, 76 jobs, 48 million invested in
  Rochester Hills
• Edgewater Automation, 97 jobs, 1 million in St
  Joseph

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Life Sciences

• MPI Research, 6,600 jobs, 330 million invested
  in Kalamazoo
• Xoran Technologies, 386 jobs, 3.7 million
  invested in Ann Arbor
• Cayman Chemical Company, 525 jobs, 9.7 million
  invested in Pittsfield Twp
• Caraco Pharmaceutical Laboratories, 1,648 jobs,
  15 million invested in Detroit
• HandyLab, 138 jobs, 3 million invested in
  Pittsfield Twp
• Emergent BioSolutions, 952 jobs, 73 million
  invested in Lansing
• Pureflex, 366 jobs, 7.3 million invested in
  Kentwood
• The Tech Group, 164 jobs, 13 million invested in
  Walker
• Stryker, 165 jobs, 20 million invested in
  Kalamazoo
• NSF, 100 jobs, 23 million invested in Ann Arbor
  Twp
• Kalexsyn, 54 jobs, 4.5 million invested in
  Kalamazoo
• AAPharmaSyn, 20 jobs, 2.4 million invested in
  Ann Arbor
• Avidimer Therapeutics, 13 jobs, 5.4 million
  invested in Ann Arbor
• Biodiscovery, 10 jobs, 2 million invested
  invested in Ann Arbor
• Compendia Bioscience, 64 jobs, 1.9 million
  invested in Novi
• Genetics Squared, 10 jobs, 1.6 million invested
  invested in Ann Arbor
• Meditrina Pharmaceuticals, 18 jobs, 3.8 million
  invested in Ann Arbor
• NanoBio Corporation, 15 jobs, 15 million
  invested in Ann Arbor
• ProNAi Therapeutics, 20 jobs, 12.5 million
  invested in Kalamazoo

12
Advanced Manufacturing

• Chrysler, over 1 billion invested in various
  locations
• Ford Motor Company, over 1 billion invested in
  various locations
• General Motors, over 1 billion invested in
  various locations
• Global Engine Alliance, 1,978 jobs, 375 million
  invested in Dundee
• American Mitsuba, 90 jobs, 11 million invested
  in Brighton
• Dow Corning, 164 jobs, 22 million invested in
  Williams Twp
• Mitsubishi Heavy Industries, 115 jobs, 7.5
  million invested in Sterling Heights
• Infineon Technologies, 73 jobs, 5 million
  invested in Livonia
• Assay Designs, 238 jobs, 18 million invested in
  Pittsfield Twp
• Toyota Technical Center, 677 jobs, 150 million
  invested in York Twp
• Hyundai America Tech Center, 1,765 jobs, 94
  million invested in Superior Twp
• AVL Powertrain Engineering, 157 jobs, 4.9
  million invested in Plymouth Twp
• Gestamp US HardTech, 348 jobs, 74 million
  invested in Mason
• Visteon Regional Assembly, 353 jobs, 35 million
  invested in Highland Park
• BASF Corporation, 648 jobs, 150 million invested
  in Wyandotte
• Siemens VDO, 2,851 jobs, 50 million invested in
  Auburn Hills
• Siemens Water Technologies, 127 jobs, 3 million
  invested in Holland Twp
• FEV Engine Technology, 178 jobs, 4.3 million
  invested in Auburn Hills
• IAV Automotive Engineering, 198 jobs, 18 million
  invested in Ann Arbor

