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Insight A publication of the Michigan Manufacturers Association

July | August 2013 Vol. XXVI No. 4

Breaking Down Barriers

to Competitiveness


Yo u r B e n e f i t s

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Insight Contents Vol. XXVI No. 4 • July | August 2013

4 MMA Online 5 President’s Message 10 Lt. Governor Calley Talks PPT Elimination 12 Advocacy Spotlight Political mechanisms for supporting a pro-manufacturing agenda

13Tools Three Powerful to Support

Manufacturers’ Interests

16forTravel Discounts MMA Members

& Employees

17 Talent Manufacturing Summit Manufacturing a CareerReady Generation

18 Advocacy Updates 20 Amicus Action Tax certainty

Down Barriers 6 Breaking Competitiveness Cover Story


The elimination of the personal property tax offers a win-win for communities and business. The tax places Michigan at a competitive disadvantage to attracting and retaining investment. Learn why and what’s being done to improve Michigan’s competitiveness.

22 Member Spotlight Humphrey Products Co.

24 Member News & Investment 26 Member Services

Discounted used oil services, parts cleaning and waste disposal through Heritage-Crystal Clean

27 Upcoming Events Insight

July | August 2013


MMA Online:


July | August 2013 Vol. XXVI No. 4

Services & Discounts Access discounts to save your company money on a variety of services: > Services & Discounts. See page 26 for information on parts cleaning and waste disposal services through Heritage-Crystal Clean.


Employee Benefit Programs MMA offers members a variety of high quality, competitive rate employee benefit programs including health, dental, life, disability, vision, workers’ compensation and property and casualty insurances, as well as a 401(k) program: > Insurance.

michigan manufacturers association

Hot Issues The MMA Government Affairs team continues the fight to make manufacturers in Michigan more competitive. Check out the Hot Issues section online: > Government Affairs > Hot Issues. E-Newsletters In addition to Insight, MMA publishes the MMA Capitol Report, the MMA Resources & Tools Report and the MMA Regulatory Report to keep manufacturers informed of issues affecting our industry. Login online and read past issues or subscribe to receive future issues right in your inbox: > News & Info > Insight & E-Publications.

Upcoming Issues Upcoming issues of the Michigan Manufacturing Insight magazine will feature MMA’s ongoing efforts to address the talent shortage , health care costs, the elimination of the Personal Property Tax and a review of what your MMA membership does for you.

Sponsorship & Advertising MMA offers many opportunities to get your company name in front of industry leaders. Consider sponsoring the upcoming Manufacturing Talent Summit or advertise right here in the Michigan Manufacturing Insight. Contact Mark Lee, at 517-487-8532 or, for information.

Publisher: Charles E. Hadden Editor: Joy Wolf Assistant Editor: Elyse Kopietz Advertising

Contact Mark Lee, at 517-487-8532 or, or see MMA Officers Chairman: John G. Smith, Ross Controls Vice Chair: Sharon J. Rothwell, Masco Corporation Treasurer: Daniel R. Lockman, Deloitte & Touche LLP Secretary & General Counsel: Duane L.Tarnacki, Clark Hill, P.L.C. President & CEO: Charles E. Hadden, MMA MMA Directors Darren Cammin, Dow Corning Corp. Brian Cloyd, Steelcase, Inc. Mary Culler, Ford Motor Company Patrick Curry, Fullerton Tool Company, Inc. William Henderson, III, Aircraft Precision Products, Inc. Owen F. Johnston, Bekum America Corporation William D. Kovats, Pfizer, Inc. Steven E. Kurmas, DTE Energy Harry A. Lomason, II, Douglas & Lomason and Magna Lomason (Ret.) Richard A. Lund, Jedco, Inc. Daniel J. Malone, Consumers Energy James M. Nicholson, PVS Chemicals, Inc. Peter J. Pestillo, Visteon Corporation (Ret.) Sanford Ring, Hino Motors Manufacturing USA Inc. Jill E. Ritchie, United States Steel Corporation Bryan R. Roosa, General Motors Public Policy Center Richard F. Russell, Amerisure Insurance Tanisha Sanders, Kellogg Company Peter S. Walters, Guardian Industries Corp. Rich Wells, Dow Chemical Company MMA SERVICE CORPORATION

MMASC Officers Chairman: Owen F. Johnston, Bekum America Corporation Vice Chairman & CEO: Charles E. Hadden, MMA President: Larry A. Janicki, MMASC Secretary & General Counsel: Duane L.Tarnacki, Clark Hill, P.L.C. Treasurer: Daniel R. Lockman, Deloitte & Touche LLP MMASC Directors William A. Demmer, Demmer Corporation Harry A. Lomason, II, Douglas & Lomason and Magna Lomason (Ret.) Edmund S. Mende, Jr., E J Group, Inc. Michael Wilson, Assem-Tech, Inc. Lead MMA Staff

Michael D. Johnston, VP of government affairs Jacquelyn L. Liebner, VP of Finance, Human Resources and Assistant Secretary The opinions expressed herein are those of the authors and do not necessarily reflect the policies, positions or opinions of the Michigan Manufacturers Association (MMA) or the MMA Service Corporation (MMASC).

Big Things Happening… If we can’t contact you, we can’t share important information. Call Adam at 517-487-8542 to update your contact information.


