Detroit Business is Up

Story first appeared in The Detroit News.

Not since the upbeat days of the Archer administration have so many Metro Detroit business and civic leaders shared so much optimism as they again converge on Mackinac Island for their annual confab, starting today.

Despite serious financial challenges at City Hall, a growing amount of private capital is flowing into the beleaguered city to claim first-mover advantage on the ground floor of a new Detroit. Driving the change is an inter-generational entrepreneurialism that sees business opportunity and the chance to reshape positively the city's battered, undervalued assets.

The conditions are right: The hometown auto industry, on the verge of collapse three years ago, is roaring back with profitable sales driven by innovation, new leaders and lean, competitive operations. The state, led by the Governor, is delivering financial stability and more business-friendly policies just as the auto restructuring is taking hold and the national economy is improving, however slowly.

And Detroit? A looming financial collapse that required still-evolving state intervention promises, if nothing else, to arrest a slide that has been accelerating under the pressure of weak leadership and even weaker financial management. Still, that would be progress.

It is a good chance, anyway, if conditions that the region's business and civic leaders cannot control -- the details of Detroit's financial workout, the economic impact of political instability in the eurozone, the outcome of November's elections at the state and federal levels -- cut the right way and quicken an unmistakable sense of momentum.

The emerging set of players do think differently, in many respects, because they've been entrepreneurial.

The optimism is legitimate, bolstered by the fact that the painful economic decline of Michigan's "lost decade" and the automotive meltdown finally are forging the real structural reform that '90s-era leaders in autos and the city failed to deliver. Instead of fleeing a manifestly troubled and poorly managed city, savvy business is investing heavily in the municipal equivalent of an undervalued stock.

They're also bringing more taxpaying employees into a city desperately in need of them, a critical precondition for reversing Detroit's population flight, bolstering its tax base and attracting new investment in retail and other services.

What gives you confidence now is some of those structural issues are fixed at the autos and are on their way to being fixed at the state.

Investment in Detroit, focused on downtown and Midtown, increasingly is less dependent on do-good philanthropy and what Cullen called "huge levels" of public subsidies. It's important to note these things are more market-driven. Do we need some support in Detroit? Yes, we do. But the gap continues to shrink.

And the evidence mounts:

Two hospital systems -- Detroit Medical Center and Henry Ford Health Systems -- together are spending more than $1.5 billion in their respective Detroit locations. Blue Cross Blue Shield of Michigan, among other corporate players, is concentrating its workforce downtown.

Gilbert's Quicken Loans Inc. has acquired nine buildings downtown totaling 2.5 million square feet, spent roughly $250 million on renovations, consolidated 5,000 employees in the city and claimed the role as Detroit's corporate change agent-in-chief. Chrysler Group LLC is opening an office in Gilbert's Dime building, to be renamed "Chrysler House," to house its Great Lakes region sales staff and CEO Sergio Marchionne -- when he's in town.

Downtown office buildings, relics of Detroit's golden age, are being eyed for possible conversion to lofts to satisfy growing demand for rental space. Whole Foods, the trendy Texas-based food retailer, is beginning work on a Midtown store that arguably is as valuable for the statement it makes as the fresh produce it will offer the city.

The list goes on: The Ilitches, owners of the Detroit Tigers and Red Wings, are moving ahead with plans to build a new arena near their Foxtown headquarters -- a development that would make that quarter of the city a year-round hub of professional sports and likely spawn a whole new round of spin-off investment in restaurants, bars and small retail.

People see opportunity, not reasons we shouldn't be doing something. There's enough positive momentum. It really is about building that sense of confidence.

And not growing complacent, a recurring malady in a town -- and state -- that has suffered the hard lessons of arrogance, confrontation and ignoring the competition. There is another way, and it's beginning to unspool in the heart of a city given up for dead.

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GM Transplants in Lansing Adjust

Story first appeared in The Detroit News.

A General Motors worker drives 600 miles so he can mow the lawn.

He's only half-kidding. Every other weekend, he and his roommate pack the car and drive straight to Tennessee at the end of their graveyard shift at General Motors Co.'s Lansing Delta Township assembly plant. They share the driving so the other can nap.

They're home for about a day and a half before it's back to Michigan and back to work.

