Michigan Business News Blog

Great Lakes Reps Want to Separate from Mississippi River

2012-01-31T09:58:00.000-05:00

First appeared in Associated Press

Groups representing states and cities in the Great Lakesregion on Tuesday proposed spending up to $9.5 billion on a massive engineeringproject to separate the lakes from the Mississippi River watershed in theChicago area, describing it as the only sure way to protect both aquaticsystems from invasions by destructive species such as Asian carp.

The organizations issued a report suggesting threealternatives for severing an artificial link between the two drainage basinsthat was constructed more than a century ago. Scientists say it has alreadyprovided a pathway for exotic species and is the likeliest route through whichmenacing carp could reach the lakes, where they could destabilize food webs andthreaten a valuable fishing industry.

"We simply can't afford to risk that," said TimEder, executive director of the Great Lakes Commission, which sponsored thestudy with the Great Lakes and St. Lawrence Cities Initiative. "The GreatLakes have suffered immensely because of invasive species. We have to put astop to this."

The report's release is sure to ramp up pressure on the U.S.Army Corps of Engineers, which is conducting its own study of how to close off18 potential pathways between the two systems, including the Chicago waterways.The corps plans to release its findings in late 2015, a timetable it says isnecessary because of the job's complexity and regulatory requirements. Apending federal lawsuit by five states - Michigan, Wisconsin, Minnesota, Ohioand Pennsylvania - demands quicker action.

"This study shows that hydrological separation is bothtechnically and economically feasible," said Rep. Dave Camp, a MichiganRepublican.

A spokeswoman said the corps would not comment until itcould review the report.

The project that linked the two drainage basins began in the1890s when engineers reversed the flow of the Chicago River to flush sewageaway from the city and into a newly built, 28-mile-long canal that created aconnection between Lake Michigan and the Illinois River, a tributary of theMississippi. It is now a network of rivers, locks and canals.

In their report, the two groups call for placing barriers atkey points to cut off the flow of water between the two drainage basins by2029.

One alternative would put barriers in five locations nearLake Michigan. Another would erect a single barrier in the ship canal before itbranches off into connecting waterways. A third plan would use four barriers.

The report does not express a preference but says thefour-barrier plan would cost less than the others - between $3.26 billion and$4.27 billion. That plan, the report says, would cause less disruption ofwaterborne commerce and fewer problems with flood and stormwater control, allof which opponents contend would result from dividing the two systems. It also comesclosest to restoring the natural divide between the watersheds, said DavidUllrich, executive director of the Great Lakes and St. Lawrence CitiesInitiative.

The report doesn't make a detailed proposal for covering thecosts but says the four-barrier plan could be done if the average household inthe Great Lakes basin paid about $1 a month through 2059.

The five-barrier and single-barrier plans' price tags couldreach about $9.5 billion.

Despite the high cost, the report's sponsors said theproject would save money in the long run by shielding both systems from speciesinvasions. Zebra and quagga mussels and sea lamprey already have exacted aheavy toll on the Great Lakes economy, and the region's leaders fear the Asiancarp could make things much worse.

"Yes, it's expensive. But the cost of doing nothing isgreater," Ullrich said.

Asian carp escaped from Southern fish farms and sewagetreatment plants decades ago and migrated up the Mississippi and itstributaries, gobbling up plankton that is essential for other nourishing otherfish.

The study, commissioned by the two groups and developed by aprivate engineering firm, will make the idea of separation easier for people inthe region to grasp, said Joel Brammeier, president of the Alliance for the GreatLakes, a Chicago-based environmental group.

"It's a natural, practical, on-the-ground map of how toget it done," Brammeier said.

Mark Biel, chairman of an Illinois business coalition calledUnLock Our Jobs that opposes separating the watersheds, said the Great Lakesgroups' proposals would take many years to carry out and would devastate cargoshipping and pleasure boating in the Chicago area while doing nothing to preventspecies invasions elsewhere.

"Calling this a solution is ludicrous," Biel said.

But the report's authors said their plan envisions upgradesto docks and other infrastructure that, in the long run, would boost watercommerce while improving water quality and flood protection. The barriersthemselves would make up just 3 percent of the total cost.

The Army Corps of Engineers contends an electric barrier inthe shipping canal is preventing Asian carp and other fish from swimmingupstream toward Lake Michigan, although carp DNA has been found beyond thedevice. Eder said the barrier is a good temporary measure, but not a permanentsolution.

"It's kind of like the old Clint Eastwood adage, 'Howlucky do you feel?'" he said. "We can take chances that the electricbarrier and other measures will work, but I don't think we should."

Legislation to Tax Internet Purchases?

2012-01-19T14:11:00.000-05:00

First appeared in Up North Live

Governor Rick Snyder is set to deliver his state of thestate address -- and many retailers hope that this year he takes action on abill that would close a tax loophole on online sales.

If you shop online, chances are you're probably breaking thelaw. That's because internet retailers like Amazon.com don't collect Michigan's6% sales tax. They don't have to, but you are legally obligated to pay it.

The loophole is something many local businesses wantchanged.

Horizon Book Sales Manager, Amy Reynolds says it puts themat a competitive disadvantage.

By forcing internet retailers to charge the sales tax itcould also bring millions of much needed revenue to Michigan.

The legislation would require online businesses to offer alink to another website where the buyer would make purchases and the internetstore could then collect the taxes.

Michigan Unemployment

2012-01-19T14:02:00.000-05:00

First appeared onAssociated Press

Michigan officials say thestate's unemployment rate fell sharply again in the latest month to 9.3percent, the lowest level in more than three years.

The state said Wednesdaythat December's seasonally adjusted unemployment rate was down 0.5 percentagepoints from November's 9.8 percent and down 1.3 points from October.

The national unemploymentrate was 8.5 percent in December.

The Bureau of Labor MarketInformation and Strategic Initiatives says the number of Michigan residentsworking rose for the fourth straight month in December. Meanwhile, the size ofthe civilian labor force continued a drop that saw 100,000 fewer people workingor looking for work last month than one year earlier.

The last time the Michiganunemployment rate was lower was September 2008, when it stood at 8.9 percent.

Windpower Project Cancelled

2012-01-19T13:59:00.000-05:00

First appeared at Up North Live

Duke Energy pulls plans to build 112 turbines in NorthernMichigan

After months of debate, Duke Energy has decided it will nolonger move forward with it's wind project plans in Benzie and ManisteeCounties.

The company spent more than a year signing contracts withdozens of landowners, setting up job fairs, and hosting public input meetings.

Community members were divided over the Gail WindpowerProject that would have created 112 turbines in their backyards. The issue evenled to the recall of three Joyfield Township board members in 2011.

Duke Energy says the decision was made because they couldn'tsecure a long term agreement with a power purchaser.

The company notified landowners earlier this week abouttheir decision.

GM Sales Soar

2012-01-11T13:31:00.000-05:00

First appeared on CNN Money

General Motors is poised to once again be No. 1 in global auto sales, after three years out of the top spot.

It's a comeback that will be official when final 2011 sales figures are reported in the coming weeks.

Recapturing the top spot seemed unthinkable in 2008 when GM lost the title. At the time, the company was in a tailspin. Its very future was uncertain, and a bankruptcy filing and federal bailout loomed.

Toyota held the title between 2008 and 2010.

GM's feat is also a contrast to other U.S. industries that lost leadership to overseas competitors, never to see it return.

Cool cars from the Detroit Auto Show

GM (GM, Fortune 500) never lost the lead in U.S. sales, but its market share here slid nearly continuously for decades, from 44% in 1980 to only 19% in 2010. But for at least the last two years that trend has been reversed, helping GM quickly return to profitability in the wake of its bankruptcy.

But its home market is only part of the sales story.

It is also the largest automaker in China, which has become the world's largest market for auto sales. It sold about 2.5 million vehicles in China, narrowly edging out its U.S. sales once again, as it increased both sales and share there.

"They continue to be awfully strong in the U.S. and China. If you can conquer those two markets, you've got two-thirds of the world," said Rebecca Lindland, director of research for IHS Automotive.

GM CEO Dan Akerson downplayed the significance of the title when speaking with reporters at the Detroit auto show Monday.

"I like profitability more than I do market share," he said. "We're a mass producer, and scale matters to us, therefore we're pleased with that accomplishment."

Market share vs. profitability: In the past GM had held onto market share and its No. 1 rank by cutting prices on cars to the point where they were unprofitable. Bob Lutz, former vice chairman of GM, said worrying about their market share rank did the companies more harm than good. (Fiat 500 sales goal 'incredibly naive')

"There is absolutely nothing to be gained by being the world's biggest," he said. "I tried to tell them to say, no, it's not our objective to be No. 1. But they just couldn't do it."

But Lindland said GM can be pleased that it got back on top without that kind of deep discounting and grab for market share.

Through the first three quarters of last year, GM's 6.8 million vehicles sold was well ahead of both No. 2 Volkswagen, at 6.1 million, and No. 3 Toyota Motor (TM), at 5.8 million.

VW has reported final global sales of 8.2 million for the year, but GM should easily top that mark, analysts said.

How long GM will be able to hold onto its lead is uncertain. Toyota is is expected to post a sharp rebound this year after disruptions caused by the earthquake and tsunami that hit Japan in March.

"I don't think we've set the goal to be the largest manufacturer in the world. I think the lead is going to trade off," said Akerson. "I wouldn't count Toyota or any of our competitors out. But we're having a good run now. I'm very pleased by our product."

Lincoln Needs to be Good for Ford

2012-01-11T13:26:00.002-05:00

First appeared in CNN Money

It's been a long time since the Lincoln car brand has been a serious luxury contender, but Ford Motor Co. hopes to change that, starting with new the MKZ sedan, a preview of which was unveiled at the Detroit Auto Show.

The MKZ concept car is sleek and elegant and, perhaps most importantly, looks like something you'd expect to pay real money for. It also sports some intriguing technology like automatic adaptive suspension that, Ford executives boast, will give the car a combination of smoothness and performance that will stand up against the best in the business.

Also planned will be a panoramic sunroof that actually opens wide over the entire cabin for a near-convertible experience.

Panoramic sunroofs aren't new, but most only open over the front seats.

Now that Ford (F, Fortune 500) has sold off the European luxury brands -- Aston Martin, Land Rover, Jaguar and Volvo -- and killed off the mid-level Mercury brand, the automaker wants to turn Lincoln back into a real luxury player.

Cool cars from the Detroit Auto Show

"We don't have the luxury of getting anything wrong," said Kevin Cour who's in charge of sales and service for the brand.

Others have gone down this path before and made it work. Ford needs only to look at GM's success with Cadillac and Buick, experts say.

In fact, Ford's task with Lincoln may be easier than GM's with Buick. Buick had a negative image with many car shoppers, having long been seen as a maker of cars for the elderly and infirm.

"With Buick it was like 'What? Are you getting me a fedora as well?" said Rebecca Lindland, an industry analyst with IHS Global Insight. "Well, guess what. Fedora's are back in style and so is Buick."

Lincoln, by contrast, is simply big question mark to many Americans.

And with younger shoppers now entering the car market, it's a good time to shape a new brand image, Lindland said.

"The consumer has a very open mind right now," Lindland said. "It's helping Kia and Hyundai and it could help Lincoln."

The image Lincoln is going for, said Jim Farley, head of marketing at Ford, is something different from what most other luxury brands have aimed at. Lincoln won't be targeted at those looking for a brash "get out of my way" luxury image.

Instead, Lincoln is looking at more of a "boutique image." Where other luxury brands have a few high-style models like the curvy Mercedes-Benz CLS or the bulbous BMW X6, Lincoln wants to do only high-style cars with nothing middle-of-the-road in the line-up.

To hone Lincoln's image, Ford hired designer Max Wolff away from GM where he had been in charge of exteriors for Cadillac.

But Ford is faced with somewhat of a conundrum with Lincoln, said Ed Loh, editor-in-chief of Motor Trend Magazine.

GM (GM, Fortune 500) turned Cadillac back into a player by tossing out the "platform sharing" playbook -- where the same bone structure is simply re-skinned to create "different" models.

Today's Cadillac cars, like the CTS, the SRX and the upcoming XTS, aren't Chevrolets -- or some other GM product -- with a different body. They're uniquely Cadillac products.

Today's best American cars

While Ford has reportedly invested as much as $1 billion into remaking Lincoln and has even given Lincoln car designers their own separate building to work in -- like Cadillac designers have -- they're unlikely to go so far as to make the cars truly unique under the sheet metal, said Loh. That would go against Ford CEO Alan Mulally's stated mission to cut costs by sharing as much engineering globally as possible.

The MKZ, for example, still shares its underlying engineering with the new Ford Fusion mid-sized sedan.

And without that, Lincoln is unlikely to be taken seriously as a big-league luxury player. It's not impossible -- Toyota (TM) pulls it off with Lexus -- but, more likely, Lincoln will be relegated to some sort of second-tier "near luxury" status similar to GM's Buick which, unlike Cadillac, openly shares engineering with brands like Chevrolet.

Not that that that would be the worst place in the world.

"I bet, secretly, they would die to have the resurgence Buick's had," said Loh.

Saginaw Too Expensive for Solar Firm

2012-01-09T09:38:00.002-05:00

First appeared in Contra Costa Times

The chief executive of a San Jose-based solar power company says a lack of market demand and costs to operate its Saginaw plant led to its decision to relocate to the northern part of Michigan's Lower Peninsula.

The Saginaw News reported Friday that GlobalWatt Inc. CEO Sanjeev Chitre held a news conference in Saginaw County's Kochville Township to discuss cancelling plans to stay and grow in the area.

Chitre says GlobalWatt would have paid $35,000 a month for the Saginaw location. It has moved equipment to a renewable energy product maker in Copemish, about 25 miles southwest of Traverse City.

He called it a "manufacturing partnership."

Chitre says GlobalWatt hasn't received taxpayer money and could return to Saginaw if the market grows and prices stabilize for solar panels.

Popular Retro LL Bean Styles

2012-01-06T14:36:00.000-05:00

Appeared first on Yahoo! Finance

A nearly century-old hunting boot is catching on with a younger generation that sees the utilitarian footwear as hip.

L.L Bean's familiar duck boot with leather uppers and rubber soles — designed for slogging through mud and snow — has become something of a fashion statement owing to its newfound popularity on college campuses, the company says. Another reason is new styles, including something Leon Leonwood Bean surely never envisioned in 1912: bright blue and pink leather, new for spring.

Part of the success of the boot is its versatility, in barnyards or in cities, in snow or rain.

At Bowdoin College in Brunswick, Zina Huxley-Reicher, of New York, wears her dark brown, shearling-lined boots nearly every day, with a skirt or jeans. She has only one pair, but some classmates have several.

"They are very practical, but they've also become a fashion trend," she said. "They're simple and kind of have that rugged look that has been adopted as a fashionable thing."

Sales have grown from 150,000 pairs four years ago to about 400,000 this year, said Jack Samson, L.L. Bean senior manager for manufacturing in Brunswick. Next year, demand is projected to reach 500,000.

Defying a trend toward offshore production, the outdoors retailer is adding 125 full-time employees to its Maine-based manufacturing operation to keep pace with orders.

The well-known boot appears to be benefiting from a retro trend, whether it's penny loafers or the Gap's 1969 series blue jeans, said Candace Corlett, president of WSL Strategic Retail in New York.

"It's sort of like the Coca-Cola bottle or the sleek silver lines of Apple. It's iconic. And when you have that kind of icon, you leverage it," Corlett said. "The good news is that L.L. Bean's icon from decades ago is striking an emotional chord with people who're yearning for the good old days."

Another factor that could be helping Bean: There's been little that's new and exciting in footwear in recent years beyond UGG boots and Crocs, said Alexander Geyman, editor of Focus on Fashion Retail, outside Los Angeles. Trendy UGG boots and the Timberland brand outstrip Bean's in sales, he said.

The original hunting shoe is not revered just at L.L. Bean. It's become something of an unofficial symbol of Maine, like the rocky coast and lobsters. There's a giant L.L. Bean boot outside the 24-hour retail store, near the company's headquarters in Freeport. Tourists regularly snap photos.

This holiday season, L.L. Bean featured one of its factory workers in a national television advertising campaign that capitalized on the boot's popularity.

The boots carry the "Made in the USA" label, something that's hard to find these days in footwear. Nationwide, the number of shoe-manufacturing jobs dropped from more than 200,000 in the 1970s to 12,500 this year, according to the U.S. Labor Department. In Maine, shoe-manufacturing jobs peaked at more than 25,000 in the 1960s, and last year there were 1,300 jobs, according to the Maine Department of Labor.

Well-known Maine brands like G.H. Bass, Cole Haan, Sebago and Dexter are now made abroad. But L.L. Bean has resisted the notion of making its Bean boots overseas.

"We've made a commitment since it's our signature product, and because of our heritage, that they'll always be made in Maine," spokeswoman Carolyn Beem said.

As the story goes, L.L. Bean created the hunting boot for himself after his feet got wet and cold on a hunting trip, and it was not an instant success. Ninety of the first 100 pairs sold in 1912 were returned after the leather separated; Bean had a satisfaction guarantee, so he returned customers' money.

These days, the original L.L. Bean Hunting Shoe is available unlined or with various linings, including Gore-Tex, Thinsulate and shearling. There are plenty of other variations, including quilted, canvas and plaid, and even bright blue and pink leather. There are low-cut versions as well.

The hunting version has a softer rubber compound that allows a hunter to tread lightly, while the "Bean Boot" has a steel shank and tougher rubber compound that holds up better on asphalt.

All of them are still made by hand. The rubber soles are made by L.L. Bean workers in Lewiston, and they're sewn to the leather uppers at an L.L. Bean plant in Brunswick. All told, there are currently 320 workers at L.L. Bean's factory in Brunswick, making boots, dog beds, canvas totes and other products.

Each Gore-Tex liner is inflated and dunked in a tank to make sure it's watertight before being dried and put in the boot.

"If you're hunting in Alaska and your feet get wet, you appreciate that," Samson said. "I don't think it's overkill. It's who we are."

Near the back of the factory floor are bins of timeworn L.L Bean boots that have been mailed in by their owners to be refurbished. People become attached to their boots, and they'd rather spend $40 to $45 to have the rubber soles replaced than buy new boots.

The boots come in rough shape, sometimes caked in dirt or, worse, chicken or cow manure.

Joked Samson: "We keep telling ourselves it's mud."

Michigan Fundraising for Universities

2012-01-06T14:26:00.000-05:00

First appeared in Detroit Free Press

When President Barack Obama wanted University of Michigan President Mary Sue Coleman to participate in a small group discussion about higher education issues, it was a reflection of her national stature. Michigan Honors Programs are concerned with similar fund issues.

When Coleman declined the invitation because she was already scheduled for two trips to Washington, D.C., it was a reflection of her busy schedule, mostly to raise money.

Increasingly, the U-M leader's schedule is being tied to fund-raising -- a necessary duty, she told the Free Press, because of recent cuts to state aid for U-M and Michigan's other public universities.

Coleman isn't alone among Michigan public university presidents in spending considerable time fund-raising.

Internal spending documents show the presidents of Oakland, Michigan State and Wayne State universities made about three dozen trips across the nation last school year, hoping to raise millions of dollars for their institutions. For example, half of MSU President Lou Anna Simon's 20 trips last school year were tied to development, financial records show.

U-M officials said they can't tie an exact amount of money coming in to Coleman's efforts. U-M raised $273.1 million last year in private giving. Through Nov. 30, the school has raised $78.6 million this school year, down slightly from the same time last year.

Coleman's travel and entertainment expense report shows 11 development trips, including two stops in Los Angeles and four to New York City.

Her travel expenditures for the 2010 calendar year, about $59,553, was more than double her spending in 2009. That money came from development funds -- not from the university's general fund, which is made up of tuition and state aid funds.

It was also more than double the presidential travel and entertainment budgets of Oakland, Michigan State and Wayne State combined. OU, MSU and WSU calculated their budgets over the 2010-11 academic fiscal year. There are Michigan Honors Programs that are thriving, though.

Coleman and her representatives said that U-M's national prominence, international alumni and need to build international relationships account for the time and increasing expense when compared with some of Michigan's other schools.

Coleman's largest travel expense, for example, was nearly $14,000 for a trip to China at the end of June 2010. U-M has numerous partnerships with universities there.

· "Certainly the expectation has always been there to have the president be involved in development efforts," said Coleman, who has been a university president for the last 17 years, including a decade at U-M. "In the last decade, it's really taken off. As we've seen a pretty dramatic drop every year in (state) funding, it's more imperative that the president focus much more on development."

MSU President Lou Anna Simon took 10 development trips last school year, records show. The largest development-only trip was $1,775 she spent on a December trip to Chicago. Her largest travel bill came to more than $4,000 for a six-day trip in June to Washington, D.C., for development events and meetings.
WSU President Allan Gilmour traveled 11 times. His largest expense was $3,560 for donor visits in San Diego and Los Angeles in November 2010.
Oakland University President Gary Russi traveled 11 times last school year, including November trips to Phoenix and a February trip to West Palm Beach and Naples, Fla., that cost more than $7,000 -- a trip that made up 35% of his travel expenses.

Coleman said she doesn't often go the hard sell route; she educates donors about what U-M is doing and why it is threatened because of funding cuts.

When Coleman's travel expenses dipped in 2009 -- $25,762, down from $42,752 in 2008 -- university officials touted the decrease as her way of acknowledging tough budget times and working her schedule to contain costs.

Spokesman Rick Fitzgerald said Coleman's schedulers try to maximize tying development events to other events she may be at in different cities. Fitzgerald said the difference between Coleman's costs and others is tied directly to her prominence, which leads to a large number of requests for her time. Michigan Honors Programs have high hopes for funds.

Charter Schools in Michigan

2012-01-06T12:42:00.002-05:00

First appeared on My Fox Detroit

Lawmakers in Lansing give the thumbs up to a bill removing the limit on the number of charter schools in Michigan. That means a new wave of schools could open soon. However, some people aren't happy with the likely change. There are hopes more students will end up in Michigan Honors Programs.

Walton Charter Academy in Pontiac, a 13-year-old school operated by Northern University, is celebrating this week's passage of legislation that uncaps the number of charters that can open in Michigan. Walton has had a waiting list in the past, making more charters good news for advocates there.

A lot of teachers prefer working in charter schools. They feel more responsible and accountable for their students.

There are currently 255 charters in Michigan. A university can't charter more than 150. That will likely change.

Charter school leaders talk often about high standards for both students and teachers, standards they say set them apart from public schools.

Charter school teachers are accountable for the growth of each student which means they may later take Michigan Honors Classes in college.

However, not everybody is happy with this lesson plan that the legislature has put together. In fact, the Detroit Federation of Teachers is expressing their dismay. Members are even going so far as to say that students are being used as pawns to help charters make money.

Detroit Federation of Teachers believes the majority of Michigan charters schools are not matching the public schools in their communities. They also believe that charters don't take into account the many students who have special needs. There may be more need for Michigan Honors Courses eventually.

Governor Rick Snyder is expected to sign this bill into law next week, but there are some stipulations in it requiring charter schools to have more scrutiny about their past performance and also more transparency.

Unemployment Benefit Changes

2012-01-06T11:29:00.000-05:00

First appeared in Associated Press (Lansing)

The Republican-led Michigan Legislature on Wednesday approved legislation aimed at stabilizing the state’s unemployment benefits fund, including a bill that could make it tougher for some to get and keep jobless benefits.

The bill that could affect jobless benefits eligibility passed the Senate by a 26-12 vote after clearing the House 61-47. Both votes were largely along party lines, sending the measure to Republican Gov. Rick Snyder.

Republicans say the bill will deter fraud, prevent overpayments and encourage the unemployed to seek jobs before their benefits run out.

Democrats say it could weaken benefits for some at time they need the help most. Michigan’s unemployment rate has been falling but remains above the national average. That’s the major reason that the state’s unemployment fund has had to borrow from the federal government to make ends meet.

