Q&A with Rich Studley: Michigan hurt by ‘arbitrary’ coronavirus shutdown

More than 1 million Michiganders have applied for unemployment benefits in the last two months as employers have closed for business. (Shutterstock)

The Michigan Chamber of Commerce, the state’s most powerful business lobby, often positions itself in the middle of statewide business debates.

Now, as the state sets coronavirus-related directives that included a statewide shutdown of nonessential businesses, the Michigan chamber has been taking a strong stance for regional plans. 

“Are we heading toward another lost decade?” CEO Rich Studley recently tweeted. “Too soon to tell. However, it’s now clear the statewide lockdown order was a colossal mistake & the Governor’s penchant for unilateral decision making is driving Michigan down the road to a one state depression.”

Studley, a 38-year employee of the Michigan chamber and in his 12th year as CEO, says political action is part of its advocacy for its 5,000-member businesses. 

Richard Studley is CEO of the Michigan Chamber of Commerce

The organization has an annual budget of about $5.5 million. Like other businesses in the state, it’s had to suspend some operations and reduce employees, going from 33 to 28, Studley said. And like many political organizations, it’s also gearing up for Michigan’s August primary and November election.

Bridge Magazine’s business editor Paula Gardner recently spoke to Studley about where Michigan businesses stand as the state launches some reopening and what he expects in the near future.

Here are edited excerpts from the conversation: 

How do you see the stay-at-home order playing out, now that it’s being relaxed a bit?

We represent companies of all size and type in all 83 counties. Michigan chamber members employ over 1 million Michigan residents. So membership is a pretty good cross-section of the general business community. We have worked with Governor Whitmer and her administration on some issues. Before the first stay-at-home order was issued, the Michigan Chamber had the opportunity to offer input.

Our view was and still is that the first order was timely and necessary. When things really started to change in Michigan is with the second order, which went really from a stay-at-home order to a statewide economic lockdown. 

That one-size-fits-all approach started to separate Michigan from other states. We started to receive a lot of questions and concerns from Michigan chamber members, whether they were major corporations or small businesses or medium-sized companies, that the governor seemed to be charting a much different  course than other governors in other states. 

That remains a concern today. Frankly, other states have done a better job of protecting lives and protecting livelihoods. I think that’s going to be a challenge for the business community and the administration going forward.

You would have preferred a phased approach sooner?

When the governor transitioned from her first order, which was a stay-at-home order, to a much more severe, far more  onerous statewide lockdown (when she extended and expanded the stay-home order on April 9), that’s when the governor started to take a course that is quite different. We continued to provide input to the executive office and state agencies. At the Michigan chamber, one of our responsibilities is to work with Michigan’s governor, whoever that governor is, to achieve good public policy.

Part of the recommendations we made to the governor, from the very beginning, was to whenever possible use national standards or to use standards that were in common practice in surrounding states.

The first big departure from over 20 other states was the governor’s decision to focus so heavily on essential versus nonessential businesses. You’ll hear many workers say, if it’s your job, it’s essential. If it’s how you support yourself, it’s essential. We had recommended a three-part test. Yes, go ahead and look at essential and nonessential, but also look at interruptable and non-interruptible and also look at the level of health risk. Is it relatively low, is it midrange or higher? 

A serious flaw … was her refusal to use federal CISA standards that 20 out of 26 governors in other states used to determine who was a critical infrastructure worker who could continue to work. Most other states did not completely shut down; since then, the governor has continued to pursue very stringent, very onerous requirements that are unlike those used in other states.

We have a lot of members … who do business in both Michigan and Ohio. Even today, those companies tell us it is far more difficult to do business in Michigan than in Ohio.

If your approach had been taken, where do you think we’d be in terms of COVID cases now and what would be different in the economy?

Our view is that the first stay-at-home order was timely. It was necessary. The focus of that order to stay at home when possible  — social distancing, washing your hands, wearing a mask — all of those measures proved to be effective. We believe all of those measures could have been achieved without shutting down the manufacturing and construction industries. 

Over a million Michigan residents have been thrown out of work. Not because of the economy, but because their employers were ordered closed by state government. We have over 1 million Michiganders who have applied for unemployment benefits in the last two months. That severe statewide, one-size-fits-all economic shutdown has resulted in skyrocketing unemployment and it is draining the employer-financed unemployment trust fund.

