Bankrupt? Detroit leaders still chasing away jobs

Posted by hpayne on August 13, 2013

John Frye, co-owner of Detroit Bulk Storage, is losing his pet coke storage and loading business that employs 20 along the Detroit River.

Detroit lost a growing business this month and Detroit politicians cheered. The blue-collar jobs that Detroit Bulk Storage supports at its Detroit River loading dock will disappear this fall after U.S. Congressmen Gary Peters, D-Bloomfield Township, and John Conyers, D-Detroit, and state House Rep. Rashida Tlaib, D-Detroit, protested the loading of a coal-like energy source, petroleum coke, on barges for export to power plants. The Democratic frontrunner for Michigan’s 2014 Senate seat, Peters is already using his “victory” in a campaign ad to raise money.

But what about Detroit’s business base?

The loss of the pet coke loading business comes as Detroit also mourns the death of dynamic American Axle CEO Richard Dauch, coincidentally a few months after union intransigence had forced the demise of his huge Detroit auto parts plant at a loss of 300 jobs.

As Detroit struggles through bankruptcy, the Detroit Bulk Storage and American Axle stories are grim reminders of how political and union leadership still hinder job creation in Detroit. They are a lesson beyond Detroit’s borders. If Motown is to put Chapter 9 in its rear view mirror — and if America is to jump-start its economy — then its political class must partner with business to grow, not use it as a political punching bag.

Detroit’s riverfront is a tremendous geographic advantage, linking it to Great Lakes region that supports $500 billion in commerce. Products like coke, coal, gravel, and steel are loaded on ships bound for local and international markets. Pet coke production, a byproduct of Canadian oil sands refining at Marathon Oil’s huge refinery in southwest Detroit, promises more Great Lakes business, especially for Detroit’s struggling waterfront.

But the growing Detroit business has run smack into the green, anti-carbon agenda of Democratic politicians.

Environmental concerns are an important part of industrial site location, and with Detroit’s industrial waterfront abutting urban neighborhoods, conflict is inevitable. But rather than bringing all sides to the table to balance business and neighborhood concerns, Peters & Co. exploited pet coke storage for political gain — scaring residents about the product’s environmental impact and ultimately driving the business out of state.

“We don’t know what kind of long-term risks pet coke poses to public health and we don’t know what kind of long-term effects it will have on the Great Lakes,” exclaims Peters in a fundraising email. “That’s why I’m fighting for a study on the long-term effects of this pet coke.” That’s pure demagoguery aimed at impressing rich, green Democratic donors —at the expense of small business. It’s part of a larger Democratic war against Canadian oil sands that has postponed the Keystone XL pipeline and cost the struggling U.S. economy 20,000 potential jobs.

Pet coke — like its cousin coal — is a known, carbon-rich commodity that the EPA has judged non-toxic. Indeed, millions of tons of coal make their way across American waterways on the way to power plants. Detroit Bulk Storage itself also stores coal and has abided by all state and EPA regulations governing pet coke storage. Yet Tlaib rages that Bulk Storage is “illegally dumping” pet coke.

Peters — who once proclaimed himself a proponent of small business — might have explained this to his Detroit constituents. But instead he has convened community “round-table discussions” that excluded Detroit Bulk Storage.

Don’t think other businesses aren’t taking note. Indeed, Bulk Storage has lost its pet coke business. Tired of the hassle, Koch Carbon, which loads the pet coke on its barges for export, is taking the business out of state — likely to Ohio’s Great Lakes ports.

This anti-business environment also shut down American Axle, leaving another gaping hole in Detroit’s post-industrial landscape. Axle’s Detroit complex employed 2,200 just five years ago, but its union leadership refused to adapt its workforce to fast-changing truck markets, struck the plant in 2008, and Dauch turned out the lights in February.

Newspaper headlines today herald the new high-tech jobs that Quicken Loans has brought downtown. But in a city with a low-skilled workforce, blue-collar industrial jobs are still essential to reducing the city’s 16 percent unemployment rate. Doug Rothwell, chief executive of Business Leaders for Michigan, tells the Detroit News that warehousing and low-tech manufacturing are key to the city’s immediate future.

But the evidence of Detroit Bulk Storage and American Axle is that the city’s political and union leaders are intent on chasing those jobs away.

 

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