Mike Ilitch School of Business in the news

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The rise, fall and potential resurgence of unions in America

By Dorothy Hernandez  Marick Masters, a management professor at Wayne State University and labor expert, joins Detroit Today to discuss unions in America. He said corporations and labor both played a role in the decline of union membership, but the trade policies driving the U.S. economy are the primary culprit. While union membership has continued to decline in recent years, last month saw an increase in momentum for labor movements in Michigan. Both state congressional staffers and nursing home workers continued formal efforts toward unionization, continuing a spike in union worker petition filings nationally this year. “I would say the principal blame lies in the structure of the U.S. economy, which is dominated by the wealthy and those who have supported free trade policies, which has led to the exodus and off-shoring of jobs,” said Masters. “Treaties like NAFTA and our trade relations with China have cost lots of manufacturing jobs, which have resulted in the decline of unionized workers.” “I’d say that if we’re looking to place blame on the unions, it wouldn’t be so much that they did a poor job representing members. In fact, the opposite is probably the case,” he said. “They probably did too good a job in trying to raise wages and raise benefits to where the companies could not remain competitive with the onslaught of international competition with unfair trade rules.” 
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Wayne State students to conduct demographic study for Detroit auto show

By Kurt Nagl Wayne State University sociology students will be conducting a demographic study for the North American International Auto Show in September to give organizers a better idea of its audience. In addition to this student project, the university’s Mike Ilitch School of Business will host an executive speaker series with an emphasis on the issue of recruiting diverse talent in the automotive industry. The Detroit auto show, scheduled for September 14 to 25 will return to downtown Detroit for the first time since 2019. The new indoor-outdoor format seeks to attract a new type of audience and raises questions about how the event will fit in the industry’s show circle going forward. “Our partnership with Wayne State University is a great example of the community outreach we are undertaking this fall as part of the auto show,” Rod Alberts, executive director of the show, said. “Students will be directly engaged with the show, managing and completing a demographic study of the various audiences that the show attracts.” 
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Crain’s, Wayne State launch New World of Work professional development program

Experts in business management, organizational development and communications will facilitate a new professional development certification program designed to help mid-level managers navigate the changing workplace. Crain’s New World of Work will feature instructors from Wayne State University and guest speakers from the metro Detroit business community. The program includes 28 hours of instruction over eight weeks in a hybrid model. Participants who complete the program will receive a leadership certificate from Wayne State University. Crain’s New World of Work was designed in partnership with the university’s Executive and Professional Development team.  
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Inflation 101: What Americans can expect from rising inflation rates

The Federal Reserve has begun to raise interest rates – in the hope of cooling off the economy – to slow inflation. You have noticed that prices are going up. Gasoline at the pump, fruits and vegetables at the supermarket, and more or less all other products, suddenly cost more money. That is inflation. Experts provide context for the factors that drive prices up. Alan Reinstein, CPA, George R. Husband professor of accounting at Wayne State University, identifies a factor specific to the United States: deficit spending. “For an extended period of time, Reinstein observes, “under both Democratic and Republican administrations,” the government has spent far more money than it has taken in taxes. “The Federal Reserve increases the money supply to fuel deficit spending, feeding inflation,” Reinstein adds. Because, by definition, “inflation occurs when too much money chases too few goods, thus raising prices,” the increasing money supply generates inflation.  
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Union interest grows in Michigan in response to COVID, wage concerns

From Amazon to Google and Starbucks, workers at more and more major companies are seeking union representation, some more successfully than others. After workers at Buffalo Starbucks locations voted to unionize in December 2021, a wave of union interest spread in Michigan and around the country. According to the National Labor Relations Board, union petitions were up 57% in the first half of the fiscal year from Oct. 1 to March 31. Marick Masters, a professor at Wayne State University’s Mike Ilitch School of Business, has written extensively on labor issues and says that despite the measurable uptick, union membership in our state is still nowhere near what it used to be. “In 1960, 50% of workers in Michigan were unionized,” he said. It’s currently around 15%, when the private and public sector are combined. “So this is perhaps a tipping point, but it’s too early to tell whether or not this represents a sea-change in union success, either in Detroit, statewide, or nationally,” Masters said. He believes the COVID-19 pandemic was a huge catalyst for the recent wave of union interest. “There’s no doubt that the workers across the nation at Starbucks saw this as an opportunity and wanted to take advantage of it as quickly as possible. And I think that’s one of the reasons why they’ve had success,” he said.  
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Fuel sippers are moving fast while gas guzzler vehicles stay on the lot

