Quarter 1 - 2018
The State of Our Region
NAFTA RENEGOTIATION INVESTOR SPOTLIGHT: EPITEC A 20-YEAR VISION FOR GERALD R. FORD INTERNATIONAL AIRPORT
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TABLE OF CONTENTS
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8
19
NAFTA Renegotiation
CEO Update
Manufacturing Success Simonds International
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9
20
Economic Development Progress Update 2018 Projects and 3-Year Progress
Newaygo County Area Dashboard
Talent Intern Connect Hello West Michigan Annual Meeting
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22
4
A 20-Year Vision for Gerald R. Ford International Airport
Projects Axis Company Viking Foremost Farms
Meet the Team Investor Relations & Events
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24
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FEATURE ARTICLE: The State of Our Region
Calendar of Events
2018 MedDevice Forum
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25
Investor Spotlight Epitec
Etc. Intern Spotlight
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TABLE OF CONTENTS
CEO Update For those who felt as though 2018 started like a rocket launch, you’re not alone. The wide variety of articles in this quarter’s issue of the RPI Insider reflect the rapid pace of growth and change many of us are experiencing.
Our business development team has already completed five business development projects in 2018, resulting in 159 new jobs and $82.7M in new capital investment. We also have a robust pipeline, with several projects slated to be announced in the coming weeks. The Gerald R. Ford International Airport (GFIA) is in the midst of a new 20-year master plan that will support the next generation of economic prosperity we are working to bring to West Michigan. We are working in collaboration with GFIA throughout the process, providing insights from an economic development perspective. Government officials from the U.S., Canada, and Mexico are continuing to renegotiate the North American Free Trade Agreement, and the outcome of these talks has the potential to significantly impact our economy inMichigan. In order to keep the regional business community updated on this important issue, we hosted a luncheon with Mr. Douglas George, the Consul General of Canada in Detroit. As the economy moves through this period of growth and change, know that our team at The Right Place is here to assist you and your business. Our Business Development team continues their work meeting with over 400 businesses each year, ensuring you have the tools, support, and connections you need to grow here in West Michigan. These meetings also provide our team with critical business intelligence, allowing us to keep our finger on the pulse of the regional economy. Our feature article this issue highlights the insights we have gained from these meetings. As companies continue to expand, invest, and create jobs in our community, The Right Place will continue driving current and long-term economic growth and prosperity in West Michigan. The GFIA 20-year master plan, challenges with NAFTA, and our work retaining and growing local companies are just a few examples of the depth and breadth of what we do to move the West Michigan economy forward.
Birgit M. Klohs President & CEO The Right Place, Inc.
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LETTER FROM THE PRESIDENT
2018 Economic Development Projects ECONOMIC DEVELOPMENT PROGRESS UPDATE
ECONOMIC DEVELOPMENT PROJECTS COMPLETED: 5 ANNUAL GOAL: 17 MANUFACTURING SUPPORT CONTRACTS COMPLETED: 52 ANNUAL GOAL: 120 COMPANIES SERVED: 249 ANNUAL GOAL: 400 CUMULATIVE COMPANY ASSISTS: 504 ANNUAL GOAL: 1,333 WORK-READY TALENT ASSISTS: 127 ANNUAL GOAL: 525 EVENT ATTENDEES: 700 ANNUAL GOAL: 1,600
Retained Jobs
New Jobs
Company
Payroll
Investment
Axis Company LLC
50
$4,248,400
$4,000,000
Viking Group
50
$2,366,000
$18,000,000
Foremost Farms Greenville
33
$1,621,620
$57,952,000
MPH Trucking and Logistics
22
$515,840
$2,701,360
VNA Corporation
4
$323,980
$25,000
Totals
159
$9,075,840
$82,678,360
ANNUAL GOAL: 1,400
2018 TOTAL: 159
NEW/RETAINED JOBS
3-YEAR GOAL: 4,200
3-YEAR TOTAL: 1,600
ANNUAL GOAL: $50,000,000
2018 TOTAL: $9,075,840
NEW/RETAINED PAYROLL
3-YEAR GOAL: $150,000,000
3-YEAR TOTAL: $79,509,734
ANNUAL GOAL: $167,000,000
2018 TOTAL: $82,678,360
NEW CAPITAL INVESTMENT
3-YEAR GOAL: $500,000,000
3-YEAR TOTAL: $203,323,717
NOW AVAILABLE: THE RIGHT PLACE 2017 ANNUAL REPORT We've just released our 2017 Annual Report. Look for your copy in the mail, or view it online at www.rightplacereport.org
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ECONOMIC DEVELOPMENT PROGRESS UPDATE
AXIS COMPANY
Axis Company opens second facility in West Michigan
Grand Rapids-based Axis Company has announced they will be expanding to a second location in Kent County. This decision came after the company explored multiple out-of-state options for a second location, with one being closer to a major customer. The Right Place and the Michigan Economic Development Corporation (MEDC) were able to craft a compelling business case to ensure Axis Company chose to remain in West Michigan. The resulting expansion will create $4 million in capital investment, along with 50 high-tech jobs. The MEDC is supporting the expansion effort with the approval of a $400,000 Michigan Business Development Program performance-based grant, as well as $125,000 in support from the Michigan New Jobs Training Program.
