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Page 3 Response to Japan disaster Quicken case not starts with money Robot Town? Interest high for plan to create robotics research center in Detroit by 2014 end of OT battle
BY CHAD HALCOM been coordinating discussions on CRAIN’S DETROIT BUSINESS the concept in recent months with local industry and research National controversy rages on Is Motown soon to become Ro- leaders and with the U.S. Army bot Town? Tank-Automotive Research, Develop- BY DANIEL DUGGAN While he said he was pleased to That’s the working title of a ment and Engineering Center in CRAIN’S DETROIT BUSINESS see Quicken’s victory, it won’t proposed robot- Warren, among others. change Ross’ policy just yet. A courtroom victory by Quicken ics research con- “The exploratory discussions “We’ll be waiting for some con- MASCOT? Loans Inc. defending a policy not to sortium, labora- right now are supposed to be sensus on this as it goes forward, pay overtime tory/test center RoboCop: helping to find some leadership and we’ll be watching the appeal to loan offi- and possible local Statue could roles for people or companies. closely,” said Ross. Amping up e-records: have a place, OT AT QUICKEN cers is yet tourist attraction There are members of the Detroit Page 29 another twist Henry Ford spends $100M under discussion business community that seem New policy: Federal guidelines prompt in a national Lawsuits, rulings and fights among industry ideally suited to this and have change — for now, controversy leaders in Southeast Michigan. It real interest,” said Jim Overholt, Battle lines were drawn over Page 27 of loan offi- could become reality by late 2014. the senior research scientist for loan officer compensation after the Inside cer compen- Management at TechTown, the robotics at TARDEC who con- Department of Labor issued an sation. Wayne State University technology ceived the idea of Robot Town opinion in March 2010 stating that The Detroit-based mortgage com- ‘Imported from Detroit’: park and business incubator, has last fall. officers should be paid overtime. pany prevailed after it was sued by “It doesn’t have to be leader- The Washington, D.C.-based 350 former employ- Are you allowed to say that? ship all from one industry. It Mortgage Bankers ees who said they could involve people in intelli- Association then Page 25 should have been gent communications, the auto- filed a lawsuit paid overtime after We’ll be waiting motive industry, city planners — against the depart- being forced “ anyone who has the sense of that ment and Secre- to work more for some Crain’s List vision.” tary of Labor Hil- than 40 hours consensus da Solis on Jan. 12 See Robot Town, Page 29 per week. in U.S. District Largest general contractors, The 2004 on this ... Court in Washing- Page 15 case has been ton, asking to REVVING UP FOR ROBOTS watched and we’ll be have the opinion Ⅲ Researcher Jim Overholt sees closely in the overturned. The possible redevelopment of a industry, es- watching case is pending. This Just In building or campus into a testing pecially be- Further compli- and research center. cause it the appeal cating the matter Report: More than 200 firms Ⅲ Robots would control some comes at the nexus is the Minneapo- operations, such as directing of two other events: closely. lis-based law firm in state wind, solar industries visitors or even urban farming. A U.S. Department of ” that took Quicken Ⅲ A preliminary version could be in A report to be released Labor opinion from Tim Ross, Ross Mortgage Inc. to court on the place by October 2014, in time for Tuesday finds that there are last year confirm- overtime issue: the Intelligent Transportation ing overtime requirements for Nichols Kaster Attorneys at Law, nearly 200 businesses — in- Systems World Congress at Cobo loan officers and an upcoming Fed- which has made a name for itself on cluding about 50 in Southeast Center. eral Reserve Board deadline to the topic. The firm has 65 pending Michigan — and 10,000 jobs in Ⅲ Proposed locations include change the compensation struc- overtime cases listed on the web- the solar and wind industries Midtown near TechTown, in Michigan, according to re- downtown, the waterfront or near ture for loan officers. site it created for the niche: search developed by Chicago- Detroit Metropolitan Airport and “Coast to coast, if there is a www.overtimecases.com. based Environmental Law & Poli- Willow Run Airport. lender that didn’t pay overtime in Don Nichols, a partner with cy Center. the past, they’re incorporating Nichols Kaster, said the Quicken The companies range from some kind of time-tracking poli- case was a loss based on rulings automobile manufacturers cy,” said Tim Ross, president of retooling to build clean ener- Royal Oak-based Ross Mortgage Inc. See Quicken, Page 27 JEFF JOHNSTON/CRAIN’S DETROIT BUSINESS gy components to startup companies that are develop- ing energy technologies. The preliminary report found 121 solar power supply chain businesses with 6,300 Still trapped in Qatar: Can diplomacy free Beydoun? jobs and 120 wind power sup- ply chain businesses with BY NANCY KAFFER Beydoun, a metro Detroit busi- a U.S. citizen who has served as ex- nothing you can do about it,” he 4,000 jobs. More than 50 of the CRAIN’S DETROIT BUSINESS nessman who has been trapped in ecutive director of the American said. companies supply both indus- the Persian Gulf Arab Chamber of Commerce and as a Beydoun’s story began in 2007, U.S. elected officials and busi- tries. nation for 15 board member of New Detroit, the when he accepted a job with ness leaders hope diplomacy can months. Detroit Economic Growth Corp., the Wataniya Restaurants QSC, a Qatari See This Just In, Page 2 succeed where the Qatari legal sys- On Sunday, Detroit Brownfield Redevelopment Au- investment group that aimed to in- tem failed in the case of Nasser Beydoun expect- thority, the Detroit Zoological Society, troduce American restaurant ed to meet with Harper/Hutzel Hospital, the National chains to the Middle East. the U.S. ambas- Arab American Museum and as a At first all seemed well. But Bey- sador to Qatar. trustee of the Henry Ford Community doun said his relationship with And U.S. Sen. College Foundation. Wataniya soured in 2009 when he Debbie Staben- With Beydoun’s connections, it discovered that the company’s fi- ow, D-Mich., has seemed he would be the last person nances were shaky. When he Beydoun urged the Qatari who could land in this predica- brought his concerns to the compa- ambassador to the United States to ment. ny’s board, Beydoun said he was
NEWSPAPER intervene on Beydoun’s behalf. “But when you get caught up Beydoun, a native of Lebanon, is with the wrong people, there’s See Trapped, Page 26 20110321-NEWS--0002-NAT-CCI-CD_-- 3/18/2011 5:40 PM Page 1
Page 2 CRAIN’S DETROIT BUSINESS March 21, 2011