Gov. Whitmer recently announced partial reopening for parts of northern Michigan and the Upper Peninsula. What are your thoughts on that?

We hope they’ll be helpful. Three out of four restaurant workers are unemployed. For over two months we were and still are strong advocates for a regional approach. 

[The shutdown has] unnecessarily had a devastating impact on working families and tens of thousands of businesses. You see that in skyrocketing unemployment, you see that in the number of business closings, you see that in the number of layoffs, you see that in the last few weeks with the state government projecting multibillion-dollar budget deficits. That’s what happens when one person decides arbitrarily to shut down the state’s economy. 

If manufacturing had continued, were people really ready to buy cars? How do you measure what could have been avoided?

Automakers may have chosen voluntarily to hit the pause button. We heard a lot from non-auto related manufacturers in West Michigan who are global companies who have had plants operating in Europe and in Asia operating safely and  they were forced to shut down when they could and should have been allowed to operate safely.

This horrendous economic impact started piling up with the second economic shutdown. 

A lot of our members are in agribusiness or construction. [It hurt them by the state] not being more discerning about who could continue to work safely. We have dozens and dozens and dozens of examples every day in the early days. Lawn care companies. Why were they closed?

Part of the challenge is that, despite their best efforts, many of the decisions that were made by the governor appear to be arbitrary and just didn’t make sense in the real world of how people run businesses and interact with employees and their customers.

 

What are you looking ahead at as the state opens?

We did a survey (of Chamber members) a couple of weeks ago and asked the question: What is the single most important thing the state government  could do to be helpful to you?

About two-thirds of the respondents said, “Lift the order.”

One of our concerns is that as executive orders are lifted or expire, they will be replaced with an equally burdensome regulatory mandate. 

Such as?

Over the past two months, we have often heard from major corporations, large and successful enterprises with in-house legal counsel, with experienced industrial hygienists, with big HR departments, who have read the governor’s vague and constantly changing executive orders and have called us to say, “we simply don’t know what’s required of us.”

I think it’s critically important as we start to reopen the state that expectations are more clear and that they are reasonable and that state government understands this is a very different world. 

Our view is that the changes announced (May 18 to reopen 32 counties) are long overdue. We have been a strong advocate for regional approach, and now we are seeing long overdue relief for northern Michigan and the Upper Peninsula. The announcements were the same things that legislative leaders proposed several weeks ago. We could be farther ahead in looking at opening up West Michigan, or the Bay City-Saginaw-Flint area. I think it will be some time before the governor opens some businesses in Detroit or Wayne County, and we understand that. But we think there’s an urgent need for some action and we need to be farther along.

What kinds of changes?

We may see more employees and employers talking about who really needs to come into the office and how often. We’re learning that some people who’ve never worked at home before are pretty good at it.

If you’re working on an assembly line at Ford or GM, you can’t do that on the internet. You have to show up. There’s also that need in the service sector where teams have high levels of creativity and synergy and collaboration. We’re all learning about technology and there will be some surprising challenges about how Americans interact.

How do you see businesses adjusting?

There’s a lot of uncertainty in the workplace. I think a big challenge for the next few months will be to reopen safely in a way that restores the confidence of customers and employees. One thing that surprises me is how many ordinarily reasonable people have just become terribly fearful. I think some of that is the gray area between social distancing and social isolation. 

What do you think the business survival rate will be, if things stay slow?

We have a lot of members in West Michigan, and northern Michigan and the U.P.  Some of them will have July, August and September to make two-thirds or three-quarters of their revenue for the year. That’s part of the reason we’re pushing so hard for the regional approach. 

I would estimate that we literally have hundreds and hundreds of members that, if they’re not able to reopen by the end of May, are already in serious financial trouble. We’re concerned that there may be thousands of small companies or major corporations that won’t reopen because they’re permanently closed in the next six months to a year.

How do you rate our economic development position? 

Going into this year, because of the things that had happened over the last 10 years to improve Michigan’s economic competitiveness, I think Michigan’s image was positive. We were viewed as a state that was increasingly competitive and well-managed. 

In the last few weeks, as it’s become more and more apparent that Michigan is an outlier, that we are failing to protect jobs and our economic health and our public health all at the same time. … Hopefully we can turn the corner and get that behind us.

Lots of states have one anchor industry. We have three: manufacturing, agribusiness and tourism. We’re still at 10 million people. We’re still the Great Lakes State. Our fundamentals are still strong.