13
Homeland Security

• Smiths Aerospace, 214 jobs, 5.4 million invested
  in Cascade Twp
• Sensicore, 338 jobs, 4.7 million invested in Ann
  Arbor
• General Dynamics Land Systems, 1,649 jobs, 17
  million invested in Sterling Heights
• Ceradyne, 69 jobs, 2.7 million invested in Wixom
• American Systems Technology, 176 jobs, 3.7
  million invested in Troy
• Second Chance Armor, 160 jobs, 1 million
  invested in Central Lake Twp
• BAE Systems, 1,019 jobs, 58 million invested in
  Sterling Heights
• Patriot Antenna, 56 jobs, 3.5 million invested
  in Albion
• Veridian, 366 jobs, 39 million invested in
  Ypsilanti
• Evigia Systems, 9 jobs, 9 million invested in
  Ann Arbor
• Burtek, 30 jobs, 1.8 million invested in
  Chesterfield Twp
• Ace Electronics, 60 jobs, 1.2 million in Troy
• Advanced Photonix, 105 jobs, 2.2 million
  invested in Ann Arbor
• Solidica, 5 jobs, 2.5 million invested in Ann
  Arbor
• Spartan Chassis, 1,056 jobs, 7.3 million
  invested in Charlotte
• Lapeer Industries, 36 jobs, 2.3 million invested
  in Lapeer
• Demmer, 300 jobs, 12 million invested in Lansing
• Parker Hannifin, 100 jobs, 3 million invested in
  Richland/Otsego

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Overseas Investment Missions

• Karmann USA Inc., 251 jobs, 22 million invested
  from Germany
• Eberspacher Group, 40 jobs, 10 million invested
  from Germany
• Robert Bosch Co., 475 jobs, 66 million invested
  from Germany
• Facton Incorporated, 93 jobs, 1 million invested
  from Germany
• Kostal of America Inc., 203 jobs, 14 million
  invested from Germany
• MBTech Autodie, LLC, 422 jobs, 5 million
  invested from Germany
• MS Automotive LLC, 106 jobs , 23 million
  invested from Germany
• EDAG, 140 jobs, 9.5 million invested from
  Germany
• FT Techno of America LLC, 56 jobs, 30 million
  invested from Japan
• Denso, 250 jobs, 36 million invested from Japan
• Tokai Rika, 230 jobs, 50 million invested from
  Japan
• Stanley Company Inc., 720 jobs, 32 million
  invested from Japan
• Hitachi Automotive, 100 jobs, 16 million
  invested from Japan
• Nippon Piston Ring, 40 jobs, 13 million invested
  from Japan
• AD Incorporated, 100 jobs, 20 million invested
  from Japan
• Hi-Lex, 208 jobs, 68 million invested from Japan
• Konica Minolta Holdings, 262 jobs, 35 million
  invested from Japan
• SECO Tools, 25 jobs, 19 million from Sweden
• Atlas Copco, 30 jobs from Sweden

15
Economic Diversification New Tools to Attract,
Grow Jobs

• Rebranding Our State Travel, Business Ads
• 60 Million Investment, Biggest Ever
• Film Incentives
• Most Aggressive in Country

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Next Step for Diversifying Our Economy to Create
Jobs

• Pass Comprehensive Energy Reform
• Energy regulatory reform
• Renewable portfolio standard
• Energy efficiency standard
• Create a new energy sector of Michigans economy
• Create tens of thousands of jobs
• Ensure adequate energy supply
• Reduce reliance on out-of-state fossil fuels

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Americas Energy Problem is Michigans Economic
Opportunity
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Michigan Uniquely Positioned to Capitalize on the
Coming Green Industrial Revolution

• Wind
• Wood
• Water
• Wheelsand batteries
• Waste
• Workforce
• WSolar

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Economic Diversification Michigan Needs an RPS
Wind Manufacturing Facilities Follow Wind
Installations
20
National Renewable Energy Lab
With the Right Policies . . .We Can Create
Thousands of New Jobs
Total Cumulative Manufacturing Jobs Created by
Scenario that Meets 20 of U.S. Electricity Needs
from Wind (2007 2030)
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3. Government Reform Making Government Cost
Less

• Cut more out of state government than any
  Governor in Michigan history
• Fewer state employees than any time since 1973
• Michigan ranks 46th among all states in
  government employees per capita