Two other, less controversial bills approved by the Legislature would help Michigan pay back loans from the federal government related to unemployment benefits. The debt, currently about $3 billion, would be paid off by allowing the state to issue bonds to cover the obligation.

“Michigan’s unemployment insurance system must address this growing debt to get back on stable footing,” said Rep. Wayne Schmidt, a Republican from Traverse City.

Snyder is likely to approve the legislative package pending final review, spokeswoman Sara Wurfel said.

The bill would further limit the ability of a person who was fired for cause or who may have left a job voluntarily to collect jobless benefits. An employee could be considered to have left work voluntarily if he or she missed several consecutive workdays without contacting the employer.

After a certain period of time, available work could no longer be considered “unsuitable” if it was outside the unemployed worker’s previous experience or if it paid lower wages in some cases. That clause could kick in after 10 weeks of receiving state benefits, which Democrats say would force Michigan families into a cycle of underemployment.

Republicans argue that the requirements simply would prompt unemployed workers to accept new jobs when they’re available.

The new requirements would come on top of an earlier law that will cut the length of time that jobless workers can get state unemployment benefits from the current 26 weeks to 20 weeks, starting with new filers in 2012.

Republicans say the overall package is designed to eliminate debt in the unemployment benefits system and ease the burden on employers who pay into the system. The legislation would require some employers to pay unemployment taxes on a larger portion of their employees’ wages. Other changes, however, would save money for employers paying into the state’s unemployment insurance program.

The bonding plan could allow Michigan employers to avoid higher payments that otherwise would be needed to repay the rising debt connected to the federal loans.

Michigan Rehabilitation Hospital Helping Patients Walk

2012-01-06T10:22:00.000-05:00

Story first appeared in Detroit Free Press
The first generation of wearable robotic devices is here to help paralyzed people walk and regain independence.

The Rehabilitation Institute of Michigan, part of the Detroit Medical Center, is one of 10 leading U.S. rehabilitation therapy centers testing the Ekso Bionics exoskeleton.

It straps around people so they can stand upright and walk with a walker. The device is propelled by electrical impulses and robotic sensors that help keep users upright and gently propel them forward, a step at a time.

The device -- a forerunner of what the company says eventually will be lighter and more adaptable systems for private use -- currently is limited to centers like the rehabilitation institute participating in the company's study.

It is federally approved for sale and expected to be available later this year for consumers buying the devices for their personal use, according to a spokeswoman for the company, based in Berkeley, Calif.

The Rehabilitation Institute plans to offer the technology to other patients by spring.

For now, six are testing it, including Brendan Milewski, a Detroit firefighter paralyzed in 2010 in an arson.

"I'm hopeful" it will help, said Milewski, 32, of Washington Township, an 11-year member of the Detroit fire force who was injured along with six others at a cell phone shop on East Jefferson.

His life has been dominated by doctor visits and therapy since the accident.

The therapy is arduous, three hours at a time, three days a week. But he'd have it no other way.

Like many younger patients with paralyzing injuries, he yearns to be more independent and wants to regain the strength and abilities he once had. A 1997 graduate of Cousino High School in Warren, he had been an avid hockey player.

Any technology like the exoskeleton holds hope, if nothing else, of what's ahead.

"I'm ready," he said.

Milewski said he already has seen the benefits of his therapy. He couldn't move his arms after the accident, and his entire upper body was weak. Thursday, he looked strong. Tattoos covered his muscular arms, strong from therapy and wheelchair use.

Ekso physical therapist Darrell Musick compares the evolution of the device over the next decade with that of smart phones with dozens of extra functions far beyond the limits of the first cell phones.

"The opportunity in the next 10 years should be endless," Musick said. The devices "should be lighter, faster, more fluid, better turning and more functional."

The device currently costs about $100,000 and is unlikely to be covered by insurance. It is limited to people with some upper-body strength and designed for people who weigh no more than about 220 pounds and who are 5 feet 2 to 6 feet 2.

Still, the technology has benefits for both patients and therapists when compared with other types of electrical stimulation devices for spinal cord recovery, the company and Detroit rehabilitation hospital specialists say.

Other devices often are limited to stationary exercises such as bike pedaling or require several therapists to help move people's feet while walking.

By comparison, the exoskeleton is "a purely passive robot that does the work for you," said Paula Denison, director of special services at the Rehabilitation Institute.

Suited up and strapped in the device's black belts around his legs, Milewski looked like an astronaut awaiting takeoff or an actor in an action movie.

The half-hour trial session he and Max Faistenhammer, 29, of Grosse Ile went a bit slowly for both men. Faistenhammer was injured in a March 2010 motorcycle accident. Like Milewski, he is young and muscular from hours of aggressive therapies to regain his strength and abilities.

For now, it's more wait and see on just how many gains they will make with the robotic device.

Maybe some day ahead, they'll be able to take steps on their own. "It would be great to get in a car, strap this on and go somewhere," Milewski said.

Blue Cross and Beaumont Battle Hurts Patients

2011-12-09T14:46:00.001-05:00

Story first appeared in the Detroit Free Press.

A dispute between the Beaumont Health System and Blue Cross Blue Shield of Michigan is being watched closely all over the state, as health chiefs wonder: Will cardholders with the state's largest insurer still be able to get care at most Michigan hospitals, including a Michigan Heart Hospital?

The fight spilled into the public in October, when the Royal Oak-based hospital system and the Blues took out full-page ads to convey their side of the issue.

If the dispute is not resolved, Beaumont -- starting Jan. 12 -- will no longer will accept the insurance of about 100,000 people insured through Blue Care Network, a Blue Cross subsidiary.

The Blues wants its payments to Beaumont to be based on strong quality and cost-cutting performance goals, rather than on volume of business, as has been the case.

Beaumont insists its care is appropriate for patients, low-cost and high-quality. It would be forced to make cuts that would hurt care if the Blues does not improve its rates to the hospital system including a Detroit Hospital, executives say.

Rick Murdock, executive director of the Michigan Association of Health Plans, a nonprofit organization of HMOs and health care organizations, said other hospitals are watching the fight. It just could signal a new time when the Blues' card is not accepted everywhere, he said.
Dispute gets nastier as deadline for deal nears

David Stock wants his doctors, not insurance companies, to make the decision about the best place for him to get care.

He wants a physician telling him he needs a test and where to get it, not my insurance company, said Stock, 49, who lives seven blocks from Beaumont Hospital in Royal Oak.

Stock is one of about 100,000 metro Detroit residents who may be forced to seek care at another hospital like a Michigan Cancer Hospital if a dispute drawing statewide and national attention is not resolved by Dec. 31.

With time running out to agree on a new contract with Blue Cross Blue Shield of Michigan, the three-hospital Beaumont Health System escalated an unusually public fight with the insurer this week, sending a team of executives to discuss the rate-increase dispute with Michigan insurance commissioner Kevin Clinton and other legislators.

Since mid-October, Beaumont and Blues executives have sparred about who's to blame for a stalemate at the bargaining table over a new three-year contract regarding what the insurer will pay for care rendered at Beaumont facilities.

The fight already is affecting care, charged Dr. Sam Flanders, Beaumont's chief quality officer. Some patients needing prior approval for tests and visits to specialists are finding delays getting the OKs, Flanders said. The Blues deny the charge.

If the dispute is not resolved, starting Jan. 12, Beaumont will no longer accept the insurance of about 100,000 people insured through Blue Care Network, a Blue Cross subsidiary.

Beaumont's emergency department would continue to see Blue Care Network patients but once stabilized, as required by federal law, there's a chance patients would be transferred elsewhere for additional care or tests, Flanders said.

Beaumont wants a 9% increase over three years. The Blues have offered 3.5%, along with a 2.5% increase all hospitals would receive in 2012. This may also be for a Michigan Rehab Hospital.

Possible impact on care

Citing research by a consortium of academically affiliated hospital systems, Beaumont said its costs are much lower than those of many like it. Beaumont officials said that without a boost in rates from the Blues, they will be forced to make cuts in care.

Dr. David Share, a Blues vice president overseeing its quality initiatives to improve care, said that though many Beaumont services are lower-priced, the hospital system overuses costlier programs, such as ultrasound stress tests for heart problems and radiation-sparring treatments for cancer.

Share also said that the number of services patients get at Beaumont are significantly higher, driving up the patient's cost. This does not apply to those who go to elsewhere like a Chicago Weight Loss center.

Both Beaumont and the Blues have taken out full-page ads in metro Detroit newspapers, including the Free Press, a media strategy that Beaumont CEO Gene Michalski called very un-Beaumont-like, a reference to the health system's more conservative corporate profile.

Several hundred Beaumont patients have called the Blues to complain, including seniors with Blue Cross Medicare plans not affected, at least not yet, by the fight.
New payment measure

Sue Barkell, senior vice president for health care value for the Blues, said the insurer is taking a "new direction" in negotiations with all Michigan hospitals to base payments on performance not volume of business, as it has in the past. She said the insurer's motive is cost control and a focus on quality, but there's no plan to limit hospitals in its network, as health maintenance organizations always have done as a way to rein in costs.

Some 40% of the contracts with Michigan's 144 acute-care hospitals will expire in 2012, she said. Beaumont is merely the first of the first two or three hospitals to participate in talks centered on new quality measurements.

This isn't about an insurance company squeezing a hospital, Blues spokesman Andy Hetzel said. It's about how to pay in the future ... to try to bend the cost curve.
Not just Michigan issue

The dispute is being watched all over the state and country. Health care experts expect other disputes to surface with insurers, as a few already have.

Two years ago, Blue Cross Blue Shield of Illinois ended its contract between its HMO subsidiary and the Rush University Medical Center in Chicago, though the 769,000 patients in the plan still can get certain care at Rush if a doctor approves them to receive out-of-network care. Some care requires consumers to pay higher costs for care considered out-of-network.

In Massachusetts, Tufts Medical Center and its state Blues plan recently agreed to resume negotiations with a third party. All other details of the talks are confidential, a Tufts spokeswoman said.

And in California, Stanford Hospital & Clinics and California's Anthem Blue Plan just resolved a protracted contract dispute. Each has declined to reveal details about the new contract.

Rick Murdock, executive director of the Michigan Association of Health Plans, a statewide organization of mostly HMOs and other health providers, said other Michigan hospitals wonder whether the Beaumont and Blues fight is the beginning of a time when large insurers may attempt to sign contracts only with hospitals that meet cost-cutting and quality-of-care goals.

The Blues already gives deep discounts to some hospitals that agree not to accept other insurance, a practice under challenge by the U.S. Justice Department. That lawsuit against the Michigan Blues is pending in federal court in Detroit. The insurer, which considers the case groundless, has lost its attempts to dismiss the case so far.
Hazy patient situation

Until more hospitals publicly post prices -- now only Oakwood Healthcare in Dearborn and Spectrum Health in Grand Rapids routinely do in Michigan -- consumers won't be able to understand whether a hospital charges too much or whether an insurer is denying them access to a hospital because it's too costly, said Lody Zwarensteyn, the longtime CEO of Alliance for Michigan.

The alliance is a Grand Rapids-based health planning group responsible for a landmark federal ruling that led to more competitive pricing there in the 1990s.

Massachusetts Sues Banks For Holiday Foreclosures

2011-12-09T14:28:00.000-05:00

Story first appeared on CNNMoney.

The Massachusetts attorney general sued some of the nation's biggest banks on Thursday, accusing them of unlawful and deceptive conduct in the foreclosure process. This is currently not involving a Birmingham Foreclosure Lawyer.

The statement described the state court lawsuit as the nation's first comprehensive lawsuit against the five major national banks regarding the foreclosure crisis.

The AG's lawsuit seeks accountability for the banks' unlawful and deceptive conduct in the foreclosure process, including unlawful foreclosures, false documentation and robo-signing ... and deceptive practices related to loan modifications, the statement said.

MERS runs a database created in the 1990s to digitize and centralize the paperwork surrounding the bundling and selling of the loans.

The Massachusetts suit alleges that the database was used by the big banks to transfer ownership of mortgage debt without paying government registration fees and properly recording the transactions. The system also concealed the identities of the holders of mortgage debt from borrowers, the suit claims. It does not appear to have any relevance if owners had Homeowners Insurance.

MERSCORP, parent company for Mortgage Electronic Registration System Inc., said the Massachusetts complaint hangs on ambiguous language and has no applicability to MERS' business model.
Fannie Mae, banks halt foreclosures for the holidays. A Rochester Hills Foreclosure Lawyer said this was a nice gesture.

The banks, meanwhile, say negotiations they are conducting with a group of state attorneys general toward a settlement over their handling of foreclosures are a more promising means of resolving the issue than lawsuits.

Bank of America spokesman Lawrence Grayson said the firm believes that collaborative resolution rather than continued litigation will most quickly heal the housing market and help drive economic recovery.

Chase echoed those comments, saying it was disappointed with the suit, as did GMAC Mortgage, which said it would vigorously defend its actions in court.

Citi said in a statement that it had not yet reviewed the lawsuit, but that the bank believes they have operated appropriately in compliance with existing laws. Wells Fargo also denied the allegations, adding that the suit will do little to help Massachusetts homeowners or the recovery of the housing economy in the state.

Settlement talks fraying: Coakley told reporters Thursday that the suit had come about in part because settlement talks with the banks, which have dragged on for more than a year, appear unlikely to yield a fair result.

Attorneys general from California, New York, Delaware and Nevada have also distanced themselves from the settlement talks and are pursuing their own investigations.
Will FHA be the next big government bailout?

The talks are stalled at present, but have focused on a settlement in the range of $20-25 billion in total from the firms involved in exchange for release from liability for all conduct related to foreclosures, according to sources familiar with the matter. Of this total, roughly $10-15 billion would come in the form of credit for loan modifications. A Wayne Foreclosure Lawyer is watching the case closely.

Iowa Attorney General Thomas Miller, who is coordinating talks on behalf of the states, said in a statement Thursday that Coakley had pledged to evaluate the joint state-federal settlement they are negotiating, which they hope to reach soon.

Is the State Of Michigan Taking Over Detroit?

2011-12-09T13:56:00.001-05:00

Story first appeared in USA TODAY.

The idea is extreme, even in a city accustomed to fighting for survival: Should the state of Michigan step in to run Detroit?

The governor has taken steps in that direction, proposing an unprecedented move that could give an appointed manager virtually unchecked power to gut union contracts, cut employee health insurance and slash services. But city leaders bristle at the notion.

If it happens, Detroit would be the largest American city ever taken over by a state. Michigan has seized control of smaller struggling cities, but until now Detroit was always off-limits.

That changed this week, when Republican Gov. Rick Snyder's administration said it would begin a review of Detroit's precarious finances. If the governor concludes that the city's economic situation constitutes an emergency, he could dispatch a manager who could push the mayor and city council to the sidelines.

It's not clear how everyday services like trash pickup and bus routes would be affected, but the fixer's mission would be clear: Do whatever it takes to stop the bleeding.

Democratic Mayor Dave Bing says Detroit doesn't need the help. He insists the city is reducing a $150 million budget deficit and easing cash-flow problems on its own.

The financial review starts Tuesday and may last up to 90 days, meaning a takeover could be under way by the end of February.

The same fate has befallen other cities.

Atlantic City agreed in 2010 to let New Jersey take over its finances in an arrangement that allowed the city to spread a $9.5 million deficit over five years, sparing homeowners and businesses a significant property tax increase.

In Pennsylvania, Gov. Tom Corbett signed a law in October enabling a takeover of Harrisburg.

New York City had a brush with bankruptcy in the mid-1970s, but the rescue package put together by then-Gov. Hugh Carey stopped short of a full state takeover.

An emergency financial manager would have the power to privatize utility departments, as well as the bus system and other agencies. A manager also could sell off city-owned parking lots and even Belle Isle, Detroit's popular island park.

In a 2001 report, LaFaive wrote about Detroit's burgeoning fiscal problems and recommended privatization, contracting out services and ways to generate revenue.

Last month, Bing declared the city government "broken" and said the public's checkbook would be short by $45 million next year unless Detroit starts saving money fast. In an attempt to ward off an emergency manager, he proposed laying off 1,000 employees — 9 percent of the workforce — and negotiating 10 percent pay cuts with unions.

If Lansing believes our plan isn't strong enough, I'd like to hear their suggestions for what they can improve, the mayor said. He suggested the state help by supplying millions of dollars that he says the city was promised in a decade-old tax overhaul. Detroit has also sought help collecting its income tax.

But even after a number of threats from the mayor, organized labor barely budged. Now that a state takeover looks more likely, adversaries have become partners.

A Michigan-based corporate turnaround specialist, James McTevia, said there would be potential pitfalls for any Detroit manager. Pay cuts ordered without negotiation, he said, could make the city's workforce boil.

Detroit has struggled for years after the auto industry collapsed, leaving the city with a much-reduced tax base and a dwindling population of 713,000, down 25 percent in just the last decade.

Managers already oversee Flint, Pontiac and Benton Harbor, as well as the Detroit public schools.

As Benton Harbor's emergency manager, Joe Harris has ordered firefighter cross-training for police officers, which reduced public-safety costs by a third.

He also negotiated new collective-bargaining agreements with many unions, forcing Benton Harbor employees to pay 20 percent of their health care premiums and contribute 10 percent of their wages to pensions.

In Pontiac, emergency manager Lou Schimmel dismissed the city clerk, the city attorney and the head of public works. He's also taken smaller steps, such as removing parking meters that cost too much to maintain. And he hopes to save $3 million by having the neighboring community of Waterford take over fire protection.

The Citizens Research Council, a nonpartisan group that studies government at all levels, analyzed Detroit's finances in 2010 and warned that the city "must be restructured." The city, it noted, owns a small airport, has its own health service, regional water agency and streetlight department, and uses city employees, not contractors, to pick up trash.

Sheila Cockrel, a city council member for 16 years until 2010, said long-term relief is unlikely until the city changes the pension system to a 401(k)-style defined-contribution plan and puts more health insurance costs on employees and retirees.

Google Gets AdMeld Acquisition Approval

2011-12-09T13:50:00.000-05:00

Story first appeared in USA TODAY.

The Justice Department approved Google's acquisition of online advertising service Admeld after concluding the deal wouldn't diminish competition in one of the Internet's most lucrative marketing niches.

The decision announced Friday clears the way for Google (GOOG) to take control of Admeld six months after the companies agreed to the deal. Google said it plans to take control of Admeld within the next few days, although the two companies' products will remain separate for a while longer.

It's the fourth time since 2007 that that the U.S. government has taken a close look at a Google acquisition to determine if it would stifle competition or drive up prices. Google has gained regulatory approval in each instance. In 2008, though, Google backed out of a proposed partnership with Yahoo (YHOO) to avoid a legal battle with the Justice Department.

The Justice Department is still reviewing Google's proposed takeover of cell phone maker Motorola Mobility Holdings (MMI). That $12.5 billion deal is the biggest in Google's 13-year history.

The Federal Trade Commission is in the midst of a broader inquiry into whether Google has been abusing its dominance of Internet search to make it harder for people to find rival services and apply pressure on advertisers to pay higher prices. Google has consistently predicted that investigation will be resolved in its favor.

Google hasn't disclosed how much it is paying for Admeld, a New York company that works with websites to help them figure out how to make the most money from the amount of space they have available for display ads. It's a steadily growing field of advertising that emphasizes photos, video and illustrations instead of Google's specialty of distributing text-based commercial links alongside search results.

The Justice Department said that privately held Admeld, formed in 2007, raised about $30 million in 2010 to help fund its operations.

Google generated revenue of about $29 billion last year and analysts expect it to surpass $38 billion in revenue this year. Most of Google's revenue still comes from search advertising.

In an attempt to diversify beyond search advertising, Google bought DoubleClick for $3.2 billion in 2008. That deal is turning display advertising into a major moneymaker for Google, but the company's market share in the segment still lags behind Facebook and Yahoo, according to the research firm eMarketer Inc.

That apparently helped sway the Justice Department to approve the Admeld deal.

Web Tools for Michigan's Unemployed

2011-12-09T13:20:00.000-05:00

Story first appeared in The Detroit News.

Gov. Rick Snyder sees a disconnect between what Michigan's employers need and what's available to them in the state's work force. And his plan to fix it drew positive early reviews after its unveiling Thursday.

To improve Michigan's work force development efforts, Snyder outlined a plan that includes everything from a new one-stop website for prospective employers and employees, to proposed changes for unemployment benefits, to calls for change on immigration caps and new goals for the state's welfare to work efforts.

Snyder said times have been tough in Michigan. He added that we have failed to think strategically about the relationship between economic development and talent. Job creators are finding it challenging to grow and develop without the right talent, and job seekers are struggling to connect with the right opportunities that leverage their skills.

He added that today, too few workers have the skills needed to meet the demands of employers in the new economy. Despite an unemployment rate of 10.6 percent, thousands of jobs remain unfilled in Michigan.

At the heart of Snyder's plan is the Internet site Pure Michigan Talent Connect, which he described as a "Web-based talent marketplace."

For those seeking work, it will provide information on education opportunities, areas of job growth and openings. For businesses searching for help, it will connect them with possible hires.

To further help businesses hold on to valued workers, Snyder will push for changes to the unemployment system. He proposed allowing work sharing, where companies can scale back worker hours and then the employees would get partial unemployment benefits.

This allows the employers to retain their talent and ensures that a business can begin growing again immediately once demand returns to normal levels.

It benefits employees because they retain employment and fringe benefits.
Lawmakers' OK needed

The change to unemployment would have to be approved by the state Legislature.

He also wants to eliminate caps on the immigrants with master's degrees or higher levels of education. It's a move that would require action in Congress and Snyder encouraged those in attendance Thursday to contact their elected officials on the subject.

Two state programs drew particular scrutiny from Snyder. Michigan's Jobs, Education and Training program is designed to help low-income families. Those receiving federal and state unemployment assistance will be encouraged to use work-participation programs.

In Michigan, Snyder said, the participation level is unacceptable.

He promoted a new effort between several state agencies to boost those levels above standards set by the federal government.

Lindsay Chalmers, vice president of Goodwill Industries, attended the governor's speech and agreed with much of what he heard concerning improvements to the two programs. Goodwill provides training and services aimed at putting people back into the workforce.

Michigan Works!, the state's doorway program to job training and employment opportunities, must be changed as well, Snyder said.

The program will shift to a "demand-driven strategy," and the program's executive director welcomed the challenge.

Snyder also focused on the role of the state's universities and community colleges in promoting a focus on computers, engineering and mathematics skills — areas that have seen a decline in student interest in recent decades.

But simply pushing colleges in that direction won't be enough, said an economics professor at Michigan State University.

UAW Continues Negotiations

2011-12-09T13:15:00.001-05:00

Story first appeared in the Detroit Free Press.

The UAW is continuing to negotiate with a General Motors supplier owned by the Ambassador Bridge's Moroun family, but union leaders are considering whether to protest or even strike the supplier's operations inside GM's Orion Township plant.

The union had planned to protest LINC Logistics on Wednesday morning, but called off those plans ahead of a renewed effort to make progress in contract negotiations. Talks continued into the evening Wednesday, said Pat Sweeney, president of Orion's UAW Local 5960. This would be the LINC employees' first union contract, Sweeney said.

The outcome will determine whether the UAW takes any action. A strike could disrupt production of the Chevrolet Sonic subcompact or the Buick Verano compact, which are built at the GM plant. LINC's employees, who work inside the GM factory, voted unanimously in June to strike if UAW leaders call for a walkout.

Negotiations have dragged on for months between the UAW and LINC, which organizes and distributes parts at automakers' plants. LINC workers currently make less than $10 an hour.

The Orion Township factory restarted production this year after getting a reprieve from GM's plan to close it as part of its 2009 bankruptcy. GM now employs about 1,600 hourly workers in Orion -- about 60% at the $28-an-hour first-tier wage and the rest at about $16 an hour. A couple of suppliers also have employees working inside the GM factory, in part thanks to space freed up by the plant's redesigned body shop.

