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www.crainsdetroit.com Vol. 25, No. 30 AUGUST 3 – 9, 2009 $2 a copy; $59 a year
©Entire contents copyright 2009 by Crain Communications Inc. All rights reserved Page 3 Blues to alter small-firm rates
would be Higher claims may mean higher premiums charged higher rates under the BY JAY GREENE pricing system, several health ben- director with Troy-based McGraw new program CRAIN’S DETROIT BUSINESS efit experts said companies with Wentworth, said another option she than would be Oshkosh’s M-ATV contract employees who have chronic con- will suggest to her clients is to self- charged lower win changes the playing field Blue Cross Blue Shield of Michigan ditions or high claims will face insure their health benefits. rates. has received state approval to be- tough choices at policy renewal “Groups with higher claim expe- “Blue Cross gin on Oct. 1 charging small-busi- time. rience would have some rate im- wants to set the John Bailey & Associates ness customers that have 51 to 99 The small groups either will pay pacts and groups with lower rates more ap- employees group insurance premi- higher premiums, go shopping for claims experience would have low- McLaughlan propriately,” sells to Grand Rapids firm ums based on factors that include a lower-cost policy with another er rates,” McLaughlan said. McLaughlan their health claims experience. insurer, choose a health mainte- However, McLaughlan said be- said. “They have lost money in While Blue Cross officials said nance organization or cancel their cause Blue Cross insures groups that segment of their business.” Inside customers asked the nonprofit health insurance. with sicker and costlier work- health insurer to develop the new Rebecca McLaughlan, managing forces, she believes more groups See Blues, Page 21 Detroit retirement department’s plan to build on riverfront draws fire, Page 4 DPS breathes Council of CEOs meets life into idle to advance East-West cooperation, The Greektown turnaround team foundation; Page 6 from The Fine Point Group (left to right): CEO This Just In Randall Fine; donors ready Amanda Totaro, Residential Home Health senior vice president, brand buys Illinois care agency marketing; and Last step: Hire Chris Colwell, Residential Home Health, a senior vice Madison Heights-based president, CEO to operate home health company, has gaming acquired Edward Home Care, a operations. BY RYAN BEENE home health agency owned NATHAN SKID/CRAIN’S DETROIT BUSINESS by Edward Hospital in CRAIN’S DETROIT BUSINESS Naperville, Ill., for an undis- Work is under way at the Detroit closed amount. Public Schools to transform the De- The purchase is part of a troit Public Schools Foundation, a new strategic growth plan Greektown bets on ‘value’ 501(c)(3) nonprofit that has sat for Residential, said David idle since its 2003 formation, into Curtis, its president. a university-style endowment and “This Edward transaction Market share rises with focused marketing development office for the dis- is a model for us. We are ac- trict. tively looking for other simi- The foundation would manage BY DANIEL DUGGAN MacKenzie & Dunleavy, the casi- lar agencies owned by hospi- an endowment funded by money CRAIN’S DETROIT BUSINESS no’s lead restructuring adviser. tals in Michigan and the GROWING MARKET SHARE raised from alumni, corporate, in- Midwest,” said Curtis. One month after entering Greektown Casino has taken a stitutional and individual donors By acquiring Edward bankruptcy protection, Greek- growing share of the casino Finding a niche to pay for such Home Care, Curtis said Resi- market in Detroit this year: efforts as dis- town Casino Hotel finished June Fine Point CEO Randall Fine dential beat 14 other compa- trict athletics, 2008 with revenue down 18 per- GreektownMotorCity MGM Grand said the strategy has four points: nies, including such in- fine arts or cent from June 2007 and captured branding, leadership with em- vestor-owned companies as Jan 22.8% 34.4% 42.8% specific non- an all-time low 21.1 percent of the ployees, a focus on public rela- Nashville-based HCA Inc. Ed- recurring pro- gaming market share in Detroit. Mar 25.0% 34.7% 40.3% tions and use of an advanced ward Home Care has 40 em- jects, such as One year later, the casino con- database marketing program. ployees and 150 patients, he Jun 26.4% 33.7% 40.0% providing elec- tinues to operate in bankruptcy Branding the property meant said. tronic black- but has shown a 24 percent in- Source: Michigan Gaming Control Board establishing a niche, he said, Edward Hospital will re- boards for crease in revenue over June 2008 honing in on the idea of a “value tain a minority stake in Resi- every class- and market share that has in- than one-third of the gaming mar- proposition” for people to have room in the Bobb creased to 26.4 percent. ket and has restructuring costs fun at a reasonable price. See This Just In, Page 2 district, DPS’ emergency finan- While the casino still has less eating up most of its profit, the lat- “The message in the past was cial manager, Robert Bobb, told est chapter of the Greektown tale ‘we’re a nice place too,’ or ‘we Crain’s. is becoming a turnaround story. have nice restaurants too,’ ” Additional funding would be Behind the numbers has been Fine said. “You know what? The crucial for the district, which an aggressive marketing and nicest casino in Detroit is one faces a $259 million budget deficit repositioning process led by the mile away, it’s not this one. and shrinking state funding. Las Vegas-based casino consult- We’re not going to try to compete “Many public schools don’t ing firm The Fine Point Group, on MGM’s playing field. A value function as if they’re a university, which took over in January after for regular folks is what we’re so in essence we’re a public it was hired by Birmingham- going after.” NEWSPAPER based turnaround firm Conway, See Greektown, Page 20 See Foundation, Page 20 20090803-NEWS--0002-NAT-CCI-CD_-- 7/31/2009 5:13 PM Page 1
Page 2 CRAIN’S DETROIT BUSINESS August 3, 2009
about 10 percent of Soave’s over- al SBT taxes and interest under Office supply firms form co-op Taubman Centers Inc. in February THIS JUST IN all beer volume moving about 2.2 protest and filed a lawsuit. to form Julie Fielder Retail Consult- million cases per year supplying Treasury filed an appeal after A group of independently ing Services L.L.C. ■ From Page 1 AB InBev products to Kalama- the Court of Claims found the owned office supply companies In the one-year Birmingham zoo, Branch, St. Joseph and parts firm was entitled to full restitu- that serve metro Detroit have cre- contract, she will be seeking new dential’s Illinois operations. of Allegan and Van Buren coun- tion, and the firm filed its own ap- ated a co-op to encourage local retailers to add to the mix of busi- buying by office managers. Residential, which employs 450 ties. peal since the lower court did not nesses in the shopping district. The co-op, Independent Dealer workers in Michigan, plans to Both Kalamazoo Beer Distrib- address interest, costs or fees “I’ll be showcasing Birming- Marketing Group, created the Web hire another 100 workers in uting and West Side Beer are ex- owed since the 2005 audit. The ap- ham to the national retail com- site www.littleguyssupplies.com. Michigan and Chicago over the clusive Anheuser-Busch InBev peals court Friday sided with the The site offers online ordering of munity,” she said. “We want to next several months, said Mike distributors. firm and ordered the case re- more than 40,000 items and touts bring well-capitalized retailers to Lewis, its chairman and CEO. — Nathan Skid turned to the lower court to com- free next-day delivery as well. augment what’s there today.” Residential has licenses to op- pute interest on top of Honig- “The inspiration for Little — Daniel Duggan erate in 34 Michigan counties and man’s refund. State appeals court sides with Guys Supplies was to let busy of- serves about 10,000 home health — Chad Halcom fice managers know that there patients, said Joe Mooney, its exec- Crain’s adds to marketing staff Honigman over Treasury are genuine, local alternatives to utive vice president of sales and Detroit-based Honigman Miller the national office supply retail- Kim Winkler has been named marketing. Metaldyne pension goes to PBGC Schwartz and Cohn L.L.P. learned ers,” said Greg Newton, executive marketing coordinator for — Jay Greene The pension plan covering Friday it will receive a judgment director of the Independent Deal- Crain’s Detroit Business. 