20100621-NEWS--0001-NAT-CCI-CD_-- 6/18/2010 6:50 PM Page 1 ® www.crainsdetroit.com Vol. 26, No. 25 JUNE 21 – 27, 2010 $2 a copy; $59 a year ©Entire contents copyright 2010 by Crain Communications Inc. All rights reserved Page 3 Huron Capital’s Ross sale Medicaid match in question ‘top notch’ – 19 times And if the state doesn’t receive feder- funding, are concerned that Michigan original investment State budget al Medicaid money that’s fallen into de- would need to make significant cuts bate, “the types of programs that would not only in a strained Medicaid pro- This is be in jeopardy, either in part or in gram, which already has providers “ Bankruptcy deadline nears counting on whole,” would be Medicaid prescrip- swallowing reduced reimbursements, obviously for Greektown Casino Hotel tion drug coverage, payments to Medic- but in other areas of state spending. critical for federal funds aid providers, mental health services, “When you’re talking about that revenue sharing and university fund- kind of money, any association ought Michigan. BY AMY LANE ing, said Liz Boyd, Gov. Jennifer to be scared out of its wits right now,” ” Inside CAPITOL CORRESPONDENT Granholm’s press secretary. said Ben Bodkin, legislative coordina- “This is obviously critical for Michi- tor for the Michigan Association of Coun- Liz Boyd, LANSING — A battle playing out in gan,” she said. ties. “It’s a real big deal, and we’re wor- governor’s office X $3M grant to help unify Congress could punch a new $514 mil- Health and human services four business accelerators, lion hole in Michigan’s budget. providers, and recipients of other state See Medicaid, Page 25 Page 6 Second Stage Extra Going with the cash flow Details murky Grede typifies story of supplier survival on petition BY JAMES TREECE CEO Doug CRAIN NEWS SERVICE Grimm — drive over shown at a Doug Grimm, CEO of Grede furnace at Holdings LLC, follows a strict regi- Grede men in running his foundry com- Holdings DPS control pany in Novi. LLC’s “At 10:30 every day,” he says, “I Reedsburg, Wis., facility get my cash position.” — says the Could Bing’s As industry volumes pick up supplier’s and the recession begins to ease, survival many parts suppliers continue to depended on clout be tested? When is the right time struggle with tight cash flows. ruthless cost to take a company public? Grede cutting and BY NANCY KAFFER (pronounced attention to CRAIN’S DETROIT BUSINESS Page 10 cash flow. At 10:30 GREY-dee) A petition drive regarding may- “ was formed oral control of the Detroit Public This Just In every day, by the merg- Schools is afoot, but details about er of two PHOTO COURTESY OF GREDE HOLDINGS LLC the petition, its end goal, backers, I get my companies funders and potential impact on Harvard Drug Group wins that had more than $8 billion. the political clout of Detroit Mayor been in license suspension reversal cash “We don’t expect the tier-ones Dave Bing are Chapter 11 a ANATOMY OF A SUPPLIER to go back to paying their tier- up in the air. Livonia-based Harvard Drug combined Headquarters: Novi Group and the U.S. Drug En- position. twos at that faster rate,” says Bing has said three times Formed: In February from ” Daniel Cheng, an A.T. Kearney he’s ready to forcement Agency have struck in the past merger of Grede Foundries Inc. Doug Grimm, partner and head of the compa- lead the school an agreement to modify the decade. and Citation Corp. Grede Holdings LLC ny’s automotive practice in North district, should DEA’s order that suspended Today the Sales: Estimated at America. voters approve a Harvard’s registration to sell restructured company is well-cap- $625 million in 2010 The foundry industry was fair- measure, and some controlled substances italized, with a diverse customer CEO: Doug Grimm to hospitals, physicians, pain ly insulated from imports, and the has indicated base. But a look at Grede’s recent Size: 2,700 employees, 14 high cost of setting up a foundry that a petition clinics and pharmacies. history shows how relentless the foundries, two machining plants The agreement, which was presented a barrier to new en- drive is under financial strains have been. Products: Castings of 1 to trants. Even so, the sector suf- way. Bing reached earlier today, covers Every day that Grede’s cus- 2,000 pounds certain controlled sub- fered from overcapacity and cut- But organizers aren’t saying tomers are supposed to pay for Largest shareholder: Wayzata throat price competition even much. stances, including steroids parts already delivered, staffers Investment Partners and codeine. before volumes tumbled with the There are three ways to bring a begin calling to make sure the ballot question before Detroit vot- But the