Although the company reviewed several properties outside of Michigan, Axis Company ultimately felt that staying in the Grand Rapids area presented many benefits, including a strong advanced technology workforce. “Robotics and automated production technology companies like Axis are innovating the future of manufacturing and providing quality jobs in our community,” said project lead Jen Wangler, Business Development Manager of The Right Place. “Our high-tech and skilled labor workforce is a desirable trait to fuel Axis’s continued growth.” Axis Company designs, programs, and builds robotic automation and assembly equipment for awide range of manufacturers and industries. The company is forecasting continued growth in the coming years and as a result, they expect to hire 50 new team members over the next three years. These positions will be across a wide variety of high-tech and skilled positions. To learn more about Axis Company and open positions, please visit www.axisco.com/careers .
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VIKING
Viking Group announces plans for new headquarters in West Michigan
Business Development Manager, The Right Place. “We’re excited to see what this state-of-the-art headquarters facility, with world-class R&D and training facilities, will do for the forward-thinking Viking.” West Michigan’s ability to attract and retain talent was one of the deciding factors in Viking’s decision to complete this expansion in the region. “As our organization and industry continue to grow, and we develop more sophisticated technology to precisely detect and suppress fires, it’s crucial that our manufacturing capacity keeps pace,” Golinveaux added. “Viking Group considers West Michigan the ideal region to support our future expansion and to attract and retain world- class talent, and this investment is a demonstration of that belief.” For more information on Viking Group, visit www.vikinggroupinc.com .
While the final site of the new HQ has not yet been determined, it will be located near M-6 and M-37 in Caledonia and is slated to be completed in early 2019. The new building will feature a high-tech training facility in addition to an upgraded R&D infrastructure. The Right Place assisted Viking Group in identifying the M-37 corridor in Caledonia Township due to its close proximity to both its Hastings campus and Grand Rapids offices. “We want to thank The Right Place for their assistance with this strategic project. Their guidance and knowledge provided the support we needed to fulfill this vision,” said Golinveaux. “We knew that Viking wanted to stay close to its Hastings operations while maintaining its presence in the Grand Rapids area, so we felt that the Southwest Grand Rapids area, with M-37 access, would be ideal,” said Thad Rieder, Senior
Viking Group has chosen Caledonia Township as the location for its new global headquarters and R&D center. The company expects 100 people to move from its Grand Rapids and Hastings offices to this new location. Viking is a fire protection product manufacturer and distributor with products including commercial and residential devices such as fire sprinklers, valves, and fire protection devices. They are currently being sold in over 90 countries. “The expansion of our West Michigan footprint is an investment not only in the communities we are proud to call home, but in our employees, who are the key to our continued success,” said Viking Group President and CEO James Golinveaux. “The new facility will free up space in our Hastings location, which will continue to house manufacturing operations, and will be conducive to the future expansion of our manufacturing footprint.”
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2018 ECONOMIC SUCCESS STORIES
FOREMOST FARMS
Foremost Farms invests $57.9 million in Greenville with assistance from The Right Place
These resources and commitments include: • The Michigan Strategic Fund (MSF) is supporting the expansion with a private activity bond inducement valued at up to $12 million. Approval of the bond authorizing resolution is expected to take place at an upcoming MSF meeting. • The Michigan Department of Agriculture and Rural Development (MDARD) is supporting the project with a $500,000 grant from its Food and Agriculture Investment Fund. • The City of Greenville plans to support the project with a 12-year property tax abatement valued at $2.33 million. • The MEDC will consider incentive support for the project at a future date. • The company is also expected to receive a grant fromWest Michigan Works!. “Through the many evolutions this project has taken, there have been a number of quick responses needed from the many partners involved at all levels,” said Kathy Jo VanderLaan, Business Development - Montcalm County, The Right Place, Inc., and Montcalm Economic Alliance. “The City of Greenville has gone above and beyond with their participation and flexibility. Representative Jim Lower played a key role in getting this over the finish line. The result will be new jobs for people in our community, future growth opportunities, and relief for Michigan dairy farmers.” To learn more about Foremost Farms, please visit www.foremostfarms.com .
“Foremost Farms’ executive management and board of directors are very appreciative of The Right Place, MEDC, the City of Greenville, MDARD, MDOT,WestMichigan Works!, and Representative Jim Lower, along with all of the other combined agencies in making this a reality to strategically build this facility in Greenville,” said Foremost Farms President and CEO Michael Doyle. “It is an ideal location as a manufacturing base for Foremost Farms USA to unify our seven-state cooperative membership’s milk. Our goal is to develop and grow this facility to continually meet the value-added needs of our customers. This, along with furtherdeveloping our strategic alliancewith Michigan Milk Producers Association that began at Constantine, Michigan, will add value for our members and all producers in this market,” Doyle added. The Right Place, Inc., Montcalm Economic Alliance, and the City of Greenville served as the key partnerswith Foremost; however, the agencies also worked collaboratively with MDARD, MEDC, West Michigan Works!, Montcalm Community College, and other local resources to help bring Foremost to Greenville.
