Professor Elam

4 responses to “Michigan Debuts in Shanghai”

1. 

   Matthew Moore

   April 26, 2007

   See how Union involvement can hurt the economy. Governor Jennifer Granholm is persuading foreign businesses to invest in Michigan. If they were to only look at the stats, they could come to a quick conclusion, that this is obviously not a wise investment. The Unions are too strong in Michigan and unless you can have some type of control over Unions (which is very little) I think it would be hard for a company to expand globally, especially in the state of Michigan. This is definately a solid attempt at globalization, but as my whole article has been about, Unions, Unions, Unions….. not a very good idea for businesses to expand into the highly unionized state. If I was a CEO, I for one would not globalize to Michigan, but instead look into other alternative routes to globalize. Geez, I wonder what my thoughts are about Unions…….

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2. 

   Dennis Elam

   April 27, 2007

   One of the profs at SWT commented that there would not be a new plant built in a union shop state, only in right to work states which is what we have seen. I have mentioned the elections in France because the situation parallels the one in Michigan. In Megatrends John Nesbitt said the purpose of unions was to provide a non college educated person the same lifestyle and wages as one that had a professional degree and background. That is now no longer the case but those that enjoyed it while it lasted don’t want to give it up. NO doubt Michigan will give one lots of tax breaks, a building etc, it is also home to some of the coldest cities in the US….

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3. 

   Matthew Moore

   April 27, 2007

   Here is some factual information I found on the web about Michigans tax rate system. Thought this might be of interest.
   Michigan’s tax rate on personal income of 3.90 percent gives it one of the lowest top brackets in the nation. Some cities impose additional income taxes. There is single business tax on small businesses that is set to expire by 2009, and a corporate tax is levied on larger concerns. Michigan offers a number of tax incentives to attract and retain business. Michigan ranks in the top 5 as a business friendly location. Michigan’s state sales tax is 6 percent. The state does not allow city or local sales taxes. Property taxes are assessed on the local, not state, level. The Bureau of Economic Analysis, recent growth in Michigan is 0.1%.
   Indeed Michigan does give alot of tax breaks, but being a Union driven economy it still does not make sense for companies to startup a business or for international companies to expand globally into the cold state of Michigan. And tax rates are not set in stone. They can always amend the tax system which is a concern for any new businesses considering Michigan as place for business. And as result like Dr. Elam mentioned, that why we are not seeing businesses build plants in the Union shop state, but instead building those in right to work states.

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4. 

   Dennis Elam

   April 28, 2007

   Nice bit of research Matt. I was thinking more of outright ‘gifts’ in terms of taxes like
   If you build or move your plant here, no property taxes for five years. Dell got a deal like that in Carolina and did not even promise how long they would stay. Which means when the prop tax holiday ends, they will no doubt put themselves up for bid again.
   There was an interesting debate on this on the local talk radio station in Odessa Midland when the cities were trying to woo business. Do you give away the farm with tax holidays, if so does it really pay off, an interesting CVP breakeven question.

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