Three key threats to Ann Arbor area's job growth
Thomson Reuters employs between 800 and 900 workers at its Ann Arbor-based health care division on Eisenhower Parkway. The division is up for sale.
Angela J. Cesere | AnnArbor.com
Ann Arbor area in 2014: Labor shortages possible
Related story: Washtenaw County economy in robust recovery: But are they good jobs?
Related story: Washtenaw County construction industry still struggling to recover from recession
Although Washtenaw County is expected to add more than 11,000 jobs over the next three years, a few variables could disrupt the pace of growth.
Here they are:
--The European debt crisis. As the European community grapples with the massive debt loads of countries like Greece and Italy, some experts fear that the crisis could spark a global contraction in credit. That would make it more difficult for small businesses to secure loans they need to grow and hire employees, said Don Grimes and George Fulton, University of Michigan economists who conducted an economic forecast on Washtenaw County for AnnArbor.com.
“That would have a substantial impact here,” Fulton said. “It’s hard to take (Europe) off the risk list. They’re going to be on the risk list for a while.”
--A sudden spike in oil prices. The economists said the threat of turmoil in Iran, which could become engaged in a military conflict with Israel over its nuclear weapons ambitions, looms as a threat to the U.S. economy.
“Every time we’ve had a recession over the last 40 to 50 years, a major contributing factor has been an increase in gas or oil prices,” Grimes said.
With gasoline prices already above $4 at some stations in Ann Arbor, a bigger spike in oil prices could dampen consumer spending in Washtenaw County, which would have a direct impact on the jobs picture. It could also affect the sales outlook for automakers.
“If the problems escalate (in Iran), that could be a real problem,” Fulton said. “It’s feasible, but not our most likely scenario.”
--The future of Thomson Reuters. Although the global information services company is not mentioned in the economists’ report, the future of its Ann Arbor-based health care division is still up in the air. The profitable division, which employs 800 to 900 workers on Eisenhower Parkway, was briefly up for sale in 2011 before Thomson Reuters took it off the market.
Now, it’s back on the market — and could be sold soon, possibly to a private equity firm, according to the Wall Street Journal. It’s unclear whether the Ann Arbor office of Thomson Reuters would be affected by a sale. The company also employs up to 1,000 people at a tax and accounting division in Dexter.
Paul Krutko, CEO of Ann Arbor SPARK, said his economic development group is actively communicating with Thomson Reuters in hopes of convincing a prospective buyer to maintain the local operation.
“They have a good strong workforce here who’s driving that profit,” Krutko said. “We’re hopeful that we can show a potential buyer that they need to keep that operation intact and grow it. It would be a different circumstance if we were talking about a company that was losing money.”
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's newsletters.
Comments
Halter
Mon, Apr 2, 2012 : 10:26 a.m.
Good article....seeing this from a small business owners point of view?.... 1) The Greenbelt and antiquated zoning laws 2) Ann Arbors super inefficient city council 3) Ann Arbors uniquely business-unfriendly atmosphere
mentalNomad
Mon, Apr 2, 2012 : 2:06 p.m.
Thank you for staying on-topic.
A2Realilty
Mon, Apr 2, 2012 : 4:50 a.m.
These comments are so constructive. I hope that everyone is savoring this worthless bitchfest.
A2Realilty
Mon, Apr 2, 2012 : 4:35 p.m.
Is Bogus Propoganda Parroting Week associated with the parrot that was in the strange guy's backpack last year?
Doug
Mon, Apr 2, 2012 : 3:46 a.m.
Tim: You forgot one, and it's a biggie: A Republican Supreme Court!
tim
Sun, Apr 1, 2012 : 8:12 p.m.
The three worst threats to the economy !. a republican president 2.a republican senate 3. a republican house.
grimmk
Mon, Apr 2, 2012 : 3:25 a.m.
I wonder if we'll be carting around a wheelbarrow's worth of cash for a loaf of bread.
