Milwaukee Biz Blog

All of those naysayers who believe Wisconsin is a terrible place to do business need to take a deep breath and do some serious recalibrating.
To be sure, like every other state, Wisconsin has its share of challenges - its high taxes and the dropout rate at Milwaukee Public Schools always quickly come to mind. And no doubt, Wisconsin has taken it on the chin with the closures of automotive plants in Janesville and Kenosha.
The losses have made the Milwaukee 7 a convenient target for people who make a habit out of trashing Wisconsin's business climate.
However, the negative drumbeat news cycle needs to take a break sometimes, and Tuesday was one of those days.
BizTimes had known for weeks that Milwaukee is one of two cities to be finalists in a Spanish company's search to build its new North American headquarters. We were told by city officials that we should not report that fact, however, because doing so could jeopardize Milwaukee's chances of landing the project.
Well, Wisconsin Secretary of Commerce Richard Leinenkugel blew those concerns out of the water Tuesday when he reported by phone from Bilbao, Spain, at the Metropolitan Milwaukee Association of Commerce (MMAC) all-member meeting that he had just concluded a "12-hour cage match" presentation to a Spanish company.
Leinenkugel is courting the Spanish firm with a southeastern Wisconsin delegation that includes officials from the Milwaukee 7, We Energies and Richard "Rocky" Marcoux, commissioner of the Milwaukee Department of City Development.
Milwaukee is "at the finish line" of landing the company's North American headquarters that would bring hundreds of jobs to southeastern Wisconsin and could also generate more work for vendors in the region, sources said.
"It's between us and one other city," said one source close to the negotiations.
Officials representing the Spanish company have been studying the business climate in southeastern Wisconsin for weeks, BizTimes has learned. The company sent representatives to the MMAC's Future 50 program in September, and they toured several southeastern Wisconsin factories, including the GenMet metal fabrication plant in Mequon. The plant tours were designed to give the Spanish company some insight about the array of potential partners and vendors in the region, sources said.
Sources said they expect the Spanish company to make a decision on the site for the North American headquarters by the end of the year.
Sources declined to identify the Spanish company that is being courted by Milwaukee.
We've got a pretty good hunch, however. Think alternative energy. Spain has become the world's second-largest producer of solar and wind energy in the world (behind Germany).
Spanish companies such as Gamesa, a manufacturer and installer of wind turbines, Iberdrola, a power group, and Acciona Energia, a wind park developer, are becoming global players in the fast-emerging alternative energy markets.

Republic Airways jobs
The news that Milwaukee is a finalist for the Spanish company's jobs came on the heels of Republic Airways Holdings Inc.'s announcement earlier Tuesday that it will save 800 jobs in Oak Creek and move 800 new jobs to the region by the end of next year.
Republic, the new parent company of Midwest Airlines, plans to move the jobs to Oak Creek and Milwaukee's General Mitchell International Airport.
Republic chief executive officer Bryan Bedford confirmed the creation of a Milwaukee hub during the MMAC's meeting at the Bradley Center.
Wisconsin Gov. Jim Doyle announced the use of the state's Enterprise Zone tax credits to help convince Republic to bring the jobs to the state.
Indianapolis-based Republic Airways will consolidate operations in Milwaukee from other cities such as Las Cruces, N.M., and Denver, Colo.
Republic acquired Denver-based Frontier Airlines on Oct. 1.
Bedford praised Milwaukee's pro-business climate as a reason for deciding to bring the jobs here, rather than Indianapolis or Denver.
"We spent a lot of time in the last three months trying to figure out where we can be our best and most competitive," Bedford said.
Bedford also announced Republic will add new routes from Milwaukee to San Francisco and Raleigh, N.C. The company is considering adding service to six more routes.
"Midwest Airlines today is about 45 percent to 50 percent of what it was at its peak. Our goal is to get back to its peak as soon as possible," Bedford said.

 

Mercury Marine jobs
Step back for a moment and recall that Wisconsin also recently beat out Oklahoma to keep Mercury Marine's production plant in Fond du Lac. Wisconsin provided about $70 million in public assistance, along with about $50 million in a loan backed by a Fond du Lac County sales tax and $3 million from the city of Fond du Lac. With the combined package of incentives, Mercury Marine plans to move up to 2,700 jobs to the Fox Valley.

 

Biotech jobs
In addition to the wins with Mercury Marine and Republic Airways, eight biotechnology companies have recently moved from other states to Wisconsin.
Biotechnology in Wisconsin is an $8.7 billion industry with 400 companies and 34,000 employees. Biotechnology is the fastest-growing segment of the Wisconsin economy, with an annualized growth rate of nearly 7 percent.
The state is benefiting from the formation of the Wisconsin Angel Network and the Wisconsin Venture Fund to help facilitate deal flow, investor exchanges and network creation.
In February, Doyle expanded the investor tax credit law as part of an early economic recovery bill. Enhancements included: raising the cap on tax credits for angel investments from $1 million to $4 million; tripling the annual pool of credits available for angel credits, from $5.5 million to $18.25 million per year, and venture credits, $6 million to $18.75 million; and allowing angel investors to claim the entire 25 percent credit on their investment in the first taxable year.
The eight biotech companies moving to Wisconsin are: RJA Dispersions LLC; VitalMedix; Rapid Diagnostek; Aldevron; Flex Biomedical Inc.; Inviragen Inc.; Exact Sciences Corp.; and NanoMedex.
They're moving here from Minnesota, North Dakota, Massachusetts and Florida.
Those relocations recently prompted the Star-Tribune in Minneapolis to write a series (and a related blog item headlined, "Wisconsin kicks our butt") about how Minnesota is losing out to a better business climate in Wisconsin.