These are the "transplants" — GM workers represented by the United Auto Workers union who headed north two years ago when the Detroit carmaker shut down part of its Spring Hill, Tenn., operation and shifted production of the Chevrolet Traverse to the Delta plant, adding a third shift of about 1,000 workers in the process.

They are among the 560 General Motors employees in Lansing who have spent the past two years living, in essence, double lives: full-time worker at the Lansing Delta Township assembly plant, part-time family member — in person, at least — in Tennessee.

For some of them, the choice to take the carmaker up on a three-year transfer wasn't much of a choice at all: anything to stay employed. Many have worked for GM for decades and are among the set of UAW-represented workers whose pay averages about $29 per hour. Add in benefits and the relocation package GM offered them — $30,000 and the ability to retain their seniority toward their pensions — and transferring for many appeared to be the best decision.

But it also has meant a radical departure from their daily lives, geographically and figuratively, as they adapt to communicating with their families via cellphone or computer, paying rent along with their mortgages on houses they own in Tennessee and missing family birthdays and other milestone events.

GM plans to reopen the manufacturing plant in Spring Hill, initially to make the Chevrolet Equinox small crossover later this year. A company labor executive last fall said the idled plant could see an initial infusion of $62 million and 685 workers. Spring Hill also could land new midsize vehicles for the 2015 model year, which would boost production there by as many as 1,200 jobs and $183 million.

They hear rumblings now, the Tennessee workers, that the UAW and GM are trying to work out a deal to let some Spring Hill transfers, who are spread out in factories nationwide, return home before their three-year terms end. They don't know if it's true. The company and the union are silent on the question. Some local workers say they could be packed to leave in 20 minutes if it happens.

They don't have anything against Lansing. But, they figure, why should they tie up a job in a place that doesn't belong to them when there are plenty of Michiganians who would line up at the mere thought of a "now hiring" sign and spend their paychecks here?

The Traverse started rolling off the Lansing Delta Township assembly line as part of GM's recovery plan after its quick trip through bankruptcy in 2009 to consolidate its operations and improve efficiency. Some of that plan involved shutting down and selling off brands — it jettisoned the Pontiac, Saturn, Hummer and Saab nameplates — closing plants and turning the remaining facilities into three-shift operations running basically around the clock.

Now, nearly six years after the Delta plant opened in late 2006, 3,123 hourly and 257 salaried workers have jobs at the facility, boosted partly by a third shift added in 2010 when the Traverse went into full production locally.

Most of the 560 Spring Hill workers accepted $30,000 relocation agreements that require them to work three years in Lansing before they would be eligible to transfer elsewhere. They aren't guaranteed jobs in Spring Hill. Twenty-five are here on $4,800 basic relocation deals that grant them contractual recall rights, or top preference, to return to Tennessee as jobs arise.

A Lansing-based GM spokeswoman, said she doesn't expect plans to re-open the Tennessee factory to have an immediate impact on Delta Township production.

Spring Hill, Tenn., is a suburban city of 29,000 about 40 miles southwest of Nashville. Its website heralds its "blend of commerce, history and country living." For awhile, its name was synonymous with Saturn, as the small city's assembly plant was for a time the only place in the country where the General Motors Co. brand was built. Locals know State Route 396, on which the plant is found, as Saturn Parkway.

Saturn was supposed to be "a different kind of car company," and for awhile it was. Spring Hill landed the facility in 1985, and the first vehicle came off the line five years later. It was intended to be GM's answer to small-car competition from foreign automakers. The chairman of United Auto Workers Local 1853 in Spring Hill, said people came from 45 states and 144 different plants to work at Saturn before the company ended the division in 2010.

To understand the impact GM has had on the Middle Tennessee community, it's important to understand two distinct trends. Spring Hill in the last decade experienced what can only fairly be called a population explosion. In 2000, the number of people who lived there numbered only 7,715. That figure soared 276 percent by the 2010 Census. It was so rapid, in fact, that in January of that year, Little Rock, Ark.-based data production firm Gadberry Group ranked Spring Hill as one of the nation's fastest-growing cities in 2009. The reason? General Motors.

And in that same decade, which saw GM executives idle production there in 2009 amid corporate-wide restructuring and bankruptcy proceedings, unemployment in Maury County quadrupled — from 3.6 percent in 2000 to 14.1 percent in 2010, according to U.S. Bureau of Labor Statistics seasonally unadjusted data.

