Mad about Great Lakes Manufacturing

Looking to cash in on the tech revolution? Financial guru and host of CNBC's Mad Money Jim Cramer says forget about Apple and Sun Micro. "They're just refining luxuries."

Invest instead, he says, in future-oriented American manufacturing outfits and, more specifically, two Cleveland-based companies - Eaton and Parker Hannifin - that produce vital goods and have a level of growth and innovation levered to the global economy.

"These stocks have become not metal benders, but new technology stocks," Cramer said on last night's broadcast. "That's right. When you think tech you probably think of Texas Instruments or Cisco or National Semi. Gimme a break. What are those companies really doing? They trying to build a better gadget. Maybe make some chips for a flashier camera. Come on. That's old tech.

"The manufacturers, the companies like Eaton, that make things the world really needs, like technology that reduces carbon emissions or allows us to save energy, that's technology. These are real things, real necessities, that the rest of the world is buying because [America] makes them better and cheaper."

Cramer's analysis - and the profit performance of companies like Eaton and PH - is a breath of fresh air for Great Lakes industry. Not only is it welcome publicity for a sector shedding jobs, shuddering factories, and struggling to reorganize for global competition. But many prophets of Great Lakes 3.0 - including some analysis on this page - suggest that manufacturing won't lead to prosperity in a 21st century economy that rewards higher education and creativity.

But the reality, Cramer rightly reminds us, is that not everybody in the manufacturing business is a high school dropout. The Great Lakes sector, for instance, boasts some of the best research, development, and engineering expertise in the world. Focusing that talent on timely and strategic innovations - like technology under development at Parker Hannifin that cuts fuel consumption in delivery trucks by 50 percent - points the way to big pay offs.

“The Street’s just not bullish enough on this one," Cramer says. "Buy some Parker Hannifin.”

True Transit Tidbit

"For the cost of two or three highway interchanges, we could develop a corridor between two major cities," Amtrak CEO Alex Kumant told NBC Nightly News tonight about the Acela which, at a top speed of 150 MPH, is America's fastest - and most popular - passenger rail service.

Plans reportedly are on the shelf to expand 100 MPH routes routes connecting Chicago, St. Louis, Detroit, and Cleveland. But America doesn't yet embrace investment in rail infrastructure as a realistic strategy to promote transportation. Nevermind economic prosperity, environmental protection, and opportunity for people from all walks of life. Ironic for a nation that grew up on - and is now stumbling in a number of ways without - extensive commuter rail service.

Name That Transit Tune

The marching band played across the street. Blowing bagpipers walked all around the grounds. And inside the Michigan Capitol yesterday the activists that make up the state's increasingly loud public transportation movement all sang the same song: modern mass transit is key to achieving economic competitiveness, environmental stewardship, and social justice in the 21st century.

As a whole, Lansing is tone deaf to the urgent need for imagination, leadership, and unity on the public transportation issue. Speaker of the House Andy Dillon, for instance, who was scheduled to speak in the afternoon press conference, showed up for a minute, posed for a couple photo opps, then mysteriously exited stage left right in the middle of the briefing. I'm guessing he wasn't rushing to catch the bus.

There is, however, a handful of strong voices emerging in the Legislature. State Representatives Hoon-Yung Hopgood and Marie Donigan, both from metro Detroit, and Tom Pearce, from the Grand Rapids suburb of Rockford, are three stand out acts. The pressing question is how much longer will they play solo.

"Michigan's dream has always been two cars in every driveway," said Rep. Pearce, a Republican. "But now we're beginning to understand that not everybody has a driveway. Not everyone has a car."

"The costs of owning a car in this day and age. The environmental concerns that vehicles create. The economic effects [of investment in mass transit]. These are all reasons pushing us to prioritize public transportation," Rep. Pearce continued. "It is certainly time for public transit to grow in the State of Michigan."

Prospecting for Wind

There's still a handful of influentials left in states like Michigan poo-pooing the potential for energy innovation to generate jobs, stimulate investment, and help reverse decades of decline.

But the experience of states like Montana, which two years ago adopted the modest goal of achieving 15 percent renewable energy by 2015, tells a different story. Check out this sampling of quotes from an article titled 'The New Gold Rush,' which ran yesterday in the Great Falls Tribune:

"In a way, it's like a mini-little gold rush," Bozeman attorney Hertha Lund said about negotiations between landowners and wind developers.

"The Montana market has gone absolutely crazy with leasing the past few months," said Sarah Hamlen, a Montana State University Extension agent in White Sulphur Springs. "A lot of landowners are getting hit by a variety of different companies."

"They wanted to make me a millionaire," said Gordon Brittan, director of Wheeler Center for Public Policy at Montana State University. "Some big money is being made."

"It's real jobs," said Cascade County Commissioner Peggy Beltrone. "It's a tax base increase in areas that have had declining tax base."

Translating the Terrible Transition

Richard Longworth's new book - Caught in the Middle - has sat on the desk here for several weeks. Right on top of Lincoln's Sword and Me Talk Pretty One Day, one of those rare laugh-out-loud reads.