Ricardo Queso
Mon, Apr 2, 2012 : 3:07 a.m.
There are no "trust funds". Only IOU's backed by printing presses.
clownfish
Sun, Apr 1, 2012 : 9:07 p.m.
The largest holders of US debt are Americans. The Fed, SS and Medicare Trust Funds. China owns 8% of our kids futures.
DonBee
Sun, Apr 1, 2012 : 8:56 p.m.
No tim - the biggest danger is a rise in interest rates that the government has to pay for its bonds. Eventually it will happen, and when it does, the deficit will skyrocket. Our money will leave the country as interest payments on the people who loaned the country money. The largest holder? China of course.
Wolf's Bane
Sun, Apr 1, 2012 : 6:27 p.m.
Huh, you think Thomson Reuters is about to go super nova, check out next door!
RayA2
Sun, Apr 1, 2012 : 4:01 p.m.
The current financial scurge of Europe is their Central Bank's reluctance to loosen credit, the same thing proposed as a remedy by republicons in this country.
Tom Joad
Sun, Apr 1, 2012 : 3:23 p.m.
Two words nearly always left out of the gasoline price reporting: Peak oil. Exponential demand on a finite resource. Once the Middle East and particularly Saudi Arabia hit peak oil in the next two or three years at most, production will plummet on the downward slope of the Hubbert Curve and prices will of necessity rise to ruinous levels for most consumers. Before you interject oil shale or non-conventional reserves, please google EROEI. Peak oil means the easily extracted, cheaper oil is all gone. Even higher prices for oil will not magically create new found oil out of thin air.
SonnyDog09
Mon, Apr 2, 2012 : 1:46 a.m.
I've been hearing that we will run out of oil since the 1970s. If you want to believe it, go ahead.
Chase Ingersoll
Sun, Apr 1, 2012 : 11:11 p.m.
Yes Tom, peak oil was what my liberal Jr. High science teach was instructing us in 1980 with a curriculum claiming that we were going to be out of it in 20 years and that Jimmy Carter was saving us with his solar panels. A decade later I was selling the services of a solar company that was cleaning up all of the solar systems installed due to the tax rebates implemented by Carter, that financed a solar industry that didn't know what they were doing other than how to line up to collect the energy industries version of government cheese. The Peak Oil scare is just that - a scare - drummed up by those who have inside stock options in petroleum or other energy companies and sit on the boards of the main stream media corporations. Chase Ingersoll
DonBee
Sun, Apr 1, 2012 : 8:54 p.m.
Tom Joad - Peak Oil is a myth. The oil reserves have grown every year for the last 20 years. OBTW - that does not mean the earth is making more oil, rather the recovery methods and amount of recoverable oil continues to increase.
leaguebus
Sun, Apr 1, 2012 : 3:08 p.m.
Mr Ranzini, there is no overnight cure for our "debt crisis". What is happening in Greece and Italy cannot be translated one to one to us. If we adopt an austerity program, we have a real chance to further depress our fragile economy. The private sector is slowly increasing jobs, but their job creation depends on demand and demand will stay low until employment abates. Lowering taxes has never gotten us out of economic doldrums, in fact, lowering taxes for the last 30 years is the biggest reason why we are where we are today. We need an intelligent combination of raising taxes and cutting spending to solve this problem. Wholesale cutting of anything will just drive the economy down and stop the recovery which is fragile at most.
G. Orwell
Sun, Apr 1, 2012 : 2:08 p.m.
Oil/gas prices are controlled by the oil and banking cartels and European and US financial crisis was created by the too big to fail banking cartel through fraud. I'd say default on the made up debt and let the too big to fail fail. Then put those responsible behind bars where they belong. This eliminates two of the three pitfalls for us and rest of the world.
clownfish
Sun, Apr 1, 2012 : 2:02 p.m.