July | August 2013


Michigan Manufacturing Insight Vol. XXVI No. 4, July/ August 2013 (ISSN 1936-8860),(USPS 024-973) is published bi-monthly for $18 per year by the MMA Service Corporation (MMASC), 620 S. Capitol Ave., Lansing MI 48933-2308. Periodicals postage paid at Lansing MI and additional offices. POSTMASTER: send address changes to MMASC, Membership Department, P.O. Box 14247, Lansing MI 48901-4247. Contacting Insight and MMA/MMASC

Editor: Joy Wolf, 517-487-8515 or MMA/MMASC general contact: phone: 517-372-5900; fax: 517-372-3322; e-mail:; address: 620 S. Capitol Ave., Lansing, Michigan 48933; Web site: Past issues of Insight:

President’s Message

Breaking Down Barriers This isn’t the first time, or the last time, MMA members will hear me talk about our efforts to eliminate barriers to competitiveness. It was the theme of our 2013 CEO & Executive Forum and the focus of this month’s issue of Insight as we talk about taxes, talent and ways members can become more engaged with MMA and continue to drive a pro-manufacturing agenda forward. Manufacturers made history last year when legislation to eliminate the onerous Personal Property Tax (PPT) was signed into law. There’s still a long road ahead for manufactures to secure the elimination of this tax. Learn more about this barrier to competitiveness and how leaders can come together to spur our industry forward on pages 6-8. MMA had the opportunity to talk with Lt. Governor Brian Calley about the importance of the PPT elimination. Read the Q&A with the Lt. Governor on page 10 to learn how the elimination of the PPT will impact Michigan, local units of government and manufacturers. Talent is another key area impacting manufacturers’ competitiveness and, therefore, a major focus of MMA’s efforts. We continue work to tackle the middle skills gap and are finalizing the details of the 2nd annual Manufacturing Talent Summit, with focus on “Manufacturing a Career-Ready Generation.” Read about the upcoming Summit, to be held in East Lansing on 10/24/13, on page 17.

Our efforts to drive a pro-manufacturing agenda are supported by members. Learn what you can do to support manufacturers’ interests and support MMA’s advocacy work on page 13. In addition to the work we do to keep your business competitive, it’s important to remember the other benefits available to members — benefits you can share with your employees. MMA membership is company-based, making every one of your employees an MMA member, too. Member employees can become actively involved in our efforts to break down barriers to competitiveness and take advantage of MMA programs and discounts. Tear out page 16 and post it in your break room to share information about MMA’s travel discounts to save your employees money this summer. Manufacturers are reinventing Michigan and we appreciate the opportunity to support you in this great endeavor!

MMA President and CEO

Access this and past issues of the Michigan Manufacturing Insight online: > News & Info > Insight & E-Publications > Michigan Manufacturing Insight.


July | August 2013


Why the Industrial Personal Property Tax Doesn’t Work By Mike Johnston

Michigan has a long history of being the hub for American manufacturing. Starting with the lumber era to Henry Ford’s innovation of mass production, to winning World War II as the arsenal of democracy to being the home of the American auto industry, manufacturing continues to define our great state. MMA has worked every day for more than 110 years to ensure Michigan remains that manufacturing hub for future generations. In December 2012, MMA worked closely with Lt. Governor Brian Calley and legislative leaders in the House and the Senate to pass legislation to eliminate the industrial Personal Property Tax (PPT) and improve Michigan manufacturers’ competitive position. The goal of this legislative push was to increase our ability to compete globally, retain our manufacturing base and attract new investments necessary for economic growth and the creation of new jobs. As manufacturing goes, so goes the state of Michigan. Our industry remains the largest sector of the Michigan economy, responsible for 18 percent of total gross state product, and accounting for one of every six private sector jobs. Our state has seen incredible turnaround since 2008 and no economic sector has seen higher job creation than manufacturing. Its 11 percent job growth rate from 2009-2011 was nearly four times that of Michigan’s overall job growth. Manufacturing created 86,300 jobs between January 2010 and January 2013.


July | August 2013


Finally, and significantly, no industry creates more spin off jobs than manufacturing. Studies have shown that for every one job created in a manufacturing facility, an additional four to six jobs are created down the supply chain. Manufacturing’s incredible job multiplier effect strengthens communities, allowing for better school facilities, more local retail activity and greater support for police, fire and local ambulance services. Any tax that creates a competitive barrier to manufacturing investment hinders the overall growth of Michigan. The PPT has been that barrier for far too long and its negative impact has taken jobs away from local communities. Many communities in this state have seen the negative impact of this tax, over the years, as manufacturers have been forced to seek states that do not charge this uncompetitive tax. The PPT punishes companies for buying new equipment in Michigan to grow their business. The PPT punishes companies for trying to compete by taxing the tools, equipment

and property required to make their products. Competing on the basis of cost is essential to economic survival. If it costs more to manufacture an item in Michigan and a company located elsewhere can make the same product less expensively, the likely result is either the eventual collapse of the Michigan business or they leave to seek a state with a more competitive manufacturing tax policy. The PPT is a tax on mobile capital and gives companies a clear reason to NOT do business in Michigan. In order to remain competitive, Michigan must be attractive for both companies outside of the state looking to expand and existing in-state businesses looking for a reason to stay. As Lt. Governor Calley said during the legislative debate, “manufacturing capital is highly mobile.” Michigan tax policy should not encourage moving a company from Detroit to Toledo allowing the company to save millions, and result in millions of dollars in lost state revenue.

MMA Vice President of Government Affairs Mike Johnston with key officials and business leaders at the signing of the bill to eliminate the PPT in December 2012.

The PPT hinders Michigan’s ability to compete even within its own region. Among Great Lake states, only Indiana has a similar tax and theirs is applied at an ultra-low rate. The PPT critically harms Michigan’s long-term future by forcing Michigan companies to be burdened by an uncompetitive tax policy, while companies in neighboring states benefit from lower cost structures. The PPT is extremely expensive to businesses. Manufacturing equipment becomes a continual cost to the business as it is taxed every year of ownership. Some companies still pay taxes on equipment purchased during World War II. By keeping the industrial PPT in place, Michigan is doing a disservice to businesses today and generations of talented entrepreneurs tomorrow. Our state can only successfully move forward by doing away with a tax whose time has long since passed. How Michigan Can Move Forward: Eliminating PPT & Supporting Local Governments While the successful push of legislation in December 2012 saw the elimination of the PPT, a victory has not yet been achieved. The solution that allowed the tax cut to occur requires dedicating a portion of an existing state tax as a local tax in order to reimburse local units of government for the revenue they lost due to the elimination of PPT. That change affords Michigan voters the right to vote in August 2014 on whether or not this can happen (see page 8). If the ballot proposal does not pass, then everything that has been achieved up to now will disappear; the tax cut legislation will be repealed and Michigan’s reinvention will be cut incredibly short.

Eliminating the Personal Property Tax. It is important to know that the proposed reforms occur over the course of a decade and won’t be completed until 2023. The phasing-in process would happen as follows: • 2014: All personal property with a “taxable value” up to $40,000 would be exempt.

distress. The smaller the community, the more likely it is that they rely on the revenue from a few manufacturers. If a company departs, those communities lose 100 percent of that revenue. That is serious on-going risk currently facing all Michigan communities.

