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www.crainsdetroit.com Vol. 27, No. 50 DECEMBER 5 – 11, 2011 $2 a copy; $59 a year

©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 Imported More indictments, lawsuits in price-fixing morass to Detroit? Dave Blaszkiewicz Chrysler hunts and the mission of office space Downtown BY DANIEL DUGGAN Detroit CRAIN’S DETROIT BUSINESS Partnership: After sparking national interest in Detroit with its Super Bowl ad- ‘Drive vertising campaign, Chrysler Group change’ LLC reportedly is close to taking of- fice space in downtown Detroit. Real estate sources say the Auburn Hills-based automaker Inside has been looking for downtown of- fice space since the “Imported State takeover? How about from Detroit” TV commercial first ran in February. (See related item bankruptcy? Page 4 in Rumblings, Page 26.) Gualberto Ranieri, senior vice president of communications for Chrysler, declined to comment. This Just In Real estate sources said the com- pany is close to a lease in the Dime Chrysler leases distribution Building, the historic building ac- quired by Quicken Loans Inc. space in Redford Township founder Dan Gilbert this year. In one of the biggest indus- Gilbert is rumored to have person- trial real estate deals of the ally lobbied Chrysler CEO Sergio year, Auburn Hills-based Marchionne on the deal. Chrysler Group LLC signed a Quicken Loans Vice President of 400,000-square-foot lease in Communications Paula Silver de- Redford Township. clined to comment when contacted The deal brought the by Crain’s. 800,000-square-foot building Chrysler reportedly is looking CLOSER LOOK from 35 percent occupancy to for a small amount of space — Ⅲ Time line: More than two 87 percent occupancy, accord- 20,000 square feet, which typically decades of developments, ing to a statement from Farm- would hold 80 people. Page 22 ington Hills-based Premier Eq- The company has been taking Ⅲ Orchestra Place: Cummings uities, the real estate additional office space in the re- as conductor, Page 23 investment company run by gion this year because its 4.4 mil- David Friedman, which owns lion-square-foot headquarters the building with Southfield- building is full. This year, it leased based General Development Co. 210,000 square feet nearby on En- Chrysler will now use the trance Drive in Auburn Hills, one space for parts distribution. of the biggest leases of the year. The building near Tele- Chrysler’s deal continues a recent graph Road and I-96 was once trend of companies taking small used by Dearborn-based Ford amounts of space in Detroit to aug- Motor Co. for logistics. How- ment their suburban operations. ever, it has been largely va- Saginaw-based Rehmann LLC re- cant for the past few years. cently opened a 3,000-square-foot The largest industrial deal office in the Dime Building in a of the year was the renewal move to accommodate growing of 632,000 square feet of space business opportunities in the city. by U.S. Manufacturing Corp. in Change echoes through radio market It complements the company’s of- Macomb Township, accord- ing to Washington, D.C.- fices in Troy, Farmington Hills based CoStar Group. and Ann Arbor. To dial in revenue, stations flop formats, cut jobs However, the Chrysler Likewise, Birmingham-based deal represents the biggest Sachse Construction opened a 1,100- BY BILL SHEA as what’s going on today,” said been on the Greater Boston Radio new lease of the year, top- square-foot office in the Guardian CRAIN’S DETROIT BUSINESS Dick Kernen, vice president of in- Inc.-owned station since 2001 and ping the 320,000-square-foot Building earlier this year, in part, dustry relations at Southfield- a presence on lease by Tognum America Inc. to accommodate the firm’s con- Since Dick Purtan retired in based Specs Howard School of Me- Detroit radio in Brownstown. struction contracts for most of March 2010 after 45 years on De- dia Arts and a 50-year veteran of since 1967. — Daniel Duggan troit’s airwaves, local radio has the radio industry. Harper was See Chrysler, Page 21 been in turmoil from format Purtan was one of the last lions unavailable to shifts, station ownership chang- of local radio, a longtime veteran talk last week es, job cuts — but also has been who still drew both a big audience because of an growing revenue. and a big salary at oldies station illness that It’s a confusing landscape, but WOMC 104.3 FM in an industry kept him off the one beginning to grow barren of beset by cutbacks. air as well, but veteran stars behind the micro- There is about to be one fewer radio industry Harper phone. Non-air talent also is be- lion in the pride: On Dec. 23, long- watchers say ing pared to save money. time morning drive-time radio his departure is the latest event in

NEWSPAPER “I have been through a lot of host Jim Harper will retire from changes, but nothing as close to Detroit’s WMGC 105.1 FM. He has See Radio, Page 24 20111205-NEWS--0002-NAT-CCI-CD_-- 12/2/2011 6:25 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS December 5, 2011

MICHIGAN BRIEFS Does this make horse sense? Cut Grand Rapids is not the only area attracting attention from track season to boost demand Kalamazoo Promise: 6 years, $30M, 2,300 students news media outside Michigan: Ⅲ The Reading Eagle compared If you’re a horse and like to race, the Pennsylvania city’s problems these are not good times. In metro Six years after the Kalamazoo Promise made na- dents eligible for Promise scholarships have en- to those of Flint — No. 1 appears to Detroit, Pinnacle Race Course in tional headlines with its commitment of free college rolled in college for at least one semester, which is be that Reading is the only city in Huron Township gave up its horse- tuition and fees, no one still says where the money higher than the 71 percent rate for public high the nation with a population over racing license this year. The thor- comes from. But the program can say how much has school graduates statewide. In all, about 85 percent 65,000 that has a higher percent- oughbred race course closed in No- been spent — more than $30 million — and the num- of Promise students who started at a four-year uni- age of residents living in poverty vember 2010 because revenue ber of Kalamazoo Public Schools students who have versity have either earned degrees or remain in than Flint. The coverage looked at wasn’t covering costs. benefited — more than 2,300. school. Flint’s struggle with vacant prop- And now in mid-Michigan, Figures show that about one-third of the students To qualify, students must live in the school dis- erty and downtown revival, Sports Creek Raceway in Swartz who started college on Promise scholarships have trict and attend it at least through high school. The among other familiar urban chal- Creek has cut its racing days to 16 dropped out, at least temporarily, the Kalamazoo scholarship covers up to 100 percent of tuition and lenges. from 32, with the season ending Gazette reported. Since 2006, about 90 percent of stu- fees at any Michigan public college or university. Ⅲ In a more positive take on Dec. 31. The reduction is an at- Flint, National Public Radio looked tempt to create more demand, Last week, Gentex broke ground Thursday, university officials said in some ways, the two cities are at how the Fisher Body 1 plant — track manager Chris Locking told on a 125,000-square-foot expansion they had reached a tentative agree- alike. Both have about 200,000 resi- made famous by the 1936-37 sit- The Flint Journal. and sought rezoning of additional ment on a new three-year contract dents, a waterfront, a university down strike — has become the new But Executive Director Richard land for possible growth. The expan- after 14 hours of negotiations facil- and nightlife. Both have preserved home of Diplomat Specialty Pharma- Kalm of the Michigan Gaming Con- sion is one of five planned by Gentex itated by Judge Paul Chamberlain some of their older buildings. cy Inc. Diplomat made news when trol Board, which regulates horse in Zeeland and Holland Township, of Isabella County Circuit Court. But the CBC contends Windsor it landed a major piece of mail-or- racing in the state, said of the less- Bruce Los, vice president of human In confirming the agreement the lacks one thing that Grand Rapids der business from Pfizer Inc. is-more approach: “If the demand resources, told The Holland next morning, the president of the has: young professionals. CBC (Michigan Briefs, Nov. 28.) was there, there would be more Sentinel. Los said Gentex has posted CMU Faculty Association, Laura Frey, Windsor coronates the Michigan Ⅲ Chicago public radio station days.” Kalm said gamblers find compounded annual growth of 19 said the vote would take place the city as “a model of millennial suc- WBEZ reported that in northern wagering easier to do at casinos. percent over the past 19 years. first week of the spring semester, cess.” Michigan, “food is becoming a In August, Gentex said it planned which starts Jan. 9. In a statement, Perhaps weary of having heard main attraction for tourists, and With $160M expansion, Gentex to spend $160 million on expansions the university said details of the this a thousand times before, The food-focused tourism is creating in the area. The company has hired agreement won’t be released until Grand Rapids Press observes that jobs for farmers, cooks and food expects growth on road ahead more than 150 people out of the esti- the union ratifies the contract. the CBC report “recites the ‘cool purveyors.” (“As leaves leave, Lee- mated 1,110 it expects to hire in the city’ talking points that seem to lanau builds year-round econo- Don’t tell the folks at Zeeland- next five years, Los said. have become standard in any out- my,” Michigan Briefs, Nov. 7.) based Gentex Corp. that it’s better to Windsor role model? No offense, side profile of Grand Rapids — look ahead than dwell on what’s be- CMU faculty to vote on deal but it’s not across the river downtown nightlife, ArtPrize, a Find business news from hind you. The company built its ‘check from two wealthy families’ around the state at crainsdetroit business and brand by manufactur- Faculty members at Central Detroit may be Windsor’s neigh- … and focuses on efforts by Grand .com/crainsmichiganbusiness. ing auto-dimming rearview mir- Michigan University will start the bor, but the Michigan city that is Valley State University and nonprofit Sign up for Crain's Michigan rors and, in its latest innovation, new year thinking about ratifica- its soul mate is … Grand Rapids? A development organization the Right Business e-newsletter at crains camera-assisted rearview mirrors. tion and not celebration. Late CBC Windsor report contends that Place to keep young adults in town.” detroit.com/emailsignup.

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December 5, 2011 CRAIN’S DETROIT BUSINESS Page 3 Price-fixing morass deepens Focus: Law

based Furukawa Electric Co. Ltd., the As lawsuits increase, many firms await outcome government alleges restraint of trade in violation of the Sherman BY CHAD HALCOM say. Even if they can prove they subsidiary E-Lite Automotive Inc. of Antitrust Act for collusion be- AND DUSTIN WALSH were overcharged, many compa- Chino, Calif. tween July 2001 and September CRAIN’S DETROIT BUSINESS nies will hold off on litigation until The latest aftermarket headlight 2008 by Eagle Eyes. the current prosecutions and spate indictment stems from an ongoing Polo Shu-Sheng Hsu, the former The global crackdown on alleged of lawsuits unfold — and some investigation into the market that president and CEO of Maxzone, auto supplier price fixing has ex- may never come to court. led to criminal fines for Fontana, was sentenced to serve 180 days in panded again, with an additional Last week, the U.S. Department of Calif.-based distributor Maxzone Ve- prison and to pay a $25,000 crimi- criminal indictment issued last Justice Antitrust Division brought hicle Lighting Corp. and Sabry Lee USA nal fine for his role in the conspir- week and a new kind of class-ac- its third Asian auto supplier indict- Inc., the U.S. distributor for Tai- acy. Chien Chung Chen, aka An- tion lawsuit pitting suppliers ment in less than three months, this wanese producer Sabry Lee Ltd. drew Chen, the former executive Returning veterans put focus against other suppliers and the au- time at U.S. District Court in San Maxzone was fined $43 million this vice president of Sabry Lee, plead- tomakers. Francisco against the Taiwan- month and Sabry Lee $200,000 in ed guilty as well and is scheduled on employment law, Page 11 But don’t expect most of the in- based aftermarket headlight maker October. to be sentenced July 17. dustry to get tangled in the fray Eagle Eyes Traffic Industrial Co. Ltd., its Much like in its September in- About 25 civil lawsuits have just yet, analysts and attorneys chairman and vice chairman and dictment in Detroit against Tokyo- See Price fixing, Page 25 Company index These organizations appear in this week’s Crain’s Detroit Business: Amherst Partners ...... 15 Compuware BBK ...... 15 Bodman ...... 13 Brooks Wilkins Sharkey & Turco ...... 15 Center for Automotive Research ...... 15 Ventures Chrysler Group ...... 1 Compuware Ventures ...... 3 Conway Mackenzie ...... 25 Cranbrook Schools ...... 22 backs site for Delphi ...... 25 Denso ...... 25 Detrex ...... 9 Detroit Medical Center ...... 6 Detroit Symphony Orchestra ...... 22, 23 news videos Downtown Detroit Partnership ...... 3 Dykema Gossett ...... 7, 13 Elco ...... 9 Glocal founder in Foley & Lardner ...... 12 Furukawa Electric ...... 3 General Motors ...... 15 Cavalieri family Glocal ...... 3 Harvel Plastics ...... 9 BY TOM HENDERSON HealthPlus of Michigan ...... 6 CRAIN’S DETROIT BUSINESS Henry Ford Health System ...... 6 Honigman Miller Schwartz & Cohn ...... 7, 13 Compuware Ventures LLC has led a House Energy & Technology Committee ...... 16 $1 million investment in a startup Invest Detroit ...... 25 called Glocal Inc., which will fund Jones Lang LaSalle ...... 21 the launch in the spring of a web- Kelly Services ...... 12 site that lets media outlets around Klimist, McKnight, Sale, McClow & Canzano . . . . . 13 JOHN SOBCZAK Lear ...... 25 the country post news videos and Among the projects Dave Blaszkiewicz is taking on in his dual role with the Downtown Detroit Partnership and Invest content without having to pay a fee. Magna International ...... 25 Detroit is the redevelopment of Capitol Park. Blaszkiewicz is involved in offering three buildings for redevelopment, Michigan Building & Construction Trades Council . . . 13 Glocal’s founder and CEO shares including the former United Way Building at 1212 Griswold. Michigan Chamber of Commerce ...... 14 a well-known name in Southeast Michigan Manufacturers Association ...... 14 Michigan business circles. Lincoln Michigan Professional Fire Fighters Union ...... 14 Cavalieri, 25, has the same name as Michigan Public Service Commission ...... 16 his grandfather, Mitsubishi Electric America ...... 25 the longtime Molina Health Plan of Michigan ...... 6 DDP leader takes new avenues Nacht, Roumel, Salvatore, Blanchard & Walker . . . 12 general manag- er of the old Nemeth Burwell ...... 12 Olympia Stadi- Oakwood Healthcare ...... 6 Blaszkiewicz steers agency into more hands-on role Ogletree, Deakins, Nash, Smoak & Stewart ...... 11 um, the former RS Electronics ...... 11 home of the De- BY NANCY KAFFER downtown Detroit; has partic- Senate Energy & Technology Committee ...... 16 troit Red Wings. CRAIN’S DETROIT BUSINESS ipated in the development of a St. John Providence Health System ...... 6 Cavalieri’s dad We want to transit-oriented development Tokai Rika Group North America ...... 25 is also a Lincoln Dave Blaszkiewicz became “ plan to align with the pro- TRW Automotive Holdings ...... 25 United Auto Workers ...... 13, 14 and is founder head of the Downtown Detroit posed M1 Rail project; and is Cavalieri drive change. Valeo ...... 25 and president of Partnership in February with a ” working to assist redevelop- Omni Corp., a Plymouth-based mak- clear directive: Re-evaluate WCSX FM 94.7 ...... 24 Cynthia Pasky, chairman ment of downtown’s Capitol WDVD FM 96.3 ...... 24 er of medical devices. everything. of Downtown Detroit Park. WJR AM 760 ...... 24 The eldest Cavalieri, 93 and liv- All the DDP’s work was on Partnership’s board “We want to drive change,” WMGC FM 105.1 ...... 1 ing in Florida, was the mastermind the table, Blaszkiewicz said. of directors said Cynthia Pasky, founder WNIC FM 100.3 ...... 24 behind the building of Joe Louis This included such programs and CEO of Detroit-based WOMC FM 104.3 ...... 1 Arena, completed on the riverfront as 211 On The Go, which helps the Blaszkiewicz’s leadership. Strategic Staffing Solutions and Yazaki North America ...... 25 in 1979. (See story, Page 21.) homeless become equipped to seek Blaszkiewicz’s DDP is a more chairman of the DDP’s board of In addition to providing funding employment and permanent hous- hands-on economic and commu- directors. for Glocal through its investment ing; Clean Downtown, the DDP’s nity development agency, filling “We’re about safety, lighting, Department index subsidiary, Compuware Corp. is pro- signature downtown street-clean- the same role that Sue Mosey’s economic development,” Clean BANKRUPTCIES ...... 9 viding Web designers, program- ing program; and the annual Midtown Detroit Inc. plays. Downtown and then “the social mers and its expertise in cloud Christmas tree-lighting ceremony Since Blaszkiewicz came on elements,” she said. At Campus BUSINESS DIARY ...... 20 computing. in Campus Martius Park. board, the DDP has announced Martius, Pasky said, the DDP CALENDAR ...... 17 Five Compuware employees While the DDP is keeping all Live Downtown, a residential in- does the tree lighting, “making CAPITOL BRIEFINGS...... 14 centive program funded by pri- those programs, it’s also ventur- JOB FRONT (FORMERLY CAREERWORKS) . . 18 See Glocal, Page 21 ing into new territory under vate and nonprofit employers in See DDP, Page 25 CLASSIFIED ADS ...... 21 KEITH CRAIN...... 8 The daily In focus OPINION ...... 8 Check out Crain’s collection THIS WEEK @ Crain’s delivers news every PEOPLE ...... 18 weekday to email inboxes. Sign of videos related to timely news WWW.CRAINSDETROIT.COM up at crainsdetroit.com/getemail. stories, crainsdetroit.com/video. RUMBLINGS ...... 26 WEEK ON THE WEB ...... 26 20111205-NEWS--0004-NAT-CCI-CD_-- 12/2/2011 6:50 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS December 5, 2011 Your Bank’s Detroit fights state takeover Not Lending? day that a preliminary review of De- state takeover is fast becoming BY NANCY KAFFER troit’s finances would begin Tues- eclipsed by an even more serious CRAIN’S DETROIT BUSINESS day. question: Will the city be able to A preliminary review, conducted avoid bankruptcy? Detroit’s political, business, and by Treasury Department staff, looks The council and mayor have been union leaders came together last for signs of financial stress. If the re- meeting to develop budget reme- week, united against a common ene- view finds those signs, an appointed dies. A report prepared by Irvin my: a state takeover. team begins a full review, with the Corley Jr., the council’s top fiscal But it wasn’t enough to stop Gov. likely outcome being the appoint- analyst, presents three scenarios Rick Snyder and state Treasurer ment of an emergency manager. that include different levels of union Andy Dillon from announcing Fri- But whether Detroit can dodge a concessions and layoffs. If unions concede to all that the city is asking, 1,700 layoffs still would be required. If not, 2,300 would be required. STORIES OF PEOPLE Still, those savings don’t address Detroit’s debt — which Dillon said REINVENTING Friday was a key factor in the deci- sion to start a preliminary review. THE REGION… Also an issue: the amount of federal ours are grant dollars the city receives. . A new report by the nonpartisan Call for a free consultation. AND THEMSELVES. Citizens Research Council found that Loan amounts: $1,000,000.00 and above. the city’s total outstanding debt, Changing Gears, airing every Wednesday legacy costs and other liabilities to- at 8:35 a.m., explores the economic tal about $14 billion — or roughly s Investment Real Estate s Equipment $19,000 for every resident. s Owner Occupied Real Estate s Turnaround Consulting transformation of the industrial Midwest, Municipal finance have said that s Lines of Credit s Loan Modifications through the stories of people driving and restructuring government debt out- s Accounts Receivable s Bank Workouts experiencing this change. side of U.S. Bankruptcy Court is diffi- cult. The city added to its debt bur- den in 2010 when it sold about $249 Learn more at million in fiscal stabilization bonds. Changing Gears changinggears.info Those bonds were supposed to buy Bing time to engage in the kind of citywide overhaul that would re- duce the city’s structural deficit. 800.509.3552 But that hasn’t happened. Cor- www.eclipsecapitalgroup.com ley’s report says the city has contin- 2207 Orchard Lake Road, Sylvan Lake, MI 48320 “Since 1997” ued to overspend by about $100 mil- lion a year, ending fiscal 2011 with just $13 million in cash on hand. Short-term fixes, Dillon said Fri- day, don’t address the city’s biggest problems. Public Act 4 — the Michigan law passed this year that grants the Make an Executive Decision. state power to appoint emergency managers — requires that an emer- gency manager be appointed before a struggling city, county or school Choose Sommers Schwartz district can declare bankruptcy. And bankruptcy can happen only To Protect your career with the governor’s approval. But PA 4’s fate is in question. Op- ponents of the act — who particular- and your Family ly oppose the power it grants emer- gency managers to open union contracts — say they’ve collected enough signatures to place a propos- Decisions… decisions. al to repeal the law on the November 2012 ballot. Choosing the right law firm to handle your In the interim, PA 4 would be sus- employment law dispute can be difficult. Fortunately, pended. It’s unclear what that would we at Sommers Schwartz can make your choice much easier. mean for the state’s ability to inter- Why? Simple. We offer you our vast experience with both vene in troubled municipalities. business and individual cases, handle a diverse clientele, “Legal opinions vary, as Act 4 specifically repealed Act 72,” said resolve cases quickly, customize fee arrangements and offer Oakland County Deputy Executive you the clout of a big law firm combined with highly Robert Daddow. He helped write PA personalized service. 4, which replaced PA 72. Sara Wurfel, Snyder’s press sec- So make an executive decision. Choose Sommers Schwartz retary, said based on the office’s le- for all your employment law needs. gal review, PA 72 would come back if PA 4 is suspended — though ac- tions taken under PA 4 would stand. If the mayor and Detroit City Council can’t come up with a plan to cut costs and boost revenue, without the option of an emergency manag- er who can’t alter union contracts, bankruptcy looks like a more viable option — unless Snyder can push a reauthorization of a law similar to yhd/s ^WZd/KE /^Whd^ ͻ /^Z/D/Ed/KE ͻ ,Z^^DEd ͻ KsZd/D >/D^ ͻ t,/^d>ͳ>KtZ PA 4 through the Legislature. Wurfel wouldn’t say whether www.sommerspc.com | | | Snyder would push for such a reau- 248-415-2234 1-888-884-3878 2000 Town Center, Suite 900, Southfield, MI 48075 thorization, but did say that the gov- ernor remains committed to the tools and ideas embodied in PA 4. “The governor doesn’t view bank- ruptcy as an option,” Wurfel said. 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Page 6 CRAIN’S DETROIT BUSINESS December 5, 2011 Insurers, hospitals try counseling, letters to cut unnecessary ER visits