 

Jobs from the Flatlands
Meanwhile, Uline Inc. of Waukegan, Ill., will move across the Wisconsin border to its new headquarters in Pleasant Prairie in 2010, bringing 1,000 jobs to a state that is supposedly a terrible place to do business. Uline is investing about $100 million in this God-awful place.
Uline received more than $6 million in incentives and aid from the State of Wisconsin to come here. In addition to Uline, several other Chicago area-based firms recently have opted to build facilities in Kenosha County instead of northern Illinois, including Vernon Hills-based Rust-Oleum Corp. and Lake Forest Village-based Hospira Inc.
And guess what? Business advocates in northern Illinois are now screaming because Wisconsin is luring away so many of their businesses. At a meeting of the Lake County Chamber of Commerce in Independence Grove, Lake County Partners president Dave Young blamed Illinois' "unfriendly business climate" for the flight of businesses TO Wisconsin.
"We have a governor (in Illinois) who goes out of his way to antagonize the business community," Young said at the luncheon, according to the Lake County News-Sun. "Unfortunately, right next door in Kenosha County, Gov. Jim Doyle is very adept at business recruitment and actually enjoys it."
Oh, and there will be more good news. Look for the efforts of the Water Council and Badger Meter Inc. CEO Rich Meeusen to pay off with more freshwater technology jobs in the next couple of years.
On Wisconsin!

Steve Jagler is executive editor of BizTimes Milwaukee.

I have never played poker with Harley-Davidson Inc. chief executive officer Keith Wandell. But if I did, and he went "all in" with his chips on a crucial hand, I'd look him in the eyes. And then I'd probably fold.

Wandell is "all in" with Harley. The stakes are high, and he's playing his hand accordingly.
As they say, drastic times call for drastic measures. Harley's core customers - people willing to plop down $40,000 or so for a new motorcycle - have been steadily dwindling. And even if they are willing to fork over that kind of coin, good luck obtaining the financing.

Harley's earnings have fallen for nine consecutive quarters.

Wandell, who built a track record of squeezing efficiencies out of operations in his years as an executive at Johnson Controls Inc., was brought in last year to do the nasty, painful hatcheting at Harley.

So far, he's been up to the task.

Wandell is laying off thousands of people and closing plants. He recently ended the Buell Motorcycle line.

Wandell is divesting Harley's MV Agusta venture in Varese, Italy.

He's threatening to close Harley's plant in York, Pa., unless the company receives the right concessions from the employees there and the right incentives from the local governments there. That decision will come in December.

With all of that chaos and all of that carnage, you might think Wall Street would be skeptical about Milwaukee Iron. You would be wrong.

Stock analyst Craig Kennison of Robert W. Baird & Co. Inc., is downright bullish on Harley, raising his outlook for the company to "outperform." Kennison is predicting a "cyclical rebound and turnaround story" for Harley.

"We expect shipments to bottom in 2009 following efforts to slash dealer inventory. Meanwhile, we see a dynamic turnaround story led by a bold CEO driving better performance. We see an opportunity to earn $2.25-$2.50 per share at modest production levels as Harley exits unprofitable brands, renegotiates York, and expands internationally. At 11-12x that expectation, we consider Harley the best value in our recreation space," Kennison wrote.

"Operations meet expectations. Harley reported a noisy quarter, reminiscent of bar-time at a Harley rally. Beyond the noise, however, key operating metrics met our expectations … Focus on post-restructuring earnings power. We see the potential to earn $2.25-$2.50 per share on a modest improvement in shipments (250K bikes) as the restructuring plan unfolds. New CEO Keith Wandell is taking bold action to refocus the business and build around the Harley-Davidson brand," Kennison stated.

Kennison is predicting that much of Harley's new growth will come from overseas, as the company plans to add 100 to 150 international dealers to drive shipments to 40 percent of bikes sold by 2014.

So, Wandell's legacy at the Harley helm awaits him. He could go down as a cruel butcher who cut the life out of one of America's proudest brands. Or he could follow in the footsteps of predecessor Richard Teerlink as a corporate savior and a turnaround genius who pulled Harley out of the scrap heap.

Either way, it will be a painful, bumpy ride.

 

Steve Jagler is executive editor of BizTimes Milwaukee.

The question is being asked at dinner tables and water coolers throughout Wisconsin:  Why would those union workers at Mercury Marine's Fond du Lac plant vote against the company's last contract proposal?

Why, indeed. At first glance, the consensus rejection by members of the International Association of Machinists and Aerospace Workers (IAMAW) Local 1947 on Sunday makes no sense. The company had flat-out threatened to leave Wisconsin for Stillwater, Okla., unless the Fond du Lac workers bent over and took substantial cuts in pay and benefits.

So, why would the Fondy workers cut their own throats? Isn't a job with reduced wages and benefits better than no job at all?

Why, indeed.

I will not try to justify the workers' vote. But I am happy to try to shed some light upon the mindset and the events that led to it.

The first thing to understand is the history that brought the Mercury Fond du Lac contract dispute to this point.
The company signed a contract extension through 2012 for the workers in Fond du Lac only last year.
"Now, they turn around and say, 'We need a complete rewrite, from cover to cover, of the contract THEY negotiated. It's union busting," said Mike King of the IAMAW. "When it's told to you across the table by a union-busting consultant (hired by the company), it really leaves a bad taste in your mouth."

In recent years, Mercury Marine had laid off about 600 people from the Fond du Lac plant and shifted production to China. The laid off employees could not participate in Sunday's contract vote.

The layoffs left the Fond du Lac plant with a senior-laden workforce. Most of the employees who still have jobs there have 25 to 30 years of experience at the plant. For many of them, retirement is on the near horizon.

Put yourself in their shoes. You are very near retirement. You are making a fine living wage. You have negotiated health care and pension benefits. The company is proposing a new contract that will slash your pay and eliminate most of your benefits, including severance pay for outgoing workers. The contract will cut benefits for retirees and will cut wages for new hires.

Even if the contract is rejected by the union, the company will need two to three years to move all of its production out of Fond du Lac to Oklahoma. If you can ride that time out, you'll walk away with the severance pay from the current contract. And then you can retire.

Or, you could take the figurative kick in the teeth - a pay cut and loss of benefits, including severance - and retire with less.

Union officials say the company's latest proposal is a "suicide offer."

Which option would you take?

"Mercury Marine never intended for this offer to be accepted," said IAMAW Midwest territory vice president Philip Gruber. "Despite progress on every major issue and a commitment by the IAM to continue bargaining, the company balked in the final hours and added terms and conditions that assured members would reject the offer … Mercury Marine has been threatening these workers and this community for weeks. Some companies may hint at dire consequences as a bargaining tactic, but rarely do we see such extortion in plain view. It's unethical, it's un-American and I respect any worker who stands up and refuses to be bullied."

