No bout a doubt it – Indiana’s right-to-work is intensifying the Michigan/Indiana border war for new business investment.

The phone calls are coming in according to a recent discussion with an Indiana economic development colleague, “we have had several calls from Michigan businesses asking about right-to-work and Indiana’s cost advantages”.

It’s inevitable, I guess.

Right-to-work is a national issue.  It’s even more pronounced in heavily unionized Michigan, where it’s become part of economic development debate over the proper legislative basis for encouragement of business job growth.

Whether pro or con, Indiana is poised to use the real, or perceived, right-to-work advantage to their economic development marketing benefit.  Indiana Governor, Governor Daniels has already cited right-to-work being the subject of 31 prospective new businesses being pursued by him.

I’m repeating a question I recently posed to an upper management staffer of the local Michigan state funded business recruitment organization.

What do I say to level the playing field when asked about the difference between Michigan and right-to-work state Indiana?

Since a forthcoming response was not made, here’s my thoughts –

1.  Unionism in Michigan for the most part is automotive driven and is not the same throughout the state.

Once a popular manufacturing area, southwest Michigan has lost over half of its manufacturing (most auto related) jobs during the last 30-years with resultant decrease in union member workforce.  Only about 7-8% of the private sector workforce remains unionized.

2. Michigan’s workforce is not all auto driven.

Where once names like Clark Equipment, Auto Specialties, Essex Wire, Modern Plastics and other auto suppliers dominated the unionized workforce, they no longer exist in southwest Michigan.  Yes, southwest Michigan workers still make some auto parts, but it’s no longer the dominate portion of the labor force. Detroit’s auto wage and union policies do not automatically transfer into southwest Michigan business practices.

 3.  Unionization is not always adversarial.

The loss of southwestern Michigan manufacturing jobs over the past 30-year has been a life lesson teaching the importance of positive labor/management relations.  There have been no work stoppages (or threats) in recent memory demonstrating the positive ability of labor and management to live by new rules that recognize the importance of maintaining successful businesses and profitable business management.

 4.  Right-to-work does not mean unfair or uncompetitive wage differentials.

Right-to-work doesn’t automatically mean unfair or noncompetitive wages. Southwest Michigan has historically been known for fair wages, typically less than wages offered in the more urban east side Michigan labor markets.

 5.  Union/management relations are most important.

Bottom line – manufacturer labor relations in southwest Michigan are better than other places in Michigan, probably due to the decline of the manufacturing job base and efforts of both labor and management to retain existing and increase the number of locally-based manufacturing jobs.

 6.  Employment productivity trumps wage costs.

In southwest Michigan the total gross manufacturing product value, even with the loss of over one-half of the labor force has increased.  Productivity per worker ratio, over the past 30-years, has increased due to efforts of both management and labor to increase productivity.  Today, workers enjoy higher wages due to greater productivity, a positive demonstration of labor/management relations.

 7.  Out state Michigan’s competitive strengths supersede Michigan’s unionization.

Everyone celebrates the unique living environment of southwest Michigan, resulting in a competitive advantage for recruitment and retention of workers. To live in southwest Michigan has a “personal value” fully recognized by workers resulting in a wage differential compared to other places in Michigan.

 8.  Economic developers need to prepare a proactive “elevator speech”.

Right-to-work is one of a number of decision items businesses must consider when locating a new business in southwest Michigan.  In fact, a recent study of corporate executives identified right-to-work being 19th in importance to a new site location.

Economic developers need to have ready a “2-minute elevator speech” to emphasize along with the lower union participation rates, greater harmony between labor and management, fair competitive wage rates plus a superior quality of life – right-to-work isn’t as important due to these advantages when compared to the east side of Michigan where the statewide perception is made and publicized.

 9.  Economic developers need to organize a labor and management response.

Communication of positive relations will be the “proof”.  But laudatory statements may not be easily accepted by the doubtful analyst so …….economic developers need to pre-organize a response and have ready, a team to be the spokesperson for documentation of the claim of positive labor/management relations.

 10.   Economic developers need to “take a strategy to the market place”.

Let’s face the facts.  It’s “game on” time, and time to take Michigan’s mitigation strategy to the market places.  Using a sports analogy, a “good offence is the best defense” and a good offence may be the best strategy in this case. 

I’m suggesting economic developers, especially those representing communities along the Michigan/Indiana border, accept the fact that Indiana will use right-to-work to lure new businesses. It’s time to  cite the difference between the states and begin to publicize Michigan’s, especially southwest Michigan’s, advantages to mitigate the perception that Indiana’s right-to-work status provides a business location advantage.

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