BY JAY GREENE mary care physicians” for treatable than three times per year with what totaled 124 million in 2008, an in- members who are high users of ERs CRAIN’S DETROIT BUSINESS conditions, said Richard Frank, are considered “primary care physi- crease of 31 percent since 1997. and may have complex chronic ill- M.D., chief med- cian treatable visits,” Frank said. In Michigan, average ER visits nesses. Nurses contact the members With visits up at hospital emer- ical officer with “We started a letter campaign and also increased 2.7 percent, but the to ascertain why ERs are used and gency departments, health plans HealthPlus of aggressive case management” (for numbers per 1,000 were slightly to suggest alternatives. and hospitals in Southeast Michi- Michigan. those members), Frank said. “Those higher than national averages — to After identifying high ER-using gan are trying strategies to reduce Nonemergen- patients are less than 1 percent of 455 from 443. patients, several hospitals, includ- costs and encourage patients to seek cies that could be our members, but we have seen an Studies estimate that inappropri- ing those affiliated with DMC, Oak- urgent care at physician offices or treated more increase.” ate use of ERs ranges from 8 percent wood Healthcare, St. John Providence outpatient clinics. quickly and at a Most hospitals in Southeast to 27 percent, depending on the defi- Health System and Henry Ford Health Over the past several years, hos- lower cost at Michigan, including Detroit Medical nition of an appropriate ER visit. System provided additional counsel- pitals and HMOs are identifying pa- physician offices Center, have experienced steady in- For example, the Rand Corp. found ing services and referred many of tients who use ERs more than 10 include sore creases in ER visits in recent years. last year that about 17 percent of vis- the patients either to a primary care times per year. Frank throats, ear Nationally, ER visits increased its to ERs were unnecessary and physician or a health center. “We have become more aggres- aches, upper respiratory infections 2.7 percent in 2009 to 415 from 404 added $4.4 billion in annual health Molina Health Plan of Michigan pro- sive in the last 12 months to identify and back pain, Frank said. per 1,000 people, according to the lat- care costs. To address rising ER vides transportation services for patients who are high utilizers of HealthPlus also considers high est data from the U.S. Centers for Dis- costs, health plans have developed members to help them get to routine ERs and could be seeing their pri- users those who visit the ER more ease Control and Prevention. ER visits case management programs for doctor appointments in hopes of avoiding the ER, said Director of Public Relations Laura Hart. “We have a program which tar- gets physician practices where there are members with high use of the emergency department,” she said. “This includes a face-to-face, physician-to-physician meeting for evaluation and strategic planning. We then track ER use rates and pro- vide follow-up.” Give. Molina and other plans also pro- vide financial incentives for physi- And the state gives back. cians to stay open evening and weekend hours. While some hospitals like DMC and Oakwood advertise their ERs to potential patients as if they were elective services, some state Medic- aid programs are moving to penal- ize hospitals for inappropriate ER use. In the past year, Iowa, Tennessee, Texas, Florida and Washington have moved to limit reimbursement to hospitals for patients coming into ERs for conditions that are consid- ered nonemergencies. For example, Washington’s Med- icaid program has plans to withhold reimbursement to hospitals for treating a Medicaid recipient for nonemergency care in the ER after the third such visit. Florida wants to charge Medicaid recipients $100 for using the ER for routine care. Texas is planning to reduce how much it pays hospitals for treating Medicaid recipients with nonemergency problems. Data shows that people enrolled in the Medicaid program use ERs three times as often people with pri- vate insurance and twice as much as the uninsured. Michigan’s fee-for-service Medic- aid program uses a different ap- proach to reduce unnecessary ER use. Under the state’s Beneficiary Monitoring Program, analysts in the Michigan Department of Communi- ty Health review ER use and come up with corrective action plans with physicians and beneficiaries. If you want to improve neighborhoods, support the arts, even To restrain costs, HealthPlus and make greener parks, the Community Foundation for Southeast several other Medicaid HMOs have Michigan can help. And when you donate by December 31, 2011, eliminated co-payments for primary care physician visits. you may get up to 50% of your gift back on your state tax return. Frank said members who overuse ER visits get calls and letters “of in- creasing strength to encourage non- ER primary care treatment visits.” Visit CFSEM.org or call 1-888-WE-ENDOW for more info on the expiring State of Michigan tax credit. HealthPlus has tracked a decline in unnecessary ER visits. “We need a new Medicaid ER pol- icy to discuss ways to drive the pop- Scan the QR Code to see a short video ulation to medical homes (physician on the tax credit. offices),” Frank said. “It is in every- body’s best interest.” Jay Greene: (313) 446-0325, [email protected]. Twitter: @jaybgreene 20111205-NEWS--0007-NAT-CCI-CD_-- 12/2/2011 4:37 PM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 7 Survey of execs on outlook of next year’s M&A finds mixed bag

BY CHAD HALCOM investment bankers and advisers. Thomas Vaughn, a partner in Dyke- modestly improved economy. Ob- ment at Detroit-based Honigman CRAIN’S DETROIT BUSINESS “The strategic buyers are often ma’s corporate finance group and stacles to closing M&A deals in the Miller Schwartz and Cohn LLP, agreed companies that have decided they part of the attorney committee that past 12 months included valuations, with Vaughn that “private equity Banks are lending again, and pri- need to grow, and in this current manages the survey. economic uncertainty and lack of clients and buyers in the market vate equity buyers face pressures to market they cannot grow organical- Positive factors driving M&A “availability of a quality target.” right now (have) a lot of dry pow- make new investments — but execu- ly. Instead, they need to grow by ac- deals include better access to lend- The survey predicts more deals of der.” tives don’t have the same enthusi- quisitions, and I’m definitely hear- ing capital, financial buyers such as companies buying other companies. Chad Halcom: (313) 446-6796, asm for mergers and acquisitions as ing people saying those exact words private equity funds under some But Joshua Opperer, partner in [email protected]. Twitter: they did last year, according to a within our own practice,” said pressures to deploy capital, and a the corporate and securities depart- @chadhalcom survey by Dykema Gossett PLLC. The Detroit law firm’s annual Mergers & Acquisition Outlook Sur- vey, to be released today, shows 26 percent of respondents think the M&A market will be “strong” in 2012, compared with nearly 40 per- cent who felt that way about 2011 in last year’s report. Nearly 60 percent had a neutral outlook, a modest in- crease from last year, and 15 percent see a weak market. Michigan executives, however, had a slightly more bullish outlook on the U.S. economy, the M&A mar- ket for next year — and their own involvement in 2012 transactions — than the group as a whole. More of the total respondents said they expect to acquire a business in the next 12 months than in any sur- vey year since 2006, and 52 percent of the Michigan group also expected to take part in a transaction as the buyer next year. About 15 percent of Michigan respondents also expect to see a decrease in distressed asset transactions, compared with just 11 percent of the group as a whole. This year’s outlook sampled 299 respondents, including executives, 20111205-NEWS--0008-NAT-CCI-CD_-- 12/2/2011 6:49 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS December 5, 2011 OPINION Detroit needs new way to handle legacy costs atching Detroit and Lansing’s political give-and-take is like watching Kabuki theater — stylized and some- W what bizarre. Gov. Snyder’s announced intent to be- gin a state-ordered financial review of Detroit — a formal step toward appointing an emergency manager — did last week what few crises have done before: unite the mayor, City Coun- cil and public employee unions. But can they make the drastic and necessary changes? De- troit’s financial structure is unsustainable. The Citizens Re- search Council pegs “legacy costs and debt” at nearly $20,000 for every resident of the city. The biggest debt is the bonds sold for the water and sewer system. The legacy costs are defined- benefit pension funds for city employees, police and firefight- ers. Detroit’s active workforce (11,000 people) is half the size of its retiree ranks (22,000), and the cost of maintaining those re- tiree promises are ensuring that current city services are cur- tailed. This creates an endless spiral: Residents leave for cities and suburbs with more services, leaving fewer — and older and poorer — residents behind. What Detroit and many other municipalities need is a new covenant for legacy costs. If the United Auto Workers created a VEBA to provide health care for retirees to help save Detroit’s TALK ON THE WEB automakers, what is a public-sector pension equivalent? Sure, the state could help the city collect income taxes, as From www.crainsdetroit.com Mayor Dave Bing has asked. But defined-benefit pension plans Re: Federal grant for energy consortium erty. I would never have made that in- Reader responses to stories and vestment in 2000 without the tax are a relic; the city’s pension plan needs to change. Over-hyped by spinners and blogs that appeared on Crain’s savings. The result is a now-thriv- Cutting police and fire workers in a city whose crime rates overplayed by the dailies, you say? website. Comments may be I’m shocked. edited for length and clarity. ing community in what was blight- already are unacceptable will only fuel the exodus from city Alan Stamm ed industrial property. neighborhoods that need a fighting chance to survive. about, thrive and survive? … This Al Downriver Re: Ficano appointees is, and has been, the continuation of the McNamara corruption that Re: As Nero fiddled, Rome burned I guess he must need more intelli- Get last round of 50% tax credits also gave birth to the Kilpatrick When you see the City Council gent people around him than the oth- clan and Jennifer Granholm. er leaders to make up for his defi- trying to undercut the mayor, then Ah, December. The month when thoughts turn toward the Dale Thompson you know it’s past time to put in an holidays — and tax filings. ciencies. t emergency financial manager. There’s a reason many of us are getting even more year-end Re: High-speed rail Rock charitable appeals than usual. On Dec. 31, Michigan’s gener- It appears that Ficano is over his No one doubts the potential for a ous 50 percent tax credits for specific types of donations will head in trying to be the county ex- high-speed rail line between De- Re: NAIAS 2012 countdown ecutive. It is time Wayne County troit and Chicago. … What people expire. The credits are awarded for gifts to community founda- Return to the glory days? That’s started electing officials, county doubt is whether the federal money tions; Michigan institutions such as libraries, colleges, li- happy talk. It’s more like returning executive, and county commis- will make any difference to making to the less-paranoid days. Yes, I want braries and museums; and homeless shelters/food banks. sioners who are well-qualified for this a reality. the show to be a success, too. This State tax credits totaled $53 million last year and $46 mil- those positions. Hutchinson Warren Richard Cooper region is tied into auto, but our lion in 2009, according to state Treasury Department. Dona- glory days will be noted when we tions behind those credits are double those amounts. If his appointees are so well- Re: Renaissance zone tax breaks can grow the economy indepen- People may not make charitable contributions simply be- qualified and so abundant, then I bought a house in St. Joseph on dent of the auto industry. cause of the tax credit it earns. But it helps. how and why did these scandals come what was reclaimed foundry prop- Timothy Dinan The Community Foundation for Southeast Michigan has a calculator on its website, www.cfsem.org, that can help donors Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email [email protected] calculate their tax credits. KEITH CRAIN: Clock is ticking loud and clear for Detroit Last week, the politicians and looks like Roy Roberts of a mess. History There is no federal money avail- and do what has to be done. the labor leaders showed up to join has his hands around should show very clear- able to the city of Detroit. Bond- My guess is that the longer every- forces and stand behind the mayor the problem. ly that General Motors holders are certainly at risk, as are body waits, the tougher it’s going to in declaring that they were in So this would not be and Chrysler had a fi- the city employees. It’s nice to see be for everyone. It will require more charge and were going to do what the first financial man- nancial manager, and everyone get together and hold and deeper cuts, and the financial has to be done to right the finan- ager for our city, and it’s the federal government hands, but the simple truth is that mess becomes clearer and clearer. cial ship of Detroit. not the first for our state. owned and ran both whoever ends up in charge is going And lest all those folks who Meanwhile, it looks like Lansing They all got together companies for quite a to have some very bloody hands. don’t work or live in Detroit are and the governor have started the last week to show soli- while. They also put bil- I don’t think that the folks in De- sitting smugly on the sidelines, re- process that would lead to an darity. But they, the lions of taxpayer dollars troit who are going to be responsi- alize that everyone is going to be emergency financial manager in various and many fac- into these companies ble for making the decisions or the impacted dramatically. It doesn’t charge of Detroit. tions, are still a million while making sure that folks who are going to be impacted matter where you live in South- Lest we forget, there are already miles apart as to what’s going on shareholders lost everything, bond- have any idea as to the severity of east Michigan, when you have a several cities, including Flint, that and the solution. holders lost almost everything, and what’s going to have to be done to problem with your largest city, have emergency financial man- The head of the UAW, Bob King, salaried employees lost a huge keep Detroit out of bankruptcy. shock waves will be felt all over agers. Detroit also has an emer- had better be very careful using the amount of their pensions. The UAW It is a pretty stark choice. De- the state. A financial tsunami for gency financial manager in charge UAW and the auto industry as a workers took some drastic cuts as troit is facing bankruptcy or hav- the entire state of Michigan. of the Detroit Public Schools, and it poster boy for digging your way out well. ing a financial manager come in It is past the time to act. 20111205-NEWS--0009-NAT-CCI-CD_-- 12/2/2011 11:57 AM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 9 Detrex to sell Harvel Plastics, focus on specialty chemicals

BY CHAD HALCOM about $1.2 billion in global sales in tor in the decision to sell Harvel. while Harvel’s was $1.5 million. CRAIN’S DETROIT BUSINESS 2010. “It wasn’t the driving factor. The Major clients for both compa- The main factor Detrex’s other subsidiary — main factor was to capture value for nies are industrial. They range The Southfield-based pipe and “ Cleveland chemical additives and our long-suffering shareholders,” from distributors and contractors specialty chemicals maker Detrex was to capture value lubricants maker Elco Corp. — has Mark said. “There are some dynam- to, on the chemical side, lubricant Corp. plans to sell its largest divi- been the stronger sales performer ics taking place in the larger mar- manufacturers. sion, Harvel Plastics Inc., next for our long-suffering in 2011, reporting 51.7 percent ket, where customers are changing Mark said reaction to last month to Switzerland-based Georg growth at midyear, compared with more from the component supplier Thursday’s announcement of the Fischer AG for around $50 million shareholders. 17.9 percent growth at Harvel. to systems supplier model. sale has been positive. cash, Detrex said last week. ” Detrex also added $2.5 million to “Harvel is more a component op- “Most of the feedback I’ve gotten Detrex (OTC: DTRX) expects the Tom Mark, Detrex Corp. its debt this year by borrowing for eration, and it makes more sense to so far is from various industry in- after-tax value of Harvel to be working capital to accommodate make it part of a systems operation. vestors — all of which have been about $30 million. $93.7 million in revenue in 2010. growth, and its pension plan Georg Fischer has that capability.” congratulatory,” he said. Easton, Pa.-based Harvel — Georg Fischer, founded in 1802, was underfunded by more than Mark also said the sale allows Chad Halcom: (313) 446-6796, which makes PVC and CPVC pipe has 13,000 employees in 130 compa- $8 million at the end of 2010. Detrex to concentrate on growth in [email protected]. Twitter: and duct, square and heavy wall nies in 30 countries. It plans to in- But Detrex President and CEO specialty chemicals. @chadhalcom. tubing — has 148 employees and ac- tegrate Harvel into its GF Piping Tom Mark told Crain’s that cash Elco had $6.9 million in operat- Michelle Muñoz contributed to counted for $58.4 million of Detrex’s Systems division, which generated needs were a more peripheral fac- ing income on its sales last year, this story.