"They (company officials) knew these were deal-breakers. It's gut-wrenching. We really, really tried to work with them," King said.

Company officials say they already have begun the process of shifting the headquarters and production from Fond du Lac to Stillwater. Company officials said they will continue to abide by the terms of the contract they negotiated with the union last year.

The company says it is doing what it needs to do to survive in a global marketplace. The company says it must reduce its labor costs.

The company said it expects the full transition to Oklahoma to take between 24 and 36 months.

"We appreciate the patient support of our employees and communities as we’ve gone through this process," said Mark Schwabero, president of Mercury Marine. "This has been a very difficult and stressful process for all involved. We will work closely with our team in Fond du Lac to develop and communicate a transition plan for this 24-36 month process."

The company has said it will stand by its offer to the union until Saturday, Aug. 29. It's possible that an 11th-hour solution could emerge. But you best not hold your breath.

In the end, the company is doing what it believes it needs to do. So is the union. Unfortunately, that doesn't make the pain any less severe in Wisconsin.

 

Steve Jagler is executive editor of BizTimes Wisconsin.

As the next chairman of the Fond du Lac County Economic Development Corp. (FCEDC) board of directors, it is my job to look to 2010 and assess, with staff, what the near future will hold for our communities, our businesses and our residents. The outcome of the vote by Mercury Marine's union on Sunday will most assuredly affect our future.

This is a difficult situation for everyone involved, especially the employees who will be casting their vote. I truly empathize with them for they must feel like the weight of the world is on their shoulders. It is not only their job at stake, but the jobs of approximately 4,000 of their neighbors in Fond du Lac County who work for companies who are suppliers to Mercury Marine or work for organizations who will be greatly affected by the potential loss of the company. The responsibility of each voting employee is incredible.

It is important that everyone understand the impact of Mercury Marine on Fond du Lac County. All told, an estimated $353 million in annual income in our county is on the line, and it is an impact that extends far beyond the boundaries of Fond du Lac County. In the seven-county region (Fond du Lac County and its adjoining counties), the direct and indirect impact is expected to result in the loss of almost 8,000 jobs and $450 million loss in annual earnings. Bump the scope to the state level, and loss climbs to over 11,000 jobs and $600 million in annual earnings.

As incoming chair of FCEDC, I have to look at how it would affect our business climate. Approximately 1,000 companies in Wisconsin provide products or services to Mercury Marine, 250 of which are in Fond du Lac County. Among the hardest hit industries will be local governments, restaurants, health care and a wide-range of manufacturing businesses.

Our stakeholders are also the citizens of Fond du Lac County.  So how does this decision affect us as individuals?  Mercury Marine is a significant water and sewer customer of the City of Fond du Lac. If no new customers took their place, the water and sewer rates would possibly have to increase by up to 5.5 percent, which equates to approximately $44 a year for the typical residential customer. In addition, Mercury pays over $620,000 in total property taxes, $219,000 of which is to the City of Fond du Lac. If the buildings were vacated, the value would decrease significantly leaving the other property taxpayers in the city, county, school district, and technical college district to pick up the difference.

The negative impact will be felt in all communities in Fond du Lac County. Nearly 400 of Mercury Marine's employees live in Fond du Lac County communities outside the Fond du Lac zip codes. The potential loss of population could impact some of the smaller communities quite severely. For example, Oakfield is home to many Mercury Marine employees and their families.  The loss of the company could directly affect over 12 percent of the 1,038 residents. This is not taking into account supply chain and those additional job losses previously mentioned.

The list goes on - property values, the impact on the area technical college system, the effects of higher unemployment rates, etc., but you get my point. The vote of the workers is a responsibility I wouldn't wish upon anyone, but it is a challenge they face none-the-less. I would like to personally thank each and every one of the employees for making an educated decision based on facts, integrity and conviction.

Russell Kamphuis is president and chief executive officer of the Bank of Oakfield and currently serves as vice chairman for the Fond du Lac County Economic Development Corp.

Editor's note: The following blog was written as an editorial in Central Penn Business Journal by Chris Passante, editor of the publication, which is based in Harrisburg, Pa. Milwaukee-based Harley-Davidson Inc. operates a production plant in nearby York, Pa. Harley is weighing its options. The editorial is reprinted with permission.

 

When Harley-Davidson chief executive officer Keith Wandell told the Central Penn Business Journal late last month it's his way or the highway, folks at the York plant - and around the country - sat up straighter.
And for good reason.

The new CEO of both the American icon and the 106-year-old company hemorrhaging employees and profits wasn't mincing words. Harley sent a clear message to the union, Local 175 of the International Association of Machinists and Aerospace Workers: It must cut $100 million in operation costs at the York plant, where it builds its Softail and Touring bikes. If it doesn't, the plant would pack up and leave behind some 2,000 hourly workers.

"…We'll either come to an agreement, or we won't," Wandell said. "And if we won't and can't, then we'll move the plant."

That's a tough-as-nails corporate stance, but one that should be taken seriously.There's simply too much at risk for one of York County's biggest and most valuable employers.

But Wandell ought to look again at his hand.

Does Harley really want to leave behind a highly skilled workforce that includes people with 20-plus years of experience?

Does it want to sever relationships with suppliers who can perform quality work and have a history with Harley?

Does it want to shake a region that for all its workforce problems still has a strong manufacturing commitment and initiatives to foster workers?

Would it risk tarnishing its image since Harley is so big on promoting its factory tours?

Can it turn its back on a state with a history of committing to Harley - including previous infusions of cash?

Would it throw away its $145 million investment into the Softail factory?

And maybe last but not least, would it not take advantage of a union that seems much more willing to compromise than back in 2007, when it went on strike?

In other words, Harley, you appear to have a partnership with the union in seeing the company through these challenging times.

Harley needs to stay in York, for York's sake, for the workers' sake, and for the company's sake. Concessions must be made now on both sides, so that when the economy grows again, so too will the company, the workers and York County.

Chris Passante is the editor of the Central Penn Business Journal. For additional information, visit www.centralpennbusiness.com.

