20110801-NEWS--0001-NAT-CCI-CD_-- 7/29/2011 6:37 PM Page 1 ® www.crainsdetroit.com Vol. 27, No. 31 AUGUST 1 – 7, 2011 $2 a copy; $59 a year ©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 Auto’s gain coincides with Questions dog Detroit Works plan retraining programs’ loss still waiting for more details about how Bing Advocates want to see long-term strategy will roll out the plan. Schools power In the months ahead, Bing must juggle sever- up programs BY NANCY KAFFER something different. al tasks: implement the short-term plan while CRAIN’S DETROIT BUSINESS As Bing unveiled the first phase of the pro- continuing to develop a long-term plan, appro- to prepare ject, he offered not a long-term plan but a short- priately handle foundation dollars and federal students The Detroit Works Project, Detroit Mayor term solution that aims to make life better for funds targeted in demonstration areas, forge re- Dave Bing’s signature policy initiative, has Detroiters by changing the way city services lationships with community development ad- for electric been touted as a plan to make the city more are delivered according to neighborhood condi- vocates already working in the city and contin- functional by consolidating residents in seven tions — while concentrating outside dollars in ue developing a long-term plan that vehicle tech to nine of Detroit’s most viable neighborhoods. three demonstration areas. What the mayor described last week was And community development advocates are See Detroit Works, Page 19 Northward on Woodward: Oakland suburbs eye rail Inside AutoHarvest: Debt ceiling debate prompts soul searching in Michigan, Page 2 Marketplace GR-based Hope Network acquires New Passages for car tech in Pontiac, Page 4 Planned website to link Crain’s List IP providers, customers Largest law firms, Page 14 BY TOM HENDERSON CRAIN’S DETROIT BUSINESS Dave Cole, the former chairman of the Center This Just In for Automotive Research, and Jayson Pankin, a former Delphi Holdings LLP ex- ecutive, have formed the Au- Getrag technical center GLENN TRIEST toHarvest Foundation, a non- All paths to Detroit Mayor Dave Bing lead first to his chief of staff, Kirk Lewis. part of GKN’s acquisition profit to help automakers, auto suppliers and universi- England-based GKN plc last ties market and license their week acquired the all-wheel- intellectual property through drive components business From exile to gatekeeper a website it hopes to launch of private German supplier in its final form next year. Getrag AG, including its Those entities have patents North American technical Lewis back on the team, at his familiar position: Bing’s right hand and other intellectual proper- center in Sterling Heights. ty they would like to commer- Cole The business includes Ge- BY NANCY KAFFER — and the friendship — continued. cialize, and they are sure trag Corp., a North American CRAIN’S DETROIT BUSINESS “I mean, I may not have spoken to him, he there are potential customers joint venture with Dana Corp., may not have spoken to me (at the first post- or partners who would be in- and Getrag All Wheel Drive AB, Dave Bing and Kirk Lewis are on a winning departure match), but it’s like anything in terested. But until now, they a Swedish joint venture with streak. your family. You may disagree with folks, but have had no easy clearing- Dana and Volvo Car Corp. Every week, the mayor and his chief of staff you’re family,” Lewis said. house for finding them. GKN acquired the units play tennis with City Hall veteran Charlie Bing welcomed Lewis back into the fold as Potentially at stake, say for a reported $480 million. Beckham and former Detroit Lions cornerback chief of staff during a tumultuous week in mid- the foundation’s founders The deal is expected to close Lem Barney, a Hall of Famer like Bing. And June that saw the firing of former Chief Com- and industry supporters, are in September. for the past three weeks, Bing and Lewis have munications Officer Karen Dumas and the res- billions of dollars in revenue The acquired business been prevailing. ignation of then-Chief of Staff Shannon Holmes. and a broad shift in how com- units had combined revenue Over the years, the men have met to play at And thanks to an organizational restructur- Pankin panies and entrepreneurs of roughly $618 million in the Eastside Tennis and Fitness Club, at the ing completed last week, Lewis, 51, is once share technology to create products and profits. 