Great Lakes Metro Chambers Push for Action on Infrastructure, Immigration and Trade

The Detroit Regional Chamber and the Great Lakes Metro Chambers Coalition met with members of Congress and their staff during a two-day fly-in to Washington, D.C. last week to discuss several recently proposed policies that will affect business in the Great Lakes region.

During the visit, the Coalition met with Sen. Bob Casey (D-PA), Rep. Tom Emmer (R-MN 6), and Sen. Gary Peters (D-MI), among others. This visit primarily centered around advancing three of the Coalition’s top policy priorities: the development of a robust, nationwide infrastructure plan; increasing high-skilled immigration; and supporting the preservation of the North American Free Trade Agreement (NAFTA).

Coalition members spent much of their time discussing President Trump’s recently proposed infrastructure, immigration and trade policies. The infrastructure policy allocates $1.5 trillion in investment that was proposed in February. The Coalition supports developing comprehensive infrastructure legislation and increased federal funding for key projects, including an upgrade to the Soo Locks.

Regarding immigration, the Coalition continues to support high-skilled immigration. Data shows that immigrants bring the talent, labor, and spending power needed to help grow the Great Lakes’ economy. According to a New American Economy report, in the Great Lakes region alone, immigrants account for half of the population growth over the last 15 years and drove almost two-thirds of the region’s working-age population growth in the same amount of time.

Finally, the Coalition met with representatives to discuss the preservation of NAFTA. Modernization is necessary to improve trade between the United States and its allies, but pulling the United States from NAFTA would be catastrophic for businesses across the Great Lakes region that rely on restrictive-free trade with Canada and Mexico.

The Coalition will continue to engage the administration on improving infrastructure, immigration and trade regulations to help grow the region’s economy.

For more information on the Great Lakes Metro Chambers Coalition, visit http://greatlakesmetrochambers.com.

Chamber Reaffirms Support for NAFTA in Joint Declaration with Canada, Mexico and U.S. Chambers of Commerce

This week, the Detroit Regional Chamber joined leaders of 25 metropolitan chambers of commerce from Canada, the United States and Mexico in Montreal ahead of the sixth round of North American Free Trade Agreement (NAFTA) negotiations. Participants discussed economic issues surrounding the renewal of NAFTA and the risks for businesses if it is not renewed.

To send a clear message to the three governments on the importance of an updated agreement and maintaining open access to the North American market, the chambers signed a joint declaration affirming the importance of NAFTA to the region’s economy. Collectively, these chambers represent an economic impact with a combined GDP of nearly $3.5 trillion.

The NAFTA renewal remains a priority for the Chamber, and Chamber President and CEO Sandy Baruah is often sought after for his expertise and insight at discussions in Michigan and Canada based on his current role at the Chamber and his past work in Washington, D.C. The declaration was signed on behalf of the Detroit region’s business community by Brad Williams, vice president of government relations for the Chamber. Read the declaration below:

JOINT DECLARATION OF METROPOLITAN CHAMBERS OF COMMERCE FROM THE UNITED STATES, MEXICO AND CANADA

We, the undersigned representatives of Metropolitan Cities Chambers of Commerce, agree to the following key facts regarding the North American Free-Trade Agreement (NAFTA):

Whereas: NAFTA has created major economic ties between Canada, the United States and Mexico, helping to quadruple trade between our three nations since its inception, now reaching $1.5 trillion USD annually.

Whereas: NAFTA has stimulated cross-border investments in the region. Canadian foreign direct investments in the US have risen from less than $40 billion USD to nearly $400 billion USD, and Mexican Foreign direct investment holdings in the United States have also increased by a factor of ten over the same period.

Whereas: 14 million jobs in the United States, 2 million jobs in Canada, and 3 million jobs in Mexico are dependent on trade between the three NAFTA member countries. Of the 14 million American jobs, 5 million are directly related to the growth of NAFTA.

Whereas: Value chains have become integrated through NAFTA, and many products cross our borders multiple times while becoming a finished product. For example, 40% of the content of all US imports from Mexico is produced in the United States. This integration severely increases the cost of breaking a free-trade zone in North America, both at the national and firm level.

Whereas: NAFTA has provided consumers in our metropolitan areas and across our three nations with access to more abundant and affordable products and services, including both high-quality manufactured goods and a wide variety of agricultural products throughout the year.