disciplinary Craniofacial and Cleft partner at Mt. Clemens commer- Jan. 23. mensurate with wages at compa- THIS JUST IN Palate Clinic. cial real estate firm Anton, Zorn & “The response was so great rable departments around the The clinic is for children born Sowerby Inc. from customers, people were — country. ■ From Page 1 with craniofacial conditions in- — Daniel Duggan quite literally — insisting the Mercado has since been indict- cluding cleft lip or palate, as well store not close,” said Ed Nakfoor, ed in the federal corruption case A similar report earlier this as for adults with facial deformi- public relations representative for involving former Mayor Kwame month found 150 companies oper- ties from various causes. Communities in Schools’ the mall. Kilpatrick. ating in Ohio. Beaumont’s other multidiscipli- founding CEO stepping down — Daniel Duggan — Nancy Kaffer The environmental policy cen- nary clinics offer cardiovascular Charlie Anderson, founding CEO ter did not release names of the and oncology care. of Detroit-based Communities in Michigan companies in its prelim- Ian Jackson, M.D., a retired plas- Council to consider raising Navistar Defense adds jobs Schools, said he plans to step inary report. tic surgeon, will assist the team as Navistar Defense is about two- down at the end of this year. pay range for water director Other findings included: educator and medical director. thirds of the way toward its goal of Anderson, 60, founded Commu- The Detroit City Council is consid- Ⅲ Michigan businesses spent Jackson and his wife, Marjorie, creating 87 new jobs in Madison nities in Schools in 1995, building ering a motion to raise the salary more than $15 billion last year on have founded the Ian Jackson Cran- Heights. on its work as a program of New of the head of the Detroit Water and research and development, more iofacial and Cleft Palate Clinic Fund to The jobs were announced last Detroit for the two previous years. Sewerage Department. than any state as a percent of gross provide treatment scholarships fall under a state tax incentives The board has launched a na- The existing pay range, $95,200 state product. and help with the education of fu- deal approved through the Michi- tional search for a new CEO; it to $156,100, “has proven inade- Ⅲ Michigan also ranks fourth in ture craniofacial specialists. gan Economic Growth Authority. the country for engineering gradu- — Jay Greene hopes to have a new CEO in place quate to attract candidates with by October to allow for a two- the skill set and competencies re- The division of a Navistar Interna- ates with 4,000 degrees granted an- tional Corp. subsidiary and a nually. month transition, he said. quired” to run a department of — Sherri Welch ground vehicle defense contractor, More than 25 companies in Light-pole manufacturer buys such size and complexity, accord- ing to notes in the agenda for the Navistar Defense has hired 56 peo- Michigan have been identified as building from school district ple since it obtained tax credits in manufacturers and component council’s Tuesday session. A building at 58233 Gratiot Ave. The Detroit Shoppe reopens September for a planned $4 mil- makers for wind farms and anoth- The new proposed pay range is in North Haven will embark on its In what was supposed to be a lion investment in the former er 900 companies provide design, $93,300 to $250,000. third life now that a Roseville temporary holiday store, The De- Valenite LLC headquarters in Madi- engineering, machining, automa- The top spot at the department manufacturing company has pur- troit Shoppe in the Somerset Collec- son Heights. The company plans a tion or assembly services, said the has been open since Director North Haven tion grand opening today at the new lo- Michigan Economic Development chased it from the will reopen on Thursday. Pamela Turner retired last year. School District. Open for roughly 12 weeks, the cations, where it recently consoli- Corp. The salary of the department’s Originally used by a seed manu- store sold Detroit-themed retail dated two groups of defense em- For more information on the director has been the topic of some facturing company, the 22,000- items as well as locally made items ployees, from Sterling Heights and report, visit www.elpc.org/ controversy in the past. Former square-foot building was convert- such as Faygo soda and Sanders hot Victor Merca- Inkster. michiganenergy. department Director “We’re not finished yet, but — Jay Greene ed by the school district to be used fudge and Pewabic Pottery. The do was hired in 2002 on a three- as its administrative offices as show also showcased local history year contract that topped out at we’re actually pretty far and have well as for vocational programs. through display of items from the $240,000 annually, making him the made a dent into it,” said Sam Beaumont Hospitals opens JMA Manufacturing has acquired Detroit Historical Society. highest paid city official. Homsy, director of Army pro- the building for its light-pole man- The store was intended to be a Some criticized Mercado’s grams for Navistar Defense and its clinic to treat facial deformities ufacturing. It will also run a voca- holiday store, and it was then ex- salary, saying it wasn’t appropri- site executive in Southeast Michi- William Beaumont Hospitals in tional education program with the tended for the North American Inter- ate for the cash-strapped city, but gan. Royal Oak has created the multi- school district, said Joe Sowerby, a national Auto Show then closed others said that salary was com- — Chad Halcom
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March 21, 2011 CRAIN’S DETROIT BUSINESS Page 3 Henry Ford Health Aid response Second Stage Extra to Japan begins amps up e-records with money Agencies await requests $100 million Cloud computing can be before sending supplies a key to biz growth, Page 19 spent on BY SHERRI WELCH CRAIN’S DETROIT BUSINESS upgrades Things were surprisingly quiet at the Company index World Medical Relief warehouse in Detroit These organizations appear in this week’s Crain’s BY JAY GREENE last week. Detroit Business: CRAIN’S DETROIT BUSINESS While other local businesses and organi- 6 Zulu ...... 29 zations ramped up financial support for hu- Advocate Commercial Advisors ...... 12 A new $100 million electron- manitarian aid to Japan after the 8.9-magni- American Red Cross-Southeastern Michigan . . . . . 28 ic health record system is be- tude quake and tsunami that struck the American Society of Employers ...... 20 ing installed over the next six northern part of the country March 11, BBDO Detroit ...... 12 months at Detroit-based Henry World Medical Re- Big Fuel ...... 12 Ford Health System’s six hospi- lief waited. Biotronic NeuroNetwork ...... 19 Blue Cross Blue Shield ...... 14 tals and 30 outpatient medical WHAT ABOUT HERE? “We don’t act un- centers. Chrysler Group ...... 25 Fermi 2: Nuke plant less there (are) spe- Compuware ...... 19 The system, called CarePlus has more safeguards, cific requests com- Crittenton Hospital Medical Center ...... 29 DTE says, Page 28 Next Generation, is expected ing in,” said Detroit International Bridge ...... 4 to give physicians, nurses, ad- Josephine Jabara, Detroit Medical Center ...... 29 ministrators and other care- director of development and community af- Detroit Public Television ...... 