By Lindsay Moore  Gas prices are influencing car buying preferences according to the latest inventory reports showing that compact cars are moving faster than their larger counterparts. A record high $5 per gallon nationally have curbed spending patterns, according to Cox Automotive. Cox’s new vehicle inventory report for May showed compact cars are staying on the lot for less than 20 days, while full-sized SUVs and trucks have more than double the days on the market. Chip shortages have now cost the auto industry 2 million vehicles that won’t be recouped. Car makers are still prioritizing high-end, high-margin models instead of entry-level vehicles. This ripple effect has shown up in the inventory data, too. Drivers can see the effects of the semiconductor shortage right on the road – or rather the parking lot. The semiconductor supply chain has improved but new production will take at least two to three years to really make a dent in production, said John Taylor, chair of Wayne State University’s department of marketing and supply chain management. “If you use semiconductors, you’re scrambling,” he said.  
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Car inventory is so tight new vehicles ‘never really touch the lot’

Car buyers will need some patience this summer as new and used vehicles are still slow to get on the lot. The car buying experience will feel more like a layaway purchase than a quick exchange negotiation as most cars that land on the lot have been claimed in advance. Pre-ordering has become the norm. Deliveries to the dealership have been slow to recover, although they have tripled since the beginning of the year. The backlog is starting at the auto plants. The summer of 2022 does look better than last summer in terms of lost production, said John Taylor, chair of Wayne State University’s department of marketing and supply chain management. Alternate suppliers, flexible design and reduced functionality have boosted production this year. “Time cures a lot of problems,” Taylor said. “Eventually, we’re going to get out of this. It’s still not going to be great for 2022 and 2023, but there’s some improvement.”  
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Workers at 11 Starbucks stores in Michigan vote on unions

A Starbucks store in Grand Rapids last month became the first in the state to unionize amid a broader organizing effort at the country’s largest coffee chain. Now, workers at nearly a dozen other Starbucks stores in the state are poised to determine whether they’ll join a union that has racked up dozens of wins across the country in the past six months. Voting in union elections administered by the National Labor Relations Board is scheduled for Tuesday at five stores in Ann Arbor and Thursday at five others in Clinton Township, Flint, Grand Blanc, Lansing and East Lansing. A store in Ypsilanti will vote on June 17. “This is a significant movement for the labor movement as a whole and the retail industry in particular. It reflects a potential change in the climate that is more favorable toward unions, particularly among younger workers,” said Marick Masters, a professor of management at Wayne State University who is working on a book about organizing efforts at Starbucks and Amazon. “The unions have had a great deal of success so far in winning certification of elections at various sites in which they petitioned to organize.”
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UAW pushes to represent battery plant workers in Ohio

The United Auto Workers said it’s moving forward with attempts to unionize a joint-venture battery cell plant after pushback from Ultium Cells LLC, a company General Motors Co. and partner LG Energy Solution own. UAW-GM leadership attempted to establish a card-check agreement with Ultium Cells that would give the union access to the facility to collect cards as a way to organize the plant, UAW Vice President Terry Dittes told local leaders in a letter. Ultium Cells employees are not covered by the national GM/UAW contract. Rejecting the union’s ability to collect cards from employees to confirm union representation complicates the effort to unionize the plant. Another path would be a vote by employees to decide if they want union representation. The vote would be monitored by the National Labor Relations Board. “The bottom line is that if you go with the secret ballot election route, it’s more difficult for the union to win recognition,” said Marick Masters, a professor at Wayne State University’s Mike Ilitch School of Business.