Do you expect proposals to change business taxation as the budget crisis unfolds?

That’s an area that is one of our biggest concerns. Michigan is one of the states that allows initiative and referendum. 

One of the challenges we have in Michigan is that our signature requirements for Constitutional amendment or a statutory initiative are very, very low. One troublesome trend that we worry will be accelerated is that out-of-state groups with national agendas will view Michigan as a spot on the chessboard. 

I have a concern that instead of looking very hard at state government and looking at what is essential and a priority versus what is not, that some people will call immediately for a bailout from the federal government. Some states are well-managed and efficient, and others are not. I can see both sides of that argument.

I think you can already start to see some individuals and groups lay the groundwork for a massive increase in individual and business taxes. The groups that want a graduated income tax, which would be economic development suicide for our state, may try to capitalize on this situation. We’ll stand guard against that.

Any other expectations?

We are trying to be very careful in our choice of words. We are talking about reopening and getting back to work. We’re not talking about returning to ‘normal’ if you think ‘normal’ was how businesses operated nine months ago or six months ago. 

I think there will be a very tough debate over how to balance the current budget and an even harder debate for the state budget for the fiscal year that starts in October. We’ll be monitoring that debate as it develops. We’ll be very actively involved.

I see the economy getting back on track. I anticipate 12 to 18 months to return … but in six to 12 months, there will be a bit of a sorting-out process.

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Comments

Beth Jacobs
Thu, 05/28/2020 - 2:29pm

Great Article! Thanks for pointing out the serious flaws and the unnecessary economic destruction of Michigan's economy.

Richard Conto
Thu, 05/28/2020 - 3:02pm

Stunning.

This is consistent with the GOP Death Cult policies of "Profits before People" and "Wealth before Health".

Matt
Thu, 05/28/2020 - 4:40pm

So Richard, thinking backward on this, how do you pay for the things that keep you alive? How do you think these items get to the store from which you buy them? If someone isn't the recipient of a government check just how does this work? Where does the government get the money they give you?

10x25mm
Thu, 05/28/2020 - 6:49pm

You wouldn't happen to have any insights on the Democrats' "Lottery Profits before People" and "Marijuana Wealth before Health" policies?

Georgie
Thu, 05/28/2020 - 3:53pm

To Mr. Studley who thinks so many people on unemployment are just crying out for help because their employers had to close; WE can't hire anybody! Why? Because people are making more money off the extra $600/week than they were at their jobs! You want to reopen Michigan? Start by looking at what that really means without a vaccine and whether businesses have been doing things the old fashioned way for too long.

Jr
Fri, 05/29/2020 - 9:19am

Anybody that refuses to go back to work in a safe environment is not eligible for unemployment.

Marty Spaulding
Mon, 06/01/2020 - 1:45pm

Let's start with that "safe environment" yoyu speak of. There is a pandemic going on. Or didn't your cash register tell you that ?

Jr
Fri, 05/29/2020 - 9:17am

Whitmer saved countless lives by doing what she did. MI went from 2nd in nation in dead to 4th. Might not look that great, but that is hundreds if not thousands of lives saved. But, I know CEOs put life low on the list of ROI criteria.

Matt
Fri, 05/29/2020 - 11:54am

Michigan has followed the same curve as have other states and, in many cases, worse than others following a much looser approach. What evidence do you have other than the virus has played out here as it has elsewhere, for the time being at least, that she's done a great job other than being a Democrat?

Bones
Fri, 05/29/2020 - 6:48pm

Most other states didn't get hit as early or as hard as Michigan. This is basic stuff, Mr. Facts and Logic

Rick
Sat, 05/30/2020 - 11:07am

'Michigan has followed the same curve as have other states and, in many cases, worse than others following a much looser approach.'
COVID hit some states earlier than others (esp. those with international airports: MI, MA, NYC, etc.) so the timelines are far different. The states with 'looser' approaches are now seeing much faster infection rates than us now. I know it's science and is ignored by the right like you but science is evidence and fact based. Ignore it if you want to get sick.