Powers Distributing named top craft beer distributor

Orion Township-based Powers Distributing Co. was named the 2011 Craft Beer Distributor of the year by the National Beer and Wholesalers Association and the Brewers Associa- tion during October’s Great Ameri- can Beer Festival in Denver. The company was selected from the wholesaler association’s 3,300 li- censed independent beer distribu- tor operations across the country. The award recognizes a beer dis- tributor that does the most to mar- ket, promote and sell craft beer. In 2004, Powers created International Northville, MI Scottsdale, AZ Indianapolis, IN Dallas, TX North Richland Hills, TX Southfi eld, MI Beverage Co., a specialty division $150,000,000 $1,334,500 $100,000,000 $50,000,000 $6,150,000 $115,000,000 devoted to craft beer — including Revolver SBA 504 Real Estate Loan Revolver Asset-Based Senior Equipment Loan Revolver two cicerones, which are equiva- Term Financing Secured Credit Facility Line of Credit Term Financing lent to sommeliers, and six certi- Foreign Exchange Sole Lead Arranger Sole Lead & Sole Lead Arranger fied beer servers. Sole Bookrunner Lender Administrative Agent Sole Lender Sole Lender Sole Bookrunner — Nathan Skid

Royal Oak, MI Mason, OH Kansas City, MO Southfi eld, MI St. Louis, MO Grand Rapids, MI BANKRUPTCIES $425,000,000 $155,000,000 $810,000 $20,000,000 $650,000 $225,000,000 The following businesses filed for Revolver Senior Secured Credit Facilities Equipment & Revolver Term Loan Revolver Term B Facility Revolver Working Capital Equipment Financing Term Financing Chapter 7 or 11 protection in U.S. Term Loan Treasury Management Bankruptcy Court in Detroit Nov. 23- Left Lead Arranger Left Lead Arranger Dec. 1. Under Chapter 11, a company Sole Bookrunner Left Joint Lead Arranger Sole Bank Sole Lender Sole Bank Sole Bookrunner files for reorganization. Chapter 7 in- volves total liquidation. Mesopotamia Food Inc., P.O. Box 1213, Highland Township, voluntary Chap- ter 7. Assets: $7,234; liabilities: Powering business growth in the Midwest and Southwest $215,044. Zeina Hospitality Inc., 4884 Quarton Road, Bloomfield Hills, voluntary Chapter 11. Assets and liabilities not with financial strength and commitment. available. Total Printing Services Inc., aka TPS Inc., 5180 Park Ridge Drive, West We’re committed to the Midwest and Southwest regions. That’s why we’re helping companies here navigate changing Bloomfield Township, voluntary Chapter 7. Assets and liabilities not available. market cycles and create new opportunities for success. Our client managers work with you to understand your business 3L Transport Inc., 1429 Annendale Court, Ann Arbor, voluntary Chapter and seamlessly deliver customized solutions based on your unique needs. Let us help increase your fi nancial fl exibility 11. Assets and liabilities not available. Talon Sales LLC, 19678 Harper Ave., and put your growth plans in motion. Suite 203, Grosse Pointe Woods, vol- untary Chapter 7. Assets and liabili- ties not available. New Clinton Auto Service Inc., dba Call 1.313.221.9394 or visit bankofamerica.com/commercialbanking New Clinton Auto Wash, dba AAA Muf- fler Shocks and Springs, dba New Clin- ton Auto Sales, dba Auto Lab #137, 366 N. Gratiot Ave., Clinton Town- ship, voluntary Chapter 11. Assets: $79,500; liabilities: $1,040,233. S & V Investment LLC, 366 N. Gratiot Ave., Clinton Township, voluntary Chapter 11. Assets: $150,000; liabili- ties: $783,255. Badran Investment LLC, 8435 E. Holly Road, Holly, voluntary Chapter 11. As- “Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking sets and liabilities not available. affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America East Holly Oil Inc., 8435 E. Holly Road, Corporation (“Investment Banking Affi liates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of which are registered broker-dealers and members of FINRA and Holly, voluntary Chapter 11. Assets SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured y May Lose Value y Are Not Bank Guaranteed. ©2011 Bank of America Corporation ARR72064 and liabilities not available. — Michelle Muñoz DBpageAD.qxp 11/28/2011 10:27 AM Page 1

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December 5, 2011 CRAIN’S DETROIT BUSINESS Page 11

A CONVERSATION WITH UNION UPTICK Labor’s resurgence drives Vicki law firms’ workload, Page 13 Patterson, Ogletree, Deakins, Nash, Smoak & Stewart PC Law

Ruling raises bar “ It’s a good time to on harassment go back Vicki Patterson, shareholder at the Bloomfield Hills offices of Greenville, and revisit S.C.-based Ogletree, Deakins, Nash, Smoak & Stewart PC and an the policies employment litigator defending employers, spoke with Crain’s and reporter Chad Halcom about the impact of Hamed v. Wayne County et procedures al, in which the Michigan Supreme Court raised the legal standard for in place. making employers vicariously liable in ” certain sexual harassment cases. Terry Bonnette, Nemeth Burwell PC How and why would the Hamed lawsuit, involving a Wayne County jail guard now convicted of sexually assaulting an inmate, affect harassment cases for private sector employers? Why the high interest level in this case? There used to be a precedent before Hamed, known as the ‘aided by agency’ standard, under the (Champion v. Nationwide Security In the Inc. decision of 1996). Usually an employer wasn’t liable for an unforeseeable intentional (employee act), but in cases where the offending employee was aided in his actions by an authority given from the employer, it could be liable. Where an employee is taken somewhere (and mistreated) because as a subordinate they had to go or it could mean their job, or even line of if a relationship is consensual but has a quid pro quo component because a supervisor is clothed with authority, that was an exception. What the court has basically said is there is no aided by agency exception anymore. In Hamed, the employee had a history of misconduct, but not sexual JOHN SOBCZAK RS Electronics Inc. Senior Vice President Dick Miller, a veteran of the Afghanistan conflict, said misconduct, so Wayne County got the returning service members can have a hard time resuming civilian careers. civil rights claims in the lawsuit hire dismissed. Does the new standard mean employee harassment is less of a concern for businesses? It’s a good case for the employers in a sense that this ‘aided by agency’ legal standard As job-seeking troops return, employers has been argued a lot by plaintiffs’ firms, and we’ve had several cases of it before. But I don’t think employers will become more lax. In terms of whether must carefully navigate employment laws we would do an internal investigation for clients, we would check all of the BY CHAD HALCOM entering the civilian labor force. same things and research employee CRAIN’S DETROIT BUSINESS President Barack Obama last month signed THE VOW TO HIRE HEROES ACT relationships and work history. But the VOW to Hire Heroes Act, which offers ick Miller says a typical senior field The law bolsters incentives to employers to history (of harassment) will now be a lot businesses tax credits of up to $5,600 to hire officer in the Army has practical hire veterans and provides job protections. more relevant under Hamed. Clients veterans and $9,600 for wounded veterans, if Key points of the law: have to know they need to be proactive D management experience equivalent either has been unemployed more than six Offers businesses tax credits of up to about that. to that of a C-suite executive at a startup or months. But Miller said it’s only a start. second-stage business. $5,600 to hire veterans and $9,600 for “The new law is wonderful, but you still wounded veterans, if either has been Separately, attorneys expect an Plus, that officer is versed in coping with have the problem of linking an individual to unemployed more than six months, and a appeal in the $12.5 million jury verdict shellfire. a hiring company that needs them,” he said. $2,400 credit to hire a veteran who is where an employee of Superior “A 30-year-old company commander, like “I’m an employer, and I truly think service- unemployed more than four weeks but less Ambulance Services Inc. assaulted a a captain, can be responsible for 155 people, than six months. teenage patient on a transfer between men need to expand on their records and tell along with all the related logistics, mainte- Employers must retain veteran hires for a hospitals. Could this case make the us the skills they acquired. But where do peo- nance and personnel management, in an op- ple usually annotate their service on a ré- year to receive the tax incentives. court review Hamed and change the eration with a couple million dollars a rules again? I would be very surprised sumé? Usually in the last line item, and it’s as Requires most active-duty service members month in payroll. That’s very much like run- exiting the military to take part in its transition if it does. The (Supreme) Court generic as the branch and specific service ning a small company,” said Miller, senior assistance programs, which help troops return majority went to great lengths to dates. And these are often humble people, who vice president at Livonia-based electronic to civilian life and compete in the jobs market. explain why it was doing away with the don’t talk about it without encouragement.” old (Champion ruling) standard. With components supplier RS Electronics Inc. Winding down Iraq and Afghanistan oper- Provides nearly 100,000 unemployed veterans between 35 and 60 years old, the current makeup of the court being “All of that, and he has had to keep those ations will likely bring a slew of new legal people alive through a period of persistent including 45,000 starting next summer, with the same as it was then, and so little matters home to employers and law firms in up to one year of added benefit assistance time passed, I doubt they want to conflict.” Southeast Michigan, as tens of thousands of But Miller, also a veteran of Afghanistan under the Montgomery GI bill, for education or take it up again. You’re still going to troops — some with highly developed skills — training programs at community colleges or have that same issue raised in future and deputy commanding general for the Indi- return amid economic uncertainty. technical schools. The assistance is for lawsuits. But if you want to argue an ana National Guard 38th Infantry Division, Some employers will likely seek veterans degrees, non-college degrees or professional ‘aided by agency,’ it’s just not going said RS Electronics isn’t hiring yet in the and the new incentives that come with them, certifications. The goal is to equip veterans for to be as valid of an argument. current economy — and returning service- high-demand occupations. men and servicewomen face difficulties re- See Jobs, Page 12 20111205-NEWS--0012-NAT-CCI-CD_-- 12/2/2011 10:48 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS December 5, 2011 Focus: Law Jobs: Hiring veterans ■ From Page 11 attorneys said, while others could ous employee claims before Labor have past employment decisions or the U.S. Department of Defense’s challenged under the federal Uni- Employer Support of the Guard formed Services Employment and and Reserve committee. Reemployment Rights Act. “I’m getting more calls from em- That law, which prohibits em- ployers looking to head off any is- ployer discrimination based on sues, because they’re being proac- military service and secures sol- tive about it,” Kopp said. “If you can diers’ re-employment rights, has- show that a service member would n’t been very controversial since it have lost his or her job anyway, be- was enacted in 1994. But attorneys cause cuts all happened by seniori- say it hasn’t been tested in as ty, that’s straightforward. But if tough a job market as many parts there’s a question of other man- of the country face now. agers an employer transferred else- While job growth is gradually where to hold onto certain people in EveryEverryy llawyerawyyer mustmust passpass thethe bar.bar. remerging in some segments, na- a downturn, then it can become a tional and state unemployment more difficult case to defend.” OursOurs gogo onon toto raiseraise it.it. rates remain high. Like the re-employment act, the “We’re in a time of tremendous new Hire Heroes Act also sets economic contraction now,” said terms on the length of employment David Blanchard, principal at Ann for returning service members — UÊ6ˆLÀ>˜Ìʏi}>ÊVœ““Õ˜ˆÌÞ Arbor-based Nacht, Roumel, Salva- in this case employers must retain UÊ ÝVˆÌˆ˜}ÊÕÀL>˜Êi˜ÛˆÀœ˜“i˜Ì tore, Blanchard & Walker PC, or veteran hires for a year to receive Nacht Law, an employment and the tax incentives, UʘÌiÀ˜>̈œ˜>ÞÊÀiVœ}˜ˆâi`Êv>VՏÌÞ civil rights firm in Ann Arbor. “So It also requires most active-duty UÊ"ÕÌÃÌ>˜`ˆ˜}Ê«À>V̈̈œ˜iÀà sometimes these jobs that reserve service members to take part in the members had before they were ac- military’s previously voluntary AIM HIGHER UÊ ÝVii˜ÌÊ՘ˆÛiÀÈÌÞÊÀiÜÕÀVià tivated are just gone, regardless of transition assistance programs, the status of the reservist. which help troops return to civilian œ˜Ìˆ˜ÕiÊޜÕÀʏi}>Êi`ÕV>̈œ˜Ê>ÌÊ7>ޘiÊ>Ü°Ê-«iVˆ>ˆâiʈ˜Ê “And the burden then falls on life and compete in the jobs market. VœÀ«œÀ>ÌiÊ>˜`Êw˜>˜Viʏ>Ü]ʏ>LœÀÊ>˜`Êi“«œÞ“i˜Ìʏ>ÜʜÀÊ the employer to prove they would “We’re looking at (geographic) Ì>Ý>̈œ˜°Ê œ˜Ì>VÌÊÕÃÊ̜`>ÞÊ>Ìʏ“«Àœ}À>“JÜ>ޘi°i`ÕʜÀÊ have eliminated that position any- areas where we have large popula- way. So I would expect a trend tions of transitioning military, and Σ·xÇLJäänn° there, but I don’t know if it’s still we’ll be focusing on recruitment early in that process.” activity and raising awareness in 6ˆÃˆÌÊlaw.wayne.edu/llmÊ̜ʏi>À˜Ê“œÀi° All 41,000 U.S. troops deployed those communities of where jobs in Iraq as of October are due to opportunities are,” said Jocelyn come home by the end of this Lincoln, vice president of Americ- month; another 33,000 troops re- as recruiting for Kelly Services Inc. turn from Afghanistan by late (Nasdaq: KELYA, KELYB) in Troy. summer 2012 under a plan Obama Kelly, which Lincoln says will outlined in June. count as the employer under the At the same time, the jobless Heroes Act for temporary and rate among post-9/11 veterans was transitional employees it places 12.1 percent in October, compared with other companies, estimates with 9 percent among the labor that veterans accounted for be- force as a whole, and the number tween 12,000 and 20,000 of the near- of reemployment act violation ly 400,000 U.S. employees it had claims has climbed every year placed in 2010. since Iraq troop deployments Kelly offers career counseling peaked in 2006, according to data and some presentations at military from the U.S. Department of Labor. transition assistance programs, Michigan unemployment stands at and Lincoln said Kelly plans for a 10.6 percent, according to the more strategic and elevated pres- state’s data from October. ence at those program briefings. The military paid out $882 mil- “In our position as a staffing lion in unemployment benefits last company, we can’t give preference year, compared with $451 million to one group over another, and we in benefits during fiscal 2008. treat all job seekers equally,” she “As the wars wind down, from said. “But … with this new legisla- the military side, having more em- tion, it’s going to be even more im- ployees come back will mean more portant to track the numbers of the queries to employers about their veterans that we place.” job status, and more demand on Miller and Kopp both said the government to review (jobs) incentives may be enough to sway claims,” said Jeff Kopp, partner in an employer to hire a veteran over the labor and employment practice an equally qualified non-veteran group at Foley & Lardner LLP in De- applicant for a civilian job, but troit and Michigan legal team they’re not enough on their own to leader of the U.S. Army Reserve 9th lead employers to end hiring Legal Support Organization. freezes or expand payrolls. “For employers, you should also Terry Bonnette, partner at em- see more legal compliance work in ployment law firm Nemeth Burwell helping companies get eligible for PC in Detroit, also said he hasn’t tax credits and in adopting proper seen any significant change in vet- policies and procedures for hiring eran employment claims yet, but under the (Hire Heroes) Act. You that both the re-employment act could also have some more (re-em- and the new Hire Heroes Act will be ployment act) claims to handle.” topics of the firm’s annual labor and Kopp and Blanchard both said employment law update Jan. 25. the re-employment act contains a With troops returning, he said, provision widely known as the “es- “it’s a good time to go back and re- calator principle.” visit the policies and procedures This allows a returning service in place. It’s important that em- member not only to regain employ- ployers also reflect on their own ment but also any promotion, se- recollection of the requirements of niority and retirement plan contri- the law, and get current.” butions that would have come if he Chad Halcom: (313) 446-6796, or she had never been called away [email protected]. Twitter: to serve. It could give rise to vari- @chadhalcom 20111205-NEWS--0013-NAT-CCI-CD_-- 12/2/2011 10:47 AM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 13 Focus: Law Firms expect work to grow as unions test laws, rebuild

