>> Can northwest Indiana survive
economic industrial change?
Steel and factory jobs,
retail, service industry jobs,
are they threatened by
neighboring counties,
states, or even countries?
When an entire region
depends on smokestacks,
there may be limitations on
embracing high technology
and encouraging higher education.
But time waits for no one.
So northwest Indiana has no
choice but to adapt and innovate
in the heart of the Rust Belt.
Will northwest Indiana
thrive, survive, or dive?
This is CounterPoint
with Garrard McClendon.
(gentle music)
Will northwest Indiana
survive, thrive, or dive?
Thank you for watching CounterPoint.
Give us a call at 844-777-9311.
Send me a tweet @garrardmc,
or send me a Facebook
comment at GarrardMc as well.
The CounterPoint.
Micah Pollak, Professor of Economics
at Indiana University Northwest.
I've got Joseph Pete from
the Northwest Indiana Times,
and Ty Warner from NIRPC.
Thank you for joining us at
the CounterPoint, gentlemen.
I really appreciate you
stopping by to talk about
such a topic that is timeless,
as well as being timely,
in that we're going to
get our crystal balls out
and see what we could prognosticate
for northwest Indiana economics.
So, I've got 300 questions.
I'll probably only get to three.
>> Ty: We may have 400 answers.
>> That's good.
So we'll just have to go Part
Two, Part Three, Part Four.
Let me get some intro, first though.
First of all, Ty Warner,
explain what you do at NIRPC.
>> Sure. NIRPC is the
Northwestern Indiana
Regional Planning Commission.
It's the council of governments
for northwestern Indiana.
It covers Lake, Porter, LaPorte
county, 41 municipalities.
Basically, it's the place
where all those municipalities
come together on a regular
basis to talk about things
that are bigger than any one of them.
What most people know us for in the region
is our designation as the MOP,
or Metropolitan Planning Organization.
That's a federal
designation that has to do
with the distribution of
federal transportation funds.
So major road, trail, transit projects,
that money gets funneled through NIRPC.
>> Good, good.
Joseph Pete, Northwest Indiana
Times, business reporter.
What does that mean?
I mean, we've read articles
from business reporters,
but what's your chief responsibility?
>> I mainly cover steel and
heavy industry, like automotive.
But I cover a wide array of
industries like groceries,
banking, craft brewing,
the high-tech start-ups.
If it's business in northwest
Indiana, I cover a lot of it.
>> Excellent, excellent.
Micah Pollak, Indiana University Northwest
Economics Professor.
Macro or micro economics?
What is your field of
interest in economics?
>> My field is mostly micro-economics,
but I'm becoming increasingly interested
in regional economics, being
here in northwest Indiana.
It's a fascinating place to
study regional economics.
We have such an interesting
economy and history.
>> Gentlemen, let's start
out by asking this question.
Are we relegated to
retail and service jobs?
There was a time when
30, 40,000 workers worked in those mills.
You know, USS, and at
the time back in the day,
it was Inland, it's ArcelorMittal now.
But then shopping malls popped up,
and casinos popped up, and
suburban areas popped up,
and then steel industry kind of decreased.
Are we relegated to just
retail and service now?
Who wants to start us off?
>> Well, we did have
more bad news coming out
of ArcelorMittal today, unfortunately.
Well, it's kind of mixed actually.
They had their quarterly earnings report,
and they announced they are
restarting a blast furnace
at ArcelorMittal Indiana
Harbor in East Chicago.
However, they are going to be
idling several finishing lines
including the illuminizing
line, the galvanizing line,
the steel shop, and the hot
strip mill, and the 84 inch.
While that's not, there
won't be any lay-offs.
They're going to lose
jobs through attrition.
That's more jobs won't
be there in the future.
As recently as the 70s
we had 70,000 good paying
steel jobs here in northwest Indiana.
Now it's dwindled down to about 20,000.
There's been wave after wave of imports,
but the biggest change is automation.
Just so much more of it is automated.
Some of those trains go
through there hauling,
like the coke and coal,
and they're not operated
by anybody anymore.
It's just all, it's a robot train.
We don't have people
manually shoveling coal
into blast furnaces or manually
unloading iron ore boats.
It's just the job opportunities
that were once there,
where you could literally come
in off a train with a bundle,
and just walk into the mill
and be hired on day one, don't exist.
>> I really appreciate
you setting us up there,
because I want to go to
Professor Pollak next,
in terms of the gross
metropolitan product.
I really want you to talk about this GM,
as opposed to the GNP,
and then we'll relate it later
to what Joseph Pete just said
about some of those roles
at ArcelorMittal being idle.