Whereas: Many of the companies that we represent would be adversely affected by a non-renewal of NAFTA, or a substantial departure from NAFTA’s core principles.

Thus, on the eve of the 6th round of negotiations for the renewal of NAFTA, we the undersigned:

  • Share a common desire to maintain free trade between the United States, Mexico and Canada.
  • Urge our respective governments to come to an agreement to an updated NAFTA, and to maintain it for the future economic success of all three nations.
  • Will maintain our mobilization in favor of an updated NAFTA, leading to a future trade agreement.

Therefore, we jointly sign this Declaration, Montreal, January 22nd, 2018.

The leaders of the following chambers and boards of trade attended the meeting in Montreal: Albany, Boston, Brampton, Calgary, Chihuahua, Cleveland, Dallas, Detroit, Edmonton, Halifax, Kansas City, Los Angeles, Mérida, Mexico City, Minneapolis, Monterrey, Montreal, Querétaro, San Antonio, St. Louis, Tijuana, Toronto, Vancouver, Veracruz and Winnipeg.

Changes ahead for auto industry provide opportunity for region

The Future Is Cloudy and Bright 

By Sandy K. Baruah 

January is always an exciting time in the Detroit region. The promise of a new year, and of course, the arrival of the North American International Auto Show, one of the premier global events on the automotive calendar and an opportunity to not only showcase the world-leading mobility assets of our region, but also the incredible and real urban renaissance of the city of Detroit.

High resolution headshot

2017, however, brings an unprecedented number of questions that could potentially impact our mobility industry.

  • Have we seen peak demand for vehicles?
  • How will the trend towards longer vehicle loan terms impact the market?
  • Will we see spiraling incentives if demand weakens?
  • Will fuel prices remain low and the demand for more pro table SUVs and CUVs continue unabated?
  • How will the Trump Administration’s pro-business, limited-regulation and potentially anti-trade policies impact the industry?
  • Will the supply chain be impacted by possible changes to the North American Free Trade Agreement?
  • And, of course, how will the continuing transformation of mobility as a product to mobility as a service – and the emergence of non-traditional players – impact our industry?

While nobody really knows for sure what the answer to these questions are, there seem to be some key principals that bode well for Michigan’s most important industry.

Michigan-based mobility companies, both at the original equipment and supplier levels, have not forgotten the hard lessons of the Great Recession. This is evident in their cautious deployment of capital and far more restrained use of debt. Break-even points have been lowered substantially and there is a far greater focus on profitability as opposed to market share. OEMs have been far from sentimental in axing unprofitable legacy nameplates and brands. Suppliers and OEMs alike have resisted major capital investments in production facilities for fear of having underutilized capacity even though they have struggled to meet historic levels of demand.

While no one saw the fuel price spike of 2007 coming, with ample yet dormant shale reserves in the United States, and a strongly pro-energy president coming into office, it seems unlikely that America will experience some kind of fuel crisis or price spike. This is good for consumers, good for the economy, and therefore, good for the automotive industry, which stand ready to meet the demand for high-riding, flexible yet fuel-efficient crossovers and utilities.

On the cautionary side, however, remains concerns over ever-lengthening loan terms. Also, the growing use of incentives is troubling several analysts. Fall 2016 vehicle sales were trending below 2015’s record levels, only to see an exceptionally strong November that was driven by a surprising growth in incentives.

But perhaps the best news of all for the immediate and long-term future is the posture of Michigan’s mobility companies regarding product. As recently as a decade ago criticism that U.S.-based companies were not always producing world-beating products was not far off the mark. But today, these companies have gone from “zero to hero” in record time. Just look at any automotive “best” list and you will see that American brands, and products produced in America, are earning more than their fair share of accolades.

Our Michigan-based companies have made this  region the most active and concentrated place for next-generation mobility research, testing and deployment. No place on the planet can compare. We have the advantage going into the future. Our friends in Silicon Valley have recognized this and have started to establish a presence in Michigan, just as our companies have done the same in the Valley.

It is certainly an exciting time in Michigan and for the industry we love. Michigan’s challenge is unique. We have to take the lead in creating world-beating products today and tomorrow, while preparing for the most revolutionary change in the industry since its creation over a century ago. Fundamental change is in the air, including a very different president. It is certainly a great time to be associated with Michigan and the automotive industry – and I am equally certain that all of us associated with the industry will indeed earn our paychecks.

Sandy K. Baruah is the president and CEO of the Detroit Regional Chamber.