Wisconsin-based dairy processing cooperative, Foremost Farms, has announced it will be investing $57.9 million to build a 55,000 square foot milk-condensing facility in the Greenville Industrial Park. Foremost hopes to break ground on the first phase of the multi- year endeavor in the coming weeks with the intention of being operational before the end of the year. The first phase is expected to create 33 jobs. Foremost Farms officials hope this initial investment will spur the development of a large-scale dairy processing campus over the next several years. Foremost is already engaged in talks with additional companies in creating value-added production facilities on the campus to serve Foremost’s cooperative partners. Once open, the plant will condense 3.2 million pounds of raw milk per day (roughly 386,000 gallons). The final product, condensed milk solids such as cream and skimmilk, would beused byForemostco-op facilities and strategic alliance partners around the Midwest to further process the condensed milk into products such as cheese, butter, and yogurt.
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2018 ECONOMIC SUCCESS STORIES
WEST MICHIGAN’S MEDICAL DEVICE INDUSTRY NATIONAL MEDICAL DEVICE FORUM COMING TO GRAND RAPIDS! It’s coming to West Michigan – The 2018 MedDevice Forum!
the space, Medical Product Outsourcing’s conference series has provided the medtech industry with the most comprehensive programs for over 10 years. These highly informative symposiums address critical issues impacting multiple stakeholders within the industry. In 2018, the MedDevice Forum—a brand new, medical device manufacturing conference event—will debut in Grand Rapids, Michigan. Modeled after the industry leading MPO Summit, MedDevice Forumwill offer amore intimate setting for attendees seeking solutions to industry challenges. This event will simultaneously highlight the appeal of the region for medtech while tackling many the most significant issues and challenges today’s medical device companies are facing. Taking place in such an impressive location, this interactive networking and educational event will partner local experts with out-of-state industry thought leaders —OEMs, contract manufacturers, suppliers, consultants, members of the investment community, and academia—for a unique forum to discuss critical industry topics and offer tools to compete and grow in today’s volatile business climate.
For over five years, The Right Place, the Grand Rapids SmartZone, and MiDevice (The Right Place’s medical device consortium) have been collaborating to attract a major medical device conference to West Michigan. As a result, MPO Summit’s 2018 MedDevice Forum will be held in Grand Rapids at the Michigan State University’s College of Human Medicine Secchia Center. The Right Place and MiDevice worked together to secure Grand Rapids as the host city for the event on May 22, 2018. Organizers expect to have up to 150 participants attend the event from around the United States. This event will bring a new spotlight to West Michigan’s growing medical device manufacturing industry and the opportunities that exist here in the region. The Right Place and MiDevice will host a reception and provide tours to many of the companies attending the forum. ABOUT THE MEDDEVICE FORUM Focusing on the world of outsourcing for medical device manufacturing coupled with a keen awareness of innovation in
The West Michigan region is home to nearly 600 companies and approximately 41,000 jobs focused around the medical device and life sciences industries. Residents of the area include MedPlast, Stryker, Perrigo, Autocam Medical, Pfizer, and Skytron. Life sciences companies account for more than $7.9 billion in economic activity in the region. In addition, West Michigan higher education institutions produce more than 10,000 STEM graduates annually, fueling the growth of the industry. Venture capital investment in life sciences in West Michigan totaled more than $106 million in 2016. THANK YOU TO OUR PARTNERS We want to provide a special thank you to the Michigan State University—College of Human Medicine for graciously hosting this event. The Grand Rapids SmartZone provided the financial support and resources to enable us to continue pursuing this opportunity. We would also like to thank Brent Nowak, Ph.D., and Grand Valley State University for determining panel speakers. Experience Grand Rapids is providing excellent customer service for the event and we thank them for their support.
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2018 MEDDEVICE FORUM
NAFTA RENEGOTIATION: HOW INTERNATIONAL TRADE TALKS WILL AFFECT WEST MICHIGAN
The need for increased efficiencies at this heavily-trafficked border have necessitated the development of the Gordie Howe International Bridge in Detroit. This six-lane bridge will connect 1-75 to Highway 401 in Canada, and support thousands of jobs across Michigan and the United States. The procurement process for the bridge has already begun, and construction is expected to begin in 2018 after a private sector partner is selected to build the crossing. HOW TO GET INVOLVED When NAFTA was enacted 24 years ago in 1994, the world economy looked very different than the digital economy we live in today. These changes necessitate a modernization of NAFTA to enhance the North American economy’s global competitiveness. However, given Michigan’s reliance on this agreement, any breakdown in negotiations could have widespread negative effects on the West Michigan economy. Working together, we must communicate the importance of a free and open cross-border trade policy. We have the opportunity to make a good agreement even better and align NAFTA to new economic realities. You can make your voice heard by contacting your respective industry associations and local chambers of commerce. For more information and a full version of the NAFTA update presentation by the Consul General of Canada inDetroit, please visit www.rightplace.org/events/nafta- update-luncheon .
Officials from the U.S., Canada, and Mexico are in the midst of renegotiating the free trade agreement that regulates the largest economic region in theworld. The outcome of these talks on the North American Free Trade Agreement (NAFTA) will have widespread effects on the global economy, but the largest impact may be felt right here in Michigan. The reliance of the state’s manufacturing and agricultural sectors on global trade and export markets make Michigan the number one state most-impacted by NAFTA. In fact, Michigan sells more goods to Canada than it does to its next nine largest foreign markets combined. West Michigan alone exports $5 billion under the agreement. For this reason, The Right Place recently hosted a luncheon where almost 200 local business and community leaders were able to hear an update on NAFTA from the Consul General of Canada in Detroit, Mr. Douglas George. Attendees also heard from a panel of several local business leaders affected by NAFTA, which was moderated by GrandValley StateUniversity’s Van Andel Global Trade Center.
