Michigan, known as a manufacturing hub in the Midwest, has always operated under a moniker of some form of “We Make Things.”
After a turbulent couple of years, where pandemic-related struggles caused disruption to supply chains and a drop in manufacturing, John Walsh is still confident the state can step up to that reputation.
“Absolutely!” said Walsh, who has been president and CEO of the Michigan Manufacturers Association since 2020. “We do make things in Michigan and what we make reaches the entire world ― in agriculture, automotive and transportation, aerospace, IT, healthcare and other industries.
“The MMA intends to make that point more loudly and proudly in the coming years ― in an effort to attract more workers to a dynamic industry, as well as investment in our state,” he added.
Walsh, who earned a bachelor’s degree in international relations and public policy analysis from Michigan State and his law degree from Wayne State University Law School, has had a diverse career, serving in both the public and private sectors. He was a member of the Livonia City Council and spent a couple of terms in the Michigan House of Representatives.
Much of what he’s done revolved around manufacturing, including a college internship with the National Association of Manufacturers in Washington, D.C., back in 1983.
He served as an M&A lawyer, an executive at Schoolcraft College running the school’s Business Development Center and as a legislator.
Walsh shared his views on a variety of issues with Corp! Magazine:
Corp! Magazine: Reports are saying the manufacturing industry is poised to have a better year in 2023 than it has in the last couple of years. Your thoughts?
John Walsh: Our members agree, with caution. Improvements in the supply chain, increasing chip production and a gradual return of the job applicant all bode well for the industry. Take that together with a resilience in business and consumer spending, and our manufacturers have reason to expect a better 2023.
Caution, however, comes from recessionary concerns and the impact federal monetary policy may have on the same. If caution becomes action, either on the part of consumers purchasing less or businesses holding back, then 2023 could prove to be a difficult year. The unfortunate part ― you can’t “order” a recession just bad enough to help settle inflation, but insignificant enough that consumer confidence remains. That leads to the caution and uncertainty.
Corp!: What are the issues that caused the industry to struggle during the pandemic? Have they changed/eased?
Walsh: The pandemic had a direct impact on the health, welfare and availability of the workforce ― the production team in particular. Working from home was not an option for many in manufacturing and, as a result, illnesses, concern and governmental responses to the pandemic impacted day-to-day productivity on the floor, even as consumer demand was rising following the early stages of the pandemic.
Another impact came from federal, state and sometimes local rules and regulations that changed the workplace, adding more expense and a quick learning curve as the private sector and the public sector raced to address challenges posed by the pandemic in the workplace. The abrupt stoppage, if you will, of the worldwide economy … and personal routine, for that matter, also had an impact, first on consumer confidence at its core and then caused a dramatic change in what consumers were looking for. Boats instead of travel, for instance. The supply chain was rocked by these changes ― toilet paper manufacturers with pallets destined for office buildings, schools and hotels, had to redesign their supply chain for the home market ― no easy task.
And while there are many other impacts, a lingering one remains the change in the working population. Many people retired earlier than anticipated, others decided to change careers after having the found time to contemplate their future and desires, while others were adversely impacted by governmental rules. No judgment here, just observations. Child care was devastated, particularly that provided in-home, in an effort to protect providers and children. This had, and continues to have, a disparate impact on mothers, who have not kept pace on a return to the workplace.
Corp!: What has improved?
Walsh: Supply chains are truly on the mend, having made adjustments to a changing worldwide economy. Workers are returning to the workplace, albeit, perhaps, in a different industry … but certainly to a new working environment that, where possible, permits an offsite option for performance. Many of the governmental rules and regulations have been eliminated as the pandemic threat faded and confidence in a safe workplace returned.
Corp!: What areas of manufacturing do you think are in the best position for a good 2023?
Walsh: Consumer goods remain an always strong segment and automotive continues to show strength, even amidst the dramatic change in focus from ICE to EV. That said, we think Michigan is well poised for entrepreneurial growth in nearly every segment. While we often focus on the automotive sector, Michigan manufacturers, both small and large, compete around the world in every industry ― and that means a strong “we can build it” attitude and ability. It also means we have a large, skilled workforce (although one that must be grown and embellished to support growth).
Corp!: Are there areas of the industry that are still struggling and which might still be in for a tough 2023?
Walsh: The conversion from ICE to EV production is impacting our largest employers and all those in the supply chain. As the conversion continues, many in the supply chain must make difficult but necessary business transitions, which include a decision to invest in the tools and training necessary to enter the EV market or to diversify their product base, while making use of their existing processes for the ICE industry.
Corp!: The supply chain seemed to cause a lot of the economic struggles around the country (around the world, really) during the pandemic. Do you think those issues have been straightened out?
Walsh: As more people return to the manufacturing industry or join it for the first time, the supply chain has and will improve. Worldwide distribution networks are still healing, but showing improvement. And while no expert on this subject at all, I do believe our domestic transportation industry has learned a great deal from the pandemic and is adjusting … not just at the moment, but for the future (this is based on a single, but impressive, presentation from folks in the port industry on the west coast last July).
Corp!: How did the state come through the pandemic economically?
Walsh: That’s a tough question. Tax receipts indicate growth, but I can’t say how much of that is related to income received from state or federal resources expended during the pandemic. Our population, however, indicates a loss. I do think Quentin Messer at the MEDC, together with the Whitmer administration and both Democrats and Republicans providing much needed funding, have done a great job bringing business investment to the state, following the loss of some significant investments to other states.
Corp!: What are your thoughts on the general economic outlook, both for Michigan and the country?
Walsh: Generally speaking, the outlook could be a positive one, so long as the reality of, or even a shadow of, a recession doesn’t stymie our collective confidence in prices, jobs, opportunity and stability.