Any tax that creates a competitive barrier to manufacturing investment hinders the overall growth of Michigan. • 2016: All industrial personal property that was new from 2013-2015 or was new in 2005 or earlier would be 100 percent exempt. Additionally, anything purchased in 2016 or beyond will be exempt. • 2017-2023: Each year, equipment that is ten years old or older will become 100 percent exempt. Starting in 2017 all equipment installed in 2006 or before will become exempt. Then each year going forward would exempt another year 10 years prior, 2018 exempts 2007, and so on until the tax is fully eliminated in 2023. The new reforms support local communities. Since the PPT was a local tax, Lt. Governor Calley designed a guaranteed reimbursement plan into the legislation to provide a high level of certainty for local budgets in the future. Local essential services including police, fire, ambulance and jails will be reimbursed at 100 percent. Other non-essential local services will be reimbursed at a rate of 80 percent. This level of fiscal certainty has never existed with the PPT. Any company that currently leaves Michigan for a state without such an onerous equipment tax, leaves Michigan communities in financial

Many Michigan communities have suffered tremendously over the years through no fault of their own. They lose revenue. Those with jobs lose them and those looking for jobs begin to look somewhere else. They watch their cities and homes decay due to decisions made because of a horrible state tax policy conceived decades earlier. By eliminating the PPT, we will no longer chase companies out of Michigan and we will guarantee local funding and eliminate the current local revenue risk. This is a win-win solution for Michigan and its local communities, but there is more work to be done on this issue to reach the great days that lay ahead. Mike Johnston is a vice president of government affairs for MMA. He may be reached at 517-487-8552 or

Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by Michigan Citizens For Strong And Safe Communities


July | August 2013


Countdown: August 2014 Manufacturers Needed to Pass Ballot Measure By Mike Johnston

The MMA made history in December when the Legislature passed, and Governor Snyder signed into law, legislation to eliminate Michigan’s industrial Personal Property Tax (PPT). This onerous tax is one of the most significant barriers to economic competitiveness for Michigan. The historic measure was a significant win for businesses large and small across the state. But it was a win that only took the Michigan business community halfway to the finish line because the legislation also included a specific requirement that Michigan voters would have to approve the reimbursement plan before it could go into effect. As passed, the law makes it abundantly clear: fail to get public support at the To protect local units of government that had come to depend on the Personal Property Tax (PPT), the legislation not only eliminated the PPT but also guaranteed 100 percent reimbursement of essential services to local communities, including schools, police, fire, ambulance and jails and 80% reimbursement for other local services. 8

July | August 2013


polls on 8/5/14 and the tax cut will be automatically repealed. To protect local units of government that had come to depend on the PPT, the legislation not only eliminated the PPT, but also guaranteed 100 percent reimbursement of essential services to local communities, including schools, police, fire, ambulance and jails and 80 percent reimbursement for other local services. As hard as the business community worked to get legislative support to eliminate the PPT, the real test will be to convince Michigan voters to vote YES on the ballot question. The political dynamics will be challenging for a number of reasons, including: • The cluttered August 2014 primary ballot will include an open US Senate seat and active primaries for all state elected offices (Governor, 110 House seats and 38 Senate seats) and additional potential issues on local ballots. • Voter turnout — and the demographic voting blocks that turn out — will be challenging in an August primary. • Potential opposition may come from some local units of government. Although local government groups supported the legislation when it passed, some local officials may express opposition to the proposal. • Statewide ballot campaigns can be very complex and costly. In 2012,

both sides in the Proposal 2 (collective bargaining) ballot campaign spent more than $50 million and both sides in the Proposal 3 (renewable energy) ballot campaign spent more than $40 million. The good news is that a core campaign team is already being assembled to lead the charge to a successful YES campaign. The MMA was successful in passing legislation that removed one of the primary barriers to manufacturing competitiveness. Now only this ballot proposal in 2014 stands in the way of successfully reinventing Michigan’s competitiveness. A very aggressive and disciplined campaign will be put forward and manufacturers must take action. Governor Rick Snyder, Lt. Governor Brian Calley and the legislators who continue to courageously put up the votes needed to reinvent Michigan are counting on Michigan’s business leaders to work together to complete the task to make Michigan a winner when it comes to manufacturing jobs and investment. Mike Johnston is a vice president of government affairs for MMA. He may be reached at 517-487-8552 or

Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by Michigan Citizens For Strong And Safe Communities

Lt. Governor Calley Talks Impact of Personal Property Tax Elimination

Q: Will the elimination of the industrial Personal

Property Tax (PPT) improve Michigan’s competitiveness? Lt. Governor Calley: I am pleased to report to you that Michigan’s economic reinvention took a significant step forward with the passage of legislation to eliminate the industrial Personal Property Tax in Michigan. In December, with the strong support of the Legislature, Governor Snyder signed bills that will eliminate one of the primary barriers to competitiveness for Michigan and put us on a level playing field with the rest of the nation for attracting job creating capital investment.

Q: Why is the elimination of the personal property tax important to Michigan?

Lt. Governor Calley: The industrial PPT punishes companies for making capital investments. This tax is particularly hard on manufacturers who must rely on expensive equipment to make products and clearly puts Michigan at a competitive disadvantage to other states. Elimination of this tax sends a clear signal to the nation and the world that Michigan is open for manufacturing investment.

Q: How will local units of government who previously received funding from this tax be affected?

Lt. Governor Calley: Equally important, the new law protects local units of government. By moving local funding away from the PPT, which is a declining revenue stream, the new law provides for a guaranteed local revenue stream of 100 percent for essential services including police, fire, ambulance and jails to replace the needed revenue. In addition, we will switch to a growing revenue stream in the Use Tax to provide a guaranteed revenue stream for non-essential services. This system is designed to provide long certainty to local units of government, avoiding the uncertainty of the annual legislative appropriations process. The plan sets a baseline in 2013 to create a back stop against unanticipated losses and provides 80 percent of that revenue replacement for non-essential services into the future. We truly

believe this approach delivers more clarity and certainty to local units of government while providing new opportunities for local growth.