LH
Sat, 05/30/2020 - 8:54pm

Check, for example, the trends in Florida and Georgia, which opened earlier and faster than Michigan. Not only are their death rates much lower than Michigan's overall, but both cases and deaths are continuing to trend down after re-opening. Georgia saw an uptick a couple of weeks after opening up, but nowhere near what the peak was in early April, and the trend is now downward again. Florida was expected to be hit hard because of the number of older residents (both year-round and snowbirds), but the governor and his staff DID NOT allow Covid patients to be released into nursing homes, and nursing home residents who contracted Covid19 were taken out of the facility and hospitalized. This probably saved thousands of lives. Of course, Wisconsin, where hordes of thirsty residents descended on bars the day the courts threw out the governor's stay home order, serves as a cautionary tale, as cases continue to rise.

Anne
Sat, 05/30/2020 - 7:15am

Actually, the governor caused moreDEATH by her order to send recovering COVID patients to nursing homes. When the final tally comes out regarding the true percentage of people who died in nursing homes or assisted care facilities, it will be shocking. Whitmer’s poor decisions have caused unnecessary harm and suffering to Michiganders, who were forced to comply with excessive stay at home orders due to “high numbers of COVID deaths” that were due to her incompetent policies.

chief54
Fri, 05/29/2020 - 11:57am

The Michigan Chamber is basically a lobbying organization for large Republican owned businesses on the west side of the state. This should be obvious from Mr. Studley's comments. As a very small business owner in the Detroit burbs for the past 22 years I was never contacted by the state chamber or could never really figure out what they did except as an lobbying group.

I didn't know Mr Studley was an MD and if he was he wouldn't agree with any MD's I've heard. I for one am in the age group that has suffered over 80% of the deaths but as several Republicans have said, so be it, we should be willing to take one for the country so the economy can get back to normal. Which it will not in my limited lifetime.

Mr Studley speaks like so many others suggesting Michigan is or was the only state locked down. Because the Gov is a female Democrat she is punishing businesses for no reason. Mr Studley also seems to have little regard for Detroit of the counties in southeast Michigan. Too many Democrats!

There can be no economy with out people, this will all pass in time, no thanks to our President, who will be well out of office when things begin to get back to normal.

Bones
Fri, 05/29/2020 - 6:50pm

On behalf of the working class of Michigan, please never interview anyone from the Chamber of Commerce again. Their interests are directly contrary to the economic well-being of the majority of Michigan citizens, and they've been helping the GOP loot this state for decades.

Linda Finkel
Sat, 05/30/2020 - 5:20pm

As has been pointed out, the Michigan Chamber of Commerce is concerned with the financial success of businesses in Michigan, period. Do you remember when public schools in Michigan started in late August, before Labor Day? That all changed with the help of the same Chamber of Commerce and Mr. Studley himself who lobbied to have the legislature insure Michigan schools started after Labor Day so that families would vacation -- and spend money -- over that holiday in northern Michigan. The ability of school districts to schedule the required 180 days of school over a slightly longer period and starting school when most kids are anxious to return to school was dashed.

Bertie
Fri, 05/29/2020 - 6:55pm

thank you, Governor Whitmer for putting the people of Michigan first. Many people who received a stimulus check and getting unemployment, refuse to go back to work when called. They make more $$ this way than going back to.work.

Mark R Foerster
Fri, 05/29/2020 - 7:17pm

So it’s dollars over people? Missed the part about your science background.

Don
Fri, 05/29/2020 - 7:32pm

Are we heading toward another lost decade?” CEO Rich Studley recently tweeted. “Too soon to tell. However, it’s now clear the statewide lockdown order was a colossal mistake & the Governor’s penchant for unilateral decision making is driving Michigan down the road to a one state depression.”

atypical republican money before people!!!

Kevin Riley
Fri, 05/29/2020 - 7:40pm

As a small retail business owner, I applaud Governor Whitmer taking the reigns. The President took no action. It was up to governors to save their own states. Poor judgement and lack of a backbone by the Federal Government has turned this situation into the mess the nation is in. I am with that woman from Michigan.