13 givers more timely informa- fairs. “Right now, we do not have any re- Detroit Venture Partners ...... 16 tion on patients, saving money quests, … so this is an unusual situation.” Dobrusin Thennisch ...... 25 and improving quality of care. When an earthquake struck Haiti last DTE Energy ...... 28 Dynamic Edge ...... 21 Most other hospitals in year, the phones started ringing the same Effortless 24/7 ...... 21 Southeast Michigan are in- night, and doctors and nurses en route to stalling or using sophisticated Entrepreneurs’ Organization ...... 19 Haiti came through the World Medical Re- Fallon Worldwide ...... 12 electronic health record sys- lief warehouse to get surgical instruments Goldstar Mortgage Financial Group ...... 27 tems to improve quality, re- immediately, she said. Goodby Silverstein & Partners ...... 12 duce medical costs and comply The University of Michigan Health System Henry Ford Health System ...... 3 with federal requirements for and others called last week to see how they Identity Marketing ...... 20 “meaningful use” of EHRs by could help, but there’d been no call for med- John Adams Mortgage ...... 27 2015. ical supplies from Japan, Jabara said. Jones Lang LaSalle ...... 14 Kresge Foundation ...... 3 “In the exam room, when I Given World Medical Relief’s established Loveland Technologies ...... 29 see a patient, I am looking at BRENDAN ROSS relationships with Japanese relief agencies, Ludlow Ventures ...... 16 the screen with the patient, David Allard, M.D., Henry Ford Health System’s chief medical “we could marshal medical supplies real and we are talking about the information officer, uses a tablet computer when he makes rounds. Michigan Department of Transportation ...... 4 quickly — once we get the call,” she said. Michigan Economic Growth Authority ...... 25 labs and radiology together,” Plans call for CarePlus to be The financial and humanitarian aid re- Michigan State University College of Law ...... 27 said David Allard, M.D., the sponse to the recent disasters in Japan is Microsoft ...... 20 system’s chief medical infor- installed at Henry Ford Wyan- dotte Hospital in mid-April, Hen- rolling out differently than those to other re- Miller Canfield Paddock & Stone ...... 20 mation officer. When I see a Moda Group ...... 25 ry Ford Hospital in June and Hen- “ cent disasters. “No matter where the pa- Japan, the world’s third-largest economy, Moosejaw Mountaineering ...... 20 ry Ford West Bloomfield Hospital patient, I am MRM Worldwide ...... 11 tient goes within the Henry is better equipped than Third World coun- Ford system, the electronic in July. The EHR would be in- Nemeth Burwell ...... 27 stalled first at the outpatient looking at the tries like Haiti to respond to emergencies, Newmark Knight Frank ...... 11 record is available and the but it is asking for financial donations. data is in real time,” Allard medical centers that are clos- Online Tech ...... 19 screen with the Perhaps because of the economy, dona- Pure Visibility ...... 20 said. est to the hospitals. tions appear to be lagging past disasters. The Quicken Loans ...... 1 Last week, Henry Ford’s Over the following few patient. Chronicle of Philanthropy late last week re- RelWare ...... 29 CarePlus EHR went live at Hen- months, CarePlus would be in- stalled at Henry Ford’s three ” ported that Americans had contributed more Robotic Industries Association ...... 29 ry Ford Medical Center-Ann Arbor, Ross Mortgage ...... 1 other hospitals and surround- David Allard, M.D., than $87 million for relief, most of it to the Allard said. CarePlus is a more Henry Ford Health System American Red Cross. SapientNitro ...... 11 robust version of the system’s St. John Providence Health System ...... 29 22-year-old current EHR. See Henry Ford, Page 29 See Japan, Page 28 Sue Ellen Eisenberg & Associates ...... 27 TechTown ...... 1 Trinity Health ...... 29 U.S. Army TARDEC ...... 1 UGL Equis ...... 14 Universal McCann ...... 11 University of Michigan Law School ...... 27 LEAP’s look: Community groups eye east-side land use Warren/Conner Development Coalition ...... 26 Wayne State University ...... 13 BY NANCY KAFFER active land back into productive idate residents into the most vi- they’re unhappy with some ele- Wayne State University Law School ...... 27 CRAIN’S DETROIT BUSINESS use. able parts of the city. Critics say ments of Detroit Works. They say World Medical Relief ...... 3 The Lower Eastside Action the community engagement por- the expiration of Griffin’s contract Detroit’s lower east side is Plan, or LEAP, isn’t opposing the tion of the project lacks credibili- provides a natural point at which among the most rundown parts of city’s Detroit Works Project, orga- ty, pointing to meetings that have to refine the scope of the project. the city. But the 10 square miles nizers say. devolved into chaos and a limited Meanwhile, work on LEAP be- Department index riddled with blighted buildings Rather, the outcomes of the plan audience interaction format. gan last spring. It builds on Com- and vacant land also is home to could be incorporated into the city- The Troy-based Kresge Founda- munity Development Advocates of De- BANKRUPTCIES ...... 16 some of the city’s most stable wide land use plan the Detroit tion, which is funding Detroit troit’s strategic framework for land BUSINESS DIARY ...... 22 neighborhoods: Indian Village, Works Project is developing, and Works, recently said it and the city use, released last year, and cate- CALENDAR ...... 24 English Village and the Berry Sub- advocates say the LEAP model are renegotiating the contract of gories of neighborhoods that CAPITOL BRIEFINGS...... 6 division. could be replicated in other parts Toni Griffin, the nationally re- group developed with the idea of CAREERWORKS ...... 23 Now, community-driven plan- of the city. nowned urban planner brought in making vacant land productive. CLASSIFIED ADS ...... 24 ning is developing a long-term But the Detroit Works Project is to lead the process. plan that would put the area’s in- in flux. The project aims to consol- Kresge representatives say See LEAP, Page 26 KEITH CRAIN...... 8 LETTERS...... 8 MARY KRAMER ...... 9 Statewide roundup CRAIN’S Business events OPINION ...... 8 Sign up for the news, delivered During any given week, useful events tailored THIS WEEK @ PEOPLE ...... 23 to e-mail inboxes every Wednesday: MICHIGAN to business are held throughout the region. WWW.CRAINSDETROIT.COM crainsdetroit.com/getemail BUSINESS Go to crainsdetroit.com/section/events RUMBLINGS ...... 30 WEEK ON THE WEB ...... 30 20110321-NEWS--0004-NAT-CCI-CD_-- 3/18/2011 3:41 PM Page 1
Page 4 CRAIN’S DETROIT BUSINESS March 21, 2011
UM-Dearborn and Crain’s Detroit Business present Keeping Detroit Sustainable Construction likely 2 years away Join us as we explore how government, non-government, community, industry and academic leaders are incorporating sustainable practices as they plan and implement the revitalization of the city. even if bridge bill passes quickly