BY CHAD HALCOM state laws surface to challenge CRAIN’S DETROIT BUSINESS them. Cameron Evans, partner in the Private-sector labor unions will labor and employment department likely rebuild lost muscle in the at Detroit-based Honigman Miller coming year, creating Schwartz and Cohn LLP, new litigation and or- said the law firm has ganizational work for Some issues seen management in- firms on both sides of “ quiries about union the bargaining table. can’t be held off issues jump in recent The United Auto months. Workers expects to add any longer, Since the new more than 20,000 jobs NLRB posting rule by 2015 to the 115,000 and the unions and a recent board de- workers it already cision broadening the represents at General are raising definition of a bar- Motors Co., Ford Motor gaining unit in health Co. and Chrysler Group them. care cases, Honigman LLC, after ratifying ” has seen client in- new contracts with John Canzano, Klimist, quiries and requests the Detroit 3 in Sep- McKnight, Sale, McClow for management tember and October. & Canzano PC training services rise. President Bob King “I think it’s going has laid out an aggressive plan to to be exceptionally busy in 2012,” organize Asian and German au- he said. “If I’m (representing) the tomakers in the U.S. as well, and union, I see a window of opportu- I’M AN MSU LAW ALUM... the UAW held a training session nity that provides the most fertile earlier this month in Indiana to ground to organize. That window pressure one transplant company could close in 2013 depending on Preparing future lawyers to use through a dealership campaign. what happens in the election. But Total UAW membership grew right now, their ranks have been intellect, ambition, and ethics 6 percent to 376,612 in 2010, for the hurt and their power reduced, and to solve the world’s problems. union’s first membership gain in they’ll (work) to increase union www.law.msu.edu six years. membership to the extent possible But new unions could crop up under the law.” well outside the auto industry, af- Klimist McKnight and several ter two recent victories for labor other local law firms have had a before the National Labor Relations busy year in litigation, Canzano Board that are expected to stream- said, and are monitoring each oth- line the organizing process. ers’ progress challenging recent The board tentatively adopted laws targeting unions and their in- rule changes proposed in June, fluence. which could reduce the timeframe The firm represents the Michigan for union elections to under 21 Building and Construction Trades days and eliminate some proceed- Council in a federal lawsuit chal- ings employers could request in lenging Public Act 98. This is a advance of a union election. state law adopted in July that pro- Nearly all private-sector em- hibits state and local governments ployers are expected to post a no- from entering construction or re- tice of rights to employees includ- pair contracts on public buildings ing the right to organize, starting that require or encourage private Jan. 31 — unless a ruling in a pend- companies “to enter into or adhere ing lawsuit by the U.S. Chamber of to agreements with a collective Commerce prevents it. bargaining organization.” John Canzano, labor attorney That case awaits a Jan. 4 hear- and partner at Southfield-based ing on the state’s motion to dis- Klimist, McKnight, Sale, McClow & miss, but Canzano said several Canzano PC, which represents the other firms have similar chal- UAW in several matters outside of lenges to other new laws. its Detroit 3 contracts, said the Evans said union organization is firm has seen some growth in busi- a growing share of the workload in ness representing unions. Honigman’s labor and employment Organization of new bargaining practice. And Canzano said union units is not yet a growth area, he organization at the supplier level said, but it could become one next could increase in the coming year. year depending on the strength of Honigman and Detroit-based YOUR BUSINESS IS UNLIKE ANYONE ELSE’S the economy and the impact of the Bodman PLC, which both represent recent labor board rulings. The manufacturers, also saw labor and law firm has five attorneys and employment litigation increase ‘—”Ž‡‰ƒŽ•–”ƒ–‡‰‹‡••Š‘—Ž†„‡–‘‘Ǥ could hire two associates in the even though total litigation in that coming months, he said. area of law was roughly constant, Customized counsel focused on today, with an eye on tomorrow. “It’s a little bit of everything dri- according to data from Monitor ving the growth. In the depths of Suite from Hubbard One, a Thom- the recession, the unions, like son Reuters company. everyone else, seemed to hold off But partner Martin Galvin of De- on spending money and hunkered troit-based Dykema Gossett PLLC said HOW CAN WE ASSIST? down,” he said. “Now that’s open- he doesn’t expect union organiza- ing up again — not so much be- tion to grow among suppliers unless P: 248.539.9900 cause the economy is expanding the economy continues to expand. E: [email protected] FOSTERSWIFT.COM enough yet, but because some is- “Until the demands for autos are sues can’t be held off any longer, higher, I’m not seeing this filter and the unions are raising them.” down to the supplier adding jobs Canzano said labor litigation is yet,” Galvin said. likely to continue to grow for local Chad Halcom: (313) 446-6796, Lansing l Farmington Hills l Grand Rapids l Detroit l Marquette l Holland law firms as unions regain mem- [email protected]. Twitter: bership and strength and as new @chadhalcom 20111205-NEWS--0014-NAT-CCI-CD_-- 12/2/2011 10:11 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS December 5, 2011 Wrangling continues over changes to workers’ comp LANSING — For a cou- strict “suitable work” to compensation benefit greatly re- ple of months, business the specific field that the duced or wiped out altogether to off- and labor, and Democrats Capitol employee worked in be- set a pension that they don’t re- and Republicans, have Briefings fore his or her injury. ceive. They may have to retire, just squared off over a wide- For example, a carpen- to put food on the table.” ranging workers’ com- ter injured on the job Newberry said “we’re not forcing pensation bill in the Leg- must not only prove that anybody to retire.” But under cur- islature. he or she cannot perform rent law, workers’ comp benefits And as the business- duties as a carpenter, but are reduced, or coordinated, with backed bill heads toward also cannot perform a dif- actual pension amounts received. action in the session’s fi- ferent job. The employer “There should be coordination of nal weeks, disputes re- would have to prove that benefits, just like there is for the in- main. jobs which the employee dividual who does elect to retire,” Business groups say Amy Lane could do exist and are she said. House Bill 5002, which re- available. Another issue is the length of vises Michigan workers’ compensa- That means workers’ comp bene- time for which an employer can tion law in a number of areas, will fits could be reduced based on theo- control the injured employee’s med- provide more certainty and clarity retical wages, opponents say. ical care. Employers by law are re- to an area that’s seen varying Michi- “Someone’s disabled, and you’re quired to provide reasonable med- gan Supreme Court interpretations going to hold against them a wage ical, surgical and hospital services and will improve Michigan’s busi- that they don’t have,” said Mark to injured employees, and for the ness climate. Docherty, president of the Michigan first 10 days of medical care, the em- But labor unions and others say Professional Fire Fighters Union. “We ployer can choose who will provide the legislation overreaches, to the have no problem with the require- that treatment. detriment of injured workers. ment to find a job, and have no prob- House Bill 5002 initially length- One issue has to do with the defi- lem with the fact that when you get ened that period to 90 days; it was nition of disability. Current law de- a job it comes off your compensa- set at 45 days in the House-passed fines disability as a limitation — re- tion. But they want to go further.” version now in Senate committee. sulting from a personal injury or Delaney Newberry, director of An employer “has to pay for med- work-related disease — of an em- human resource policy at the Michi- ical benefits for the life of the ployee’s “wage earning capacity” in gan Manufacturers Association, said claim,” so the widened window al- work suitable to the person’s quali- the language reflects Supreme lows more control to ensure the best fications and training. Court workers’ comp decisions that treatments and care are followed, Under the bill sponsored by Rep. recognized “jobs that you are able “so that they can return that person Bradford Jacobsen, R-Oxford, wage to do.” She said there’s also an ex- to work as soon as possible,” said earning capacity would be the pectation that employees should re- Wendy Block, director of health pol- wages that the employee earns or is turn to the workforce if they are icy and human resources at the capable of earning at a job reason- able. Michigan Chamber of Commerce. ably available to that employee, Docherty said “most people want But opponents say getting in- whether or not the wages are actu- to work, and they do make efforts to jured workers healthy is a reason to ally earned. It also would not re- work. They’re trying to address keep the 10-day time frame and al- some abuses of the system by pun- low workers more rapid treatment ishing everybody.” by their own physicians. There’s similar argument over In the House, Democrats unsuc- language that allows workers’ comp cessfully offered bill amendments benefits to be reduced by a pension that included allowing a worker to that a retirement-eligible worker seek a second opinion from another could receive, even if that worker doctor during the 45-day time has not retired and is not drawing a frame, and more narrowly defining pension. wage earning capacity. The bill is In testimony submitted to Senate before the Senate Reforms, Restruc- committee, United Auto Workers In- turing and Reinventing Committee. ternational Union lobbyist Tim Michelle Muñoz contributed to Hughes said that a worker might this story. not want to retire or can’t afford to Amy Lane: (517) 371-5355, retire, but if they get injured on the [email protected]. Twitter: job they “could see their worker @alanecdb 20111205-NEWS--0015-NAT-CCI-CD_-- 12/2/2011 10:46 AM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 15 Suppliers to hire as they struggle to meet capacity for growing OEMs

BY DUSTIN WALSH will add about 6,000 salaried jobs ers. With the increase in buying de- CRAIN’S DETROIT BUSINESS and about 10,000 UAW hourly jobs, spite volatile market conditions, said Sean McAlinden, chief econo- the constraints will only get worse AND DAVID BARKHOLZ mist for CAR. going into 2012, said Bill Diehl, pres- CRAIN NEWS SERVICE All UAW hires at the Detroit 3 ident and CEO of Southfield-based advisory firm BBK Ltd. As the U.S. auto industry recov- will earn entry-level wages and “Many suppliers, especially in ers, market conditions will pick benefits, about one-third less than the privately held supply base, are more winners and losers for sup- the $28 an hour in wages earned by pliers. traditional workers, he said. skeptical about how sustainable Sales are expected to reach The pool of salaried workers at the current volume increases are,” 15.2 million units in the U.S. in the Detroit 3 will increase at a he said. “They simply don’t have 2015 from a forecasted 12.8 million greater rate — up 10 percent to the ability to meet the volumes if in 2011, according to an Ann Ar- roughly 71,000 — than the roster of they continue to ramp up, and bor-based Center for Automotive Re- UAW hourly workers, up 9 percent they’re saying, ‘What if I spend all search presentation last week. No- to about 120,000, CAR research pre- this money (to add capacity) and vember was the best sales month dicts. the volumes drop?’ ” on record since the “cash for However, capacity constraints Dan Sharkey, principal at Birm- remain a problem at lower-tier ingham-based law firm Brooks Uncommon clunkers” incentive in 2009. Creative, Conservative Thinking. Remarkable Solutions. Demand calls for a ramp-up in suppliers that are hesitant to Wilkins Sharkey & Turco PLLC, said parts production — which is good spend money after barely surviv- many lower-tier suppliers are seek- for workers but bad for capacity- ing the industry collapse, local ex- ing lawyers to access contracts in constrained suppliers. perts say. regards to capacity issues. Sharkey We work with our clients and their advisors to: Parts suppliers are expected to Of the 100 suppliers surveyed in specializes in contract litigation in add 150,000 new jobs through 2015, May by A.T. Kearney, 37 percent said the automotive sector. Reduce estate and income tax Enhance fixed income CAR said last week. their capacity is below what they “Suppliers are riding a volumes yields Solve family and business issues Improve In the same period, the Detroit 3 are obligated to supply to automak- roller coaster,” he said. “No one existing life insurance policies. wants to admit it, but there’s ab- solutely been an uptick in suppli- ers declining to honor contracts because they can’t keep up with the volumes.” The Original Equipment Suppliers Association’s supplier barometer for September revealed that capac- BIRMINGHAM, MICHIGAN 248.731.9500 ity was the most significant short- term challenge companies felt they WWW.SCHECHTERWEALTH.COM would face in 2012. Diehl said lower-tier suppliers continue to suffer from lack of available capital. “The lending market didn’t open up to many of these suppliers be- cause they survived the downturn without restructuring their books,” he said. “Now they lack the ability to expand.” Sheldon Stone, partner at Birm- ingham-based financial advisory firm Amherst Partners LLC, said funding opportunities exist, and if a supplier can’t find lending, it’s not looking. “Shame on suppliers that aren’t prepared,” he said. “We see lots of banks willing to lend to automotive right now.” Automakers are combating ca- pacity constraints by helping sup- pliers access capital. Renault-Nissan There are millions of blogs, but our blog has been working with suppliers for employers is one of a kind. to secure low-interest bank rates, the company told Automotive News earlier this year. Visit: www.employerlegaladvocate.com General Motors Co. is trying to be “a more reliable buyer” by stick- ing to its volume forecasts, CEO Dan Akerson said in an Oct. 13 in- terview with Automotive News. He also said GM is trying to be more upfront about its product plans so suppliers are better able to offer innovations early in development. Suppliers losing out on new con- tracts because of capacity con- straints may lose out in the end, as GM intends to cut vehicle platforms from 30 to 14 by 2018. Suppliers with Carl J. Grassi Stephen M. Gross additional capacity could be the President Detroit Managing Member beneficiary of new contracts as a re- McDonald Hopkins PLC duced number of platforms creates less differentiation of parts. 39533 Woodward Ave., Suite 318 Sharkey said savvy suppliers Bloomfield Hills, MI 48304 • 248.646.5070 are working contingencies into contracts to insulate them from the ebb and flow of volumes. www.mcdonaldhopkins.com David Barkholz writes for Auto- Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach motive News. 20111205-NEWS--0016-NAT-CCI-CD_-- 12/2/2011 10:17 AM Page 1

Page 16 CRAIN’S DETROIT BUSINESS December 5, 2011 Work smarter for your business. Lawmakers consider one-time funding shift for heating aid

BY AMY LANE Services. House Bill 5189 was in- hold a joint hearing to look at heat- CAPITOL CORRESPONDENT troduced last week and referred to ing aid dollars long term. the House Energy and Technology The idea of a temporary sur- With just two weeks left on the Committee. charge on utility customer bills to legislative calendar and winter The money would replace a state replace the LIEEF also has been weather arriving, a new solution low-income energy assistance pro- looked at as a short-term solution, has emerged to provide heating as- gram that is shut down. The Low and Horn said that legislation may sistance funds for low-income util- Income and Energy Efficiency still be introduced in the Senate as ity customers. Fund, a grant program adminis- “Plan B,” given the limited time Size, comfort, value and versatility that drives your potential. A bill spon- tered by the Michigan Public Service remaining this year for the Legis- sored by Rep. The 2011 Sprinter Van — exclusively at Mercedes-Benz of Novi. Visit us today to Commission, has been frozen since lature. The last scheduled day of see one of the area’s largest Sprinter inventories. Amanda Price, the Michigan Court of Appeals ruled session for the House and Senate is R-Holland, in July that the PSC lacked author- Dec. 15. Mercedes-Benz of Novi would take ity to fund and administer it. As a companion to the Price bill, 39500 Grand River Ave. $62 million in House Energy Committee Chair- Horn introduced House Bill 5190, Novi, MI 48375 surplus federal man Kenneth Horn, R-Franken- which would require the PSC to re- 248-426-9600 (Sales & Service Available Now) Temporary As- muth, said the shift is “a one-time fund to utility customers some www.mercedesbenzofnovi.com sistance for shot” for this winter and a fix $40 million that the PSC directed Needy Families that’s needed, but it is not a perma- the Detroit Edison Co., Michigan Con- Price funding within nent or continuing solution. solidated Gas Co. and Consumers En- the Michigan De- Horn said he and Senate Energy ergy Co. to collect for LIEEF but partment of Human Services and put and Technology Committee Chairman place in escrow. it into the State Emergency Relief Mike Nofs, R-Battle Creek, will go Horn said he expects his and program administered by Human that direction in January and likely Price’s bills to move quickly. Seasons greetings! MEDC hires for export Have a little assistance program holiday cheer in your office with The Michigan Economic Develop- ment Corp. has been beefing up its simple and export staff as part of an export as- affordable options sistance program that began Oct. 1. The six people hired under the from Kosch. State Trade Export Promotion pro- Visit our website to gram are stationed throughout Michigan to help businesses. Cov- see our new holiday ering the Southeast Michigan re- Call (248) 608-0690 or Email menus. gion is international trade devel- [email protected] opment manager Jeanne Broad, a former international trade consul- tant who previously was director of international trade policy for 324 East Street General Motors. Broad is based at Automation Alley in Troy. Rochester, MI Michigan’s $1.9 million export as- 48307 sistance program includes $1.5 mil- (248) 608-0690 lion in STEP funding from the U.S. Small Business Administration, and MEDC funds. Michigan companies with fewer than 500 employees can apply for financial assistance for ex- port-related activities — Amy Lane

Crain’s fills newly created FULL SERVICE ASSEMBLY events coordinator post TOOLING SYSTEMS Kacey Anderson has joined Crain’s Detroit Business as its events coordi- CONTINGENT WORKFORCE nator, a newly Business on Need growth capital? When businesses created posi- face the up-and-down demands of tion. Anderson, SERVICES the rise? growth, purchasing goods, or even to make 26, is charged with coordinat- payroll, Crestmark’s service and ing all event innovative solutions can be the answer. venue relation- Providing asset-based lending/ lines of credit Anderson ships and work- to small- and medium-sized businesses ing with guests and clients to 29401 Stephenson Highway nationwide for over 15 years. make Crain’s events successful. Madison Heights, MI 48071 Events Director Nicole LaPointe Call me today for more information. 248 548 6010 said Anderson’s eye for detail and www.gonzalez-group.com customer service while working as an intern has helped the publica- Marty Blake tion’s events. She graduated from www.crestmark.com 248.267.1614 | [email protected] AEROSPACE | DEFENSE | AUTOMOTIVE Western Michigan University with a bachelor’s in public relations. OVER $180,000,000 PROVIDED TO NEW CLIENTS IN 2011 20111205-NEWS--0017-NAT-CCI-CD_-- 12/2/2011 10:18 AM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 17

CALENDAR

ity Health. Barrio, 203 Hamilton Row, Birmingham. Free for chamber mem- MEET CRAIN’S WOMEN TO bers business builder and above. Con- WE’RE HELPING DETROIT COMPANIES tact: (313) 596-0479; email: WATCH WEDNESDAY [email protected]; web- Crain’s Detroit Business and the site: www.detroitchamber.com. GROW HEALTHY. Inforum Center for Leadership present Inner Circle: Women to Watch, 5:30-8 p.m. Wednesday at the FRIDAY Townsend Hotel, Birmingham. DEC. 9 Honorees scheduled to attend include Olga Dazzo, director, CREW Detroit Holiday Party and Silent Michigan Auction. 4:30-7:30 p.m. Commercial Department of Real Estate Women Detroit, others. Benefit for Alternatives for Girls. Community Birmingham Bloomfield Art Center, Health. Birmingham. $40 members, $60 non- Tickets are $55 members; registration requested. for Inforum Contact: (785) 856-8277; email: crew members and [email protected]; website: $65 for www.crewdetroit.org. nonmembers. Corporate Investor gratis Dazzo tickets are not COMING EVENTS available; Detroit Economic Club. 9-11 a.m. Dec. tickets for this event may not be 15. With Steven Rattner, former lead HEALTHIER EMPLOYEES. HEALTHIER COMPANIES. GROW HEALTHY MICHIGAN combined with any other purchase. auto adviser, U.S. Treasury Depart- Information, call (877) 633-3500 or ment. Masonic Temple, Detroit. $45 visit www.inforummichigan.org. DEC members, $55 guests of members, $75 nonmembers. Contact: (313) 963- 8547; email: [email protected]; web- THURSDAY site: www.econclub.org. DEC. 8 DC in the D. 7:30-11 a.m. Dec. 13. Nextek Detroit Economic Club. 11:30 a.m.-1:30 Power Systems. With Paul Savage, p.m. With Doug DeVos, president, CEO, Nextek Power Systems; Doug Amway Corp. Westin Book Cadillac, Hamborsky, president, Hamborsky So- Detroit. $45 DEC members, $55 guests lutions Group Inc. and director of ar- of members, $75 nonmembers. Con- ©2011 United HealthCare Services, Inc. Insurance coverage provided by or through UnitedHealthcare chitectural and design services, Nex- tact: (313) 963-8547; email: info@econ tek; others. NextEnergy Center, Insurance Company or its affiliates. Administrative services provided by United HealthCare Services, club.org; website: www.econclub.org. Detroit. Free; limited seating; register Inc. or their affiliates. Health Plan coverage provided by or through a UnitedHealthcare company. before Dec. 8. Contact: (313) 887-1321, UHCMI561378-000 Connections & Cocktails. 4:30-6:30 ext. 127; email: nicole.bopp@ p.m. Detroit Regional Chamber; Prior- nextekpower.com. WOW! AMERICA’S FASTEST GROWING COFFEE CHAIN Ranked by CNBC 9.5% unit growth Ranked Top 30 Food Franchises by Franchise Business Review 11% + same-store sales year-over-year Build-out costs reduced by 40% There has never been a better time to own a BIGGBY! 20111205-NEWS--0018,0019-NAT-CCI-CD_-- 12/2/2011 10:20 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS December 5, 2011