Editor's note: Linda Kiedrowski, chief executive officer of The Paranet Group Inc., a Brookfield-based consulting company for manufacturing companies, recently wrote the following letter to President Barack Obama and is sharing it with readers of BizTimes Milwaukee.

 

Mr. Barrack Obama
President of the United States of America
1600 Pennsylvania Avenue
Washington, D. C. 20500
Re: An Idea to Stimulate the Economy

 

Dear President Obama:
I am a small business owner in Brookfield, Wisconsin. My business, The Paranet Group, is a development and network organization for manufacturing company executives located primarily in southeastern Wisconsin.

I have approximately 250 members. Paranet has been in business for about 20 years.

While there is much buzz about the Stimulus Bill, I have to be honest and say that I am not sure how it will stimulate my business or most of the manufacturers in my network. This is probably ignorance as I find the 750 page document daunting. I will, over time, invite "experts" to advise my members on how and what the stimulus plan holds for them.

However, that is not why I am writing today. Today I am writing with an idea that would spur the economy immediately. What we need in this country is for people to start buying. The media needs something positive to tout to help our country get out of the depressed state it is in. I am tired of the gloom and doom and want to see some positive action. So, here is my idea:

National Buying Day.

Let's pick a day and designate it as National Buying Day. Everyone will be encouraged to spend about $100, if they can, to help stimulate the economy. Buy that small appliance, new outfit, lawn mower, a couple shares of stock, etc! If people buy things, manufacturers can make them, service organizations can provide services, etc. That is the people's part. The government's part is to provide everyone with a tax credit equal to the amount (there may be a maximum tax credit limit) they spend on that day. People just need to present their sales receipts with their tax returns. Perhaps we even go as far as to say that all states with a sales tax forego that tax on National Buying Day.

Businesses could have special sales that day, etc. I am sure that there are probably lots of holes in this idea, but I believe the premise is good.

The media would have something positive to promote. It seems pretty simple to me. I really think this would be a win/win proposition. I look forward to your response.

 

Yours truly,

Linda G. Kiedrowski
CEO
The Paranet Group Inc.
13005 W. Bluemound Road
Brookfield, WI 53005
www.paranetgroup.com

Editor's note: This blog is a tribute to Cathy Schuldt, owner of Butler Wire & Metal Products Inc., Menomonee Falls. Schuldt passed away Wednesday. The tribute is written by Jerald (Jerry) Skoff, president Badger Metal Tech Inc., Menomonee Falls.

Dear friends of manufacturing:
I write bringing some very sad and shocking news that I just found out about. I am sure you remember SAMnow and all of our efforts to Save American Manufacturing. We were featured in a cover story about "America's Other War" written by Steve Jagler in the old Small Business Times on March 7, 2003.

One of SAMnow's founders, Cathy Schuldt, owner of Butler Wire & Metal Products Inc. in Menomonee Falls, passed away unexpectedly on Feb 25, 2009, from colon cancer.

I do not know all of the details, except that she had been feeling ill for the past few weeks. Scott, her son called me last evening to inform me. Cathy was a great lady, a fighter and such a generous giving person. She also tried her damnedest to warn about what is happening to our economy, middle class and the dumbing down of the American people.

It is so sad, that now that Congress and our government are starting to wake up to the fact that manufacturing is the lifeblood of our once vibrant and strong economy, that Cathy will not be around to enjoy the fruits of her labor and dedication to the cause.

During her life, she touched many people. Over the years, we had grown to become very dear friends. Just recently on Dec 12, she got married to Randy Demett. For their honeymoon, they went on an extended vacation and just got back a few days before Valentine's Day.

Now she is gone.

I spoke with her just a week or so ago. Scott said it was colon cancer. But no one knew about her having this.

She will really be missed by me and I am sure by all of the SAMnow supporters and many, many others whose lives she touched while here with us. I loved that girl. Her loss leaves a huge hole in my life - a joy that will be hard to fill.

 

Jerald (Jerry) Skoff, president Badger Metal Tech Inc., Menomonee Falls, co-founded SAMnow (Save American Manufacturing) with Cathy Schuldt. To read the original 2003 cover story about SAMnow, click here. To read a sidebar about the perils of American manufacturers shifting production overseas, click here.

Editor's note: Milwaukee Mayor Tom Barrett today delivered his State of the City Address at the Harley-Davidson Museum. The text of his speech follows in a special edition of the Milwaukee Biz Blog.

Fellow Milwaukeeans and special guests, I am pleased to stand before you to present my fifth report on the State of our City. Thank you, Gail for that welcome and introduction, Harley-style.

Welcome to Harley-Davidson's world-class attraction and welcome to the Menomonee Valley. When I took office in 2004, the Harley-Davidson Museum project was at a standstill. I immediately committed my administration to moving forward with the plans and together, with Harley-Davidson and the Common Council, this incredible cultural asset rose out of an old public works yard.

We also saved the taxpayers money by consolidating two public works facilities into one. These projects are never easy, but they are certainly worth our efforts. Thank You Harley-Davidson for your commitment to Milwaukee.

I chose this venue not only because of the Harley-Davidson story, but also because of the story of the Menomonee Valley. I hope when you drove here this morning you took Canal Street, and if you didn't, I strongly encourage you to drive through the Valley soon.

What you see today is in stark contrast to what you would have seen just five years ago. What was then the City's biggest eyesore has become home to growing companies and first-rate attractions. It's an invigorating drive, and during a time when the economic news is not good, it's a great example of what forward thinking can achieve.

It is because of the collective efforts of all our Valley Partners that The International Economic Development Council recently recognized Milwaukee with an award for its achievement in redeveloping the Menomonee Valley. The Valley was recognized as one of the world's 25 best economic development projects. Drive through it, and you'll see why. The Harley-Davidson Museum rightly deserves all the praise and press it receives. This company has survived the Great Depression, the economic turmoil of the 1980s, and other difficult times. What hasn't grabbed a lot of headlines is Harley's commitment to its historic west-side neighborhood. It's there where you'll find the Harley-Davidson Targeted Investment Neighborhood strategy at work. The targeted investment initiative dedicates public and private resources to improving quality of life and strengthening the neighborhood. Working with the City, Harley employees and residents around its headquarters have worked to address nuisance properties, improve public safety, clean up litter, and make home repairs. In fact, 48 percent of neighborhood residents participated in this effort.

