Crossposted to the_recession

Michigan News

CNN Money: Solution to Detroit's jobless: Move
By Hibah Yousuf, CNNMoney.com contributing writer

NEW YORK (CNNMoney.com) -- Detroit continued to lead the nation's cities of 1 million people or more with the highest unemployment rate in September, according to government figures released Wednesday.

And for Detroit's painful unemployment rate to stabilize and eventually decline, economists say the jobless will just have to leave the Motor City.

The Labor Department said the metro area ravaged by the auto industry's collapse reported a 17.3% jobless rate in September, up from 17% in August, and 8.9% last year.

Detroit also recorded the largest jobless rate increase from September 2008 with 8.4 percentage points, followed by Muskegon-Norton Shores, Mich., at 6.8 percentage points.

Michigan has received $5.2 billion in federal stimulus money, split between 3,999 federal contracts, grants and loans, according to data released Friday by the White House.

The money used for everything from education grants to construction and energy projects to loans to General Motors Co., has created or saved 22,514 jobs in the state, the White House said.

Michigan ranks ninth nationally for jobs saved or created.

Friday marked the formal end of Michigan's budget season, as Granholm reluctantly signed the last six bills enacting a $44.5-billion 2009-10 state spending plan.

But in a state plagued by seemingly endless financial crises, the new season was already well under way.

"The budget for 2010 is signed. There will not be a government shutdown. But the fight is not over," Granholm told journalists in a conference call Friday morning.

She said she still wants the Legislature to find more revenue to restore funding for college scholarships, local governments, health care for the poor and disabled and public schools.

Maybe the bromance needs couples counseling.

Of all the Sturm und Drang of this year's budget battle, the relationship between Democratic House Speaker Andy Dillon and Republican Senate Majority Leader Mike Bishop has been the most puzzling -- friendly on a personal level, strained in political rivalry.

It has stirred the pot of their political ambitions and given Dillon's fellow Democrats arrhythmia over what they feel they lost in the just-concluded budget debate.

As Gov. Jennifer Granholm signed final bills Friday to complete the 2009-10 state budget, it seemed Bishop cleaned Dillon's clock. Yet Dillon is hopeful they can rebuild trust.

Tucked away in the fine print of Gov. Jennifer Granholm’s state budget veto message this morning was at least one surprise, her decision to kill $7.1 million for the State Fair in Detroit.

The governor’s decision likely ends hopes that the fair will survive into its 161st year.

Michigan's Canadian-born governor on her state's challenges. Jennifer Granholm will now take your questions

It's no secret that Michigan is enduring the most extreme effects of the nation's economic crisis: its unemployment rate stands at 15.3%, and the state is functioning on a temporary budget as legislators rush to close a $2.8 billion deficit. In recent years, the financial situation here has been so dire that Michigan has closed several detention facilities, reducing its prison population by thousands. Now, however, the state appears to be viewing prisoners in a different economic light — as a potential revenue generator.

In particular, Michigan is moving to import out-of-state prisoners and even alleged terrorists who are detained by the Federal Government at Guantánamo Bay, Cuba. The effort could make Michigan an unlikely player in the increasingly lucrative business of transporting prisoners across borders. Already, several states grappling with overcrowded prisons — including California, Pennsylvania and Vermont — spend millions each year sending inmates to private and public prisons in Arizona, Oklahoma, Mississippi, Tennessee and elsewhere.

One of Michigan's key selling points is that the capacity at two prison facilities that are scheduled to close by the end of the year could be significantly increased by double-stacking beds. Michigan would charge some $30,000 a year for each domestic inmate brought to its maximum-security prison at Standish, about a 90-minute drive from Detroit. California has thus far balked, partly because of the cost, but Michigan officials say they are still negotiating with Pennsylvania and other states.

Squeezed by shrinking state funding, Michigan State University may close two of its departments -- Geological Sciences and Communicative Sciences and Disorders -- and discontinue several majors.

Certainly, some budget-trimming isn't new to Michigan's 15 state universities in recent years.

But until now, most cuts have been more invisible to the everyday student -- making buildings more energy-efficient, leaving empty staff positions unfilled, tweaking employee health care and even reducing paper costs by relying more on e-mailed reports and documents.

Ford Motor Co. began the year by reporting a $14.6-billion loss -- the largest in its history -- and managed to survive without asking for emergency federal loans. Now, the Dearborn automaker is on track to report improved third-quarter financial results Monday.