Q: What do manufacturers need to do to secure the elimination of this tax?

Lt. Governor Calley: We have a big challenge ahead of us before this legislation can take effect. Because the plan converts the state tax and dedicates it to a local tax, the plan must be approved on a statewide ballot. That vote is scheduled for August of 2014. More importantly, if voters fail to approve the “last step” in the process, the legislation is repealed and there will be no tax relief for manufacturers. It is imperative that we get “Yes” votes on the ballot in 2014.

“This effort will require the involvement of every manufacturer.” Governor Snyder and I are calling on manufacturers to carry the day on approval of this ballot proposal. The challenge is substantial. It will take a multimillion dollar campaign to get “Yes” votes on this ballot proposal. I will be working with MMA as they work to support this campaign for competitiveness. This effort will require the involvement of every manufacturer, large and small. I want you to stand with me and your fellow manufacturers to make sure we win this ballot proposal in August 2014. This will be a very expensive endeavor. But a small investment now will yield many years of increased competitiveness for your company. I know together, we can continue to reinvent Michigan. Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by Michigan Citizens For Strong And Safe Communities

10 July | August 2013


Save Time. Save Money. Stay Informed. As a member of MMA, all employees in your company can take advantage of the tools and discounts MMA provides, including: • Travel Discounts • Informative E-Newsletters • Human Resource Services

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Advocacy Spotlight

MMA’s Political Mechanisms for our Pro-Manufacturing Agenda Mike Johnston serves as MMA vice president of government affairs with focus on tax, energy and general government affairs policy issues. He may be reached at

Weekly Advocacy Updates The MMA Capitol Report delivers legislative, regulatory and judicial news on state and federal issues affecting Michigan’s industrial sector. It is free to MMA members. Call 517-487-8542 or sign up online: > News & Info.

12 July | August 2013


MMA’s core mission in Lansing is advocating on behalf of manufacturers. We implement our advocacy efforts in several different ways, from issue education to support of candidate committees, to advocating the election of individual candidates. I would like to articulate the ways we work to promote a pro-manufacturing agenda to help highlight the mechanisms we have in place and how we can work together to achieve our advocacy goals. Most manufacturing issues are complex and require explanation and education for both policymakers and the general public who elect the policymakers. The MMA Advocating Issues for Manufacturing (AIM)Fund provides the resources to develop studies and educational pieces that help move our issues forward. The fund helpd commission the Anderson Economic Group study that indicated elimination of the industrial Personal Property Tax (PPT) would generate 20,000 to 45,000 new jobs and played a significant role in our successful legislative effort in December. MMA members can make contributions to our policy efforts in two ways. Companies can make corporate contributions directly to the AIM Fund or make additional dues contributions. Both contributions will support our pro-manufacturing issue advocacy efforts. Since these are not political activities regulated by the Michigan Campaign Finance Act, these corporate contributions are not publically reported contributions. Our political efforts are key to our advocacy efforts. There are many anti-manufacturing groups that are very active in elective politics. If we are not increasingly active in getting pro-manufacturing candidates elected, the landscape for moving our pro-manufacturing agenda becomes much more difficult. We now have another mechanism dedicated to making our manufacturing voice heard.

The MMA ImPACt Fund allows corporations to provide unlimited support to advocate for or against political candidates. The US Supreme Court approved corporate free speech in the Citizens United case a few years ago. We encourage members to take advantage of your free speech rights to advocate for or against political candidates. These funds are not contributed to political candidate committees. Contributions to this fund is required to be reported to the state. With these options, we encourage MMA members to support our efforts to move a pro-manufacturing agenda and support promanufacturing candidates. We have made several significant policy gains on behalf of manufacturers in the last few years, including the legislation to eliminate the industrial PPT that, if fully implemented, will save manufacturers over $500 million annually. In addition, accomplishments include saving members $300 million annually in unemployment insurance (UI) costs by leading the nation in reducing the benefit weeks from 26 to 20 weeks, eliminating the $3.2 billion deficit in the UI Trust Fund, helping the Snyder Administration eliminate over 1,300 burdensome regulations and countless other pro-manufacturing policy changes. With the tools provided to members, we will be increasingly successful in moving our manufacturing agenda. Together we can compete with those who oppose manufacturing success and ensure you are able to compete effectively on the basis of price in the global economy. Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by MMA ImPACt Fund

Make a Corporate Contribution to Support a

Pro-Manufacturing Agenda Manufacturers must make their voices heard. We must all become involved in driving our pro-manufacturing agenda. MMA truly is manufacturing focused and member driven and without you, our dues paying members, we would not have the legislative accomplishments nor the various benefits we have to offer.

Corporate Contributions for a

Pro-Manufacturing Agenda

Here are three vital ways MMA members can make corporate contributions to support MMA’s mission which, in turn, will support manufacturers in Michigan like you. For more information, contact MMA’s Adam Cowell at 517-487-8542 or Sincerely,

3 powerful tools to support manufacturers’ interests

MMA President and CEO


July | August 2013


MMA Dues Contribution Reporting Required: Supports:

No Manufacturing Issues

Calculating Dues Determine your company’s Total Stockholder Equity (retained earnings plus stock) allocable to Michigan. Data necessary is located on your company’s Balance Sheet. Use the schedule below to find the dues category for your company. There are no other dues or assessments. Stockholder Equity in Michigan



Under $1.5 million



$1.5 to $3 million



$3 to $5 million



$5 to $7.5 million



$7.5 to $10 million



$10 to $15 million



$15 to $20 million



$20 to $25 million



$25 to $35 million



$35 to $50 million



$50 to $75 million



$75 to $100 million



$100 to $150 million



$150 to $200 million



$200 to $250 million



$250 to $350 million



$350 to $450 million



$450 to $550 million



$550 million and over



All manufacturers seek to operate their business efficiently and economically with opportunity for fair profit. The MMA’s objective is to promote and maintain a business climate that makes it possible for employers to prosper, expand and compete in the marketplace. All MMA members support manufacturing in Michigan through the payment of dues.