Separately, the Orion Township factory had a small fire around 8 a.m. Wednesday in its body shop. GM called the fire department as a precautionary measure and evacuated the body shop, but restarted production by 9 a.m. The fire did not impact production and no one was injured.

Should Hemp Growing Be Legal?

2011-11-29T16:15:00.003-05:00

Story first appeared in USA TODAY.

It hasn't gotten the attention of medical marijuana, but a growing number of states have passed laws authorizing the growth of hemp and are attempting to get the federal government to make it legal nationwide.

Hemp can be cultivated for fiber or oilseed, and it is used to make thousands of products worldwide, including clothing and auto parts. From 1999 through last year, 17 states have enacted measures that would either permit controlled cultivation or authorize research of industrial hemp, according to the National Organization for the Reform of Marijuana Laws (NORML).

Colorado was the most recent to authorize research in 2010. Maine, Montana, North Dakota, Oregon, Vermont and West Virginia have passed laws authorizing cultivation, according to NORML.

Hemp and marijuana are different varieties of the same species of plant, Cannabis Sativa. Industrial hemp has lower THC content, the primary psychoactive component of marijuana.

The federal government classifies all cannabis plants as marijuana and places strict controls on the cultivation of hemp. Industrial hemp was an American staple in colonial times. The output peaked during World War II.

Advocates say American farmers are being shut out of a lucrative market. More than 30 countries grow hemp as an agricultural commodity, and hemp-planted fields in Canada — which legalized cultivation in 1998 — increased to 26,815 acres in 2010. Opponents say the arguments in favor of hemp-growing represent little more than a smokescreen for legalizing marijuana and other illegal drugs.?

Rep. Ron Paul, R-Texas, has introduced a bill that would effectively legalize hemp-growing by excluding low-THC cannabis from the Controlled Substances Act each of the past four legislative sessions, including this year, but the legislation has never progressed to a committee hearing.

In October, Democratic California Gov. Jerry Brown vetoed a measure that would have created a pilot program for cultivating industrial hemp in four counties. In his veto statement, Brown criticized Washington's position on hemp and called for the law to allow cultivation nationally.

Rep. Dan Lungren, R.-Calif., wrote in a June 20 letter to a constituent that he supported the Drug Enforcement Administration's argument that commercial cultivation would increase the likelihood of covert production of high-THC marijuana and send the wrong message to the American public concerning the government's position on drugs.

North of the Vermont-Canada border, Christian Boisjoly says he is growing 23 acres of hemp in Lanoraie, Quebec, northeast of Montreal. Some farmers in his region are switching from tobacco to hemp, he says.

The crop is regulated closely there. The government checks growers' criminal records and mandates that hemp cultivars test for less than 0.3 percent, according to a fact sheet issued by Health Canada. A minimum of 10 acres is required for a permit, according to Canada's Department of Justice.

By some estimates, hemp is used in more than 25,000 products worldwide.

Michigan Economy on the Rebound

2011-11-23T14:18:00.000-05:00

Story first appeared in the Bloomberg News.

Michigan’s sink-or-swim automotive economy is swimming again and taking Toby McGowan with it.

McGowan makes $15.78 an hour as one of 280 production workers hired in the past two months at General Motors Co.’s Lake Orion assembly plant as the state’s carmakers increase sales and add personnel. He lost his last job at a print shop thanks to slow business.

Michigan lost 860,000 jobs from 2000 to 2009, almost half in the final two years. One of every five residents receives Medicaid assistance, and Detroit is in peril of state takeover. Since 2008, however, its economy fared better than that of any other state, except for oil- booming North Dakota, according to the Bloomberg Economic Evaluation of States. The index calculates growth by examining job creation, personal income, tax revenue, housing prices, mortgage delinquencies and the stock performance of state-based companies.

Republican Governor Rick Snyder, 53, said in an interview in Ann Arbor that the index confirms that Michigan is the value place to be.

Snyder, who cut $1.5 billion in spending, said finances are more stable and a slimmed-down auto industry can better withstand downturns.

Hinging on Building

The question is whether the surge, enabled by the Obama administration’s auto-industry bailout, will return Michigan to its prerecession state.

Dearborn’s Ford Motor Co. reported a third-quarter profit of $1.65 billion Oct. 26. The next day, Chrysler Group LLC, the Auburn Hills carmaker majority owned by Fiat SpA, raised its forecast for its first annual profit to $600 million.

GM’s U.S. sales climbed 15 percent this year through October from the same period a year earlier, according to Autodata Corp. Deliveries rose 11 percent at Ford and 23 percent at Chrysler, the Woodcliff Lake, New Jersey, researcher reported.

Newer and Cheaper

GM, Ford and Chrysler will hire or retain 42,300 employees nationwide over four years thanks in part to a new United Auto Workers contract that continues to pay rookies such as McGowan less than the $28 per hour that senior workers make, according to the Center for Automotive Research. Also, those higher-paid employees receive no raises under the four-year contract.

Such hiring helped Michigan’s October unemployment rate drop to 10.6 percent from 11.1 percent in September, according to the Bureau of Labor Statistics. That’s one percentage point lower than a year ago, though higher than the 9 percent national rate.

Tough Search

Jeffrey Hickmott, 26, graduated with a mechanical engineering degree from the University of Michigan-Dearborn in 2009. He’s still hunting for a job and lives with his parents in Taylor, a Detroit suburb. Last year he had two interviews. This year he has had 20 or 30 contacts over the phone. They said they were impressed, but they wanted someone with more experience.

His prospects may improve: A University of Michigan report last week predicted 0.8 percent job growth in the state next year and 1.4 percent in 2013.

Michigan’s rebound from the 18-month recession that ended in June
2009 gives it a higher BEES ranking -- in part because it fell so far.
Compared with a decade ago, the state’s economic health has fallen
25.4 percent, ninth-worst among states.

During 2010 and the first quarter of 2011, though, Michigan’s economic health improved by 8.8 percent, second to North Dakota.

The state still suffers from free-falling property values, which have starved its municipalities of property-tax revenue. Statewide real and personal property values declined about 20 percent from 2007 to 2011, according to the state Treasury Department.

Detroit in Danger

Oakland County, with Michigan’s second-highest median household income of $62,626 in 2009, lost almost one-third of its overall property value in that time, according to Robert Daddow, deputy county executive.

Last week, Detroit Mayor Dave Bing said the city faces a $45 million shortfall by June, on top of a $155 million long- term deficit, and he said he would eliminate 1,000 city jobs in February. He warned that without union concessions, the city may face state takeover.

Snyder said economic growth needs a stable political and tax environment. The state this year cut business taxes by $1.7 billion and balanced its budget without temporary fixes.

In July, Fitch Ratings revised Michigan’s credit outlook to positive from stable, citing a balanced budget and improved economy. Moody’s rates Michigan’s general-obligation bonds Aa2, third highest, and both Fitch and Standard & Poor’s rate the state AA-, fourth highest.

‘Ready to Explode’

Doug Rothwell, president and chief executive of Business Leaders for Michigan, which includes 80 executives of the state’s largest companies, said most are more optimistic about Michigan’s economy than they are about the U.S. as a whole. Rothwell said there is pent- up demand for cars and services.

Doug Gaylor, 53, a New York-based municipal fixed-income portfolio manager for Principal Global Investors LLC, said he’s delayed replacing his 2001 Oldsmobile Silhouette minivan, which has 133,000 miles. He said he’ll look to buy a U.S. car first, when the next minivan repair costs too much.

Gaylor, who once oversaw a Michigan bond portfolio, said he’s impressed by the state’s handling of its finances and its positioning for more high-tech jobs in the future.

MyElderLawPlanning VA Disability Help Michigan

2011-10-27T16:58:00.004-04:00

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MyElderLawPlanning Michigan Medicaid Help

2011-10-27T16:55:00.004-04:00

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Elder law is becoming more important as baby boomers approach their golden years. Elder law is a distinct practice, designed to assist the elderly in protecting their assets from probate expenses, federal estate taxes and nursing home expense.
The Elder Law professionals at Jordan Balkema Elder Law Center (JBELC), are dedicated to providing intelligent, compassionate and timely information about estate planning, probate, Medicaid and all other issues pertaining to elder law.
These are the areas of service that the Jordan Balema Elder Law Center provides:
Estate Planning — Throughout the years you have built up an estate and achieved success. Now your focus shifts from accumulation to preserving these assets for your care and eventually distribution to your loved ones upon your death. That is what estate planning is all about.
Medicaid Planning — Do you have a loved one in a nursing home or hospital? Or are you thinking long-term care may be inevitable? The professionals at Jordan-Balkema Elder Law Center can assist you with planning for long-term care costs.
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Property Tax Bill Would Ease Family Property Transfer

2011-10-18T13:08:00.000-04:00

Story first appeared in the Traverse City Record-Eagle

Measure aims to cap tax when land passes to relative
Homeowners could more easily pass their homes to their heirs or sell them to their relatives under a bill that would ease the property tax burden of such transaction.

Rep. Peter Pettalia, Presque Isle, introduced the bill to cap property tax when homes and land are passed between relatives. Heirs would pay less taxes than currently paid by family members that inherit land.

Since Proposal A passed in 1994, taxes on a homestead property cannot rise more than 3 percent a year, no matter how much property values rise.

But when someone sells their property, the buyer pays taxes on the newly assessed worth, lifting the 3 percent cap. This bill would keep the cap for family-exchanged properties.

Many times, Pettalia said, people inherit a piece of land from their family such as lakeside cottage and cannot afford to keep it because the property is now worth more than the previous family member was taxed.

“It’s a family heritage; they have no intentions of ever selling it, but they can’t keep it because the property tax has now become too much of a burden upon them, “Pettalia said.

If approved, the law would become a good estate planning tool, said Brad Ward, director of public policy and legal affairs at the Michigan Association of Realtors. “It would be an incentive to create more of those internal family sales.”

But the bill could create headaches for local assessors.

“I think some of these legislators have to think about the reality and the complexity of what we have and how it can be handled,” said Laurie Spencer, equalization director of Grand Traverse County. “They are asking an awful a lot of assessment administrator, in my opinion.”

Assessors would have to see proof of family as far as third cousins, a potentially difficult task because last names are different and proof is hard to come by.

"Are we going to start doing DNA tests to see if they meet the criteria?” Spencer said.

The bill would require assessors to go back through old deeds. The bill would affect all land transactions to December 8, 2006.

“If you want it done according to what this bill says, we definitely would have to put on more staff,” Spencer said.

The Michigan Assessor Association does not yet have a position on the bill, said Swayne McLachlan, president of the group. The organization typically opposes such exemptions because local governments want the additional revenue created by sales or property owners’ deaths.

“It gets into the question of fairness and inequality,” McLachlan said.

But Pettalia said that it is the large tax burden on a family inheritance that is unfair.

“It’s Michigan’s family heritage to keep these properties with families,” he said.

Ferris State University Offers Technology Degrees

2011-10-06T17:14:00.002-04:00

Story first appeared on CBSDetroit.com.
Ferris State University is one of those schools that isn’t afraid to let its nerd flag fly. Especially with their Michigan Honors Programs.
Its roots are in a private vocational school, and it’s still in the two-year associate’s degree business in some technologies that are important to society but rarely degreed — rubber engineering technology, for instance.
My visit to Bulldog Country started with a presentation from Carl Shangraw, professor of surveying engineering. He walked me through all the stuff people know surveyors do — establishing legal boundaries — to the stuff people have no clue surveyors do, from setting up a local geocache to position offshore oil rigs to manage sophisticated geographic Information systems to helping design everything from tall buildings to freeways to railroads. They offer a considerable amount of Michigan Honors Courses, as well.
Surveying can be used to remote-control farm and road building machinery — something that Shangraw said has not yet taken off in Michigan but apparently has elsewhere.
Of particular interest to Ferris is hydrographic mapping — surveying the bottom of bodies of water. Gone are the days of guys in small boats with weighted ropes measuring depths. These are the days of stereoscopic sonar. Ferris is working with Northwestern Michigan College in Traverse City to create a hydrographic surveying system out of NMC’s maritime academy boat.
Shangraw said he and a couple of Ferris students spent last summer for the National Park Service, mapping the bottomlands between Sleeping Bear Dunes and the Manitou Islands. Among their discoveries — what appears to be an ancient river bottom in Good Harbor Bay, marking a river that emptied into a smaller ancient Lake Michigan when the shoreline was several miles farther west than today’s lake. This can be a part of Michigan Honors Classes, as well.
Shangraw said the Ferris surveying engineering degree program now has 75 students, down from 125 a few years ago. He blamed the state’s poor economy. But even so, he said the program gets three offers for every graduate, with starting salaries all above $50,000. Most of them, though, have to leave Michigan.
The next presenter, Joel East, a senior in surveying engineering, related how he worked surveying a particle accelerator, the Thomas Jefferson National Accelerator Facility, in Newport News, Va.
East said he and his crew were brought in to make sure the accelerator’s huge racetrack still lined up as the atom smasher prepared for a power upgrade from six billion electron volts to 11.
My next presentation came from Brian Holton, a professor of heating, ventilation, air conditioning and refrigeration at Ferris. These days, he’s working on something called the Legacy HVAC Equipment Field Evaluation and Performance Testing research project. These projects can be part of Michigan Honors Programs.
This U.S. Department of Energy funded effort aims to bring scientific rigor to quantify just how quickly appliances and heating and cooling systems lose their efficiency. It’s such a new idea that Ferris had to develop its own testing equipment and methodology to do the work.
Holton said the effort should give the federal government an idea of how much efficiency a 10-year-old furnace originally rated at 90 percent efficiency has lost. That will guide the government’s recommendations on replacing old appliances.
There’s also a second federal contract that will test energy-saving retrofit measures for their cost-effectiveness.
They will take three test homes, one control and the other two experimental, install different retrofit measures, and test them, to determine their cost effectiveness.
And that means designing algorithms and new technologies to simulate human occupancy of a house — everything from lights going on and off to refrigerators opening and closing to ovens going on and off to thermostats going up and down. Interesting stuff for Michigan Honors Programs.

Internet Secret Lairs

2011-10-04T12:13:00.000-04:00

Story first appeared in USA TODAY.
From the outside, the Gothic brick and limestone building a few blocks south of downtown almost looks abandoned.
Plaques identify it as a landmark completed in 1929, a former printing plant that once produced magazines, catalogs and phone books. The sign over the main door says "Chicago Manufacturing Division Plant 1."
There are hints, though, that something is going on inside. Cameras are aimed at the building's perimeter. A small sign at the back entrance says "Digital Realty Trust."
Sturdy gates across the driveway keep the uninvited out.
There's good reason for the intentional anonymity and security: The Internet lives there.
Editor of Data Center Knowledge, which tracks the industry, and, senior vice president of portfolio management for Digital Realty, which owns the 1.1 million-square-foot former R.R. Donnelley printing plant, say it is the world's largest repository for computer servers.
He won't identify its tenants, but he says the building stores data from financial firms and Internet and telecommunications companies. The 'cloud' that you keep hearing about … all ends up on servers in a data center somewhere.
There are about 13,000 large data centers around the world, 7,000 of them in the USA. Growth stalled during the recession, but estimates show about $22 billion will be spent on new centers worldwide this year.
The need for data centers is increasing as demand for online space and connectivity explodes. Some are inside generic urban buildings or sprawling rural facilities. For all of them, security is paramount. Inside, after all, are the engines that keep smartphones smart, businesses connected and social networks humming.
Some data centers have "traps" that isolate intrusions by unauthorized individuals, technology that weighs people as they enter and sounds an alarm if their weight is different when they depart, bulletproof walls and blast-proof doors.
When Wal-Mart opened a data center in McDonald County, Mo., a few years ago, County Assessor says she signed a non-disclosure agreement promising she wouldn't discuss anything she saw in there. She hasn't.
Although the rapid growth of data centers has diminished their ability to hide in plain sight many owners and occupants are very secretive and … sensitive about the locations.
That makes sense. "hese facilities are critical to the financial system and the overall function of the Internet.
Making new use of the old
Some data centers — sometimes called carrier hotels because space is leased to multiple companies — are in large urban buildings where they can tap into intersecting networks.
Old manufacturing facilities such as Chicago's Donnelley printing plant often are repurposed because they have high ceilings and load-bearing floors to support heavy racks of servers.
They are interesting examples of the new economy rising up in the footprints of the old.
Giant companies such as Google, Facebook, Apple, Yahoo and Amazon often build their data centers in rural areas. They're looking for cheap power and cheap real estate. While the number of private centers grows, the federal government is consolidating. It has more than 2,000 data centers and this summer announced plans to close 373 by the end of 2012.
Communities such as Quincy, Wash., population 6,750, and Catawba County in western North Carolina want to become data center hubs. Catawba and neighboring counties dubbed themselves "North Carolina's data center corridor.
Apple last fall opened a 500,000-square-foot, $1 billion facility in Catawba County. Google and Facebook have data centers in nearby counties and more are under construction.
Catawba County is building a second data center park in hopes of attracting more. Because data centers don't require many employees, most of the permanent jobs are created by contractors who provide electrical, cooling or security support. About 400 people work at the giant Chicago data center; many employ far fewer.
The Apple data center is pretty secretive. No signs indicate what the building holds, but everybody knows what it is.
James Lewis, a senior fellow in technology and security at the Center for Strategic and International Studies, a public policy research group in Washington, D.C., compares the evolution of data centers to changes in the way electricity is generated.
A century or more ago, he says, factories and other companies operated their own electric plants to power their lights, elevators and other functions. Those with spare capacity began to sell it to their neighbors.
Instead of maintaining computer servers in their own facilities for rapidly growing data storage needs, some businesses locate their servers or backup servers in data centers, he says. They can save money because the centers minimize energy consumption, ensure security and allow computers to share tasks. Data centers also give companies places to store backed-up data that is crucial to their businesses.
The amount of data in the world doubles every couple of years and people … are willing to pay for it to be stored.
He doesn't think it's essential to conceal the centers' locations, though, because hackers won't try to come in through the front door. The main source of risk isn't physical, it's cyber. If hiding the location … is all that they're doing, they're not doing enough.
Tall building, low profile
Keeping a low profile is just the beginning of the security measures at Digital Realty Trust's massive Chicago data center.
The exterior is embellished with terra cotta shields depicting printers' marks. The building occupies almost a full block, is nine stories tall and has a 14-story tower. Inside, there are visible and unseen protections, some of which the company won't talk about publicly. There are guards at both entrances, cameras inside and out, motion sensors and much more. To access the rooms where rows of servers live, a card must be scanned and a fingerprint recognized.
The interior of the building is a mix of old and new. Because it is a landmark, its wood-lined two-story library, which has been used for photo shoots, must be kept intact. Some corridors feature stone arches overhead, and some offices are paneled in English oak.
Other hallways are sterile and silent. Inside the locked doors of the individual data centers are locked metal-grid cages and, inside them, rows of black shelving with the blinking lights of servers visible through the doors. The only sound is an electronic buzz. Cameras scan every square foot of the room.
Between the rows of servers are "cooling aisles" with thousands of round holes in floor tiles feeding cool air into the space. Over the server shelving are ladder racks that suspend "raceways" — yellow plastic casing enclosing fiber optic cables. The shelving doesn't extend to the ceiling; air must circulate above the servers to keep temperatures down.
Caron says it costs $600-$800 per square foot to build a data center and often less than $70 a square foot for a normal industrial building, including the land. The giant printing presses that once filled space in the former Donnelley building made it ideal for conversion to data center use, he says. A data center floor must be able to handle at least 150 pounds and as much as 400 pounds per square foot. By comparison, most office buildings are built for 70 pounds per square foot.
Huge amounts of electricity power all those servers, he says: 100-150 watts or more per square foot, compared with 3-5 watts for each square foot of an office building. To keep the servers running, there's more than one electrical feed into the building and backup systems and generators ensure there's never an interruption in power. The Chicago facility has 63 generators.
Digital Realty Trust, which bought the building in 2005, owns 96 properties, most of them data centers, in the USA, Europe and Asia, Caron says. There is, he says, "a lot of demand" and the company expects to spend up to $500 million this year on acquisitions. Last year it spent more than $1 billion.
'You have no idea what's here'
Not every data center is a fortress. The one owned by the city of Altamonte Springs, Fla., is a former 770,000-gallon water tank next to City Hall.
Information services director in the city of 40,000, says he relocated the city's servers after being forced by three hurricanes to pack everything up to keep them out of harm's way. The tank has 8-inch-thick walls. It did a great job holding water in so they knew it could keep water out.
Even a small-scale data center needs security, though. One is protected by video surveillance, requires dual authentication to enter and a biometric lock limits access to the server room.
It's even harder to get into the five data centers 200 feet deep in a former limestone mine in Butler County, Pa.
The facility affords a very high level of security, not only physical — armed guards, steel gates, layers of security, biometrics — but also we're protected from the elements, civil unrest, terrorist-type things, Vice president of the Underground, as it's called, for Iron Mountain, an information management company.
Except for the cars parked outsideyou'd have no idea what's here. Besides 7 million gigabytes of digital data, including e-mail, computer backup files and digital medical images such as MRIs, the Underground is home to documents, film reels and computer backup tapes owned by the U.S. Patent and Trademark Office, Sony Music and Universal, among others.
Doughty worked for years on Room 48, an experiment in making data centers more energy-efficient and reliable, and is working now on ways to utilize some of the cold water in the mine to cool the computer space without using chillers or cooling towers. He hopes to begin construction next year.
The security of data centers, Doughty says, is becoming increasingly important for companies and governments not only because of the situation in the United States with terrorism, but because of the world situation.
Lewis says one of the lessons of the Sept. 11 terrorist attacks was the importance of having data stored in more than one place. As more data centers are built, he says there will be more debate about legal issues: What happens if law enforcement has a warrant for a server that also contains data owned by other companies? Should there be standards for protecting consumers, including requirements that they be notified of breaches? Should data centers be regulated by the government?

Fiat Credit Rating Goes Down Because Of Chrysler Group

2011-10-04T11:56:00.000-04:00

Story first appeared in USA TODAY.
Ratings agency Moody's downgraded the credit rating of Fiat today, saying it did it primarily because of risks associated with Fiats closer combination with Chrysler Group.
Fiat holds a 53.5% of Chrysler and has said it will get 5% more by year-end -- a chunk due from the U.S. government when it meets the final bankruptcy deal goal of building a high-mileage small car in the U.S.
Moody's said increased integration of the companies likely means they'd have to prop each other up if things go south, even though Fiat, under the terms of the takeover, is not on the hook for Chrysler's debts. Moody's expects "that the creditworthiness of Fiat and Chrysler will become more closely aligned over time as the strategy and operations of the two groups becomes progressively more intertwined," including sharing vehicle platforms and powertrains, Moody's lead Fiat analyst Falk Frey told the Associated Press.
In the arcane heirarchy of debt ratings, Moody's cut Fiat from Ba2 to Ba1. The real-world impact is that Fiat will have to pay more for loans. Chrysler already is lower, at B2.
While the rating reflects the risks still inherent in Chrysler's comeback, it also seems to reflect caution about Fiat's financial muscle to handle adverse events at one or both operations.
Fiat has lost money in Europe, where the financial mess, especially as it affects Fiat's home market in Italy, has hurt sales. And Moody's says that Fiat's loss in Europe share is due in part to a slower pace of new models than rivals, a pace CEO Sergio Marchionne said at the Frankfurt show last week may slow further because of Europe's woes. Moody's also cites increased competition in Brazil, Fiat's most profitable market.
Marchionne also at Frankfurt that for now, an IPO for Chrysler is not possible because of market conditions.

