MACKINAC ISLAND — West Michigan business leaders say that a proposed upgrade of the Soo Locks in the Upper Peninsula is critical for keeping the region’s economy moving forward.
Gov. Rick Snyder along with legislative and business leaders on Wednesday pledged around $50 million in state support to assist the federal government with what could be a $1 billion infrastructure upgrade at the international trade passage that allows ships to pass from Lake Superior through the St. Marys River and into the lower Great Lakes.
Speaking during the Mackinac Policy Conference, the annual business and political confab hosted by the Detroit Regional Chamber on Mackinac Island, Snyder noted the importance of the locks, which the Department of Homeland Security (DHS) has identified as one of the nation’s most important pieces of infrastructure.
“Upgrading the Soo Locks is one of the most critical ways we can ensure the continued success of Michigan’s economic comeback,” Snyder said in a statement. “The nation’s entire economy depends on the daily operation of the Soo Locks. Without it, we would not be able to deliver the American iron ore that domestic steel manufacturers depend on to run their mills, and our manufacturing industry would not have access to the high quality domestic steel it needs to make everything from auto parts to office furniture.”
Grand Rapids office furniture industry executives say they depend on the locks for getting raw materials for their own operations as well as for their supply base.
“We have come to understand how quickly our supply base could be impacted if the locks were to shut (down),” said Hannah Naltner, senior corporate counsel for Grand Rapids-based Steelcase Inc. (NYSE: SCS). “In West Michigan, we have an amazing talent pool, we have the best workers in the region, great factories, (but) no raw materials. That’s a problem. We want to make sure that our supply base has the raw materials they need.”
Other business leaders echoed Naltner’s sentiments.
“Trade is the life blood of the economy and the Soo Locks are a vital artery for industry in North America, passing an average of 10,000 ships per year,” Rick Baker, president and CEO of the Grand Rapids Area Chamber of Commerce, said in a statement to MiBiz. “We need to ensure they last another hundred years, and the time is now for investment.”
An October 2015 report by DHS outlined the devastating consequences that even a six-month shutdown of the U.S. locks — particularly the larger Poe lock — could have on the national economy.
“An unanticipated closure of the Poe Lock, the only lock large enough at the Soo Locks to allow passage of the Lake Carriers carrying iron ore, would be catastrophic for the Nation,” according to the DHS report.
The agency noted that, depending on the time of the year of any possible closure, about 75 percent of the country’s steel production would shut down within a matter of weeks and all of the North American automotive and appliance manufacturing industries would cease — in addition to affecting myriad other industries.
The report also found that a shut down of the locks would result in around 11 million job losses and the U.S. would likely enter into a recession.
Maintenance of the locks has been minimal over the last several decades, sources said.
“If something goes wrong there’s no backup plan,” said James Weakley, president of the Lake Carriers’ Association, a Rocky River, Ohio-based trade group for owners of Great Lakes shipping vessels.
Nonetheless, Weakley and others say President Trump’s public support for upgrading the locks from and the willingness of the state to commit funds to the project makes for good news.
“The fact that the state of Michigan is putting money at the project is a big deal,” Weakley said. “I think it’s a game-changer.”