Michigan Business Leaders Share Experiences from 2020: State of the Region Response

The challenges Michigan business continue to face due to the COVID-19 pandemic are wide and varied. Keeping employees safe, managing technology challenges associated with remote work, and promoting company culture have become even more important over the past 12 months. During the Detroit Regional Chamber’s State of the Region event on Feb. 25, business leaders from the manufacturing, telecommunications, and financial services industry shared how their respective organizations have responded to the pandemic and some of the lessons they have learned. Chamber President and Chief Executive Officer Sandy K. Baruah moderated a panel with Linda Hubbard, president and chief operating officer of Carhartt Inc.; David Lewis, president of AT&T Michigan; and Jim Malz, Midwest regional executive at Citizens.

Manufacturing in Michigan

According to the State of the Region report, Michigan’s manufacturing sector helped lead a strong recovery during the third quarter. Michigan’s GDP initially fell 37.6% from Q1 to Q2 but rose significantly by 44.2% from Q2 to Q3. The U.S. Manufacturing PMI ® (Purchasing Managers’ Index) reported eight consecutive months of growth, rising to 60.5% in December, after the low in April 2020 of 41.7%. All six of the biggest manufacturing industries demonstrated moderate to strong growth in December 2020.

Carhartt’s Pivot Leads to Success

Like all businesses February and March brought considerable uncertainty for Carhartt. How would they manage working from home, manufacturing being shut down, sheltering in place, and closing retail stores? Hubbard shared how Carhartt was able to successfully pivot through a combination of remote work, a safe start to manufacturing, e-commerce, and working with retailers as they began to reopen.

“2020 ended up being a better year than we anticipated in March and April,” said Hubbard. “Carhartt’s pivot led to a better result for the year than they even expected.”

One of the most interesting challenges Carhartt faced was managing their international footprint. Carhartt produces product in the U.S. and in 15 countries around the world. The design team had to accelerate their use of technology to create products. International cross-cultural communications is an art and not a science, but Carhatt was able to navigate their relationship with partners by having well-established relationships that they will continue to rely on while they still have to collaborate remotely.

Technology Critical for Remote Work

Telecommunication and technology companies were critical in helping workers transition to remote work during the pandemic. The Chamber’s report shows how the Detroit Region began 2020 with 2.1 million private-sector jobs. By April 2020, private sector jobs had reached a low of 1.5 million, a loss of over 556,000 jobs over two months. Month-over-month job gains leveled off through the year with a December 2020 job total of 1.9 million, a 10.0% decrease over the beginning of the year.

AT&T Keeping the Businesses Connected

Lewis highlighted the seriousness that his organization took over the past year to ensure people had the ability to reliably work remotely. At the outset of the pandemic, one area of concern was how internet connectivity would be impacted by millions of people moving from their offices to homes. Bandwidth had been engineered for larger capacity connectivity at offices; however, AT&T was able to quickly find design solutions for the work-from-home environment.

“Our job is to help people connect where they need to be,” said Lewis. “As AT&T looks to the future and the workforce, it is important that people are technically ready to operate at home, in the office, or on-the-go.”

Lewis also spoke about how important it was for AT&T, other businesses, and government leaders to help close the digital divide so that the students of today are ready for the jobs of the future.

Small Business Hit Hard

The State of the Region report highlighted how, as of the end of December, the number of small businesses open in the Detroit Region decreased by 32.6%, with a nearly 40% drop in revenues since January 2020. One of the most important lifelines for businesses was the Paycheck Protection (PPP) loans to help pay employee salaries as consumer spending dropped.

Citizens Supporting Clients

For Citizens, communication was critical for employee and client success. The transition to being out of the office, where employees could not meet with each other or visit clients was difficult at first. However, it became clear that clients needed more guidance and support than ever. Malz outlined how his team used culture and communication to navigate the financial hurdles of the pandemic, “Culture is the secret sauce for any company. Leaders must be empathetic.”

Citizens made more than 6,300 PPP loans equal to more than $400 million, helping to save more than 53,000 jobs in Michigan. Across their national footprint, they provided more than 50,000 PPP loans equal to more than $4.8 billion, helping to save more than 540,000 jobs.

Echoing findings from the State of the Region report, Hubbard, Lewis, and Malz all emphasized that despite the challenges of COVID-19, their businesses and the economy as a whole have shown resiliency.