20140324-NEWS--0001-NAT-CCI-CD_-- 3/21/2014 6:40 PM Page 1 ® www.crainsdetroit.com Vol. 30, No. 12 MARCH 24 – 30, 2014 $2 a copy; $59 a year ©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved Page 3 Lansing ponders pulling plug Hospitals merger: Rx for capital on electric regulation Beaumont-Oakwood-Botsford alliance would bolster assets BY JAY GREENE Michalski, Oakwood’s Brian Con- the cash flow clining reimbursement” from CRAIN’S DETROIT BUSINESS nolly and Botsford’s Paul LaCasse, and the greater Medicare and private payers, said D.O. — confirmed they signed a let- ability to ser- McTevia, a longtime health care The proposed merger of Beau- ter of intent Thursday to begin 90 vice debt,” said consultant in Southeast Michigan. Detroit neighborhood mont Health System, Oakwood Health- days of discussions to combine Jim McTevia, If a Beaumont-Oakwood-Bots- care Inc. and Botsford Health Care their organizations into a new $3.8 managing mem- ford deal materializes, the new sys- sprouts new development could give the new $3.8 billion billion health care system. ber of McTevia & tem would control eight hospitals, health corporation more afford- Crain’s had reported Thursday Associates in 3,015 beds and about 30 percent of Digital news: The digits not able access to capital that none of that a potential merger or alliance Bingham Southeast Michigan’s inpatient adding up on the bottom line the systems could achieve on their was imminent, citing sources close Farms. days. The new company would em- own, said several health care ex- to the deal. At the time, the hospi- McTevia “Hospitals ploy 25,500 workers, and the sys- perts in interviews with Crain’s tal systems declined to comment. have to have ac- tems have more than 5,000 physi- M&A Awards last week. “It makes sense from an access- cess to capital because there is so cians on its hospital medical staffs. Last week, CEOs of the three to-capital standpoint, because the much uncertainty in the future health systems — Beaumont’s Gene larger the institution, the greater with an aging population and de- See Hospitals, Page 30 GM ignition recall A ‘deal junkie’ is lifetime NATHAN SKID/CDB achievement winner, Page 11 South by Southwest: 12 days of tech music, film — and brand building. Inside may haunt Delphi It’s getting bloody for beef SOUTHWEST buffs as prices rise, Page 20 Supplier’s fate in liability case could be matter of timing This Just In BY DUSTIN WALSH from certain product liability obligations that oc- EXPOSURE CRAIN’S DETROIT BUSINESS curred before they emerged from bankruptcy, but it New restaurant options still may not be able to avoid penalties, experts say. A faulty part in as many as 1.6 million vehicles Delphi declined to comment on the issue for this Texas festival coming to Metro Airport could ignite legal and financial calamity for Delphi article. Automotive plc if it is held responsible for the ac- The issue comes down to whether the product li- A range of national and lo- tions of its bankrupt predecessor. is as much for cal restaurant chains plan 25 ability discharge for bankrupt Delphi Corp. is up- The Troy-based supplier of the defective ignition held in the face of civil suits and potential fraud new dining options for the switch at the center of a massive recall, investiga- McNamara Terminal at De- under a criminal investigation. brands as bands tion and public shaming of General Motors Co. could “This is relatively unprecedented and will make troit Metropolitan Airport. face mounting scrutiny over the hot-button issue. The Wayne County Airport for a great law school class,” said Mark Aiello, BY NATHAN SKID However, the unanswered questions in the in- partner at Foley & Lardner LLP in Detroit. “Forget CRAIN’S DETROIT BUSINESS Authority approved conces- quiry has left legal experts unsure of Delphi’s plight. sion agreements for the new about the complexity of a component that Delphi, as well as GM, is protected un- has failed; now you have the complex- The crush of people, brands and food and beverage sellers der Chapter 11 bankruptcy code bands at the South by Southwest Festi- that will open in the terminal val in Austin, Texas, creates brand See Delphi, Page 29 over the next year and a half. exposure, and this year Detroit com- Local restaurants with con- panies, musicians, attorneys and cession agreements include An- advertising agencies were there to diamo, Bigalora Wood Fired Cuci- capitalize on the opportunity. na, Plum Market, Zingerman’s Mark Rieth, owner of Detroit- Deli, Corridor Sausage Co., based Atwater Brewing Co., sent 2,100 Grobbel’s Gourmet Deli and Papa cases of Dirty Blonde Ale to the Joe’s Gourmet Market. Restau- nine-day conference and festival. rants based out of state include The beer was given away for free at P.F. Chang’s, Chick-fil-A, LongHorn more than 22 events over 12 days as Steakhouse, Bruegger’s Bagels, a way to plant Atwater’s flag in its Potbelly Sandwich