A brief look at history shows that under "conservative" GOP presidents since Nixon, spending increases outweighed revenue increases EVERY TIME. How about Messiah Reagan? hen Mr. Reagan entered office the percent of US debt relative to GDP was down to 33.3%. During his eight years in office the percentage of debt to GDP grew to 51.9%. This amounts to a 64% increase in debt relative to GDP while Reagan was in the White House -- a rather significant increase by anyone's measure. Was Reagan a liberal socialist democrat? (well, todays Tea Party might very well call him that if he ran today) Then comes an evil democrat: The percentage of debt to GDP continued to grow until 1996. The US debt peaked at 67.3% of GDP under his administration. By the end of the Clinton administration this percentage had dropped to 57.6% Mr. Bush II inherited a shrinking government and debt in 2001. With his first budget he managed to increase the debt to GDP ratio to 60.0%, by cutting taxes but not spending. By 2004 this ratio had risen to 63.7%, as a result of additional tax cuts but no significant corresponding cuts in spending. If you want to blame anybody for our debt, look in the mirror. I know, I know, it is so much easier to blame Other People rather than face reality. If you wanted to go to war, you are the debt problem. If you wanted tax cuts across the board, you are the debt problem. If your parents use Medicare, they are the debt problem. If they use Medicare Part "D", they are the debt problem. If they get SS benefits, they are the problem. If you like having hundreds of military bases scattered around the world, you are the debt problem. What can YOU do for your country? What sacrifice are YOU willing to make? (Whining on a blog does not count).
leaguebus
Sun, Apr 1, 2012 : 3:22 p.m.
Good analysis. The Conservative mandate to starve the beast by cutting taxes is the basis of all our monetary problems today. I am 66 and will definitely vote for those who want to leave entitlements alone or who will make intelligent changes to them. The Republican budget is a recipe on how to drive our economy to Third World status or at least put us on the par with Greece.
blahblahblah
Sun, Apr 1, 2012 : 1:52 p.m.
Adding to Mr. Ranzini's analysis, it's like the US is processing a cash-out mortgage refinance of our economy each and every year. Once interest rates start to move back up - the game will be over. It should also be mentioned that most of Washtenaw's top employers are all public/government entities. This helped us during the latest financial crisis but could hurt us if drastic austerity measures are eventually required to deleverage the public debt.
clownfish
Sun, Apr 1, 2012 : 1:43 p.m.
One would think, reading the Whining today, that the "socialists" are solely to blame for our economy? A simple look at history would show this simplistic argument to be so much propaganda. What was that term that used to be prevalent ?... "revisionist history"? The "conservative" GOP had the WH and both houses of congress not long ago, what happened? Debt and increased deficits. John Engler had the gov-ship for 12 years, did he leave the state fiscally stable? The MI GOP had both houses for a while, were was the balanced budget? Last year they managed to somewhat balance the budget, and they did it by raising taxes! OMG, only "socialists" raise taxes!
DonBee
Sun, Apr 1, 2012 : 8:53 p.m.
Clownfish - Don't forget that the larger companies in the state are also paying more in state taxes. It was only the small businesses (average decrease $1800) that saw a tax cut. By the end of next year 2013 - the loopholes in state business tax that were closed will raise an additional $800 million a year growing to $1.2 billion by the end of 2016.
clownfish
Sun, Apr 1, 2012 : 2:56 p.m.
MI income tax rate was supposed to drop back to 3.9%, Snyder axed that, desiring to keep the rate at 4.35%. Normally this would be called a "tax increase" by celebrity entertainers and pols. But we hear a pretty good silence on this one. (remember how this tax hike was going to destroy Michigans economy? That was so 2007) Snyder has proposed raising gas taxes. He has increased taxes on a large group of seniors and the working poor.
clownfish
Sun, Apr 1, 2012 : 2:04 p.m.
So, Tommy, Engler left the state with a balanced budget? Yes or no.
TommyJ
Sun, Apr 1, 2012 : 1:48 p.m.