I am confident Harley-Davidson will continue to be one of the most successful brands associated with the City of Milwaukee. We are all facing difficult and uncertain times. But just like Harley-Davidson,

Milwaukeeans are resilient. I am fully confident that Milwaukee will withstand the current economic downturn. We will make smart investments, continue to build strong partnerships, provide training to our workforce and improve our public schools. We WILL emerge as a stronger and more competitive city.

Even during this economic downturn, we see signs of optimism. In late 2008, we transformed a brownfield into a success story. We used a remediation strategy to help a central-city business expand in its current location. Medovations, a medical products company, embarked on a $3 million expansion, maintaining its current workforce and adding 12 additional jobs. This is the first physical expansion of this company and we are thrilled to put a brownfield back to use. Equally exciting, the company hires nearly all of its employees from the central city, and provides on-the-job training.

The City celebrated the ninth groundbreaking in the Valley with Charter Wire's new facility, a facility that will be home to 115 employees. Elsewhere in the Valley, the Canal Street Commerce Center, the Harley-Davidson Museum and Derse have all opened for business, and the Potawatomi Casino has expanded.
Through the development of more than a dozen projects, more than 2000 jobs have been created.

I'm proud to say that one of the first new businesses in the Valley is already exceeding our expectations. Palermo's Pizza now has 400 employees and is strongly committed to my Summer Youth Jobs Initiative. In an effort to replicate the success in the Valley, the City has invested $6.4 million in assisting businesses in the 30th Street Industrial Corridor. Through the use of our TIF financing tool, we assisted DRS in upgrading its facility. In 2009, we plan to tackle three of the worst brownfields in the 30th Street Industrial Corridor.

The old tannery on 32nd & Hampton will be part of the Bishop's Creek development.

Further south, we have our sights set on the former Tower Automotive plant, and we're going to clean up the former Esser Paint factory on 31st & Galena. Great progress is being made on Milwaukee's south side in the Airport Gateway Business Improvement District. I'd like to thank Alderman Terry Witkowski for his leadership. We couldn't be more pleased with the progress on the Brewery Project. This $205 million redevelopment will be the first 'sustainable' LEED-certified neighborhood. The city assisted with a $29 million TIF to fund demolition, environmental cleanup, new 'green' streets, sewers and sustainable public improvements.

The Keg House was converted into the Blue Ribbon Lofts. And, we celebrated when the newly-converted Boiler House welcomed it first two commercial tenants. I'm grateful to Joe Zilber for his continued civic philanthropy, and I look forward to working with him for many years to come. One of the keys to a stronger neighborhood is a stronger workforce. I want our workforce development to be the best in the nation in helping those most in need find family-supporting jobs. Since taking over Workforce Investment, we've created a more demand-driven and customer responsive system with activities to connect employers with employees.

The Workforce Board has identified key new partnerships with City employers, such as Supersteel on the Northwest side. Through its customized welding and manufacturing skills training program, the Board helped meet Supersteel's need for an additional 26 trained employees. Growing and attracting green industries is central to my vision for Milwaukee.New green technologies create jobs and lower costs. A 2008 sustainability survey ranked the 50 largest U.S. cities based on water quality, recycling and energy efficiency efforts. Milwaukee ranked 12th, up from 16th in 2006.

And we're not slowing down.

At the current rate of water use, the U.S. will need 16 trillion additional gallons of fresh water per year by 2020. This is equal to one-fourth of the combined outflow of ALL the Great Lakes. 1.2 billion people worldwide suffer from a lack of clean water. 2.6 billion people lack adequate sanitation, primarily due to water conditions. Milwaukee must grow its water economy. Here in Milwaukee, our companies have developed cutting-edge research and technologies associated with treating water and preserving water quality.

We're also home to companies that invent and produce water-quality related equipment. I'm not talking about selling our water. I am talking about growing and selling our expertise with treating freshwater. Water WILL be one of the largest economic growth sectors in the world over the next few decades. And Milwaukee can be the hub for freshwater technologies and research if we do something NOW to plan for our future.

That's where the Milwaukee 7's Water Council comes in. It has a membership of more than 100 water technology companies. Combining that business innovation with UWM in a School of Freshwater Sciences AND the research of the Great Lakes Water Institute is a shared goal that must be realized. Governor Doyle has authorized the school in his budget. Now, we must work to ensure that the financial commitment is there at the end of the state budget process. Imagine a School of Freshwater Sciences with a front door on our incredibly beautiful lakefront.

On the near-south side, we will have the School's freshwater research facilities and a water technology business park. We can and must accomplish this. I want to thank Badger Meter's Rich Meussen, UWM Chancellor Carlos Santiago and GMC President Julia Taylor for their leadership in shaping and pursuing this goal, and I pledge that I will do all I can to make the school and the water technology park a reality. Innovations in the way government delivers services will also improve Milwaukee's competitive standing.

Over the past few months, I have been in discussions with MMSD over its annual $14.6 million natural gas bill. We think it's time for a less expensive option. Just yesterday, I announced that Veolia Environmental Services and MMSD will proceed on the construction of a 17-mile methane gas pipeline that will capture landfill gas in Muskego and deliver it to the Jones Island Water Treatment Facility. Presently, the landfill gas is flared off at the landfill. That's money going up in smoke.

The methane gas will be transported through the pipeline and then converted into a fuel source to heat and dry Milogranite. With the installation of five new methane gas turbines, MMSD will be able to meet its electrical needs and eventually produce excess electricity to put back on the electrical grid. This project will result in lower customer bills for families and businesses, especially our businesses that use a lot of water in production...think Miller beer.

This is a great win-win for businesses and the environment. I want to thank MMSD Director Kevin Shafer, Commissioners Preston Cole and Alderman Ashanti Hamilton, as well as the staff from MMSD and Veolia. This pipeline is also ripe for federal stimulus dollars and we're going to do all we can to get the funding for this and other job-producing projects that help to improve our infrastructure.

I know there are critics of President Obama's stimulus plan. I am not one of them. Congress and the President have made the decision to spend the money. Since our taxpayers are going to help pay that money back, I'd much rather have that money spent in Milwaukee, Wisconsin, than Milwaukie, Oregon.