How to fix the U.S. baby formula shortage

The ongoing shortage of powdered baby formula in U.S. stores has been caused in part by pandemic-related snags in the global supply chain and high inflation. But it’s also been exacerbated by product recalls from Abbott Nutrition, the largest supplier to the U.S. market. Amid the nationwide shortage, desperate parents have been crossing states and scouring social media for supplies, or making DIY formulas, which can be dangerous to babies’ health. “It is shocking that the U.S. baby formula market is so vulnerable, that the closure of a single factory throws the entire country into a food crisis,” said Kevin Ketels, who researches and teaches supply chain management with a focus on health care at Wayne State University. President Biden has invoked a wartime measure to give formula makers first priority from ingredient suppliers and has ordered military-contracted planes to fly in product from overseas. While it’s difficult to predict how the federal government and industry will prevent a formula shortage from happening again, it is quite possible there will be a shake-up of the players involved. “It seems that more companies will be allowed to sell because of this emergency,” Ketels said, adding that foreign suppliers who already meet the FDA’s nutritional standards (and who have significant production capacity) make ideal candidates.  
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Wayne State names Virginia Franke Kleist dean of Mike Ilitch School of Business

By Jake Bekemeyer  Wayne State University has selected Virginia Franke Kleist to serve as the next dean of the Mike Ilitch School of Business after a seven-month national search. The WSU Board of Governors approved the appointment that was announced by Provost Mark Kornbluh. She will begin at Wayne State on July 11. Kleist succeeds Robert Forsythe, who will remain as dean until Kleist’s arrival. “We had a number of outstanding candidates for this highly-coveted position, but Virginia’s extensive leadership experience and her preparedness stood out,” said Kornbluh, WSU provost and senior vice president for academic affairs. “She also has a proven track record in supporting faculty research, creating innovative programs, and growing graduate and undergraduate enrollments. And perhaps most important, she has a passion for students like ours with limited resources, but lots of grit.” Kleist comes to Wayne State from West Virginia University, where she served as the associate dean of graduate programs, research, and academic affairs and a professor of management information systems at the John Chambers College of Business and Economics. 
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UM, Wayne State name new business school deans

By Kurt Nagl Two business schools in Southeast Michigan have appointed new leadership. Wayne State University named Virginia Kleist as the new dean of the Mike Ilitch School of Business, taking over for Robert Forsythe, who has held the position since 2014. Kleist, who comes to Detroit from West Virginia University, begins her new role July 11. Forsythe will take an administrative leave before returning to the faculty. In her previous job, Kleist was associate dean of Graduate Programs, Research and Academic Affairs and professor of Management Information Systems at the John Chambers College of Business and Economics. “We had a number of outstanding candidates for this highly-coveted position, but Virginia’s extensive leadership experience and her preparedness stood out,” said Mark Kornbluh, Wayne State provost and senior vice president for academic affairs.

Nation’s baby formula shortage continues even with shipments from Europe

A shortage of baby formula started in the early days of the pandemic and has only worsened after a plant in Sturgis, Michigan was shut down earlier this year. With low stock and high demand, the lack of available baby formula has created a crisis for parents reliant on the infant food source. Supply chain experts point to several factors leading to the shortage – including the concentration of production. Only a handful of companies are approved makers of baby formula in the United States by the Food and Drug Administration. To alleviate the crisis, the Biden administration invoked the Defense Production Act to boost domestic production of formula. Kevin Ketels, assistant professor of teaching in global supply chain management at Wayne State University, participates in a discussion about what families need to know about the shortage, how the industry operates under a consolidation of production, and what else the Biden administration is doing to alleviate the crisis. Ketels discusses how long it would take for factories to get more formula on the shelves at stores. “What we’re looking at is a consent agreement for the Abbot facility in Sturgis, Michigan to start back up. They have to go through some procedures to get started. Once they get started, they’ve told us it will be about 6-8 weeks before formula starts to hit shelves. The facility hasn’t been restarted yet, it’s expected in the next week or week and a half, so it’s going to take a little bit of time before we start to see the impact,” he said. “They have to line up all the resources and make sure all protocols are followed. They have to go through the production process and the distribution process, and that takes a long time. I think that everyone is going to go as quickly as they can, but they also don’t want to cut corners because we’ve got to make sure that quality and safety are 100%. Everyone’s going to be watching very carefully to make sure we don’t have any more problems and we don’t have any more babies who are adversely affected.”  
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Baby formula industry was primed for disaster long before key factory closed down