10,770 employees of bankrupt of interest on top of a $114,628 re- er Marketing Group. Winkler, 24, has a bachelor’s auto supplier Metaldyne Corp. has Soave sells beer distributor fund the law firm is owed on the Independent Dealer Marketing degree in organizational commu- been taken over by the federal state’s former Single Business Group consists of Westland-based nication from Detroit-based Soave Enterprises government, the Pension Benefit Tax, following an unsuccessful Office Star L.L.C., Madison Western Michi- Inc. has agreed to sell one of its Guaranty Corp. announced Friday. appeal by the Michigan Department Heights’ LB Office Suppliers Inc., gan University distributors, Kalamazoo Beer Dis- of Treasury. The Plymouth-based company, Port Huron’s Kerr-Albert Office Sup- and a minor in tributing, to Grand Rapids-based which reported revenue of $1.57 ply Inc. (multiple locations), West Side Beer Distributing Co., but The Michigan Court of Appeals in graphics de- a unanimous decision Friday de- billion last year, filed for Chapter Troy’s Office Express Inc. (multiple sign. She has the transaction awaits regulato- Ar- nied Treasury’s appeal of a lower 11 bankruptcy protection in May locations) and Detroit-based worked as a ry and supplier approvals. in the U.S. Bankruptcy Court for the row Office Supply Co. (multiple lo- Terms were not disclosed. court ruling, involving Honig- Crain’s intern Southern District of New York. cations). The deal would turn West Side man’s practice of paying SBT since 2008 and Metaldyne’s pension plan was — Dustin Walsh Beer into one of Anheuser-Busch In- only on hours of legal services has handled 53 percent funded at the time of Bev’s top 10 distributors. billed to its Michigan clients. projects such Winkler the takeover, with liabilities of The distributor moves an esti- A 2005 Treasury audit found Birmingham hires recruiter as designing $334 million and assets of mated 15 million cases of AB In- that Honigman apportioned legal The city of Birmingham’s Prin- sales proposals and marketing e- $177 million. The PBGC, a federal Bev products per year to Michi- services to clients outside Michi- cipal Shopping District has hired a mails, and assisting in the coordi- program that insures company C gan’s Kent, Montcalm, Ionia and gan to the states where those ser- retail consultant to recruit new nation of major events and recog- Barry counties. The company em- vices were performed — general- pension plans in case of failure, retailers for the downtown area. nition programs. She has held ■ ploys about 65 full- and part-time ly 3.5 percent to 4 percent of all will foot the bill for $153 million Julie Fielder left her position of previous positions in bookkeep- employees. billable hours for Honigman in of the $157 million shortfall. 25 years as a leasing representa- ing, design and special events ■ Kalamazoo Beer represented 1999-2001. The firm paid addition- — Gabe Nelson tive for Bloomfield Hills-based planning.
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August 3, 2009 CRAIN’S DETROIT BUSINESS Page 3 Bailey-Lambert deal Focus: Going Green creates $6M PR firm
COURTESY OF OSHKOSH CORP. Winning a defense contract for its M-ATV was a John Bailey to maintain leadership role ‘game-changer’ for Oshkosh. Can Motown get to BY BILL SHEA Lambert Edwards, established in 1998, has CRAIN’S DETROIT BUSINESS 90 clients in 20 states, including 5-Hour Energy Greentown? Page 10 and Georgia Pacific, and its primary practice ar- Oshkosh’s M-ATV Metro Detroit public-relations veteran John eas are consumer, business and financial com- Bailey has sold his Troy-based agency to a munications, health care and technology. Grand Rapids competitor for an undisclosed Its investor relations capabilities will be amount, creating one of Michigan’s largest PR added to John Bailey’s offerings while Lam- win changes firms. bert Edwards gets access to Lambert, Edwards & Associ- Bailey’s established public Company index ates has been in an acquisi- policy and automotive work. tion mode for several years Bailey said he signed a These organizations appear in this week’s Crain’s playing field as it expands locally and na- long-term deal to remain as Detroit Business: tionally, and bought John Bai- chairman of the office he es- AGIS ...... 21 Askar Brands ...... 6 ley & Associates Inc. Public Re- tablished and will work in a BY CHAD HALCOM lations to establish a BAE Systems ...... 21 senior advisory and leader- Bearclaw Coffee ...... 6 CRAIN’S DETROIT BUSINESS presence in Detroit and ship role. Bieri ...... 4 specifically in the automo- A recent “game-changer” for the business His transition out of day- Blue Cross Blue Shield of Michigan ...... 1 tive PR market, said Jeffrey outlook of Oshkosh Corp. and its defense divi- to-day management began Campbell-Ewald ...... 3 Bailey Lambert, president and Locricchio sion could create more competition than new in 2007 when he hired for- City Connect Detroit ...... 7 managing partner. CMS Energy ...... 6 jobs in the local defense industry. mer Chrysler L.L.C. communi- Terms of the deal, which Conway, MacKenzie & Dunleavy ...... 1 The Wisconsin-based maker of commercial cations manager Sam was signed Wednesday, Detroit Public Schools Foundation ...... 1 and emergency service trucks saw recent up- Locricchio, whom he pro- were not announced. Detroit Renaissance Inc...... 6 grades in its earnings projections and analyst moted to president of the The combined firms will Detroiters Working for Environmental Justice . . . . . 11 recommendations after its Oshkosh Defense agency in September. DTE Energy ...... 6 retain their names, all 40 division won a $1.05 billion bid June 30 on the Locricchio now becomes EBusiness Strategies ...... 7 employees and have com- Mine Resistant Ambush Protected All Ter- managing director and Flame Heating, Cooling and Electrical ...... 7 bined revenue of $6 million. rain Vehicle. group head for the global au- Gabriel Roeder Smith ...... 4 Bailey will stay on, too. The contract could swell to more than $3 tomotive practice, and he’ll General Dynamics Land Systems ...... 21 Bailey, a member of the General Motors ...... 19 billion based on projected future orders as continue to be in charge of Detroit chapter of the Public Palsrok General Retirement System ...... 4 well as future component replacements and Lambert the Detroit office. Relations Society of America’s hall of fame, creat- Great Dane Heating & Air Conditioning ...... 7 upgrades. Emily Gerkin Palsrok, a John Bailey senior ed his agency in 1996. Its client list, which Greektown Casino Hotel ...... 1 But Oshkosh executives say M-ATV is just vice president, becomes managing director Lambert characterized as “blue chip,” in- Green Task Force ...... 10 one of many major systems in the coming and head of the public affairs practice in Lans- Hamilton Anderson Associates ...... 4 cludes the North American International Auto years where it intends to grow through the ing. John Bailey & Associates ...... 3 Show, R.L. Polk & Co., National City Bank and Blue U.S. Army Tacom Life Cycle Management Com- Discussion about buying Bailey began about Lafontaine Automotive Group ...... 10 Cross Blue Shield of Michigan. mand in Warren. The company estimates six months ago, Lambert said. “Acquisition is McGraw Wentworth ...... 1 “We had an opportunity to come together, more than $275 million of its revenue comes part of our strategic plans.” He said further ac- McLaren Health Care ...... 6 and it worked out,” Bailey said, noting that his McLaren Performance Technologies ...... 17 from Tacom contracts annually, but job quisitions will happen as opportunities arise. agency had previously looked into the Grand McVety & Associates ...... 6 See Oshkosh, Page 21 Rapids market. See Bailey, Page 19 MGM Grand Detroit ...... 20 Michigan Business Roundtable ...... 6 Michigan Dept. of Transportation ...... 6 Michigan Office of Financial Insurance Regulation 21 MotorCity Casino ...... 20 Mr. Pita Sandwiches ...... 6 Mt. Clemens Regional Medical Center ...... 6 Pressure mounts for Campbell-Ewald over Chevy work Office of Energy and Sustainability ...... 10 Papa Romano’s Pizza ...... 6 Police and Fire Retirement System ...... 4 Will it lose the lucrative account or see an increase? Public Sector Consultants ...... 6 Skillman Foundation ...... 20 Signature Associates ...... 4 BY BILL SHEA “Campbell-Ewald has a long his- to an unnamed source familiar Small Business Association of Michigan ...... 21 CRAIN’S DETROIT BUSINESS tory with Chevrolet and has done a with the meeting, he “crapped all Southeast Michigan Sustainable Business Forum . 