Crain’s Job Front Visit www.crainsdetroit.com/jobfront to search for jobs, post a résumé or find talent. Job Front PEOPLE

OJMR Architects, dinator, admissions and academic ad- Kirk Rosin to HEALTH CARE Los Angeles, vising. Also, Brenda Meller to director sales vice presi- IN THE SPOTLIGHT Greg Solecki to vice president of Hen- Calif. of marketing from marketing manag- dent of national ry Ford at Home, Henry Ford Health Royal Oak-based Beaumont er. accounts for Indi- System, Detroit, from vice president Physician Partners , the CONSTRUCTION Linda Mackensen to executive direc- ana, Kentucky, of Henry Ford Home Health Care, De- organizational arm of Beaumont Michigan, Min- Jason Cooper to tor, Practice Transformation Institute, troit. Also, Mike Ellis to executive di- Health System nesota and Ohio, that deals with estimator and Troy, from field operations manager rector of Henry Ford Home Health medical administrative issues project manager, for physician group incentive pro- Aetna Inc., South- Care, from director of support ser- relating to all Beaumont doctors, Beal Inc., Ann Ar- gram and patient centered medical field, from vice vices for Home Health Care, Henry has named David Wood Jr., M.D., to bor, from own- home program, Blue Cross Blue president, health Ford Hospital, Detroit; and Mark the new er/operator, J&N Shield of Michigan, Detroit. and benefits, Aon Iwanski to operations director of Hen- position of Hewitt, South- ry Ford Health Products and Henry Contracting LLC, Rosin president. Cooper Canton Town- ENGINEERING field. Ford Self-health Centers, Southfield, Wood, 54, had ship. Also Jeff De- Jason Matteo to Tom Kuslits to se- from manager of business develop- been chief of Clercq to project project manager, nior vice presi- ment for Henry Ford Pharmacy Ad- the division of manager, from su- municipal engi- dent, market vantage, Southfield. urologic perintendent, ser- neering depart- manager, Flagstar Jean Meyer to president/executive oncology since vice warranty, ment, Spalding Bank, Troy, from vice president, acute care operations, 2002. Arteva Homes, DeDecker Associ- vice president, St. John Providence Health System, Bloomfield Hills. middle market Warren, from president, Providence Wood received ates Inc., Rochester Hills, sales director, Park Hospital, Novi. his medical CONSULTING from project man- Fifth Third Bank, Wood degree from the Judy Wernette to ager, Applied Sci- Southfield. LAW University of Michigan. He served his ence Inc., Detroit. partner, Strategic Doug Wells to ad- Randall Goble to director of market- residency at the Cleveland Clinic Kuslits DeClercq Partners Inc., visory partner, ing, Warner Norcross & Judd I LLC, Foundation and a three-year Matteo FINANCE fellowship in urologic oncology at Canton Town- KPMG LLP, De- Southfield, from national marketing troit, from manag- manager, Truck Accessories Group, Memorial Sloan-Kettering Cancer ship, from consul- Bob Fuller to underwriting manager, ing director. Elkhart, Ind. Center. tant. Shore Financial Services Inc., Birming- ham, from wholesale lending division Mark Mendola to ARCHITECTURE underwriting manager, Bank of Ann U.S. tax leader MANUFACTURING EDUCATION Arbor, Madison Heights. Also, Greg and vice chair- Stephen Field to Paul Johnson to building technology Vita Romberger to Pappas to head of capital markets, from man, Pricewater- general manager, studio leader, SmithGroup Inc., De- assistant director, senior vice president of secondary mar- houseCoopers operations, Tren- troit, from senior member, building admissions and keting, First Guaranty Mortgage Corp., LLP, Detroit, technology studio. academic advis- McLean, Va.; and Mike Castleforte to from tax manag- ton Corp., Ann Ar- Kurt Neiswender to director of archi- ing, Walsh Col- legal counsel and head of business de- ing partner, tax bor, from presi- tecture, MainStreet Design Build, lege, Troy, from velopment, from associate, Winston & core leadership dent, Field Birmingham, from project designer, Wernette recruitment coor- Strawn, Chicago, Ill. Mendola team. Consulting Ser- vices Inc., Ann Arbor. Ramon Guitart to vice president of Field engineering, Dan- otek Motion Technologies Inc., Can- ton Township, from director of engi- neering, North America rotating machines, Converteam Group, Min- neapolis, Minn. Debbie Sayers to director of sales, Thomson-Shore Inc., Dexter, from You Deserve Unbiased Tenant Representation vice president, CM Books, Ann Arbor. MARKETING Bruce Haynes to senior vice presi- dent, strategy and activation, W.B. Doner & Co., Southfield, from vice president, as- sociate media di- rector. Also, An- drew Tahy to vice president, associ- ate strategic Haynes leader, from asso- ciate media direc- tor. Kim Smith to se- nior vice presi- dent of business development, ePrize LLC, Pleas- ant Ridge, from vice president of sales and busi- Real Estate Strategy ness develop- Tahy ment, Viewpoints Tenant Representation Network, Chicago, Ill. Monica Groesbeck to creative manag- Buyer Representation er, TMV Group LLC, Birmingham, from junior art director, Campbell-Ewald Project Feasibility Co., Warren. Whether leasing, buying or building, users of space have the Nick Conflitti to art director, re:group Construction Oversight Inc., Ann Arbor, from designer of web, upper hand in today’s real estate market. Let our experienced print, digital and collateral, Brilliance team of real estate professionals uncover every option. Incentives Audio Inc., Grand Haven. Lease Administration MEDIA pmcresa.com 248.223.3500 Mark Brown to vice president/finance, Detroit Media Partnership LP, Detroit, See Next Page 20111205-NEWS--0018,0019-NAT-CCI-CD_-- 12/2/2011 10:20 AM Page 2

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 19 Job Front PEOPLE JOB FRONT CALENDAR From Previous Page sales manager, film. Job fair for veterans [email protected] or (616) business. 6-9 p.m. Thursday. The from controller. Also, Tracey Medley Kevin Burke to vice president and 336-4462 or (888) 779-7774 ext. 4462; event is designed to help aspiring to controller from assistant con- market leader, Accretive Solutions-De- A job fair for veterans is sched- or Carrie Headworth, email head entrepreneurs assess their abili- troller. troit Inc., Troy, from president, Bell uled for 10 a.m.-2 p.m. Friday at the [email protected] or (517) 492- ties to lead and manage a compa- TechLogix, Indianapolis, Ind. National Guard Armory, 12450 5576 or (989) 224-2000 ext. 1090. ny, as well as evaluate market and NONPROFITS Kim Ziomek to vice president, strate- Beech Daly Road, Taylor. Vets will sales potential for their products. Robert Bowen to gic alliance and business develop- be able to apply and interview At the business center, 2100 Pon- vice president ment, Paragon Leadership Interna- with a number of employers and Help starting a biz tiac Lake Road, Waterford Town- and CFO, Detroit tional Inc., Novi, from director, new meet with a veterans employment The Oakland County Business ship. $30. Contact: (248) 858-0783; Institute of Arts, business development, RDA Group, representative. For more informa- email: [email protected]; Detroit, from con- Center is hosting a workshop on sultant, Harmon Bloomfield Hills. tion, contact David Marin, email the fundamentals of starting a website: www.oakgov.com. Street Consulting, Birmingham. Also, Peggy Falcon to vice president of development from Bowen campaign, major gifts and corporate relations director. REAL ESTATE A LOAN WITH Ren Snyder to sales manager, The Charles Rein- hart Co., Saline, from Realtor, The Snyder Group, Ann Arbor. Falcon Gino Del Pup to as- sociate of project management, Plante Moran Cre- sa LLC, Southfield, from project and relationship man- ager, Wold Archi- tects & Engineers, Royal Oak. A CITIZENS BANK LOAN LETS YOU FOCUS ON THE FUTURE ... because the businesses RETAIL that will succeed tomorrow are the ones that make the right choices today. They are Del Pup Anna Steenland to controller, led by individuals who see opportunity for growth and expansion, and take action with Summit Sports Inc., Bloomfield complete confidence. A loan from Citizens Bank will keep you moving forward and Hills, from con- troller and human never wondering, “What could have been?” resource director, PC Treasures Inc., Oxford. Get the loan you deserve now. To make an appointment with a Citizens Banker, call SERVICES 800-946-2264 or visit CITIZENSBANKING.COM/BUSINESS. Hannan Lis to CEO, Yoga Shel- Steenland ter LLC, Farming- ton Hills, remaining venture capital- ist. Also, Nicole Yoder to COO, West Bloomfield Township, from general manager. Michael Chittam to partner and vice president of administration, On- Demand Mail Ser- vices LLC, Auburn Hills, from presi- dent of sales and marketing, Zip Mail Services Inc., Madison Heights. Michael Chittam Also, Colleen Chit- tam to account manager, from account executive, Zip Mail Services Inc., Madison Heights; and Norman Zators- ki to account manager, from account executive, Wolverine Mailing Packag- ing Warehouse Inc., Detroit. John Donaldson Jr. to president, Vec- tor Pipeline LP, Livonia, from vice president of marketing. Mark Nelson to vice president, aerody- namics technical services, Aerody- namics Inc., Waterford Township, from vice president and accountable manager for the FAR 145 Certified Re- pair Station, Comlux Aviation Ser- vices, Indianapolis, Ind. Jennifer Petrous to international sales manager, Metropolitan Detroit Con- vention and Visitors Bureau, Detroit, from manager, tour and travel sales. Also, Xenia Castillo-Hunter to interna- tional sales manager from national 20111205-NEWS--0020-NAT-CCI-CD_-- 12/2/2011 10:45 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS December 5, 2011

BUSINESS DIARY ACQUISITIONS Altair Engineering Inc., Troy, a global NEW PRODUCTS provider of technology and services, GKN Driveline, Auburn Hills, acquired Daifuku Co. Ltd., Farmington Hills, de- announced that global engine manu- Getrag Driveline Products, Sweden, veloped a new baggage handling sys- facturer Perkins, Peterborough, U.K., Germany, Sterling Heights and New- tem for airports called Baggage Tray ton, N.C. has deployed solidThinking Inspired to optimize the design of industrial en- System. Website: www.daifukuwebb. Henniges Automotive, Farmington gine components. com. Hills, an automotive industry suppli- The Detroit Red Wings, Detroit, and LifeSecure Insurance Co., Brighton, er of sealing and anti-vibration sys- announced the release its personal ac- tems, acquired Nomaseal s.r.o., Hran- Chrysler Group LLC, Detroit, have signed an extension of the automak- cident insurance coverage, a new ice, Czech Republic and Viersen, product that reimburses policyhold- Germany, an automotive industry er’s sponsorship agreement with the Thomas H. Bergh Paul L. B. McKenney team for the current season. ers for expenses resulting from acci- Litigation – Trusts & Estates Litigation & Controversy – Tax supplier of weatherseals. dental injuries regardless of their tra- Construction Association of Michigan, ditional insurance coverage. Website: Detroit Area Detroit Area Bloomfield Hills, and CONTRACTS www.yourlifesecure.com. MeasurePlans.com, Cincinnati, Ohio, Coherix Inc., Ann Arbor, has been entered into an agreement giving The Gale Group Inc., Farmington awarded a phase-two small-business CAM members a discount and free tri- Hills, part of Cengage Learning Inc., innovative research contract by the al offer to Cloud Takeoff, cloud-based Stamford, Conn., a publisher of re- U.S. Naval Warfare Center, San Diego, estimating software. search and reference resources, re- Calif., to develop a system for surface Nissan Americas, Farmington Hills, leased Gale Business Insights: Glob- mapping of corrosion on complex al, a new international online curved surfaces. and GE Global Research, Niskayuna, N.Y., have signed a two-year research business resource designed to em- Detroit Medical Center, Detroit, collaboration to speed up the develop- power students to progress quickly signed an agreement with Walden Uni- ment of a smart charging infrastruc- from basic research to higher levels versity LLC, Minneapolis, Minn., pro- ture to fuel mass-market adoption of of understanding. Website: www. viding higher education opportunities electric cars. Website: www.nissan- gale.cengage.com. for its employees to meet increased global.com/en. health care demands. NEW SERVICES Ford Motor Co., Dearborn, announced Your People LLC, Southfield, a market- the sale of 35 Ford Transit Connect ing, PR and communications compa- Oakland County Community & Home Marilyn A. Lankfer John Patrick White Taxis to Metro Taxi, West Haven, ny, is handling all public relations, Improvement Division, Pontiac, an- Trusts & Estates Employment Law – Management Conn. Also, Azure Dynamics Corp., marketing and communications func- nounced the Oakland County Home- Grand Rapids Grand Rapids Oak Park, an automotive supplier, an- tions for Yoga Shelter LLC, Farming- buyer Program, directed toward help- nounced that Auto-Strunk GmbH, ton Hills. ing low- and middle-income families Cologne, Germany, has become the PixoFactor Entertainment, Royal Oak, take ownership of vacant, foreclosed Congratulations to Varnum’s 48 attorneys listed latest European dealership to sign a a video gaming and entertainment single-family homes as their primary ® sales and service agreement for the content development company, an- residence. Website: www.oakgov. in Best Lawyers 2012 including those who Transit Connect Electric van. nounced an agreement with Tapjoy com/chi. received Lawyer of the Year recognition. MWW Automotive Group, Howell, a Inc., San Francisco, a mobile applica- National Airlines, a wholly owned sub- global design, engineering and manu- tion marketplace, in developing sidiary of National Air Cargo Holdings, facturing firm, has begun production Gaslight, a game on the Android and Ypsilanti, a provider of global air car- for the painting and fulfillment of in- iOS platforms. go services, announced its initiation terior parts for the Ford Motor Co. F- National Equipment Leasing Corp., of Boeing 747-400F flight operations. 150 series line of trucks. Brighton, an equipment leasing and fi- Website: www.nationalairlines.aero. BorgWarner Inc., Auburn Hills, sup- nancing provider, has been selected as 401 (K) GPS Inc., Brighton, launched plies transmission components for a preferred business partner for the 401kgps.com, a new online service to Hyundai’s new 8-speed automatic rear- Michigan Business & Professional As- manage 401K retirement investments. wheel drive transmission. The trans- sociation, Warren. National will pro- The Society of St. Vincent de Paul-De- mission will drive the 4.6-liter vide a discount to all MBPA members troit, announced the launch of its new Hyundai Equus, Hyundai Genesis and who require equipment leasing and fi- I I I I I website: www.moreforthepoor.org. Metro Detroit Grand Rapids Kalamazoo Grand Haven Lansing Kia Mohave as well as the 3.8-liter nancing and the MBPA will promote Hyundai Genesis for the domestic Ko- National’s service to its members. Diaper Buys, Wixom, an online retail- rean market. er of diapers and incontinence sup- EXPANSIONS plies, has launched a new website: www.diaperbuys.com. Alfred Benesch & Co., Lansing and Northville, an engineering firm, an- nounced a new Southeast Region, DIARY GUIDELINES Nashville and Chatanooga, Tenn., fol- lowing a merger with Clinard Engi- Send news releases for Business neering Associates LLC, Nashville, Diary to Departments, Crain’s Tenn. Detroit Business, 1155 Gratiot Main Street Bank, Bingham Farms, Ave., Detroit, MI 48207-2997 or opened Northville Home Loan Center send e-mail to cdbdepartments@ at 126 W. Main St., Northville. Tele- crain.com. Use any Business Diary phone: (248) 434-2555. Website: item as a model for your release, www.mainstreetbankmi.com. and look for the appropriate category. Without complete NAME CHANGES information, your item will not run. Photos are welcome, but we cannot AVL Strategic Analytic Services Inc., guarantee they will be used. Plymouth, to Scenaria Inc.