As the anchor city of Michigan, Breakfast and Discussion BY BILL SHEA Detroit is the center of March 29, 2011 CRAIN’S DETROIT BUSINESS First on shopping list: Land economic, social and cultural 7:30 a.m.–10:00 a.m. It could take up to two years af- activities in the state. Fairlane Center North ter passage of enabling legislation A Michigan bridge authority stave off some potential lawsuits Quad E before the private sector begins that would oversee a new Detroit or holdouts. Panelists will discuss how 19000 Hubbard Drive construction of a publicly owned River bridge would acquire land “We expect, given the nature of federal, state and local policies Dearborn, MI 48126 Detroit River bridge, Michigan’s for the span in what is now the in- the area and amount of publicly and programs are influencing lieutenant governor said. dustrial Delray neighborhood — owned land, that we’ll have a sig- the economic vitality of the $35 per person If the bill gets passed by summer, spending that would represent nificantly easier time acquiring city through implementation bridge construction potentially the state’s first construction-re- land compared to what other pro- lated expenditures on the project. jects would require,” he said. of sustainable practices. could start by mid-2013 and the span would open after 48 to 52 months of Money for land purchases is ex- Ambassador Bridge owner work — or by 2017 at the latest. pected to come from Canada’s offer Manuel “Matty” Moroun owns the Lt. Gov. Brian Calley said he ex- of $550 million to cover Michigan 42-acre Yellow Freight truck ter- pects a prelimi- for anything not paid for by the pri- minal at 7701 W. Jefferson, which For more info or to register online, nary bill autho- vate sector or U.S. government. is partially in the bridge project’s visit umd.umich.edu/sustainability_lecture rizing the The mechanics of how the Cana- footprint. That means there likely project to circu- dian money would be used, howev- would be a legal battle over the late among leg- er, remain to be worked out. land. Moroun bought the site in islative leaders The bridge is expected to require January 2010 and moved some of this week, but a plaza on about 160 acres, which his trucking operations there. doesn’t know currently is home to 43 businesses, The state has said it would use when it will be 257 homes and five churches. eminent domain laws to secure the officially intro- A large percentage of the land property it needs for the bridge. Calley duced. already is publicly owned from Michigan has spent about “We have a draft that is basically tax foreclosures, said Lt. Gov. $40 million on studies for the pro- completed already, but we’re work- Brian Calley. That will make ac- ject in the past decade. ing with our partners in the Legisla- quiring all of the land easier and — Bill Shea ture on some decision points,” said Calley, Gov. Rick Snyder’s point der traffic remains at 1987 levels. The private sector is expected to man on the project. While MDOT will no longer lead sell bonds to fund construction, and The bill would authorize the the state’s involvement in a new investors will be aware the Ambas- state to establish an authority to bridge — a move seen as a conces- sador Bridge is a factor in revenue oversee its half of the proposed sion to GOP lawmakers critical of projections. Firms bidding on the $3.8 billion New International Trade the agency — concern remains that project will develop their own traf- Crossing that would connect I-75 in NITC is unneeded and unfair com- fic and revenue estimates. Detroit to Windsor’s Highway 401. petition for the Ambassador Bridge. The NITC project bases its prof- The new legislation would allow The bridge company, which itability estimates on the Ambas- the authority to enter into a joint claims a congressionally approved sador Bridge’s toll prices. agreement with a to-be-created monopoly on Detroit-Windsor “(The project bidders) are not go- Canadian bridge authority. Togeth- bridge traffic, said the traffic ing to rely on our studies or the er, they would offer a concession to growth estimates used to justify a bridge company’s studies,” Calley a private company to build and op- new bridge are flawed and the pro- said. “Before they invest capital, erate the span, which would link ject will end up costing taxpayers they’re going to do all their own leg- the highways between Detroit’s in- $100 million in subsidies annually. work and come to their own conclu- dustrial Delray neighborhood and “It makes no sense to be trying sion. They’re going to have confi- Windsor’s Brighton Beach area. to pass a bill based on an illusion,” dence in it, or the project won’t go.” Once the bill is approved, the said bridge company President Calley also said the new law and process to bid the project, select a Dan Stamper. the agreements to create the joint concessionaire, design the bridge The Ambassador Bridge could project with Canada would ensure and be ready to start work should lower tolls to maintain its share of Michigan taxpayers never are at take one to two years, Calley said. traffic, a move that could jeopar- risk for cost overruns or any de- A bill died last year in a Senate dize toll revenue the NITC needs to fault on debt from the project. committee that would have autho- pay its debt and operational costs. The preliminary interest bids on rized the Michigan Department of “It’s technically possible some- the project mostly recommended a Transportation to enter into public- body could say ‘I’m going to bank- public subsidy, called availability private partnerships. That bill did- rupt my operation just out of spite,’ payments, to finance the project’s n’t specifically mention the bridge ” Calley said. “Even if the Ambas- capital and operations costs instead project and worried many lawmak- sador Bridge is a low-cost option, of a pure toll revenue concession. ers because it was seen as giving the it’ll be competing with a toll plaza Michigan won’t allow that for its agency too much unsupervised abil- with a modern footprint. That’s go- half of the project, Calley said. ity to enter into P3 projects. ing to make it competitive.” “There will be an explicit prohi- The new bill addresses some of Insiders have said the Ambas- bition from the authority obligat- those worries, Calley said. sador Bridge collects about $100 mil- ing availability payments for the “We’ve narrowed the scope lion annually in toll revenue, and project,” he said. “We will not al- down very substantially. This will about 55 percent of that is needed for low any of the liability to come be a specific purpose and loca- maintenance and operational costs. back on Michigan.” tion,” he said. A traffic study for DRIC estimat- Canada has said it will consider The old bill drew most of its op- ed that the new span would collect the subsidy payments in lieu of position because it would have au- about $60 million annually. tolls, he added. thorized MDOT to begin work on Theoretically, Moroun could However, limiting Michigan’s ex- what was then called the Detroit slash tolls 45 percent, break even, posure also potentially limits the River International Crossing bridge and jeopardize the public bridge fi- number of bidders on the project, project, which is opposed by the nancially. said Peter Samuel, editor of Freder- Detroit International Bridge Co. that “We’re going to protect our busi- ick, Md.