Michigan looks west for share of federal contracts
Michigan has always made what Californians love most: cars.Skip to next paragraph
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Now that its automotive industry has fallen on hard times, however, the Wolverine State is hoping to get more than a little mileage out of another California love affair - government contracts.
The West Coast, and particularly California, attracts more government contracts - in defense, communications, and aerospace - than any other region in the country. That fact hasn't been lost on Michigan Gov. William G. Milliken, who, with 41 Michigan businesses, staged a recent two-day business fair in Los Angeles, cosponsored by California's governor, Edmund G. Brown Jr.
Part of an extensive international campaign to diversify Michigan's depressed , automotive-dependent economy, the event was aimed at persuading West Coast companies with government contracts to channel millions of dollars' worth of subcontracts to Michigan companies, many of which have relied heavily on Detroit's automotive giants.
Once President Reagan's defense appropriations are passed by Congress, California companies are expected to get a whopping share of the government contracts. It is standard practice for those winning such contracts to subcontract portions of the work to other businesses. With an unemployment rate of nearly 15 percent, Michigan is eager to make a pitch for those subcontracts.
''We're not trying to raid California business, we're trying to set up a partnership,'' says Governor Milliken. ''There are a lot of major prime contractors out here doing defense contracts, who will need subcontractors.''
Michigan officials argue that the flow of defense contracts will be so heavy that West Coast prime contractors won't have enough local subcontractors to do the work on time. They say that their skilled labor force and plant facilities can help fill that gap.
Their argument may have made sense to some contractors who visited the show. ''We have subcontractors who can do the job out here, yes,'' says Marek Gwozdziowski, small-business administrator for Litton Data SysteUq. ''But the trick in doing a government job is having not just a source, but to have as many as possible so you can fulfill a job.''