T.
Fri, 05/29/2020 - 7:59pm

I appreciate hearing this perspective, but I would also appreciate hearing other business perspectives that are not so conservative. Some analysis and followup questions would also be helpful. Its not at all clear what Mr. Studley's epidemiological predictions are based on. Calling the lockdown arbitrary and a colossal mistake is not supported by ANY evidence offered. Mr. Studley is comparing Michigan to other states that did not confront the coronavirus pandemic early on - Michigan suffered a relatively early and rapid spread of the disease. The fact that Michigan had only the rather blunt instrument of a lockdown is not the responsibility of the Governor, but rather of the failed national response to this pandemic, which meant the country acted too late. The failed federal response left us underprepared, without adequate testing, without the resources or coordination for contact tracing, and with no strategy. The high death rate in the State, which goes unmentioned in the article, should be seen as a reflection of a failed set of priorities for the State - we have been de-regulating business and reducing taxes for years. But so many people in the State have not benefitted from those policy choices - quite the contrary. Michigan, like all states, has been trying to figure out how to manage an unprecedented and difficult situation without any real assistance from the federal government, including clear, detailed and explicit guidance on re-opening. That is why we have agencies like the federal Centers for Disease Control, which has been disabled by a dysfunctional White House. Instead, states are struggling with this on their own, with guidance from academic institutions in their regions. Further, careful adherence to social distancing, mask wearing, and hand hygiene are going to be critical to successful reopening, particularly in areas with community spread, and yet we have a President who is undermining this at every turn. Where is the business critique of the utterly incompetent and dangerous response at the top? Instead, its been endless and unbalanced criticism of the Governor. Really, its astonishing and suggests a failure to evaluate dispassionately how we find ourselves in this situation. In a crisis, the patriotic thing to do is to roll up your sleeves and solve problems together and to step up to help in any way possible. Reasonable critiques should always be welcome, but without any context, they seem partisan rather than genuine.

George Hagenauer
Fri, 05/29/2020 - 8:30pm

Is the 20 out of 26 governor quote accurate? as it seems strange given there are 50 governors (and Hawaii is not only on a lock down but also quarantining anyone who steps onto the island and jailing them if they step outside during their 2 week quarantine period!) It is pretty obvious that the initial impact varied by state - we seem to be more attached to the global economy via a major airport and our industries than say Wyoming and Montana. So that needs to be taken into account in any evaluation of the COVID response by states. What was seen in SouthDakota however was that a loose response resulted in a major outbreak in the meat packing firms which is a major essential industry . The lack of testing overall means it will be months before we actually know how many people actually died of the virus in any state.

Dave
Fri, 05/29/2020 - 9:43pm

If we only go through this once, and some other states go through it twice, she will look like a hero. Mr Studley does not mention the severity here vs some other states. More severity means more severe measures, which is what happened here. Not a Whitmer fan, but she has handled this well.

Studs Richard
Fri, 05/29/2020 - 11:41pm

Of course the shutdown is hard on business. It's tough on people too, but it was the only move to make if you're concerned about your fellow citizens and neighbors. It is VERY clear that the Michigan Chamber of Commerce only concern is, just that, commerce at all costs. Lives, health and safety be damned. Governor Whitmer did the only responsible thing anyone could do, look out for the citizens. America would do very well to purge not only the money from our politics, but purge those who bow to those who are corrupting our democratic republic.

Tim Joseph
Sun, 05/31/2020 - 8:09am

Many if not most businesses pay as low wages as they possibly can. The Chamber has always been at the forefront of pushing an "Economy" (be sure to genuflect when you use that word) which operates on the principle of as much profit to the business owners and investing class as possible and incomes for working people which keep them on the edge of poverty and disaster. So, wonder of wonders, this "economy" is very fragile and prone to crisis. It is way past time for some serious income redistribution in this country. The rich can still be well-off, but they have to stop cannibalizing the working class.

Patricia S Duffy
Sun, 05/31/2020 - 8:16am

Bridge questions were spot on! Calley's answers, not so much. He laments auto companies and construction being locked down when they're actually starting up again. He claims no other states or countries are using such "arbitrary" measures, then gives examples of states and countries doing the same thing. Calley's evidence seems pretty shakey.

Bruce
Sun, 05/31/2020 - 8:59am

It is far past time to reopen all businesses. Yet more have announced they are closing permanently today. The current governor and her administration have failed the People of Michigan who love this state and work hard every day to keep it great. The governor, and those who support her, are welcome to leave. The sooner, the better. It will be healthier for everyone that way.

Marty Spaulding
Mon, 06/01/2020 - 1:43pm

Sounds exactly like the opinion you'd expect from someone represnting the Chamber of Commerce ... one of the most highly partisan outfits in the State. Interstingly, he has no criticism for the wholesale LACK of policy from the White House. Hardly shocking. Neither does he give much weight to what will follow from a probable second wave this fall. Smells like a partisan hit piece to me.