10 lot of good work over the years, but over the advertising,” Advertising The unfolding post-General Mo- Strategic Properties ...... 6 this is either the first inning of a Age reported. Synergy Group ...... 4 tors Co. bankruptcy environment whole new ballgame or the bottom The trade magazine also quoted Tanner Friedman Strategic Communications . . . . . 19 for the automaker’s oldest and of the ninth in Lutz’s webcast commentary from U.S. Army TARDEC ...... 17 biggest advertising agency is filled an old one and before the meeting: “I think you Villages Community Development ...... 4 with uncertainty and optimism. even an occa- will very quickly see a drastic Walsh Construction ...... 17 There’s hope that Warren-based sional failure is- change in the tone and content of Warm Training Center ...... 11 Campbell-Ewald, which has handled n’t an option,” our advertising. And if you don’t, White Construction ...... 4 GM’s Chevrolet work since 1922, said Bud it will mean that I have failed.” eventually could see an increased Liebler, former So, the pressure is on. budget because the automaker has senior vice pres- “Agencies need to be concerned. shed Pontiac, Saturn, Saab and ident of market- I don’t think it is automatic the Department index Hummer so that it can focus on its ing and commu- current agency roster at GM will remaining brands. nications at survive intact,” said Peter De- BANKRUPTCIES ...... 18 Liebler But there’s angst after new mar- Chrysler Group Lorenzo, creator and publisher of COURTESY OF CAMPBELL-EWALD BUSINESS DIARY ...... 16 GM and Campbell-Ewald launched the keting and advertising Vice Presi- L.L.C. and president of Detroit- AutoExtremist.com, a popular auto CALENDAR ...... 16 dent Bob Lutz reportedly gathered new campaign for the 2010 Chevy based Liebler Group Strategic Com- industry blog. “They have to prove Equinox (above) while amid the CAPITOL BRIEFINGS...... 6 the brands and their agencies for a munications. to Lutz they belong.” bankruptcy process. A campaign for CAREERWORKS ...... 14 criticism session recently and Lutz met with GM’s brand teams And recent history shows noth- the Chevy Cruze, set for mid-2010, CLASSIFIED ADS ...... 16 plans on being more hands-on as on July 14 for short critiques of the will be the first full post-bankruptcy he seeks new creative work. current campaigns, and according See Campbell-Ewald, Page 19 campaign. KEITH CRAIN...... 8 LETTERS...... 8 OPINION ...... 8 OTHER VOICES ...... 9 Follow the primary election, find out about candidates Stay in the know THIS WEEK @ Voters will trim the Detroit City Council candidates down to 18 on Tuesday. We’ll Sign up for Crain’s e-mails PEOPLE ...... 15 have complete coverage of the primary. Not sure who deserves your vote? Go to at www.crainsdetroit RUMBLINGS ...... 22 WWW CRAINSDETROIT COM www.crainsdetroit.com/election for information on all the candidates. .com/getemail . . WEEK ON THE WEB ...... 22 20090803-NEWS--0004-NAT-CCI-CD_-- 7/31/2009 4:35 PM Page 1
Page 4 CRAIN’S DETROIT BUSINESS August 3, 2009 World Famous Trademark- WorldClassOpportunity Detroit retirement group’s plans Ever Dream of Owning your own business? for riverfront building draw fire The 7-Eleven Franchise System* offers individuals to operate their own ready-to- BY NANCY KAFFER strong showing at a Planning Com- operate neighborhood convenience store CRAIN’S DETROIT BUSINESS Van Dyke St. mission hearing Wednesday. under the auspice of a world famous “Right now it’s an overgrown lot trademark. We take an active role in the E. Vernor Hwy. Construction on a new head- E. Grand Blvd. that’s fenced in, so I don’t know franchisee’s business because our quarters for the city of Detroit’s re- success is predicated on their success. why you wouldn’t want a new de- tirement system could begin this Mt. Elliott St. velopment,” Stampor said. “It will fall, although residents in nearby be one of these LEED constructions, Contact us today neighborhoods say the project is so it’s a green project and it should to see if you qualify: not the best use of the chosen site. be pleasant to the eye. It should look The division’s roughly 55 em- better than what’s there now.” Call 630-366-3328 ployees currently are housed on LEED, or Leadership in Energy the ninth floor of the Coleman A. 7850 E. Jefferson Or visit us at and Environmental Design, is a Young Municipal Center. E. Lafayette St. designation granted by the U.S. www.7-Eleven.com In January 2008, the PFRS/GRS Green Building Council to structures Jefferson Avenue Corp. — a joint ven- that meet high environmental con- ture of the General Retirement Sys- E. Jefferson Ave. struction and design standards. tem and the Police and Fire Retire- Architect for the project is De- * Moderate financial resources and business experience are required to franchise a store ment System — acquired 4.81 acres Belle Isle troit-based Hamilton Anderson Asso- on the Detroit River at 7850 E. Jef- ciates, Stampor said, with con- ferson Blvd. for $1.8 million, ac- struction by White/Synergy JV, a cording to city tax records, with a joint venture of Bloomfield Hills- state equalized value of $338,542. zoning change. based Synergy Group Inc. and De- Plans call for a 30,000-square- The parcel is marked for high- troit-based White Construction. foot, three-story office building, rise residential development. The Royal Oak-based Milestone Real said Walter Stampor, executive boards have requested the parcel be Estate Services Inc. is the project co- secretary of the city’s General Re- rezoned for planned development — ordinator. tirement System, at an estimated a move opposed by some residents The pension boards have come cost of $7.2 million. of nearby neighborhoods. under fire in recent months for Stampor said the department has “We feel that it’s not the highest questionable investments and ex- grown as the complexity of pension and best use for the land,” said pensive trips abroad for pension benefits has deepened and as the Kimberly Ross Clayson, president board trustees. ranks of city retirees have swelled. of the Villages Community Develop- Residents also have questioned “Every time we’ve tried to do any ment Corp., which encompasses the the project’s cost, but Chris Man- type of expansion, we’re at the dis- neighborhoods Indian Village, Is- sour, an associate broker with cretion of the (Detroit-Wayne Joint) landview and English Village, Southfield-based Signature Associ- Building Authority,” he said. “Right West Village, East Village, the ates, and Jim Bieri, president and now, there’s no way to expand un- Gold Coast and the Berry Sub. CEO of the Detroit-based Bieri Co., less we move to a different floor.” “It’s a very low-density purpose, say there’s nothing out of line A plan for the exterior of the and even though the housing mar- about the price tag for the land or new building hasn’t been finalized, ket right now is not that strong, it’s the construction. Stampor said. bound to come back at some point. At $8.59 per square foot, the land “We’re still in the design stage,” We would hate to mar prominent was a fair purchase for January he said. “The boards have a sub- high-density residential opportuni- 2008, Monsour said. committee going through it on a ties for a development that doesn’t “A year ago, in the minds of sell- regular basis, and they’re meeting fit into the neighborhood or that ers and buyers (the idea was), next week to maybe come up with part of the neighborhood.” ‘Things are bad, but things will get the final design.” Clayson said residents also are a little better,’ ” he said. “I think The boards will split the cost of concerned about access to the wa- that price was pretty fair. … If you the building equally, according to terfront. look, $8.59 is still in the upper meeting minutes. “We’re interested in providing range. It wasn’t a steal, it’s more “If everything falls in place, access and better integration with a into the higher range of what that there’s a possibility construction pedestrian-friendly community,” land would sell for, but you would could start late this fall,” Stampor she said. “There’s talk of the expan- not get that price today.” said. “But if there are delays … sion of the river walk. Right now Bieri said that $240 per square even though we’re the city, we still it’s not pedestrian friendly, but foot for a three-story office build- have to deal with the city.” that’s one of our goals as an organi- out and finish isn’t exorbitant. One piece that must fall into zation.” Nancy Kaffer: (313) 446-0412, place before work could begin is a Clayson said her group plans a [email protected].