Over the past nine months, the Dearborn automaker has achieved gains in market share, both in North America and Europe, even while it has cut incentive spending. It also has reduced its operating costs through a cost-saving agreement it reached with the UAW in March and a successful debt restructuring.

While an additional deal that Ford was seeking with the UAW was rejected in national voting that took place over the past two weeks, the company wasn't counting on that deal for immediate cost savings.

Even with a few UAW locals left to vote today, UAW officials have concluded that there is no way that a proposal to modify its labor contract with Ford Motor Co. can pass.

On Friday, two of the UAW's largest units, which represent an assembly plant in Dearborn and two in Louisville, Ky., followed the lead set by other locals by soundly defeating the proposal that Ford said it needed to be competitive long term with its domestic rivals, General Motors Co. and Chrysler Group LLC.

"It looks like the numbers are heavily against" the deal, said Rocky Comito, president of UAW Local 862 in Louisville. "I see no way of overcoming it."

UAW President Ron Gettelfinger told the Free Press on Friday that the union would not go back to the bargaining table if the measure was defeated. The current Ford-UAW labor contract expires in 2011.

UAW workers to Ford Motor Co. and Chief Executive Alan Mulally: “We think we’re OK where we are.”

That’s the clear message in a decisive rejection by Ford hourly workers of the Dearborn automaker’s latest plea for concessions on pay and work rules to match what Chrysler and General Motors gained in bankruptcy.

And it’s proof that words can come back to haunt you.

In just two days of voting, the Canadian Auto Workers union pulled off what the UAW was unable to do in weeks – convince its membership to vote in favor of yet another set of contract modifications with Ford Motor Co.

Today, the CAW, which represents about 7,000 Ford workers, said its members voted 83% in favor of ratifying an agreement that follows a pattern established by new CAW deals with General Motors Co. and Chrysler Group LLC in Canada.

Under the new agreement, wages for all CAW Ford workers will be frozen for the life of the contract and there will be no cost of living increases for active workers until 2012. In addition, it will take six years, instead of three years, for the wages of new workers hired by Ford to be increased the same level as current employees. Ford CAW workers also will contribute at least $30 per month for their health care.

General Motors' board of directors may make a final decision Tuesday on what to do with the automaker's Opel/Vauxhall business in Europe, but neither Opel/Vauxhall nor any of its potential owners is out of the woods yet.

The odds are that GM's board will endorse selling 55% of its European business to Canadian supplier Magna International and Russian bank Sberbank, but none of the parties involved will be getting exactly what they wanted.

The saga has dragged out for six months now. The U.S. government's restructuring of GM is a marvel of efficiency and decisiveness by comparison.

NEW YORK (CNNMoney.com) -- Days before unveiling its latest recovery plan, Chrysler Group has extended a buyout program to 23,000 U.S. workers in an effort to further trim its workforce.

In a statement, Chrysler said workers have until Nov. 13 to accept the proposal, and that the company would determine who qualifies for it depending on operational needs. The company said termination dates would be at its discretion.

DETROIT (CNNMoney.com) -- Most people assume the Packard Plant in Detroit is vacant. It's an industrial ruin where the last car was manufactured 53 years ago.

Almost all the windows are blown out. Collapsed walls litter the overgrown sidewalks with broken bricks, mixed with charred metal and shattered glass.

But one tenant remains headquartered among the vines, rust and graffiti. Where 11,000 employees once clocked in, now just 10 workers for Chemical Processing Inc. show up each morning.

As metro Detroiters head to the polls for local elections Tuesday, the challenges facing the winners will be the same: falling revenues, rising costs.

From property taxes to fees to revenue-sharing dollars from Lansing, the coffers of local government that already have taken a beating will continue to decline in coming years, and experts say it could take a decade or longer before they bounce back even to current, relatively anemic, levels.

While mayors, supervisors and council members across the region will face tough decisions on what services to keep and cut, they'll also have an unprecedented opportunity to reform the way they deliver the services taxpayers expect -- particularly with the possibility of many new faces in office.

Many collaborative efforts already save the region millions, but experts say more is needed on things like:

• Transportation
• Business recruitment and jobs
• Land use and zoning
• Shared police, fire and EMS
• Administrative functions

Thorny issues such as Cobo Center and the Detroit Zoo have been resolved regionally; experts say they provide a model for dealing with more day-to-day government services.