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December 5, 2011 CRAIN’S DETROIT BUSINESS Page 21 Glocal: Compuware Ventures backs website for news videos ■ From Page 3 have been assigned to the project, websites, can post videos on “They’re going to need a major buy into the concept. was once it got this site up, what and others will be brought in as YouTube, where they run the risk of marketing campaign to get people It’s a concept Cavalieri began was next? How could you leverage needed, said Paul Czarnik, Com- being placed alongside kittens on to come to the site,” said Jack working on while a communica- one idea into others to generate puware’s chief technology officer piano keys or college kids at keg- Lessenberry, veteran local journal- tions major at Syracuse University in more revenue?” said Czarnik. and the point person for Com- gers. Or they can have their videos ist and lecturer in the journalism New York, where he was a mid- Czarnik said Cavalieri revised puware Ventures. posted for a fee on other commer- department at Wayne State Universi- fielder on the national champi- his business model, came up with a The plan is to have a robust beta cial sites, such as Paris-based Daily- ty. “And will they have as easy a job onship lacrosse team. possible follow-on revenue genera- site up in the first quarter next year motion and St. Paul, Minn.-based In- of it as they think getting videos?... In late 2010, after graduation, he tor they’d rather not discuss yet, that can be shown to potential part- ternet Broadcasting Systems Inc. Fox 2 or WDIV (Channel 4) might raised $60,000 in seed money from and came back the next day with “a ners. As it signs on media partners, Glocal takes its name from the think it’s cannibalizing their own friends and family and then began business model that worked from a Compuware will finish building a phrase “Think globally, act local- site to drive people to their site.” making the rounds for further fund- financial perspective.” more complete version of the web- ly.” It will launch in the U.S. first Cavalieri said having the power ing of venture capitalists in New In November, Aaron Hodari, 24, site for launch in the spring. but plans to have a global reach. of Compuware behind Glocal will York, where he had an apartment. joined Glocal as chief operating of- Glocal and its content providers Posted videos will initially reach a allow it to build a robust site with Cavalieri said he kept getting “it’s a ficer. He and Cavalieri went to De- will share advertising revenue. local audience, but those that are so much functionality — and ways nice idea, come back when you’re troit Country Day School in Beverly Currently, news outlets, in addi- most popular will be moved up to to deliver more viewers to news further along,” but no money. Hills. Hodari was an economics ma- tion to posting things on their own regional and then national pages. videos — that media partners will Meanwhile, his grandfather put jor at the University of Michigan, then him in touch with Peter Karmanos worked in New York for the invest- Jr., Compuware’s executive chair- ment management firm of Black- man and an old friend through Rock Inc. before rejoining Cavalieri. MARKET hockey. Karmanos, now the owner Compuware Ventures was REAL ESTATE of the Carolina Hurricanes of the Na- launched last April. Its other port- tional Hockey League, once owned the folio companies are iRule LLC, PLACE Junior Wings franchise in Detroit and which sells smart apps and hard- ANNOUNCEMENTS OFFICE SPACE sponsored numerous youth teams. ware that allow smartphones and Karmanos told Cavalieri to fly in tablets to act as universal remotes, BUSINESS OPPORTUNITIES for a meeting. A few minutes into and Own Point of Sale Corp., a compa- STOP For Sale Office Condominiums it, Karmanos called Czarnik. ny that allows store transactions to COMMERCIAL REAL ESTATE Learn why owning a Speed Queen Coin Laundry Park on the Green-12 Mile & is so profitable. Retirees, diversification, buyouts. Said Czarnik: “(Cavalieri) had an be conducted wirelessly. FORECLOSURE Universal Company LLC (since 1920), Halsted www.universal-laundry.com (248) 435-6200 interesting business plan for a guy Both iRule and Glocal are based so young, but I was having a hard in the Compuware Building in • All property types 1,175, 1,288 & 2,788 SF — time making the numbers work.” downtown Detroit. Own Point of • 7-9% fixed rates -- Partner Wanted -- Pine View Office Park-14 Mile & He put the Glocal business plan Sale is now based in San Francisco. • 30-day closing Farmington Rd. through a checklist he uses to eval- Tom Henderson: (313) 446-0337, • 30-year amortization 1,319, 1,784 SF uate prospective investments. One [email protected]. Twitter: • Foreclosure OK — • Bankruptcy OK Quakertown Medical Arts-12 Mile item Glocal needed to think about @tomhenderson2 • Receivership OK & Farmington Rd. 1,173 SF, Former Dental Lab IVY PRIVATE CAPITAL — Partner wanted for nine place prop jet Franklin Office Center-12 Mile & www.ivyprivatecapital.com based at Detroit City Airport. 400+ Franklin Rd. 248-430-4858 mph, 2,000 mi range, 41,000 ceiling. Chrysler: Seeking space 1,800 - 7,200 SF Detroit-West Palm Beach 2:45/Detroit- "The place to go when ■ Contact: Robert Moon New York 1:20. From Page 1 your bank says NO!" 248-324-2000 Contact Charles Chase (313) 610-4120 Gilbert’s redevelopment projects. media buying is handled by Birm- And even with a small number ingham-based Universal McCann, and of people in the office, Chrysler’s its retail advertising is done by W.B. INDUSTRIAL PROPERTY move could also be a boon to down- Doner & Co. of Southfield. town restaurants and hotels. Chrysler’s not likely to draw www.friedmanrealestate.com The Crain’s reader: AVAILABLE NOW A possible draw for the city other companies to Detroit by it- 26.5% influence the would be advertising companies; self, but a move would be some- Taylor/Romulus Area — 4,000 to 80,000 sq. ft. Call or email today for information purchase of office/industrial Detroit-based General Motors Co. thing that continues the momen- Ideal for logistics company, on a custom advertising plan! and commercial space. has been requiring its advertising tum in the city, said Ron Gantner, manufacturing or warehousing. firms to have a Detroit presence. a vice president in Jones Lang [email protected] Help them find you by Yvon Rea 734-946-8730 advertising in Crain’s Real Chrysler’s advertising firms aren’t LaSalle’s Detroit office. 313.446.6068 in the city. “It’s the kind of deal that would Estate section. The Chrysler and Dodge brands be an endorsement of what’s going 313.446.6068 • FAX: 313.446.1757 are represented by Portland-based on downtown, and the unique en- E-Mail: [email protected] Wieden + Kennedy, the Jeep brand by vironment being created,” he said. Southfield-based GlobalHue and the Daniel Duggan: (313) 446-0414, JOB FRONT Ram Truck brand by the Dallas- [email protected]. Twitter: based Richards Group. The company’s @d_duggan

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Page 22 CRAIN’S DETROIT BUSINESS December 5, 2011

TIME LINE 800-292-3831 1989: After 12 years as a developer, Cummings and his indiantrails.com family move to metro Detroit so his Business icons children can attend Cranbrook Schools. help Cummings ONE HU G ND IN R T E A D R Y B E

E A

L R

E S C 100

COSTAR GROUP Riverfront Towers make the grade 1992: Cummings takes over the management of the Riverfront BY DANIEL DUGGAN At the DSO, Cummings oversaw Towers apartment complex in CRAIN’S DETROIT BUSINESS development of the Orchestra Place Detroit, part of his new role in complex, including the 170,000- overseeing the real estate Peter Cummings’ move to De- square-foot office component and investments of father-in-law Max troit in 1989 from Florida could the Max M. Fisher Music Center. Fisher. The towers were a project have been motivated by a lot of jointly developed by Fisher and A. Fisher and Cummings also things. Alfred Taubman. Fisher died in teamed up on the land across the It could have been motivated by March 2005. street from Orchestra Place. his father-in-law, Max Fisher, and 1992-93 DSO season: Cummings The two bought the site bound the chance to work hand in hand joins the board of directors of the by Woodward Avenue, Mack Av- with one of the city’s business icons. Detroit Symphony Orchestra. enue and John R with the potential For a real estate developer, the Comfort and 1996: DSO announces plans for for a new development. idea of revitalizing Detroit — and the Orchestra Place project (see Their initial vision was for retail the vacant parcels in the city — story, Page 23), a complex of and residential, something later buildings for performing arts, could also have been motivation t
$IBSUFST built. The Ellington Lofts brought 52 Luxury education and offices on 8 acres enough. units and 13,000 square feet of re- surrounding Orchestra Hall at And while those things later mo- t
5PVST tail, including the only Starbucks in Woodward Avenue north of Mack tivated him to stay, the original Detroit; and the forthcoming Whole Avenue. It also secures nonprofit idea to come to Detroit was Cran- t
4IVUUMFT
status for the Orchestra Place Foods Market to be built on the site, brook Schools. 00 Renewal Partnership, launched to owned by Cummings. Cummings’ wife, Julie Fisher, t
$POWFOUJPO
4FSWJDFT $100 OFF deal with blight around the hall. Much of the Whole Foods deal SAVE managing trustee of the Max M. and Orchestra Place is built over the was handled by Cummings’ son, Marjorie S. Fisher Family Foundation, course of two years. Ram Realty Services CEO Casey t
$PSQPSBUF
&WFOUT went to the Bloomfield Hills schools Contact Indian Trails for details. Must use this Cummings. and insisted their kids do the same. promotional code at time of booking: 2011CDB-DEC “What we didn’t foresee is that it t
4DIFEVMFE
4FSWJDF “Were it not for Cranbrook, we would take 15 years,” Peter Cum- would not have come to Detroit,” mings said jokingly at the press Cummings said. conference in July announcing the Peter Cummings worked daily Whole Foods project. with Fisher and then built real es- tate projects with Detroit’s iconic developers such as the late Bob Overcoming obstacles COSTAR GROUP Sosnick, former president of Redi- Projects have never developed Ellington Lofts co LLC; Taubman Centers Inc. easily for Peter Cummings. In a joint venture with Max founder A. Alfred Taubman; and 1996: A plan to turn the rental units in Fisher, Cummings buys 4 acres of Taubman’s late longtime business the Riverfront Towers into condo- land east of Woodward, north of partner Robert Larson. miniums ran into the down econo- Mack, with the idea of a mixed-use He also had the chance to work my and had to be aborted one-third development that was later built, with the city’s mayors, business called the Ellington Lofts. of the way through. leaders and its recent legends. Likewise, sales at the Ellington 1998: Cummings forms a joint “Our moving up here is a great ex- venture with former Redico LLC lagged in the downturn. ample of the law of unintended President Robert Sosnick to After being on the market for consequences,” he said. “We came develop the Compuware Building. four years, 49 units at both the here to educate our children, and After Sosnick died in 2000, Riverfront and the Ellington Lofts in a sense, I got as much an educa- Cummings worked with Chicago- had to be sold at auction in 2009 for based on the building. tion as they did.” U.S. Equities less than half the original price. Cummings’ father brought him 1999: Detroit Public Schools And his dream of redeveloping begins work on the to the family business of real estate Detroit High the Orchestra Hall was almost School for the Fine and Performing development, but only after a stint dashed when his father-in-law said Arts on land west of Orchestra as a journalist at the Montreal Star. he wasn’t thinking big enough. But Hall, donated by the DSO. A residential development the projects all came together in the 2001: Groundbreaking is held for brought the Quebec native to Flori- end, including the multi-use Or- phase two of the Orchestra Place da, where he had 12 years of work chestra Place. plan, the Max M. Fisher Music as a real estate developer by the Center, which included the Cummings vividly recalls his time he moved to Detroit in 1989. renovation of Orchestra Hall and advice from Joe Hudson, CEO of But he had no intention of doing the addition of a 500-seat recital J.L. Hudson Co. department stores business in Detroit. hall, state-of-the-art box office and and Detroit Medical Center. It was when Fisher asked him to refreshment areas, in addition to a After hearing Cummings boast multi-story, glass-fronted atrium run the real estate associated with about the size and scope of the Or- lobby. his vast investments, such as the chestra Place project, Hudson halt- Grand opening is held for swanky Riverfront Towers, that he 2003: ed Cummings’ story. the Max M. Fisher Music Center. couldn’t say “no.” “He looked at me and said ‘But Detroit High School for And when he saw the potential 2005: you haven’t built it yet,’ ” Cum- the Fine and Performing Arts is to redevelop the west side of Wood- mings said. completed. ward Avenue around Orchestra The lesson learned: Anything 2009: Amid the down economy, Hall while serving as vice chair- can happen with a project. Keep 49 units at the Riverfront and the man for the Detroit Symphony Or- your head down and get it done. Ellington Lofts, on the market for chestra, he was sold on being part That’s been Cummings’ style, four years, are sold at auction for of Detroit. Cummings is noted for less than half the original price. said Paul Robertson. splitting his time effectively be- Chairman of Bloomfield Hills- 2011: The remaining undeveloped tween civic and for-profit pursuits. parcel of land purchased by Fisher based development firm Roberts “Max used to peek his head in and Cummings at Woodward and Brothers Co., Robertson worked on my door from time to time, and he Mack is set to be developed as a the 12-unit Detroit development, would look at me and say, ‘P or Detroit site for Whole Foods Market, Hancock Square, with Cummings F?’ ” Cummings said. with Cummings’ Ram Realty Services in Detroit in 2001 and has followed as developer. Whole Foods is to “He would want to know if I was Cummings’ career ever since. open in the first quarter of 2013. working on ‘P,’ which was philan- thropy, or ‘F,’ which was for-profit.” See Next Page 20111205-NEWS--0022,0023-NAT-CCI-CD_-- 12/2/2011 6:53 PM Page 2

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 23 Orchestra Place project wins applause despite sour notes

BY SHERRI WELCH profit thing,” Cummings said. “I Disney and more than $50 million bonds. It put the money it had CRAIN’S DETROIT BUSINESS didn’t make a dime out of that.” in additional contributions from raised into its endowment and In fact, Cummings said, he con- the Disney family before it opened paid the immediate costs of the Were it not for Peter Cummings, tributed millions of dollars to the in 2003 at a cost of $274 million. building from bond-sale proceeds. the Detroit Symphony Orchestra’s de- project. The Kimmel Center for the Per- The $54 million that the DSO velopment of the Orchestra Place In addition, Cummings gar- forming Arts, which opened in 2001 owed to the bondholders would complex of arts, education and of- nered a $10 million gift from his fa- at a cost of $235 million, was named come due in a balloon payment in 30 fice buildings would never have ther-in-law for the project. for philanthropist Sidney Kimmel years, and up until then, the DSO happened. He enlisted the help of then- who gave $15 million to the project would pay the interest only, with As vice chairman and then Mayor Dennis Archer in asking between 1993 and 1998. The concert any additional investment income chairman of the DSO board, Cum- for Fisher’s support for a much hall within the center, home to the going to subsidize the DSO’s opera- mings used his development expe- smaller plan that included only Philadelphia Orchestra, was named tions and to build its endowment. rience to benefit the orchestra some expansion of Orchestra Hall, Verizon Hall to recognize cash and “The theory was that you would while spurring development in De- parking and landscaping. in-kind contributions totaling $14.5 be able … to get 5 to 8 percent on troit’s Midtown area. He devel- COSTAR GROUP “Max looked at it, and he said to million from Verizon Communications your money, and over a 30-year oped plans for the complex, creat- Orchestra Place me, ‘You’re not thinking on a big Inc. and its foundation. time frame, that arbitrage between ing the nonprofit Orchestra Place enough scale.’ So we went back to The DSO got much better bang In the late 1990s, prior to begin- paying 2.5 or 3 percent on the bonds Renewal Partnership to oversee the the drawing board.” for its buck with its project, Volpe ning development on his first for- to build the building and getting 6, DSO’s efforts to remove blight in The final plan included three said. It accumulated about 18 acres profit development in Midtown, 7, 8 percent on the growing endow- the surrounding area. phases: the office building and of land basically for back tax liabil- ment would have paid off the He helped secure a $10 million the Ellington Lofts, Cummings said parking deck at Martin Luther King ity of about $250,000-$300,000. By bonds,” said Cummings who was gift from his father-in-law, the late he sought and got a blessing from Jr. Boulevard and Woodward Av- contrast, “in Boston, we ended up chairman of the DSO at the time. Max Fisher, to support the $125 then-DSO Chairman Al Glancy. enue and, a block north, the restora- paying $4.5 million to $5 million But Cummings and the DSO million Orchestra Place campaign tion of the old performance hall and for a parcel that was about a quar- board and management didn’t see and led development of a creative The birth of Orchestra Place construction of “The Max” addition ter of an acre.” the 2008 market crash coming. debt financing model for the sec- and the Detroit High School for the Could Fisher’s gift have been DSO’s endowment was $56.8 mil- ond phase of the project, the Max When he began attending DSO Fine and Performing Arts. more? “Of course,” Kang said. lion at the end of fiscal 2008 before M. Fisher Music Center. concerts regularly in 1991, Cum- “The multipurpose aspect of the “Did we want it to be more? Of the stock market crash. At the end But Cummings’ contributions to mings said he couldn’t help but no- expansion was a brilliant aspect,” course … (but) it was $10 million of last year, it was $22 million. the DSO over the past 15 years tice the contrast between the beau- said DSO President Anne Parsons. more than we had.” To compound matters, the DSO have invited suggestions that sub- tiful Orchestra Hall and the “It’s diverse … and had a greater Donors offering $20 million- was borrowing money from the sequent Midtown developments “horrible” neighborhood around it. impact than was previously imag- $25 million never materialized, he building fund to pay for operations that he personally invested in “If you were interested in the ined before Peter got a hold of it said. Cummings acknowledged as income declined and expenses were fraught with conflicts of in- DSO, as I was, and came from a real and Max.” that Fisher got a bargain on the rose, Parsons said. terest. Plus, the type of bond fi- estate background, which I do, you naming rights. The endowment’s drop in value nancing used for The Max was started to think: ‘What can we do?’ ” Cummings got his opportunity “With the benefit of hindsight, put the DSO in violation of a loan high-risk and was affected by stock Naming rights he got a good deal, but Max always market turmoil. after he joined the DSO board dur- covenant that the endowment ex- ing the 1992-93 season. He worked Fisher committed a $5 million got a good deal,” he said. ceed the principal of the loan, fur- Still, the final results have made The DSO shifted plans for the new the area more inviting to suburban with then-President Mark Volpe to gift after the office building ther exasperating the fact that it arts high school building on to De- concertgoers and new Midtown res- map its property holdings, flesh- opened. But as the larger plan had fallen out of compliance with troit Public Schools, donating the land idents, and have laid a foundation ing out what became the plan for went forward, Cummings said he another loan covenant. the school sits on to the district, for other development in the area. the Orchestra Place complex of of- went back to his father-in-law to Cummings said he feels “terri- which opened the school in 2005. “You could maybe argue it was a fice, arts and education buildings. ask for a larger commitment. Fish- bly” that the financing plan didn’t In 2001, the orchestra broke conflict of interest, the fact that he Figuring out how to create criti- er increased the gift to $10 million work out as designed. ground on phase two of the plan, was developing something on the cal mass and get suburban people on the strength of the education He’s comfortable, he said, that The Max, which included the reno- back of what we were working on,” comfortable coming to the area and revitalization components, the DSO will be able to resolve its said former DSO President Emil were the challenges, said Volpe, and though he wasn’t actively vation of Orchestra Hall and the $54 million in outstanding debt Kang, who oversaw much of the who left the DSO in 1997 to become fundraising for the DSO, he helped addition of a 500-seat recital hall, with the syndicate of banks back- fundraising and construction of the managing director of the Boston spur $10 million from the state for box office, and a glass-fronted atri- ing the notes issued on the Max. Max before resigning in 2004 amid Symphony Orchestra. the plan, Cummings said. um lobby. The Max opened in 2003. North Carolina-based Bank of Amer- operating deficits. “Peter had the relationships and There was consternation over ica leads the syndicate of banks Kang, who now serves as execu- wherewithal to make (revitaliza- the fact that the DSO gave the nam- Market woes holding the debt. tive director for the arts and pro- tion) happen.” ing rights to Fisher, Kang said. “There’s a deleveraging going fessor of the practice at the Univer- Under Cummings’ direction, the Comparisons were made between To finance the $60 million music on, and as part of that deleverag- sity of North Carolina at Chapel Hill DSO acquired nearby land for pen- the DSO’s developments and two center, the DSO in 2001 set up ing, banks are having to write where he recruited Cummings as a nies on the dollar and leveraged in- other major capital projects for or- what’s known as an arbitrage plan down positions,” Cummings said. board member, said Cummings’ vestment opportunities for the Or- chestras happening at the same to pay the debt, an approach “They are now in a place where further development of Midtown chestra Place developments, Kang time which garnered larger nam- which banks on projected invest- they have generated enough prof- Detroit is a show of his “undeni- said. With a commitment from the ing rights gifts. ment returns to pay off bonds. its to be able to take some of these able commitment to the city.” Detroit Medical Center to lease the The Walt Disney Concert Hall in It raised more than $50 million write-offs.” “Peter was dedicated not only to majority of space in the planned Los Angeles, home of the Los Ange- as it ramped up plans for The Max. Sherri Welch: (313) 446-1694, the orchestra but also the city and Orchestra Place office building, les Philharmonic, attracted a $50 As pledges came in, the DSO is- [email protected]. Twitter: where it was going.” the DSO built it. “It was a not-for- million gift from the late Lillian sued low-interest, tax-exempt @sherriwelch