-based Tollroad News. runs the Ambassador Bridge for ness,” Stamper said. “Whatever “I’m sure that leaving it open (to owner Manuel “Matty” Moroun. we’ve got to do as competition to availability payments) would at- Many Republican lawmakers keep our business, we’re going to tract more of the private sector be- expressed worry that DRIC would do.” cause a lot of people out there don’t harm the bridge company finan- The toll concession language will see the thing being financially vi- cially and is unnecessary because protect Michigan taxpayers even if able entirely on tolls,” he said. “Not of a privately funded plan — there’s a toll war, Calley said. having availability payments will stalled by lack of government ap- “The safeguard is that the pri- reduce the number (of bidders).” provals — to add a second span to vate sector has to put up the mon- Bill Shea: (313) 446-1626, the Ambassador Bridge. Also, bor- ey to make it happen,” he said. [email protected] DBpageAD.qxp 3/16/2011 2:48 PM Page 1
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Page 6 CRAIN’S DETROIT BUSINESS March 21, 2011 Biz groups, Snyder split over UI extension
LANSING – A down-to- availability for an esti- liance, a statewide business-labor revenue. people on both sides of the aisle in the-wire press to change mated 115,000 additional coalition. “It’s an employer-financed ac- Washington,” he said. Michigan law before Capitol people who could qualify But individual business organi- count, it’s borrowing money, it “I think it’s an incorrect as- thousands of unem- Briefings by the end of the year. zations, including the Michigan doesn’t have any money and there- sumption to say FUTA taxes will ployed workers lose fed- Time is short — the Chamber of Commerce, the Michigan fore it will trigger higher taxes increase because Michigan took eral jobless benefits Legislature is slated to Manufacturers Association, the Na- somewhere down the road to repay this money. There’s no direct link- April 2 has major busi- leave at the end of this tional Federation of Independent-Busi- (the borrowing) and pay for this age at all.” ness groups opposing a week for its two-week ness and the Small Business Associa- program,” said Wendy Block, direc- The alliance estimates a $350 stand-alone fix that Gov. spring recess, and if it tion of Michigan say continuing the tor of health policy and human re- million cost of the benefits contin- Rick Snyder, Democrats takes no action the extended benefits bears a $500 mil- sources at the Michigan chamber. uation, based on information it re- and the Economic Alliance 35,000 people receiving lion to $900 million price tag and Jackson disputed that employ- ceived from the Michigan Unemploy- for Michigan support. extended benefits would would ultimately lead to higher ers would end up paying higher ment Insurance Agency. The legislative change lose them as of April 2. federal UI taxes. Federal Unemployment Tax Act, At the heart of the issue is that Amy Lane would retain federally “If the Legislature The benefits are paid out of a or FUTA, taxes as a result of con- Michigan has become ineligible for funded unemployment insurance doesn’t make a change by Thurs- federal account that collects em- tinuing the benefits. the extended benefit program and extended benefits for 35,000 people day, that’s it. It’s game over for ployers’ federal unemployment “I don’t think there’s any appetite no longer meets one of two criteria currently receiving those benefits these benefits,” said Bret Jackson, taxes, but the account is in deficit in Congress to increase FUTA taxes to qualify for the final 20 weeks of and continue extended benefit president of the Economic Al- and has borrowed other federal on businesses, and I’ve talked to benefits that are available. A state must have an unemploy- ment rate that is at or above 6.5 per- cent and that is 110 percent of what the rate was three years ago. The look-back period had been two years, but Congress changed it to three years in December, and states must pass conforming legislation if they want to continue to qualify. An unemployment fraud bill passed Thursday by the state House is a likely target for incorporating the change if lawmakers act, but late last week it was unclear what might occur in the Senate. Block said the chamber and oth- er business groups feel that if law- makers want to continue the feder- al benefits, they should at the same time pass cost-saving reforms in the state UI system. While saving money in the state UI system would not address the deficit in the federal account, the idea is that “if you’re going to add strain in one area, like the federal unemployment extension, reduce strain in another area of the sys- tem,” Block said. She said she remains hopeful that a deal can be reached “to bring balance and to create a situa- tion where it’s a win-win for job providers and claimants alike.” Jackson, at the Economic Al- liance, said the Legislature “should always look at ways to improve the unemployment system,” but “given the time that we have to enact this, the Legislature should make pass- ing the extension a priority.” He said the benefits are impor- tant both to unemployed workers and the state economy. “These benefits are spent in our local busi- nesses. People don’t put this mon- ey away; it’s money they spend to take care of their families, to take care of themselves, and it flows di- rectly into the local economy.” The alliance also says that many who would lose benefits would turn to other state programs, adding more strain to those areas. Comings & goings Ⅲ Marc Corriveau, former Democ- ratic state representative from Northville, is now of counsel at Lansing government relations firm Kelley Cawthorne. Ⅲ John Bursch, previously chair- man of the appellate practice and public affairs litigation groups at law firm Warner Norcross & Judd LLP, was tapped in February by Michigan Attorney General Bill Schuette to become state solicitor general. Eric Restuccia, previous so- licitor general, became deputy so- licitor general. Amy Lane: (517) 371-5355, [email protected] DBpageAD.qxp 3/11/2011 3:04 PM Page 1
