Detroit Prepares for EM
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20130225-NEWS--0001-NAT-CCI-CD_-- 2/22/2013 7:48 PM Page 1 ® www.crainsdetroit.com Vol. 29, No. 8 FEBRUARY 25 – MARCH 3, 2013 $2 a copy; $59 a year ©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved Page 3 Compuware Belle Tire on a roll with Detroit prepares for remodeling stores takeover try Art Van not lounging asks: Where’s around EM; Snyder mulls pick when it comes to board’s IT IQ? City can expect an 18-24 month stint expanding BY TOM HENDERSON CRAIN’S DETROIT BUSINESS BY KIRK PINHO In an interview with Crain’s Detroit Business CRAIN’S DETROIT BUSINESS last week, Snyder said he has a short list of emer- State ready to roll the dice Whether Elliott Management Corp. gency manager candidates and his administration decides to make a better offer for Com- Wanted: A seasoned turnaround expert who can is considering candidates from across the U.S. But on Internet lottery puware Corp., it likely will ask for a lead the city of Detroit through tough decisions he wouldn’t speculate on how many there are or shake-up of the company’s board of needed to fix its balance sheet. where they are from. directors, based on its past proxy bat- Experts believe an emergency manager in the The Financial Review Team on Tuesday said the Inside tles with other publicly traded infor- city is all but certain; Snyder said Thursday he will city has “no satisfactory plan” to address its finan- mation technology companies. take at least another week to make a decision on cial problems, although Mayor Dave Bing respond- Barring, that is, Compuware’s sale whether he agrees with the Financial Review Team’s ed Wednesday by saying that while the city has a Newsmaker to another suitor. conclusion that the city is in a financial emer- plan agreed to by the state and Detroit Financial Advi- On Thursday, Reuters reported that gency. sory Board, significant roadblocks exist to its full winner Compuware (Nasdaq: CPWR) has But whoever gets the job will have an enormous implementation. Schlichting held prelimi- task as he or she tackles a cumulative cash deficit Those include a restrictive city charter, law- HUNGRY nary talks with of $100 million by June 30, a $327 million general suits, and “a scarcity of financial and human re- tells why New York City- fund deficit in fiscal year 2012, and more than $14 INVESTORS based Blackstone billion in debt. See Snyder, Page 19 health Group LP and Lear Corp., others Fort Worth, system is also battling activist investors, Texas-based TPG finding Page 20 Capital LP. In a EM FAQS release dated success in the city. Page 7 Jan. 25, Com- puware said it Can the city reject an would entertain other offers. Capitol Briefings: State’s When New York-based Elliott appointment? What bumpiest road is on the launched its $2.3 billion offer to buy Compuware and take it private in De- powers does an EM route to repairs. cember, Jesse Cohn, a portfolio man- have? What about Page 9 ager for the hedge fund, said Com- puware’s independent board labor contracts? members lacked technology back- This Just In grounds and seemed chosen more for being high-profile members of the See Page 19 Lakeshore Express Aviation community than for having an ability to provide expert advice. adds local flights NATHAN SKID See Compuware, Page 21 Lakeshore Express Aviation is adding service between Chicago’s Midway Airport and Oakland County International Airport in Waterford Town- ship. Service begins June 6 and Price-fixing probe may widen; suppliers uneasy will operate Thursday-Sun- day. Tickets cost $109 each BY CHAD HALCOM wider. Group and NTN Corp., were previously in- way, said Luke Dixon, vice CRAIN’S DETROIT BUSINESS Earlier this month, Tokyo-based bear- dicted by the Tokyo District Public Pros- president of technology for ings and electric power steering compo- ecutor’s Office last June, following a Lakeshore. Over the past two years, more than nents supplier NSK Ltd. reported in a price-fixing investigation by Japan Fair The carrier will use a two- $800 million in judgments against indi- public disclosure that its U.S. sub- Trade Commission. jet fleet – a pair of Saab viduals and companies have been sidiary, NSK Americas Inc. in Ann Arbor, NSK Americas President Bernard 340B’s with 30 seats. reached related to automotive supplier has received a subpoena from Justice re- Lindsay and Vice President of Finance Lakeshore currently offers price-fixing, but for four months the U.S. questing information on its sales of bear- Brian Parsons did not return phone calls service between Midway and IG CASES B Department of Justice has been fairly qui- ings. seeking comment last week, but a com- the Pellston Regional Airport. Hot flap over et about its