8 years of ineptitude from the Mole was the real problem, not Engler or the state GOP.
SonnyDog09
Sun, Apr 1, 2012 : 1:43 p.m.
I can see Greece from my house.
walker101
Sun, Apr 1, 2012 : 1:37 p.m.
Just look at our current administration, with ObamaCare and his mandates we'll be right behind Italy and Greece as far as the economy goes. According to the latest another $17 trillion gap was noted in his plan and yet the media does not even mention it, we are blinded by ignorance regardless of whose in office and many continue to follow like blind sheep. We have no one to blame but ourselves without of control spending.
grimmk
Mon, Apr 2, 2012 : 3:20 a.m.
Yes because it's so horrible that he wants to help the sick and injured. I admit that it's not perfect and we should start small. But I believe that a person should be able to walk into an ER and not have to worry about going bankrupt at the same time. You should be able to get treatment whether for a broken limb or a life threatening disease or injury. Obama did not make this debt. He inherited it. You can thank Bush 2 for most of this.
dogpaddle
Sun, Apr 1, 2012 : 1:28 p.m.
Right, Joe Blow - like conservatives and Republicans have never been a threat to our economy: shall we start counting the ways? Two wars that we had no business being in and could never afford as we watched our debt continue to soar. Last administration asleep at the wheel while Wall Street and big banks did whatever they wanted. Mitt Romney believing that GM should've failed. I wonder where that threat would have landed us today.
jcj
Sun, Apr 1, 2012 : 1:21 p.m.
After the rosey can't miss predictions, here come the list of outs for the forecasters! LOL
joe.blow
Sun, Apr 1, 2012 : 1:11 p.m.
Threat one : Liberals Threat two : Democrats Threat Three : Socialists
grimmk
Mon, Apr 2, 2012 : 3:16 a.m.
Threat one: Tea-republicans Threat two: right-wingers christians Threat three: you Or all the same thing.
garrisondyer
Sun, Apr 1, 2012 : 5:15 p.m.
The actual threat # 1: "Partisanism". From both sides. It's absolutely destroying our federal government.
TommyJ
Sun, Apr 1, 2012 : 1:46 p.m.
Down with liberal socialist democrats!
obviouscomment
Sun, Apr 1, 2012 : 12:29 p.m.
"With gasoline prices already above $4 at some stations in Ann Arbor" Some stations? I thought it was all stations. Please share where it's below $4.
GirlNextDoor
Mon, Apr 2, 2012 : 3:03 a.m.
@A2comments: I purchased gas at Kroger on Carpenter today, to use my Kroger card points. I got a discount of $.70 a gallon, and paid $3.25 a gallon. You can get up to $1 per gallon discount on your gas purchase.
YpsiLivin
Mon, Apr 2, 2012 : 2:09 a.m.
A check of prices at GasBuddy.com currently shows 10 stations in Ann Arbor proper with gas prices listed at $3.999 or less. If you want to eliminate the $3.999 stations, there are 6 with gas prices below that level: Speedway@ State & Ellsworth CITGO @ State & State Circle CITGO @ Platt & Ellsworth BP @ Washtenaw & Glenwood Circle K @ Stadium & Packard CITGO @ Jackson and Zeeb The average price for gasoline in Ann Arbor is $4.068, but there are 25 stations listed in Ypsilanti with gas prices below $3.999. (Just sayin' )
Mike K
Sun, Apr 1, 2012 : 3:11 p.m.
Capenter Road and Packard. $3.95 yesterday.
A2comments
Sun, Apr 1, 2012 : 1:01 p.m.
Kroger on Carpenter was $3.95 yesterday, $3.92 if you have a Kroger card, and $.10 per gallon for every $100 you spent on groceries the prior month. I paid $3.85 yesterday as a result.
Kara H
Sun, Apr 1, 2012 : 12:39 p.m.