Tom Barrow spent the last Sunday before Tuesday’s election in a nonstop dash of campaigning for Detroit’s top job.

Mayor Dave Bing, who had been out working Angels’ Night patrol until 3 a.m., made one campaign stop.

The contrast reflected what pundits say are their chances: Barrow is widely rated the underdog.

With time running out, Robert Bobb spent part of Saturday shaking hands, cracking jokes and getting residents out to vote on a $500.5-million bond issue Tuesday for Detroit Public Schools.

But DPS' emergency financial manager acknowledged he's fighting the past.

"There's a lot of support for DPS. But there's also a lot of distrust about how funds were spent in the past," he said at Central High School over the sound of a half-time marching band. "I tell them: 'If we keep looking backward, we can't move forward.' "

A dying auto industry, failing schools, rampant unemployment and a home foreclosure crisis: Detroit has no shortage of ills, but in recent years it has made progress combating the city's notorious tradition known as Devil's Night, the period leading up Halloween each year when scores of buildings would be torched. Yet earlier this month, when nearly a dozen vacant homes were set afire in the span of a weekend, authorities here feared the worst: The real estate crisis that has hit Detroit particularly hard would mean a resurgence of Devil's Night.

Locals are working hard, however, to not allow that to happen. Thousands of people from across the country — including Guardian Angles from New York City — are arriving to patrol, hoping to prevent the burning of vacant buildings and cars. Many residents will sit on their front porches, watching for prospective arsonists. Wooden boards have been placed across the doors and windows of vacant buildings to keep out intruders. On street posts and buildings across the city, there are signs saying, "THIS BUILDING IS BEING WATCHED," above a sketch of a set of human eyes. "Obviously, I'm nervous," Detroit's mayor, Dave Bing, said in an interview earlier this week, when asked about the possibility that homes here may become targets for arsonists as Halloween approached. "But we need to be observant, and I think our community has gotten engaged."

Detroit Mayor Dave Bing’s office is expected to announce the outcome of Angels’ Night efforts Monday.

The Detroit Fire Department did not have numbers today but reported no unusual increases in the number of fires leading up to Halloween.

As I mentioned earlier this week, I sat down with Deborah L. Younger, the executive director of Detroit LISC, for a conversation about Detroit and our seemingly intractable land issues. Younger has also been appointed treasurer of the newly formed Detroit Land Bank Authority by Mayor Dave Bing. If anyone knows what it'll take to get a better handle on our land woes, it'd be her.

She held forth on a number of topics, including previously horrendous city planning, how racism and neglect combined with the economic meltdown to devastate our housing market and how the city appears to finally be getting more serious -- and realistic -- about managing its 138.77 square miles of terra firma.

It's lengthy, which is why I'm posting in two parts, but I also think her diagnoses are especially important since Younger is expected to play such an instrumental role in city policy going forward. In the first part of the discussion, she explains why our land crisis has gotten much worse in recent years. In part two, which I'll post tomorrow, she explains how we can really turn Detroit around.

Later today, federal authorities are expected to explain more details behind Wednesday's raid of a suburban Detroit warehouse that revealed a mysterious Islamic sect that apparently seeks to establish an independent state based on Sharia law on American soil.

Yesterday's raid targeted Detroit-area members of the Ummah, an Islamic sect comprised mainly of American-born blacks who converted to the religion while serving prison sentences. During the raid, four of the group's members surrendered to federal authorities and were swiftly arrested. The group's local iman, Luqman Ameen Abdullah, also known as Christopher Thomas, apparently directed a weapon at authorities, and was fatally shot. Some suspects remain at large. The authorities have charged at least 11 men with an assortment of alleged crimes, including possession of firearms by a convicted felon, mail fraud, and conspiring to receive and sell stolen goods.

According to documents filed in U.S. District Court here earlier this week, Abdullah, 53, called his followers to an “offensive jihad,” rather than a “defensive jihad,” and urged them to carry, and use, firearms and swords. The documents note the group was evicted from its Detroit mosque earlier this year because it failed to pay property taxes.