ongoing investigation. The company’s Singapore subsidiary pany statement said NSK is cooperating More information is avail- homeowners Still, officials and investigated compa- also underwent an unannounced inspec- in the investigations. able at www.lakeshoreex- insurance and nies have dropped new hints that the tion Feb. 6 from that country’s Competi- “Financial losses … may occur in the press.com. other top verdicts government’s work in Detroit isn’t over tion Commission. NSK, along with bear- — Ryan Felton of 2012, Page 11 — and the investigation may be getting ings market competitors Nachi-Fujikoshi See Price fixing, Page 18 Yearning for legal peace of mind? (see our ad on page 2) ‰ ATTORNEYS AT LAW A BETTER PARTNERSHIP WNJ.com NEWSPAPER 20130225-NEWS--0002-NAT-CCI-CD_-- 2/22/2013 4:55 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS February 25, 2013 MICHIGAN BRIEFS Mich. firm accused of honey up nearly 40 percent from 2011. Ⅲ Priority Health’s chief medical of- laundering with China imports Magna brings new life to ECD plant in Battle Creek ficer for the past 20 years, Jim There’s more to this story than Byrne, will retire in July, the Grand A never-occupied plant in Battle Creek that was incentives from the federal, state and county gov- the fact that a headline writer Rapids Business Journal reported. built by now-bankrupt United Solar Ovonic LLC has a ernments. Magna received a $1.6 million perfor- could have untold amounts of fun Ⅲ The Grand Valley State University new owner. mance-based Michigan Business Development with bee-related puns. Last week, board of trustees has approved $18.7 Cosma Castings Michigan, a subsidiary of Canadian grant from the Michigan Strategic Fund. The city of the feds accused a honey process- million in renovations and addi- auto supplier Magna International Inc., purchased the Battle Creek provided a 50 percent real property tax ing plant south of Jackson of help- tions to the main Allendale campus. plant and plans to bring 572 jobs with an investment abatement and 100 percent personal property tax ing pollinate the smuggling and Ⅲ Lansing-based Demmer Corp. of $162 million, MiBiz reported. abatement, both for 12 years. mislabeling of honey from China. has laid off about 90 employees, When the parent of United Solar Ovonic, Auburn Signature Associates Inc. represented the buyer and Also charged were another proces- citing reasons that include a loss Hills-based Energy Conversion Devices Inc., built the the seller. The plant had been for sale for $5.6 mil- sor and five individuals. of defense-related programs, plant in 2008, it received about $120 million worth of lion, but the purchase price was not disclosed. The group allegedly mislabeled WLNS-TV reported. It’s the fourth Chinese-origin honey in an at- round of layoffs at Demmer in re- cent years. tempt to skirt more than $180 mil- returned the verdict after deliber- cials said three companies had in the manufacturing and sale of Ⅲ lion in anti-dumping duties, ating for parts of two days, filed tax liens against the Holland the compressors, which in turn What is Michigan’s most pop- Bloomberg News reported. The Bloomberg News reported. The tri- plant for more than $250,000 over raised prices for consumers. ular tourist attraction? According charges from the investigation al before Judge John Lungstrum of work not paid for, WOOD-TV in Ⅲ The Experience Grand Rapids to a story in Bridge Magazine (yes, you could say it was a sting), U.S. District Court began Jan. 23. Grand Rapids reported. At the visitors bureau said hotel revenue about the “Pure Michigan effect,” called “Project Honeygate,” led to The case started in 2005 with al- Michigan Economic Development in Kent County totaled more than it’s Frankenmuth, with 3 million two of the nation’s largest honey legations that Dow plotted with Corp., officials told MLive.com $127 million last year, up 11 per- visitors annually. Good news, un- suppliers — Texas-based Honey BASF SE, Huntsman International LLC that they had not paid any of the cent from the previous record high less you’re a chicken. Holding and Onsted-based Groeb and Lyondell Chemical Co. in viola- state tax credits promised to LG set in 2011, the Grand Rapids Busi- Find business news from Farms Inc. — entering into deferred tion of federal law. Only Dow did- Chem. The battery maker was or- ness Journal reported. The in- around the state at crainsdetroit prosecution agreements and pay- n’t settle. At the heart of the suit dered to refund $842,000 of its $151 crease is higher than the 7.7 per- .com/crainsmichiganbusiness. ing $1 million and $2 million in were urethane-based products million federal stimulus grant cent average gain in the state and Sign up for Crain's Michigan fines, respectively.