MMA Membership Dues are based on a company’s Total Stockholder Equity (retained earnings plus stock, allocable to Michigan). A member company chooses a dues category and is invoiced at that level each year. A company can increase their support for manufacturing in Michigan by evaluating their stockholder equity and increasing their dues level or by making an additional voluntary dues contribution above their current dues level. Contributions made by way of additional dues are not required to be reported. Complete this form and return with a corporate check or credit card information to: MMA • PO Box 14247 • Lansing MI 48901-4247

Tax Notice

The portion of 2013 membership dues allocable to lobbying expenditures, and thus not deductible for federal income tax purposes, is 48%. Membership dues are not deductible as charitable contributions, although 52% may be deductible as ordinary business expenses. Dues, as approved by the MMA Board of Directors in December 2012, are payable in advance.

Contribute Today!

Corporate Information

Contribution Options q Dues

Company Name

q AIM Fund

q ImPACt Fund

Payment Method

Mailing Address

q Check Enclosed City



Card Number

q Visa

q MasterCard

q Discover

q American Express Exp. Date

Name Name on Card Title Signature of Person Authorizing Card Use Phone



14 July | August 2013


$ Amount Authorized


MMA ImPACt Fund Reporting Required: Focus:

Yes Candidate Support

Manufacturers are leading Michigan’s economic recovery. Corporate contributions to support a pro-manufacturing agenda can continue and accelerate this recovery. The MMA ImPACt Fund allows corporations to provide unlimited support for MMA to advocate for or against political candidates, however, the fund is prohibited from donating money directly to political candidate committees. Company name and dollar amount of contributions to the MMA ImPACt Fund are required to be reported to the State of Michigan under the regulations for this type of committee.

MMA AIM Fund Reporting Required: Focus:

No Issue Awareness

Education is key to achieving public support of manufacturing issues and companies can support a pro-manufacturing agenda by contributing to the MMA Advancing Issues for Manufacturers (AIM) Fund. The MMA AIM Fund accepts corporate contributions to support issue development and public messaging on pro-manufacturing legislation or issues. The fund can commission issue-related studies, develop awareness campaigns and educate the public, and policymakers, on the vital role manufacturing plays in our state. Contributions to the MMA AIM Fund are not required to be reported.

Paid for with regulated funds by the Michigan Manufacturers Association 620 South Capitol Avenue, Lansing, MI 48933 Authorized by MMA ImPACt Fund

Contact Adam: E-mail: Phone: 517-487-8542 Fax: 517-853-3342

Mail: MMA P.O. Box 14247 Lansing, MI 48901-4247 Web:


July | August 2013


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Manufacturing focused. Member driven.

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Manufacturing focused. Member driven.

16 July | August 2013


2013 Manufacturing Talent Summit Brings Together Stakeholders

Information-Packed Day Attendees of the 2013 Summit can expect a day full of best practices, hands-on experiences and opportunities to connect with others in their region. Summit attendees will receive a powerful, information-packed “Tool Kit” to help them cultivate collaborative partnerships and develop their own action plan to grow a career-ready generation of workers. “MMA is looking forward to continuing to build on the success of the 2012 Summit and respond to Governor Rick Snyder’s call for greater collaboration between

industry and educators,” said MMA President & CEO Chuck Hadden. “It’s imperative that we keep the momentum going and continue to highlight examples of programs that are bringing stakeholders together.”

Manufacturing Talent Champion Awards In addition to multiple panel presentations focused on examples of best practices, the Summit will feature the 2013 Manufacturing Talent Champion Award. The award program was established to recognize the outstanding contributions of an individual or an organization for their commitment to working with manufacturers to address the need for skilled workers. Information on the Manufacturing Talent Champion Award can be found on the MMA website: > Seminars & Events > Manufacturing Talent Summit. “The Talent Champion Award is a great way manufacturers can recognize and honor those who have partnered to change misperceptions about careers in manufacturing and develop a pipeline of skilled workers,” explained Hadden.

Register Early Registration is open for the 2013 Manufacturing Talent Summit. Members are encouraged to register early, not only to take advantage of the early-bird pricing discount but to secure their seat. The 2012 Summit greatly exceeded registration expectations and it’s anticipated that this event will again reach sold-out capacity.

Agenda Coming Soon! Contact MMA’s Adam Cowell at, or 517487-8542, to make sure we have your correct contact information. We will e-mail members the agenda for the 2013 Summit as soon as it is available.

Manufacturing Talent Summit


MMA remains committed to collaborating with stakeholders to create a pipeline of skilled manufacturing workers. Planning is under way for the 2nd annual Manufacturing Talent Summit to be held on Thursday, 10/24/13 at the Kellogg Hotel & Conference Center in East Lansing. The 2013 Manufacturing Talent Summit will bring together manufacturers, educators, school administrators, non-profit organizations and state agencies to focus on “Manufacturing a Career-Ready Generation.”

Manufacturing a Career-Ready Generation Insight

July | August 2013


Advocacy Updates MMA-Led Legislation for Merit Curriculum Flexibility Receives House Approval

Mike Johnston serves as MMA vice president of government affairs with focus on tax, energy and general government affairs policy issues. He may be reached at


Delaney McKinley serves as MMA director of human resource policy with focus on labor and other policy issues. Contact her at McKinley

Andy Such serves as MMA director of environmental and regulatory affairs with focus on environmental policy issues. He may be reached at


MMA applauded the Michigan House for passing legislation on 6/6/13 to create avenues for more in-depth, hands-on career and technical education (CTE) programs. House Bill 4465, sponsored by Representative Ed McBroom (R-Vulcan), and House Bill 4466, sponsored by Representative Joel Johnson (R-Clare), improve the flexibility of the Michigan Merit Curriculum to provide students with options to explore careers and gains skills to enter a 21st century jobs market. The MMA-driven bills passed by large margins and saw bi-partisan support as it now moves to the Senate. This legislation benefits manufacturers who are looking to fill more than 7,000 jobs statewide by creating avenues for more in-depth, hands-on CTE programs. By creating flexible options, Michigan graduates can have the option to enter the workforce with valuable vocational skills while still having obtained a well-rounded, relevant education. “This is a tremendous step forward in addressing the diminishing opportunities that students have to explore manufacturing careers through CTE courses,” said Delaney McKinley, MMA director of human resource policy. “We see this as a critical component to solving the deeply concerning shortage of skilled manufacturing workers.”