While that can't entirely be attributed to idling the plant — it happened in the midst of the nation's most devastating economic downturn since the 1930s — it does offer some insight into how influential the auto industry became there.

Spring Hill Manufacturing never truly shut down. About 1,000 people remained on the job, mostly those with the highest seniority. At its lowest point, about 600 people worked there. The plant didn't manufacture any vehicles, but instead focused on engines, steel stamping operations and injection molding.

The factory is positioned on more than 2,000 acres on what once was agrarian land. To this day, it's still a working farm. The region served as a Civil War battleground, first in the Battle of Spring Hill in November 1864 and, a day later, in the Battle of Franklin. Re-enactors occasionally set up near the plant.

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Update to Michigan Medical Malpractice Laws

Story first appeared in The Detroit News.

It's not in the state Governor's health care plan, but medical malpractice tort reforms could help Michigan deal with a nationwide doctor shortage. Other states — Texas most recently — have overtaken reforms Michigan adopted in the 1980s and 1990s.

Loopholes and ambiguous legal provisions are eroding controls that once made this state a national leader in avoiding unwarranted and overblown liability awards, according to the Michigan State Medical Society. That could make it harder to recruit enough doctors to meet the growing needs of an aging population, not to mention the expected surge in newly insured families under the 2009 federal affordable health care act.

Even if we take this step, trends aren't in our favor. One in every four Michigan doctors is older than 60 and approaching retirement, says the Medical Society, which represents about 16,000 Michigan doctors.

Studies suggest the state will have a shortage of more than 4,500 physicians in fields such as pediatrics and internal medicine by 2020.

Almost two-thirds of the state's doctors told the Medical Society in 2010 that their practices were full and they can't take more patients, up from 42 percent five years earlier.

And the federal health care law and its insurance exchanges, should it be upheld, would bring 75,000 additional Michiganians into the market for regular physician care.

There is a new package of bills to restore the limitations on non-economic damages that were intended by earlier malpractice liability reforms. Those limits were among the most effective of the rules that ended Michigan's long and dubious distinction as a haven for liability lawsuits in the 1980s.

Non-economic damages used to dramatically drive up the totals won by lawyers for their medical malpractice clients. Juries were encouraged to pile on tens of thousands of additional dollars in penalties based on concepts such as pain and suffering.

While complex, the legislation makes a clearer distinction between economic damages, such as lost wages and legal bills, and non-economic damages. According to the Medical Society, lawyers have found ways to as much as double the limit, which is supposed to be just under $500,000 for fuzzy problems such as loss of companionship.

Detroit Medical Malpractice Lawyers feel that the legislation also would eliminate "lost opportunity" as reason for upping the tally. The state Supreme Court has sought a clarification of legislative intent for this terminology, but proponents of the bills say many other states don't even include it in their laws.

Patients harmed by physicians' misdiagnosis, inappropriate treatment or unreasonable delays in providing care still could sue for damages. A patient also might have a case against a doctor who didn't provide enough information, such as that a particular surgery had a 30-percent chance of resulting in paralysis.

The proposed changes deserve to be fully aired and debated, according to Grand Rapids Medical Malpractice Lawyers. It's in our best interests to make sure Michigan welcomes doctors looking for a place to set up a practice.

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Grand Rapids Bar Owner's Career A Colorful Tale

Story first appeared in The Detroit Free Press.
What do Ayn Rand, Warren Buffett, the Titanic, rock bands, a hedge fund and Michigan craft beer have in common?

All are intertwined with the splendidly erratic career of a Grand Rapids bar owner.

At age 43, with the man presumably only midway through life's journey, more plot twists undoubtedly lie ahead -- but let us begin with the present day, then flash back through the zigs and zags from Michigan to Boston, L.A. and Chicago before returning to his hometown.

He is on the verge of announcing that his newest project, the Grand Rapids Brewing Co., will be Michigan's first all-organic brewery when it opens in August.

He and his wife are already key players in the downtown Grand Rapids bar and restaurant scene, by virtue of opening the HopCat beer bar in 2008, followed two years later by Stella's Lounge and the adjacent Viceroy speakeasy-style joint a block away.

Their Barfly Ventures holding company also bought McFadden's Irish Saloon, and he is landlord and financier to the Pyramid Scheme bar and indie rock venue nearby.

