Borders out of Balance

20110207-NEWS--0001-NAT-CCI-CD_-- 2/4/2011 6:51 PM Page 1 ® www.crainsdetroit.com Vol. 27, No. 6 FEBRUARY 7 – 13, 2011 $2 a copy; $59 a year ©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 Prentice: What went wrong Borders Chip maker’s expansion at out of pressure point over gas service balance Inside Doctors’ Hospital expected Expansion, e-commerce, to buy McLaren’s share, music CDs among missteps Page 5 BY DANIEL DUGGAN Crain’s List CRAIN’S DETROIT BUSINESS DUSTIN WALSH/CRAIN’S DETROIT BUSINESS With Ann Arbor bookseller Borders Senior living facilities, Two technology-laden demonstration vehicles at Visteon Corp. headquarters in Van Buren Township show Group Inc. expected to file bankruptcy as “we never stopped innovating,” said Tim Yerdon, vice president of global innovation and design. early as this week, industry watchers Page 12 point to a series of management prob- lems by a company that always fol- This Just In lowed and never led the industry. When its competitors were focused National weight loss chain Visteon charged for high-tech on superstores, Borders Group was still focused on mall stores. When breaks into Detroit market competition moved online, Bor- ders focused on bricks-and-mor- National weight loss fran- Supplier steers its future toward cockpit gadgets tar sales. chise Pounds and Inches Away When it started to expand, it went BY DUSTIN WALSH stopped innovating,” he said. “You can be the is entering the Detroit mar- too far too fast, moving to the United CRAIN’S DETROIT BUSINESS best company with the best balance sheet, but ket with a location in West Kingdom and Australia. It made a Bloomfield Township. if you don’t keep investing in your products, it Fresh off its 16-month bout in U.S. Bankruptcy will be a short-lived comeback.” push to sell CDs in its stores as the The St. Louis-based com- media format transitioned to digital. pany is opening the 1,000- Court, Visteon Corp. has emerged a stronger sup- Visteon stepped out of the shadows to show- plier poised to capitalize on high-growth tech- case its technologies at the Consumer Electron- And as Barnes & Noble Inc. and square-foot store in the Sims- Amazon.com worked on e-readers, bury Plaza on the northeast nology integration products. ics Show in Las Vegas last In October, the Van Buren month, before bringing its Borders Group worked on sell- corner of 14 Mile and Farm- ing books through its website. ington roads. Township-based supplier e- If you don’t keep two global-platform demon- merged from bankruptcy $2 stration vehicles back to its The track record is that of a The franchise owner for “ company trying merely to keep Michigan, Rebecca Brown, is billion lighter in debt and be- investing in your Van Buren Township com- gan trading publicly again last plex for a press event. up with the competition and never a licensed registered nurse lead, said Mike Souers, an industry and has been on the program month to little fanfare. Shares products, it will be In its test models, drivers were trading at $71.45 in Fri- and passengers are able to ac- analyst covering Borders for S&P for over a year. Equity Research. Pounds and Inches Away day mid-morning trading. a short-lived cess Internet radio, control Visteon has been position- ambient interior lighting and “They were always chasing has locations in Kentucky, rather than trying to figure out a Missouri, Texas and Leth- ing its product lineup to capi- comeback. integrate a gamut of electron- talize on the everyday driver’s ” ic devices — iPads, Androids, strong, long-term way to run a bridge, Alberta. business,” he said. The space was leased by increasing desire for technolo- Tim Yerson, Visteon Corp. etc. — from the driver’s or Farmington Hills-based Ger- gy in the digital world, creat- passenger’s seats. shenson Realty & Investment LLC, ing infotainment and in-dash systems based on “As a supplier, you’re trying to predict Stumbles with website global platforms and the mobile Web. three years out for a five-year model cycle,” which owns the plaza. The Standing out among the com- deal was brokered by South- This is possible because Visteon never Yerdon said. stopped spending on research throughout its The ability to control nearly every segment pany’s missteps has been its field-based Details in Retail. digital strategy. — Daniel Duggan bankruptcy, said Tim Yerdon, vice president of a car is a universal want and not just for of global innovation and design. “During the last 24 months, we never See Visteon, Page 15 See Borders, Page 18 Lewand removed from role ISTOCKPHOTO.COM in water department case A federal judge has removed Bodman PLC attorney Thomas Lewand from his posi- What snow day? Work goes on in the ‘virtual office’ tion as the court’s special master