From Previous Page When the Orchestra Place project er, the buildings just west of Joe and I know that they couldn’t raise other sites: land at Woodward and “He’s always kept a low profile, was in its planning stages, Cum- Louis Arena were turned over to the rental rates much. Warren, owned by Wayne State Uni- but he knows everyone,” Robertson mings needed financial support Cummings to run and later sold to “At that level of debt, there was versity, and the Detroit Police De- said. “He has a Rolodex that won’t from Max Fisher. Approaching him him. In the condo boom of the early no way to make that work,” he said. partment’s former 13th Precinct quit; he knows everyone in town, with the idea of redeveloping the ex- 2000s, he attempted to turn all three Cummings’ condo conversion building to the south on Woodward. and he knows who to call in order to isting Orchestra Hall, Fisher told towers into condominiums but project was part of the same condo “I was told that they didn’t get things done.” him to “think bigger.” found the market slowed after one boom that led to the Ellington Lofts, choose my land but wanted me to be Being lead developer for the Then-Mayor Dennis Archer, who building was converted. With 282 where sales stalled midway the developer,” Cummings said. Whole Foods project in Midtown is was in the meeting, said Cummings units as condos, the two towers con- through the marketing process. “It’s something we don’t typically as complex as all the others. The es- took the challenge from Fisher and tain 550 units. The Ellington Lofts is a develop- do, but in this case, it was some- timated $10 million project has close dreamed up the project that is on The remaining two were sold to ment that came after Cummings thing we would take on.” to $5 million in tax incentives, Woodward today. New Jersey investors Empire Ameri- and Fisher bought the land 15 years And then, several days later, an- grants and other creative funding. “It was a great vision that went can Holdings LLC and Aintstar River- ago. A parking structure was built, other call. It’s meant to be a lease to attract far beyond the hall itself, that over front LLC. The buildings are current- the condos and then the retail. “They called me back and said Whole Foods to Detroit. But the time, all fell into place,” said ly in receivership after the $55 that, on second thought, they want- credits are all given to Cummings, Archer. “You have to credit Max for million loan fell into default. ed to use my land as well,” he said. who then offers the lower lease rate. having a vision that went beyond Cummings said that because of No victory lap yet But Cummings jokes that he’s “They evaluated the risk, evalu- what I had, and what Peter had, but the price, there was no way to oper- With the condos at the Ellington never forgotten to heed Hudson’s ated what they would invest, and it all started with a concept that ate the buildings profitably. now filled, the retail fully leased, advice, and doesn’t want to cele- told us to figure out the rest,” Cum- came from Peter.” “This group had twice the the Whole Foods development com- brate the Whole Foods deal. mings said. Among the first real estate deals amount of debt that I had,” he told pletes the entire 4-acre project. “I haven’t built it yet,” he said, Cummings worked with in Detroit the crowd at a recent real estate Similar to how his other projects laughing, wagging a finger in the Reacting to challenges was the Riverfront Towers. conference. “I know there is not a have worked, Cummings actually air. A tough project in Midtown is Built in a joint venture of long- way to run the buildings more cost- lost the deal at one point in time. Daniel Duggan, (313) 446-0414, nothing new, however. time developer Taubman and Fish- efficiently than I was running them, Whole Foods was looking at two [email protected] 20111205-NEWS--0024-NAT-CCI-CD_-- 12/2/2011 6:26 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS December 5, 2011 Radio: To dial in revenue, stations switch formats, owners ■ From Page 1 a turbulent time for the market. ters that replaced the traditional to extend or renew his contract at now $20 billion in debt, according to written diary method in recent its current rate. In 2001, he report- FORMAT SHIFTS Clear Channel’s latest U.S. Securities Issue 1: Metered pressure years. edly inked a “multimillion dollar” Ⅲ Lanham, Md.-based Radio One and Exchange Commission filings. Results have altered the ad rates deal with WOMC after a bidding Inc. bought WGPR 107.5 FM in In the first nine months of the There’s been pressure from mu- for shows. For example, it’s estimat- war with other stations. October from the International Free year, Clear Channel burned sic station management for on-air ed that Harper’s show a few years Such wars are probably a thing of and Accepted Modern Masons for through $755 million in cash, leav- staff to talk less and play more ago could command $500 to $1,000 the past. an undisclosed sum. Radio One ing it $1.1 billion in cash on hand. tunes. That stems from increasing- for a 60-second spot. Now, it’s $125. “Radio DJs were superstars and then changed the station’s format At this point a year ago, the compa- ly detailed and instant audience There’s been speculation that the they were promoted. They were as from R&B to hip-hop. In turn, the ny had $1.7 billion in cash available. measurement technology, such as ad revenue decline from his show big as sports stars. Radio got away broadcaster’s WHDT 102.7 FM Clear Channel has had $2.3 bil- switched from hip-hop to a Arbitron Inc.’s Portable People Me- meant that ownership wasn’t going from that,” said Don Tanner, a part- religious format. lion in payments on debt service ner in Farmington Hills-based Tan- and long-term debt so far this year. Ⅲ Veteran on-air personality John ner Friedman Strategic Communica- Mason’s “Mason in the Morning” In response, the company has tions and radio veteran who show jumped to afternoons on been reducing headcount and authored a book on the radio and Radio One’s urban talk station, shifting to increasingly syndicated music industries, No Static At All. WCHB 1200 AM, which is content. It declined to comment. “What’s the only thing that differ- simulcast on 99.9 FM. Atlanta-based Cumulus Media entiates radio from satellite and Ⅲ Clear Channel switched adult Inc., meanwhile, has $3.6 billion in iPods? Personalities.” contemporary station WDTW 106.7 debt, and has been trimming staff That’s not to suggest Detroit is FM to a classic rock format on Nov. at its 570 stations. It owns three in without recognizable air talent. 4, overlapping those of WCSX 94.7 Detroit. Cumulus bought 225 radio Paul W. Smith on WJR 760 AM and FM and WRIF 101.1 FM. stations from Las Vegas-based WCSX 94.7 FM ’s trio of Ken Calvert, Citadel Broadcasting Corp. in a Steve Kostan and Karen Savelley $2.4 billion deal. can still be found on the dial. Jay Earlier this month, a number of Towers has been heavily promoted TOP 5 reports said that local Cumulus as the face of WNIC 100.3 FM. The top metro Detroit radio layoffs included WJR on-air news But one of Detroit’s biggest disc stations by 2010 revenue, plus anchors Donna Barbera and Day- jockeys, “Big Daddy” Arthur Pen- format and ownership: na Clark, weekend host John Mc- hallow, remains off the air after he Ⅲ WOMC 104.3 FM (classic hits, Culloch, WDVD FM 96.3 evening and management at WRIF 101.1 FM CBS Radio): $13 million host Scott Vertical, overnight host couldn’t agree on a new deal in 2009. Ⅲ WRIF 101.1 FM (adult-oriented Jeanmarie Pavol, and engineer What’s also gone from many sta- rock, Greater Media): $11.2 Kevin Hawley. tions are young DJs working million Also getting pink-slipped were overnights and weekends — the Ⅲ WJLB 97.9 FM (urban traffic reporters, production staff training ground for the premium contemporary, Clear Channel): and others, various reports and in- morning and afternoon drive-time $10.5 million dustry websites said. slots. Instead, the nights and week- Ⅲ WKQI 95.5 FM (Top 40, Clear Cumulus’ CFO J.P. Hannan de- ends often are filled with cheaper Channel): $9.9 million clined to discuss staffing, but he syndicated programming. Ⅲ WMXD 92.3 FM (urban adult acknowledged that the company “Where is the next generation of contemporary, Clear Channel): continually seeks efficiencies great broadcasters going to come $9.8 million where it can find them, and has from?” Tanner asked. Source: BIA/Kelsey what he called the historically On the flip side, stations have highest margins in radio industry. been adding staff to handle website revenue is going to satisfy corpo- Hannan said criticism that the and social media duties. rate debt service. company has reduced on-air talent When radio industry woes are in favor of syndicated content is discussed, fingered as a chief cul- “grossly overblown” and that Cu- Issue 2: The money prit is San Antonio-based Clear mulus stations thrive on “robust lo- It’s the age of the iPod, Pandora Channel Communications Inc., a con- cal talent.” and digital music downloads, but glomerate that owns 850 stations, Haley said Clear Channel and there’s still money in radio. including eight in Detroit. Cumulus’ financial tribulations The Detroit radio market should Clear Channel was taken pri- don’t mean radio in general is in see $180 million in revenue this vate in July 2008 in a $24 billion trouble. year, up from $170 million last year, deal after it merged with an indi- “I don’t think that one compa- said Jeff Haley, president and CEO rect wholly owned subsidiary of ny’s reconfiguration approach is of the New York City-based Radio CC Media Holdings Inc., which is a representative of the whole indus- Advertising Bureau, which represents creation of Bain Capital Partners LLC try,” he said. the ad industry interests of more and Thomas H. Lee Partners LP. Bill Shea: (313) 446-1626, than 6,000 stations. One of the results of that deal [email protected]. Twitter: “The radio folks are pretty opti- was the accumulation of what’s @bill_shea19 mistic about what’s going on in De- troit,” he said. Insurance, home furnishings and fast food are big drivers of the growing revenue. The revenue estimates match a market analysis by Chantilly, Va.- !&!6,2 based BIA/Kelsey. WOMC led all local stations in %"/ 2010 with an estimated $13 million in revenue, according to BIA’s &$$ 6&01%" numbers. (See box, this page.) The overall U.S. commercial ra- #01"01W$/,4&+$ dio industry is expected to surpass last year’s $17.3 billion in advertis- ,##"" %&+ ing revenue, according to the bu- reau’s data. Its information is &+1%"2 0 culled from a sample of 35 mar- kets, including Detroit, monitored by Los Angeles-based accounting A FRANCHISEE! firm Miller, Kaplan, Arase & Co. The industry has seen seven con- Not only do we lead the industry in sales secutive quarters of ad revenue growth, Haley said, the most since growth, but we reducedduceddduuceuucceeded build-outbuuiluiilldd-d--ooutouutt costsccooostosstssttst the boom times of the 1990s. With by 40% (WOW!), andaannndd wew always alwallwwaayys provide prpprovproroviderovrooovvivvidididede increased spending expected for the 2012 presidential election, things comprehensive andndnd ongoingononggoooiniinnng support.supporsuuupppppooortorrt.rt.t are predicted to keep improving. There has never beenbebeebeeenen aab betterbetettetttterteer time ttimtiimmee to own a BIGGBY! Issue 3: The debt A chunk of radio’s increasing ad 20111205-NEWS--0025-NAT-CCI-CD_-- 12/2/2011 6:21 PM Page 1

