Whitmer: Michigan's future depends on diversifying state economy

To ensure a bright economic future for Michigan, the state needs to diversify its economy beyond manufacturing and the federal government should step in to help, according to Gov. Gretchen Whitmer and Lt. Gov. Garlin Gilchrist II.

The two wrote a letter Wednesday urging the U.S. Economic Development Administration (EDA) to designate a "tech hub" in Michigan so the state can receive federal investments aimed at spurring tech sector growth in selected regional economies across the country.

"While much progress has been made to move Michigan’s economy forward over the last few years, our state remains vulnerable to a changing economy," Whitmer and Gilchrist wrote in their letter. "Michigan will always compete for good-paying manufacturing jobs, but the future of our state is dependent on diversifying our economy and increasing the number of good-paying, high-skill jobs that the Tech Hubs program will create."

Congress passed the CHIPS Act last year to establish the EDA's Regional Technology and Innovation Hubs program and went on to appropriate $500 million to implement it. Key technology areas the EDA wants to target in the tech hubs competition include artificial intelligence, semiconductors, robotics, medical technology and cybersecurity. The EDA is expected to designate at least 20 tech hubs across the country.

The Whitmer administration's appeal for the federal support comes as the governor has touted major deals with companies that promise to create thousands of new manufacturing jobs in exchange for hundreds of millions in state funding. Since the start of the legislative session, state lawmakers have approved funding for three new electric vehicle battery plants. Whitmer recently announced a renewable hydrogen manufacturing facility also expected to come to Michigan.

"These projects ... exemplify our ability to ensure the industries of the future are built right here in America," Whitmer and Gilchrist wrote in their letter to the EDA.

But while the Whitmer administration champions these projects, the letter raised concerns about what the future holds for manufacturing workers in the state amid the auto industry's push to transition to electric vehicles.

"New technologies like batteries and electric vehicles bring economic opportunity, but also potential displacement for union workers building engines, transmissions, and gasoline-powered vehicles today," Whitmer and Gilchrist wrote. "As domestic manufacturing jobs shift to states with lower wages and less protections for workers, fewer families can count on a manufacturing job to lift them into the middle class."

Gilchrist told the Free Press earlier this week that the Whitmer administration has taken "an all of the above approach to delivering economic opportunities."

"It's our job to demonstrate to people that there's a place in today's Michigan and tomorrow's Michigan and that's the path that we need to pave," he said.

Last week, he launched a series of gatherings alongside economic development officials to kickstart collaborations in regions across the state that could compete for the "tech hub" award. Sessions have been held in Detroit, East Lansing, Grand Rapids and northern Michigan with another session to be held in Ann Arbor Wednesday, according to a news release from Whitmer's office.

Applicants vying for designation as a "tech hub" can include some combination of state and local government, higher education institutions and industry groups as well as labor and economic development organizations. The deadline to apply for the federal funding is mid-August.

Clara Hendrickson fact-checks Michigan issues and politics as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA. Contact her at chendrickson@freepress.com or 313-296-5743. Follow her on Twitter @clarajanehen.