NAFTA’S IMPACT ON MICHIGAN AND THE U.S. Mr. Douglas George’s keynote discussed the importance of NAFTA, which facilitates a trillion dollar trade and investment relationship between the U.S. and Canada. Nearly 9 million jobs in the U.S. depend on this trade and investment. 366,000 of those jobs are located in Michigan. These are quality jobs with higher wages, as export-related jobs are paid between 13 and 18 percent more than the national average. All of these jobs could potentially be at risk should the U.S. withdraw from NAFTA, which is why it is critical to come to a mutually beneficial partnership during these negotiations. According to data from the U.S. Bureau of Economic Analysis, the U.S. already possesses a trade surplus with Canada when it comes to service, manufacturing, and agricultural exports. While the U.S. does currently have a trade surplus with Canada, the trade balance between the two nations is only one part of the equation. Both economies have deeply connected supply chains and there are approximately $2 billion in goods and services crossing back and forth over the U.S.-Canada border on a daily basis. In fact, the busiest of these commercial land crossings is right here in Michigan.
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NAFTA RENEGOTIATION
The Right Place announces launch of new tool to build strategic change in Newaygo County DASHBOARD NEWAYGO COUN T Y AR E A
foundation identified 10 indicators on the broader dashboard that were critically important to their mission. The foundation plans to evaluate future funding requests based on the applicant’s ability to impact measureable changewithin those indicators. These indicators include the following for Newaygo County, in no particular order: • Median income by race • Total employment • Kindergarten readiness • Labor force participation rate • Households below the ALICE threshold • Third grade reading level • 8th grade math proficiency • High school graduation rate • Post-high school certificates awarded • Low birth-weight percentage By highlighting these 10 specific indicators, the Fremont Area Community Foundation will be able to better serve its strategic goals, while the broader Newaygo County Dashboard they’re a part of provides 20 more social, economic, and environmental indicators for the county. This wider range of dashboard indicators will provide other stakeholders in Newaygo County with the opportunity to analyze local year-over- year data aligned with their respective organizational missions. If your organization has been using either the Newaygo County Dashboard or theWest Michigan Regional Dashboard to further your strategic goals, The Right Place wants to hear from you. Please contact us at info@rightplace.org to share your story.
of separate sources. Now, with the data combined into one dashboard, regional organizations can more readily take action on metrics that fall within their sphere of influence. One of the first organizations to capitalize on this opportunity was the Fremont Area Community Foundation. Over the past year, The Right Place and the Fremont Area Community Foundation have been collaborating on the development of a dashboard to measure growth and prosperity on a more localized level. This partnership resulted in the January launch of the Newaygo County Dashboard, available at www.ncdashboard.org . By taking a deeper dive into county-level data, the Fremont Area Community Foundation will be able to use the Newaygo County Dashboard as a tool for evaluating grant applications. Specifically, the
Communities throughout West Michigan are continuously looking for ways to build strategic change and empower collective action. To better enable this regional advancement, The Right Place worked with the West Michigan Regional Prosperity Alliance last year to establish a common set of shared metrics to track West Michigan’s progress on 34 critical economic, social, and environmental indicators. The result of this effort was the West Michigan Regional Dashboard: an online tool available at www.wmdashboard.org that displays West Michigan’s performance on key metrics in one convenient location. Before the development of this dashboard, the region lacked a common set of measurements by which to measure its growth and prosperity. The data displayed on this dashboard was previously only available by combing through a multitude
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NEWAYGO DASHBOARD
A 20 YEAR VISION FOR GFIA
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GERALD R. FORD INTERNATIONAL AIRPORT
GFIA is also a diversion airport for multiple, large airlines which have hubs in Chicago and Detroit. With a designated FIS, GFIA would be able to accommodate wide-body aircraft arriving from international destinations on Delta Air Lines, United Airlines, Southwest Airlines, Frontier Airlines, American Airlines, Allegiant, and others. Once the airport has consensus to construct the FIS, design and construction would take approximately 24 months. This, however, must begin with approval and designation from U.S. Customs and Border Protection. The most efficient path to designation is via a Congressional act to compel Customs and Border Protection to designate GFIA as an “International Airport.” AIR TRAFFIC CONTROL TOWER REPLACEMENT Thesecond keyfinding in thenewmasterplan is the relocation and replacement of the Air Traffic Control Tower (ATCT) at the airport. The current ATCT is 54-years-old, which makes it the second oldest operational tower at a “Top 100” airport in the country. The current location and construction of the ATCT is inhibiting airport growth due to line-of-sight issues. For example, the top level of the parking garage is not covered because air traffic controllers’ line-of-sight of the taxiway on the north side of the airport would be obstructed. GFIA and the Airport Authority are urging the FAA to prioritize the relocation and replacement of the ATCT. To date, GFIA has lost an estimated $3.15 million in revenue and will continue to lose approximately $1.46 million each year until the ATCT is relocated and replaced. The airport currently predicts that within the next four years, future development necessary to accommodate increased passengers will be restricted and/or not completed. This will result in increased congestion, delays, and an overall decrease in customer satisfaction and safety. A formal inquiry on the status of the ATCT within the FAAs Tower Replacement Program has been sent to the FAA Acting Administrator. However, the airport is still waiting for a response. As West Michigan’s community and economy continue to grow and prosper, it is imperative that we invest in the initiatives that drive growth. The Gerald R. Ford International Airport plays a critical role in our region’s future and The Right Place is fully supportive of these two initiatives.