Police-fire pension board sues city over $45M
BY NANCY KAFFER said that the system’s ratio of recognized assets to ac- CRAIN’S DETROIT BUSINESS crued liabilities was a healthy 106 percent as of June 30, 2008 — but noted that due to market conditions, Detroit’s Police and Fire Retirement System has filed a the board should expect to see that ratio decline at the lawsuit to compel a $45 million required city contri- end of the 2008-09 fiscal year. bution it says is delinquent. However, Jones wrote, “Benefits are fully secure The board voted on June 25 to authorize legal ac- provided that required city contributions are made to tion if the payment wasn’t made by June 30, according the system on a timely basis in future years.” to minutes from the June 25 meeting. A government body’s failure to make payments to The city missed that deadline, said Walter Stampor, its pension fund can trigger a financial review by the executive secretary of the city’s General Retirement Sys- Michigan Department of Treasury, the first step toward tem, and the lawsuit was filed two weeks ago in Wayne appointment of an emergency financial manager. County Circuit Court. The case is before Chief Judge Vir- For a review to occur, a trustee, actuary or at least 10 gil Smith. percent of a local government pension fund’s beneficia- Stampor said Friday that the city and the retire- ries must notify the state treasurer in writing that the ment system haven’t reached a payment agreement. local government hasn’t made a timely deposit of its Stampor said that the general system has voted to minimum obligation payment, according to Michigan’s follow suit, but that no action had yet been taken. Local Government Fiscal Responsibility Act. An April 22 letter to the police and fire retirement Edward Cardenas, press secretary for Detroit Mayor system’s board of trustees from actuary Norman Dave Bing, declined to comment on pending litigation. Jones, of Southfield-based Gabriel Roeder Smith and Co., Nancy Kaffer: (313) 446-0412, [email protected] DBpageAD.qxd 7/8/2009 9:17 AM Page 1
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Page 6 CRAIN’S DETROIT BUSINESS August 3, 2009 Council of CEOs meets on East-West agendas
LANSING – When a Michigan chairman of Detroit Renaissance A leading Democratic bill sponsor, how- that utilities must achieve by 2012 under CEO survey recently emerged, and chairman and CEO of Domino’s ever, says the measures proposed last week current law. sponsored by Detroit Renaissance Capitol Pizza Inc. by House Democrats are needed to encour- Len Singer, senior specialist, external Inc. and a group called the Michi- Briefings Rothwell said one benefit of the age alternative-energy businesses to come communications at DTE Energy Co., said the gan Business Leadership Council, council could be seen in the recent to Michigan. 2008 legislation “contains significant targets the question arose: Who’s the CEO survey, which produced Rep. Pam Byrnes, D-Chelsea, said she has for renewable energy and energy efficiency” council? “more of a statewide feel for how talked with a wind-energy related company, and “thoughtfully addresses the energy The answer: A group of high- people saw the economy.” which she declined to identify, that is inter- needs of the state while ensuring that utility powered CEOs that is somewhat As reported on ested in Washtenaw County but is also look- bills remain affordable for Michigan’s resi- a reincarnated version of the for- crainsdetroit.com, the survey found ing at other states because they have more dents and businesses.” mer Michigan Business Roundtable, CEOs pessimistic about Michigan’s stringent requirements for use of renewable He said that with DTE and other state util- an effort joining chief executives economy in the coming months but energy. ities just beginning to enact the 2008 provi- from the East and West sides of believing the national economy will Last September, Michigan passed new en- Amy Lane sions, “before moving forward with next Michigan. hit bottom and begin to improve. ergy regulations that included a mandate steps, we need to allow some time to evalu- The council, which meets a The survey of 60 Michigan chief that 10 percent of utilities’ electricity come ate how the current changes play out.” couple of times a year, contains CEOs from executives found approximately 90 percent from renewable sources by 2015. The legisla- Byrnes said that in terms of the cost of leading corporations throughout Michigan forecasting the same or lower employment tion currently being drafted and expected to higher standards, “obviously we need to and provides opportunity for discussion, and Michigan capital investment over the be sponsored by Byrnes and Dan Scripps, D- look at that,” but increasing energy efficien- east-west understanding and shared agen- next six months. Leland, would require a 30 percent renew- cy also produces cost savings. Holyfield, das, said Doug Rothwell, president of De- able portfolio standard by 2025. however, said that energy-efficiency gains troit Renaissance and the leadership coun- “It’s aggressive, but let’s start there,” depend on customers’ acceptance and use of cil. Utilities cool to energy bills Byrnes said. “The legislation we passed be- “There are a lot of the same issues that A package of bills that would raise Michi- fore was a really good step, a first step, but measures. we’re all facing in the state today,” such as gan requirements for renewable energy and now we need to improve on that, and that’s Byrnes said she would like the RPS bill to struggles over the state budget and taxes, he energy efficiency is getting a cool reception what we’re asking.” be introduced by September but doesn’t an- said. A chief council goal is to make Michi- from utilities, who say the state’s 2008 ener- Democrats’ legislation, which is support- ticipate hearings until after lawmakers gan a more competitive place to do business. gy laws need to be given time to work. ed by environmental groups and other inter- complete work on the budget for fiscal 2010, Bill Rustem, president and CEO of non- “Our position is, let those standards that ests, comes as utilities prepare to start which starts Oct. 1. partisan think tank Public Sector Consultants were established after a year and a half of charging customers for renewable-energy Other pieces of House Democrats’ agenda, Inc., said that the idea of bringing together very detailed discussion by the Legislature plans to meet current state requirements. some of which are already in play in the Leg- business leaders and bridging divides be- and administration … let those take effect, Separate charges for utility energy-efficien- islature, include tax incentives for solar en- tween the state’s east and west sides is a see how customers react to the energy-effi- cy programs, also prompted by 2008 law, re- ergy companies, personal property tax ex- good move. ciency aspect of that, see how the market- cently began. emptions for wind energy systems and “If there’s one thing about Michigan, we place reacts to the building of new renew- House Democrats’ proposal would require property, and revising building codes to in- like to fight with ourselves too much,” he able energy sources,” said Jeff Holyfield, utilities to work with customers to decrease crease energy efficiency. said. director of news and information at Con- electricity usage by 2 percent annually, com- Amy Lane: (517) 371-5355, Chairing the council is David Brandon, sumers Energy Co. and CMS Energy Corp. pared to the 1 percent annual reductions [email protected] Bearclaw Coffee, Askar Brands M-53 exit ramps could drive hope co-branding will jolt sales life science office park plans BY NATHAN SKID lease that being busy during more hours of BY CHAD HALCOM Mile Road, as well as a proposed water line CRAIN’S DETROIT BUSINESS the day generates more cash flow and a higher return on investment. CRAIN’S DETROIT BUSINESS extension into a portion of Bruce Town- Two Michigan companies are joining According to Oakbrook, Ill.