I'm sure Mr. Longworth's book, subtitled America's Heartland in the Age of Globalism, is really smart, and full of common sense revelation. That's why I bought it.

But with chapter titles like 'From Rust to Bust,' 'Left Behind,' and 'Flunking Out,' I'm content reading Jack and the Beanstalk to my one-year-old daughter. We're planting seeds for bigger and better things.

Here's what Mr. Longworth, a decorated journalist and senior fellow at the Chicago Council of Global Affairs, told the Grand Rapids Press yesterday in advance of a visit to that city tonight...

"You are in a terrible period of transition. The Industrial Age created the Midwest, and that age is over. It's time we started talking together, planning together and working together. Michigan is not in competition with Indiana or Ohio. It is in competition with China."

The View from Germany

The German magazine Spiegel dispatched a correspondent to Pennsylvania to cover the race for the American presidency. The good news is that the global press is paying more attention to the urgent issues in the greater Great Lakes region. The bad news is that the global press is paying more attention to the urgent issues in the greater Great Lakes region. Here's an excerpt from yesterday's report:

"Pennsylvania, like Michigan, Wisconsin and Illinois, was once one of the country's industrial powerhouse states. But today, the landscape in cities like Reading is no longer shaped by factories, but by discount chains like Wal-Mart and a generous smattering of fast-food outlets. The city's crowded row-house neighborhoods look run-down - with well-paying jobs a rarity, many homeowners cannot afford repairs and upkeep. Reading is one of America's losers."

Detroit and Grand Rapids: Fellows Not Foes

In an otherwise sharp column yesterday about Detroit's exhausting mass transit pickle, Free Press editorial writer Jeff Gerritt suggests that Grand Rapids, Michigan's second largest city, is competing against the Motor City for federal transit funding no different than Denver, San Diego, or Portland.

But a closer look at the situation reveals that, at this moment, greater Grand Rapids actually is one of the biggest allies in the campaign to finally put modern public transportation on the ground in Detroit. In fact, one of the more strategic moves transit leaders in Southeast Michigan can make right now to advance their own efforts is to support a proposed permanent Bus Rapid Transit line in West Michigan.

How's that? Well, in December 2007 metro Grand Rapids became the first city in Michigan history to gain access to the federal New Starts Program, the nation's primary funding mechanism for major mass transit projects.

The program is exceptionally difficult to tap into because the process is rigorous, dozens of cities are in line for funding, and the program tends to favor states and cities that have previously filed successful applications. Detroit, for example, has yet to break into the fund.

But greater Grand Rapids cleared the high hurdles. In a decision that could trigger as much as $29 million in federal funding, the feds approved Grand Rapids' application to build a $40 million Bus Rapid Transit line serving one of its busiest urban corridors.

By doing so, Grand Rapids now stands on the verge of not only building its own permanent public transportation line, but also putting Michigan and its major cities on the official federal transit funding radar for the first time.

Put another way, Metro GR is poised to open the door to hundreds of millions of dollars in future federal funding for the long stalled light rail train on Woodward Avenue in Detroit, for example, or commuter rail line from Ann Arbor to Detroit.

This is the break Michigan's mass transit movement has been waiting for.

The immediate challenge is to prompt Michigan Governor Jennifer Granholm and the Legislature to identify approximately $8 million (over the next three years nonetheless) in state funding that enables Grand Rapids to "match" the generous federal grant. That would gain the entire state official membership in the New Starts Program and position places like GR and Detroit to start modernizing their mass transit infrastructure.

State leaders, however, are short on both funding and leadership when it comes to public transportation.

So you'd think Detroit, acting in its own self interest, would stand shoulder to shoulder with Grand Rapids in the State Capitol advocating for the vital state appropriation and a standing process to do it more often.

But few people in the Motor City recognize the significance of what's happening in Grand Rapids. And those that do, as Mr. Gerritt's column reveals, view the city as out-state competition rather than a cross-state colleague.

Obama on PA: Reality or Overreaction

“You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them," Senator Barack Obama said while campaiging in San Francisco, CA.

"And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it’s not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren’t like them or anti-immigrant sentiment or antitrade sentiment as a way to explain their frustrations.”

Dry Wells and Wet Slides

The western Milwaukee suburb of New Berlin, which drinks from its wells faster than nature can recharge them, has been called 'Exhibit A' in the case of the greater Great Lakes region's quiet water supply planning crisis.

But it's hard to empathize with the good people struggling through shortages there when they approve construction, of all things, a new water park.

Ironically, the popular fear hovering over Great Lakes society is that the parched people of distant lands like Georgia, Arizona, or even Asia are the ones standing at the front of the line to siphon off the region's fresh water.

But clearly the most immediate threat is much closer to home. New Berlin, like neighboring Waukesha, and countless other cities, townships, and villages - both inside and just over the edge of the Great Lakes drainage boundary - are sticking more straws into the big lakes and digging deeper into aquifers to keep up with increasing demand, even questionable proposals like a water slide.

