20110314-NEWS--0001-NAT-CCI-CD_-- 3/11/2011 6:02 PM Page 1 ® www.crainsdetroit.com Vol. 27, No. 11 MARCH 14 – 20, 2011 $2 a copy; $59 a year ©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 Moroun ad blitz, big names ‘Music can try to turn tide on bridge Snyder tax break be that bridge’ for business: 60% Calley: Focus is on SHIFTING THE BURDEN What’s a Pontiac dealer to Sphinx seeks to expand Under Gov. Rick Snyder’s plan, business taxes do? ‘Shift gears’ for Buick equity, job growth would contribute less to the state’s general and School Aid fund revenue, and individual income global reach with BY AMY LANE taxes would contribute more: Amid Mideast turmoil, rising CAPITOL CORRESPONDENT Currently FY 2013 diversity conference Business tax: 11% Business tax: 4.3% oil prices, Japan earthquake LANSING — Gov. Rick Snyder’s tax reform proposal would slice business-tax contribu- latest challenge to suppliers BY SHERRI WELCH tions to state revenue and shift the burden CRAIN’S DETROIT BUSINESS largely to increases in individual income tax- Other: Other: es. 58% 54.7% Inside The Sphinx Organization plans to estab- Under Snyder’s plan, Michigan’s main busi- lish an international conference on in- ness tax would generate 4.3 percent of the creasing diversity in classical music state’s general fund and School Aid Fund rev- If Icahn sells Federal-Mogul Individual income Individual income while showcasing its musicians. enue — a major shift from the nearly 11 per- tax: 31% tax: 41% cent that the current Michigan Business Tax stake, private equity firms “SphinxFest” Source: Crain’s research, Public Sector Consultants Inc. supplies. could show interest, Page 8 IDEA: DETROIT would take place in The net business-tax revenue in fiscal 2013 England over a is even lower — 1.6 percent of general fund 2013, when changes are fully phased in, equat- Speaking: Sphinx and school aid revenue — if tax-credit payouts ing to a 60.8 percent tax cut. founder among week’s time, bring- are factored in, according to a recent analysis Beyond that, the state would pay out Crain’s List innovators addressing ing together key $500 million in previously granted tax credits conference, Page 4 arts, education and by Gary Olson, a senior fellow at Public Sector Consultants Inc. that year, further reducing business-tax con- Michigan’s largest diversity leaders But increasing, from 31 percent to 41 per- tributions to the general and School Aid funds from the country to discuss best prac- cent, would be the amount of state revenue to a net $292.7 million, or an 85.5 percent drop employers, Page 18 tices and to hear performances from generated from individual income taxes. from the current MBT. By comparison, general fund and School Sphinx musicians. Snyder’s plan would drop business-tax rev- enue from $2 billion to $792.7 million in fiscal This Just In Plans for the conference, which See Tax, Page 26 Sphinx seeks corporate funding to sup- port, are part of an international ex- Chinese company plans pansion of Sphinx’s mission to expansion in Canton Twp. See Sphinx, Page 28 Bing team’s turnover questioned A major Chinese automo- tive parts manufacturer is Sphinx expanding a technical center in Southeast Michigan — the founder Departures put power in fewer hands first step of its plan to form Aaron rector of planning and development; Janet An- alliances with U.S. suppliers. Dworkin BY NANCY KAFFER CRAIN’S DETROIT BUSINESS derson, deputy budget director; and the entire The China Auto Parts & Ac- Office of Targeted Business Development. cessories Corp., a group of Al Fields joined Detroit Mayor Dave Bing’s And three veterans of the Kilpatrick admin- suppliers with $30 billion in executive team in January 2010. A veteran of istration — Chief Communications Officer annual sales, is expanding a former Mayor Kwame Kilpatrick’s adminis- Karen Dumas, Chief of Staff Shannon Holmes and Canton Township technical tration who also has private CFO Norm White — continue to center that it shares with sector experience, Fields said climb the organizational chart. Tempo International Group Ltd., he was recruited by Bing and So many departures have a Chinese maker of chassis other top city officials. People come left power in the mayor’s office components. Fifteen months later, he was “ concentrated in the hands of a The Canton facility al- and go. What’s gone. few C-level employees and ready has 100 engineers, and Fields is one of 46 employ- group executives, a lineup that CAPAC is hiring an addition- interesting is that ees, 31 of them managers, di- critics of the administration al 100. The company has rectors, deputy directors or say lacks the experience to spent $10 million on the facil- it’s all in the first group executives, who have guide the state’s largest city. ity and expects to spend left the mayor’s office in the To some, it signals instability more as operations expand. 