CareTech Solutions Invests $1.5 Million in Hospital IT Help Desk

2011-10-03T14:58:00.000-04:00

Company’s Service Desk Undergoes Major Renovation in Preparation for Growth Explosion

(TROY, Mich., Sept. 29, 2011) CareTech Solutions, an information technology (IT) and
Web products and services provider for U.S. hospitals today unveiled its newly re-configured and remodeled Service Desk, a 24x7x365, on-shore medical help desk that currently responds to nearly one million contacts a year from hospital users seeking IT support with clinical and business systems. The $1.5 million investment enables additional growth and hiring for the Service Desk which is on track this year to experience twenty five percent growth in revenue.

“The Service Desk is the fastest growing piece of our business, largely due to the recent explosion of electronic medical records and healthcare technologies,” said Jim Giordano, president and CEO, CareTech Solutions. “Service Desk is more than a call center, it’s a highly-specialized technology support organization with analysts trained to quickly resolve doctors and clinicians’ IT issues so they can get back to what they do best, caring for patients.”

The Service Desk, based in Troy, Michigan, was launched by CareTech Solutions in 1998 with less than 30 employees. In 2008, CareTech added a dedicated physician-only hotline, remote control tools, and a knowledge base that holds over eight thousand answers for all major clinical systems and business applications. Today, the Service Desk staff has grown to almost 160 employees, with more than 45 added this year.

About CareTech Solutions
CareTech Solutions, Inc., an information technology and Web products and services provider for more than 180 U.S. hospitals and health systems, creates value for clients through customized IT solutions that contribute to improving patient care while lowering healthcare costs. From implementing emerging technologies to supporting day-to-day IT operations, CareTech offers clients expert health information management services across the entire patient data lifecycle earning it the 2008, 2009 and 2010 Best in KLAS award for IT Outsourcing (Extensive) as ranked by healthcare executives and professionals in the Top 20 Best in KLAS Awards: Software & Professional Services report.

For more information, please visit www.caretech.com.

Chrysler’s Workers Overwhelming In Favor of National Labor Contract

2011-10-03T14:49:00.000-04:00

Story first appeared in the Detroit News.
Workers at Chrysler Group LLC's Global Engine Manufacturing Alliance plant in Dundee, near Splash Universe Dundee, have voted overwhelmingly in favor of a proposal to make their factory subject to the new national labor contract the company is negotiating with the United Auto Workers.
More than 99 percent of the votes were cast in favor of the plan. Only two workers voted against it, according to local union officials.
The vote was prompted in part by Chrysler's decision to implement a controversial rotating shift schedule that would require workers to alternate between days and nights.
Tom Zimmerman, plant chairman for UAW Local 723, said Chrysler has agreed to reconsider that plan now.
A labor expert comment that she thinks it's ultimately better for them to be a part of the national agreement, noting that GEMA workers will now have the right to relocate to other factories if there are job cuts at their facility. She added that it's easier for Chrysler too, because it makes things a lot simpler for the company."
The measure had been endorsed by UAW Vice President General Holiefield, head of the union's national Chrysler department.
The Dundee factory was not previously part of the national agreement because it was originally set up as a joint venture between Chrysler and two Asian automakers: Japan's Mitsubishi Motors Corp. and South Korea's Hyundai Motor Co.
Zimmerman said negotiations will begin shortly on a new local agreement that will address the shift schedule, which was due to begin next week.
Workers at Chrysler's Trenton Engine Complex have been working the grueling schedule since last year and are lobbying for it to be rescinded or changed.
If Chrysler and the UAW agree to the same language on alternative shift scheduling that was part of the recently approved contract between the union and General Motors Co., at least some relief could be in sight.
There would still be alternative work schedules allowed, as there is in the GM agreement, but there is a wide range of work schedules made possible by that language.

Economic Gardening

2011-09-27T13:34:00.000-04:00

Story first appeared in the Traverse City Record-Eagle.
Economic Gardening is the new buzzword in Michigan’s economic development lexicon. It’s focused on growing Michigan-based companies and entrepreneurial start-ups over trying to lure new operations into the state. Sunday’s September 25th Business section will debut a new monthly column produced by the Traverse City Area Chamber of Commerce on its economic development efforts in the region. This week Tino Breithaupt, the chamber’s outgoing senior vice president of economic development, will expand on the organization’s Economic Gardening activities in northern Michigan.

UAW-CHRYSLER NEGOTIATIONS AT A STANDOFF

2011-09-27T13:27:00.000-04:00

Story first appeared in the Traverse City Record-Eagle.

Negotiations over a new four-year contract between Chrysler and the United Auto Workers have broken down as both sides refuse to budge on key financial issues, two people briefed on the bargaining said Thursday.

The talks ended late Wednesday in a dispute over the number of workers who are paid an entry-level wage, said the people, who asked not to be identified because the negotiations are private.

Chrysler Group LLC, which is losing money, wants no limit on cheaper entry-level workers. The union wants a cap on the number of those workers, who make $14 to $16 an hour, about half of what a longtime union employee earns.

Chrysler factories continue to operate under a contract extension.

Detroit’s three car makers are each negotiating labor agreements with the UAW.

Jobless Rates Decrease In Michigan

2011-09-27T11:41:00.003-04:00

Story first appeared in the Traverse City Record-Eagle.

The state of Michigan says seasonally unadjusted unemployment rates have decreased in all of Michigan’s 17 major labor markets.

The figures for August were released Thursday by the Department of Technology, management and Budget, and they reflect seasonal reductions in the work force.

Fewer unemployed workers actively sought employment in August than in July. Summer hiring receded from a July peak.
Statewide, the unadjusted jobless rate in August was 11 percent compared with 11.9 percent in July.

Rates ranged from a low of 7.2 percent in the Ann Arbor region to a high of 12.9 percent in the Detroit region.

Seasonally unadjusted payroll jobs in Michigan increased by 0.3 percent in August.

Jobs were added in manufacturing, construction and professional and business services. The state lost government jobs.

Traverse City Company Holds Nation Wide Art Contest

2011-09-27T10:40:00.000-04:00

Story first appeared in the Traverse City Record-Eagle

An art contest sponsored by Traverse City-based banner company Britten Inc. will award cash prizes and offer a chance for artists to gain major exposure.
The contest, artUP, hopes to find great fine and digital art, photographs, graphics and logs. Contestants can submit entries, for a fee, starting this week through Dec. 28.

For some artists who participate in artUP, their art will literally go “up” in public places. Britten makes large banners and signs to display in malls, stadium, downtowns and other venues such as exhibit rentals. The contest will help Britten build an online Artist Marketplace full of art for customers to use on various projects.
There’s a lot of times that client would come to Britten and ask if they have any creative work, clip art or stock art.

Contest submissions will be pooled into a collection where clients can access and review the work for use in creative campaigns.

General Motors Is Said to Offer Bonuses and Reopened Plant

2011-09-22T13:07:00.003-04:00

Story first appeared in The New York Times.

DETROIT - The United Auto Workers union won $5,000 signing bonuses for its workers and a promise to reopen an assembly plant in Tennessee as part of its tentative new contract with General Motors, according to people briefed on the negotiations.

In what is being viewed as a landmark deal, the union also preserved health care and pensions and improved profit-sharing for its roughly 48,000 members who work at G.M.

Officials at G.M. and the union declined to discuss specific terms of the deal. But people briefed on the negotiations said that workers would receive a signing bonus of $5,000 in lieu of cost-of-living wage increases. Entry-level workers, who are paid about $14 an hour, are expected to receive an increase of $2 to $3 an hour.

The company has also agreed to reopen its idled assembly plant in Spring Hill, Tenn., the people said.

The U.A.W.’s tentative, four-year agreement with G.M., announced late Friday, also opens the door for the automaker to bring back laid-off workers and move jobs back into the United States.

G.M. is the first of Detroit’s Big Three to reach a deal with the union. Details of the agreement were being withheld until the union can inform members, who will vote on ratification over the next two weeks.

The union’s president, Bob King, said in a statement that union members would get a larger share of the profits from G.M.’s comeback from its federal bailout and bankruptcy in 2009.

G.M.’s lead negotiator, Cathy Clegg, said the agreement allows G.M. to continue adding jobs as it increases market share in the United States.

Industry analysts said the union achieved its goals of balancing economic gains in the agreement with solidifying G.M.’s cost structure for future growth.

Increasing jobs in the United States was a critical goal for U.A.W. leaders under pressure to show that the government’s bailout of G.M. is producing positive economic benefits.

Mr. King took the unusual step of acknowledging the Obama administration’s support of the industry in his statement: “None of this would have been possible without the efforts of President Obama, who invested federal funds to help turn the company around, protect the auto supplier base and keep good-paying jobs in America.”

The union said that it had successfully fought off G.M.’s proposals to weaken pensions and obtain major concessions on health-care benefits.

Mr. King’s next task is to seek broad support among local union leaders and G.M. workers for the tentative deal. U.A.W. leaders from plants across the country are expected to gather in Detroit on Tuesday to hear the details.

GM UAW Deal

2011-09-22T12:14:00.004-04:00

Story first appeared in USA Today.

Late Friday night, the UAW and General Motors reached a deal on a tentative labor agreement covering 49,000 U.S. workers that gives a long-awaited glimpse into what the post-bankruptcy Detroit auto industry — and union — will look like.

The deal will create an undisclosed number of new jobs, and if the terms are viewed as reasonable, it will likely be heralded by the backers of GM's 2009 government-backed bankruptcy as proof the rescue was a success.

The UAW feels this contract will get their members who have been laid off back to work, will create new jobs in their communities and will bring work back to the United States from other countries.

While many details of the deal were not immediately divulged, the UAW press release shared some of the positive highlights of the deal:

"Significant" investments and products for GM plants.
Wages and benefits that "reflect the fact that it was UAW members who helped turn this company around," said Joe Ashton, UAW vice president.
Improved profit sharing

The new jobs include opportunities at powertrain plants in Warren and Romulus, Mich., and Wentzville, Mo., people familiar with the talks said. GM will also reopen the former Saturn assembly plant in Spring Hill, Tenn., they said.

Profit sharing will now be based on income from all GM's North American operations, not just U.S. plants, a person familiar with the deal said. With the new formula, the average profit-sharing check from last year's $5.7 billion North American profit would have been between $5,000 and $6,000, instead of the $4,000 or so that workers received, the person said. The union claimed profit sharing would be more transparent. Indeed, the bonuses will be based on a simple chart that lists ranges of profits and corresponding profit-sharing payouts, the person said. The bonuses will have a cap.

The contract also increases the entry-level wage, the person said.

Now, the UAW must sell the deal to its GM members. A vote is expected to take place in seven to 10 days.

A 25-year GM worker now at the Pontiac stamping plant, said he was pretty confident the two sides would reach a deal. He said he hopes GM will be restoring some of the benefits for the retirees and a raise of some kind for the new hires.

The four-year deal could set the competitive tone for the Detroit Three as they continue recovering from the Great Recession that sent GM and Chrysler into bankruptcy two years ago.

After kicking off negotiations in late July, it was clear the UAW was making more progress at GM, and both sides worked toward reaching a deal before the Sept. 14 expiration of the 2007 contract. That didn't happen. Final details were eventually hammered out at about 11 p.m., after several days in which a deal seemed close, punctuated by an angry letter to UAW President Bob King from Chrysler and Fiat CEO Sergio Marchionne.

Friday night, union officials heralded their tentative deal.

A GM exec said they worked hard for a contract that recognizes the realities of today's marketplace, enabling GM to continue to invest in U.S. manufacturing and provide good jobs to thousands of Americans. She said they are proud of this agreement and are happy that it truly recognizes that the success of the company is tied to the success of the workers, and as everyone knows, they have had, and will continue to have, some real differences with GM. It's the union's job to fight for workers and protect their members, and we will continue in that fight.

Evaluating and replicating the new deal.

The UAW is expected use the deal as a guide for talks at GM's crosstown rivals. Chrysler is widely expected to be the next automaker to reach a deal with the UAW, followed by Ford, where talks might be complicated by the automaker's strong turnaround and workers' recent discontent.

In the days ahead, the deal will be scrutinized by autoworkers, Wall Street and the taxpayers and politicians who helped finance the controversial 2009 bankruptcies of the two automakers.

If the terms are viewed as reasonable, the contract and the new jobs that go with it could be sold as a victory by President Barack Obama and the Democratic Party, who backed the automakers when public support was weak.

GM likely benefited by negotiating the first tentative agreement with the union in this round of bargaining, the first since the financial crisis of 2008 and 2009.

Friday night, the union claimed to have prevented cuts to pensions and secured improvements, not cuts, to health care benefits.

Mindful of taxpayers' aid.

In July, when contract talks began, GM and UAW leaders said they would keep the taxpayer assistance in mind as they worked on the new contract.

Both sides were also equally invested in showing the world that they weren't slipping back into what might be perceived as their old ways.

High labor costs — relative to foreign rivals — and heavy retiree health-care burdens had helped to drag down the Detroit Three in the years before the financial crisis. Other contributors: general mismanagement; an over-reliance on light trucks, especially SUVs; and a reliance on profit-eroding incentives that damaged brand value.

That "old Detroit" paradigm was largely cleaned up during the restructurings at the Detroit Three in recent years. The union did its part, too, agreeing to amend its labor contract with GM and Chrysler in 2009 before the automakers' bankruptcies. That deal brought U.S. wages and benefits to near-parity with foreign competitors, ended the notorious "jobs bank" that paid laid-off workers, eliminated cost-of-living raises and replaced some of the payments owed to a union's health-care trust with stock.

While GM and Chrysler completed their makeover during quick trips through bankruptcy, Ford self-financed its turnaround — a fact that became a proud marketing point for the automaker.

Healthy and making progress.

Today, the Detroit Three are more profitable than they've been in years, and at far lower sales volumes.

Consider this: Between 2005 and 2008, when the U.S. selling rate generally surpassed 16 million cars and trucks, GM and Ford posted losses that topped $100 billion.

In the first half of the year, when the selling rate was about 12.8 million cars and trucks, GM and Ford made $5.4 billion and $4.9 billion respectively. That's on top of the $4.7 billion GM made last year and the $6.6 billion Ford made in 2010.

Chrysler, meanwhile, continues to improve as its new Italian owner Fiat integrates the management teams and product portfolios. But, for now, it remains the weakest of the Detroit Three. Its $254 million loss through the first half of the year was largely due to repayment of government loans. Chrysler posted a loss of $652 million in 2010.

Given those profits, the UAW's King said he saw no reason for additional concessions and declared that autoworkers deserved to benefit from automakers' new found profits.

The automakers haven't objected to that notion, but have remained firm in their opinion that the reward be shared in ways that do not increase their fixed costs. Wall Street could see rising fixed costs as regression into Detroit's former bad habits.

King, a creative and practical leader, had repeatedly suggested that the two goals were not adversarial and remained positive that a deal could be reached that achieved goals on both sides.

He also was aware that a contentious round of negotiations, or one that gave workers either too little or too much, could have further tainted the images of the automakers or their union.

Chrysler talks contiune.

At Chrysler, contention is still possible, even if a strike is not. At GM and Chrysler, workers gave up the right to strike on wages and benefits as part of the U.S. government's assistance for the automakers. Any impasse will go to binding arbitration under the terms of that deal.

The scathing letter CEO Sergio Marchionne sent to King on Wednesday could signal trouble or just a momentary flare-up. Marchionne criticized King for failing to show up to a previously scheduled meeting to negotiate the contract after Marchionne flew back from Germany.

Even without Marchionne and King, talks between the UAW and Chrysler were scheduled to continue through the weekend, under a continuation of the outgoing 2007 contract. And Marchionne was expected to return to the table Tuesday.

Today's new agreement with GM could also give King the opportunity to convince Chrysler that he is more of a partner than an adversary and patch up the relationship.

Ford talks resume next week.

Meanwhile, at Ford, no bargaining is planned for the weekend, although it's expected to resume next week. Bargainers there have maintained a slower pace than at GM and Chrysler.

Ford and the UAW have indefinitely extended the contract they reached in 2007.

Talks in Dearborn are expected to be more complicated. For one, Ford's turnaround is regarded as strong. It's been profitable since 2009 and it has gained market share and confidence under CEO Alan Mulally's "One Ford" plan.

Ford will likely push to get its labor deal competitive with those at GM and Ford, where the UAW was able to get more concessions out of its members to assist with the 2009 bankruptcies.

In early 2009, Ford got workers' cost-of-living allowances suspended and eliminated its jobs bank. After GM and Chrysler's bankruptcies, however, the Dearborn automaker sought to get a similar no-strike clause and an entry-level wage freeze.

But workers overwhelmingly voted down that proposal, despite the promise of a $1,000 bonus. The UAW has since filed a grievance against Ford over the reinstatement of merit pay for salaried workers, claiming unequal treatment for their hourly counterparts. That grievance remains outstanding.

With a strike out of the question at GM and Chrysler, Ford is the only automaker that faces the possibility of a strike this year. Workers at Ford have already authorized a strike, a routine step, although national strikes are rare.

Fuel Cell Partners Sought By Daimler

2011-09-15T16:28:00.002-04:00

Story first appeared in Bloomberg News.

Daimler AG, the world’s third- largest maker of luxury vehicles, is in advanced talks about expanding its fuel cell partners beyond Ford Motor Co. as it targets widescale production of the technology, development chief Thomas Weber said today in an interview at the Internationa Motor Show in Frankfurt.

The Stuttgart, Germany-based maker of Mercedes-Benz vehicles is in talks with other automakers as well as companies that would set up a hydrogen fuel station network, Weber said.

Daimler, which introduced a fuel cell-powered concept vehicle in Frankfurt, plans to produce more than 1,000 B-Class F-Cell vehicles, which are powered by the chemical reaction that creates water. The production run will rise to more than 10,000 with a next generation in 2017, Weber said.

Mercedes plans to expand its fuel cell offering with a sedan below the S-Class by 2017, he said. Daimler and Ford both own stakes in Automotive Fuel Cell Corp.

Contract Deadline Extended By UAW

2011-09-15T15:06:00.002-04:00

Story first appeared in USA TODAY.
The United Auto Workers union extended its contracts with General Motors Co. and Chrysler Group LLC early Thursday after failing to meet a deadline to reach a new agreement.
GM broke off talks after midnight and said they would resume at 8 a.m. EDT Thursday. Chrysler didn't say when its talks would resume.
The decision has little impact on the 71,000 U.S. factory workers covered by the GM and Chrysler contracts. In the past, workers might have gone on strike if the UAW hadn't extended their contracts. But as part of their 2009 government bailouts, GM and Chrysler workers had to agree not to strike over wages.
A UAW local official at a GM factory in Lordstown, Ohio, wrote that they should continue to do the things they do until they receive official notification otherwise.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker. The Ford contract covers around 40,000 workers.
Up until the deadline, the negotiations that began over the summer appeared to be proceeding without the acrimony that plagued them in the past. But just before the 11:59 p.m. EDT Wednesday deadline, the CEO of Chrysler fired off a letter to UAW President Bob King saying an agreement likely wouldn't be reached because King didn't come to the table Wednesday night to finish the deal.
Chrysler CEO Sergio Marchionne said he knows they are the smallest of the three automakers in Detroit, but that does not make them less relevant.
Marchionne said he planned to travel out of the country for business and will return next week. He said he would agree to a weeklong extension of Chrysler workers' current contract. The UAW didn't set a new deadline to reach agreements.
The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker.
Marchionne said he and King met a week ago and agreed to finish work on the new contract before the deadline. He said not meeting the deadline hurts Chrysler's workers.
Things appeared to be progressing more smoothly at GM. Joe Ashton, the UAW's vice president in charge of the GM negotiations, told local union officials Tuesday night in a note that bargainers have made "much progress" in talks with the company. GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.
The contract talks will determine wages and benefits for 111,000 union workers at the auto makers, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more. The contract talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.
GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it's been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well.
Ashton wrote that difficult restrictions have been placed on the union and company as a result of the bailout. To get the government funding, the union had to agree not to strike over wages at GM and Chrysler. Also, unresolved issues can be taken to binding arbitration, and the union's new contracts must keep the companies' labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.
The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and GM want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady. Health care costs are also an issue.
Once the contract agreements are reached, workers will vote on them.

Gas Mileage Not As Great As One Might Think

2011-09-15T14:52:00.002-04:00

Story first appeared in USA TODAY.
Chevrolet's new small Sonic subcompact is going to be able to join the 40-mile-per-gallon club, but only with a pricier, turbocharged version.
Despite GM's earlier claims of a 40-mpg rating for the 2012 Chevrolet Sonic, the standard 135-horsepower, 1.8-liter four-cylinder will be rated by the EPA at 26 miles a gallon on the highway and 35 mpg on the highway, for a combined 29 mpg with a five-speed manual transmission. With an optional six-speed automatic transmission, the 1.8-liter returns 25 city/35 highway/28 combined mpg.
The only way to get 40 mpg on the highway is to opt for the 138-horsepower, turbocharged 1.4-liter four-cylinder, which comes with a six-speed manual transmission only. The engine is a $700 option for the higher level LT and LTZ trims. The Sonics are starting to boom their way into dealers: Cars.com shows more than 500 Sonics available, but none are equipped with the turbocharged motor just yet.
The Sonic's EPA rating is a disappointment compared with its competitors and even against its larger sibling, the Cruze:
A 2012 Chevrolet Cruze equipped with the same 1.8-liter four-cylinder and a six-speed manual transmission gets 25 city/36 highway/29 combined mpg. The Cruze Eco with an automatic transmission gets a 26 city/39 highway and 31 mpg combined. The fact that the lighter-weight Sonic scores no better than a Cruze is probably due to aerodynamics.
Competitors like the 2012 Hyundai Accent (30 city/40 highway mpg), 2012 Ford Fiesta SFE (29 city/40 highway mpg), 2012 Toyota Yaris (30 city/35 highway mpg) and 2012 Honda Fit (28 city/35 highway mpg) all score better. To add insult to injury, the Sonic scores worse, or no better, than the outgoing 2011 Chevy Aveo, which got 27 in the city and 35 on the highway for a 30 mpg combined with a manual transmission and a combined 28 mpg with a four-speed automatic transmission.
We don't know if GM plans on releasing an Eco version of the Sonic, which would help it compete with other fuel misers. For now, the model will likely try to compete on price since it's behind the field on mileage.
The 2012 Chevy Sonic went on sale earlier this month.

Michigan Required Car Insurance Coverage Is Up For Debate

2011-09-12T10:16:00.000-04:00

Story first appeared in the Detroit News.
Possible changes to Michigan's unique auto insurance coverage for people injured in accidents are coming up for debate in the state Legislature.
Michigan now is the only state in the nation that mandates unlimited medical benefit coverage for people seriously injured in auto accidents. That would change under proposals that could offer motorists less expensive insurance in exchange for limited personal injury protection coverage.
Supporters of the changes, including the auto insurance industry, say it would allow motorists to opt out of more expensive coverage they can't afford or don't want. Insurers also are looking for relief in a system they say is growing increasingly expensive and threatening their finances.
Sen. Joe Hune, a Republican from Livingston County's Hamburg Township and chairman of the Senate Insurance Committee said if you take a look at the cost of the system, the skyrocketing medical costs, it's simply unsustainable, and there's going to be a tipping point sometime. The system just can't sustain itself."
Opponents of the proposed legislation say it could threaten the financial stability of the state's no-fault auto insurance system. They say motorists opting for less coverage could wind up underinsured and in deep financial trouble if they're seriously injured in an accident.
John Cornack, CEO of Ann Arbor-based Eisenhower Rehabilitation Center and president of the Coalition Protecting Auto No-Fault, said the proposed legislation does not come close to meeting the needs of severely injured accident victims.
The coalition opposed to the proposed changes includes hospital and health groups, trial lawyers and other organizations. They're engaged in a lobbying battle with auto insurance companies and business groups such as the Michigan Chamber of Commerce that want to alter the system.
The legislation would make significant changes to how people involved in catastrophic injury accidents are covered under state law.
Currently, all Michigan auto policyholders must buy unlimited medical benefits as part of their coverage. Regular auto insurance policies handle coverage up to $500,000, after which all insured motorists are assessed a fee to cover more severe cases, which are reimbursed through the Michigan Catastrophic Claims Association. The association, created in the late 1970s, now covers medical bills for roughly 12,800 accident victims across the state.
Unlimited coverage would continue for those currently in the MCCA system, according to supporters of the developing legislative plan. But there would be no such guaranteed coverage for those severely injured in future accidents.
Instead, motorists would have options for personal injury coverage likely ranging from $250,000 to $5 million. The developing legislation, which could be introduced this month, is likely to replace an original proposal that would let motorists buy as little as $50,000 in coverage up to unlimited coverage.
The new plan also likely will contain fee schedules and other measures aimed at controlling health insurance claims costs. It also likely will include elements of a plan backed by Sen. Virgil Smith, D-Detroit, that could provide some personal injury protection insurance relief in Detroit and possibly to residents in other areas of the state.
The $250,000 threshold would cover about 99 percent of accident victims, Hune said. But the Coalition Protecting Auto No-Fault says the average acute care stay cost for a person with a severe brain injury is more than $250,000, with some surpassing $1 million. The coalition says hundreds of people a year could have injury-related costs beyond even $500,000 in insurance coverage and would need to turn to other income, charities or taxpayers to pay for their care.
Cornack said right now, accident victims in our state can get the care they need without turning to welfare.
But the possibility of cheaper rates might be tempting for some motorists, who now pay an average premium of more than $1,000 a year in Michigan. Supporters of allowing flexibility on medical coverage say Michigan motorists could save roughly 15 percent on comprehensive policies and up to 40 percent on basic policies that don't include coverage for collision or theft.