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Page 8 CRAIN’S DETROIT BUSINESS March 21, 2011 OPINION LETTERS Bet on Quicken boss Note immigration differences Editor: to taxes on individuals will upset Crain’s Detroit Business I am weary of those who speak or even outrage many, but it relies welcomes letters to the editor. out about immigration without on a very common and persistent All letters will be considered for differentiating between legal and publication, provided they are false dichotomy. to keep on fighting illegal immigration. signed and do not defame All taxes are taxes on individu- Anika Fassia, in her Feb. 28 Oth- individuals or organizations. als. “Business” taxes are taxes col- ou have to hand it to Dan Gilbert: He does what he er Voices, “Our state should wel- Letters may be edited for length lected for the state by businesses come immigrants,” continues the and clarity. from individuals. Business taxes thinks is right and he doesn’t worry much about the pattern of not acknowledging the are irrational and unfair because Write: Editor, Crain’s Detroit court of public opinion. significance of this difference. She we never know which individuals Y Business, 1155 Gratiot Ave., And the court of public opinion seemed to have Gilbert los- cites the new Arizona immigra- Detroit, MI 48207-2997. are paying the tax, and we do not tion law as anti-immigrant, when know the circumstances of the in- ing the 2004 lawsuit filed against him by former loan officers, E-mail: [email protected] who argued that they should be paid overtime in addition to it is, in fact, an anti-illegal-immi- dividuals paying the tax. grant bill. A successful business passes the commissions. I am happy about the legal entre- cessing our country illegally, and tax on to its customers, and there- And Gilbert’s court testimony regarding e-mails that preneurs who have come to Michi- they still viewed the opportunities fore it is a regressive tax, like a seemed to encourage employees to promote mortgages to rela- gan and have started up business- here in America as worth not being sales tax. Weaker businesses col- tives over Thanksgiving dinner and then compared Quicken es that can grow and employ fellow able to collect the benefits. lect the tax from their employees I fault the employer who hires employment to the birth of a child wasn’t widely thought to Michiganders. I also agree with or from the business owners, some Ms. Fassia’s comment about an ed- them and the federal government of whom may be rich or middle have weighed in his favor. ucated workforce. If the millions that allows the illegal invasion to class, others of whom may be poor. But when the jury ruled on Thursday, it was Gilbert who of illegal immigrants rolling into continue to the detriment of legal A better headline would be came out on the winning side. The verdict is certain to be ap- this country were like she de- immigrants who are in line around “Snyder shifts from irrational to pealed, if for no other reason than the law firm for the former scribes — more likely to possess a the world trying to come here the rational tax.” Every economist right way, as well as unemployed Quicken employees has made a business of trolling for over- four-year degree than native-born knows this. When will the busi- residents — I doubt that she would citizens looking for work. ness writers get it? time-case plaintiffs. have needed to write her editorial, We have already lost congres- It might be possible to argue for Expect Gilbert to continue to see the litigation through. nor would I have felt the need to sional representation to states that business taxes on businesses locat- respond. are the main destinations for illegal ed in Michigan and selling their Unfortunately, this is not the immigration. I hope that Ms. Fassia goods all over the country. That Motown could use a Robot Town case. The vast majority are under- doesn’t want Michigan to become a tax at least has the merit of falling educated and not coming here to sanctuary state as a way to grow on people who don’t live in Michi- First it was RoboCop, now it’s Robot Town. become Americans, but solely to out of our economic doldrums. gan. But it is also a tax that would As Chad Halcom reports on Page 1, a consortium that in- work. Assimilating into the Amer- Mike Hayes drive and has driven such busi- cludes TechTown, Wayne State University and the U.S. Army ican melting pot, to the politically Livonia ness from our state. That kind of Tank-Automotive Research, Development and Engineering correct, is a relic of legal immigra- business has to compete with busi- Center have been discussing the creation of a robotics re- tion from Europe. ‘Business’ tax flawed nesses in other states, which do Ms. Fassia notes that illegal im- not impose such taxes, and it can- search consortium and laboratory/test center that could be- migrants pay Social Security and Editor: not stay here even if it wants to. come a reality by late 2014. other taxes, though they will not be Your March 14 article, “Snyder Edward Kickham The discussions are still preliminary, but it’s the kind of able to collect these benefits. I am tax break for businesses: 60%,” Kickham Hanley PLLC about a shift from business taxes Royal Oak collaborative venture that makes real sense for Southeast sure that they knew this prior to ac- Michigan. We hope the idea becomes reality — and we also like the idea of making the now-inevitable RoboCop statue part of the project. The imagery is controversial, but it isn’t go- ing away, so it makes sense to use it in a way that sends an af- firmative message. TALK ON THE WEB From www.crainsdetroit.com tion in sales, not for time spent. Start land use plan at grass roots? Re: Capitol protesters arrested Reader responses to stories and Albert Connor A coalition on Detroit’s far-east side is making progress on Businesses are getting a $1.8 bil- blogs that appeared on Crain’s lion (tax) cut under the unproven as- Web site. Comments may be a land use plan that so far has eluded the Detroit Works Pro- Re: What happened to democracy? ject. sumption that somehow this will cre- edited for length and clarity. ate jobs. It’s all BS. Maybe it’s because the Lower Eastside Action Plan — People in the streets? Well, of Charles Parrish course it’s not enough. But it’s sweatshop. Too bad for these young LEAP — is being created by people who have a direct stake in promising. kids. Hey, now Dan Gilbert can buy their particular geography and so have managed to avoid the I give Gov. Snyder a highly posi- Frank Joyce another hockey team. winners-and-losers reaction that so far has bedeviled the larg- tive rating. Keep up the good work. Rock er citywide land use project. (See story, Page 3.) Wayne Those without means use protest and civil disobedience. … If so, a strategy of similar community-driven processes Since when do commission- Breaking the law in the name of a throughout the city might yield better results than a broader Re: Quicken Loans wins trial earning employees qualify for plan that unintentionally sows seeds of dissension and mistrust. My son … said it was a real overtime? … You get paid for produc- See Talk, Page 9 KEITH CRAIN: We can’t ignore benefits of nuclear power I don’t know if anyone bothers have to do is stop using oil prove during the next opment of nuclear power. understand for decades. The nu- to count up the fatalities in coal to generate electricity. We half century. Sadly, there are many deaths clear accident in Russia was very mining. There are plenty. have to prioritize the use In the meantime, we each year related to coal or oil pro- real, and although it was thought to I don’t know if anyone bothers of oil for planes and ships, need to include nuclear duction. But for some reason, that be a disaster for thousands, it was to count up the fatalities in the ex- which simply don’t have power as an important hasn’t stopped anyone from using responsible for about 50 