We’re growing. Growing as a community, growing as an economy, and growing as an airport. In 2017, 2.8 million passengers flew in and out of the Gerald R. Ford International Airport (GFIA), 5.9 percent above the 2016 passenger number. Along with the increase in demand, comes the need to plan for future growth within 10 to 20 years down the runway. Airports are a critical piece of the region’s economic growth engine. GFIA opens West Michigan’s businesses to the world, bringing in and sending out goods and talent from around the globe. That is why Birgit Klohs and Rick Chapla from The Right Place are collaborating with GFIA in the development of the airport’s next 20-year master plan. GFIA MASTER PLAN In 2016, the airport began the process of developing a new 20-year master plan for the airport. The plan consists of an assessment of existing facilities and future demand. It identifies future facility requirements and outlines an implementation program. It also considers sustainable factors and environmental consequences, with the ability to timely finance and meet future demand. In the end, the plan is about providing the strategy and infrastructure for accommodating growth and maintaining GFIA as a world-class gateway. Among the findings discovered through the master planning process, two key recommendations emerged as a top priority: the implementation of a Federal Inspection Station (FIS), and the replacement of GFIA’s air traffic control tower. A FEDERAL INSPECTION STATION Imagine travelling internationally without having to make that extra stop in Chicago, Detroit, Minneapolis, or another domestic hub. That is the power and convenience of an FIS. An FIS is essentially a customs and border protection space in the terminal that will allow the airport to accept scheduled direct inbound and outbound commercial international flights. Today, GFIA is losing 40 percent of West Michigan’s international passengers to other airports, resulting in an estimated $1.7 million in lost airport revenue and $15 million in lost regional revenue. The airport also projects that regional demand for direct international flights is estimated at 243,500 passengers per year.
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GERALD R. FORD INTERNATIONAL AIRPORT
The State of Our Region In West Michigan, businesses are growing. The economy is booming. Yet, persistent challenges remain.
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THE STATE OF OUR REGION
What areas of West Michigan are included? For this article, we have included the four counties where The Right Place provides direct business development support services to local businesses: Kent, Ionia, Newaygo, and Montcalm counties. These meetings give us qualitative insights into the challenges and opportunities faced by companies. Our business research and intelligence team is then able to compare that informationwith thequantitative labor market information platform, Emsi. This combination of qualitative and quantitative information provides more complete insight on regional economic trends. Let’s start with the quantitative side of the equation. I nWestMichigan, businesses are growing. The economy is booming. Yet, persistent challenges remain. For manyWest Michigan businesses, 2018 began with the same fast pace and volatility felt throughout 2017. The good news? Business is up. West Michigan companies are investing in growth initiatives and creating jobs. The bad news? Familiar challenges persist. The rapid advancement of technology and automation continue their disruption, the future of NAFTA remains uncertain, and years of record-low unemployment levels make talented employees harder to find. Although businesses are facing challenges and uncertainty, there are also opportunities. Many of West Michigan’s industries are growing at rates out-pacing the state and nation. The Right Place is dedicated to working with these growing industries, providing businesses the assistance they need to create jobs in our community. Specifically, we serve businesses in Kent, Ionia, Montcalm, and Newaygo counties, where we meet with over 400 companies each year.
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THE STATE OF OUR REGION
Overall job growth 2015-2017
Within the advanced manufacturing sector, three supply chain-related subsectors in the region experienced job growth worth noting: Transportation and Equipment Manufacturing(+4%,635newjobs),Furniture and Related Product Manufacturing (+8%, 476 new jobs), and Electrical Equipment and Component Manufacturing (+15%, 277 new jobs). This substantial growth speaks to the strength of West Michigan’s manufacturing supply chain. Construction (+17%, 3,000 new jobs) Overall, construction jobs jumped by 7 percent, nearly twice the state and national growth rate. West Michigan subcontractors and general contractors saw explosive job growth, but subcontractors, in particular, accounted for over half of the sector’s growth rate. These are businesses involved in building construction, but not responsible for the entire project, such as electricians, building material providers, safety and security suppliers, etc. Services (+10%, 11,470 new jobs) At 10 percent, the region’s services sector experienced surging growth between 2015 and 2017. Most of the growth was reported
Place and Litehouse announced the company would invest $12.1 million in an expansion, adding 77 new jobs at its Lowell facility over the next three years. Advanced Manufacturing (+3%, 1,360 new jobs) Manufacturing job growth inWest Michigan grew by 3 percent, on par with Michigan’s job growth rate. However, both the region and state far exceeded the nation’s manufacturing growth rate of zero percent. Michigan’s reputation as one of the nation’s manufacturing strongholds continues to stand true.