-based restau- ship through the Detroit Water and Sewerage forces in an effort to drive down costs while A $4 million public investment in a set of Department. rant magazine Chain Leader, Askar Brands exit ramps in northern Macomb County raising volume and sales. generated about $44 million in sales for 2008 If all goes well, Racz said, he would Chelsea-based Bearclaw Coffee Co. and could literally pave the way for a life sci- “love to begin” sometime next year on and operates about 100 units in seven states. ence-oriented office park development Commerce Township-based Askar Brands, Last year, Bearclaw generated about $5.5 construction of the more than 150,000- parent company of Mr. Pita Sandwiches, Stuc- north of Romeo valued from $75 million to square-foot development and include se- million in revenue and has 20 locations in $80 million, according to a developer and chi’s Ice Cream, Papa Romano’s Pizza and CJ’s Michigan, two in Kentucky and four mobile nior living space and offices for medical Brewing Co., hope a co-branding agreement several local officials. device manufacturing companies. He has units. Developer Darryl Racz, president of will give franchisees more leverage in the Founder Debi Scroggins said same-store been in talks with several health care and marketplace by expanding product offer- Rochester Hills-based Strategic Properties life science companies, he said, although sales were about $275,000 per store, and the L.L.C. and Mark Ohalla, CEO of Mt. Clemens ings and boosting sales in what were the coffee company is expecting the co-brand- no discussions are as far along as the slow periods of the day. Regional Medical Center Inc., have held talks McLaren talks. ing effort to triple systemwide revenue about leasing medical office space in a pro- Jerry McVety, president of Farmington through increased franchise fees and addi- “There is pent-up demand for health Hills-based restaurant posed development along 33 Mile Road east care services, senior assisted and indepen- tional royalties. of M-53, Racz and the hospital’s owners consulting firm McVety & “Now that we have a stable of brands, we dent living, medical devices and life sci- Associates L.L.C. said co- confirmed. ence space, and once all the infrastructure can give potential franchisees choices,” Kevin Tompkins, vice branding arraignments Scroggins said. “We can let them choose improvements are here, this will be a can be beneficial as long president of marketing prime location,” he said. which pairing work best for them while let- at Flint-based McLaren as the brands balance ting each brand continue to develop their Macomb County Commissioner Don Health Care Corp., said each other relative to day expertise.” Brown said MDOT previously indicated it Mt. Clemens Regional parts, or brackets of time Franchisees will have to file separate was against the exit ramp proposal at 33 has an interest in leas- relative to breakfast, franchise disclosure agreements, but Raab Mile, but that he and fellow county offi- ing space at the 98-acre lunch and dinner. said the paperwork has been simplified to cials, such as Treasurer Ted Wahby, and development site but “In our industry we expedite the process. state Rep. Pete Lund, R-Shelby Township, McVety hasn’t settled on the see strength in numbers She also said the cost of adding a brand are continuing to negotiate with the scope of its role in that and are beginning to find smaller, regional and housing it under the same roof will be agency. Another round of discussions is ex- project and which ser- food service operations with complemen- significantly cheaper than building new. Tompkins pected in the second week of August, he vices it could house. tary product offerings joining forces,” “If a Mr. Pita adds a Bearclaw Coffee, it said. McVety said. “They almost have to do this will be a different price than if a Bearclaw “There is an interest, but it’s very pre- Bruce Township also is expected to hold in order to stay competitive with the big Coffee adds a Mr. Pita,” Raab said. “But ei- liminary,” Tompkins said. “It’s along a cor- a public hearing on the water line exten- players who have much deeper pockets.” ther way, it will be a lot cheaper than start- ridor of growth where we would at least be sion within a month. Mary Jean Raab, board member and co- ing from scratch.” interested in placing primary care facili- “The area could become a destination owner of a Bearclaw franchise in Ann Ar- The first Bearclaw Coffee slated to under- ties and physician office space. But a real for medical device companies and ad- bor, said about 40 percent of specialty cof- go the transformation is the Brooklyn loca- definitive issue is the development of an vanced manufacturing,” Brown said. “Ad- fee sales are made before 9 a.m. tion followed by one in Ann Arbor. exit to have access from M-53. That’s the vanced manufacturing is one of the indus- “By adding, say, a Mr. Pita to a Bearclaw The first Mr. Pita/Papa Romano’s to of- game changer.” try areas where Macomb County in location we could extend our sales opportu- fer Bearclaw products will be the Campus Racz said he is waiting on the outcome of particular is growing its specialization, as nities,” she said. Martius location. discussions between county elected offi- an area of the new economy.” Gary McCausland, chief development of- Nate Skid: (313) 446-1654, cials and the Michigan Department of Trans- Chad Halcom: (313) 446-6796, ficer for Askar Brands, said in a press re- [email protected] portation about installing exit ramps at 33 [email protected] 20090803-NEWS--0007-NAT-CCI-CD_-- 7/31/2009 4:39 PM Page 1
August 3, 2009 CRAIN’S DETROIT BUSINESS Page 7 Flame Heating seeks to build business through mergers
BY SHERRI BEGIN WELCH be just 50 percent of June’s sales. cial maintenance business for companies specialize in different make up revenue declines associ- CRAIN’S DETROIT BUSINESS The company will go from doing Flame, Marowske said. geographical, equipment and ser- ated with the cooler summer and 40 to 60 service calls a day during Flame had annual sales of about vice areas, said Josh Bigelow, deferred maintenance and repairs Flame Heating, Cooling and Electri- normal off times to about 150 ser- $9 million in 2008, reflecting 14 per- president and owner of Clinton associated with the economy, cal in Warren is leading an effort to vice calls a day booked out for four cent growth year over year and its Township-based Great Dane Heating Bigelow said. consolidate a fragmented industry. to six days once the first cold second year of revenue increases, & Air Conditioning. “Our market has been so volatile Following the merger of two weather hits in the fall, he said. he said. Great Dane this year is on pace to over the past 10 years, that there are much smaller competitors into Combining operations with other He projects that with the addition increase its 2008 sales of $2.1 mil- a lot of people that have decided to Flame, President Gary Marowske heating and cooling companies in- of Roseville Heating & Cooling, lion, he said. High-efficiency fur- merge because of weather patterns recently sent letters to about 20 oth- creases the total number of service Flame, which now employs 65 peo- nace and air-conditioning system and financial reasons,” he said. er companies in the industry to see calls to be made during off-peak ple in Warren, Fraser and a sales of- installations sparked by the govern- “When you are able to merge if they’d also be interested in com- times and increases the sales poten- fice in Riverview, will see sales in- ment stimulus tax credits and man- with a solid secure company like bining operations. tial for fee-based maintenance ser- crease another 9 percent this year. ufacturer rebates, are helping to off- Flame, there’s a lot of security for “So far, I’ve got three or four re- vice, as well, Marowske said. There is ample room for consoli- set slower seasonal demand caused the merging employees.” sponses we’re following up on,” Fraser-based Roseville Heating & dation in the heating and cooling by the cooler summer. Sherri Begin Welch: (313) 446- Marowske said. Cooling combined with Flame in services business because so many Not all companies are able to 1694, [email protected] “If we can increase our revenue, June, bringing about $900,000 in we can offer more things to our cus- revenue, former owner Larry tomers and more security to our Potvin and four other employees employees,” he said. “We’re a very to Flame, along with a customer seasonal business.” base established over 40 years. When the hot weather first set in The deal followed the merger of Engineer a Brighter Future a month or so ago, Flame “went ba- Lussenden Mechanical, a Warren- nanas” with service calls on air con- based business in operation since ditioning units, Marowske said. 1950, into Flame last year, bring- Lawrence Technological University But until the cold weather sets ing about $600,000 in revenue and is leading the way toward a more in, the company expects its busi- two employees. sustainable world with alternative ness to be way down. Marowske Lussenden owner Rocco Cin- energy education, research, and projects Flame’s August sales will queranelli now oversees commer- practice. From earth-friendly transportation to energy-efficient homes, Lawrence Tech students are committed to using cutting- edge technology to create a 12 businesses join youth brighter future. Visit ltu.edu/applyfree summer jobs program to have your application fee waived! Explore over 20 master’s and doctoral programs in architecture, business BY NANCY KAFFER based on age. administration, communication, computer science, information systems, interior design, and engineering, as well as 20 accelerated graduate certificate programs CRAIN’S DETROIT BUSINESS Most of the 3,300 youths placed in growing fields, including bioinformatics, defense, energy, and urban design. through the program thus far are V. Lonnie Peek’s Detroit-based working at nonprofit organizations eBusiness Strategies is one of 12 or government workplaces, as in Lawrence Technological University 21000 West Ten Mile Road, Southfield, MI 48075-1058 800.CALL.LTU [email protected] ltu.edu businesses that have partnered years past, Williams said. with the federally funded Detroit “What’s new and different this Summer Youth Employment Program. year … is that we have a high prior- “I can’t wait,” said Peek, whose ity on private sector jobs and partic- five-employee company offers cus- ularly those jobs that can expose tomer service-related project man- young people to the new economy agement, and will take 50 youths — health jobs, green jobs, energy through the program. “I have indi- jobs, creative jobs,” she said. “This viduals who will do clerical, some is really not only new for us in De- will be working on computers, troit, it’s just new generally. There some doing stuff like filing, others typically have not been those kinds who will be doing general work.” of experiences and opportunities Coordinated by Detroit-based for young people.” City Connect Detroit, the $11 million It’s also an opportunity for busi- program aims to place 7,000 Detroi- nesses, Williams said. ters ages 14 to 24 in summer jobs “This gives a chance for employ- through Sept. 30, at no cost to busi- ers to train and develop potential ness owners. new employees at no cost to them- Participants must be low-income selves,” she said. and meet other at-risk criteria. Seventeen percent of employers City Connect vets employers, as- who participated in a Youth Devel- sesses youths’ skills and provides opment Commission pilot pro- worker orientation to explain ex- gram last year kept youth workers pectations and workplace behavior. on after the end of the funded pro- One day a week, City Connect rein- gram, Williams said. forces that training and provides CVS/Pharmacy is placing 90 other tools, such youth workers in 39 stores around as financial liter- the metro area, said Lena Barkley, acy classes, said CVS Caremark workforce initia- Geneva tive manager for Michigan and In- Williams, CEO diana — and she has high hopes and president of that the crop will yield long-term the organization. CVS employees. “For many “It is taking the opportunity to young people, let our stores take a look at them, this might be the let them work in the environment,” first time they Barkley said. “Hopefully they will get a check,” Williams stay with us. These are our future Williams said. managers and pharmacists.” In past years, the program has Interested businesses should placed about 3,000 youths. This call City Connect’s innovation year’s expanded capacity is funded partnerships specialist at (313) 887- by the American Recovery and 6517, Williams said. Reinvestment Act. Workers earn Nancy Kaffer: (313) 446-0412, between $7.50 and $11 an hour, [email protected] 20090803-NEWS--0008-NAT-CCI-CD_-- 7/31/2009 5:14 PM Page 1
Page 8 CRAIN’S DETROIT BUSINESS August 3, 2009 OPINION LETTERS Cockrel’s eco-efforts State funding for colleges vital Editor: have spent $1.954 billion on higher Crain’s Detroit Business Keith Crain has joined the list of education last year. Adjusted for welcomes letters to the editor. those who seem to have given up the influx of students that Michi- All letters will be considered for deserve city support on the vision of Michigan as a publication, provided they are gan universities have encouraged, great state and is ready to accept signed and do not defame and state funding should be well our current second-rate status. individuals or organizations. over $2 billion today, and tuition etroit’s going green — or at least it’s making its best That can be the only explana- would be significantly lower. effort. Letters may be edited for length tion for his recent column calling and clarity. State funding cuts have left pub- As Jay Greene reports on Page 10, a green task for cutbacks at our state’s most im- lic universities with two choices. D Write: Editor, Crain’s Detroit portant economic development en- They can become mediocre and force created and led by City Council President Ken Cockrel Business, 1155 Gratiot Ave., Jr. issued a report that made a number of recommendations gine, our public universities. Detroit, MI 48207-2997. lose the luster that has kept our Tuition increases at our univer- best and brightest here and at- E-mail: [email protected] intended to help Detroit become environmentally friendly. sities this decade have been driven tracted the best minds in the world Many of the suggestions are common sense — the beginning by reductions in state support — to our state. Or they can cut as of a long-overdue curbside recycling pilot project, retrofitting of reductions created by tax cuts put In fiscal year 2001, the state much as they can but raise tuition buildings and expansion of bike and walking paths — but we’re in place in the late 1990s. Those tax spent $1.615 billion on Michigan’s as needed to keep their high quali- also glad to see some a bit more out of the box, such as large-scale cuts have not created the econom- public universities. In fiscal year ty, painful as that may be for some ic prosperity promised, but have 2008, that figure was $1.581 billion. students. urban farming. Detroit is awash in vacant and underused land; been the major driver of this If we had just adjusted the 2001 fig- proposals to use it more effectively are welcome. decade’s state fiscal crisis. ure for inflation, the state would See Letters, Page 9 Cockrel deserves respect for his consistent attention to this issue; let’s hope he gets the support he needs, both from coun- cil and the mayor’s office, to make real improvements. DPS endowment plan a good one TALK ON THE WEB From www.crainsdetroit.com Our hat, once again, is off to Robert Bobb for his work as changed; it was done by creative emergency financial manager for Detroit Public Schools. Re: Mayor Dave Bing: ‘We are broke’: Reader responses to stories and advertising. Here’s an idea: Since Kwame blogs that appeared on Crain’s As reporter Ryan Beene reports on Page 1, the latest devel- Anonymous Kilpatrick can afford a trip by pri- Web site. Comments may be opment is resurrection of a 501(c)(3) public school foundation Dumping Pontiac was a huge vate jet for a job interview, $3,000 edited for length and clarity. created in 2003 that had been sitting idle because potential per month rent for a house, an mistake. GM will have to scramble donors did not have confidence their conributions would $80,000 Escalade and huge attor- to keep the “excitement” buyers in achieve their intended purpose. neys’ fees, go back to court and ob- Barat Child & Family Services. the GM fold. It may be too late to get Bobb’s plan: Recruit a respected high-level fundraiser to tain a court order for larger She always acted with great in- the average Buick buyer age down to Pontiac’s level, although they are run the foundation as a university-style endowment and devel- restitution. tegrity and high standards. I can- Peter Rockwell not believe she acted in any way she trying with this ad. opment office. Donors have pledged several million dollars to thought inappropriate. Anonymous fund such an effort. Re: Brewer vs. business, Round 1: David Sanders Foundation money will represent a very small portion of Re: MEGA OKs $290M in tax breaks: If the Michigan Democratic Par- the DPS budget, but will be able to serve as a source of funding ty is for helping people in tough Re: OU passes 9% tuition hike: The fact that MEGA and the for things like athletics, fine arts and some special projects, all economic times, Brewer should Schools need to learn that de- state have to offer tax breaks to of which provide a better educational experience for students. consider not trying to destroy the very mand for their product is both price- keep or acquire these jobs and companies is further proof that businesses that provide jobs and pay sensitive and elastic. These are busi- taxes need to be lowered for all busi- taxes to keep the state running. nesses, subject to market Anonymous nesses to thrive. East-West council: So far, so good conditions, and should be run as Anonymous Brewer needs to put his name on such. East and West Michigan are once again making attempts to the front of a check, not the back of Anonymous one. Re: Celani plans to buy Greektown: meet in a recently formed Michigan Business Leadership Anonymous Re: Attacks on Buick ad: Plenty of experience with Tom. Council. Detroit Renaissance President Inc. Doug Rothwell You need someone with passion for serves as president. Re: Friends rally around Waterstone: The ad content seems to have no Detroit as well. I like this and hope Initial council members represent a range of high-profile connection with cars. Besides, in it goes his way. Judge Waterstone did not act for these perilous times, a trendy pool business names on both sides of the state (see www.michigan- Gregory Bockart personal gain. She was interested party as subject matter could be With what experience do the businessleadership.com), which is a good early sign. These in preventing another crime, the perceived to be on the decadent kind of efforts require special commitment, however, because group of investors have in running killing of the police informant. The side and a distraction from the in- a casino? With what experience of the geography involved. A similar effort, the Michigan Busi- charges should be withdrawn. tended message. Maybe not. does Celani have in running a casi- ness Roundtable, foundered a few years back