By Kevin Ketels  Kevin Ketels, assistant professor, teaching, of global supply chain management at Wayne State University’s Mike Ilitch School of Business wrote an article for The Conversation analyzing the factors that have contributed to the baby formula supply chain issues, which have left retailers with dwindling supplies and parents across the country traveling or paying exorbitant sums of money to obtain formula for their babies. Ketels says that the conditions that led to a shortage of baby formula were set in motion long before the February 2022 closure of the Similac factory tipped the U.S. into a crisis. News that the Food and Drug Administration and Similac-maker Abbott have reached a deal to reopen the formula factory in Sturgis, Michigan, is welcome news for desperate parents, but Ketels says it will do little to alleviate the shortage anytime soon – in no small part because of the very nature of the baby formula industry. “The closure of the factory may have lit the fuse for the nationwide shortage, but a combination of government policy, industry market concentration and supply chain issues supplied the powder,” he writes.  
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Small businesses shift gears to compete for seasonal workers

For small business owners who depend on the warmer months for the majority of their revenue, time is money. From landscapers, restaurants and summer camps to house painters, public relations firms and swim clubs – they all need additional help each summer. And they’re all competing for a smaller pool of workers, whether it’s students on break or adults looking for full-time or supplemental income. Businesses are using financial incentives like higher pay and signing bonuses as well as some now-sought-after perks like flexible hours and hybrid office-remote work models to attract talent. Adding to full-time payroll takes away some flexibility, according to Matt Piszczek, Wayne State University assistant professor of management. Still, Piszczek, who specializes in employee relations and human resource management, sees seasonal employment as a major benefit to small business owners because it allows them to avoid hiring too many full-timers who may not be needed in the off-season. However, small and seasonal businesses are facing new staffing problems, Piszczek said. “Businesses are generally facing the opposite problem. They need more full-time staff over the long term, not just temporary help over the summer,” he said. “Competition for seasonal workers will be stark this year, but rather than thinking of them as a stopgap to wait out the ‘Great Resignation,’ businesses may want to consider this as an opportunity to convert some of those seasonal workers into permanent employees in order to fill now-persistent gaps.”  
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Hyundai EV plans in Georgia reflect watershed moment for auto industry

By J. Scott Trubey and Kelly Yamanouchi   Ford announces an electric vehicle manufacturing mini-city in Tennessee. General Motors unveils a $7 billion road map to build EVs at plants across the Midwest. An electric upstart picks Georgia for a truck, SUV and delivery van plant. Peach State leaders prepare to uncork a second multibillion dollar EV plant near the coast. Factories to make EV batteries spring up in Georgia and across the South. After years in which Tesla was a lone standout in battery-powered cars and the rest of the industry appeared mired in the slow lane, the biggest vehicle brands are suddenly placing future-defining bets. “We are definitely at a watershed moment, at a tipping point in the automobile industry,” said Kevin Ketels, an assistant professor of global supply chain management at Wayne State University in Detroit.  
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First Starbucks in Michigan to reveal union vote as others set elections

A Starbucks store in Grand Rapids is poised to be the first in Michigan to count votes for unionization, while more than half a dozen others in the state have set election dates. Staff at Workers United are confident the vote will be in favor of unionizing. On Monday, the National Labor Relations Board authorized four stores in Ann Arbor and one each in Grand Blanc, East Lansing and Flint to hold elections. Workers United was notified that a total of 10 stores in Michigan have been approved for election dates in early June. Seattle-based Starbucks has more than 15,000 locations throughout the U.S. Since the recent wave to unionize began in December in New York, more than 50 stores have voted to unionize, while hundreds more are poised to vote soon. Employees have demanded higher wages, better working conditions, and a platform to voice worker interests. On the other side, CEO Howard Schultz has taken a strong stance against unions and said the company could not have grown into a globally famous coffee behemoth with the restraints of organized labor. The Starbucks unionization effort has the potential to rekindle the labor movement in the U.S., and organizing in Michigan, once a union stronghold, has symbolic significance, said Marick Masters, former director of Wayne State University’s labor relations department and current interim chair of the department of finance and business. “If you combine it with some recent successes that unions have had at Amazon, I think that they have the potential to be transformative in the sense of really rekindling the labor movement, but we are a long way form that type of rejuvenation.” Unionization is only half the battle, Masters said. Winning better benefits for employees will be a tough go. “There are serious challenges that the union will face in trying to represent workers at Starbucks sites,” he said. “Their management team is going to become more aggressive and sophisticated in resisting in these campaigns. They’ll resort to a whole bag of tricks to discourage workers at other sites from unionizing.”
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Detroit studies plan to reduce the fiscal ‘penalty’ of residency

