LANSING (AP) - Michigan's Democratic governor and Republican legislative leaders renewed their calls to diversify the state's economy after Ford Motor Co. announced yesterday it would close the Wixom assembly plant and 13 other facilities.

But the two sides took different approaches on how to do that.
House Speaker Craig DeRoche of Novi and Senate Majority Leader Ken Sikkema of Wyoming, both Republicans, emphasized cutting more business taxes and getting rid of some regulatory oversight.

Gov. Jennifer Granholm said the state should begin looking at new uses for the Wixom plant and new ways to compete for future manufacturing facilities.

"We want to plan for what comes next for the site and for the workers who are affected," Granholm said in a telephone interview with The Associated Press.

More than 1,500 jobs at the Wixom assembly plant, where the Lincoln Town Car, Lincoln LS and Ford GT are made, will be cut by 2008. The Michigan job losses were part of Ford's overall restructuring effort that will cut up to 30,000 jobs and idle 14 facilities.

DeRoche, whose district includes the Wixom plant, said it's a good time to review the state's ability to compete for nonmanufacturing jobs in a new economy.

"We've got to get back to basics: Cut taxes; build the roads and infrastructure needed to move goods and services; provide an educated and skilled work force; eliminate red tape; and break down the barriers anchoring Michigan's economy in last place," he said in a statement.

Sikkema said the state needs to reform K-12 education to put more emphasis on higher education, limit government spending and support small businesses by cutting taxes and improving the state's regulatory environment.

"We need to show the world we are serious about change and eliminate this environment of uncertainty that is turning job providers away from our state," he said in a news release.
Michigan's unemployment rate continues to hover well above the national average. The seasonally adjusted jobless rate for December was 6.7 percent, up one-tenth of a percent from November; the U.S. unemployment rate for December was 4.9 percent.

Granholm said she and other state officials tried everything they could to keep the Wixom plant open.

"The whole array of tools in our toolbox was brought out," the governor said. "Every kind of tax incentive was out on the table but they had overcapacity issues they had to deal with."
The state also had new laws on the books to give tax relief to manufacturers hard hit by the changing economy, but Granholm said tax cuts aren't the answer to every economic problem.

House Republicans are pushing additional business tax cuts as one way to help revive the state's economy. They plan to vote today on more tax cuts - this time for small businesses. The measure is expected to pass because the GOP has a majority in the House.

The legislation, already approved by the Senate, would cut state taxes in half for 35,000 small businesses. Businesses that pay an alternative to the state's main business tax would see their rate drop from 2 percent to 1 percent under the bill. The cut would save those businesses an average of $686 annually.

Granholm has spoken out against the proposed tax cut because the legislation does not offset the lost revenue, which the nonpartisan House Fiscal Agency estimated would be about $21 million for this year's general fund and $29 million for the fiscal year that starts Oct. 1.

The governor and Democratic U.S. Senate Debbie Stabenow of Lansing said Ford's announcement shows that the federal government needs to better enforce fair trade laws and improve the health care system that puts domestic automakers at an economic disadvantage.

"The long-term strategy cannot just be cutting jobs and cutting salaries," Stabenow said.

U.S. Rep. Mike Rogers (R-Brighton) listed other changes the federal government needs to make to help automakers such as Ford, including ending Asian currency manipulation, which he said puts U.S. workers at a competitive disadvantage.

He also said energy costs need to be brought under control, health care needs to be made more affordable for workers and employers, and tort and pension laws should be changed.