What is the GM?
>> Absolutely, so Gross Domestic Product,
a lot of people are familiar with,
is the value of all the goods and services
produced by the nation,
or by a larger group, like a state.
And so we've recently started publishing
Gross Metropolitan Product,
which is a measure of the
value of the goods and services
produced here in northwest Indiana.
It's the same kind of economic variables
that you look at
nationwide to track growth
and our quality of life.
We're starting to track them
here in northwest Indiana,
so we can see how our economy is changing,
and measure it over time,
and track and forecast where it's going.
>> So, Ty Warner.
You have to fill some
very, very large shoes,
being the executive director of NIRPC.
I've done some consulting
for NIRPC back in the day.
I used to be the program manager
for an urban enterprise association.
So I've spent lots of
time in that building.
What's your responsibility when
it comes to infrastructure?
When it comes to making
northwest Indiana more amenable?
More attractive?
What is the executive director
of NIRPCs responsibility
as it pertains to somewhat of a fallout
of what these gentlemen
were talking about?
>> Sure. In addition to the functions
that I mentioned before,
NIRPCs got this role of a
regional planning agency
that tries to cast a vision
for northwestern Indiana.
So it tries to say where's
the whole region headed?
And what's the collective input of folks
all across this region?
>> So there's a vision?
>> Ty: There absolutely is.
>> There's a vision for northwest Indiana.
>> Ty: There's a vision.
(laughter)
>> Okay, so, when it
comes to board meetings,
when it comes to you
speaking with your staff,
holistically, what is that vision?
>> In a nutshell, it's
to make a more vibrant,
accessible, united,
and revitalized region.
That's the capsulized statement.
But getting to that point was a process
that involved thousands of people
all across northwestern
Indiana to come up with that.
That was inculcated in
something called the 2040,
so the year 2040
comprehensive regional plan.
And that takes us out with a whole series
of goals and focus areas to try to say,
if we're going to get to that end state,
here's all the things that
we have to get in line
to work together to do to get us there.
>> I know it's the
Northern Indiana Regional
Planning Commission.
>> Ty: Northwestern.
>> Northwestern.
So it's northwestern,
but are you getting
support from down state?
Or do you even invite it?
>> We have a great
partnership with Indianapolis.
We work a lot with the Indiana
Department of Transportation,
and I'd say that relationship
is getting better all the time.
So, you know, I've said this before,
I think in northwestern Indiana's history
is sometimes easy to kind of whine about,
because, and I think there
was some truth to this,
that Chicago and people
on the Illinois side,
and that's where most of my career was
before coming to NIRPC,
would overlook northwest Indiana,
because it's another state,
so they didn't think about it.
>> Gerard: Da region, da region.
>> Right, exactly. So it's over there.
Then Indianapolis, we get
it from down state as well,
because they say, well
we don't really think
about northwestern Indiana
because that's Chicago.
But that's changing rapidly.
There's a lot of stuff that's
happening by state now,
and a lot of stuff
that's happening through,
I could go into things like
the regional cities initiative
that have helped tell the
story of northwestern Indiana,
so that folks in Indianapolis say,
this is our gateway to the
Chicago economy for the state.
>> Got you. So I want to,
I'm trying my best to remain optimistic
as I go to Joseph Pete from
Northwest Indiana Times here.
(laughter)
>> Ty: Stay optimistic!
>> Joseph: Bring it crashing down, now.
>> You know, how steel capacity
utilization is under 70% now,
and how employment in
the industry has fallen,
from what you said earlier, the 30 thou,
so is there,
is there a bounce back,
as a reporter of business of
these industries, Joseph Pete,
do you see other ways of
northwest Indiana leveraging,
is there an advantage
in some of this despair.
I know you're a reporter and
you have to deal with facts,
but I'm just asking you
right now to commentate.
>> Oh, absolutely. Well, they have,
while heavy industry, you
know, what we're known for,
has been declining, the economy
is diversifying somewhat.
We are seeing a rise in steels
commodity manufacturing,
but we're seeing a rise
in advanced manufacturing.
We have innovative companies
like Pratt, MonoSol, Fronius.
MonoSol just here in Merrillville,
they make the dissolvable film
for the wildly popular Tide Pods.
They've revolutionized the way people do,
for Proctor & Gamble in
Cincinnati, a Fortune 50 company,
they've revolutionized the way
people all over the world do
their laundry and their dishes.
We have Pratt Industries out of Australia,
they just invested 250 million
into one of the world's
largest recycled paper
mills in Valparaiso.
We have, there is a lot of investment
and there's a lot of good things.