There's an app for that... A website too. Go to gasbuddy.com. $3.92 at a couple of gas stations on Ellsworth in my neck of the woods.
motorcycleminer
Sun, Apr 1, 2012 : 12:01 p.m.
Forget the world economy ..you have a current administration intent on collapsing our own , through socialization, taxation , handouts , poor fiscal management , union cronyism, illegal immigration, and a dozen other venues...while the frogs boil ,they run amok..you get what you vote for....our own mismanagent here in OZ is just the tip of the iceberg...
clownfish
Sun, Apr 1, 2012 : 2:21 p.m.
Tax increases under Obama : Cigarette taxes. (yes, that is the extent of tax increases) Tax burdens are at 50 year lows. Immigration: Obama has record high deportation of illegal immigrants. "Socialism"- the new Health care law uses the private market, not a socialized system. Obama has tried to push through hundreds of billions in Medicare cuts, but the GOP is FOR this socialism, and is fighting those cuts. -- Obamas "socialist" school speech was about working and studying hard. Not one word about Marxism. There are no national production quotas or centralized control of industry. "cronysim"- This one is really funny. For 7 years the former admin hired politically connected companies to work for the feds...at "cost plus", often without open bidding. Now, all of a sudden the alleged conservatives discover that having more corporate connections in govt is bad? That is what they wanted. KBr lost pallets of cash, some 6 billion tax payer dollars. Where were the fiscal hawks then? One would think that if the govt lost 12 Solyndras in cash there would have been some outcry, other than "We Support the President" posters. Is our economy shrinking? 4th quarter growth is estimated to be about 3%. The economy stopped shrinking in 2009. Corporate profits are at record highs. DOW exceeds 13,000. Living in Oz, sometimes one has to peer behind the curtain of the celebrity entertainers.
Stephen Lange Ranzini
Sun, Apr 1, 2012 : 11:46 a.m.
European debt crisis? How about the U.S. Government debt crisis? How would local businesses and families cope if borrowing costs rose to over 25% as is happening in the European nations whose governments can't pay their debts? How dire is the country's fiscal shape? According to an analysis by economists hired for USA Today: the federal government has accumulated "$61.6 trillion in unfunded obligations." Now add in the actual national debt of over $15.2 trillion and compare that to the wealth of the country. According to the Federal Reserve Bank's economic analysis unit the entire net worth of every man, woman and child, corporation, non-profit and unit of government other than our federal government is $55 trillion. Our national debt and the future cost of the entitlement programs is over $75 trillion, far exceeding the net worth of the country, exceeding even the total assets of the country! We could tax *every* dollar of wealth away from every billionaire, millionaire, middle class and poor person in the U.S. and it still would be insufficient to close the gap. We've done a leveraged buy-out of the United States and screwed our children. If the crisis hits, the local economy will be devastated. See: http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm
Ricardo Queso
Mon, Apr 2, 2012 : 2:56 a.m.
You speak heresy in this land of those who feed at the public trough.
Hot Sam
Sun, Apr 1, 2012 : 10:50 a.m.
Not very comforting. The Europeans have done nothing but kick those cans down the road... A sudden spike in oil prices? How about a sustained growth of fuel costs? What we had in the past were "sudden spikes" followed by decreases... What we have now looks like it may last, and that would be extremely troublesome...
McGiver
Sun, Apr 1, 2012 : 10:16 a.m.
Here are three more: Pittsfield Township government, Scio Township government, and Ann Arbor city government.
clownfish
Sun, Apr 1, 2012 : 2:40 p.m.
These figures are bit dated, national unemployment at the time these were calculated was 9.1%. Pittsfield unemployment rate : 6.60% Scio township: 7.10% Ann Arbor- 7.5%. Yes, clearly these governments are holding things back. Grand Rapids: 12.1%. Battle Creek 10.9% Holland MI 12.2% Jackson (birth place of the GOP)- 15.5% Plymouth Twp- 12.7% Alto (district of one Posthumus, a "first family" of MI) -8.8%