2010. courts on Belle Isle when the weather is nice, again Bing’s right hand, the go-to guy for city “The auto industry has a lot of knowledge to GKN’s business is predom- or sometimes at the Fairlane Club in Dearborn. operations and the only direct report to the share. There’s a tremendous amount of intellec- inantly based in Asia, and The game, like the friendship, is longstand- mayor, overseeing every major department, tual property that hasn’t been tapped,” said ing. So enduring that when Bing fired Lewis See This Just In, Page 2 for three months this spring, the tennis game See Lewis, Page 20 See AutoHarvest, Page 21 Introducing the Business Side of Best Buy® BestBuy.com/business NEWSPAPER © 2011 BBY Solutions, Inc. All Rights Reserved. BBY11007 20110801-NEWS--0002-NAT-CCI-CD_-- 7/29/2011 6:18 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS August 1, 2011 Go to www.umuliforum.com THIS JUST IN for more information. State tries to plan for federal cash crunch — Daniel Duggan BY AMY LANE office. The Michigan Department of Trans- ■ From Page 1 CRAIN’S DETROIT BUSINESS Depending on the length and portation believes it has enough cash amount of loss of federal funding, on hand to meet its obligations for the new acquisition expands the Retail sales up in June LANSING — To run as a state, employees funded with federal dol- at least a month. But road builders supplier’s footprint in the North Retail sales performance in Michigan needs money from Wash- lars could be laid off and payments were watching the debt ceiling de- American and European mar- Southeast Michigan improved ington. in federally supported programs bate closely. kets, the company said in a re- in June, with 56 percent of re- But last week, there were more like Medicaid could be affected. But “The concern is that you end up tailers reporting growth over lease. questions than answers on what on Friday, the state budget office in a situation where a contractor May, according to a study by — Dustin Walsh might transpire if Congress failed continued to see those scenarios as has done work, has paid for prod- Michigan Re- the Lansing-based to reach a deal on the nation’s debt unlikely and believed a resolution uct, has paid for labor, and can’t get National developer to speak tailers Association, with 35 per- limit. would be reached in Washington. paid in a timely manner from the cent reporting a decrease and A central unknown, as of Crain’s About 25 percent of Michigan’s public agency,” said Mike Nystrom, at Detroit forum 9 percent showing a decrease. deadline for this story Friday, was workforce, and about 44 percent of executive vice president of the The growth topped statewide The national developer how the federal government would its overall budget, is supported with Michigan Infrastructure & Transporta- results, which show 42 percent scale back spending if there were no federal funds. tion Association. known for improving Florida’s of retailers reporting growth, South Beach and New York’s deal, potentially affecting payments State Budget Director John Besides operational areas, feder- 34 percent showing a decrease to states. Nixon said he and Treasurer Andy al money also supports debt service SoHo district will be coming to and 24 percent no change. Detroit as a speaker for the Uni- For example, Michigan every Dillon had been in discussions and on state building projects, said bud- The next three months are week makes about $400 million in department heads were going get director Nixon. And “if that fed- versity of Michigan/Urban Land In- not showing optimism, howev- stitute Real Estate Forum. cash draws from the federal govern- through all their perspective opera- eral money evaporates, it makes it er, with 44 percent of Southeast ment for areas that include Medic- tions to see what could be affected if harder for us to service the debt,” Tony Goldman, chairman and Michigan retailers expecting CEO of New York-based Gold- aid, education and transportation. federal support is reduced. he said. growth, compared to 39 percent As of midday Friday, state officials He said “the immediate issue is If the U.S. credit rating were to be man Properties, will speak at the expecting things to decline and forum’s 25th annual event on didn’t know how or if those draws it’s kind of a cash flow problem,” be- downgraded from AAA, there’s 17 percent expecting no change. might be affected and, if they are af- cause in several areas, like Medic- also a concern that could have a rip- Nov. 9. The forum, hosted in a — Daniel Duggan different Michigan city each fected, how rapidly Michigan would aid, the state makes expenditures ple effect to states and make it more year, is being held in Detroit need to cut its spending. and then is reimbursed by the feder- expensive for Michigan to borrow with the theme “Forged by In- Preservation Wayne gets chief “It would depend on how much al government in the cash draws.