Works, new market. Pinkberry and Espressamente Illy. The reason? The new restaurants will Atwater is building a $15 mil- add about 22,000 square feet lion, 80,000-square-foot brewing fa- to the terminal’s food and cility in Austin with the capacity beverage space. A photo of a Chevrolet Cobalt taken by an engineering firm hired by the lawyer for the family of a woman who died in a 2010 crash. — Nathan Skid See SXSW Page 30 Merging of the Minds (see our ad on pg 2) NEWSPAPER 20140324-NEWS--0002-NAT-CCI-CD_-- 3/21/2014 3:45 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS March 24, 2014 MICHIGAN BRIEFS Siemens donates $55.8M in sonal finance website, the Grand Rapids Business Journal reported. software to Mott College Doctor fired after Facebook post sues health system NerdWallet divided the number of Mott Community College in Flint re- people 65 and older by the total pop- ceived its largest in-kind donation An emergency room doctor has sued Grand nurse that showed the backside of a woman. Think- ulation in each of the nation’s 75 in school history with a $55.8 mil- Rapids-based Spectrum Health, saying her position ing she recognized the woman, Puetz posted a com- largest metropolitan areas in 2007 and 2012. The Detroit-Warren-Livo- lion software grant from Siemens was eliminated and she was wrongfully accused of ment: “OMG. Is that TB?” nia market ranks fourth. Corp. Siemens, the U.S. subsidiary violating the Health Insurance Portability and Ac- According to the suit, Spectrum investigated the Ⅲ The Ethisphere Institute, an in- of German-based Siemens AG, donat- countability Act over a comment she posted on post and comments. Some employees were fired and dependent research center that ed its product life cycle manage- Facebook, MLive.com reported. some not. Puetz said she submitted an apology and promotes corporate ethics and ment software to the school for Catherine Puetz, a former associate medical di- the chief medical officer said her job was not in jeop- governance, recognized Battle classes in manufacturing design, rector of emergency services, filed the lawsuit this ardy. Creek-based Kellogg Co. as a development and engineering. month in U.S. District Court against Spectrum and Puetz said she later was told she was being re- World’s Most Ethical Company, The software will be used in two executives. The lawsuit involves a Facebook moved from her leadership role but she would con- the Kalamazoo Gazette reported. It Mott’s curriculum for certificate post Puetz made in August 2013 in response to see- tinue as an emergency physician. Spectrum Health ing a picture posted by an emergency department officials declined to comment. is the sixth time Kellogg has been and associate degrees in design, given the designation. manufacturing and service indus- Ⅲ Los Angeles-based Malibu try specialties. from the Mississippi River system Vestar Capital Partners, a private eq- furniture manufacturer Haworth Media, which goes by the name Siemens, which has 13 offices in — connected to the Great Lakes via uity firm, signed a definitive Inc., has been named the Economic X-Art.com, has filed a lawsuit alleg- Michigan including Troy, Livonia the Chicago Sanitary and Ship agreement to acquire Hearthside Club of Grand Rapids’ Business Per- ing that numerous West Michigan and Plymouth Township, has made Canal — to travel to Muskegon un- Food Solutions from Wind Point Part- son of the Year. residents have illegally shared its more than $2 billion in investments der the restrictions they have to ners, a Chicago-based private equi- Ⅲ Forbes magazine says the products, MLive.com reported. and donations to nearly 30 of Michi- other Lake Michigan ports, such as ty firm, bakingbusiness.com re- Grand Rapids market ranks sev- The products: high-definition erot- gan’s community colleges and uni- Milwaukee. Currently, much of the ported. Downers Grove, Ill.-based enth on its list of “America’s Most ic films and photographs. versities. freight that comes in by water with Hearthside, the nation’s largest in- Affordable Cities 2014.” Buffalo, — Dustin Walsh West Michigan as its final destina- dependent baker and largest con- N.Y., topped the list, while Warren Find business news from tion first goes to the Chicago area. tract food manufacturer, has five rounded out the top 10. around the state at crainsdetroit “It would be a game-changer for plants in metro Grand Rapids. Ⅲ The Grand Rapids-Wyoming .com/crainsmichiganbusiness. Business, agriculture groups want West Michigan and potentially all of Ⅲ The state seeks civil subpoenas market ranks 10th on a list of Sign up for Crain's Michigan to open Muskegon to river barges Michigan as we look at the freight against Overland Park, Kan.-based “America’s Fastest-Growing Retire- Business e-newsletter at crains advantages from a cost standpoint of Ferrellgas propane company and its ment Places” by NerdWallet, a per- detroit.com/emailsignup.