MMA-Supported Bill to Preempt Locally Mandated Sick Leave Passes Senate

Visit the MMA website to download a copy of the MMA 2013 Legislative & Regulatory Agenda:

18 July | August 2013


On 6/5/13, MMA-supported legislation to prevent local governments from mandating paid leave policies passed the Senate by a vote of 25-13. Senate Bill 173, sponsored by Senator Mark Jansen (R-Gaines Twp.), reacts to a wave of local ordinances across the country that requires employers to provide paid sick leave to their employees. By forcing employers into a one-size-fits-all paid-leave mandate, these ordinances make employers less competitive and create a patchwork of disparate requirements across the state.

“Decisions about employee benefits are best kept among management and employees, free of government interference,” said Delaney McKinley, MMA director of human resource policy. “Employers should be free to select leave options that best suit their workplace, balancing both the health and wellness of employees and the ability of the business to stay competitive.”

MMA Leads Fight to Exempt Manufacturers from Unnecessary and Expensive Regulation Senate Bill 358 was introduced by Senator Arlan Meekhof (R-West Olive) on 5/9/13 and has been referred to the Senate Reforms, Restructuring and Reinventing Committee. The MMA-supported legislation will remove the unnecessary requirement that manufacturers must obtain an electrical contractor license in order to perform electrical work in their own facility. It would also redefine “licensed electrician” as a licensed electrical contractor, electrical journeyman or master electrician. Current state regulations create unneeded burdens on manufacturers, including the requirement to obtain a license despite many manufacturing employers not acting a s contractors to the general public. Without the exemption provided in Senate Bill 358, Michigan manufacturers must become licensed electrical contractors even if they don’t do “outside” electrical contracting. A licensed electrical contractor must meet worker ratios and have an apprenticeship program dictated by the federal government. The bill is expected to be taken up in the Senate Committee and passed later this year.

HICA Tax Increase Blocked On 6/11/13, Governor Rick Snyder signed into law Senate Bill 335 (Senator Roger Kahn, R-Saginaw) which extends the life of the Health Insurance Claims Act (HICA) Tax, the 1 percent tax on health insurance claims for four more years. The tax has experienced consistent shortfalls and was slated to expire at the end

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of the year. The original version of Senate Bill 335 would have increased the tax rate and proposed to eliminate the sunset to repeal the law on 1/1/14, thereby passing the tax burden onto Michigan manufacturers indefinitely. Thanks to forceful advocacy efforts by MMA Government Affairs and member involvement, the bill was amended to remove the most onerous provisions of the bill. The redesigned Senate Bill 335 no longer increases the current 1 percent tax rate and pushes back, rather than eliminating, the sunset on the law to 1/1/18.

Hazardous Waste Fees Increase Blocked During the budget process, the House Appropriations Committee reported House Bill 4666 and House Bill 4708, both sponsored by Representative Eileen Kowall (R-White Lake), which will extend the hazardous waste management fees through the end of Fiscal Year 2014. The legislation extends the sunset requiring new fees for an additional year and it is now set to expire 10/1/14. MMA currently remains in negotiations with the Department of Environmental Quality on these fees. “By extending the sunset, manufacturers have a level of certainty in knowing what their costs will be,” said Andy Such, MMA director of environmental and regulatory policy. “This allows them the opportunity to pursue job creation and investment more easily than if they were hampered by an uncertain future.”

House Approves Spending to Crack Down on UI Fraud With the work on the Fiscal Year 2014 budget complete, the House began work on a supplemental spending bill that will adjust approximately $711 million worth of spending in the current Fiscal Year 2013 budget. The House passed the supplemental spending bill, House Bill 4112, on 6/6/13. Included in House Bill 4112 was the allocation of $1.8 million to the Unemployment Insurance Agency (UIA) to hire 15 new employees as part of the Expanded Fraud Control Program. The program would use the additional jobs to increase the agency’s presence at contested unemployment benefits fraud hearings. MMA supports these enhancements to the integrity of the employer-funded UI system and continued efforts by the UIA to crack down on fraudulent payments.

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Amicus Action

Defending Michigan Manufacturing Taxpayers Cynthia Filipovich is a senior attorney and the chair of the Appellate Practice Group at Clark Hill PLC. She specializes in appellate practice with an emphasis on federal courts of appeals nationwide. Her practice also includes trial litigation, including complex commercial litigation and product liability disputes. Gregory N. Longworth is a senior attorney of Clark Hill’s Litigation Practice Group. He specializes in litigation, focusing on business litigation, including complex commercial disputes, employment matters, intellectual property issues and real estate litigation.

MMA at Your Service

Let us know what issues you’re facing and what we can do to help you. The MMA Lawyers Committee is here to serve members of the MMA; here to serve you. We encourage you to join the Lawyers Committee to have a voice in legal cases of concern for manufacturers. For membership information, contact Andy Such, MMA director of environmental and regulatory affairs, at 517-487-8543 or

20 July | August 2013


“Nothing is certain but death and taxes,” wrote Benjamin Franklin to his friend Jean-Baptiste Leroy on 11/13/1789 to express his hope that our newly adopted Constitution would stand the test of time. Mr. Franklin would be pleased to know that the Constitution has stood the test of time for nearly a quarter of a millennium. But even he might be surprised by the scope and magnitude of taxes levied upon businesses and individuals in America today.

This month’s article involves one of Ben’s certainties: taxes. Don’t tune out … because the case has ramifications for many Michigan manufacturers as they seek to minimize taxes through lawful means by making beneficial elections about how to report deductions. You see, for purposes of the Corporate Income Tax Act — as well as the Michigan Business Tax Act and the Single Business Tax Act — the beginning point in calculating a taxpayer’s “business income” is its “federal taxable income,” which Michigan defines as “taxable income as defined in Section 63 of the Internal Revenue Code.” Section 63 of the Internal Revenue Code gives the taxpayer the option to make certain elections — for example, whether to write off the entire amount of research and experimental (R&E) expenses in a single year or, alternatively, write off those expenses over, say, 10 years. Lear Corporation incurred a substantial amount of R&E expenses a few years ago. Lear elected to deduct the expenses over a ten-year period on its federal tax return. But Lear elected to take the full deduction in the first year on its state tax return because that was more advantageous. The Department of Treasury balked. “You can’t do that,” Treasury said, even though Treasury had allowed other companies to do exactly that in the past. “If you are deducting the expenses over ten years on your federal return, you have to deduct the expenses over ten years on your state return, too!”