REGIONAL JOB GROWTH TRENDS The fourWest Michigan counties served by The Right Place all experienced significant jobgrowth over the last several years. Despite having unemployment rates hovering between 3-5 percent the last two years, employers in the region added nearly 23,000 new jobs between 2015 and 2017, and the overall job growth rate was 5 percent across all industries. (See Figure 1) To put these numbers into perspective, West Michigan’s 5 percent job growth rate was morethandoublethatof thestateandnation. Digging deeper into West Michigan’s job growth between 2015 and 2017, there are four industry sectors leading the pack: agribusiness and food processing, advanced manufacturing,construction,andservices. (See Figure 2) Although employers across all industries created jobs and contributed to West Michigan’s high job growth rate, these industries were exceptional. Let’s take a closer look. Agribusiness Agribusinessand foodprocessing jobgrowth in West Michigan swelled by 7 percent, over and above both the state (5 percent) and nation (2 percent). Within that sector, food manufacturing jobs experienced growth at 10 percent (730 jobs), which is three times the national average. One example of this growth was our economic development expansion project with refrigerated salad dressing manufacturer Litehouse. In November 2017, The Right JOB GROWTH BY INDUSTRY SECTOR and Food Processing (+7% job growth, 960 new jobs)
Figure 2
Job growth by sector 2015-2017
10%
West Michigan Michigan United States
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Ag & Food Processing
Advanced Manufacturing
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THE STATE OF OUR REGION
Figure 3
under the Administrative and Support Services sector, which grew by 20 percent. The Temporary Help Services subsector added 10,000 new jobs, accounting for the vast majority of that 20 percent job growth. Many of these 10,000 jobs were located in manufacturing facilities, but since they are employed by temporary help service companies, they’re counted in this sector. In fact, if we took even half of these temporary jobs and counted them under the manufacturing sector, we’d see West Michigan’s already strong advanced manufacturing growth far exceed national averages. Another growth area within the service sector is Professional, Scientific, and Technical Services, which experienced 4 percent job growth (750 new jobs) from 2015 to 2017. This sector includes a wide variety of knowledge-based jobs that require a high degree of expertise and training such as IT, accounting, legal, architecture, engineering, design, and management. The Right Place completed several service sector-related economic development projects in 2017, including an expansion of Advantage Sales & Marketing in the City of Wyoming. This project alone is expected to generate a total investment of $4.3 million and create 100 new jobs. The quantitative data paints a clear picture: West Michigan’s agribusiness and food processing, advanced manufacturing, services, and construction sectors are growing the fastest, and out-pacing both state and national averages. This demonstrated exceptionalism is why they are included in The Right Place’s Strategic Plan for economic growth. It’s also why our business development team meets with over 400 of these companies each year to ensure their job growth remains here in West Michigan. Of the 400 companies our team meets with annually, most are middle market companies with annual revenue between $1 million-$100million (See Figure 3) , and are distributed across several key industries. (See Figure 4) These strategic business retention efforts account for 80 to 85 percent of our work in a given year. They also offer us qualitative insights into the challenges, opportunities, and trends facing companies in West Michigan, detailed further in the following section. THE VOICE OF WEST MICHIGAN BUSINESS
Visits by company annual sales
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n $0-1 Million n $1-25 Million n $25-100 Million n $100+ Million
45%
20%
Figure 4
Visits by company industry
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n Advanced Manufacturing n Information Technology & Communications n Other Industries
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n Life Sciences & Medical Device n Food Processing & Agribusiness
Figure 5
Visits by company employment trends
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n Companies that report INCREASING employment n Companies that report STABLE employment n Companies that report DECREASING employment
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Figure 6
Visits by company sales trends
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n Companies that report INCREASING sales n Companies that report STABLE sales n Companies that report DECREASING sales
75%
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THE STATE OF OUR REGION
Figure 7
n Low Skills (Entry-level, General Labor) n Engineers n Machine Operators, Machinists, CNC Operators n Management n Welders n Industrial/Machinery Maintenance High demand jobs reported by companies
RISING SALES AND EMPLOYMENT Most of the business we met with in 2017 work in growing industry sectors. As expected, the majority reported both increases in sales and hiring. (See Figures 5 and 6 on page 15) Many of these companies also report plans for upcoming expansions, with 60 percent expecting to expand in the next three years. These expansion plans have the potential to add an additional boost toWest Michigan’s economy in the future, and our team is connecting these companies to needed resources that remove barriers to their growth. We work as trusted partners with these companies to ensure they’re able to complete their expansion plans right here in the region. WORKFORCE WOES The challenge of finding and retaining a talented and skilled workforce persists. Nearly 75 percent of manufacturers and
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18%
20%
the regions that are able to solve this workforce dilemma will be best positioned to compete globally. This is why The Right Place continues to work with local and statewide partners to make sure the West Michigan workforce possesses the skills companies need both nowand in the future. What are the skills companies look for? Many report they’re searching for engineers, entry-level workers, industrial maintenance, and management, to name a few. For more details, see Figure 7 and the skills sidebar on this page. Beyond specific skills, our business development team is also hearing firms are struggling to meet inclusion goals. Companies are actively recruiting female and non-white employees, yet they face a low supply of candidates. Combine this with the all-time-high demand for this section of West Michigan’s workforce, and companies have significant difficulties reaching their goals. MOVING FORWARD INTO 2018 Givenwhatwe’ve heard fromWestMichigan businesses, and the labor market data our team has analyzed, we expect many of last year’s challenges to spill over into 2018. Uncertainty remains the status quo and West Michigan’s workforce is stretched thin. Yet, simultaneously, many of the region’s industries are experiencing rapid job growth out-pacing the state and nation as a whole. Companies are capitalizing on opportunities and investing in their businesses. If you would like to meet with The Right Place to discuss your future business opportunities and challenges, please contact us at info@rightplace.org to set up a confidentialmeeting. Amemberof ourteam of experts will visit your company and assist you with accessing a wide variety of resources to keep you competitive locally, domestically, and globally. We look forward to working with you.