Since last November, I have been working with Congresswoman Gwen Moore, Congressman Dave Obey, and Senators Herb Kohl and Russ Feingold to make sure Milwaukee's needs were addressed in the bill. Last Friday I met with President Obama and members of his cabinet. I want to also acknowledge the leadership that Common Council President Willie Hines has brought to this issue. The Council and I understand that spending wisely and putting Milwaukeeans to work is paramount. Thank you, President Hines. We have the opportunity to invest in our infrastructure and our workforce. In these difficult times, we have to do all we can to build upon both. Improving our local roads is good for residents and businesses alike.

Attacking lead poisoning lowers health care costs. Weatherizing our older housing stock reduces energy bills and improves the value of City homes. Leveraging federal funds for our police department helps keep our streets safe.

Repairing and improving the KK River channel will enhance the value of nearby neighborhoods and add to the City's green space. Cleaning up the environmental problems at the old Tower Automotive site will lead to future development, more jobs and an increase in the City's tax base. Investing in high-speed and commuter rail will enhance Milwaukee's standing as the state's center of commerce and a national destination. These are the types of activities I want to pursue for funding. These are investments that will pay off in the future and investments that are worth making. We must continue to grow Milwaukee.

In order to grow Milwaukee, we will need to capitalize on partnerships at all levels. Governor Doyle and I recently formed a partnership with the Milwaukee donor community to study the finances of the Milwaukee Public Schools. I'm expecting the work and findings to be completed within the next few weeks. The Governor and I will then present a report and prepare legislation to be taken up by the State Legislature. I can tell you that the briefings I have had on the schools so far are some of the most sobering and difficult meetings I have had since becoming mayor.

The fiscal challenges facing MPS are serious and will require both short and long-term solutions. There are a number of factors that drive the district's financial bottom-line: enrollment, excess facilities, district spending and state school aid formulas. As you know, for years I have been fighting to fix the flaws in the funding of the Milwaukee Parental Choice Program. No matter how you feel about school choice, the fact is Milwaukee property taxpayers pay a disproportionate share of the program's costs.

These costs get attached to the Milwaukee Public School levy, drive up our property taxes, and decrease the amount of money that flows into our classrooms. I am hopeful today that this scenario is about to change. Governor Doyle has included in his budget a provision that phases out after five years the property tax burden caused by not including school choice program students in the calculation of school aids for Milwaukee.

If this provision is included in the final state budget - and I strongly encourage all of you here to contact your state legislator and tell him or her to support the provision - Milwaukee taxpayers will receive $38 million in property tax relief once the phase-in is fully implemented. In the first year alone, we will receive $10 million in tax relief. This is a huge step forward and I want to express my thanks to Governor Doyle. Fixing the school aid funding flaw is only one piece of the puzzle. Unfortunately, there are a lot pieces and not all of them fit together nicely.

As we have worked through the fiscal review of MPS, the issue of school governance has naturally risen from the discussion. I said a week or so ago that it is time for this community to have a very frank and serious conversation about the future of our schools. I don't believe that I'm alone in asking if the structure we have in place today is the best structure to address the issues facing Milwaukee Public Schools now and into the future.

The review of school finances does not address the governance issue. It is the district's finances and performance that raise the governance issue. I have the responsibility to do all I can to ensure the growth and stability of our great city. That responsibility includes doing everything I can to improve the Milwaukee Public Schools. Hiring and retaining great teachers, getting more dollars into the classroom and preparing our students for a bigger and more competitive world are what I want - what most of us want. Improving our schools will not be accomplished with any magic potion or any quick fix. That's why now is the time to have that very frank conversation about the future of MPS. It's a conversation that should be conducted with civility and reason. Teachers are dedicated public servants. A career in the classroom is significant and one involving a great deal of personal sacrifice. Parents rightly want the best education possible for their children and our students should always be our main concern.

Unfortunately, City government is not immune to the international economic downturn. I will prepare our next budget so that it's balanced and doesn't over-burden our residents and businesses. There will be tough cuts.

Not surprisingly, the City's finances are closely related to the condition of the economy. During my first five years in office the City's budget has balanced City services while dealing with declining State aid in a fiscally responsible way. That trend will continue as we address our priorities in difficult times. Governor Doyle's budget contains relatively modest shared revenue cuts. The cuts could have been deeper and I appreciate the Governor's efforts to maintain a funding freeze in 2010.

Nevertheless, the City's budget picture is very cloudy. It is more important than ever that the Mayor and the Common Council address these serious fiscal issues as collaboratively as possible. To that end, I am moving forward on a suggestion offered by Aldermen Michael Murphy and Nic Kovac that we implement joint fiscal planning discussions, which will also involve the Comptroller and representatives from the private sector. In addition, the reconstituted Capital Improvements Committee has the potential to provide serious and well-informed discussion regarding our budget priorities for infrastructure and public buildings. I've also directed my cabinet to continue developing partnerships that will produce efficiencies and tax savings.

From the day I first took office, I have made public safety my top priority. With scarce municipal resources, I still put more cops on the street. The cooperation among police officers, the clergy, community agencies and individuals has led to some very gratifying results.

Homicides of young African American men plunged 65 percent last year-from 54 in 2007 to 19 in 2008. That's still too many homicides and we have much work to do, but it is an astonishing one-year drop. Violent crime is down in all categories.

I am grateful to all the men and women of the Milwaukee Police Department for their hard work. The City funds numerous activities that help to reduce violence in our neighborhoods as well. From the City Attorney's office and the Department of Neighborhood Services, to the Health Department and its focus on family violence prevention through the Commission on Domestic Violence and Sexual Assault, we are making a difference. There is a shared desire in Milwaukee to make our city safer and stronger by reducing crime.