The Michigan Court of Appeals recently sided with Treasury on this issue in the case of Lear Corporation v. Department of Treasury. In effect, the court is requiring Lear to use the same taxable income number on its state return that it used on its federal return. The ruling makes no sense for several reasons. First, some states expressly do require a taxpayer to make the same elections on its state returns that it made on its federal return. Michigan does not. Instead, Michigan’s definition allows a taxpayer to make one election for federal tax purposes but a different election for state tax purposes. Second, the ruling makes no sense for taxpayers like Lear who file consolidated tax returns for more than one company. Michigan also requires consolidated returns, but the state and federal governments don’t use the same criteria for determine which companies need to be included on the consolidated return. In Lear’s case, it’s simply not possible to transfer a number from its federal return to its state return. Lear believes the court is wrong so it has requested that the Michigan Supreme Court review that ruling. The MMA supports Lear’s request and has filed a brief in support of the request. Our hope is that the Supreme Court will agree to hear the case and reverse the Court of Appeals’ ruling, giving the statute its plain meaning. The payment of taxes is, sadly, inevitable. But Mr. Franklin would no doubt agree that Lear and other Michigan manufacturers should not be required to pay more than is rightfully due. The MMA Lawyers Committee will continue to advocate forcefully on behalf of Michigan manufacturers.

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Member Spotlight Interview with David Maurer Humphrey Products Co. , Kalamazoo MMA Member since 1961

Connecting Michigan’s Past with its Future Kalamazoo-based Humphrey Products has a rich history, dating back to 1901 when the modern manufacturing industry was relatively new. The company, originally named the General Gas Light Company, was founded that year by Alfred Humphrey. With offices across the country and around the world, Humphrey was soon supplying over one million inverted arc gaslights used to light homes, offices and city streets worldwide. General Gaslight survived the struggles that plagued the 1930s and diversified into heating equipment, also manufacturing equipment for military use, during World War II. General Gaslight would eventually sell off its gas products divisions to focus

on the new technology of pneumatics and by the 1980s the company was very different from the one founded in 1901 — their focus had changed and so had their name, changing from the General Gas Light Company to Humphrey Products. One thing that has not changed in the company’s 112 year history is its connection to Michigan and to Kalamazoo. “We cannot imagine operating anywhere but in Michigan,” said Dave Maurer, Humphrey’s vice president of operations. Today Humphrey Products is a leading provider of custom engineered gas and fluid control solutions. While their products have changed, the family atmosphere of Alfred Humphrey’s

company has remained constant. It remains a small, privately owned company led by the founder’s great grandson Bob Humphrey. They enjoy a loyal workforce, where the employees’ average tenure is 17 years. They are a company that celebrates together during good times and stands together during rough times. Humphrey Products has survived and thrived through the same hard work, grit and determination that define all Michigan manufacturers. The innovative approach taken by Humphrey Products is beneficial to their customer base but also benefits the Michigan economy as their talent strategy gains traction.

Humphrey Products is a company that celebrates together during good times and struggles together during rough times.

22 July | August 2013


Member Spotlight “Manufacturing in Michigan is an industry with a bright future,” Maurer said. “With so many applications for new technology, we are getting to do very interesting things but Michigan faces a real challenge in ensuring people will be available to fill those jobs.”

today, manufacturing remains defined by the stereotypes of the past. “We aren’t talking about these career paths enough,” Maurer stated. “I think parents and counselors look at manufacturing as being the industry of their fathers’ and grandfathers’ era. It’s

“Manufacturing can provide a wonderful career path, but we must work with our peers in education to ensure that we are addressing both awareness and preparedness.” Maurer and the entire Humphrey Products team are avid community supporters and advocate for manufacturers to actively involve themselves in key issues like talent and workforce development. Maurer’s experience shows that, despite being Michigan’s largest economic sector

allowing educators and industry leaders to showcase the industry as a serious career option for students. “Our future success depends on preparing students for careers they may not even be aware of, let alone interested in,” said Maurer. “Manufacturing can provide a wonderful career path, but we must work with our peers in education to ensure that we are addressing both awareness and preparedness.” For more information about Humphrey Products, see Brett Garrish is a communications specialist with MMA. He may be reached at 517-487-8533 or

so much more than that today — a manufacturing career doesn’t restrict your future, manufacturing opens doors to discover what your career path can be.” For Humphrey Products, the solution to Michigan’s talent gap comes by promoting the positive side of manufacturing and

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Member News For more on each “Member News” story, see the MMA website: General Motors Exec Named Michiganian of the Year Dan Akerson, chairman & CEO of MMA member company General Motors, was honored by The Detroit News as the 2013 Michiganian of the Year. The award is due largely to Akerson’s work with Habitat for Humanity in rebuilding the City of Detroit. Akerson said he believes it is important for corporate leaders to be involved in their communities and help when they are able. Akerson was also honored as the 2012 Habitat for Humanity Sponsor of the Year.

DTE Energy Tops Pure Michigan Business Connect Spending MMA member company DTE Energy has spent $231 million with Michigan-based suppliers year-to-date,

exceeding its $191 million target as part of a commitment to the Pure Michigan Business Connect program. The energy company exceeded its 2012 target spending with Michigan-based suppliers by nearly 45 percent.

Amy Proos, owner and CEO of Proos Manufacturing

Dart Container Takes Great Strides in Polystyrene Recycling Dart Container is one of the nation’s leading manufacturers of polystyrene foam packaging. This foam, often being 95 percent air, becomes a challenge to store and later recycle. With programs designed to return the material to Dart once used — Dart’s Cups are Recyclable program, as one example — and its investment in on-site compactors called densifiers, Dart has become a major player in recycling the product they are famous for producing.