over 65 percent of all companies told us they’re experiencing recruitment problems. While West Michigan’s two years of record-low unemployment are partly to blame, there’s no shortage of issues causing this talent crunch. These issuesarenotuniquetoWestMichigan. Employers nationwide are experiencing similar workforce challenges. However,
IN DEMAND SKILLS What skills are West Michigan companies searching for exactly? We used EMSI’s job posting analytics tool to validate what we’ve heard from companies.
Lower-skilled industrial trades: • Production Assemblers • Press Operators • Press Assistants • Injection Mold Operators • Machine Operators • CNC Operators • Production Worker Required hard skills: • Preventive Maintenance • Blueprinting • Welding • Lathes • Mechanics Top I.T. skills: • SQL (Programming Language) • Software Development • Information Systems • Agile Software Development • Java (Programming Language) • C# (Programming Language)
Industrial skilled trades: • Maintenance & Repair Workers • Industrial Machinery Mechanics • Machinists • Welders • Electricians • Electrical & Electronics Repairers • CNC Programmers • Tool & Die Makers Required soft skills: • Troubleshooting/problem solving • Management Operations • Communications Top I.T. job titles: • Software Engineers • Systems Analysts • Project Managers • Business Analysts • Desktop Support Technicians • Java Developers
Source: Economic Modeling Specialists International (EMSI)
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THE STATE OF OUR REGION
Mi FOOD 2018 Michigan Food Processing & Agribusiness Summit
When: APRIL 19, 2018 8:00 - 2:30 P.M. Where: EBERHARD CENTER 301 FULTON W GRAND RAPIDS, MI 49504
Brought To You By:
Key ingredients to profit and success.
Event Partners:
The MiFOOD 2018 summit tackles some of today’s most challenging issues in the agriculture and food processing industries. Learn from business leaders and industry experts on how you can drive new, innovative strategies for growth, safety, and increased efficiency in your own company. Michigan’s food processing and ag industries are two of the fastest growing sectors of Michigan’s economy. The goal of the 2018 summit is to ensure that trend continues and that Michigan’s growers and processors have access to the resources, education, and support they need to succeed. LEARN MORE & REGISTER AT: RIGHTPLACE.ORG
Premier Sponsor:
Full Conference Sponsors:
Epitec looks to The Right Place for industry expertise and partnership
Founded in 1978, Epitec has become a premier IT, engineering and professional staffing company providing services throughout the United States. Epitec employs more than 1,500 consultants annually and is certified African-American owned and operated. Over the last 40 years, Epitec has engaged with several advocacy organizations, but our partnership with The Right Place provides the economic line of site we need for predictive and strategic planning. As our West Michigan client base has grown, working towards additional relationships in partnership with The Right Place has been a logical move in the right direction. The associated credibility has been well worth the investment; With a staff of industry experts and relevant programming, The Right Place continues to resonate and offer our team and organization significant value. In partnership with The Right Place, Epitec has found West Michigan offers our organization a business friendly, innovative community ripe with opportunities. And that’s just the beginning, as we work with West Michigan to innovate the way the world thinks about employment.
Tony Hollamon Executive Vice President Epitec
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INVESTOR SPOTLIGHT
Company slices inefficiency and increases on-time delivery
Simonds International is a manufacturer of hardened tools, steel knives, and saw blades for a wide variety of woodcutting and processing markets. Headquartered in Fitchburg, Massachusetts, Simonds employs approximately 250 people at five North American manufacturing locations: Fitchburg, MA; Big Rapids, MI; Portland, OR; Camden, AL; and Quebec. The company employs 74 workers locally in Michigan. Simonds’ customers include original equipment manufacturers, equipment dealers, distributors, lumber mills and paper mills. THE CHALLENGE The Simonds facility in Big Rapids, Michigan produces up to 2,000 cutting knives per day with approximately 40% made to order. David Campbell, Plant Manager, wanted to improve the plant’s overall production efficiency and reporting. Production reports were often inaccurate and the entire process required a herculean effort to ensure on-time delivery. Campbell discovered The Michigan Manufacturing Technology Center and its services through Michigan Works! and the STTF training program.
RESULTS Since implementing improvements through MMTC training and coaching, Simonds has experienced significant increases in both efficiency and on-time delivery. • On-Time Percentage (Improved Productivity): Simonds’ overall productivity increased 15% over seven months (March – October); In addition, their 1st quarterly delivery performance to major customers was the highest ever with a 99% on time delivery rate. • Past Due Jobs (Time): Simonds regularly tracks jobs that are past due. Past due jobs decreased 30% in just over two months. • Work-In-Process (Cost Savings): Simonds’ overall work-in-process (WIP) decreased 15% over eight months (March – November).