Meanwhile, the freewheeling approach lowers water tables, sparks small water wars, and runs up municipal water costs in Michigan and parts of Ohio, Illinois, and Wisconsin. The lack of clear, common, and consistent standards to promote sustainable water use also sends a dangerous signal that Great Lakes water is free for the taking.

“We have seen the enemy and he is us,” Ron Kuehn, the Madison-based lobbyist who represented Wisconsin farmers in state water use negotiations, told me in May 2005.

So the debate goes on in Wisconsin...

...and in Ohio...

...and Michigan.

Read All About the Rust Belt Reinvention

Searching for signs of light at the end of the Rust Belt's post-industrial tunnel? Look no further than today's headlines. The movement toward modernity is alive, and making news.

Steel City Chips Away At Its Rust Belt Image

A Rust Belt Rebirth Buds Before Our Eyes

From Rust Belt To Innovation Zone

Forging Rust Belt Economic Appeals

The stories remind us that getting the nation's Heartland back on track is as much a PR battle as it is a campaign to update antiquated economic, environmental, and social agendas. Want more proof? Civic leaders in Erie actually formed a task force to spread the good word during a month in which visits by presidential candidates and a convention of GE shareholders are expected to attract the national spotlight to their town.

“We would like all [the media] to write glowing reports,” John Oliver, the president of VisitErie, told the local paper. “But I don’t know that we expect that. We’ll be successful if they don’t begin their stories with a negative first sentence.”

Tomorrow's Tech Towns

Great Lakes 1.0 was about exploring waterways, trapping fur, chopping lumber, raising forts, planting crops, and settling a new American frontier.

Great Lakes 2.0 was about pioneering an incredible era of industrialization, building powerhouse cities like Chicago, Cleveland, and Detroit, establishing civic institutions and contracts, and defending the nation.

Now the region is slowly upgrading its purpose and priorities with a new operating system of economic, environmental, and social platforms to meet the challenges and opportunities of a global community.

Call it Great Lakes 3.0. And innovation remains a constant, driving force.

Philip Auerswold, the public policy professor at George Mason University, provides some useful evidence of the transition. He recently surveyed technology trends and generated a list of innovation hot spots in the United States.

The goal of the study, he told the Milwaukee Journal Sentinel, was to identify tech potential in places beyond usual metro suspects like Boston and San Fran.

His findings, based largely on the increase in the number of science-based patents in a given city, reveal industry and commerce in the greater Great Lakes region continues to evolve for the Digital Age.

Here's his Top Ten up-and-coming tech hubs:

  1. Columbus, OH
  2. Santa Fe, NM
  3. Palm Beach County, FL
  4. Houston, TX
  5. Milwaukee-Waukesha, WI
  6. Pittsburgh, PA
  7. Boise City, ID
  8. Iowa City, IA
  9. Lake Charles, LA
  10. Yuma, AZ

"Some places believe that manufacturing is dead or dying. We don't," Jim Paetsch, director of corporate relocation, expansion, and attraction at Milwaukee 7, an economic development organization, told Forbes about the study.

"Manufacturing is certainly different today than it was even 10 years ago. Our strategy is to become the leading global center for the technology-intensive manufacturing enterprises of the future."

Three Serious Streetcar Studies on Track

At least three Midwest cities are seriously pushing toward the construction of a modern streetcar system to diversify their transportation strategy, spark urban revitalization, attract talented workers, and strengthen competitiveness in the global economy. And Columbus, OH appears to be closest to actually laying the track.

The city last week announced a financial plan for a proposed 2.8 mile route connecting neighborhoods, downtown business districts, and The Ohio State University. Revenue from a special surcharge on sports and entertainment events, parking meters, rider fares, advertising, federal grants, and annual contributions from the University would fund the construction, extension, and operation of the $103 million High Street line, which is viewed as the first leg in a much more comprehensive system circulating people around the central city.

Parts of the community are skeptical the thing will work.

But experts forecast the route will generate 3,000 new jobs, $2.7 million in new income tax revenue, and as much as $764 million in new economic activity after five years.

"This is a step toward attracting and retaining young creative and entrepreneurial professionals in the region," Chester Jourdan Jr., executive director of the Mid-Ohio Regional Planning Commission, said in a press release.

That seems to be the emerging consensus among future-oriented cities in the nation's heartland. Cincinnati, as another example, continues to debate a proposed $182 million streetcar line linking the University of Cincinnati, a medical hub, and the riverfront.

Leaders there hope to secure federal funding for the project, which will likely slow things down as they navigate the government's onerous process.

But Mayor Mark Mallory says the effort is a key "public improvement project" that deserves public funding.

Grand Rapids, MI, too, is taking a hard look at streetcar transit. A local task force recently agreed to the initial route for new service. And consultants and civic leaders continue to study whether investment in the proposed project is practical. Findings of the feasibility study are expected in June 2008.

"The development potential is huge," Peter Varga, CEO of the transit agency serving metro Grand Rapids recently said about the proposed initial route, which would run past several surface parking lots, vacant lots, and underutilized properties ripe for reinvestment.