deaths. ploration and pumping of both oil an alternative today. part of our energy mix. these energy sources. We can’t let No one knows what will be the and natural gas. It’s a significant Stationary power We have learned a this happen with nuclear power. final outcome in Japan. If only one number as well. plants can convert from great deal about build- Nuclear has many advantages life is lost, it will be a tragedy. No one died at Three Mile Is- oil to many different en- ing nuclear power over other energy sources, but it But there are a lot of safety fea- land, the nuclear power plant that ergy sources. plants since the Japan- desperately needs a better public tures built into newer nuclear had an accident more than 30 Eventually automo- ese plants were built 40 image. power plants. years ago. That accident created biles, over the next half century, years ago. (See story, Page 28.) The experience in Japan is not The question is whether the an environment of fear that made will in all probability gradually They are safer and more reliable going to do anything positive for world will be able to take advan- it impossible to build any new nu- shift to other forms of energy be- than at any time in history, and we the image of nuclear as a safe, tage of this very environmentally clear power plants. sides gasoline. And we are starting cannot let the hysteria that is sur- clean energy source for the future. safe energy source, or will the me- If we want to lower our dependen- to see the development of electric rounding the tragedy in Japan The fear of nuclear is something dia and public opinion stall devel- cy on foreign oil, the first thing we systems that will evolve and im- stop us from the continual devel- that the energy industry has had to opment for many more decades? 20110321-NEWS--0009-NAT-CCI-CD_-- 3/18/2011 10:49 AM Page 1
March 21, 2011 CRAIN’S DETROIT BUSINESS Page 9 MARY KRAMER: Lawsuit may cost Chrysler some good will
Long before the Cass Corridor wiches at the Rowland they had done with trademark that phrase. Chrysler beef?” three decades ago. Cooper, was reinvented and christened Café and Stella Interna- dozens of products cele- applied for a trademark before the who is communications director Midtown and Detroit’s vibe started tional Café. The shops brating Detroit, they Super Bowl spot ran, but it has not for the conservative Heritage to attract 20-somethings to set up are popular with locals commissioned produc- yet been granted. Foundation, concluded: “To con- shop, Shawn Santo and Kevin Bor- and visitors because tion of T-shirts with It’s not like Chrysler wants to tinue a campaign based on reviv- say plunged into Detroit retail. they are full of Detroit- “Imported from De- start a new revenue line on T-shirt ing a city while simultaneously They saw Detroit in a way that branded items, many of troit” across the top. sales. It has set up its own imprint- going after the small businesses few people were seeing the city in them made by Detroit Their lawyer assured ed apparel to benefit charities. But that actually inhabit that city is a the mid-1990s. T-shirts, CDs, artists and crafters. them that a geographic- like many companies, trademarks terrible way to go about restoring mugs, posters — anything that cel- When I first saw specific trademark are key to protecting their brands. a tarnished brand.” ebrated Detroit — could be found Chrysler’s edgy, two- wouldn’t be granted They defend them to avoid setting in the tiny original Pure Detroit minute commercial Chrysler because it a precedent. Mary Kramer is publisher of shop. The Vernors gnome sign on during Super Bowl, I was too broad. But Chrysler might take a hit in Crain's Detroit Business. Catch her the wall was almost as big as the thought: “Wow. They Last week, Chrysler public opinion. Rory Cooper, a take on business news at 6:10 a.m. retail space itself. That first store really got Detroit.” sued Santo, Borsay and their com- blogger for The Daily Caller web- Mondays on the Paul W. Smith show was kind of a last-man-standing in Kind of like Santo and Borsay. pany in federal court. site, chastised Chrysler for not let- on WJR AM 760 and in her blog at the David Whitney Building be- And there’s the irony. Santo and That’s where a judge likely will ting the phrase go viral as www.crainsdetroit.com/kramer. fore the heat and lights were Borsay saw the spot, too, and, like figure out if Chrysler can actually Wendy’s did with “where’s the E-mail her at [email protected]. turned off. From those small digs, the by- then married couple grew a retail network of Pure Detroit shops in the Renaissance Center, Fisher Building and Guardian Building, branching into coffee and sand-
TALK CONTINUED ■ From Page 8 deeply held political stance is a time-honored American tradition. Timothy Schacht
Re: Ending item pricing mandate I’m sure some union jobs were lost when electric street lights re- placed manually lit gas lights. CMC1978
Re: Job cuts at AnnArbor.com I seriously doubt that the Ann Arbor News wasn’t making money. They just weren’t making enough mon- ey to satisfy the Newhouses. ... It’s hard to imagine that (profits will) be big enough at AnnArbor.com in the lifetimes of most of the New- houses. Old Newsie
Re: Proposed winery on Belle Isle Given the amount of wine, beer and spirits consumed on the isle, this would be the first step toward in- dependence. Now they need to bot- tle it there, too. Timothy Dinan Isn’t it time your working capital Any natural, productive, self- supported improvement is much bet- ter than city expenses for vacant lot worked as hard as you? maintenance. I can’t imagine how the beauty of vineyard rows could have a negative impact. Leo Artil
Leave Belle Isle alone. Especial- ly don’t take away the great little hiking area around the lighthouse and east end of the island. Choose some available acreage along the riverfront that is not on the island. Mary Beth Improve your cash flow and strengthen your business. My big question is how many jobs Cash flow is essential to the success of your business. Fifth Third’s comprehensive suite of Cash will be Detroiters’, and will they be more than just laborers? Management solutions can help maximize your receivables for quicker access to capital. Our North Rosedale Park business bankers will take the time to listen, so we can recommend a customized solution for Re: Bing team turnover questioned your specific business needs. So, let’s start the conversation today. Stop in your local Fifth Third The musical chairs approach Bank, call us at 1-877-804-2091, or visit 53.com/workingcapital. will lead to defeat. There is no sub- stitute for strong and able directors Fifth Third Bank, Member FDIC. Equal Housing Lender. and deputy directors for individual departments. Saulius Simoliunas DBpageAD.qxp 3/11/2011 10:41 AM Page 1
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March 21, 2011 CRAIN’S DETROIT BUSINESS Page 11
REPORTER’S NOTEBOOK
Daniel Duggan PUBLIC TV RETURNS TO DETROIT covers retail, Midtown satellite studio once real estate and hospitality. housed WXYZ-TV Channel 7, Call (313) Page 13 446-0414 or write dduggan @crain.com. real estate