THE SOLUTION The solution to Simonds production reporting and on-time delivery started with a value stream map exercise to lay out current and future states. MMTC- West’s facilitator, Craig Steenbergh, was brought on to provide expert consulting and training throughout the project. Steenbergh worked with the company to create daily management boards for each department. These boards measured quality and schedule attainment among other things. The boards were also used during daily accountability meetings to focus on schedule attainment and quality. Production f low was also changed to begin releasing work based on Takt Time. This will ensure Simonds will deliver the right product, at the right time, and in the right quantity to the customer.
www.simondsint.com
“The Center has enabled us to make dramatic improvements to our production scheduling and on-time delivery to our customers. Thanks to their work, we are currently among the top 10 in supplier performance to one of our largest customers.”
– David Campbell, Plant Manager-Simonds International
14 9
ECONOMIC OUTLOOK
MMTC-WEST SUCCESS STORY
Intern Connect: Professional development and social events for West Michigan interns
To help make sure interns are seeing everything the region has to offer, Hello West Michigan hostsWest Michigan Intern Connect, a combination of events designed to teach area interns about West Michigan, its lifestyle, and exciting employers. The program averages 400 – 500 intern attendees each summer. Although manyWest Michigan companies host summer interns, some companies and organizations may be too small to host social events or professional development opportunities for their interns. Intern Connect events are opportunities for any and all interns inWest Michigan to come together.
For most workers in West Michigan, the summer months are prime time to exercise the “flex” in flexible schedules and take advantage of the short summer season. But if your company has summer interns, most of them are experiencing the first 40 hour workweek of their career. During this summer long interview, companies aren’t just evaluating the interns, the interns are alsoevaluating thecompanyand the region. Luckily for us, West Michigan puts her best foot forward in the summermonths. There’s a festival every weekend, restaurants pop open their umbrellas, the beach is always beckoning, and the sun sets long after happy hour concludes.
What’s on tap for Summer 2018?
Day in the Park Thursday, June 21 Ah-Nab-Awen Park
Day in the Park is a social event just for the fun of it. It’s an opportunity for interns to get outside, relax, and most importantly, meet their peers from other companies. There will be carnival games, attractions, and food trucks, all situated on a prime spot in Ah-Nab-Awen Park, along the Grand River overlooking the downtown skyline.
Summer Sendoff Tuesday, July 31 Grand Rapids Art Museum
At the end of the summer, we invite interns for our Summer Sendoff, so they can cement the connections they made with other interns and employers. It’s important for interns to have a good impression of West Michigan in case there is a job offer on the table from a local employer. By showing interns what it’s like to be a young professional in our region, we are more likely to retain that college graduate or attract a college graduate from outside of the region. Companies can be involved in several different ways. Gain some exposure for your employment brand by hosting a game at Day in the Park or sponsoring an attraction. Connect with students at the Summer Sendoff. If you don’t want to be involved at a company level, you can pay for your interns (either in part or in full) to attend Day in the Park or simply pass the word along to them and encourage them to attend. Learn more at wminternconnect.com or reach out to Hello West Michigan.
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INTERN CONNECT
Intern Connect Day in the Park 2017
Hello West Michigan Annual Meeting Hello West Michigan hosted their 2018 Annual Meeting this past March, which featured guest speaker Matt Jung, Co- founder of Comfort Research. This meeting is also Hello West Michigan’s opportunity to update their member companies, partner organizations, and the community at large on the organization’s achievements and metrics from the past year.
Hello West Michgian Annual Meeting 2018
CULTURE AS A TALENT ATTRACTION TOOL
In addition to Hello West Michigan’s yearly update, the Annual Meeting included a presentation from guest speaker, Matt Jung, Co-founder of member company Comfort Research. The company designs and manufactures furniture in Grand Rapids and has a central focus on company culture. Matt talked about how culture can be used as a differentiator and talent attraction tool for companies. Matt’s three keys to success for building a winning
2017 HIGHLIGHTS ReThink West Michigan, the annual Thanksgiving Eve event co-hosted byHello West Michigan and The Right Place since 2012, expanded to become a multi-location event in 2017. It now includes event locations in Barry County, Mason County, Kent County, MuskegonCounty, andOttawa County. In total, all 5 events had over 260 attendees and 38 participating companies. Hello West Michigan also launched a successful out-bound marketing campaign for IT Candidates that resulted in 2 candidates relocating to West Michigan. Additionally, 21 candidates were sent in the Weekly Resume Pack so more relocations are possible. A new internal system for tracking candidates through the weekly resume pack was launched in 2017. These improvements allowed Hello West Michigan to increase the number of candidates they spoke with by 10%. In total, Hello West Michigan has sent out 2,042 candidates since 2013.
company culture are: 1. Recognize them 2. Reward them 3. Repeat
At Comfort Research, employees are rewarded for their ideas and hard work in significant ways. There are quarterly opportunities for pitching new ideas/ processes where winners receive cash prizes, extra time off, and their picture on the “Wall of Fab”, a central hallways all employees must funnel through. There is an emphasis on both manager to employee recognition and peer-to-peer recognition.
To learn more about this year’s annual meeting, please visit www.hellowestmichigan.com .
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HELLO WEST MICHIGAN ANNUAL MEETING
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