But the difference is these steel mills
had employed like 20, 30,000 people,
and these companies,
while they're successful,
and they're prospering,
and they're investing,
they don't employ anybody at the scale.
You know, they're still
hiring manufacturing jobs,
and they're still good paying jobs,
but we just don't have the same scale
that that we did with the mills.
>> I love those pods.
Those make my life so easy.
You know, I don't mind washing dishes
or doing the laundry with those,
you know, it just makes it,
you don't have to do any
measuring or anything.
>> We should have pride in what
we make in northwest Indiana,
we make the Build-a-Bear machines,
we make a lot of different
things here, it's not just steel.
>> Yeah. So, I've got about one
minute left in this segment,
so I've got to ask you, and
I'll continue this, Dr. Pollak,
the Indiana Coincident Economic Index.
What is this ICEI? What is this?
>> So that is the background
index that we use to construct
things like the Gross
Metropolitan Product.
It's and index that
measures, in a single number,
it was 143.0 back in September,
is the most recent value,
the health of northwest Indiana's economy.
And we can track it up and down,
month-to-month, year-to-year,
and keep an idea of how
the economy's doing.
>> You can track it month-to-month?
>> Yep, go on our website,
and we publish it every month.
You can go and see the
latest value edition,
it gets published in the Times as well,
so you can go on and track it yourself.
>> Is that index just
for a nerd to look at?
How does that--
>> No, that--
>> I mean how do--
>> No!
>> So I ask that question because what if
the every day retail worker
takes a look at that,
what are they going to get out of it?
>> Absolutely. They can compare
this month to last month.
Last month it was 143.1,
so it went down .1 points,
which means our economy
shrunk very slightly
between August and September.
And so you can just go online,
you can look at the number each month,
and it will give you an idea
whether things are improving,
and also we include a forecast
for the next six months as well,
so you can see how the forecast changed.
>> Man, you know, I'm so glad
the three of you came in today.
And we're going to break here shortly,
but I'm just excited,
because so often we get
this grim representation
of what northwest Indiana
is in terms of the horizon,
but I think that there's
a ray of optimism here.
And so, you three gentlemen hold on tight.
Thank you for watching CounterPoint.
We will be back shortly.
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Tweet me, post on Instagram
or send me a message on Facebook.
Let's start the conversation.
Your voice is important on CounterPoint.
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>> Can Northwest Indiana thrive
in a world of massive competition?
Thank you for watching CounterPoint.
Give us a call at 844-777-9311.
Tweet and send Facebook
comments to GarrardMc.
I've got Micah Pollak,
Joseph Pete, and Ty Warner
joining us at The CounterPoint.
Gentlemen, let's continue
the wonderful discussion
about northwest Indiana and industry.
I want to look at something
that I've been thinking
about for quite some time.
Ty, from NIRPC, should
mayors in northwest Indiana,
should they spend more time talking to you
about some of the trends taking
place in northwest Indiana?
Oftentimes it seems like mayors are on,
mayors, town managers,
it seems like they're
on these islands alone,
and northwest Indiana
can be very polarized
to say the least, right?
17 communities, no one can really
agree on anything at times.
So when the mayor of Gary
or the mayor of Hammond,
or the town manager of Merrillville says,
what can we do here, we need analytics,
can Ty Warner and the NIRPC crew help me?
What do you say to that?
>> Well, absolutely. I mean
the whole reason for NIRPC
is so those folks have
a place to come together
and be able to share
that kind of information.
In fact, a lot of the stuff
that happens at NIRPC is just that.
It's a forum where folks
from one community learn
from another community,
and say, hey that's a great idea,
maybe I can learn from that
and implement something in my own town.
So that's exactly the forum
where that takes place.
>> Is there ever any purging, though.
So let's say a big company is
looking at northwest Indiana,
and so they say, hmm,
Portage looks interesting,
so does Valpo, but
Hammond's got extra land.
Do you steer them one way or the other,
or can you be the person
to just facilitate and say,
why don't you look at all three?
>> Well, a couple ways to answer that.
I mean, we all work together
with partners all across the region,
so the Northwest Indiana Forum,
who we're co-located with,
they would be more involved in helping to
tell a company that wants to
locate in northwest Indiana,
here's some options,
here's some other people
you should talk with.
We provide the infrastructure
and the backbone
that might provide the places
for those companies to want to locate,
you know, if they need to look
for a particular rail spur,
they need to look for
an interchange location.
We're providing the infrastructure,
other groups are helping to steer that in,
groups like the Regional
Development Authority
are providing other amenities
that's making that
attractive for a business.