22
Government Reform Making Government Cost Less

• Just last year, we enacted 26 reform measures,
  including
• Public School Employee Benefit Reform
• School districts can shop competitive health
  insurance plans
• Tightened vesting requirements
• Increased teacher contributions
• State Employee Benefit Reform
• 2003 - 300 million in pay concessions
• 2007 - 300 million over 3 years in health
  benefit concessions
• Eliminated benefit loopholes no double dipping

23
Government Reform Making Government Cost Less

• Permitting Reform Cutting Through Red Tape
• 60 reduction in air quality permitting times
• Over 200 permits available online
• Online tax registrations 6-8 week process now
  takes less than 5 days.
• Center for Digital Government MI 1 in state
  government IT since 2004
• Next Step - One-stop permitting shop for
  businesses - One web portal, One number -
  piloting late this summer

24
Government Reform Making Government Cost Less

• Contracting Reform
• Ended no bid contracting
• State contract savings total 671 million since
  2003
• Buy Michigan First - 92 of contract dollars to
  Michigan companies.
• Pew Center on States 2008
• Michigan is 4th Best Managed State in the Nation

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Prison Population Has Increased 60 Since 1990
55,000
51,500
50,200
49,500
49,400
48,600
48,900
50,000
45,800
43,800
45,000
40,200
40,000
38,100
35,100
35,000
31,200
30,000
1990
1992
1994
1996
1998
2000
2002
2003
2004
2005
2006
2007
while the population of the State of Michigan
has increased by less than 10.
Source State Budget Office
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Corrections Staffing Has Increased While Overall
State Employment has Declined
Corrections staff up three-fold while overall
staffing down 14.
70,000
62,080
60,000
53,600
50,000
40,000
37,200
56,400
30,000
20,000
10,000
16,400
5,680
0
1982
2007
Source State Budget Office
27
3 Out of Every 10 State Employees Now Works for
the Department of Corrections
2007
1982
91
9
69
31
Total State Employees 62,082Corrections
Employees 5,677
Total State Employees 53,596Corrections
Employees 16,418
compared to less than one in ten 25 years ago.
Source State Budget Office
28
Corrections Spending has Grown from 5 of All
Discretionary Spending to 20
2007
1982
95
5
80
20
Total GF/GP 4,457,300,000Corrections GF/GP
215,800,000
Total GF/GP 9,186,200,000Corrections GF/GP
1,866,400,000
Corrections spending is almost 9X the 1982 level
Source State Budget Office
29
Michigans Prison Rate Out of Sync with
Midwestern Neighbors
Prison Rates - 2006
550
511
500
450
429
395
400
Per 100,000 Residents
358
353
350
328
300
250
Michigan
Midwest
Illinois
Ohio
Pennsylvania
New York
Average
Source US Census Bureau, US Bureau of Justice
Statistics
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Next Step for Lowering the Cost of Government

• Pass Sensible Corrections Reform
• Already reduced corrections spending by 560
  million through belt-tightening since 2002
• Keep citizens safe and lower the cost of
  government through further corrections reform
• Distribute the savings in three ways
• 1/3 Higher Education
• 1/3 Law Enforcement
• 1/3 MBT Surcharge Reduction

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Recap Next Steps to Move Michigan Forward

• Create a Skilled, Educated Workforce
• Pass 21st Century Schools Fund
• Diversify Our Economy, Create Jobs
• Pass Comprehensive Energy Package
• Lower the Cost of Government
• Pass Safe, Cost Saving Corrections Reform

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• People know we are in a jam. A large part of
  the problem is a cynicism, fatalism and
  negativity a toxic mix -- shared by people in
  leadership positions.
• Phil Power Center for Michigan

33
Gone Fishin
34
A Simple Sunrise
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General Session

• Conversation with the GovernorLive on WWJ
  Newsradio 950

Session Sponsor
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Daniel J. Loepp
Moderator

• President CEOBlue Cross Blue Shield of
  Michigan
• ChairmanDetroit Regional Chamber Board of
  Directors