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MACKINAC ISLAND, Mich.
Loans and spending pledged by large companies and government agencies will generate $3 billion in Michigan economic activity over the next several years, Gov. Rick Snyder and business executives said Thursday.
The governor and heads of several companies described the planned transactions as part of an initiative to enlarge the pool of investment capital in Michigan and encourage Michigan businesses to buy more goods and services from each other, while also stepping up exports.
The initiatives are part of the Pure Michigan Business Connect program, meant to convey the message that "this is the place for capital to come, for capital to be invested, for capital to succeed," Snyder said.
Among the pledges were $2 billion in loans from Huntington National Bank to Michigan businesses over the next four years, plus $250 million in purchases of goods and services from Michigan-based suppliers by both Consumers Energy and DTE Energy.
A private investment group called Stage 2 Innovations, led by former Chrysler CEO Tom LaSorda, kicked in $100 million for "second stage" businesses -- those that have advanced beyond the startup level but are still young.
Federal and state agencies are taking part as well. The Michigan Economic Development Corp., a public-private partnership, is offering $100 million in economic incentives to partially replace programs that previously funded ventures such as redevelopment of contaminated sites and historic tax credits. The state also has secured a $80 million federal grant that will leverage $800 million in bank loans for Michigan businesses.
Also, the U.S. Export-Import Bank intends to boost its investment deals with small businesses in Michigan, reaching $187 million by 2015 -- more than double the $75 million provided in 2009.
Snyder said other companies or agencies were welcome to join the program by pledging business financing or purchases of Michigan goods.
"And if you're a small business ... here are potential financial resources that are good free-market tools for you to help be more successful," Snyder said during a news conference at the Detroit Regional Chamber's annual Mackinac Policy Conference.
Huntington's loans will be made to businesses around the state, President and CEO Steve Steinour said. The Columbus, Ohio-based bank company has boosted its Michigan employment by 40 percent over the past 15 months and plans further growth, he said.
"We want to be part of Michigan as a growth story, to be part of this exciting economic recovery and expansion that's going on here," he said.
Russell said Consumers already had implemented a new purchasing policy that would make it easier for Michigan companies to sell their products to the electric power company.
"Our future is tied to Michigan's future," he said.
DTE already spends about $500 million a year in Michigan -- about 40 percent of its total purchasing -- and has been trying to do more since the economic downturn began, Anderson said. After fulfilling its new commitment, the company's in-state buying rate will be about 60 percent, he said.
"Companies can't afford to make this a charitable activity but if you look hard in the state, you can find companies who can compete on costs and quality," Anderson said. "It sometimes takes more work to search those companies out and connect them to your business, but we learned over the past few years that it can be done."
The commitments -- especially from Huntington Bank -- are a hopeful sign for businesses that have struggled to obtain capital for startups and expansions during the recession, said Rob Fowler, president of the Small Business Association of Michigan.
"I think there's a pent-up waiting for the time to be right," Fowler said.