My Office of Violence Prevention has been bringing community stakeholders together. I offer my appreciation to the Homicide Review Commission, our partners in the District and U.S. Attorney's offices, neighborhood groups, and members of the clergy. It's people like Elder Ruben Madison Jr., block club captain on the 3100 block of N. 21st street, who are helping to make the difference. He's teamed up with others to rid the neighborhood of nuisance properties and drug dealing. And with the help of his community liaison officer, enlisted many allies who have worked tirelessly to take back this block. They've done it so well, they're now moving on to the next block and will help the residents there organize their own improvement effort. I'd like to recognize Elder Ruben and the other individuals for contributing to the success of this effort. Please stand and be recognized. Adam Stephens of the City Attorney's Office... Ron Roberts and Matt Dama of the Department of Neighborhood Services... Jake Corr of the District Attorney's Office... Taleeba Mateen and Al Hegwood of Safe & Sound AND, Ray Robakowski, of the Milwaukee Police Department.

I also want to recognize Tina Chang of Syslogic and Don Layden of Metavante for stepping forward and responding to Chief Flynn's request for computer technical support. The department's focus is on data-driven policing, making its IT systems critical to its crime-fighting strategy. Tina is with us today and on behalf of city taxpayers, I thank you.

While crime is down, unfortunately, foreclosures are up. Currently, there are more than 1,800 bank-owned foreclosed properties in the City and more than 4,700 foreclosure filings. Families are being disrupted and our most vulnerable citizens are being impacted. Tenants in foreclosed homes are being evicted with little or no notice. Vacant and boarded-up homes can undermine a neighborhood. They also impact the City's tax base. We're meeting this crisis head on - with strong partners. I convened the Milwaukee Foreclosure Partnership Initiative to help. This group assisted us in developing a coordinated strategy to address the foreclosure issue. More than 100 volunteers representing a broad range of community interests answered the call. I thank them all for their efforts. The partnership developed a plan to intervene with homeowners currently at risk, stabilize neighborhoods and prevent foreclosure issues from developing in the future.

Here are a few of the steps we're taking as a City: Milwaukee will soon launch a Homeownership Consortium that will enhance homebuyer education and financial literacy efforts. We are moving forward with a Court Appointed Mediation program that will bring lenders and borrowers to the table. Similar programs in other parts of the country have achieved considerable success. Thank you to Catey Doyle and the Legal Aid Society for spearheading this program. Alderman Joe Davis and I have been working to secure funding to launch this effort. I'm pleased to announce the City will be contributing $100,000. Thank you, Alderman Davis for your support. And just yesterday afternoon, I spoke to Attorney General J.B. Van Hollen who indicated that his office would contribute a significant amount to the mediation effort as well. In addition, the City has received $9.2 million of federal funding to help address the foreclosure problem. Our plan for using those funds has already been approved by HUD. The funding will be available in a few weeks and we are moving forward to help homebuyers, responsible landlords and developers put foreclosed homes into use. If we are to become a thriving economic engine fueling others, then we will need to build on our regional partnerships. The time is now with the federal stimulus on its way, and the opportunities are exciting.

We need to support and pass the Regional Transit Authority legislation. Our region is much more than interstate highways. An RTA that funds and operates transit will be an asset to Milwaukee and to the region. With an RTA in place we can reverse the death spiral of the current County-operated transit system, expand transit services so workers can be connected to regional jobs and extend commuter rail from Kenosha to Milwaukee. I'm asking all regional leaders to join me in supporting the high-speed rail initiative. There's $8 billion in the stimulus package for this and it has Milwaukee and Wisconsin written all over it. It is also time for regional leaders to join together and demand that federal and state transportation officials recognize that transportation is more than widening highways. It's also about local roads and mass transit.

The first action we should take is to re-direct the state's $21 million appropriation for the construction of the Pabst Farms exit. That money should go into local roads. Let's put those dollars to work repairing potholes and paving local roads that are heavily traveled right now. In tough economic times, we really do need to appreciate what makes Milwaukee such a great place. For example, in 2008, we tied for the second lowest number of fire deaths in well over 50 years. Thank you, Chief Doug Holton and the brave men and women of the fire department. The Health Department formed a partnership with both the Boys and Girls Club and the Fire Department to provide immunizations to Milwaukee citizens. During 2008, the Health Department provided more than 30,000 vaccinations to children and adults representing a 14 percent increase over 2007. Thank you, Commissioner Baker and the staff of the Milwaukee Health Department for your hard work. Thanks also to the many people who are working to help students through the I Have A Dream Milwaukee Program. We officially started our program this past September at Clarke Street School. Last year, we saluted the Kellners' for their generous contribution to cover college tuition costs for the entire first grade.

This year we salute the Brady Corporation for taking on the entire second grade. CEO Frank Jaehnert from Brady is with us today. Thank you, Frank. Thanks to all of you who have participated in my summer youth jobs program. We all need to help build the skills of Milwaukee's future workforce and provide hope in the lives of young people. That's why I'm asking you again to join the Earn and Learn Team. I'm very pleased John Kissinger of GRAEF is the co-chair of this year's program and is with us today. Thank you for your partnership in this very worthwhile endeavor.

Finally, I want to follow-up on an announcement I made at last year's State of the City address. In tough economic times, with less money for family vacations, what better way to spend a summer weekend than to watch the Great Circus Parade.

Yes sireee, step right up. On July 12, Milwaukee will once again host this national treasure. Please join us as we celebrate. There will be many more details coming soon.

We are facing economic challenges not seen in this country for generations. It's important that as we leave here today, we remember the difficulties and challenges our parents and grandparents faced as they made their way through the most difficult economic time our country ever confronted. They were optimistic and confident, and that attitude went a long way. I am confident that Milwaukee will weather this economic storm. I believe in the strength of our community and that the progress we've made will continue through successful partnerships with businesses, unions, and community groups. We do not stand alone; we stand and rise together.

I ask you to be optimistic, to be part of the positive change and to join the progress that's happening in our City. I look forward to working with all of you. Thank you for coming.

Tom Barrett is the mayor of Milwaukee.

Who does more damage to the state of Wisconsin, the Wisconsin Manufacturers & Commerce or the Wisconsin Education Association Council?

The answer to that question, of course, depends upon which side of the political aisle you're standing in.
State Sen. Mark Miller (D-Monona) raised some eyebrows recently when he spoke at the Wisconsin Manufacturers & Commerce (WMC) Business Day in Madison 2009.

At the end of his remarks, Miller took the WMC to task for "bad-mouthing" Wisconsin as a place to do business and for being "a large contributor" to the "degradation" of politics in the state.