Saab Bankrupt

2011-09-07T11:42:00.001-04:00

Story first appeared in USA TODAY.

Swedish car maker Saab is filing for bankruptcy protection in a self-managed reconstruction process, the Associated Press reports.
Saab's owner Swedish Automobile, says the Trollhattan-based Saab and its subsidiaries, are filing for a "voluntary reorganization" at Vanersborg District Court on Wednesday.
It cites Saab's limited funds and says the move is to secure short-term stability while simultaneously attracting additional funding.
The brand has been plagued by production stoppages and problems to pay its suppliers and 3,700 staff for months.
Creditors have threatened to put it into bankruptcy unless it pays up.
Netherlands-based Swedish Automobile brought Saab out of a liquidation process by buying it from General Motors in 2010.

WHIRLPOOL CORP. OUT OF A SLUMP

2011-09-06T12:16:00.000-04:00

Story first appeared in Bloomberg.
Whirlpool Corp., the world’s largest appliance maker, said first-quarter profit increased 3 percent, helped by an energy tax credit.
Net income rose to $169 million, or $2.17 a share, from $164 million, or $2.13 a share, a year earlier, the maker of KitchenAid refrigerators and Maytag washing machines said today in a statement. Revenue gained 3 percent to $4.4 billion, surpassing the $4.29 billion predicted by analysts. Profit was $2.11 a share, excluding some items, topping the $1.16 median estimate in a Bloomberg survey. Operating profit declined.
Sales at Whirlpool, based in Benton Harbor, Michigan, recovered last year after the company gained market share and benefited from U.S. tax credits for making energy-efficient appliances. Jeff Fettig, chairman and chief executive officer, is also expanding business in emerging markets such as Brazil, with about half of the company’s sales coming from North America last year.
Fettig said that their first-quarter results reflect their ongoing cost reduction efforts and continued innovation investments, which helped to mitigate significant material cost inflation.
Whirlpool reaffirmed its profit estimate of between $12 and $13 a share this year, helped by between $300 million and $350 million in energy tax credits. The company said in February that it expected to receive $300 million in energy tax credits this year. Fettig told analysts today that the higher number was based on better visibility after monitoring sales of qualifying models.
Whirlpool rose 79 cents, or 0.9 percent, to $88.65 at 4:01 p.m. in New York Stock Exchange composite trading. The shares are little changed this year.
Research and Development
Whirlpool plans to spend more than $600 million on research and development and will open a plant and distribution center in Tennessee and a new headquarters in Michigan with $1 billion in U.S. investment through 2014, Fettig said in a speech in Detroit last month.
Founded a century ago, Whirlpool bought smaller Maytag Corp. in 2006 for $2.6 billion to compete with appliance makers in Asia.
After closing nine factories in North America since the merger, the company still operates nine plants in the U.S., with about 17,500 workers, and says 82 percent of the units sold in the U.S. are domestically made. Whirlpool can claim the tax credit only for appliances produced in the U.S.
Globally, Whirlpool employs 71,000 people.
Sales at the appliance maker rose 7 percent to $18.4 billion last year after dropping during the housing slump of the previous two years. In the year-earlier quarter, the company attributed a rise in revenue to increased productivity.
Tax Rates
Whirlpool had negative effective income tax rates in 2010, 2009 and 2008. Last year, the company reported an income tax benefit of $64 million and an effective tax rate of negative 10.9 percent, according to company filings. The company expects a similar tax benefit in 2011, corporate controller Larry Venturelli told analysts today.
The company relies more heavily on the credit than do other appliance makers such as Electrolux AB and General Electric Co., said Laura Champine, an analyst at Cowen & Co. in New York.
Electrolux, based in Stockholm, is accruing the credits for future use against its U.S. tax liability, chief financial officer Jonas Samuelson told analysts.
Tax Benefits
He said they have the same opportunities for tax benefits that are quite similar to Whirlpool when it comes to energy tax credit, however, they can’t realize them to earnings to the same extent.
Congress created the appliance manufacturing tax credit in 2005. It was extended for a year in December in a broader tax law. The congressional Joint Committee on Taxation estimated that a one-year extension would cost the government $235 million in forgone revenue over the next decade. That’s higher than the $78 million estimate it issued last year, before officials realized how much of a benefit the credit provides to Whirlpool.

Does Akerson know what he is doing?

2011-09-06T11:04:00.001-04:00

Story first appeared in Bloomberg.
In June, Daniel F. Akerson, the chairman and chief executive officer of General Motors (GM), gave a speech to about 400 engineers and designers at the company’s technical center north of Detroit. It was a boilerplate, morale-boosting speech, generous with exhortations about work ethics and staying vigilant. Then came the Q&A session. One employee wanted to know: What kind of hours did Akerson expect them to put in at the office? Akerson answered with a family parable. He told the crowd he’d called his son’s office at 6:30 that morning and found him at his desk. Akerson informed his son, who does not work at GM, that he would call again in 12 hours and that he expected him to still be at work. The moral, as if anyone in the room needed an explanation: “Generous Motors” is gone, so get busy. Next question.
The anecdote didn’t go over well, according to two people in attendance who spoke on condition of anonymity because the gathering was private. This was 10 months into Akerson’s reign as CEO and two and a half years after the company’s bankruptcy and bailout by the federal government. Thousands had lost their jobs, leaving the survivors to do more even as they watched their stock in old GM evaporate. Akerson said he hopes some people are uncomfortable, and that it’s not his role to make people comfortable. He added that he doesn’t know what it was like there five years ago, and really he doesn’t care, because they are in a war. One Bed Liner manufacturer wants to see truck sales increase so his business can get back on track. He is excited for the new CEO's changes.
When the U.S. Treasury appointed him to GM’s board in 2009, Akerson, 62, had no auto industry experience. He does have a résumé, though: nearly 20 years as a telecom industry executive, successfully leading MCI and Nextel, then a run as a private equity investor with Carlyle Group. Depending on who’s talking, these qualifications make him either a refreshing force for change or a clueless newbie doing more harm than good. A longtime car industry consultant said that it’s not that he isn’t smart or a good executive, he just lacks the background, and even when he gets an answer, he may not know if it’s the right answer.
Of course, the same could be said of Ford’s (F) Alan Mulally (previously at Boeing) (BA) and Akerson’s predecessor, Edward E. Whitacre Jr. (AT&T) (T). Akerson says being new was a gift because he could ask questions that were impolite, previously imponderable, or politically incorrect. His 39th-floor office at GM’s headquarters in Detroit’s Renaissance Center is decorated with large glamour photographs of a Camaro and a Cadillac, but not the auto-racing tchotchkes that industry veterans typically display. He says he is not a car guy, nor should the CEO be worried about rear axle ratios on the next transmission.
Now that GM is making money—profits hit $6.2 billion last year, and the company has $32 billion in cash—Akerson has moved the company out of survival mode and is pushing it, whipping it even, to grow.

Akerson was born in California and raised in Mankato, Minn. His father had been an enlisted man in the U.S. Navy. Akerson attended the Naval Academy, graduated in 1970, and served a tour aboard a destroyer during the Vietnam War. He boxed in college—he was a light heavyweight—which may help explain his penchant for talking smack. Since taking over at GM, he has declared Lincoln dead—Ford should “sprinkle holy water” on its luxury brand, he told the Detroit News—and ridiculed Toyota’s (TM) Prius as a “geekmobile.”
The jab at Toyota came during a speech last December in Washington, when he heaped praise on the Chevrolet Volt, a plug-in hybrid and would-be Prius killer. In December, Akerson and his top managers had a meeting in the office of Thomas Stephens, then the company’s vice-chairman of global product development. The team wallpapered the room with plans for the Volt’s rollout, including pricing, sales targets, and production. Stephens and the product development staff figured the plan was baked and ready to go. Sales started that month and supplier contracts were already in place for future model years. Akerson homed in on the plan to build 45,000 Volts next year and wasn’t satisfied. He said the package came to him completely sanitized, with the notion that he just had to put his stamp on it but he wanted more, more, more.
Prior to the meeting, Akerson says, someone told him that new models need to sell at least 100,000 in a year to be successful. So that’s the goal he gave his team: 120,000 Volts in 2012. When GM’s Volt engineers heard about their new stretch target, they blanched—and not merely because engineers everywhere tend to resent orders from the suits. It took the Prius about seven years to hit the annual numbers Akerson wanted. Since the Volt is still a money loser, jacking up production would only push prices lower and losses wider. Quality could suffer, too, they argued, if GM pressured its suppliers to nearly triple the volume of the car’s high-tech parts, especially its lithium-ion batteries.
After four months of fact-finding and debate, Akerson backed off. It turned out that the suppliers wouldn’t take on the risk of building enough batteries to power 120,000 Volts unless GM guaranteed to repay their capital investment should sales come up short. (In the past, the company had exuberant sales forecasts for hybrid systems in its large SUVs that never quite materialized, making it difficult for suppliers to make a return on their investment.) Since no one at GM could say for certain how many of these pricey, tech-laden cars it could actually sell, Akerson settled on a production goal of 60,000—half of what he wanted and still a third more than his development people originally planned. The compromise also sent a message to his team: He may be pushy and unschooled in the practicalities of automobile production, but he wasn’t, just a reckless gambler. GM Vice-Chairman Stephen J. Girsky says Akerson’s sense of when to relent is what makes him more than a mere bully. Girsky says that even when he losesit’s a good thing because he is challenging the organization.
William E. Conway Jr., co-founder and managing partner of Carlyle Group, said people say he is tough but he wouldn’t say that. He added that Dan will make the tough decisions, but he is also willing to change his mind.

One of Akerson’s first tasks after taking over as CEO last Sept. 1 was figuring out how to break up the old bureaucracy without losing too much institutional knowledge. For help, he turned to an old pro: retired IBM (IBM) Chief Executive Louis V. Gerstner Jr., who came to GM’s headquarters in January to talk shop. Gerstner was a computer industry novice when IBM’s board hired him from RJR Nabisco in 1993. Early on, he brought in a new chief financial officer, Jerry York, who had been CFO at Chrysler. Then he concentrated on assembling a team with deep knowledge of the computer business. His advice regarding GM, says Akerson, was to identify optimists with experience and a competitive streak and promote them.
In February, Akerson nudged aside the veteran Stephens in favor of Mary T. Barra, the 49-year-old human resources director, to run product development. (Stephens is now chief technology officer.) Akerson elevated former Hyundai marketer Joel Ewanick to global chief marketing officer and promoted Treasurer Daniel Ammann, 39, to CFO after the resignation of Ammann’s predecessor, Christopher P. Liddell. Filling out Akerson’s top team are Girsky, a former Wall Street analyst and private equity investor who’d been an in-house adviser in 2005 and 2006, and GM-North America President Mark Reuss. A GM lifer, Reuss is the management team’s car guy and has earned Akerson’s trust.
Reuss recalls that around the same time Akerson was pushing to sell more Volts, the boss was raising questions about the next-generation Chevy Malibu. At a meeting at GM’s design center north of Detroit in December, Reuss and design chief Edward Welburn proudly showed Akerson a hard-foam mockup of the future Malibu. The design added the distinctive tail lights and sculpted haunches of the hot-selling Camaro. Akerson loved it. Reuss says Akerson turned to him and asked how fast can we get this, when the car wasn’t due to market until mid-2012.
Akerson wanted it as soon as possible. He pointed out that the longer Chevy has to sell the current car, the more incentives it will need. That would push its price closer to the all-new Cruze compact. A loaded Cruze compact sells for almost $23,000, and the larger Malibu sedan starts below $22,000, not counting $1,000 in rebates and cut-rate financing offered on the bigger car. Akerson’s fear was that buyers would opt for the Malibu and cannibalize Cruze sales.
Old GM pushed back. One employee sent Akerson a long e-mail telling him why pulling the car ahead was a dumb idea. Engineers said that rushing the Malibu could compromise quality. Worse, the new four-cylinder engine wouldn’t be ready until later next year. The engine was designed to make its debut on the Malibu and there is no way to speed engine development, Reuss says.
The rebellion went straight to Akerson who said he started getting e-mails from people he didn’t even know saying he would threaten the quality of the product. Others told him that the Malibu already had a POR, for “plan of record,” which is GM-speak for “set in stone.” Akerson recalls asking in exasperation that don’t you ever reshuffle your plan so we can think competitively?
He responded to the internal critics by saying that the family sedan business is hotly competitive and GM would blow about $200 million in incentives over the next year while waiting for a fresher model of the Malibu. Then Reuss, who’d come up through the company’s engineering ranks, realized that the company had another four-cylinder engine that would be ready in January and could be mated with GM’s eAssist mild hybrid system. After just three meetings—unheard-of at GM—the company figured out how to start selling the new Malibu in January with the hybrid system, offering buyers 38 mpg on the highway. The hybrid version will help GM compete with the Ford Fusion and Toyota Camry, both of which offer hybrid systems in their cars.
Some of the new team’s decisions have been costly. Late last year, Reuss concluded that GM should jack up rebates to help dealers boost volume and thin out rising pickup truck inventory. Akerson backed him, and GM offered the industry’s largest deals in the first quarter of 2011. The move was an echo of pre-bankruptcy GM, which used massive rebates to boost sales and sell out the capacity of its overblown factory network. The strategy helped sales, but GM’s first-quarter earnings showed that the new management team overspent: GM said the incentives lowered profits by $300 million. Meanwhile, Ford said its price increases helped its bottom line by $900 million in the quarter.
Akerson is planning to stay at GM for three to four years, says a person familiar with the CEO’s intentions. During that time, he’ll have some legacy-defining decisions to make. GM has seven global engineering centers, which the company calls tier-one centers, each specializing in designing the foundations of vehicles that are most popular in their regions. The Korean center specializes in subcompacts for emerging markets, the U.S. focuses on trucks, Europe on compact cars, and so on. The cars are engineered in those centers and sold around the globe. The centers have produced some recent hits, including the Chevrolet Cruze compact and Buick LaCrosse sedan, but Akerson says the system is too costly and complex. He may shut down some centers and consolidate engineering. It would save money—and it could also backfire by shifting development of some models away from the experts. Akerson say there’s always that risk, but our competition doesn’t have seven tier-one engineering centers around the globe.
He’s weighing how to make Cadillac a global luxury player that can rival BMW, Mercedes, and Audi. This has been the subject of yet another internal debate at GM. Akerson says there was a push to go after Europe first and establish Cadillac as a legitimate competitor to the German brands. He disagreed. Akerson figured that investing in Europe first would mean missing out on the real growth market, China. He won. By the third quarter of next year, GM will be making more than 100,000 Cadillacs a year on the mainland. Going after the European market is at least two years away, Akerson says if they wait five years, German brands will take over, and they have a chance in the second-largest market in the world.
Another big choice awaiting Akerson is the designation of his successor. He has nothing but praise for Reuss, Girsky, Ammann, and Barra. He says he wants to groom a few different candidates and then heaps extra praise on Reuss.
Akerson knows that none of those decisions will matter if GM backslides, as it has so often in the past. The company has a long history of following periods of glory with periods of failure. Breaking out of that cycle will require a new work ethic, product vigilance, and all the other virtues he harangues GM employees about. This summer, Akerson had his top 60 managers engage in a kind of automotive war game called Tough Love. The exercise called for six teams with 10 executives each representing GM’s major competitors. The executives had to get out of the GM uniform, Akerson says, and figure out how to crush the company.
Akerson was on the Fiat-Chrysler team. Team Toyota, headed by Girsky, examined how that company handled its recall fiasco last year. The Japanese company offered deals to its customers to bring them back. GM figured Toyota may come out swinging with aggressive sales tactics once the tsunami’s impact subsides and Japan’s factories are cranking again. They also decided the Prius—the geekmobile—still gave Toyota a huge advantage in fuel economy. GM has the Volt, but team Toyota didn’t think GM would do much beyond that. GM’s remedy: Come up with something Toyota won’t expect. As a result, GM this summer resurrected the once-shelved Cadillac Converj, a concept car using Volt technology. Akerson says the car will come to market a few years from now, under the name Cadillac ELR.
When asked later about strategies his team came up with to destroy GM, he demurs, claiming he spent most of his time observing. The main goal of the exercise was getting his executives to consider every threat, as opposed to pretending the competition doesn’t exist. Akerson says he’s pleased with the changes in attitudes he saw during Tough Love. Akerson said going into this exercise, there were a lot of cynics and doubters, but after the feedback was, they realized they have got a lot of work to do. This bodes well for other related industries such as Tonneau and truck accessories makers.

Texas Beats Out Michigan When It Comes To Jobs

2011-08-30T10:06:00.001-04:00

Story first appeared in the Detroit Free Press
In the global contest for jobs and economic growth, Texas has spent the last decade eating Michigan's lunch.
But who deserves the blame -- or, if you're a Lone Star State partisan, the credit?
Is Jennifer Granholm, who served as Michigan governor from 2003-10, the person most responsible for this state's lost decade? Or does Texas' superior economic performance have more to do with the stewardship of Rick Perry, the Republican who succeeded George W. Bush as Texas' governor in 2000, remains in office and recently became the newest entrant in the crowded GOP presidential race?
One possible answer, as we approach the 10th anniversary of 9/11, is that we ought to pay more attention to the pivotal role of Osama bin Laden -- a man whose contributions to both Texas' ascent and Michigan's decline arguably eclipsed that of either state's governor.
You probably thought you'd heard the last of bin Laden earlier this year, when his death in a one-sided firefight with Navy SEALS briefly provided Americans with a welcome distraction from their own deteriorating standard of living.
But the legacy of the 9/11 attacks he masterminded lives on -- and nowhere has the continuing impact of those attacks been more glaring than in Texas and Michigan.
Reversal of fortune
In the years immediately preceding 9/11, American consumers were spending money on all sorts of things, especially cars and trucks. At the end of 2000, nearly three-quarters of U.S. adults expected to make a large purchase within the next 12 months; 23% were specifically in the market for a car or truck.
With gasoline prices hovering around $1.25 a gallon, many of those shoppers coveted one of the shiny new SUVs on which Detroit's domestic automakers had mortgaged their (and Michigan's) future.
Then, on Sept. 11, 2001, bin Laden's minions threw a wrench into everything. The economic turmoil spawned by the attacks rattled Americans' confidence in their immediate economic prospects as well as their nation's security. By year's end, most of the large purchases they'd planned were on hold.
It was the beginning of a more-or-less steady erosion of consumer aspirations; by the end of 2010, only 12% of American adults expected to purchase a new vehicle within the next year.
Michiganders may be less familiar with how the economic trends set in motion by 9/11 affected Texas, but the impact there was equally profound.
The price of crude oil, which hovered around $30 a barrel in 2011 dollars when then Lt. Gov. Perry was promoted to the governor's mansion in December 2000, soared to $150 before leveling off in the $80-$90 range. Besides resuscitating Texas' oil industry, the long-term increase in energy prices incentivized the exploitation of new technologies to extract natural gas. Today, energy industries pump more than $300 billion a year into the Texas economy.
The protracted wars in Iraq and Afghanistan set in motion by the 9/11 attacks were more good news for Texas, which is home to a disproportionate number of large military bases. Though you shouldn't expect to hear much about it from Perry partisans, federal spending in Texas doubled during his first decade in office, exceeding $200 billion a year by 2010.
Post hoc fallacy
OK -- so maybe I've stacked the deck a little here. Plenty of other factors have contributed to Texas' dramatic jobs bonanza -- population growth, and specifically population growth fueled by immigration, is the one economists mention most often -- and the residual impact of 9/11 may be fading even as Texas continues to outperform most other states by many economic metrics.
My point is that we voters have to be very careful about confusing coincidence with causality, whether we are trying to decide which governor provided better economic stewardship or which industries and states have benefitted most from the myriad forces unleashed by 9/11.
The conditions that give rise to prosperity in one state -- or abruptly curtail the economic prospects for residents of another -- are complex, and many of them lie outside the reckoning or control of policymakers.
But if political partisans are serious about understanding how we got where we are today, they may find the trail leads, at least in part, to the watery grave of a madman who wished only the worst for Americans of every political stripe.

Second Hand Mom2Mom Sales Explode

2011-08-30T10:01:00.000-04:00

Story first appeared in the Detroit Free Press.
On a cool Saturday morning earlier this month, 80 cars sat in lines covering the front lawn of the Warren Woods Christian School. It was 8:35 a.m. The school doors had been open for five minutes.
Mothers, some with babies strapped to their chests in carriers, hustled through the dewy lot and headed inside. At the entry table, the workers scrambled. So many had already come through and paid the $2 early-bird entry fee that they'd run out of change.
These moms were there for one reason -- the deals at the Mom2Mom sale.
Table after table of deals, spilling through the cafeteria, into the hallways and down into the gymnasium. More than 100 tables in all. All piled with used baby clothes, toys, shoes, maternity wear, bibs, bottles, books, games and more. All priced to sell.
For Michigan parents, fall means the return of the busy Mom2Mom sale season. Each weekend at churches, community centers and schools from Grosse Pointe to Shelby Township to Trenton and Bloomfield Hills, thousands of moms flock to sales hoping to score cheap goods or to turn their used kids stuff into cash.
The sales work like this: Organizations sell tables and racks for a fee, usually about $20 a table and $5 for a rack. They also sometimes charge for adding items to the "big item" room, which houses strollers, high chairs, play kitchens and more. The sellers rent a table spot and haul in used kids stuff. Shoppers then pay a small entry fee -- usually one or two dollars -- before bargain shopping the morning away. Negotiating is common.
The sales, which started in Macomb County in the early 1990s, are extremely popular. Who can pass up a cute onesie for a buck? Strollers for $15? High chairs for $10?
One mom said they have the exact same toys you see in the store now
During the busiest fall weekends, more than 40 Mom2Mom sales will dot metro Detroit, said Patty Zilinsky, the owner of Mom2Momlist.com, which lists private sales for a small fee. Last spring was the busiest ever, with 247 sales listed. This month, she's been adding about 30 sales to the fall list each week.
Zilinsky said it's just been a domino effect. She started the site in 1999 with Valerie Zilinsky, her then-daughter-in-law. Each year, it used to be there were 35-40 sales in the spring and 15-20 in the fall. And the spring used to go March to May and the fall September to November. Now the spring is from January to June and the fall goes July to December.
Why does this trend continue to grow? Because in a bad economy, thrifting is more acceptable than ever, experts say. This month, Entrepreneur magazine called thrift stores "franchising's hottest industry."
The Association for Resale Professionals reports that the number of thrift stores has grown 7% each of the past two years.
There's no question in Michigan and all over, people are watching their dollars, and in lieu of shopping in a discount store, more are now going secondhand. And Mom2Moms provide the same opportunity to find a brand or product you want that's slightly used but gives you a deep discount. And especially if they're done in community centers, people identify with those places, whether it is in Canton or Grosse Pointe or Bloomfield Hills.
Some metro Detroit sales are so popular, lines form 30 minutes before doors open. At the annual spring sale at Cross of Christ Church in Bloomfield Hills, demand is so high that shoppers are routed to Birmingham Seaholm High School to park and take a shuttle to the sale.
Michigan's Mom2Mom trend has also given rise to a group of moms who are holding onto their children's stuff, rather than donating it or handing it down.
Munro, who organized the Warren Christian sale said it's a brilliant concept, and the organization makes money. People get to come and make money selling their stuff. Shoppers get good discounts. It's a win-win-win.
Munro has been hooked since her daughter, now 9, was 3 months old. She's purchased everything for her at Mom2Mom sales, from big-ticket items to most of her clothing.
She said she bought her entire winter wardrobe one year for $80, which included twenty pairs of pants, 30 shirts, sweaters, dresses, boots, tights, everything. All in one day.
Anna Magri, a 33-year-old from Troy, shopped the Warren sale looking for items for a baby girl due on Nov. 25. It's her first child, and this was her first sale. She struck Mom2Mom gold quickly and found a mint condition Boppy pillow (used to support a baby during feedings) with a retail value of $35 for $5, and an infant carrier for $2. She also stocked up on books. She was excited to find a toy for one dollar that was shaped like a caterpillar that teaches babies the ABCs that in not in stores anymore.
Magri had come to the sale just looking for whatever piqued her interest. Bazinet, the 25-year-old from Warren, had come on a mission for something specific for her 1-year-old daughter -- a small cube play structure with a slide.
By 9 a.m., she was loading the exact toy she had in mind into the back of her SUV. She paid $10. The same toy, used, on eBay was listed at about $30.
It's moments like that that turn her away from retail shopping, even when items are on deep discount, and back to the Mom2Mom sales. Again. And again.