So everybody's working
together to make that happen.
And I've got to say, just to
come back to your question,
about the polarization and all that,
I think that's changing
rapidly in northwest Indiana.
>> Garrard: You think so?
>> Absolutely.
So it's even better news than
just the 17 you mentioned,
It's Lake, Porter, and LaPorte
County, 41 municipalities
that are all working together
for this kind of thing.
When I came to NIRPC, I
heard that all the time,
about how balkanized the region was,
and frankly, I really haven't seen it.
>> Garrard: You haven't seen it.
>> Folks have their squabbles,
sure, but for the most part,
I think this region is really
banding together to say,
look, we've got to all work
together to try to capture
growth and this general market.
And we're on the brink
of a lot of cool stuff
in northwest Indiana.
>> I want to come back to that
balkanization in a minute.
I want to go to Joseph Pete.
So, Joseph Pete, you're
the business reporter
in Northwest Indiana Times.
There are businesses who at times
just want to make themselves
look good, alright?
So they may send you a press release.
Joseph Pete, look at what we're doing.
We just employed 45
people. Our sales are up.
We just utilized this tax break
so that we could hire more employees.
Run the press release.
Do you ever run a press release,
or do you investigate more?
I say this because there's
this little company
out of Cupertino, California, called Apple
that writes these amazing press releases,
and people think that these
press releases are the gospel.
Because when they introduce a new product,
many times the reporters don't even
tamper with the press release,
because Apple has great writers
who make their product
launch look like news.
What do you do if a northwest
Indiana company says
Joseph Pete, we're great. Print it.
What do you do?
>> Well we don't just,
we would never print a
press release verbatim,
and we don't do it,
we don't take what they say at face value.
You know, we do additional...
Often they do have good
news to report though,
they will be investing
millions of dollars,
that kind of thing.
But we do follow up on
these things to make sure
that they're coming through
with like their hiring.
A lot of the incentives in the state,
the tax incentives that they give,
are based upon hiring to ensure
the people actually get the,
that the companies are actually, you know,
if they say they're going
to employ 500 people,
they don't get the tax breaks
unless they actually do hire that many.
It's tied to the employment.
And then we've had,
especially with the Indiana
Economic Development Corporation
out of Indianapolis,
they tend to do these very
rosy press releases about,
oh so-and-so's investing
here and hiring there,
but usually we'll call the company
and confirm that that's what,
because sometimes the
numbers can be a little
inflated or pie-in-the-sky.
Or oftentimes too,
when the companies are coming
from Illinois, they'll say oh,
they're going to hire
300 people from Indiana,
but in reality it's going
to be 200 of those people
were already working in Illinois
and are now commuting to Indiana,
20 minutes across the border.
So we do due diligence
always when we get those.
But that's, if companies
have something to celebrate,
there's no reason not to celebrate it.
We need to highlight any
kind of positive economic news we have,
especially with the condition
of the steel industry.
>> Yeah. Dr. Micah Pollak.
So this question has been in
my head for the last month.
You've been on the show
before, and I said,
ah, I've got to ask him
when he comes on the show.
What's more sustainable...
And I'm going to point this
strictly toward northwest Indiana.
What's more sustainable, many
small companies that employ,
or fewer large employers?
When it comes to the macro
micro world, what do you think?
>> Sure, I mean, it's some of each,
but I think the trend is more
toward smaller companies.
We have a more dynamic
world, a global economy now,
and you have to be kind of, very nimble.
And you have to be able
to respond very quickly.
And that's much easier to
do for smaller companies.
So smaller companies tend to be
a little bit more competitive.
At the same time,
this also means the bigger companies
that we have tend to now
have to pay more attention
to being able to change quickly.
They can't just keep doing what
they've been doing all along
because market forces
can shift overnight now,
it's such a global economy.
>> Do we have enough
workers in northwest Indiana
to sustain our labor
needs and our tech needs?
>> Um, that's a tough question.
We have a lot of workers.
They're not trained as
well as they need to be.
That's guaranteed.
Connections Indiana is an
organization that comes out
with a grade, every year,
for a variety of categories
for the state of Indiana and other states.
And our lowest grade has
consistently been in human capital,
which is education and training.
We usually get a C or around that part,
you know coming from education,
a C is barely passing.
At that point, we'd really
like to go for that A.
So, we don't have the training
and the education that we need here.
Northwest Indiana, we have
fewer bachelor degrees
than the state as a
proportion of our population,
and much fewer than the nation.
So we need to invest more in education.
But the flip side of this,
and maybe Ty will talk about this some,
is that it's not enough
just to train these people
and get them educated,
we have to get them to stay in the region.