By Malachi Barrett  Detroit is looking at policy changes to ease the “unsustainable” tax burden it places on residents and to deter land speculators from snapping up and sitting on vacant property. Varying tax rates – higher for open land and lower for structures and improvements – could reduce tax bills for homeowners and accelerate the development of long-vacant properties, according to a study cited by the city as it investigates how to bring down residential property taxes. The “split-rate” system has attracted interest from city leaders for years, dating back to when Detroit filed for bankruptcy in 2013, and is getting a renewed push. Matthew Roling, an adjunct professor at Wayne State University with past experience at the Detroit Economic Growth Corp. and Rock Ventures, said he’s encouraged city officials are looking at innovative ways to prevent tax delinquency and foreclosure that is “burning out” neighborhoods. “I don’t know if it’s going to be a silver bullet,” Roling said. “The devil is in the details. There is a huge problem here and it’s that the property tax regime in the city of Detroit has failed the city. Let’s start with that.” 
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He was a CEO at 20 and a Wayne State University graduate at 21

There’s an undertone of panic beneath the stirring sounds of “Pomp and Circumstance” at your average college graduation ceremony – the knowledge that after the well-earned joy of the occasion, there’s that tricky business of finding a job. Zeeshan Tariq graduates Saturday from Wayne State University’s Mike Ilitch School of Business, and his concerns are a bit different: How’s the work crew doing on those new porches at the apartment complex in Troy? And has anyone dealt with the bathroom door in unit 17 that won’t all the way shut? In 2020, Tariq sold off the last of his 10 residential properties in Detroit, and is concentrating on the apartments he co-owns in Troy and Linden while he crunches numbers to see what might be worth acquiring next. Tariq, now 21, bought his first house at 17, when he was a senior at Farmington Hills Harrison High. Bussing tables at a Middle Eastern restaurant while slinging boxes at a grocery store during summer breaks, he amassed $6,500 and paid all but $500 of it for a bungalow on the west side of Detroit. He sold the home a year later for almost $30,000. Tariq estimates that his real estate company Tariq Development Co., LLC has bought, sold or consulted on more than $10 million worth of property. Tariq says his unofficial charge to the rest of the class of 2022 is “Do the right thing. And do what’s in front of you.”  
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Michigan public colleges work to plug pandemic 'leaks' that hit enrollment

n the third year of the COVID-19 pandemic, Michigan's public higher education institutions have found themselves in a landscape rife with challenges, some long-anticipated, others entirely now. Enrollment in Michigan's public institutions overall took a downward turn during the pandemic, dropping 6.24% between fall 2019, when 280,490 students enrolled, and fall 2021 when 262,985 students enrolled. The landscape of higher education has changed, including class modality. Despite a push for in-person classes, assistant dean Kiantee Rupert-Jones said remote and hybrid classes will remain at the university's Mike Ilitch School of Business due to student demand. "Our students are usually working full time or have family obligations. So they're looking for flexibility and online and hybrid classes," she said. "And so at the graduate level, that's what we're offering, because we'll see an even greater decline in our enrollment if we don't offer that type of flexibility." Wayne State University bumped tuition for first-year undergraduates by 3.83%  for the 2021-22 school year after freezing tuition for 2020-21. Annual tuition for lower-division resident undergraduates at WSU for 2021-22 was $14,043. "It was a priority for us to keep any increase to the lowest level possible while not jeopardizing academic and student resources and investment," said Mark Kornbluh, Wayne State's provost and senior vice president for academic affairs. "Also, there was a significant increase in financial aid over this period." Between 2020 through 2022, WSU increased its commitment to financial aid by $16.6 million dollars, an increase of 21%.