Ruling Closes Marijuana Dispensaries

2011-08-30T09:46:00.000-04:00

Story first appeared in the Detroit Free Press.
Thursday was a bad day to be among Michigan's nearly 100,000 medical marijuana patients and down to a last joint.
Many marijuana dispensaries closed their shops to pot sales, on lawyers' advice, following a court of appeals ruling.
John Lewis, lawyer for Compassionate Apothecary in Mt. Pleasant, the center of the marijuana maelstrom, said it would be dangerous to operate with the specter of a criminal case hanging over their head.
On Tuesday, a unanimous panel of the Michigan Court of Appeals ruled that the dispensary's business model of charging clients a fee to store marijuana that could be sold to any registered patient was illegal. The ruling was a blow to the burgeoning medical marijuana business and its patients.
Richard Celmer, 46, of Chesterfield Township went without marijuana to ease pain from his stomach cancer Thursday because the Big Daddy's dispensary in the township stopped selling medical marijuana Wednesday. Celmer uses the dispensary when his regular caregiver can't meet his needs.
Raids, closings leave medical marijuana patients in a bind
Four pounds of dried marijuana, cookies, cupcakes and other pot-bearing confections were loaded into a black SUV while employees and an owner of the MedMar A2 Compassionate Health Care dispensary were led away in handcuffs Thursday.
Chuck Ream, president of the marijuana dispensary that was targeted in a police raid after a far-reaching court ruling late Tuesday against Michigan's burgeoning medical marijuana business, said they didn't get a letter -- they got a bunch of agents that came in and stripped everything.
He said about 750 patients who come to his business for their marijuana are now without medicine. He said everyone who gets sick doesn't have an old hippie to grow marijuana.
Around Michigan, county prosecutors and dispensaries responded to the ruling and the warnings from Attorney General Bill Schuette that law enforcement would be pursuing medical marijuana dispensaries. Many of the nascent businesses shut down marijuana sales as a precaution.
Rick Ferris, president of the Michigan Association of Compassionate Centers said he has a building full of patients today, referring to Big Daddy's in Chesterfield Township, where people can buy paraphernalia and growing materials, but not marijuana itself.
The company has five dispensaries in southeast Michigan.
Others decided their business model would stand the legal test, including 3rd Coast Compassion Center in Ypsilanti. Owner Jamie Lowell runs his center as a nonprofit, fee-based membership club that relies on donations.
He said they are still trying to digest the implications of this ruling. They are not convinced that it completely eliminates dispensaries.
Schuette will speak to prosecutors about the decision this weekend on Mackinac Island, said spokeswoman Joy Yearout. His focus will be how to prosecute offenders using a nuisance-abatement clause.
But in Isabella County, prosecutor Larry Burdick made his intentions clear, said Brandon McQueen, co-owner of Compassionate Apothecary.
A letter Burdick's office sent Wednesday to at least six dispensaries said "You must immediately cease such operations.
The case that led to the appellate court ruling began at the Mt. Pleasant dispensary. The circuit court ruled that the operation didn't violate the law voters overwhelmingly approved in 2008.
Co-owner Matthew Taylor said the store stopped selling marijuana. He and McQueen are preparing an appeal to the Michigan Supreme Court.
Matthew Newburg, who will represent them, said he counseled Lansing-area clients to close up until the Supreme Court issues a different opinion or there is new legislation. Along Michigan Avenue in Lansing on Wednesday, many dispensaries were closed.
Clarifications to the 2008 medical marijuana law will be submitted in the fall legislative session.
Jessica Cooper, the Oakland County prosecutor, said she didn't know of any dispensaries open in the county. Detroit police steered clear of raids, and Kym Worthy, the Wayne County prosecutor, issued no cease-and-desist letters, spokeswoman Maria Miller said. Eric Smith, Macomb County's prosecutor, did not return calls seeking comment.
In other counties, prosecutors said they would wait to see which dispensaries stayed open and which ones police identified as troublesome.
Chris Becker, assistant prosecutor in Kent County, said he was hopeful dispensaries would close on their own. Alan Schneider, Grand Traverse County prosecutor, said he would wait to hear from police.
But where card-carrying patients who rely on dispensaries will get their medical marijuana is unclear.

PENSKE HAS NAMED TOSSED INTO PRESIDENTIAL RACE

2011-08-23T12:03:00.001-04:00

Penske for president?
Not a bad suggestion. In honoring racing legend and auto executive Roger Penske last night at posh dinner in Pebble Beach, Calif., Mercedes-Benz host Geoff Day tossed out the idea as a tribute, not so much of a campaign kick off. But as far as we know, no one yelled back "Bachmann," "Obama" or "Romney" in protest.
Penske is a model of brains and steely resolve. It wouldn't be the first time he was urged into politics. A couple of years ago, Penske, a dashing, silver-haired Mr. Fix-It, was being pushed to run for mayor of Detroit, a city that could truly use his executive talents. He declined.

Last night in presenting the "star driver" award, Day called Penske "a hero, a legend ... an icon." His team has won 15 Indianapolis 500s. Penske, among his many businesses, operates some of the biggest U.S. Mercedes dealerships.
Penske, who grew up in Cleveland, said his father took him to the Indy race for the first time in 1951, and from that point on he was hooked.
Day asked Penske, the 1961 U.S. Auto Club champion the perennial question: Is it the car or the driver. Penske said qualifying is dependent on the car but over the length of the actual race, driving skill makes all the difference.
Mercedes gives the award each year to a person who is "driving the industry," Day said. Maybe Penske should be driving the country.

Detroit Car Makers Come Back

2011-08-04T10:05:00.000-04:00

This story first appeared in USA TODAY.
Ford Motor reported Tuesday that it made $2.4 billion in the second quarter, down 8% from a year ago.
The earnings reports — especially Chrysler's projection it only will break even this year because of the cost of repaying the loans — won't trigger a ticker-tape parade in downtown Detroit. But they do suggest that the Detroit 3 have put the big loses behind them.
No tooth fairies, guardian angels or rabbits out of hats rescued Detroit automakers from what seemed certain ruin not that long ago. Motor City's still-fragile bounce-back is the result of years of awful pain.
To stop the billions in red ink and give automakers a chance to make money again, more than 100,000 people lost their jobs. American taxpayers put tens of billions into auto bailouts and lost $1.3 billion on Chrysler, and would lose another $11.6 billion if the U.S.Treasury sold all its remaining shares of GM stock at typical recent prices. Car buyers will be hurt, too, eventually seeing higher prices and fewer discounts if the restructured U.S. auto industry avoids the overproduction that for years resulted in fire-sale discounts.
Two years ago for Chrysler, too: Government-arranged Chapter 11 bankruptcy reorganization, summer of 2009 that gave control of Chrysler to Italy's Fiat in return for high-mileage small cars and international distribution.
Ford avoided Chapter 11 and federal bailout money, so it took longer, five years, to become an "overnight success."
Actually, the reshaping of the Detroit 3 stretches further back than that.
Restructuring has been underway at these companies for many years, aimed at making them profitable at much lower volumes.
From 2006 through 2010 the three Detroit automakers shed an astonishing 120,000 jobs, more than one-third their combined total, and closed dozens of factories.
Key changes
The Detroit 3 now are sized to make money when the U.S. new-vehicle market is 12 million or 13 million a year. The record is 17.4 million, set in 2000, and the low in the recent recession was 10.4 million, in 2009. The industry's on pace to hit 12 million or more this year.
If demand for new vehicles booms, Detroit can schedule overtime and reopen idle plants to avoid missing the chance to sell more than expected.
Several modifications of the labor agreement with the United Auto Workers union, which represents most auto-industry hourly workers, have lowered the total outlay for workers — pay, benefits and other costs — to a range of $49 an hour (Chrysler) to $58 (Ford), down from an average $75 to $78 before the contract modifications in 2005, 2007 and 2009.
The 2007 changes were key, letting automakers off-load responsibility for retiree health care to the UAW and establishing two-tier wages. Newly hired hourly workers are paid $14 to $16 an hour, about half what veterans get.
New hires are locked into less-generous benefits than veteran workers get, no matter how high the new group's pay rises. They cost infinitely less, and they will become the majority of hourly workers as others age and leave.
Before the bloodletting, there was no hope.
At GM, for example, Structural costs were so fouled, so broken, that they couldn't make money at the high end of the (sales) cycle: 16.8 million and General Motors was essentially breaking even.
Akerson wasn't connected with GM before the bankruptcy period. A businessman and investment specialist who graduated from the U.S. Naval Academy in 1970 with an engineering degree, he was put on the GM board July 24, 2009, by the Obama administration, was picked to be CEO last September and got the chairman's title as well on Jan. 1.
He completed Detroit's corner-office overhaul. All three CEOs now are outsiders in an historically insider town. Ford Motor CEO Alan Mulally was a Boeing executive when hired by Ford Chairman Bill Ford in 2006 to save the Blue Oval. Chrysler Group CEO Sergio Marchionne is also CEO of Fiat Auto, which now owns a majority of Chrysler, comes from way outside Detroit, culturally and institutionally. And he's known by investment analysts as a finance and deal man more than as a "car guy."
No guarantees
Despite the new blood at the top, leaner organizations and recent near-death experiences as motivation, the Detroit rebound comes with no guarantee.
• Costs are rising. The new models in the pipeline, the ones that could save the industry, cost billions of dollars to design, develop and launch, then to support with heavy marketing for a year or so. Commodity costs are up, too.
•Negotiations with the UAW on a new contract begin this week. Automakers don't want to lock in higher wages or other costs, but the union passionately wants to regain some ground it surrendered to keep the automakers afloat.
•Detroit's move to small cars might not work. Ever-tightening federal fuel-economy regulations almost dictate many more small, lightweight cars for automakers to hit the required average of 35.5 mpg in 2016 and perhaps 54 mpg by 2025, according to the latest not-so-private discussions between the White House and the auto industry.
But you can't sell what people won't buy.
One market analyst says Americans don't have an affinity for small cars. When they can, they like to get into bigger, more comfortable cars.
•Economic malaise lingers. Unemployment remains stubbornly above 9%. And Treasury Secretary Timothy Geithner said on last weekend's TV talks shows that the economy might have slowed, not accelerated, in the second quarter.
People without jobs in an uncertain economy are antithetical to new-car sales. It's not clear whether GM, Ford and Chrysler could withstand more years like 2009, when only 10 million cars were sold. And if they must try to, what's left to cut?
•Product problems remain. GM has far too many powertrains that aren't all that different. Akerson says there is not any real difference between a 1.4- and a 1.5-liter engine. He adds that just causes complexity in your purchasing and your supply chain.
GM also must move fast into non-petroleum-fuel powerplants, such as pure electric cars and those fueled by clean-burning compressed natural gas (CNG), he says.
Ford's confusing high-tech electronics, and six-speed automatic transmissions tuned so aggressively for fuel economy that the cars drive poorly, caused frustrated owners to slap Ford down to No. 23 on a recent J.D. Power and Associates quality survey, from a lofty No. 5 a year ago.
Ford's Lincoln luxury brand definitely needs a better-defined identity. Consumers are smart. They're not going to pay an extra $10,000 for a cosmetically enhanced Ford.
Chrysler's Fiat-designed, U.S.-built 40-mpg small cars — a Fiat promise to the U.S. government as part of the Chapter 11 rescue — have yet to materialize. They're in the works, but will they be soon enough, and good enough, in a market crawling with new-design, high-mpg small cars?
•Widespread mistrust of Detroit, from years of shoddy and un-inventive vehicles, hasn't been eliminated.
Ford seems to have a head-start overcoming that, for not taking government money.
GM's Akerson acknowledges the low esteem and notes that it's an impression created over the past 20 or 30 years, and they are not going to cure that in one year.
He hopes the advanced-technology Chevrolet Volt helps erase the low-tech image and that a series of new models coming in the next 18 months will help identify GM as an exciting and relevant company.
In a fell swoop, Chrysler has overcome some resistance. Its "imported from Detroit" TV ad during the Super Bowl acknowledged that the city and its main industry have taken hard hits but asserted powerfully that times have changed. The ad starred popular musician Eminem driving a then-new Chrysler 200 mid-size sedan.
The ad spawned lines of clothing, overwhelming numbers of e-mail to Chrysler and a continuing social-media buzz.
What Akerson finds exciting, and believes is a mark of GM's integrity and a harbinger of its success, is that the company continued to work on the controversial Chevy Volt extended-range electric car even during the distractions of Chapter 11.

Ferris State Participates in Google Maps Street View Partner Program

2011-08-04T09:20:00.001-04:00

Story first appeared in Ferris State University's University News.

Ferris State University is participating in the Google Maps Street View Partner Program, which provides interactive 360-degree ground-level photos of special attractions around the world.

A Google Street View team visited Michigan last week to capture imagery of the Ferris campus that will be stitched into immersive panoramic views and viewable directly on Google Maps in the coming months.

The Google Street View crew spent the day on campus with a vehicle called the “Street View Trike,” a three-wheel pedi-cab with a camera system on top that is pedaled through pedestrian walkways and paths, automatically gathering images as it goes. It weighs about 250 pounds, but its small size enables maneuvering and access to places not accessible by cars.

“We’re so excited to participate in this free program that provides a wonderful opportunity for prospective students and their parents, in particular, to get a unique perspective of Ferris’ Big Rapids campus before coming here. It also gives alumni, who may not have visited Ferris in a long time, a glimpse of how the campus has changed over time and to reflect on their fond memories of the University," said Shelly Armstrong, associate vice president for Marketing and Communications. The Michigan Honors Programs students enjoy the new access.

Armstrong said the campus locations captured by the Google Street View team were pedestrian-only areas, enabling Ferris’ facilities and grounds to be showcased in a very personal, up-close manner for those who may never set foot on campus. “We have no doubt this will be a valuable tool to anyone who wants to explore the Ferris campus virtually and will be especially helpful to those who are planning a visit. We can’t wait to see the final 360-degree panoramic images on Google Maps and to be able to make the campus available to the world,” Armstrong said.

25 July, 2011

THE LIFE AND DEATH OF BETTY FORD

2011-07-14T09:39:00.000-04:00

Betty Ford, the former first lady whose triumph over drug and alcohol addiction became a beacon of hope for addicts and the inspiration for her Betty Ford Center in California, died at age 93.
The former first lady died at the Eisenhower Medical Center in Rancho Mirage. Other details of her death were not immediately available.
Ford's husband, former President Gerald R. Ford, died in December 2006.
Former President George H.W. Bush said she was a wonderful wife and mother; a great friend; and a courageous First Lady. He also stated that no one confronted life's struggles with more fortitude or honesty, and as a result, we all learned from the challenges she faced.
While her husband served as president, Betty Ford's comments weren't the kind of genteel, innocuous talk expected from a first lady, and a Republican one no less. Her unscripted comments sparked tempests in the press and dismayed President Ford's advisers, who were trying to soothe the national psyche after Watergate. But to the scandal-scarred, Vietnam-wearied, hippie-rattled nation, Mrs. Ford's openness was refreshing.
According to Mrs. Ford, her young adult children probably had smoked marijuana — and if she were their age, she'd try it, too. She told the CBS television news magazine 60 Minutes she wouldn't be surprised to learn that her youngest, 18-year-old Susan, was in a sexual relationship (an embarrassed Susan issued a denial).
She mused that living together before marriage might be wise, thought women should be drafted into the military if men were, and spoke up unapologetically for abortion rights, taking a position contrary to the president's.
Candor worked for Betty Ford, again and again. She would build an enduring legacy by opening up the toughest times of her life as public example.
In an era when cancer was discussed in hushed tones and mastectomy was still a taboo subject, the first lady shared the specifics of her breast cancer surgery. The publicity helped bring the disease into the open and inspired countless women to seek breast examinations.
Her most painful revelation came 15 months after leaving the White House, when Mrs. Ford announced that she was entering treatment for a longtime addiction to painkillers and alcohol. It turned out the famously forthcoming first lady had been keeping a secret, even from herself.
She used the unvarnished story of her own descent and recovery to crusade for better addiction treatment, especially for women. She co-founded the nonprofit Betty Ford Center near the Fords' home in Rancho Mirage, California, in 1982. Mrs. Ford raised millions of dollars for the center, kept close watch over its operations, and regularly welcomed groups of new patients with a speech that started, "Hello, my name's Betty Ford, and I'm an alcoholic and drug addict."
Although most famous for a string of celebrity patients over the years — from Elizabeth Taylor and Johnny Cash to Lindsay Lohan — the center keeps its rates relatively affordable and has served more than 90,000 people.
"People who get well often say, 'You saved my life,' and 'You've turned my life around,'" Mrs. Ford once said. "They don't realize we merely provided the means for them to do it themselves, and that's all."
In a statement Friday, President Barack Obama said the Betty Ford Center would honor Mrs. Ford's legacy by giving countless Americans a new lease on life.
As our nation's First Lady, she was a powerful advocate for women's health and women's rights. After leaving the White House, Mrs. Ford helped reduce the social stigma surrounding addiction and inspired thousands to seek much-needed treatment.
Mrs. Ford was a free spirit from the start. Elizabeth Bloomer, born April 8, 1918, fell in love with dance as a girl in Grand Rapids, Michigan, and decided it would be her life. At 20, despite her mother's misgivings, she moved to New York to learn from her idol Martha Graham. She lived in Greenwich Village, worked as a model, and performed at Carnegie Hall in Graham's modern dance ensemble.
But her mother coaxed her back to Grand Rapids, where Betty worked as a dance teacher and store fashion coordinator and married William Warren, a friend from school days. He was a salesman who traveled frequently; she was unhappy. Their marriage lasted five years.
While waiting for her divorce to become final, she met and began dating, as she put it in her memoir, "probably the most eligible bachelor in Grand Rapids" — former college football star, Navy veteran and lawyer Jerry Ford. They would be married for 58 years, until his death in December 2006.
When he proposed, she didn't know about his political ambitions; when he launched his bid for Congress during their engagement, she figured he couldn't win.
Two weeks after their October 1948 wedding, her husband was elected to his first term in the House of Representatives. He would serve 25 years, rising to minority leader.
Mrs. Ford was thrust into a role she found exhausting and unfulfilling: political housewife. While her husband campaigned for weeks at a time or worked late on Capitol Hill, she raised their four children: Michael, Jack, Steven and Susan. She arranged luncheons for congressional wives, helped with her husband's campaigns, became a Cub Scout den mother, taught Sunday school.
A pinched nerve in her neck in 1964, followed by the onset of severe osteoarthritis, led her to an assortment of prescription drugs that never fully relieved the pain. For years she had been what she later called a controlled drinker, no binges. Now she began mixing pills and alcohol. Feeling overwhelmed and underappreciated, she suffered an emotional breakdown that led to weekly visits with a psychiatrist.
The psychiatrist didn't take note of her drinking but instead tried to build her self-esteem: He said she had to start thinking she was valuable, not just as a wife and mother, but as herself.
The White House would give her that gift.
In 1973, as Mrs. Ford was happily anticipating her husband's retirement from politics, Vice President Spiro Agnew was forced out of office over bribery charges. President Richard Nixon turned to Gerald Ford to fill the office.
Less than a year later, his presidency consumed by the Watergate scandal, Nixon resigned. On Aug. 9, 1974, Gerald Ford was sworn in as the only chief executive in American history who hadn't been elected either president or vice president.
Mrs. Ford wrote of her sudden ascent to first lady: "It was like going to a party you're terrified of, and finding out to your amazement that you're having a good time."
She was 56 when she moved into the White House, and looked more matronly than mod. Ever gracious, her chestnut hair carefully coifed into a soft bouffant, she tended to speak softly and slowly, even when taking a feminist stand.
Her breast cancer diagnosis, coming less than two months after President Ford was whisked into office, may have helped disarm the clergymen, conservative activists and Southern politicians who were most inflamed by her loose comments. She was photographed recovering at Bethesda Naval Hospital, looking frail in her robe, and won praise for her grace and courage.
The public outpouring of support helped her embrace the power of her position. "I was somebody, the first lady," she wrote later. "When I spoke, people listened."
She used her newfound influence to lobby aggressively for the women's Equal Rights Amendment to the U.S. Constitution, which failed to get ratified nonetheless, and to speak against child abuse, raise money for handicapped children, and champion the performing arts.
It's debatable whether Mrs. Ford's frank nature helped or hurt her husband's 1976 campaign to win a full term as president. Polls showed she was widely admired. By taking positions more liberal than the president's, she helped broaden his appeal beyond traditional Republican voters. But she also outraged some conservatives, leaving the president more vulnerable to a strong Republican primary challenge by Ronald Reagan. That battle weakened Ford going into the general election against Democrat Jimmy Carter.
Carter won by a slim margin. The president had lost his voice in the campaign's final days, and it was Mrs. Ford who read his concession speech to the nation.
After leaving the White House in January 1977, the Fords retired to a Rancho Mirage golf community, but he spent much of his time away, giving speeches and playing in golf tournaments. Home alone, deprived of her exciting and purposeful life in the White House, Mrs. Ford drank.
By 1978 her secret was obvious to those closest to her.
"As I got sicker," she recalled, "I gradually stopped going to lunch. I wouldn't see friends. I was putting everyone out of my life." Her children recalled her living in a stupor, shuffling around in her bathrobe, refusing meals in favor of a drink.
Her family finally confronted her and insisted she seek treatment.
"I was stunned at what they were trying to tell me about how I disappointed them and let them down," she said in a 1994 interview. "I was terribly hurt — after I had spent all those years trying to be the best mother, wife I could be. ... Luckily, I was able to hear them saying that I needed help and they cared too much about me to let it go on."
She credited their "intervention" with saving her life.
Mrs. Ford entered Long Beach Naval Hospital and, alongside alcoholic young sailors and officers, underwent a grim detoxification that became the model for therapy at the Betty Ford Center. In her book "A Glad Awakening," she described her recovery as a second chance at life.
And in that second chance, she found a new purpose.
"There is joy in recovery," she wrote, "and in helping others discover that joy."
The family expects to organize a service in Palm Desert over the next couple of days. Ford's body will be sent to Michigan for burial alongside her husband, who is buried at his namesake museum in Grand Rapids.