Here's exactly what Miller, who is co-chairman of the powerful budget writing Joint Finance Committee, said to the WMC:
"I think I would not be doing you a service if I didn't address something that has concerned me for a long, long time and that has been the fact that for the last 15 years it seems like the organization that bad-mouths Wisconsin more than any other is your organization right here, the Wisconsin Manufacturers & Commerce. We try as hard as we can to try and promote Wisconsin, to bring businesses in here. And it's very, very difficult to try and push that bean uphill when our largest business organization is saying what a bad place Wisconsin is to do business. I would hope that as part of your getting together here you would take on the responsibility for (re-)visiting your role in helping to promote Wisconsin, helping us to bring additional businesses in here. Help us to figure out our strategic future for Wisconsin that benefits not only you as business people but also the citizens of our state. And also, I think, and I suspect, and I sense, that there is a willingness to revisit the sort of extraordinary one-sided investment in partisan politics that Wisconsin Manufacturers & Commerce has engaged in. I perceive that the WMC's participation in our political process has significantly coarsened our political dialog. The kinds of political ads that WMC has run on behalf of candidates and against candidates, more importantly against candidates, I think has been part of what has really irritated the citizenry about politics in general in our state. Wisconsin was known for its clean politics for decades. In the last 20 years, we've lost that reputation, and I would charge that WMC has been a large contributor to that degradation. I know none of you want to be part of that. So I am hoping at this meeting you will have an opportunity to revisit how you participate in our political process. I know these are things that you probably did not want to hear, but I think I would not have been doing my duty to challenge you to be part of making Wisconsin better. You are absolutely the lifeblood of our economy. We need to work together."
(You can go to WisconsinEye if you want to view footage of Miller making the remarks.)

 

Republican Party of Wisconsin (RPW) executive director Mark Jefferson responded to Miller's remarks by criticizing the Wisconsin Education Association Council (WEAC) for its influence in state politics.

"While the Wisconsin Education Association Council is in the process of buying yet another race for the Department of Public Instruction (DPI) and on the heels of the group's 2008 purchase of the Wisconsin state Assembly, Sen. Mark Miller is drawing laughs for blaming the state's chamber of commerce for destroying the state's reputation for clean government," Jefferson said. "Mark Miller should open his eyes and look who's bankrolling the Democratic Party in this state. Can anyone remember when the Department of Public Instruction wasn't controlled by WEAC?"

In a recent Milwaukee Biz Blog Jeff Hoffman, vice president of Pewaukee-based Judson & Associates S.C. and president of the Independent Business Association (IBA) of Wisconsin, lamented "anti-business" legislation under consideration in Madison and also commented on Miller's remarks to the WMC.

Then the Democrats struck back at Jefferson.

"Why are Mark Jefferson and the Republicans launching petty attacks on behalf of WMC?" said Joe Wineke, chairman of the Democratic Party of Wisconsin. "Is WMC too cowardly to defend themselves, or are they simply broke after eight years of supporting the Bush economic policies that have hurt main street and bankrupted many of their own business members? Mark Jefferson should open his eyes and look who's bankrolling the Republicans in this state. Can anyone remember when the Republican Party of Wisconsin wasn't WMC's little lapdog?"
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The April 7 election is around the corner. Stay tuned.

Andrew Weiland is the managing editor of BizTimes Milwaukee.

As I travel around the country and speak with Badger's employees, distributors, customers and business partners, I am often asked a very simple question: "Why Milwaukee?" They want to know why Badger Meter is headquartered in Milwaukee, Wis.

Certainly other cities may be more convenient for travel (like Atlanta), more centrally located in the country (like Chicago) or closer to the investment community (like New York). So, why Milwaukee?

The easy answer is that Badger was founded in Milwaukee in 1905. But many companies relocate as they grow, while Badger chose to remain in Milwaukee.

What most people do not realize is that, over the past 100 years, the Milwaukee area has grown into a major hub of water technology companies. The city's location certainly helped this development. Milwaukee is located on the western shore of Lake Michigan, which is part of the Great Lakes that comprise 20 percent of the world's fresh surface water.

As a result of this favorable location, a large number of water technology companies call the Milwaukee area home. In fact, a recent survey conducted by the Greater Milwaukee Committee found over 120 Milwaukee area companies in the water technology sector. And according to a recent report by Goldman Sachs, five of the 11 largest water technology companies in the world have significant operations in the Milwaukee area, including Veolia Water SA of France, ITT Corp., Pentair, GE Water & Process Technologies, Siemens AG of Germany and Badger Meter.

Badger Meter comes in on the list as the 45th-largest water technology company in the world, with 1,100 employees worldwide.

The Milwaukee area also has a significant number of other water technology companies, including the largest manufacturer of residential water heaters, A.O. Smith Corp., and control system manufacturers like Rockwell Automation Inc. and Johnson Controls Inc.

Badger Meter is proud to be a leader among these Milwaukee-area companies in continuing to grow the region's reputation in the water industry. In 2007, I had the honor to help found the Milwaukee Area Water Council, which brings together the area's water technology companies, universities, and governmental entities to promote economic development in the water sector. As the CEO of Badger Meter, I also have the honor of co-chairing the Water Council along with Paul Jones, CEO of A.O. Smith. Several of Badger Meter's employees are involved in the day-to-day work of the Water Council.

Although the council has only existed for the past year, much has been accomplished.  The council was instrumental in getting the University of Wisconsin–Milwaukee to found the first-ever School of Freshwater Sciences. We have begun work on an internship program to link local university students with the water technology companies. We have obtained government funding for some technology start-up companies. We have held two water summits in Milwaukee, continuing to develop the region as the "Silicon Valley of Water Technology."  This is just the beginning of building on the many water-related resources that are located here in Milwaukee. And having all these companies nearby helps Badger find new solutions for our customers.

So, when people ask me, "Why Milwaukee?" I tell them that, for a water technology company, Milwaukee is simply a great place on a Great Lake. And Badger Meter is proud to be in Milwaukee.

Richard Meeusen is chairman, president and chief executive officer of Badger Meter Inc. in Milwaukee and co-chair of the Milwaukee 7 Water Council.