when meeting Bob Cosgrove Milton Alexander no? Bids should have gone out to dates couldn’t be scheduled. For more on the council, see I knew Mary through her work I thought the ad was great. Think some Vegas casino operators. ... “Capitol Briefings” on Page 6. for abused and neglected girls at of how Cadillac’s image has Gman KEITH CRAIN: Voting in city election no easy task this week I have little doubt that Dave of the most qualified and qualifications. voters need to put on themselves to the candidates running for office. Bing will be the runaway winner candidates will be able The city, its citizens make sure they pick the best can- When the citizens don’t have of the primary for mayor of De- to survive until the sec- and the mayor deserve didates. any interest, it is easy for politi- troit. I don’t really know who ond round. the best that is avail- The best and quickest way to cians to be tempted to make all the might come in second, but it will This has to fly in the able from the communi- eliminate political corruption in wrong decisions, and that leads all be a very small percentage and it face of all we have ty. It is simply too easy our community is to have a well- too often to corruption. would appear that our interim learned about democra- to check off candidates educated and informed electorate. The primary election is impor- mayor will not have any road- cy, but it sure seems to who have familiar- If our citizens demanded honesty tant as a beginning of the process to blocks for a full four-year term. me that if you don’t sounding names. as the No. 1 criteria for their sup- elect a new Detroit City Council. But the election of runoff candi- know the candidates, It is often said that port, it won’t take long before we Our mayor will deserve members of dates for Detroit City Council is then just don’t vote. democracy depends on see a radical change in the attitude City Council who can help him do another kettle of fish. This election is far an informed and edu- of our elected officials. one of the toughest jobs in the state. With well over a hundred candi- too important for the se- cated electorate. This It simply makes good govern- There is a great deal of informa- dates, we can only hope that name lection of 18 candidates week’s election is a per- ment and good business to demand tion out there about the candi- recognition doesn’t play a big part based on some familiar-sounding fect example of that requirement. that before you mark your ballot, dates. Let’s hope the citizens of De- in the selection process and some names without any regard to skills It is certainly the requirement that you have an informed opinion of troit take advantage of it. 20090803-NEWS--0009-NAT-CCI-CD_-- 7/31/2009 10:41 AM Page 1
August 3, 2009 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: Teacher health care needs an overhaul
The education communi- ucation Association). It is boards of education to honestly programs to pay for increasing in- tics ultimately resulted in labor ty is abuzz at state House between little Johnny and ask that question, steel them- surance and retirement costs. If we costs that made their product over- Speaker Andy Dillon’s re- his beloved teacher. selves to do what is right, and act don’t lower those costs, Johnny will priced for the market. The MEA’s cent proposal to overhaul The real discussion accordingly. be the big loser. Where Johnny story is similar, and unless its health care for teachers. that needs to occur in The 2004 Cherry Commission goes, so goes Michigan. membership accedes that labor Former state superinten- every state school district Report indicated the need to in- The parallels between the MEA costs have become unbearably dent Tom Watkins raised should be about the nexus crease the number of college grad- and the UAW are frightening. When high, the K-12 system could be- the red flags five years ago between adequacy of fi- uates to re-energize Michigan’s the Public Employees Relations Act come educationally bankrupt. in his report “Structural Is- nancial support for in- economy by providing a highly was enacted in 1965, Michigan Teachers, we still love you, but sues Surrounding Michi- struction and the appro- skilled and technologically profi- teachers were poorly paid and over- it’s time the MEA did a reality gan School Funding in the William Coale priate level of salary and cient workforce. That won’t hap- worked. Today, they are well paid, check. Do it for Johnny, and for 21st Century.” Watkins indicated benefits for school employees. pen if we continue to siphon off but are still overworked. Michigan. that “escalating labor costs — pri- The key question should be, “How money to pay for increasing retire- It’s not that we don’t value William Coale is a retired super- marily health care, pensions and much can and should we take ment and health care costs for teachers highly, but times have intendent who holds an education- minimal inflation-related salary in- away from the classroom to pay school employees. changed. When my father partici- al specialist degree from Wayne creases — exacerbate the financial for health insurance and retire- Something must be done to rein pated in the 1936 UAW Sit-Down State University and a Doctor of situations of local districts.” ment benefits?” In the interest of in health care and retirement costs. Strike in Flint, it was to gain a fair Philosophy degree from Oakland Since 2004, the problem has been local control, I charge our local Currently, schools are forced to cut wage. The UAW’s negotiation tac- University. compounded by a crumbling state economy and shrinking K-12 school aid budget. The battle is not just between David (aka Joe Taxpayer) and Go- liath (aka the Michigan Education Special Services Association, the insurance arm of the Michigan Ed-
LETTERS CONTINUED ■ From Page 8
Our university boards of direc- tors and their management teams have decided it is more important Capacity. You’ll do exactly to maintain excellence and pre- pare Michigan’s workforce for the what you’ve prepared to do. coming economic recovery — which will be driven by workers with four-year degrees — than to That’s one of the things the take the politically popular route of dismantling higher education. military taught me, and it’s Our state highway system, once highly regarded, tells us what happens when we stop paying for engrained in the Oshkosh what we want. Public universities are even more vital to our state’s mindset. We’ve got the space economic transition than our freeways. Just as Crain’s Detroit and people to build vehicles – Business has supported new taxes for roads, it should be supporting additional investment for higher simple as that. And they’ll be education — from any source pos- sible. on time and to spec, too. Michael Boulus Executive Director Presidents Council, State Universities of Michigan Our vehicles will be ready
Historic buildings for the Warfighters when also engineering marvels they need them. Editor: I really enjoyed reporter Nancy Kaffer’s article on Detroit’s his- toric structures. One aspect, however, that seems to be forgotten or reported on to a lesser degree is Detroit and Michi- gan’s engineering history. When historic buildings are demolished, so also are the “engineering DEFENSE hearts” of those buildings. The great architect Louis Sulli- van had the dictate that “form fol- lows function.” So when a great www.oshkoshdefense.com historic auto plant or manufactur- ing plant bites the dust, so do the engineering marvels that were de- signed into those buildings to Scott, Assembler, 4 years make their respective products. Engineers need to forge a greater alliance with historic building preservationists to help save both the buildings (form) and the engi-
neering heritage created within ©2009 OSHKOSH CORPORATION Oshkosh and the Oshkosh logo are registered trademarks of Oshkosh Corporation, Oshkosh, WI, USA those buildings (function). 7KHYLHZVH[SUHVVHGLQWKLVDGYHUWLVHPHQWDUHVROHO\WKHYLHZVRIWKHHPSOR\HHDQGGRQRWLPSO\HQGRUVHPHQWRUDSSURYDOE\WKH'HSDUWPHQWRI'HIHQVH Joe Neussendorfer American Society of Civil Engineers Livonia 20090803-NEWS--0010-NAT-CCI-CD_-- 7/31/2009 10:42 AM Page 1
Page 10 CRAIN’S DETROIT BUSINESS August 3, 2009
REPORTER’S NOTEBOOK