CAN THE UAW AND THE DETROIT BIG THREE FIND COMMON GROUND

2011-07-12T11:32:00.000-04:00

Despite massive restructuring at the Detroit three since 2007, top union and company negotiators who kick off national labor talks later this month will be in for a difficult stretch as they race toward a Sept. 14 deadline on the current contract.
As many as six assembly plants face uncertain futures — three each at Ford and GM — and the automakers will still make an effort to cut labor costs that have already been dramatically slashed in recent years.
UAW and Detroit Three leaders may also find themselves at odds with rank-and-file autoworkers who feel they've already taken more than their fair share of cuts. Many are talking tough about winning back concessions.
One Ford employee said it has been over six or seven years since they have had a raise and complained the automaker just keeps taking away from them.
Throughout it all, the seasoned negotiators must be mindful of appearances after the highly politicized government-backed bankruptcies of General Motors and Chrysler. Neither side wants to look like it's slipping back into old ways.
The UAW's top agenda will be jobs. For them it is all about putting America back to work.
For GM and Ford, the talks will be about getting labor costs in line with foreign rivals.
Ford's hourly labor costs are at $58, compared with about $50 for Asian automakers in the U.S.
The carrot: Jobs
Automakers often use job commitments as leverage during contract talks, and that will happened again this year.
One difference this time around, however, is that in the past two years automakers have already announced 13,000 U.S. jobs are coming, even before the start of formal negotiations.
In June, Chrysler said it would add 268 jobs at its Trenton North engine plant.
In May, GM said it would create or retain about 4,000 jobs in eight states over the next 18 months.
GM commented that these were investments that were done to continue to move their business forward, and should not be read as negotiating tactics.
Despite those announcements, many of the 1,700 Ford workers in Flat Rock are worried about Mazda's decision to end production of the Mazda 6.
One assembly worker comment that this is a little scary, and they would like to get their concessions back, but definitely job security is more important.
And in St. Paul, Minn., where Ford plans to discontinue the Ranger pickup in December, the mood for about 750 workers is also grim.
Estimates are that three plants each at Ford and GM are in danger of eventual closure or of not being reopened.
For Ford, those plants are in Minnesota, Flat Rock and Avon Lake, Ohio. Ford makes the ever-popular Econoline van at Ohio Assembly but could make the next-generation model at another plant.
Meanwhile, the UAW has been publicly pressuring GM to keep its pickup truck plant in Shreveport, La., open and re-open plants in Spring Hill, Tenn., and Janesville, Wis., that have been on standby since the bankruptcy in 2009.
GM could move production of the GMC Canyon and Chevrolet Colorado from Shreveport to a plant in Wentzville, Mo. That would help fill the capacity of the Wentzville plant, which is operating on one shift.
Even if the plants closed, many UAW workers would be able to keep their jobs by accepting the already-announced new positions in other locations, although they'd likely have to move to another state to take them.
'Vying for new work'
To be sure, the danger of plant closures and job disruption is lower than in 2007, when automakers were losing billions and their labor costs were far higher than Asian rivals.
But the dramatic restructuring over the last several years has left many plants with underutilized space.
In Brook Park, Ohio, UAW Local 1250 is hoping Ford's engine plant is picked for a four-cylinder version of the EcoBoost engine. That could bring 300 more jobs to the plant.They are a strong advocate that it should be built in Cleveland, but every other plant is vying for new work.
As the UAW fights for jobs, and the automakers work to lower labor costs, the two sides could find common ground.
That's because the automakers can lower their labor costs by hiring new workers an entry-level wage rate of $14 and $16 per hour, thereby lowering their average labor cost per worker.
Under the current contract GM and Chrysler can hire an unlimited number of entry-level workers until 2015 while Ford's contract is capped at 20 percent.
Already, Chrysler has lowered its total labor costs more than Ford and GM because it has filled many of the more than 2,800 jobs it has announced since June 2009 with entry-level workers.
That has helped Chrysler cut its total labor costs per worker from nearly $76 per hour in 2006 to $49 per hour in 2010.
Ford could reduce its total hourly labor costs by as much as $3 per hour to $55 per hour if it hires the maximum amount of entry-level workers allowed under its current contract. But it cannot do that unless older workers retire, and many are reluctant to do so given Ford's success, which comes with annual bonuses.
The UAW plans to push for an increase in the entry-level wage, which is about half of the regular $28 per hour. They feel entry-level may not be a good middle-class standard of living today, so they want to figure out a way to get more income to those workers.

The bestselling car in June was the Chevy Cruze

2011-07-12T10:25:00.000-04:00

The bestselling car in June was the Chevy Cruze
The March disaster in Japan continued to scramble the list of Top 10 best-selling vehicles in June, leaving Chevrolet's new compact Cruze on top as the bestselling car in the USA -- the spot typically held by Toyota's Camry -- and the No. 3 vehicle overall.
Camry did make the Top 10 -- the only Japanese vehicle to do so -- but as the No. 4 car and 8th overall, with sales down 27.7% from last June. Toyota says production is getting back to normal, so expect Camry to move back up -- boosted this fall by the rollout of the redesigned Camry for 2012. Neither Honda nor Nissan had a vehicle in the Top 10. The top Honda was the Civic at 15th, with sales down 34% vs. last year. The top vehicle for Nissan, which was not hit as hard by the disaster, was the Altima at 11th, with sales up 22.7%.
Behind the Cruze, giving Chevy a 2-3-4 finish on the list was the midsize Malibu, still showing appeal well into its cycle -- the redone 2013 will be on sale in the first quarter of next year, a few months after the new Camry.
Ford's new Focus was the third car and sixth overall, behind the brand's venerable Escape small SUV.
Hyundai's new Sonata was 10th overall and the No. 6 car. The brand continued its sales roll with a 15.6% gain, while corporate sibling Kia was up more than 41%. Taken together (which is how their sales are reported in most of the world) they've now passed Nissan as the sixth-largest automaker in U.S. sales.
For trucks No. 1 and 2 overall were Ford's F-series and Chevy's Silverado, which had sales gains over last year of 6.7% and 5.1% respectively. They were near the industry gain in June of 7%. The two pickups on top, plus the Ram at No. 8, should ease some fears that economy has shifted into reverse. Businesses and tradesmen appear to still be spending.

MICHIGAN COLLEGES CAN’T CONSIDER RACE IN ADMISSIONS DECISIONS

2011-07-12T10:18:00.000-04:00

MICHIGAN COLLEGES CAN’T CONSIDER RACE IN ADMISSIONS DECISIONS
A federal appeals court on Friday struck down a state constitutional amendment that barred Michigan colleges from considering race or gender in admissions decisions.
The Sixth U.S. Circuit Court of Appeals concluded that the law violated the U.S. constitution, a victory for civil-rights advocates who challenged the ban. The ruling comes as California wrestles with a similar challenge to its ban on race-influenced admissions, a restriction that exists in three other states.
Michigan voters in 2006 approved an initiative known as Proposal 2 that banned consideration of race in college admissions for public universities. A group of minority students, backed by affirmative-rights advocacy groups, sued on grounds that it violated federal law.
A couple of judge found that Proposal 2 unconstitutionally alters Michigan's political structure by impermissibly burdening racial minorities.
Michigan Attorney General Bill Schuette, a Republican, elected last year said he would appeal the decision to the full Sixth Circuit rather than to the U.S. Supreme Court. The law will remain in force during the appeal, he added. He stated that entrance to our great universities must be based upon merit, and he will continue the fight for equality, fairness and rule of law.
The amendment, which passed with 58% of the vote, also pertained to government hiring.
Plaintiffs argued the ban unfairly discriminated against taking race into account while other considerations—children of alumni and the disabled among others—were allowed. Supporters of the ban insisted the measure allowed for an even playing field without special preferences for race. Several of its backers couldn't be immediately reached Friday.
In 2008, a federal district-court judge in Detroit upheld the law, finding it was race-neutral.
The law has forced the University of Michigan and other schools to alter admissions policies that give minorities preferential treatment. The university is reviewing the possible implications of the court's decision and recognizes that there may be further legal steps as well.
The battle over racial preferences in college admissions began in the 1960s and '70s, as racial diversity began to be used as an admissions criterion. In the 1990s, several U.S. Supreme Court decisions said public universities couldn't establish race-based quotes or treat applications uniquely based on race.
In the intervening years, California, Colorado, Nebraska and Washington state enacted bans similar to Michigan's. Arizona voters rejected one in November 2010.
One 24-year-old Mexican-American plaintiff from Detroit, graduated from University of Michigan in Ann Arbor in 2010. She was a beneficiary of race-influenced admission before the ban took place, but said she saw the minority population on the Ann Arbor campus drop during her time there.
Now, she worries about the fate of her sister, a high-school junior who wants to attend the University of Michigan.

JUDGEMENT REACHED IN FORD CASE WITH DEALERS

2011-06-15T10:59:00.000-04:00

Ford's shares recovered some of their losses, but still closed down 1.6%, or 21 cents, at $13.14 today on news of the $2 billion judgment against it in a class action suit by 3,000 Ford truck dealers. Shares had dipped as low as $12.78, or more than 3%, at midday.

The damages ruling in an Ohio state court came late Friday and was based on a February jury verdict against Ford.

A statement from Ford General Counsel emphasized that Ford believes the ruling is wrong and will appeal. They believe the decision made Friday by a state court judge in Ohio is highly flawed, and are appealing.

The judge ordered Ford to pay the dealers $781 million in damages and about $1.2 billion in interest in the suit, which alleged Ford overcharged them for 474,000 600-series and heavier trucks from 1987 through 1997. The suit, filed in 2002, claimed Ford violated its agreements with the dealers by not disclosing discounts on the published wholesale prices that it gave some dealers through its so-called Competitive Price Assistance program (CAP).

Ford’s attorney argued that the evidence they presented at trial showed clearly that the former (CAP) program – which was a common practice formerly used by companies selling in the extremely competitive medium- and heavy-truck market – resulted in thousands of additional sales benefitting customers and dealers, and it did not violate their agreement with dealers.

Ford also took strong issue with the expansion of the suit, initially filed by one dealer, into a class action, leading to the huge award:

They believe among the most egregious errors was the decision to apply alleged damages from this one case to each and every dealer in the class without allowing any evidence of how other dealers might have been affected.

The judge delayed his ruling pending the appeal on the condition Ford post a $50 million bond.

Ford’s statement expressed confidence about the appeal -- and indicated the dealers shouldn't expect a check any time soon. They feel the decision is far outside the bounds of normal legal process, and are confident that the Ohio appellate courts will reach the same conclusion upon review of the matter, which will take several years based on normal timing.

That also would leave time for Ford and the dealers perhaps to settle for a less eye-popping amount.

GM EXECUTIVE SPEAKS OUT ABOUT THE DISPUTE BETWEEN POLITICAL PARTIES

2011-06-13T13:28:00.000-04:00

Politicians should not play chicken with the country's credit rating, but need to focus urgently on finding ways to reduce the rising budget deficit, according to the head of General Motors Co.
The battle between President Barack Obama's Democratic Party and the opposition Republicans over whether to raise the limit on government borrowing from its current $14.3 trillion level plays a dangerous game with default, according to the executive of the largest U.S. automaker.
He added that we shouldn't underestimate that and play chicken with our national credit rating, our national honor.
If the government does not raise the nation's borrowing limit by August 2, the nation runs the risk of defaulting. That would shake the credit markets tremendously.
GM received a $52 billion taxpayer-funded bailout and the U.S. government still owns a 32 percent stake in its common stock, following the company's November initial public offering.
Some investors see the government's continued stake in GM as an overhang on the shares, which have lost some 22.5 percent of value so far this year, at a time when the broad Standard & Poor's 500 index is up 2 percent.
The stake remains a consideration for GM's board, which is delaying any decision on whether to start buying back shares until after the Treasury Department decides what to do with its stake.
The government has said it would review the situation in late summer after GM reports second-quarter results, and pointed out Treasury wants to exit its stake as soon as it can.
The Treasury Department plans to hold its shares until at least August. The primary driver of any further balance sheet activities will in the near term be driven by the government's decision of when or when they will not exit the company.
The shaky U.S. economy, facing stubbornly high unemployment and volatile oil prices, is one of the main worries facing GM. There's a lot of uncertainty about a jobless recovery, how strong is the recovery going to be? There's a lot of concern about oil prices. This company, more than any other he has been associated with, is more closely tied to the gross domestic product.
Economists and government officials have called recent U.S. economic reports on economic activity and employment disappointing, raising concerns that the nation may be sliding back toward recession.
U.S. automakers have been the nation's first major industry to show evidence that the economy may be slowing again after a tepid recovery from a brutal recession.
GM's U.S. auto sales in May fell short of analysts' expectations, as higher prices and lower incentives by the company and many of its larger rivals led consumers to put off purchases in the face of a weakening economy.
Industry-wide, May sales fell 3.7 percent from last year to an annualized rate of 11.8 million. That fell far short of the 12.6 million expected by a poll of economists and was the lowest rate since September 2010.
GM aims to increase manufacturing of its high-end Cadillac vehicles overseas in the next 18 to 24 months to strengthen that luxury brand outside the United States.
GM currently builds a small number of Cadillacs in a joint venture in China and sells it in European and Asian markets.
GM's shares rose 29 cents, or 1 percent, to $28.85 on the New York Stock Exchange in afternoon trading.
Investors will also get a deeper look into rival Ford Motor Co later on Tuesday when that company's management meets with analysts to lay out their long-term growth strategies, particularly for China and India.
GM still faces many challenges, but it is focused on building a fortress balance sheet. GM had about $36.5 billion in cash and available liquidity at the end of the first quarter.
They have strung up five consecutive quarters of profitability together, but no one said this was going to be a lay-up. There's a lot of work to be done over the next couple of years, not only at General Motors but throughout the industry.

FIAT TO TAKE OVER CHRYSLER

2011-06-13T12:28:00.001-04:00

Chrysler Group, newly profitable and confident in its revamped products, will soon sever its ties with the U.S. government after most, but not all, of the bailout loans it got two years ago are repaid.
Italian automaker Fiat agreed late Thursday to buy the U.S. Treasury's 6% interest in Chrysler for $500 million. Once the deal closes, the government will no longer hold a stake in the auto company. Treasury officials said it could take up to three months to make sure the agreement meets regulatory approvals, but it will likely close more quickly than that.
The deal will give Fiat a majority 52% stake in the automaker, just two years after it agreed to manage Chrysler after its bankruptcy.
President Obama announced the agreement during a trip to a Chrysler facility in Toledo, Ohio.
The U.S. government will ultimately lose around $1.3 billion in the deal. The government authorized $12.5 billion in loans for Chrysler from the end of 2008 through Chrysler's bankruptcy filing in the summer of 2009. The Treasury Department said Thursday that Chrysler has repaid $11.2 billion — including $2 billion in undrawn loans — but it is unlikely to recover the rest. Government officials have long said that they didn't expect to recover the full amount they loaned to Chrysler and General Motors during the auto industry downturn, and that their top priority was saving thousands of auto jobs.
A representative from the Treasury stated they didn't do this to maximize return - they did it to save jobs. He noted that GM and Chrysler are hiring again and making new investments at U.S. plants, which wouldn't have happened had they gone bankrupt.
Fiat also agreed to pay $75 million for the right to purchase the Chrysler shares held by a trust for retired autoworkers. The Treasury Department will receive 80% of those proceeds, or $60 million, while the government of Canada will get $15 million. The trust holds a 47.5% stake in the company. It is expected to sell its shares when Chrysler holds an initial public offering, which could happen later this year or early next year.
Chrysler has made a remarkable turnaround in that time. Before entering bankruptcy proceedings, the company was nearly out of cash, starved after a decade under the ownership of German automaker Daimler and a private equity firm. It needed U.S. government money to survive. But in the first three months of this year, Chrysler made a net profit of $116 million and is forecasting 2011 earnings of $200 million to $500 million.
Under the leadership of the Fiat CEO, the company has cut costs and revived its sales by refurbishing most of its lineup of Jeep, Chrysler, Dodge and Ram vehicles. Sales of the Jeep Grand Cherokee were nearly three times higher in May than in the same month a year ago.
Fiat received a 20% stake in Chrysler after it emerged from bankruptcy proceedings in exchange for management expertise and technology. The Italian automaker has gradually raised its stake by meeting benchmarks set by the government. Last month, it paid about $1.3 billion to buy another 16% of the company.
Chrysler repaid the bulk of its loans on May 24, when it paid off $7.6 billion from the U.S. and Canadian governments. Chrysler repaid that money through a combination of bank loans, bond sales and money from Fiat.
Fiat's stake is likely to rise to 57% before the end of the year, when Chrysler meets another milestone set by the U.S. government: Producing a 40 mpg small car in the U.S. All told, Fiat has the right to purchase more than 70% of Auburn Hills, Mich.-based Chrysler.
This wasn't the first time Chrysler had to be rescued by the U.S. government. In the early 1980s the company, led by legendary pitchman Lee Iacocca, paid off $1 billion in government-guaranteed loans in three years.
The government still owns 26.5% of GM after selling part of its stake in GM's initial public offering in November. GM received $49.5 billion from the government in exchange for a 61% stake in the company. The Treasury Department has said it will hold off selling the rest of its shares until at least August, after GM reports its second-quarter results. The government would need to sell its remaining shares at $53 apiece to break even on its investment. On Thursday, GM's shares closed at $29.60.
The third Detroit automaker, Ford Motor, didn't seek a bailout.

5 HOUR ENERGY BASED IN FARMINGTON HILLS NOW TARGETING SENIORS

2011-06-06T16:35:00.000-04:00

Energy shots are pocket-sized bottles with names like 6 Hour Power, Nitro2Go and ZipFizz that are packed with caffeine, stimulants and blends of vitamins and herbs. They claim to keep those who drink them amped up for hours. Their makers pitch them as a youthful tonic when coffee just isn't enough.
Some teens down the shots to focus and stay awake while studying. For truckers, the two-ounce serving size means fewer pit stops.
Now, the shots are appealing to a growing number of people over 60 who aren't ready to slow down with age. At the Raleigh Costco, cases of energy shots are stacked beside Ensure nutrition shakes and across from tubes of wrinkle cream.
Living Essentials of Farmington Hills, Mich., which makes 5-Hour Energy, initially built sales by targeting students and people who work long hours, like cops. But when CEO Manoj Bhargava heard that aging Baby Boomers were increasingly buying energy shots, he looked to them for the company's next sales jolt.
Last October, the company handed out thousands of samples at the annual AARP convention in Orlando. The company was amazing to see the number of people who took it right there and then.
In January, 5-Hour began running full-page ads in the AARP Bulletin, which is delivered to 22 million households. The ad shows John Ratzenberger, best known as postman Cliff Clavin on "Cheers," holding a bicycle. "Getting older is fine," says the 64-year-old Mr. Ratzenberger. "But not having the energy to do the things I enjoy isn't."
5-Hour sales teams call on doctors, giving them coupons to pass out to older patients. Staffers tells physicians that 5-Hour's main ingredients appear naturally in foods and include niacin, often prescribed to lower cholesterol, and citicoline, used in some countries to fight dementia.
5-Hour Energy created the energy shot trend seven years ago and dominates the market, with a nearly 80% share. Annual sales of 5-Hour Energy total about $1 billion.
Mr. Bhargava says he isn't worried about the brand losing its cachet with young people, since it has always had cheesy commercials and a non-cool name.
NVE Pharmaceuticals, the market's second-biggest player with a 5% share, is also reaching out to older adults by advertising on the Learning Channel and the Discovery Channel instead of just MTV and Comedy Central.
Sold as dietary supplements, energy shots don't require Food and Drug Administration approval. A study in the journal Pediatrics in February warned that consumption of too many energy drinks can give children heart palpitations, seizures and other problems.
AARP says its health consultants vetted 5-Hour before allowing the company to advertise at its convention and in its publications. AARP refuses ads for controversial products such as reverse mortgages and tobacco, but found nothing worrisome about 5-hour Energy.
Energy-shot makers generally don't confirm the precise amount of caffeine in their shots, but a recent review found a 5-Hour shot has 207 milligrams of caffeine, while a tall-sized Starbucks coffee has about 260 milligrams. Another report said the caffeine would likely provide a lift but there was little if any research showing the other ingredients would help.
One geriatrician says she's a skeptic. Most adults get more than enough of the B vitamins and other nutrients found in energy shots, so any extras are just excreted from the body, she says. She claims medically and physiologically that it doesn't hold water.
Other skeptics say that older adults can get more energy by eating right and exercising, not by guzzling excessive amounts of caffeine. A well balanced diet will give you extended energy where the energy drinks just give you a caffeine rush.

MOVIE STUDIO OPENS IN MICHIGAN

2011-05-05T09:29:00.000-04:00

It is no secret that Michigan has been trying to boost its economy by luring movie makers with financial incentives, great venues, and lower production costs. Recently, however, talks about removing the film incentives have left the Michigan movie industry shaky. Now a large step in the right direction comes as Raleigh Michigan Studios opens its doors in Pontiac.
Michigan's first major film studio features seven sound stages and state-of-the-art equipment at the site of the former General Motors Centerpoint truck plant and office complex. The studio also has 360,000 square feet of office space, some of which has already been leased to production companies, production services firms and other vendors.
The new studio is owned by local businessmen and has yet to start filming. However, a recent Film Detroit newsletter stated that one major, pre-approved, studio blockbuster has contracted for most of the space at Raleigh for the rest of 2011 and a bit beyond.
Owners declined to comment about any movies filming at Raleigh Michigan this year, citing confidentiality agreements that studio executives have signed. The Detroit Free Press has previously reported that Raleigh Michigan will be the site of filming for "Oz: The Great and Powerful," a Disney prequel to "The Wizard of Oz."
The movie was approved for a $40-million state film incentive last year, before Governor Rick Snyder proposed a limit of $25 million a year on these incentives as part of his budget-savings plan. Disney plans to spend $105 million in the state and hire 257 local residents.
"Oz" will keep Raleigh Michigan going this year, but the studio's long-term future depends on what happens to Michigan's movie incentives, which are critical in attracting filming to the state. Plans for the studio had envisioned as many as 3,600 people working at the complex for a variety of companies.
Many in Michigan and in the movie industry are concerned over Governor Snyder’s incentive cap. They feel that this will have a huge negative effect and will reduce film-making in Michigan. Lobbing has begun to raise the cap for $25 million to $180 million per year. Only time will tell what the results of the upcoming weeks state budget negations will be.

Adoption supporters battle Michigan officials on second-parent adoptions

2011-04-27T15:54:00.002-04:00

Just weeks after the Arkansas Supreme Court overturned a same-sex adoption ban, the dispute over two-parent adoptions is becoming a growing concern for Michigan adoption agencies. Advocates for children in the foster care system argue that thousands of children are being denied permanent homes as a result.

Under a law established in 1935, only one person in state government can sign off on every adoption in the state. However there are some children who have two loving adult caretakers. Among some of those caretakers are a grand parent and aunt, or same-sex partners. Those cases of co-parenting are called “second parent adoptions” and the struggle to get them approved has been a rocky process for years.

The Michigan Department of Human Services is responsible for oversight over domestic infant adoptions and foster care programming in the state. The current director is a long-standing opponent of same-sex partners adopting children. The director asked MDHS spokesperson Gisgie Gendrau if the department had any plans to allow for second parent adoption.

“Michigan statute requires that, when there is a two-parent adoption, the parents must be married. Michigan does not recognize same-sex marriages. Single parent adoptions do not take into account the sexual orientation of the parent. This is a legislative issue, not a court nor a DHS issue,” Gendrau wrote in an e-mail.

