Starkman: Michigan Must Be Reformed 'Right Now' or Businesses Won’t Come, Warns Veteran Executive

November 04, 2021, 3:39 PM

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Eric Starkman of Los Angeles is a former Detroit News business reporter who blogs at Starkman Approved.

By Eric Starkman

Reading Crain’s Detroit Business is often akin to eating a box of Cracker Jack in my youth: Sometimes there’s a surprise buried at the bottom of the business publication’s stories.

One such example is this story, an edited transcript of an interview Crain’s scored with John Rakolta, who has returned to Michigan after a stint serving as Ambassador to United Arab Emirates. Rakolta, chairman of construction giant Walbridge, is one of the few remaining local business leaders who passionately cares about Michigan and the Detroit region. He played an instrumental role in the state bailout of Detroit Public Schools.

Rakolta revealed during his interview that Walbridge’s customers include upstart EV manufacturers Rivian, Lucid, and Nikola. None of them even considered Michigan as a location to build their EV vehicle assembly plants.

John Rakolta: "We are a long way from there."

Neither did Ford, which recently announced it plans to invest more than $11 billion in Tennessee and Kentucky to build EV and battery plants. Ford’s investment is expected to directly create more than 11,000 jobs and 20,000 ancillary jobs.

If the future of automotive is electric vehicles, Michigan’s future is pretty dire.

“The bottom line is that (Michigan) needs to get reformed right now,” Rakolta told Crain’s. He said Michigan is going to be short as many as 300,000 new jobs within five years. Unless Michigan improves education standards, “businesses aren’t going to come here. They’re going to go to the states where they can hire and put to work the kind of skilled labor that they need.”

Rakolta said all Michiganders need to understand the severity of the situation.

“I’ve been racking my brain, how do you create that crisis to galvanize liberals, conservatives, suburbanites, urbanites, rural? How do we pull them all together that we can make Michigan a Top 10 state? We are a long way from there,” Rakolta said.

Awful Stats

Rakolta rattled off some stats that should serve to galvanize.

He said Michigan ranks in the bottom quartile for eighth-grade reading and fourth-grade math. CNBC in its recent ranking of top states for business gave Michigan a D for education. Admittedly, CNBC gave Michigan an A- for technology and innovation, but there are those who would dispute that assessment. Rivian was previously headquartered in southeastern Michigan, but it decamped for California last year reportedly because the company’s CEO believes California is a cool place and Detroit has an old technology image.

Gov. Bill Lee

Tennessee Governor Bill Lee and other officials in the Volunteer State appreciate the importance of education to attract EV businesses.  Lee, a mechanical engineer, has championed career and technical training, work-based learning, and apprenticeship programs since he was elected in 2019.

According to Chalkbeat Tennessee, a publication focused on education, Lee and other state officials understand that building electric vehicles requires different skills than those in traditional manufacturing.

“It takes a lot of math, reading, and critical thinking. It’s not a lot of lifting or repetitive manual tasks,” Ann Thompson, director of workforce development for Tennessee’s Department of Economic and Community Development, told Chalkbeat Tennessee.

Tennessee plans to build a trade school at Ford’s massive manufacturing complex outside Memphis to train many of the project’s first workers. Some of Tennessee’s technical schools already have courses specializing in electric vehicle manufacturing.

“Everybody is going to have to up their game with career and technical education and work-based learning,” Amity Schuyler, senior vice president of workforce development for the Greater Memphis Chamber of Commerce, told Chalkbeat. “It’s going to be more important than ever to introduce students early to real-world experience.”

If someone knows of Michigan state officials who have the vision and focus of Lee, Thompson and Schuyler, let me know. Gov. Gretchen Whitmer is under the mistaken impression that sporting fashionable leather jackets and bashing Donald Trump is an example of great leadership.

Gov. Gretchen Whitmer

Whitmer promised to elevate Michigan’s education standards, but like her promise to fix the roads, she so far has failed. A Detroit Regionalk Chamber report in February revealed that only 36 percent of the region’s high school graduates are college ready, down from 40 percent four years ago. The percentage of high school graduates who didn’t enroll to further their education increased to 32 percent from 27 percent.

If the Detroit-area media were doing its job, it would heed Rakolta’s call and be writing stories to galvanize its readers and educate them about the severity of Michigan’s leadership problems on both sides of the aisle. Instead, the Free Press published this puff piece on CEO Jim Farley after Ford announced its Tennessee and Kentucky investments and the Detroit News just named Farley a “Michiganian of the Year.”

Tennessee's Hero

Really? The local Memphis publication should give Farley his due and name him “Tennessee Hero of the Year.” It would make a nice follow up for its “Christmas Came Early” banner headline after Ford announced its planned investment in that state.

That Farley was named a “Michiganian of the Year” speaks to the decline of leadership committed to the state. Rakolta, a deserving leader, was named a “Michiganian of the Year” in 2018.

I recently said The News was a better publication than the Free Press, but I take that back given its follow-up Farley puff piece that included his BS statement saying his only concern is doing right by Ford and its employees: “This is not about the CEO. I’d be happy working on the line as this job.”

Yeah, right.

When I worked at The News before it was destroyed by Gannett, a reporter wouldn’t have lasted long filing these kinds of stories. Gannett ultimately sold The News and then acquired the Free Press, which it also destroyed but still owns.

As for Crain’s, it’s a decent local business publication, better than most. But perhaps executive editor Kelley Root can muster some of the anger and passion she displayed attacking Mat Ishbia for not sponsoring Michigan State’s female athletes and start holding Michigan’s elected officials accountable for their sorry state of leadership. Ishbia, CEO of United Wholesale Mortgage, is at least creating jobs and “sponsoring” stories in Crain’s.

One of Rakolta’s accomplishments as UAE ambassador was helping broker a peace agreement with Israel. If Michigan remains on its downward economic trajectory, maybe Rakolta can broker a deal with Tennessee Gov. Lee to show some mercy and put a limit on how much business he and his capable team of state officials steal from Michigan.

Let ‘em pick on Indiana or Ohio. Stealing business from Michigan with its current leadership is like taking candy from a baby.

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