December 5, 2011 CRAIN’S DETROIT BUSINESS Page 25 Price fixing: As lawsuits increase, some wait it out www.crainsdetroit.com ■ From Page 3 EDITOR-IN-CHIEF Keith E. Crain PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] been filed so far in Michigan, four dustries Inc. and Bombardier Inc., so also had a joint venture, Furukawa Since then, at least four automo- EXECUTIVE EDITOR Cindy Goodaker, (313) 446- other states and the District of Co- it’s possible that customers outside Lear Corp., which became Furukawa tive dealers and more than 25 indi- 0460 or [email protected] lumbia alleging Furukawa and the automotive industry were also Wiring Systems America Inc. after Fu- vidual car buyers have brought DEPUTY MANAGING EDITOR Jennette Smith, (313) 446-1622 or [email protected] other automotive suppliers of wire indirectly affected by the collusion, rukawa bought out Lear’s stake in lawsuits in federal courts around SENIOR EDITOR Bob Allen, (313) 446-0344 or harnesses and other components Lockhart said. June 2010. the country against Furukawa, [email protected] WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- engaged in false and deceptive “If I’m going to For its part, Lear Lear, Sumitomo, Leoni AG and oth- 8158 or [email protected] trade practices, fraudulent con- build a harness, I hopes to get out of ers. But OEMs and suppliers had COPY DESK CHIEF Gary Piatek, (313) 446-0357 or cealment, violation of antitrust might buy a connec- the lawsuits quickly. yet to bring any civil action before [email protected] This (case) ASSISTANT NEWS EDITOR Jeff Johnston, (313) laws and/or unjust enrichment. tor from a Fu- “ The Southfield- Martinez Manufacturing did so. 446-1608 or [email protected] The latest is Illinois-based Mar- rukawa or another based seating and An unnamed source familiar DATA EDITOR Brianna Reilly, (313) 446-0418, gives the OEMs [email protected] tinez Manufacturing Inc., a former company in these safety systems mak- with the cases told Crain’s the au- WEB DEVELOPER Steve Williams, (313) 446- wire harness maker that filed what court cases. They leverage in the er, which exited fed- tomakers themselves will avoid a 6059, [email protected] WEB EDITOR Gary Anglebrandt, (313) 446-1621, appears to be the first prospective also make harness- eral bankruptcy in class-action suit and may avoid lit- [email protected] class-action suit on behalf of “direct es, and if they’re go- future. November 2009, igation completely by demanding EDITORIAL SUPPORT Robertta Reiff (313) 446- purchasers,” or customers of the ing to make sure ” asked the judge in lower prices in the future to offset 0419, YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 446- colluders. All other federal lawsuits they’ve got the best Ravi Shankar, Morgan Stanley that case to issue an their overcharges. 1687 TIP LINE (313) 446-6766 so far are on behalf of auto dealers price in the market, injunction dismiss- Analysts agree. REPORTERS or individual buyers who bought then they’re going to be looking at ing it from all the antitrust law- “As expected, the OEMs are be- Daniel Duggan, senior reporter: Covers retail, real cars or aftermarket products from what you buy from them to make suits. ing quiet about this. It doesn’t serve estate and hospitality. (313) 446-0414 or [email protected] the OEMs, as indirect buyers. sure you can’t (beat) them later,” Lear finished its reorganization their purpose to be vocal. It’s tech- Jay Greene, senior reporter: Covers health care, insurance and the environment. (313) 446-0325 or Martinez’s manufacturing opera- he said. “It does convolute the pic- near the end of the time period the nically possible for them (to sue), [email protected]. tions were acquired in 2007 by ture.” feds are investigating — and since but I don’t know that it serves their Chad Halcom: Covers law, non-automotive manufacturing, defense contracting and Oakland Thermtrol MGI Global LLC, a sub- Supplier competition began to no one specifically alleges post- purpose. They’re more likely to and Macomb counties. (313) 446-6796 or sidiary of North Canton, Ohio- come under scrutiny when the bankruptcy Lear “committed a sin- serve their own purposes,” said [email protected]. Tom Henderson: Covers banking, finance, based Thermtrol Corp. The successor Japan Fair Trade Commission raided gle overt act” to further the conspir- Ravi Shanker, vice president and technology and biotechnology. (313) 446-0337 or company still makes automotive Furukawa’s Tokyo offices, along acy, the company argues the lead equity analyst at Morgan Stan- [email protected]. Nancy Kaffer: Covers small business, the city of wire harnesses and is not part of the with those of wire harness market lawsuits basically amount to claims ley’s research unit for the North Detroit, Wayne County government. (313) 446- supplier suit — but Thermtrol Se- leader Sumitomo Electric Industries discharged by the bankruptcy. American auto parts industry. 0412 or [email protected]. Bill Shea, enterprise editor: Covers media, nior Vice President Gene Lockhart Ltd. and Yazaki Corp. Around that Judge Allan Gropper in New “There’s always an element of advertising and marketing, the business of sports, and transportation. (313) 446-1626 or said last week that could change. same time, in February 2010, FBI York has yet to rule on Lear’s re- OEM-versus-supplier pricing pres- [email protected]. “We do have ability to participate agents also raided Yazaki North quest. sure. The general perception in the Nathan Skid: Multimedia reporter. Also covers the food industry and entertainment. (313) 446-1654, in it. We bought items from the sup- America Inc. in Canton Township, Gregory Hansel, partner at Preti, industry is that this (case) gives [email protected]. pliers that are listed in those court Denso Corp. in Southfield, and Tokai Flaherty, Beliveau & Pachios LLP in the OEMs leverage in the future. Sherri Welch: Covers nonprofits and services. (313) 446-1694 or [email protected] cases,” said Lockhart, who had the Rika Group North America in Ply- Maine and attorney for Martinez At the next contract (negotiation), Dustin Walsh: Covers auto suppliers, steel, higher company’s purchasing department mouth Township. Manufacturing, said the company this topic could come up.” education and Livingston and Washtenaw counties. (313) 446-6042 or [email protected] review its component orders after The FBI also sought documents has a “sizable claim” against Lear, Fred Hubacker, executive manag- LANSING BUREAU the Furukawa indictment. in October from Magna International Furukawa and the others, but it has ing director of turnaround firm Con- Amy Lane: Covers business issues at the Capitol, telecommunications and utilities. (517) 371-5355, “Our volume in that business af- Inc., and over the summer Justice yet to be fully evaluated. way Mackenzie Inc., also suspects au- FAX (517) 371-2492, [email protected]. or 115 W. ter the purchase wasn’t as high as also served a subpoena on the Troy “But Martinez is also suing for tomakers will avoid litigation — but Allegan, Suite 220, Lansing 48933. it was before the (Thermtrol acqui- subsidiary of French air condition- the claims that cover the whole may start sourcing parts away from ADVERTISING sition). But we buy enough that it ing and sensor electronics maker (prospective) class of companies,” the companies that get indicted. ADVERTISING DIRECTOR Marla Wise, (313) 446- 6032 or [email protected] would be worthwhile to pursue.” Valeo Inc. and searched Mitsubishi Hansel said. “That is for the total “There’s no value to (automak- SALES INQUIRIES: (313) 446-6052; FAX (313) Martinez Manufacturing, later Electric America Inc. in Northville as overcharge, or the difference be- ers) jumping into this,” he said. 393-0997 ADVERTISING SALES Christine Galasso, Matthew MGI Manufacturing Inc., had around part of the antitrust probe. tween what the prices would “It’s possible and likely that they’ll J. Langan, Lori Tournay Liggett, Tamara Rokowski, $11 million revenue prior to the ac- The European Commission haven been in a competitive mar- use this as sourcing leverage in Cheryl Rothe, Dale Smolinski quisition, but Lockhart said wire made unannounced visits in the ket and what the price was during the future. They are not going to CLASSIFIED SALES (313)-446-0351 MARKETING MANAGER Jeff Kapuscinski harness sales lost some momen- summer to Lear Corp., TRW Automo- the period of the cartel.” look favorably to future business EVENTS DIRECTOR Nicole LaPointe tum afterward with the 2008 lend- tive Holdings Corp.’s occupant safety Federal prosecutors have said with these suppliers.” EVENTS COORDINATOR Kacey Anderson ing market downturn and automo- systems division, a subsidiary of the wire harness price-fixing con- Chad Halcom: (313) 446-6796, SENIOR PRODUCER FOR DIGITAL/ONLINE PRODUCTS Pierrette Dagg tive industry restructuring. Autoliv Inc. in Germany and a Euro- spiracy lasted from at least Janu- [email protected]. Twitter: MARKETING ARTIST Sylvia Kolaski Thermtrol MGI also sells har- pean office of Delphi Corp. ary 2000 to January 2010. Fu- @chadhalcom SALES SUPPORT Suzanne Janik, YahNica Crawford nesses and thermal components to Delphi formed a wire harness rukawa pleaded guilty last month Dustin Walsh: (313) 446-6042, AUDIENCE DEVELOPMENT MANAGER all-terrain vehicle and recreational joint venture with Furukawa in in Detroit and has agreed to pay [email protected]. Twitter: Candice Yopp MARKETING COORDINATOR Jenny Griffith watercraft makers like Polaris In- 2004, which was ended in 2010. Lear $200 million in fines in the case. @dustinpwalsh PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Larry Williams CUSTOMER SERVICE MAIN NUMBER: Call (877) 824-9374 or write [email protected] SUBSCRIPTIONS $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. DDP: Leader steers agency into more hands-on role Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or ■ (877) 824-9374. From Page 3 SINGLE COPIES: (877) 824-9374. REPRINTS: (800) 290-5460, ext. 125; sure we have an ice-skating rink, son’s say-so, he said. oriented development plan, he said. on the park in Detroit’s west down- (717) 505-9701, ext. 136; or rosie.hassell having concerts in the summer. Pasky said there was some talk But safety is necessary for a suc- town. The park, once a transfer @theygsgroup.com. TO FIND A DATE A STORY WAS PUBLISHED: “But for the city to grow and on the DDP board of merging the cessful downtown, Blaszkiewicz point for many city bus routes, (313) 446-0367 or e-mail [email protected]. thrive, we need to have a strong organizations, but the board agreed said. Without a safe downtown, was rehabbed in 2009 after the CRAIN’S DETROIT BUSINESS IS PUBLISHED BY safety element, the city has to be that one person could lead both. economic development, social pro- lines were routed through the CRAIN COMMUNICATIONS INC. well-lit, it has to be clean, it has to It was important to determine grams and recreational program- nearby Rosa Parks Transit Center. CHAIRMAN Keith E. Crain have a strong economic develop- how the DDP could boost economic ming don’t matter. The project is justified, PRESIDENT Rance Crain SECRETARY Merrilee Crain ment arm, and then you can have development without duplicating The DDP is working with the Blaszkiewicz said, in part by the TREASURER Mary Kay Crain the programming.” the work of the Detroit Economic DEGC, the Detroit Downtown Devel- Live Downtown incentives, set to Executive Vice President/Operations William A. Morrow Choosing Blaszkiewicz to fill the Growth Corp., the city’s quasi-gov- opment Authority and the city’s Pub- run for five years. He said develop- Group Vice President/Technology, Manufacturing, Circulation role advanced those priorities, she ernmental economic-development lic Lighting Department to install ers should see the incentive pro- Robert C. Adams said. arm, Blaszkiewicz said. 1,077 new LED street lights in the gram as a sign that there’s a mar- Vice President/Production & Manufacturing “He’s the perfect person,” Pasky Part of Blaszkiewicz’s work has downtown area, Blaszkiewicz said. ket for housing downtown. Dave Kamis Chief Information Officer said. “He has a lot of capacity, he’s concerned developing a new “This will lighten the load on “Dave is a very effective leader Paul Dalpiaz very smart, he knows how to work framework for the DDP’s work. the grid — they use 40 percent less who is working to develop a com- Director of Audience Development Operations Michelle Roth with other agencies, engage corpo- The organization has two priori- energy — and will reduce replace- prehensive, integrated approach G.D. Crain Jr. Founder (1885-1973) rations … he is hands-on but he’s ties: physical enhancement ment costs and labor” because to revitalizing the downtown dis- Mrs. G.D. Crain Jr. Chairman (1911-1996) hands-on in a way that he has oth- through making downtown safe, LED street lights last 10 years, trict in concert with the DEGC,” EDITORIAL & BUSINESS OFFICES: 1155 Gratiot Ave., Detroit MI 48207-2732; (313) er people” involved in the work. clean and inviting; and economic rather than the three or four that Mosey said. 446-6000 Blaszkiewicz is also president of development targeted and coordi- conventional street lights can last. “District planning, prioritiza- Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 Invest Detroit, a job he’s had since nated with other agencies — but The DDP is also working to tion of downtown services and in- is published weekly, except for a special issue the 2001. Invest Detroit is a loan fund they’re linked, Blaszkiewicz said. boost stakeholder engagement, frastructure needs, new security third week of January, a special issue the fourth week of August, and no issue the third week of that finances business, residential Within the framework, it’s easy with regular meetings and partici- initiatives and other place-making December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals and other economic development to see how the organization’s two fo- pation in broader DDP decisions, programs such as the Live Down- postage paid at Detroit, MI and additional mailing in the city. He’s still president of cuses support each other: Code en- and has hired retail recruiter town program are already under offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation that organization but doesn’t par- forcement and the Clean Downtown Heather Kazmierczak to attract way and gaining traction under Department, P.O. Box 07925, Detroit, MI 48207- ticipate in decisions that could program make downtown more at- businesses to the downtown. the new DDP.” 9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2011 by Crain pose a conflict of interest. Loans, tractive to applicants to the Live The Capitol Park project recent- Nancy Kaffer: (313) 446-0412, Communications Inc. All rights reserved. for example, are granted with ap- Downtown program; lighting and ly received proposals from devel- [email protected]. Twitter: Reproduction or use of editorial content in any proval of a board, not on one per- landscaping connect to the transit- opers to renovate three buildings @nancykaffer manner without permission is strictly prohibited. 20111205-NEWS--0026-NAT-CCI-CD_-- 12/2/2011 6:23 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS December 5, 2011 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF NOV. 24-DEC. 2

ever tool imaginable, from Also, the Tigers’ retail ers into 21, AP reported. small hammers to laser-con- Townsend sales grew 26 percent this Wayne County Execu- Best person trolled metal lathes to 15- season over 2010, earning tive Robert Ficano has more ton presses, for would-be the team the 2011 “Club Re- appointees than counter- entrepreneurs to build pro- Energy seeks tailer of the Year” by Major parts in two neighboring totypes and turn ideas into League Baseball Properties. counties, the city of Detroit manufactured goods. Financial details were not and the governor of Michi- for EFM? Pool Membership is open to to develop part disclosed. gan combined. Ficano has anyone 18 and over for $100 A123 Systems LLC fur- 187 appointees, The Detroit a month, with folks on site loughed about 125 employ- News reported, while De- to advise users on materials of Wixom plant ees at its Livonia and Ro- troit Mayor Dave Bing has and machines. mulus plants in November 95, Gov. Rick Snyder has 54, is expanding ownsend Energy Solu- because of reduced orders Oakland County’s Execu- tions LLC, a Mary- for lithium-ion batteries. tive L. Brooks Patterson has s Detroit inches clos- T land investment The Detroit Medical Cen- The Onion may yet 19 and Macomb County Ex- er to a state Chrysler ‘choir’ ad group tied to the Dow Kokam ter physician-hospital orga- ecutive Mark Hackel has 14. A takeover, specula- blossom in Ann Arbor battery plant project in wins top prize at D Show nization and the Lansing- Local economic activity tion about who the city’s The joke may not be over: Midland, is proposing a based Michigan Association A television spot called took a dive in November, ac- (hypothetical) emergency The Ann Arbor outpost of $238 million energy devel- of Health Plans have signed “Born of Choir” for Chrysler cording to the Southeast manager might be is rising. The Onion is out of business opment for part of the va- separate contracts with Group LLC’s “Imported From Michigan Purchasing Man- The first after three months, but a cant Ford Motor Co. factory Chicago-based Amagine Inc. Detroit” campaign took the agers Index, falling from 59.7 name that source familiar with the sit- in Wixom. It is seeking a to become part of a health Best of Show honor in October to 51.5. Anything seems to uation said that the publica- $50 million state tax credit. information network for Wednesday night at the above 50 indicates economic come up is tion’s corporate owner is Among Townsend’s pro- physicians in Michigan. fifth annual D Show adver- growth. It was the 22nd con- Joseph looking for another publish- jects is the Dow Kokam Amagine is a subsidiary of tising awards gala. secutive month above that Harris, cur- er in the college town. joint venture that involves the American Medical Associ- The spot is the product of threshold. rently serv- Prospective franchisees Dow Chemical Co. ation. Under the agree- Royal Oak’s Avalon Films Edward Schlacht, man- ing as emer- can apply online at ments, physicians will be and Beast, and Rochester ager of Grigg Box Co. in De- gency theonionnation.com/faq. able to connect with insur- Hills-based Union Adworks. ON THE MOVE troit, was arrested by the manager in The Chicago-based satiri- ers to check insurance eli- Harris The top award was Bureau of Immigration and Benton Har- cal national newspaper and Auburn Hills-based En- gibility and medical claims. among 87 handed out from a Customs Enforcement agents bor. Harris spent 10 years as website had a printing and ergy Conversion Devices Inc. Blue Cross Blue Shield of pool of more than 500 en- and charged with knowing- Detroit’s auditor general and distribution deal since July has appointed Julian Michigan and Michigan At- tries, the most in the ly accepting false documen- a few short months as CFO with Chicago-based Bopper Hawkins president and CEO torney General Bill Schuette event’s history, organizers tation in hiring workers. under then-interim Mayor Media Inc. to publish the free and named him to the com- have agreed to a five-year said. A $1 million grant Ken Cockrel Jr. weekly tabloid print edition pany’s board of directors. freeze on premiums for se- The awards event is a from the Michigan Economic Recently added to the (hy- in Ann Arbor. Jay Knoll, currently interim niors who purchase production of the D Coun- Development Corp. will allow pothetical) pool are a few fa- That ended for undis- president, has been ap- Medicare supplemental in- cil, the Adcraft Club of Detroit miliar names: Michigan Eco- closed reasons with the pointed executive vice pres- surance, or Medigap. The Focus: Hope to continue committee that oversees the nomic Development Corp. Nov. 24 issue. ident and chief restructur- freeze is part of a larger some of the job training boss Mike Finney, who previ- awards judging and “cre- ing officer. Knoll became deal that permits Blue programs it shut down last ously led economic develop- ative black-tie” presenta- interim president in May Cross to acquire a minority week in response to cuts in ment organization Ann Arbor TechShop stalls, but on way tion event at the Max M. when President and CEO interest in AmeriHealth Mer- federal funding for work- Fisher Music Center. Spark; or George Jackson, A little later than first ex- Mark Morelli resigned. cy, a Philadelphia-based force development and the Other “best of” winners: head of the Detroit Economic pected, TechShop Inc. is com- Stephen Calkins, a law Medicaid company, allow- ongoing budget gridlock in Best of Print: “Bridges” Growth Corp. Another name ing to town. professor and vice presi- ing Blue Cross to tap into Washington, D.C. by Goodby Silverstein & Part- that keeps popping up is Crain’s dent at Wayne State Universi- the growing market for Gov. Rick Snyder vetoed broke the news in ners for Chevrolet. Robert Daddow, Oakland July that the Menlo Park, ty, has taken a leave of ab- Medicaid managed care. a measure approved by the County Executive L. Brooks Best of Radio: “First Calif.-based company was sence to accept the new Software engineering Legislature that would Patterson’s deputy. Tee,” “Catch Up” and “Head opening a machine and tool position as member of the supplier EnGenius Inc. of have prevented state gov- Another name that’s been for the Hills” by McCann Er- shop in Allen Park in part- Competition Authority of Ire- Livonia will keep a ernment agencies from advanced by Detroit’s chat- ickson for Pure Michigan. nership with Ford Motor land and head of its mergers $22.7 million judgment adopting rules that are tering classes is George Best of TV: “Arrive in division. against longtime customer more stringent than federal Land Development Co., taking Style” by W.B. Doner & Co. Voinovich, the former U.S. David Lam, a University Ford Motor Co. after the Michi- rules. up some 15,000 square feet for Chrysler. Senator and governor of of Michigan economist, has gan Supreme Court tossed out The Detroit Pistons will of a 38,000-square-foot build- Best of Digital Media – Ohio who’s credited with been appointed as the di- the automaker’s appeal. open a two-game preseason ing at 800 Republic Drive Social Media: Ford Focus – Cleveland’s renaissance rector of a European re- Starting in the 1990s, EnGe- schedule for the truncated that was formerly was a Focus Rally by Team Detroit (since stalled) while he was search program to study nius was part of a team that 2011-12 season by hosting training center for Ford. for Ford Motor Co; The Joe its mayor in the 1980s. economic growth and labor helped maintain Ford’s end- the Cleveland Cavaliers at The plan was to have the (chosen by local journal- Gov. Rick Snyder’s office markets in low-income of-line test system. The com- 7:30 p.m. Dec. 16 at The has been mum about the shop up and running by ists): “Zamboni” by SMZ for countries. The program is pany was awarded the mon- Palace of Auburn Hills. Four whole thing, so really it’s all Nov. 18, but organizers are the Detroit Red Wings; and funded by the United King- ey in a January 2009 Wayne days later, the teams will just talk. But our money’s now targeting Dec. 27, with The Ambassador (art): dom Department for Interna- County court judgment up- meet at 7 p.m. in Cleveland on none of the above — look a press preview likely the “Fire House Detroit” by Gre- tional Development and the holding a prior arbitration at Quicken Loans Arena. Both for Detroit’s new czar to week of Dec. 12. gory Holm and Jeffery German Institute for the Study award. games will air on Fox Sports come from out of state. TechShop offers nearly Williams. of Labor, and will support Detroit and WXYT 97.1 FM. peer-reviewed research OTHER NEWS Tickets for the home game projects around the world. go on sale at noon today. The estate of former Community Central Bank COMPANY NEWS Corp. CEO David Widlak has OBITUARIES settled two civil lawsuits BEST FROM THE BLOGS The 12 Bally Total Fit- Tom Fox, founder of the ness clubs in Michigan will that sought more than Prescription Arts Pharmacy READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS be converted to L.A. Fitness $500,000 in combined dam- drugstore chain and ex-di- after Irvine, Calif.-based Fit- ages, connected to his past rector of community affairs ness International LLC pur- work as an attorney. Wid- Nonprofit prize: Tech makeover HHS ruling jolts insurers for WJBK-TV2, died of a chased 171 clubs from lak allegedly borrowed as- The U.S. Department heart attack Nov. 20. He Toshiba America Chicago-based Bally. sets from others for busi- of Health and Human Business Solutions and ness investments before he was 82. “ “Services issued a final The Detroit Tigers will Detroit Toshiba Business James Garavaglia, se- rule that could return split $6.8 million in cash for became the bank CEO in Solutions plan to award nior vice president of cor- more than $31 million to reaching the American 2006, and he’d only partial- a $100,000 technology people who purchase League Championship Series. ly repaid them before his porate public affairs and makeover to one local health insurance in death. community reinvestment nonprofit in January … The team gets 44 full shares Michigan. at Comerica Inc., died from through a Facebook of a $57.3 million pot of gate Detroit’s Roman idiopathic pulmonary fi- contest. receipts from playoff Catholic leader Archbishop ” games, and each share is Allen Vigneron proposed to brosis Nov. 23. He was 59. ” worth $126,901.50. The team reduce the number of Frederik Meijer, founder Reporter Sherri Begin Welch’s blog Reporter Jay Greene’s blog about health care, also gets 10 partial shares parishes from 270 to 222 by of Grand Rapids-based re- about Southeast Michigan nonprofits can be found insurance and the environment can be found at and some smaller cash closing nine within five tailer Meijer Inc., died Nov. at www.crainsdetroit.com/welch www.crainsdetroit.com/greene awards. years and merging 60 oth- 25. He was 91. DBpageAD.qxp 11/22/2011 10:43 AM Page 1

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