Daniel Duggan Brokers wary about uptick Is it safe to let my guard down yet? That’s what industrial brokers are wondering. After a long drought of real estate deals, momentum started to pick up in the local industrial market at the end of last year and into this year — for the first time in a while. In fact, the industrial market showed positive absorption in the fourth quarter, marking the first time the region showed a positive quarter in 10, according to the year-end Grubb & Ellis market report. Just over 291,000 square feet was absorbed during the quarter, a small amount. But when considering that 2009 ended with 6.6 million square feet of negative absorption, small amounts are still victories. Grubb & Ellis’ report is similar to other forecasts of stronger industrial activity as automotive production COURTESY OF SAPIENTNITRO Brad Simms of SapientNitro had worker appeal in mind when he chose this office space on Old Woodward Avenue in Birmingham. ramps up. However, rental rates remain low. In the report, CB Richard Ellis takes the approach that at least rates are not going down. “This apparent stagnancy in prices Image-conscious advertising makes is a positive sign compared with the dramatic decreases that have occurred in the past few years. Since 2005, the average lease rates have had a net change of almost one dollar to the negative. its move – to Detroit, Birmingham “It is probable that the rates have bottomed out, which means that the BY DANIEL DUGGAN market is in the midst of a sluggish CRAIN’S DETROIT BUSINESS recovery. Any improvement is better When people come in, we want to create an image than none, and the fourth quarter s General Motors Co. and Chrysler Group “ holds true to that statement.” LLC have reshuffled their advertising that they can see themselves working in. But many people close to the deals A contracts, the companies have ” say that the region’s numbers would prompted a reshuffling of ad company Brad Simms, SapientNitro be looking even better if it wasn’t for real estate in metro Detroit. the small spaces holding the market Through a series of deals, tled on 8,600 square feet at 135 and 165 back. HE DEALS Detroit and Birmingham SHIFTING SPACE Old Woodward Ave. in Birmingham. Large blocks of space have been T emerged as the go-to places for Outfitted with a full bar, including a picked up by automotive-related Ad offices: Six the incoming ad companies, When it comes to advertising office space beer tap, the space is in the middle of in Southeast Michigan, Troy’s loss has suppliers, making it harder to find comings and leaving vacant space in Troy. Birmingham’s walkable downtown. been Birmingham’s and Detroit’s gain: space requirements in the larger goings, Page 12 According to a Crain’s The image of the office is crucial in re- building supply of more than 50,000 analysis of the presence of ad 2009 cruiting, Simms said. square feet, said Kris Pawlowski, an companies city by city, Troy went from “When I was interviewing people, one industrial broker who specializes in having 37 percent of the total advertising of the first questions they had was the I-75 corridor with Southfield-based office space in the region to 19 percent. ‘where is the office going to be,’ ” he Signature Associates. Other* Troy 37% Birmingham jumped from 10 percent of said. “We wanted a space that is aligned 49% Birmingham 10% “Space in the higher range of the space to 16 percent and Detroit from with the type of people we want to hire. 50,000 square feet and up has been, 4 percent to 13. Detroit 4% “When people come in, we want to cre- or is being, absorbed right now,” he The moves speak volumes about the ate an image that they can see them- said. “Though we’re already starting preferences of the highly cov- Today selves working in.” to see things trickle down to the eted creative companies, said The city of Birmingham has also bene- smaller users below that range, the Brian Schwartz, a director in Troy 19% fitted from the expansion of the firms af- larger suppliers are releasing work to the Southfield office of New- filiated with McCann Worldgroup under the smaller guys, so those 20,000- to Other* mark Knight Frank, who has Birmingham 16% the corporate umbrella of New York- 40,000-square-foot spaces are seeing worked on two recent adver- 52% based Interpublic Group of Companies Inc. deals as well.” tising deals and has several Detroit 13% MRM Worldwide took 20,000 square feet Positive signs are there, Pawlowski pending. at 280 Old Woodward Ave. and Universal said, but after weathering such tough Large open spaces for col- * Ann Arbor, Bloomfield Hills, Dearborn, Redford McCann took 23,000 square feet in the for- times, it’s hard to let your guard down laboration, and amenities Township, Royal Oak, Southfield and Warren mer Observer Eccentric building at 805 E. again. such as coffee bars, food sta- Maple Road. “There is activity out there; my book Schwartz tions and break spaces, are most as important as compensation.” Schwartz, who represented IPG in of business for the next year and a all key, he said. When Boston-based SapientNitro won a both deals, said the firms needed to be in half is looking good,” he said. “But “When they hire, the environment social media account from Chrysler, proximity to each other, but remained with all that’s happened, I just keep plays a key role,” said Schwartz. “They’re Brad Simms was dispatched to metro De- committed to Birmingham. wondering, when does the rug come looking for an office that can include a lot troit to find an office space and hire a “There are challenges in Birmingham, out?” of amenities for employees, because these staff of 35 to 40 people. firms see offering amenities as being al- After touring dozens of offices, he set- See Move, Page 12 20110321-NEWS--0012-NAT-CCI-CD_-- 3/18/2011 9:53 AM Page 1
Page 12 CRAIN’S DETROIT BUSINESS March 21, 2011 Focus: Real Estate
RECENT AD REAL ESTATE DEALS Decisions by Chrysler Group LLC and General Motors Co. to shake up their advertising contracts last year have prompted a series of real estate deals across metro Detroit: 6WDUW6DYLQJ Universal McCann MRM Worldwide (a division of the New York-based (a division of the New York-based Interpublic Group of Cos. Inc.) Interpublic Group of Cos. Inc.) 7RGD\ZLWK(QHUJ\ Ⅲ Size: 23,000 square feet Ⅲ Size: 20,000 square feet Ⅲ Location: 280 E. Maple Road, Ⅲ Location: 280 Old Woodward (IÀFLHQF\,QFHQWLYHV Birmingham Ave., Birmingham Ⅲ Broker: Brian Schwartz, Ⅲ Broker: Brian Schwartz, Newmark Newmark Knight Frank Knight Frank (tenant), Brendan ITH COLDER TEMPERATURES, now is the Ⅲ Ad shuffle: Hired by Chrysler Group George, CB Richard Ellis (landlord) time to start saving energy and saving LLC for media buying, forced to move Ⅲ Ad shuffle: Picked up some of W to a new office because an affiliated General Motors’ digital advertising money by boosting the energy efficiency of your company, McCann Erickson, does work from competitor Digitas’ natural gas heating system. work for General Motors. Detroit office. Incentives are available for: SapientNitro • &URNACE