Via HopCat's Facebook page, he led a crusade that vaulted Grand Rapids to the top of a National Beer Examiner poll last week as co-winner of the 2012 BeerCity USA title, tied with Asheville, N.C.

HopCat, which brews craft beers along with selling about 40 others on tap from around the globe, will make good tonight on a promise that if Grand Rapids won the BeerCity poll, patrons could buy $1.50 pints of Michigan craft beer for one night.

All of his bar and restaurant ventures, including revival of the Grand Rapids Brewing name that dates to 1893, are in historic downtown buildings.

In search of purpose

None of this, including the return to his hometown in 2007, was ever part of a plan.

He was born in Kalamazoo and raised in Grand Rapids, where his parents divorced when he was 15. He attended college for a while, enjoyed the campus life but not the classes -- and dropped out of Michigan State University.

He taught himself to play piano well enough to get into Berklee College of Music in Boston, but didn't stick with that, either, and migrated to Los Angeles, where he played keyboards and guitar with some rock bands.

He also discovered that he was better at the business side of the band than he was as a musician.

Armed with newfound passion and focus, he re-enrolled at MSU and aced his business courses en route to a degree in accounting.

A wild ride

He landed a job with GE Capital in Chicago and then moved to Morningstar, where he authored the investment firm's newsletter and became chief equities strategist before leaving in 2005 to start his own hedge fund, Sellers Capital.

Oh, and during his Chicago stint, he earned a master's in business administration at Northwestern University.

He raised $12 million from investors and by 2008 was managing a $300-million portfolio -- but then got whacked by the big financial crisis and stock market plunge.

He and his wife had already resettled in Grand Rapids, where they found they could have a 5,000-square-foot house for the same price as an apartment one-third the size in Chicago.

Late in 2008, he decided to sell all of his funds' stocks and return the money to investors -- except one stock, Premier Exhibitions, which holds salvage rights to the Titanic.

Premier operates touring exhibitions, including "Titanic: The Artifact Exhibition," on display at the Henry Ford through Sept. 30, during the 100th anniversary year of the Titanic's sinking. Its stock has been selling between $2 and $3 a share since early April, and has a total market value of about $128 million.

How to find your niche
Although his HopCat bar and brewery is profitable now, he said it was not conceived as a vehicle to make money.

He made some decidedly un-commercial moves there.

HopCat banned smoking in the bar from its opening in 2008, two years before Michigan's smoking ban took effect. And refuses to sell national mega-brands Budweiser, Miller or Coors, even in bottles.

He said craft beer lovers are a different breed -- they like to smell the brew and swirl it, and increasingly, they come from far away to visit Founders, the biggest and best-known of Grand Rapids' craft-beer makers, and the region's growing cluster of smaller brewers and beer bars.

He said the fact that he's now making money, despite being called crazy for the no-smoking and no-Bud stances, just proves the old adage about working at something you love.

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Tribe Plants Trees to Soak Up Toxins in Polluted Land

Story first appeared in the Record Eagle.

A northern Michigan Indian tribe will plant thousands of black willows on a contaminated site, hoping the trees will help cleanse the area by pulling toxic chemicals from the ground, a leader said Wednesday.

The 1.5-acre parcel near Manistee was an industrial site for decades, and the Little River Band of Ottawa Indians acquired it in 1998. A sawmill was located there in the 19th century. Later came a salt mining operation, chemical companies, and plants that manufactured asphalt and fiberglass.

Archangel Ancient Tree Archive, a nonprofit group that clones some of the world's biggest and oldest trees to preserve their genetics, is donating the black willows. Between 3,500 and 4,000 will be planted, said Meryl Marsh, the organization's director of operations.

Scientists say some trees and other plants can remove heavy metals such as zinc and cadmium from the soil through their roots and store them in stems, shoots and leaves-- a process known as phytoremediation.

It's a far cheaper option than scraping up the contaminated dirt and replacing it with fresh soil, Mitchell said. This is a far simpler, and more natural approach to ridding the area of the contaminants.

The tribe will take core samples yearly to analyze how well the trees are performing. The tribe is hoping that eventually the land can be used for something else.

The fast-growing black willow, with its netlike root systems, is among the most widely used species for phytoremediation. It's also well-suited to the moist soils of the polluted site near Manistee Lake, a swollen river mouth that flows into Lake Michigan.


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