in a long-running BY NANCY KAFFER customers. come just that — no big deal. up and running with little to no case involving the Detroit Wa- CRAIN’S DETROIT BUSINESS Titled “SnO.M.G.,” the e-mail’s Last week’s 5 to 9 inches of local loss in productivity. ter and Sewerage Department. first image showed a snowy snowfall didn’t quite reach the At Netarx, which sells network The department has oper- Before the snow started to fall road, congested epic proportions predicted by infrastructure products and ser- last week, Auburn Hills-based Net- with traffic. In a some, but the anticipation of a vices, telecommuting on a snow See This Just In, Page 2 arx Inc. sent an e-mail blast to its second image, blizzard led many companies day was a natural fit. titled “N.B.D.,” to offer employees the option “We are a strong proponent of or “no big deal,” a of a “virtual workday,” en- what we call the ‘virtual office,’ ” man sits in a abled by tools like laptops, said April Wong, Netarx’s market- home office, video- cell phones, e-mail and Web ing manager. “Your workplace is conferencing with conferencing. more of an event and not a place. colleagues. And local com- Because of the technology tools we For many companies say put in place and help customers panies in metro that means put in place, you can work from Detroit, a day of they were NEWSPAPER heavy snowfall has be- able to stay See Snow, Page 18 ISTOCKPHOTO.COM 20110207-NEWS--0002-NAT-CCI-CD_-- 2/4/2011 6:18 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS February 7, 2011 LevelSet to develop branding, family home permits issued in all organizations withdrew their re- The lawsuit is still going for- THIS JUST IN of 2009, it lags historical figures. quest for an injunction last week ward. online strategies for Crittenton Association CEO Michael against the city of Troy in a law- Troy contends in pleadings ■ From Page 1 Crittenton Hospital Medical Cen- Stoskopf’s six-month forecast of suit over the privatization of its that the 20 percent it has kept — ter, Rochester Hills, has hired home permits shows a decline, building department. $140,607 over the first three ated under a federal consent de- Royal Oak-based LevelSet Solu- well below the level during the The homebuilders joined with months of the contract — does cree since 1977. U.S. District tions to build the hospital’s brand same period in 2010. the Associated Builders and Con- not cover the building support Judge John Feikens had oversight and create a comprehensive In- The 631 permits forecast to be is- tractors of Michigan and Michigan functions it still performs, and so of the case from its origination ternet marketing strategy. sued from January through June Plumbing and Mechanical Contrac- the city is not violating state law. until his retirement last year, The strategy will include is 24 percent below the 831 permits tors Association in a December — Chad Halcom when the case passed to Judge search engine optimization, so- issued during the same period in lawsuit, seeking an injunction to Sean Cox. cial media content and other on- 2010, Stoskopf calculated. lower Troy’s building fees and re- Luttman joins Frasco Caponigro Lewand, a member at Bodman, line marketing approaches. — Daniel Duggan turn excess fees it collected to an was appointed by Feikens in 2002; Formed in 2008, LevelSet escrow account since it out- Trusts and estates attorney Roy Cox’s order vacating the position works with clients to develop on- Community House CEO retires sourced most of its building de- Luttmann has left Troy-based Giar- of special master was dated Feb. 3. line interactive strategies geared partment functions last July. marco Mullins & Horton PC in Troy In his role as the court’s special to specific business objectives. The Community House in Birm- “We’re not against privatiza- to join Frasco Caponigro Wineman master, Lewand was paid $1.6 Goals are to develop customer ingham has launched a search for tion. We’re for it. But (Troy) is ba- & Scheible PC in Bloomfield Hills. million by the water department. loyalty and increase sales. a new CEO and president. sically taking its building fees Luttmann, 49, a member of the The appointment and resulting Planned spending was not dis- Shelley Roberts, CEO and presi- and co-opting a portion of them to Giarmarco board of directors for fees have been criticized in court closed in time for deadline, but it dent for the past 13 years, has re- help fund the rest of the city,” four years, moved in January to filings by Oakland County Water was described as a “six-figure” 12- tired to have “more personal time said Daniel MacLeish, president of start a new estate planning prac- Resources Commissioner John month contract beginning Feb.

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