Interview with Michigan DLEG’s Tom Martin

This interview with Tom Martin of the Michigan Department of Labor and Economic Growth took place after his testimony at the Economic Development, Small Business Regulatory Reform hearing on June 14th, 2006. His testimony was, “I’ll be very brief, Mr. Chair, members of the committee. The department is very concerned about the potential loss of manufacturing jobs that Michigan has at the program. We would encourage you to look long and hard at that before moving this bill.”

Boating Industry
You say you are very concerned about the potential loss of manufacturing jobs that Michigan has. How do you define “very concerned”? What does that mean, exactly?

Tom Martin
We used to have a much larger boating manufacturing sector than we do now. My understanding is that there are very few boat manufacturers left in Michigan and we worked very hard to keep them here. As you know manufacturing all over the country is hemorrhaging jobs badly and is very competitive between states. States like South Carolina and Florida are aggressively competing for manufacturing jobs. MEDC has fairly recently provided incentive packages to two boat manufacturers that I know of — Four Winns in Cadillac and Tiara in Holland. Those packages were critical in keeping those jobs here. What we hear from the industry is that if there is a law like what’s going to be proposed here, that would negatively impact the business climate as far as they were concerned. Certainly if a another opportunity for expansion comes up our concern is that will negatively affect our ability to persuade their expansion in Michigan or perhaps take all their jobs to another state. It’s a very serious concern.

Boating Industry
With your concern in mind, can you tell me what steps you’ve taken, other than your testimony at this hearing, to have an effect on SB 1188? Have you worked with either of the two sides to help determine language that is fair and equitable?

Tom Martin
We’ve not been involved in the negotiations. I understand there have been discussion between the two sides. Hopefully they’ll continue talking. I think the other side believes there is a problem worth talking about. It’s my understanding that on a national level, the dealers and manufacturers have reached an agreement. Hopefully they’ll be able to do that here. The concern here, is that the press release I saw was a non-legislative solution. What we’re looking at here is a legislative solution. Hopefully discussions will continue and they’ll reach a solution. I hope they reach a negotiated solution rather than maybe having some legislation.

Boating Industry
What would you say is the “potential” for the loss of manufacturing jobs in Michigan based on this bill?

Tom Martin
Well there is history in that, to my understanding anyway, that we used to have a much larger boating manufacturing section than we do now. I think there are 500 companies or so nationwide. We have relatively few of them although we have lots of water and very robust sales. So we have a history of losing jobs in that area. You look at any manufacturing sector and jobs are being reduced. It’s not just a Michigan problem. And we know for a fact that when we were putting together the package for Four Winns and Tiara, we were in competition with other states. Those jobs could have gone to other states. Though it didn’t happen in that case, it’s happened in other states. It’s very, very competitive.

Boating Industry
Have you looked closely at the bill?

Tom Martin
Not very. I’m aware that the bill is different than the version they had the last time around. Last time it was a free-standing act. This time they’re using the existing act as a platform to make changes. I’ve been told that what they’re proposing is to write into law the national agreement. I’ve not seen that, so I’ve not been able to compare the two documents whether that is the case.

Boating Industry
There is similar legislation for auto dealers and manufacturers. Why is it OK for the auto industry to have such a law, but not the marine industry?

Tom Martin
I am aware of that. I am very aware of that. My response would be the auto-manufacturing sector is historically different than the boating manufacturing sector, though it’s in change. You have a lot more boat manufacturing than you do auto manufacturing. At one time there were many, many more auto manufacturing also. So you’ve got a very different structure to the manufacturing sector so to say well, the auto dealers have a similar set up, and we should have it too, I think you’ve really got to understand the different structure of the industries and what the implications would be.

Boating Industry
Don’t you think the fact that you point out that there are more boat manufacturers than auto manufacturers is a good reason why there should be legislation?

Tom Martin
I’m not a manufacturing expert, nor am I an expert in retail, but the other way to look at it is that if you’re a dealer and somebody — a manufacturer — decides you’re not going to sell our boats anymore, if that happens in the auto industry, you don’t have very many options. If it happens in the boating industry, you have 499 other options.

Boating Industry
Just an opinion from hearing the testimony, but it seems that the only risk the state faces with job loss is based on upsetting Mr. Slikkers and his company, who have to some extent threatened the state that if the law is passed he will take his company and “go where there’s interest in having those kinds of jobs.”

Tom Martin
Yeah, he almost stated that point blank, didn’t he? Well, of course he’s not the only boating manufacturer we have left. We have a few others. We’re very concerned about maintaining what’s left of our manufacturing base. Michigan has been criticized because we’ve lost so much of it. Whenever a proposal comes up that has potential of costing us manufacturing jobs, we’re very careful before we embrace it. That’s why we opposed the bill as written. Hopefully the two sides will continue to discuss the issue and reach some kind of compromise. We’re just very conservative.

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