Jay Greene writes CRAIN’S LIST: LARGEST ENVIRONMENTAL COMPANIES about health care, insurance and the Some firms find new revenue streams in consulting, environment. Call waste management, Page 12 (313) 446-0325 or write jgreene @crain.com Going Green Jay Greene Auto suppliers join eco-efforts A group of Ford Motor Co. suppliers, including several of Detroit’s big supplier names, are working on sustainable business practices, such as recycling materials or using less energy. Through the Aligned Business Framework Suppliers, several dozen companies have pledged to 22 different commitments to improve the environment through sustainable business practices. Some of the Detroit-area companies in ABFS include The Bing Group, Lear Corp., Delphi Corp. and Dakkota Integrated Systems. In June, Ford released its latest report on its sustainability efforts that highlighted work it is doing with suppliers to recycle materials, reduce waste and cut costs out of its supply NATHAN SKID/CRAIN’S DETROIT BUSINESS chain, said Monique Oxender, Ford’s Pedestrians and bicyclists use Detroit’s Dequindre Cut, one example of a new emphasis on trails and green spaces in the city. global manager for supply chain sustainability. “This has wide impact to the region because hundreds of companies are being hugely impacted by the loss of auto company revenue,” said Bill Stough, executive director of the Southeast Michigan Sustainable Getting from Business Forum. “If you are going to be an auto manufacturer, you need a strong and committed supply chain to be able to go through tough times.” Despite the economic downturn, suppliers have not backed away from their commitments to reduce greenhouse gases like carbon dioxide, control waste water and Motown reduce electricity costs, Oxender said. NATHAN SKID/CRAIN’S DETROIT BUSINESS “It has become even more to A recycling truck’s robotic arm picks up refuse important to pursue the plan as near West McNichols and Five Points on Detroit’s stated because it can reduce costs,” west side. It’s part of a pilot program of curbside Oxender said. “You can’t be a recycling. preferred supplier without having a robust environmental management program in place.” Oxender said Ford works Growtown individually with suppliers to help them understand requirements. also could allow commercial bee farms. A The 22 ABF elements include public hearing on the issue is expected to agreements by suppliers to assure Plan to narrow Detroit’s ‘green gap’ be scheduled in September. proper working conditions, Ⅲ responsible environmental An $8.9 million federal grant applica- management of their supply chain, tion was submitted in late June that could internal awareness training and the allow the city to retrofit several of its development of compliance includes recycling, urban farming buildings to make them more energy effi- processes supporting their code. cient. They also must extend these BY JAY GREENE Ⅲ In July, a pilot curbside recycling Ⅲ Plans to expand biking and walking expectations to their subtier CRAIN’S DETROIT BUSINESS paths are under way. suppliers. project began in two sections of Detroit with some 30,000 homes eligible for pick- Cockrel said he views environmental General Motors Co. has a similar etroit City Council President Ken protection and conservation as an eco- sustainable business practice model up. The areas include Rosedale Park and Cockrel Jr., who has been leading ef- East English Village. nomic development opportunity for the that it is encouraging its suppliers to city that can have a positive long-term im- follow. D forts the past several years to promote Ⅲ The Detroit Planning Commission may the city as a destination for green-minded revise codes to allow for large-scale agri- pact on business. Earlier this year, Lafontaine “We need to promote green jobs and en- Automotive Group opened a new businesses and eco-friendly people, ac- culture farms in the city. The new codes $15 million GM dealership in knowledges that Detroit is behind cities courage green companies to locate down- Highland Township. It is expected to such as Chicago, Seattle and Boston in the town,” Cockrel said. “This is just as much receive a gold LEED-certification for municipal green movement. This is just as much an an economic-development issue as it is an its building. But a roadmap exists for closing the gap “ environmental issue.” “They said they were so innovative in making Detroit an environmentally economic- Last year, Cockrel, when he was interim and far ahead of the curve that their friendly city. It is outlined in a June report mayor, also created the Office of Energy and decision helped keep them off the by the Detroit City Council’s Green Task development Sustainability to implement initiatives (closure) list,” Stough said. “GM told Force, which Cockrel chairs and helped identified by the Green Task Force. them they are one of the templates create through a city resolution. The office was designed to work within for the future.” issue as it is an The Green Task Force was formed in the city as well with local businesses, non- Said Oxender: “We want suppliers profits and other organizations in metro to take a leadership role on materials March 2007 to advise the City Council on environmental green principles and practices. Detroit to promote energy savings, he management instead of waiting on said. It continues as a City Council office; legislation that will ban or restrict Here are a few of the task force’s recom- issue. materials.” mendations that have been implemented ” Mayor Dave Bing discontinued it as a or are under study: Ken Cockrel Jr., Detroit City Council See Green, Page 11 20090803-NEWS--0011-NAT-CCI-CD_-- 7/31/2009 10:44 AM Page 1
August 3, 2009 CRAIN’S DETROIT BUSINESS Page 11 Focus: Going Green Green: Sustainable Lighting From Motown to Growtown + ■ From Page 10 Professional Design mayoral office. said. “The recommendations were Darchelle Strickland Love, a good first step toward suggesting group executive for health and hu- A greener, changes we need to make to im- = man services with the Bing admin- “ prove efficiencies.” istration, said the mayor has in- cleaner city can Bowers said additional funding ROI stead created a special office on job is required to do a more complete creation and business develop- bring us out of the energy audit that would include ment that incorporates some of the additional recommendations on objectives of the Office of Energy ashes and make us a reducing electricity costs. and Sustainability. “This has great potential for the “We know the environment and national model. city to save a lot of money on elec- New lighting methods can improve energy conservation has a great ” tricity,” Cockrel said. visibility and reduce your costs. potential for bringing jobs to the Donele Wilkins, Detroiters Working And in July, the pilot curbside See our Sustainable Lighting Video and city,” she said. “We are taking ad- for Environmental Justice recycling project began in two sec- other lighting education programs. vantage of funds available from “We are rewriting the code to al- tions of Detroit comprising about the Recovery Act to” improve the low for urban agriculture, which 30,000 homes. The $3.8 million pro- www.illuminart.net environment. exists and is thriving at the com- ject will run for 12 months. The $7 billion American Recov- munity level,” Bowers said. “Com- “In our budget last year we set ery and Reinvestment Act of 2009 mercial agriculture is ready to ex- aside dollars to finance the recy- offers state and local governments plode but is not allowed now.” cling project,” Cockrel said. “We money for environmental protec- Strickland Love said Bing sup- don’t know if we will transition to A MICHIGAN-BASED GLOBAL COMPANY SUPPORTING THE LOCAL ECONOMY tion and infrastructure improve- ports the concept of urban agricul- full curbside pickup in the city. We ments to improve wastewater and ture but has not taken a position will find out if the city is culturally drinking water technologies. on rezoning city land for commer- and emotionally ready for curb- Michigan has been allocated cial agriculture. side recycling program.” $7 million in Recovery Act funds, Cockrel said Detroit is far behind but only has been awarded $4 mil- other cities in curbside recycling. lion, with $1 million actually paid Green city “There is a strong feeling of many out. Another change the City Coun- on the council, with JoAnn Watson Rick Bowers Jr., who heads up cil has on its agenda is to amend leading, that we need to move for- Cockrel’s sustainability office, its purchasing ordinances that ward with curbside,” Cockrel said. said a green agenda has huge po- would allow for slightly higher- Bowers said the pilot project tential. cost supplies to be purchased if will help determine whether the “If it were in the mayor’s office, they are safer for the environment. city has the guts to expand curb- this green agenda could be pushed Currently, the city is required to side recycling. along more quickly, but it can be purchase the lowest-cost supplies, “Chicago started a program (in just as effective from the City Bowers said. 2002) and it cost them tens of mil- Council standpoint,” Bowers said. For example, the ordinance lions of dollars because they made a “The ultimate future will be deter- change would allow city employ- mistake: only 20 percent of the pop- mined by whoever is mayor and ees to purchase cleaning supplies ulation participates,” Bowers said. whether they will adopt it. The val- that do not contain phosphates and “Detroit has 120 square miles. ue of it is not only helping the envi- are less harmful to the environ- We need to look at participation ronment, but helping the image of ment, Chapman said. rates before we move forward with the city that is in need of repair In late June, Cockrel completed citywide recycling,” Bowers said. FlinXccjZfd\`e^i\\e% and rejuvenation.” an application for an $8.9 million Detroit also is still formulating a Donele Wilkins, executive direc- Energy Efficiency and Conserva- pilot project to deconstruct aban- Precast Edge-to-Edge insulated wall panel s &REE