agreement did not A recent study by Chicago- credit crisis of 2008. Then things payments are made. If customers ers. One is an initiatory petition, cover Schedule II drugs like based consultants A.T. Kearney Inc. got worse. can get by with paying one week as described under state law, in oxycodone manufactured at backs Grimm up. The delay in “When Lehman Brothers col- late, Grimm says, they’ll see which the signatures of 5 percent Harvard’s Livonia plant, payments from automakers to lapsed, my banks said, ‘Take out whether they can delay for two of registered voters are collected, tier-one suppliers stretched from your GM and Chrysler business, weeks. which must be filed by Aug. 24. See This Just In, Page 2 an average of 50 days in 2005 to 62 and all automotive, then tell me Does that sound cynical? Another kind of initiatory peti- days in 2009, the study found. what positive cash flow you’ve tion, described by the Detroit City But that was nothing compared got,’ ” Grimm recalled. Charter, must be signed by 3 per- with the delay in payments from Grede, along with other suppli- cent of voters who cast ballots for tier-one suppliers to tier-two sup- ers, attacked costs with a chain the office of mayor in the last gen- pliers. saw. eral election. The deadline to file From 2005 to 2009, tier-one sup- “We cut one-third of our work- that type of petition is also Aug. 24, pliers nearly doubled the delay force and had managers running said Daniel Baxter, Detroit direc- from 26 days to 47, increasing tier- machines,” Grimm said. Three tor of elections. two receivables — essentially, times in 2009, all employees were The Detroit City Council also NEWSPAPER money that tier-twos have been forced to lend to tier-ones — by See Grede, Page 24 See DPS, Page 25 20100621-NEWS--0002-NAT-CCI-CD_-- 6/18/2010 6:43 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS June 21, 2010 Another former Campbell ing development in Detroit for Kaffer will be honored at an THIS JUST IN The way it was: 1987 homeless youths and their chil- awards ceremony during employee joins Angle Advisors dren — and other families. SBAM’s Annual Meeting and ■ From Page 1 Throughout our 25th-anniversary Another former W.Y. Campbell & Oakman Place Apartments will Networking Luncheon Thursday year, Crain’s will use this space Co. investment banker has joined include 24 units and supportive at the Kellogg Hotel and Confer- said Stephen Glazek, an attorney to look at interesting items from Birmingham-based Angle Advisors- services. It is to be on Woodrow ence Center in East Lansing. with Barris, Sott, Denn & Driker past issues. Investment Banking LLC. Wilson and Oakman Boulevard PLLC, Detroit, who represents Matthew Zwack, who had been a on less than 1 acre of land bought Harvard Drug. Red Cross regional chapter The director at the Detroit-based from Focus: HOPE for an undis- “We could ship it from another “ firm, which is owned by Comerica closed amount. transfers blanket program warehouse, but we decided to symphony on Inc., has been named a director at The group has contracted with work with the DEA” to put in The American Red Cross, South- Angle, which was founded in real estate company The Damone place additional systems and pro- eastern Michigan Chapter has Woodward? April by two other former Camp- Group LLC in Troy for the project, cedures to detect and prevent ille- transferred its emergency blan- bell bankers, Cliff Roesler and which is expected to be just under gal diversions by customers, ket program to Detroit-based That’s music to the ears of Kevin Marsh. 26,000 square feet. Glazek said. World Medical Relief, in re- Zwack focuses on mergers and The group said in a news re- In the past three years, the anybody who cares about sponse to decreased operational acquisitions and raising capital lease that it plans to contract DEA has also ordered other oxy- funding and increased need for for companies that do industrial with Fenton-based Premier Proper- codone distributors, such as Detroit. its other services. manufacturing and metal pro- ty Management LLC to manage the AmerisourceBergen, Cardinal Health “As our national organization ” cessing or are in the energy, auto- project. and Bellco Drug Corp., to improve From a Jan. 19, 1987, editorial continues to challenge local motive or consumer product mar- — Sherri Welch their oversight systems to pre- addressing reports that the Detroit chapters to increase capacity in kets. vent drug diversions, Glazek Symphony Orchestra would move our unfunded congressionally from Ford Auditorium to its home Angle now has a staff of nine, said. mandated services (health, safe- from 1919-1939: Orchestra Hall, including five Campbell alumni.