Shortly before noon on a recent Monday, T.J. Cooper sat in his red pickup, showing off his digital camera. He clicked through pictures he had taken a few weeks earlier of a man driving a truck full of radiators stolen from a vacant home here in Indian Village, one of Detroit's last middle-class neighborhoods. No one, Cooper notes wryly, likes having his picture taken. "They try to hide their face. Or break your camera. Or," he says, driving up a tree-lined street, "break you." Minutes later, Cooper passes the same man, in the same truck, apparently scoping out another house.

Cooper, 29, is a private-security detective, one of many who patrol once prosperous enclaves like Palmer Woods, Boston-Edison and Indian Village. With the city's police force cut more than 25%, private security appears to be one of Detroit's few growth industries. Local precincts are overwhelmed with shootings and other violent crime, leaving companies that supply home protection with long customer waiting lists. "People put a premium on security when unemployment and crime go up," says Larry Dusing, founder of Dusing Security & Surveillance, which has expanded into three neighborhoods.

Crime weighs heavily on the minds of Detroit's middle class, although it's an issue few residents want to discuss. In some neighborhoods, armed guards stand watch outside houses of worship; in September a pastor shot a man trying to rob his church. In others, street barricades have been set up to help deter potential thieves.

Lunch period at an inner-city all-boys school is an event associated with the sounds of chaos, not classical music. And yet there are definitely strains of Beethoven coming from the piano in the cafeteria at the University of Detroit Jesuit High School and Academy. Behind the pianist, another student waits patiently for his turn. Upstairs in the art room, a senior is using the lunch hour to apply more brushstrokes to a portrait. A few kids are playing pickup ball in the gym, but more are crowded in the library.

In a city where 47% of adults are functionally illiterate and only 25% of high school freshmen make it to graduation, U of D is the chute through which bright young men can get to college. The school boasts a near perfect graduation rate and sends 99% of its graduates on to higher education. (In 2009 the one student who didn't go to college turned down a scholarship from the University of Michigan to sign a seven-figure contract with the Detroit Tigers.)

Catholic high schools have long provided a way out for high-achieving urban students. But in Detroit, most Catholic schools either closed down or left the city decades ago, after the race riots in 1967, when white Catholics fled to the suburbs and the city's population dropped by half. Only the Jesuits stayed, maintaining U of D's imposing stone structure on the corner of 7 Mile and Cherrylawn. The Catholic order is known for its education systems and its missionary work. In Detroit, they have become one and the same.

President Barack Obama is "getting bad advice from ... clowns" on Afghanistan and "sucking up to the wrong people" on health care, U.S. Rep. John Conyers told a Detroit radio audience Saturday, according to show host the Rev. Horace Sheffield.

Conyers, a Detroit Democrat, made the comments during a discussion about the effects of the recession on urban poor people, Sheffield said.

The congressman expressed frustration that health care legislation pending in Washington, D.C., is too solicitous of insurance companies and special interests, Sheffield said.

The city combats Halloween-time arson, a deadly local custom

Michigan's Advocate
Jennifer Granholm is the first female governor of Michigan. In office since 2002, she now presides over one of the most economically troubled states in the nation.

In a new book, best-selling author Mitch Albom discovers a connection of faith with the pastor of a ramshackle Detroit church

A search team recovers aircraft downed in training missions over Lake Michigan during WWII

Detroit's derelict Packard Plant is the country's largest abandoned industrial site. One last small company still calls the complex home.

These days, the barber's chair at Steve Trachsel's shop is more like a psychologist's couch than anything else.

Trachsel is owner of The Barber Pole, a 60-year-old barber shop in Birmingham, about 20 miles outside of Detroit. (For the uninitiated, B'ham is like Michigan's version of Beverly Hills – expensive homes, celebrity sightings, Rodeo Drive.)

“It's more than a business; it's a heirloom,” Trachsel said. “I love the longevity of it. It's a hidden treasure and a great place to hang out and talk.”

So, let's talk.

In honor of Halloween, I bring you one of Detroit's little-known yet fascinating characters: the Nain Rouge.

Nain Rouge is French for red dwarf. Supposedly, this evil mythical creature haunts Detroit and is feared as our fair city's "harbinger of doom."

According to lore, he appears as a small, child-like creature with red or black fur boots. He is also said to have red eyes and rotten teeth. Some claim he has horns. Supposedly, he sounds like a crow. And witnesses say he is dancing or doing flips as he does his dirty, dirty deeds.