Former Mich. Governor Outlines How To Convince Companies To Stay

NPR's Ari Shapiro talks to former Michigan Gov. Jennifer Granholm, about how she convinced companies to stay in the state during the economic recession by offering a package of tax incentives and other perks.

ARI SHAPIRO, HOST:

Donald Trump keeps saying he'll keep American manufacturing jobs from going overseas. We're going to talk now with a former Michigan governor who knows how hard that can be. Jennifer Granholm led the state from 2003 to 2011 during the height of the economic recession. In 2009, the unemployment rate in Michigan topped 14 percent - the worst in the country.

Granholm was known for a tactic used by many governors and now Donald Trump for convincing companies to keep their doors open - offer up a package of tax incentives and other perks. We should also note Granholm is a Democrat and supported Hillary Clinton's campaign. Welcome to the program.

JENNIFER GRANHOLM: Thank you. Glad to be on.

SHAPIRO: How does your experience with these negotiations in Michigan compare with what Donald Trump recently announced with the Carrier plant in Indiana?

GRANHOLM: You know, every governor is doing this, Ari. It is an amazing thing to see on a federal level - the president doing this. Democrats and Republicans are pursuing job providers constantly and trying to lure them or keep them in their states through the only tool they have really, which is state tax credits.

And so to have the president chime in in some way is pretty interesting. You know, you've got to - despite the fact that there's some controversy over how many jobs are created, you've got to give him credit for trying.

SHAPIRO: I know you're no fan of Donald Trump, but you say it is amazing; it is interesting to see these kinds of negotiations. Is that a thumbs-up amazing, interesting...

GRANHOLM: Oh, totally - you know, listen.

SHAPIRO: ...Or a thumbs-down amazing interesting?

GRANHOLM: I am all about anybody who's obsessed with trying to keep jobs in America in a global economy. Now, can the president do this indefinitely - calling up every job provider across the country and trying to persuade them if they threaten to leave - of course not. But what he could do is to see a national policy that helps governors try to keep and create industrial clusters in their states. You just have to make sure that it is a policy that works overall and not just on one-off deals.

SHAPIRO: When you were governor, you negotiated to keep this Electrolux refrigerator plant in Michigan. You brought your cabinet to the town. You offered this incredible package of tax incentives. You laid it all on the table, and the plant said, sorry, we're going to Mexico anyway. The lesson of that seems to be these negotiations don't necessarily work. I mean what's the moral of the story there?

GRANHOLM: One moral is that governors bring a knife to a gunfight in terms of global competition. On my own, I did not have the tools to be able to save Electrolux, and nor does any governor or any mayor in the country when you are going against the lowest-wage countries.

SHAPIRO: So it sounds like what you're saying is these negotiations are one important tool, but they are not a substitute...

GRANHOLM: Yes.

SHAPIRO: ...For bigger...

GRANHOLM: Yes.

SHAPIRO: ...Structural changes that will...

GRANHOLM: Absolutely.

SHAPIRO: ...Keep jobs in the United States.

GRANHOLM: Right. There has to be a strategy. Renegotiating trade agreements - that's great. Do it. Negotiating the ability for governors, for example, to offer training packages that are specific to job providers - you could consider helping - like Germany does - helping to subsidize people to learn on the job working, doing apprenticeship programs that are really focused on the jobs of the future. All of those are things that you could do and that he could be working on.

SHAPIRO: When you talk about job training and apprenticeships, that doesn't sound like saving manufacturing jobs, preventing them from leaving. That sounds like moving the U.S. economy into the next phase - whatever it is - beyond manufacturing.

GRANHOLM: Ari, there is no beyond manufacturing.

SHAPIRO: (Laughter).

GRANHOLM: Manufacturing is here. We're going to have stuff, and it's going to be made somewhere. And all of that stuff is becoming very sophisticated. So for the United States to be going after manufacturing products that are complex, that are sophisticated, that require a level of training, those are opportunities for us.

SHAPIRO: That is Jennifer Granholm, former governor of Michigan, now professor at the University of California, Berkeley. Thank you for joining us.

GRANHOLM: Glad to be on. Thanks so much.

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