If we invest and train them,
then they move to Illinois or to Chicago,
we've wasted a lot of resources there.
>> So do we need to train people,
do they just need to be more educated,
and how do we curtail brain drain?
You know, so many students of mine,
Dr. McClendon, soon as I graduate,
I'm moving to Indianapolis.
Soon as I graduate, I'm going to Columbus.
I'm going to Atlanta,
where I can get two or three
jobs the minute I'm there.
NIRPC, Ty Warner, what
do you say for that?
>> Part of that vision I
was talking about earlier,
this is all part of it.
The big key phrase here
is quality of place.
And that's what we need to
create in northwest Indiana.
So, to try to keep people here,
you gotta have places where
people actually want to live.
And I've said this before too,
we have a lot of price points of housing
across northwest Indiana,
but we don't have a lot of housing types.
And what I mean by that is
the kind of loft apartments,
the kind of downtown amenities
that so many folks want to live in,
like students of yours that
might be going to Indianapolis.
Look what Indianapolis has
done to enhance their downtown,
their walkability, their livability,
to make it a place where you want to be.
We can do that in northwest Indiana,
we have some spots that
are capitalizing on that,
but we can do a lot more.
>> This is a good point,
cause I want to go to Joseph Pete on this.
Are you finding in your
business writing and reporting
that there are vibrant
startups in northwest Indiana?
So you mentioned the craft brew industry.
There's a fairly vibrant
craft brewing industry
in northwest Indiana,
but do you find that,
I guess holistically,
that there are numerous
companies starting up
and being sustainable
and maintaining value
within northwest Indiana?
>> There are some startups,
like LoopyCases in Cherryville
developed a new case for the iPhone,
where you hold it with your finger,
it prevents you from dropping it,
they're selling out
like all over the world.
You do have pockets of innovation
like that throughout the region.
Part of the problem,
though, is in this area,
unlike Chicago and Silicon Valley,
you don't have venture capitalists.
We had a very innovative company
in Michigan City called
RockZip Highballoons,
where they originally developed balloons
that you could shoot up
to the very edge of space,
to the upper atmosphere,
and originally they were going to sell it
to universities to do research,
but then later Google and Facebook started
to want to make internet more widespread,
so they saw a market where,
hey, we can, you know,
sell this to Google and Facebook
so they can improve internet
access across the world.
However, the problem they ran into here
was they didn't have
enough venture capitalists
to keep them going, and they
ended up moving to California.
>> So, Joseph Pete, let
me go to Micah Pollak,
do we need more venture capitalists here?
>> Yeah, absolutely.
We have to compete with Chicago,
and that's really hard for us to do
because we're still Indiana,
and we're still relatively
small compared to Chicago.
But, geographically, we are
directly competing with Chicago,
so we really have to
make every dollar count,
and make sure we get
a really good bang for
our buck, essentially.
And that's why the stuff
that Ty's doing is incredibly important,
because we have to coordinate,
we can't have these fragmented markets,
we can't have little
pockets here and there.
We need a combined effort to make sure
we're actually providing
what venture capitalists,
what young entrepreneurs,
what the next generation
really want here in northwest Indiana,
so we can become a place
that they want to go to,
not a place they want to leave from.
>> Yeah, yeah. Ty Warner,
the show is closing,
but from NIRPC, being the ED of NIRPC,
is there optimism, man,
is there a rainbow here on the horizon?
>> There definitely is.
This region's coming together
in a way that it hasn't
for a long, long time.
I mean, folks are heading
in the right direction,
all moving together to try
and make this a great place
to live, to work, to come to.
We could spend another
hour, two hours, three hours
just going through all those things
that have been happening
in just a very recent amount of time.
So, the answer is yes.
>> I feel much better now.
>> Ty: You should.
>> I wish that I could
continue, gentlemen,
I've got to go Part Two with you,
but my little pocket
square is happy, here.
(laughter)
I'm feeling much better now, you know,
I thought we were just land rich
and cash poor and industry poor.
But for Part Two, when
I bring you guys back,
we've got to talk about some more things,
some more intricate things
happening here in northwest Indiana.
I really appreciate you guys, I really do.
Hey, thanks to my guests,
Micah Pollak, Joseph Pete, and Ty Warner.
We are still here.
Northwest Indiana still has plenty
of potential to employ, grow, educate.
Great ideas and people originate here,
so we appreciate and celebrate
being from the region.
Thank you for watching Counterpoint.
I need you to stay
positive, keep your head up.
And always be encouraged
to voice your counterpoint.
Have a great week.
(gentle music)
