Michigan's economy may cloud President Barack Obama's spring commencement address at University of Michigan

His address - the first appearance by a sitting U.S. president at U-M’s Ann Arbor campus since George H.W. Bush visited in 1991 - comes as even the most talented of graduates are struggling to find jobs.

Some 46 percent of Michigan’s top public university alumni leave the state within 8 months of graduating, according to a 2008 study by Ann Arbor-based nonpartisan think tank Michigan Future Inc.

“I don’t think he needs to hear this, but I think a lot us want to hear about jobs, and are we going to get them after we graduate?” said U-M graduate student Evangeline Harvey, who is graduating this spring with a master’s in education. “I have a feeling that that’s one of his reasons for doing this.”

The content and tone of Obama’s speech won’t be clear for months.

But business leaders, politicians and students in the Ann Arbor region said they hope the president discusses Michigan’s jobs crisis and how to help reconstruct the state’s economic infrastructure.

Obama will be greeted by a Michigan economy suffering from an unemployment crisis. Michigan’s unemployment rate in December was 14.6 percent, according to the state.

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“The Ann Arbor region is certainly dealing with the same economic stress that the rest of the state and the rest of the country is dealing with,” said Michael Finney, CEO of economic development group Ann Arbor SPARK. “The good news is we are doing some things proactively that have the potential to favorably impact our fortunes here. So our hope is that we’ll have the chance to showcase some of those things to him.”

U.S. presidents usually use the platform provided by a commencement address to inspire graduates, deliver broad policy speeches and, occasionally, unveil new programs and strategies.

In 1964, for example, President Lyndon Johnson included the first mention of his “Great Society” proposal in his commencement address at U-M.

Obama has declared that his focus in 2010 is stimulating job growth and passing health care reform.

Michigan state Rep. Pam Byrnes, D-Lyndon Township, said Obama needs to discuss ways to prop up small companies that are having difficulty getting bank financing.

“We need some specifics,” Byrnes said. “We’ve got some serious problems with getting small businesses lines of credit and support. That is key to our revitalization because it’s going to be through the small businesses that we’re going to help turn Michigan around.”

Rich Sheridan, CEO of Ann Arbor-based software firm Menlo Innovations, said small businesses are the powerhouse of job growth.

“The president can make big ideas move forward,” Sheridan said. “Everybody’s pretty convinced that it’s going to be small businesses that start growing up that’s going to be where most of the job growth is going to come from.”

Economy, economy, economy

Cynthia Wilbanks, U-M’s vice president for government relations, said Obama’s decision to come to Michigan to deliver the address fits with his focus on revitalizing the economy.

“I have an expectation that he will describe the challenges of the current economy and global world that we’re in, the role that students play, that graduates play, the expectation that they will assume leadership roles in helping to shape a better future,” Wilbanks said. “I think he will do that very well. I wouldn’t be surprised if he took a little time to reflect on Michigan as perhaps an epicenter of the way in which the economy is transitioning and has to cope with the challenges.”

Michigan’s challenges were globally publicized in 2009 with the federally financed bankruptcies of homegrown automakers General Motors and Chrysler.

The U.S. government got an equity stake in GM and Chrysler in exchange for providing $65 billion in emergency loans to help them avoid liquidating.

Obama, faced with the unpopularity of the loans, has largely avoided discussing the auto companies in recent months.

But David Cole, chairman of Ann Arbor-based Center for Automotive Research, said Washington needs to continue to support Michigan’s manufacturing base.

The administration must “really focus on the importance of manufacturing in our economy,” Cole said. “That, to me, is something that we have not had in an administration in many years.”

Stimulus spending in Ann Arbor

Meanwhile, Obama’s appearance at U-M comes as the university is celebrating its reception of more than $100 million in federal economic stimulus funds. About half of that came from the National Institutes of Health, and $19.5 million is devoted to a new solar energy research center.

Two local nonprofits - Ann Arbor-based Merit Network and Ypsilanti-based Clean Energy Coalition - have collectively landed about $48 million in stimulus funding, as well.

Finney said those projects were critical to stimulating growth here.

But he also argued that the region needs to be cultivating a wide range of high-tech jobs that provide a wealth of opportunities for talented workers.

“What I’m hoping is that we have a chance to see him embrace the challenges we have here in Michigan and by embracing those challenges, he outlines plans from his administration to take steps to help support some of the efforts that we have going here in our region,” Finney said. “Finding ways to stimulate the economy through these knowledge-based employment opportunities is such a big-time opportunity.”

Leveraging governmental resources to create jobs is controversial, however.

Ann Arbor native Ron Weiser, chairman of the Michigan Republican Party, questioned the effectiveness of the stimulus package - despite the millions funneled to the local area.

“In the end, you can take money from the government and hire people with it,” he said. “But the way that you grow the economy is that you have the private sector create jobs. The public sector can’t continue to pay for them because the money’s got to come from someplace.”

Weiser called for Obama to focus his address in May on how to reassemble a vibrant economy.

“We just came out of a year that was the most severe year we’ve had since the Great Depression. Focusing on jobs is absolutely critical for this state,” Weiser said.

Convincing graduates to stay

Creating jobs is the first step to convincing young talented workers to stay in Michigan after graduating from college.

Stephen Rapundalo, a Democratic member of Ann Arbor City Council and executive director of Ann Arbor-based MichBio, the state’s life sciences association, said Obama’s team needs to find ways to “maintain the country’s level of competitiveness and leadership in innovation.”

That starts with providing great job opportunities to young people, he said.

“I think we need to have some kind of stimulus package version for job creation,” Rapundalo said. “Some kind of incentives that help small companies hire these young graduates and preferably keep them here within Michigan’s borders rather than see them leave to pursue careers elsewhere.”

As U-M graduates eye the president on stage May 1, they’re sure to be pondering their own futures - and whether there’s room for them in Michigan.

Some will leave.

Some will return.

“What I’m encouraged by is the number of people that have had a connection with the state, tested themselves beyond the borders of the state and, after some period of years, decided to return to the state and make a difference, make a mark and contribute to the state’s economy,” Wilbanks said.

“I do think there’s evidence that people are thinking that once they leave, it’s not forever.”

Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com Business Review's weekly newsletter.