After Obama kudos, supplier executive pushes for hiring incentives

Andra Rush: "I'm trying to learn and navigate how we access grants and tax credits."
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DETROIT -- Following a name drop by President Barack Obama during his State of the Union Address Tuesday night, Detroit Manufacturing Systems LLC CEO Andra Rush plans to capitalize on the spotlight.

Rush, who serves on the U.S. Department of Commerce's manufacturing council, is pushing for legislation that would provide incentives for companies that hire unemployed workers.

Rush founded the minority-owned joint venture Detroit Manufacturing Systems with French supplier Faurecia SA in 2012, taking over a nearly $700 million book of interior business from Ford Motor Co. The deal put Rush in charge of one of the area's largest minority auto suppliers -- and the largest run by a woman.

Since leasing space at the Gateway Industrial Center off the Southfield Freeway and I-96 in Detroit, Rush has focused her supplier toward hiring unemployed and underemployed Detroit residents.

DMS employs 729 -- 486 of whom were unemployed or underemployed. The average length of time her workers were unemployed before starting at DMS was 18 months, the company said.

Rush wants the federal government to offer tax breaks to companies that hire unemployed individuals, removing them from public assistance. She'd also like those employees to receive tax breaks during the first few years of employment to ease the transition, she said.

"I'm trying to learn and navigate how we access grants and tax credits so that I can continue to invest into our businesses and our people," Rush said in an interview from Washington, D.C. on Wednesday. "A lot of the individuals I've hired went from recipients (of public assistance) to contributors; the government isn't paying for Bridge Cards, health care, etc."

Earmarks for community

Rush said tax reductions for a business should be earmarked for community improvement or the promise to hire more unemployed.

She said she'd use the money to fix street lights near bus stops in the vicinity of DMS or invest in child care services for employees, as well as to hire more Detroit residents.

"… the city is coming around, but there's still blight, and offering safety to my employees is critical," she said. "Let's face it, if we're able to change the course of people's lives so they are not on unemployment, we're changing the course of Detroit."

Rush is pushing not only for more money for her company to invest in workers, but tax relief for her newly employed staff. She'd like to see the government offer reduced taxes to formerly unemployed workers for up to four years on a sliding scale.

"If, for instance, the unemployment insurance and Medicaid is $24,000 per person annually, the government is already ahead $24,000 on these employees; plus they (employees) are now paying into the federal system," she said. "Maybe that employee will use those tax dollars to invest in their home and stay in the neighborhood."

Financial freedom

Rush said the program could assist employees with long-term financial freedom, such as a boost in 401K enrollment or even better day-care options for these employees.

More importantly, Rush said this plan could help keep her employees off public assistance in the cyclical automotive industry.

Rush said while DMS is doing well now, layoffs are inevitable in the industry, and keeping laid off workers from falling into the ranks of unemployed again is critical.

"Let's say a launch is delayed or a vehicle we supply isn't selling, I'm forced to lay people off," Rush said. "These employees are really fragile, as they are just getting into the (workforce), and I'd be disrupting their cash flow and new work ethic. A program like this could change that."

Rush said she's discussed the plan with U.S. Commerce Secretary Penny Pritzker and hopes her dream can be a reality under President Obama's tax reform plan.

"Everybody will agree that long-term, sustainable jobs … in chronically underserved areas are a positive in every state in our country," she said. "I look for the win, win, win. You can call it a dream, I call it an opportunity."

DMS generated $594 million in revenue last year and projects revenue of $740 million in 2014 -- and plans to hire more of Detroit's unemployed.

You can reach Dustin Walsh at dwalsh@crain.com.


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