Proos CEO Announced as Finalist for Entrepreneur of the Year Award Proos Manufacturing owner and CEO Amy Proos was named a finalist for the Ernst & Young Entrepreneur of the Year 2013 Award in Michigan & Northwest Ohio. The Award recognizes outstanding entrepreneurs who demonstrate excellence and extraordinary success in such areas as innovation, financial performance and personal commitment to their businesses and communities.

Investment in Michigan Construction Begins on New Amway Facility Amway began construction on its facility near the company’s world headquarters in Ada. The manufacturer is investing $81 million on a 317,000 square foot manufacturing and warehouse facility and plans to add 200 advanced manufacturing jobs over the next three years, including 50 jobs when the plant opens in 2014. Operations are scheduled to begin at the Spaulding Avenue location, in 2015, where Amway will manufacturer NUTRILITE vitamins, minerals and dietary supplements.

“This new manufacturing facility is a reflection of the hard work of our distributors and employees,” said Steve Van Andel, chairman of Amway. “Thanks to their efforts, we’ve reported record sales for our products year after year. That increased demand is the driver for our $375 million global manufacturing expansion at seven sites around the globe. Four of the sites are located in the U.S., with two sites in our world headquarters community of Ada.”

Tell Us! Help us share the positive impact manufacturers have on Michigan every day. Send your success and investment news to 24 July | August 2013


Ralco Planning Auburn Hills Development Ralco Industries Inc., manufacturer of complex, tight tolerance metal stampings and welded assembly solutions, is planning an expansion in Auburn Hills, estimated at $13.5 million. The manufacturer has submitted plans to construct a new 125,000 square-foot world headquarters and manufacturing facility on 18.8 acres located along the north side of Taylor Road. Steven Cohen, director of community development for the city of Auburn Hills, said, “Ralco could have built this new facility anywhere in the Midwest, but they want to be here. That’s great news not only for the city of Auburn Hills but also the state of Michigan.”

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Your company is a member of MMA — and so are you! All employees of MMA member companies can take advantage of MMA discounts, services and programs.

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MMA is rolling out a new membership system to make it easier for you to take advantage of member discounts and services. The system will also allow you to customize your subscriptions.

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July | August 2013


Member Services Crystal Clean Adds Used Oil Re-refining to List of Valuable MMA-Member Discounted Services For more information about MMA Discount Programs and Services, contact Mark Lee, MMA member services manager, at 517-487-8532 or

Heritage-Crystal Clean provides the following discounted services to MMA members. • Parts Cleaning Services (Solvent & Aqueous) • Waste Minimization • Drum Waste Management • Environmental Audits • Crystal Cat™ Absorbent Products and Services • Water Filtration Services and Management • Manifest and Label Preparation • Vacuum and Used Oil Truck Services

HCC’s mascot Homer models the 2725 mobile aqueous parts cleaner

Heritage-Crystal Clean (HCC), a longtime leading provider of parts cleaning and industrial waste disposal services, has expanded its horizons even further by recently constructing and now operating its own oil re-refinery. This operation was originally set up to process 50 million gallons of used oil and produce 30 million gallons of base oil lubricating stock annually. However, plans are under way to increase that amount to 75 and an estimated 45 million gallons, respectively. For five years, MMA and HCC have partnered to form a program that affords MMA members a minimum 25 percent off of all HCC products and services, along with no-charge installation of equipment and waste profiles. These benefits will continue for members in addition to new used oil services. With an innovative mindset, HCC is always looking for ways to meet customer needs and exceed the expectations while doing so in a cost effective manner. HCC’s evolution has given customers mobile aqua filtration units and services (AFS) designed to prolong the life of water-based coolants and cleaners without reducing the effectiveness of these fluids but yet

decreasing odors and dermatitis and lessening purchasing frequency, all resulting in time and money savings for HCC customers.

“MMA Members Save a Minimum of 25% on HCC Products and Services.” Shorty after rolling out AFS, HCC launched the 2725 aqueous parts cleaner. This unit has the standard parts cleaner sink and brush on top but also opens up to a turntable and 30 jet sprays for cleaning to be done automatically on a fifteen minute cycle, allowing workers to get back to their duties instead of cleaning parts. This shop-ready, stainless steel unit runs on 110 power, sits on heavy duty casters and comes equipped with a specially formulated HCC chemistry, designed specifically for this HCC patented machine. The used oil, parts cleaning and waste disposal services are just the beginning of what continually puts HCC above the rest. Pair these with the many other reasons to choose HCC, and it’s easy to see why MMA has made HCC their vendor of choice. See the MMA website, > Services & Discounts > Parts Cleaning & Waste Disposal or,

to learn more about the company more than 50,000 customers have chosen to assist them with any and all of their environmental services needs.

Tell Us! Has an MMA service saved you time, money or made your job easier? Let us know! We are always interested in member feedback. Contact 26 July | August 2013


Upcoming Events Check out MMA Policy Committee meetings, training opportunities and other events of interest to manufacturers.







MMA Air Policy Committee Meeting, Lansing 517-487-8552


5 MMA Tax Policy Committee Meeting, Lansing 517-487-8552



























MMA Environmental Policy Committee Meeting, Lansing 517-487-8552

UIA Employer Super Seminar, Saginaw 12 855-484-2636 13

UIA Employer Super Seminar, Kalamazoo 855-484-2636

18 19 Changes Ahead‌


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3 MMA Environmental Policy Committee Meeting, Lansing 517-487-8552

UIA Employer Super Seminar, Lansing 9 855-484-2636 10


DEQ Air Permit-to-Install Application Workshop, Lansing deq


MMA Air Policy Committee Meeting, Lansing 517-487-8552

11 MMA Health Care Policy Committee Meeting, Lansing 517-487-8552


16 UIA Employer Super Seminar, Muskegon 855-484-2636



UIA Employer Super Seminar, Clinton Twp. 17 855-484-2636 18

12 MMA Lawyers Committee Meeting, Conference Call 517-487-8552

MMA Employment & Workforce Policy Committee Meeting, Lansing 517-487-8552







UIA Employer Super Seminar, Grand Rapids 855-484-2636



See for details on MMA seminars, meetings and the most up-to-date calendar of events or call 517-487-8557.

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July/August 2013 Michigan Manufacturing Insight