22 months. past 22 months. in the mayor’s office. “We want to use this as a ” Most of the 46 were asked to Sheila Cockrel, “There’s always been a lot of See This Just In, Page 2 resign or their appointments Former City Council member movement on and off the 11th MIKE MOURADIAN were revoked; a handful re- floor,” said Sheila Cockrel, tired or were cut as departments were elimi- who served 16 years as a Detroit City Council nated. member and is now an adjunct professor at Bing defends his personnel choices as Wayne State University’s Irvin D. Reid Honors housekeeping, clearing out unsuccessful lega- College and owner of Crossroads Consulting. cy appointees from past administrations. “People come and go. What’s interesting is But many of the 46 were hires made by Bing, that it’s all in the first 22 months.” including Fields; former Bing Group CEO Kirk Cockrel said the churn shows that Bing is Lewis, who served as Bing’s chief government prepared to be decisive when it’s time to make NEWSPAPER and corporate affairs officer; Charlie Beckham, chief administrative officer; Warren Palmer, di- See Turnover, Page 27 20110314-NEWS--0002-NAT-CCI-CD_-- 3/11/2011 5:31 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS March 14, 2011 der’s proposed 2012 budget, said cent of the program’s 1.8 million Initiative promoting Lake St. DMC parent lays off staff THIS JUST IN MEDC President and CEO recipients who are in Medicaid’s Clair as a tourism attraction and Michael Finney. fee-for-service program, among economic development asset. Last week, the Detroit Medical ■ From Page 1 Local participants include other things. Gerard Santoro, senior planner Center’s new corporate parent, George Jackson, president and — Jay Greene in the department, becomes the Vanguard Health Systems Inc., laid platform to (work with) all the CEO of the Detroit Economic county program manager of land off 21 employees at its Nashville other R&D centers in Detroit,” Growth Corp., and Maureen Dono- 3 leave Colliers, start new firm and water resources. headquarters — one side-effect of said CAPAC President Chen Kan- hue Krauss, director of the Oakland Santoro’s duties will include the acquisition of DMC, said Van- guard officials. gren, following a speech to busi- County Department of Economic De- Three commercial real estate coordinating with the nonprofit The layoffs represent about 10 ness executives here. velopment and Community Affairs. brokers have left Colliers Interna- Lake St. Clair Tourism Initiative percent of corporate staff. Beijing-based CAPAC, which is Stephen Cassin, executive director tional to form their own firm. launched in 2009, the Macomb The company said the job cuts primarily an aftermarket suppli- of the Macomb County Planning and Greg Kloiber, Al Leszczynski and County Water Quality Board and were part of a decision to shift er, generates annual sales of Economic Development Department, David Stechly have formed TG Cor- other agencies on improving wa- $80 million in the U.S., a relative- joins the group this week. porate Real Estate Advisors with a various management duties to ter quality and the economic de- some of the 26 hospitals it owns in ly small portion of its global The council was organized ear- new office in Livonia. All three velopment potential of the lake five states. Departments included sales. Chen said he wants to sell lier this year and will be an ongo- are owners, and Kloiber is man- and Clinton River. supply chain, marketing, strate- more components in North ing advisory panel to the MEDC aging partner. He will also seek funding for The three brokers were able to gy, program management opera- America, and he also hopes to on coordinating economic devel- debris removal from the river. opment programs. bring with them four major tions and clinical operations. form partnerships with U.S. sup- Hackel said the program manag- — Chad Halcom clients that have provided rough- A Vanguard spokesman said pliers to sell parts in China. er will promote and market the ly 85 percent of their revenue in regional Vanguard offices could CAPAC also has linked up with lake and river, as well as court recent years, Leszczynski said. hire people to fill the void, but Di- Leuliette Partners, a Birmingham- Agencies lobby against businesses ranging from canoe ana Marx Prosi, vice president of based investment group that has The move follows several other departures at Colliers. Last year, rentals and liveries to hotels or marketing for the DMC, said it been working with Tempo Inter- mental health budget cuts Randy Thomas left to revive his marina casinos.