The battle of two-parent adoptions have become a cause for concern for state adoption agencies. Adoption Associates Inc., an adoption agency in Grand Rapids, is one organization keeping a close eye on the topic.

Supporters work to sustain best of brownfield tax credits

2011-04-26T14:47:00.001-04:00

Expert urban developers and local officials throughout Michigan are quietly working to maintain key aspects of what they believe to be the most significant economic program for rebuilding struggling Michigan cities, a tax credit for the redevelopment of areas that at one time were home to deserted factories or old industrial complexes.

Anxiety grips developers of projects, such as Presbyterian Villages of Michigan, as they wait to see what lawmakers will do. Parties supporting the Presbyterian Villages are trying to finalize the finances needed to build the $38 million redevelopment project in a Detroit neighborhood. The Villages would provide housing, health care and other community services for the elderly.

While the project's closing date nears, Michigan's governor, Rick Snyder, has spiked concerns after proposing to omit such tax credits for brownfield redevelopment, historic renovation and other improvements.

"Everyone's kind of standing and waiting," said Brian Carnaghi, Presbyterian Villages' senior vice president of finance and business development. "This one is a little bit out of our control."

The proposed changes Snyder put forward are still being debated in the budget process. He added that businesses, whether they are in the building industry or auto transport industry, will be better off if the state takes on a 6 percent corporate income tax on corporations with shareholders rather than hosting several incentive programs that don't always yield jobs and can be quite costly.

State officials advise that current commitments to projects will be honored with credit. They plan to work with project applicants during the transition phase.

However urban development experts and supports argue that the brownfield redevelopment credit must be kept if economically challenged cities are to be revived.

"If you want to see... revitalization of some of our core urban areas, where you have existing infrastructure and old, unused buildings, you have to continue to use tools like this," said John Byl, chair of the Michigan chapter of National Brownfield Association and a Grand Rapids lawyer. "If they simply eliminated the program or minimized it so drastically . . . we would see downtown urban development come to a screeching halt."

Byl, who is currently working with the Snyder administration on creating a new brownfield program, said he's "cautiously optimistic" that the state can "continue some of the great achievements with the current program."

He said brownfield credits have been crucial to the success of several statewide projects, including the restoration of Detroit's Book-Cadillac hotel, reviving a vacant, century-old high school in Grand Rapids now the Union Square Condominiums, and redeveloping the lawn care and long abandoned complex of the Traverse City State Hospital into a residential and retail community called The Village at Grand Traverse Commons.

One concern now being addressed is how much of a budget should be allocated to such redevelopment credits. Initially, Snyder proposed a $50 million appropriation that would include Michigan Economic Growth Authority incentives, however he has noted that amount could see an increase of as much as $100 million. Some growth incentives could indirectly help companies ranging from the car shipping business to real estate agencies.

"He understands the feedback" from economic development leaders throughout the state, said Michael Finney, president and CEO of the Michigan Economic Development Corp. "It's unclear whether we'll be able to do as many projects as we did in the past, but we're willing to make some movement in the amount of money available."

One critical component, Finney claimed, is straying away from unlimited tax credits in a budget-sensitive state and setting aside certain sums of money.

"There are projects that have been incentivized as high as 80 percent," Finney said. "When it takes that level and there's very little private investment, there's something that's fundamentally wrong."

Finney added that the governor's proposed 6 percent corporate income tax could also aid many would-be Apex homes developers. If lawmakers approve replacing the Michigan Business Tax with the new tax, an estimated 95,000 businesses would not be required to file a state business tax return, even if they're constructing Raleigh homes.

"We now have a lower starting point for companies so the need to incentivize them at a really high level is reduced," Finney said.

But Detroit Economic Growth Corp.'s vice president of board administration, Art Papapanos, is worried that several projects in the city's works will not earn state approval for brownfield credits, hindering progressive efforts to redevelop Detroit, one of the state's largest and economically challenged cities.

"You cannot expect (developers) to spend money to on a what-if basis," he said. "I don't know where we'll be in line."

The Detroit project of Presbyterian Villages, which was among eight projects this month to receive approval from the Detroit Brownfield Redevelopment Authority, now waits for state economic development officials to give the green light to begin the car hauling.

New Video Podcast is Promoting Michigan Businesses, Communities and People

2011-04-13T09:00:00.004-04:00

Photo: Duane Weed and Frank Krywicki on the set recording the upcoming Buy Local TV episode.

Welcome to Buy-Local TV, a video netcast where hosts Duane Weed and Frank Krywicki, have teamed up to promote Michigan businesses, communities and its people.

“The goal is to show the importance of buying local in your community,” states Frank. “We are producing county spotlights, promoting businesses and events, as well as, providing marketing and technical tips that will help the consumer and business professional.”

The duo has video episodes highlighting the new format. Topics recently covered in these Michigan video profiles include: Spotlight on Montcalm County, Mecosta County and even a road trip for the “Up North Adventure.” “The ‘Up North Adventure’ is style we want the show to have,” Frank commented. “That is going on-site to communities, events, meeting with the people and showing off what Michigan has to offer. Duane has even interviewed Detroit Red Wing legend Ted Lindsay which is on episode #56.”

“What started out one year ago as a simple one minute internet marketing video podcast entitled the ‘Buy-Local Minute’ has grown into spotlighting businesses, communities, and events that inform and promote Michigan. They are now 10 to 20 minute video production segments entitled ‘Buy Local TV,’” comments Duane. “The show is an extension of what we are doing with the Buy Local Video Profiles - that is ‘Everyone has a story to tell and we are telling it.’”

According to Frank, “Since the format is new it will take awhile to reach the desired audience. That is ok, as our main goal is to promote Michigan by showing off what great people and businesses we have here. In addition if we can bring tourist and businesses to Michigan and show off the importance of buying local that will be a bonus.”

“Just like the seasons in Michigan, the show will change and evolve as we grow”, Duane continues. “We invite everyone to check out the show at www.buylocaltv.us, on Facebook, Twitter and through our Buy Local Video blog.”

Buy Local TV is a division of DW Video & Multimedia, LLC (www.dwvideo.com). Have a show idea or need some internet video marketing or technical advice? To learn more about promoting your Michigan business contact Duane at 231-937-5420. The Buy Local TV team will be happy to air your ideas on an upcoming episode.

Contact:
Duane Weed
5510 Maple Hill Rd
Howard City, MI 49329
(231) 937-5420

High Gas Prices Affect Car Sales

2011-04-04T09:48:00.003-04:00

Take high gas prices and the crisis in Japan in an already struggling economy and you get lower automobile sales.

March light-vehicle deliveries may have run at a 12.9 million annual rate. While higher than a year ago, it’s less than the seasonally adjusted rate of 13.4 million in February.

The conflict in Libya helped push gas prices to the highest since September 2008, slowing truck, sport-utility vehicle sales and car shipping. Confidence among U.S. consumers fell more than forecast to a three- month low this month. 3.6 percent of Americans plan to buy a new auto in the next six months, down from 3.9 percent in February.

A lot of uncertainty in the geopolitical environment, with the crisis in Japan and Middle East unrest, affects consumers’ tendency to make big-ticket item purchases.

A 12.9 million rate this month would be an increase from the 11.7 million pace in March 2010, and all major automakers except Toyota Motor Corp. may report gains in deliveries from a year earlier.

Light-vehicle sales in 2010 rose to 11.6 million from a 27- year low in 2009. Deliveries still were 31 percent fewer than the 16.8 million annual average from 2000 to 2007.

Deliveries at Toyota may have slipped 3.6 percent from a year earlier as the world’s largest automaker offered smaller discounts. Toyota City, Japan-based Toyota boosted sales incentives 46 percent in March 2010 after it began record recalls earlier that year.

Sales may have gained 24 percent at Honda Motor Co., and Nissan Motor Co. deliveries may have increased 16 percent.

Global automakers may lose production of 585,000 vehicles this month after the March 11 Japan earthquake and tsunami damaged factories of manufacturers and their suppliers.

Toyota said last week it has lost output of more than 140,000 vehicles. Honda, based in Tokyo, said it had lost 46,600 vehicles, while Yokohama, Japan-based Nissan said it lost 42,000 units of production from March 14 to March 27.

GM, which closed its Shreveport Assembly plant in Louisiana the week of March 21 because of a Japan-related parts shortage, may report a 20 percent gain in March deliveries.

Ford Motor Co. may report a 13 percent increase for March. Ford’s increased sales of small cars such as the Fiesta and Focus may help the second-largest U.S. automaker outsell GM, which offered smaller discounts during the month.

The GM and Ford race will be really tight. GM came out really strong in the beginning of the year with incentives. When you do that, you’re going to pull ahead sales from later months.

Automakers may cut incentives and sales to fleet customers to conserve inventories as parts shortages threaten the loss of as much as 100,000 units of production in North America in the near term.

It feels like it’s going to be a little bit more of an impact than just a few vehicle shortages, however it is expected the lost output to be made up by the end of the year. The depletion of inventory of some key imported models could happen a lot faster than expected entering this month.

Chrysler Group LLC, based in Auburn Hills, Michigan, say sales rose 20 percent. Chrysler and Ford said last week they are restricting dealers’ orders on some vehicle colors after Merck KGaA, a producer of a paint pigment for automakers, lost access to its Japanese factory near a crippled nuclear reactor.

Higher gas prices may drive a shift in market share to cars from trucks and SUVs, according to J.D. Power. The average price of regular unleaded gasoline in the U.S. was $3.54 a gallon this month through March 29, according to AAA.

GM’s Chevrolet brand has doubled the share of sales it gets from vehicles with four-cylinder engines since 2007, to 46 percent of its retail deliveries this year. Ford, which set monthly records in February for sales of its Fiesta and Fusion cars, sees consumers changing buying patterns due to gas prices. There is a line that if a gallon of gas goes over, that may shift the market mentality.

For every $1 a gallon increase in U.S. gas prices, the more-profitable light-truck segment may lose 5 percentage points of market share to lower-margin cars. That would translate to a 56-cent decrease in annual earnings per share at GM, and a 15-cent drop at Ford.

GM has fallen 14 percent since Feb. 18, before intensifying violence in Libya sent crude oil prices to the highest in more than two years, to close at $31.55 yesterday in New York Stock Exchange composite trading. Ford has dropped 5.8 percent in that span and closed at $14.86 yesterday.

Estimates for car and light-truck sales in the U.S. Estimates for companies are a percentage change from March 2010, unadjusted for the difference in selling days. Forecasts for the seasonally adjusted annual rate, or SAAR, are in millions of vehicles.

Although estimates for car sales are trending down with the recent increase in gas prices and the effects of the crisis in Japan, automakers and car transport companies are preparing to make adjustments to keep themselves competitive.

DETROIT HOMEOWNERS OWE MORE THAN THEIR HOMES ARE WORTH

2011-04-04T09:25:00.000-04:00

Detroit homeowners purchased homes before the recession and of course took out loans to finance based on the value of the home. As years and recession have gone by the homes values have dropped as much as 50% leaving those trying to relocate trapped. If the home does sell it may be for less than what the original homeowner has financed on it. This results in the homeowner coming up with a lump sum of money at closing, and they just don’t have that. Their options are to rent, which does not usually cover the mortgage, or stay where they are at and wait for home values to rise.
The last time home prices in metro Detroit were this low, it was the summer of 1994, and Wayne Fontes was the Detroit Lions coach.
Southeast Michigan is far from alone in having depressed home prices, but its descent has been more dramatic. Home prices in metro Detroit have dropped an average of 48% from their December 2005 peak. They're down 34% from 2000.
Those in the market to sell their homes know that all too well. Many realize they will have to take a loss on their home.
Home prices nationwide were down in January for the sixth consecutive month, according to the S&P/Case-Shiller Home Prices Indices released Tuesday.
Metro Detroit home prices remain the most depressed in America, according to data released Tuesday.
The S&P/Case-Shiller Home Prices Indices through January were down 3.1% compared with January 2010 in the nation's 20 largest cities, marking the sixth consecutive month of price declines. In metro Detroit, the drop was more substantial -- an 8.1% decline in home prices in the past year through January as the market weans itself off homebuyer tax incentives that ended last year.
In metro Detroit, the decline is 34% from its 2000 level, while the other cities' home prices are less than 1% below their 2000 levels. Detroit was joined by Atlanta, Cleveland and Las Vegas as markets where home prices are now below their January 2000 levels.
The weakened state of home prices could last for some time. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery.
The bank foreclosure with attributes such as three bedrooms, 2.5 baths, two-car attached garage, hardwood floors, vaulted ceilings, a master suite with walk-in closet and 1,926 square feet once sold for $268,000. Now, it's listed for $124,900.
Foreclosures are appearing to be decreasing compared to 2009. Because sales are down, there are often times when a property won't sell for what a buyer wants to pay because there are no comparable sales available, and that further depresses prices.
Home prices won't rise until people who owe more on their mortgage than their home's market value are able to refinance. It is also noted that more job creation would boost demand.
The S&P/Case-Shiller composites of the top 10 and top 20 cities have posted monthly declines for the past six months. San Diego and Washington, D.C., are the only metro areas that have seen price appreciation in the past year.
A continuing supply of foreclosures, weak demand and an oversupply of homes for sale will likely mean another 5% drop in home prices before they start improving in the second half of the year, said Patrick Newport, U.S. economist with IHS Global Insight.
Metro Detroit had the second-largest drop in home prices in January behind Phoenix, where home prices fell by 9.1%.
Many residents in the Detroit area are putting up their homes on the market for the third time or more in hopes to sell for at least what they owe. Unfortunately, some will take substantial losses and be forced to owe a large sum of money at closing if their homes.

DETROIT SCHOOLS SLATED FOR MAJOR CHANGES

2011-03-31T15:32:00.000-04:00

In a wake of new legislation, Detroit teachers’ union worry about the unmanaged changes proposed to the public schools.
The state-appointed manager of Detroit Public Schools identified 45 schools in the struggling district that could be turned over to private charter operators in a bid to improve student performance.
Wednesday's release of the target list comes as the manager, Robert Bobb, heads into a new round of talks with unions, armed with broad new authority to reopen labor contracts, cut costs and dictate curriculum.
Since his appointment more than two years ago, Mr. Bobb's efforts to stabilize the district's finances and bolster its academics have faced resistance from teachers unions and the school board. Michigan Republican Gov. Rick Snyder changed all of that earlier this month, when he signed into law expanded powers for Mr. Bobb and other financial managers appointed to take over struggling cities and schools.
A Wayne County judge who earlier ruled that Mr. Bobb had improperly exerted control over academics stayed her order in light of the new legislation. School board President Anthony Adams stood behind Mr. Bobb's plan for charters. Mr. Bobb had already gained state approval for a last-resort plan to eliminate the deficit by 2014. It called for closing as many as half the district's 142 schools.
Detroit, whose population fell 25% in the past decade, according to the 2010 census, has seen an even faster exodus from its schools, with students fleeing to charter schools and the suburbs, and taking state funding with them. The district's deficit has grown to $327 million from $218 million when he arrived.
Under Wednesday's modified plan, 14 schools will close by 2012 and another 45 are charter candidates. Of these, 18 have been marked for closure or conversion to charter schools as early as this fall; the other 27 will stay open, but could be converted to charters if a plan is approved to lease the school buildings from the district.
The charters are expected to employ nonunion teachers at least initially, but unions could later try to organize their staff.
Meanwhile, Mr. Bobb is bringing his beefed-up powers to negotiations with unions to help close an estimated $100 million shortfall for next year. Under the strengthened financial-manager law, union contracts, which were cut a little more than a year ago and supposed to be in place for three years, could be slashed again by Mr. Bobb, with approval from the state treasurer.
The Detroit teacher’s union members are in an uproar. They are requesting a meeting to discuss cuts that could be devastating to their members.

MICHIGAN WOOS PEOPLE TO FILL JOB VACANCIES

2011-03-25T11:56:00.005-04:00

Available technology jobs in the Detroit area are requiring companies to be creative in their recruiting techniques to woo candidates away from California.

Currently Ford has been trying to lure engineers to the automaker to design software. They want to make Silicon Valley engineers feel at home in Detroit. They have also been going after recruits from Stanford University and Internet companies. Recruiting from local universities has also been a tactic; however, there are nowhere near enough graduates to meet the need. Detroit may be a hard win when compared to the pleasant location and climate of the Silicon Valley, which boasts itself as the technology mecca for the country. As Ford and General Motors participates in the war for talent they wine and dine their applicants and show a relaxed work atmosphere with options of telecommuting or working in jeans verses the Silicon Valley companies where suits are familiar work attire. The automakers are also challenged to get qualified candidates with their offers of salary, which are lower than California, but are quick to make clear the benefits of lower home costs and living expenses.
Expertise in cloud computing, Michigan SEO, mobile software applications and energy management are in demand in the Motor City as automakers replace car stereos with Internet radio and gasoline engines with motors powered by lithium-ion batteries. Technology job postings in the Detroit area doubled last year, making it the fastest-expanding region in the country.
Companies that work with automakers on in-car entertainment systems, such as online streaming music providers Pandora Media Inc. and Mog Inc., have opened offices in the Detroit area. Google Inc., based in Mountain View, California, has an office in Birmingham, Michigan, where it’s looking for sales associates to work with the auto industry.
With the onset of job and technology expansion in Michigan, the U.S. Patent and Trademark Office announced in December that it will open its first satellite office in Detroit. The decision was made due to the region’s high percentage of scientists and engineers, as well as its patent output. Due to its 4,000 patents, Michigan was ranked the seventh highest patent-receiving state in 2010. The new office is likely to create about 100 new jobs to review patent filings.
Michigan lost about 413,000 jobs from December 2007 through December 2009, including 83,200 jobs in the Detroit area, according to the U.S. Bureau of Labor Statistics. Things picked up last year, as jobs in the Detroit SEO field and Detroit area professional and business-services sector, which include many of the tech jobs, rose almost twice as fast in December as the overall Michigan job market, according to the bureau. An auto transport company may also be looking to expand with all the anticipated moves.
Dan Gilbert, chairman and founder of Quicken Loans Inc., stated that he plans on adding more jobs as well. Gilbert, owner of the Cleveland Cavaliers basketball team, moved 1,700 of Quicken Loans’ employees into Compuware Corp. headquarters in Detroit’s Campus Martius Park area, the center of the city’s tech industry, where he plans to add 2,000 more workers.
In the building, graffiti from local artists decorate many of the walls and floors, and mini kitchens on every floor offer free slushies and snacks. When the space is fully finished, Quicken also will have a basketball court for employees.
Gilbert’s venture capital firm’s goal is to fund social media, cloud computing and other software companies in Detroit. So far, Detroit Venture Partners has received more than 200 proposals for investments and has term sheets under consideration for six that may be signed in the next 30 days.
Gilbert also helped fund a planned light-rail project for downtown, formed a venture capital firm to invest in startups, and purchased a historic theater with plans to renovate it as an incubator space for budding technology companies. His objective was to improve Detroit’s downtown to draw people to move back to the area which helps both recruiters and candidates.

Chief of Ford may set record compensation for an auto CEO

2011-03-11T16:31:00.001-05:00

Ford CEO Alan Mulally earned record setting compensation for reviving the challenged auto maker. His earnings will likely exceed the previous auto industry record set by Ford's former chief Alex Trotman in 1998, who made $73 million, a sum that also reflects the total his stock and options.

Mulally banked $33.4 million in after-tax gains on incentive stock awards granted as part of his 2008 pay package, which is only a fraction of what he has earned for his recovery efforts in Ford.

In the upcoming weeks, the Michigan-based auto maker will report Mulally's 2010 compensation. Industry analyst say there is a good chance his earnings will represent the largest compensation package the auto industry has ever seen.

A spokesperson for Ford declined to comment on the exact amount of the CEO's pay, but noted the company's stock rose 68% in 2010. He also added that Ford cut its debt by $14.5 billion and could now fund the company's $7-billion obligation to the health care trust for UAW retirees.

Equilar, a financial risk management firm that aggregates data on executive pay, claimed Mulally's total equity-based incentives are worth roughly $313 million based on Ford's $14.01 closing price on Monday. According to the firm's analysis, that estimate does not include bonus and other benefits.

The CEO's grand compensation is expected to raise the question of whether his pay is excessive or an appropriate reward?

During the past few weeks, shares of Ford's stock have dropped 24% from their highest level of $18.97 in January. The slip comes with concerns of extreme oil prices that will hinder overall profitability for the company.

Many make the claim that Mulally's $313 million payout is just and fair, however several others are not so quick to agree. The CEO is raking in a grand compensation for achieving what his peers in the domestic auto industry could not - driving a successful recovery without the intervention of the federal government.

Ford's drastic turnaround over the recent years will fuel other industries in automotive. One type of company that is already seeing improvements is a producer of hard tonneau cover products and accessories.

Yet the debate begins over whether his reward was right or too much. Advocates of the "pay-for-performance" system claim it is fair and well-deserved.

Ford does not plan to release any information regarding its top executives' pay for a few weeks, however the recent release that Mulally is to receive a $56.5-million stock award for delayed compensation granted in 2008 has spawned an uproar from the peanut gallery.

With respect to the $6.6-billion profit Ford earned last year, the CEO's compensation is not considered "excessive", said Van Conway, a specialist and advisor in corporate recovery. "When you look at the stock award, it's about 1% of profits," he said.

Opponents argue that such compensation packages like Mulally's are excessive amidst a national unemployment rate of 8.9%. In addition, some say his heafty pay package could also stir up issues with the UAW.

The CEO of Ford has "done a fabulous job, but when they negotiate with the union later in the year it's probably going to come back and bite them in the butt," said a key Ford shareholder.

Ford's recovery is destined to help a number of related sectors, ranging from auto transport companies to manufacturers of parts and components.

Ford sees solar solutions with new DTE program

2011-03-11T12:42:00.000-05:00

Ford and DTE Energy have teamed up to implement a more green energy source at the auto maker's manufacturing complex in Wayne. The duo recently installed solar panels that are expected to generate roughly 500 kilowatts of power.

The new solar panels were installed in front of Ford's Wayne Assembly Plant and will fuel production at the adjacent Michigan Assembly Plant.

The electricity supply manager of Ford said the solar panels will save the company about $160,000 annually. The entire energy-saving project totals about $5.8-million.

Although the new solar panels will render only a small portion of the 20 megawatts of electricity demanded by the plant on an annual basis, the supply manager is confident that the investment will save Ford money in the long run. Such savings will enable Ford to produce renewable energy and experiment with battery-powered parts for auto transport vehicles.

Additionally, the new panels will be feed a 750-kilowatt energy-storage system as well as contribute to 10 new electric-vehicle charging stations at Michigan Assembly. The charging stations will recharge on-site electrical vehicles that transport auto parts to and from various buildings at the manufacturing site.

"These new investments should help us cut overhead costs in a number of ways." said a spokesperson for the company. "Our reliance on auto transport companies being one of the major areas of savings," he added.

Ford's current project is part of DTE Energy's SolarCurrents program, and the newly installed solar panels are owned by the utility.

The overall goal of DTE is to work with various corporations throughout southeastern Michigan to install enough panels over the next five years to produce 15 megawatts of electricity. The utility provider is seeing opportunities with all sorts of business, ranging from microfiber cloth manufacturers to others in the auto industry.

Go Green By Taking Advantage Of An Auto Transport Company

2011-03-04T15:00:00.002-05:00

The movement to become more "green" is evolving at a rapid rate. One area that is not jumping on the green bandwagon quite as quickly is the automobile industry. New models for fuel-efficient vehicles are unveiled every year, however many of these hybrids are only considered "concept cars." However those small, gas saving vehicles that are available for purchase, are only affordable to those buyers who have the pockets to pay. A simple method to contribute to the trend of going green is to utilize auto transport services. United Road is one company that has pioneered the vehicle logistics industry and has made considerable efforts to help minimize carbon emissions.

The Department of Energy has released compelling data regarding the amount of carbon dioxide one gallon of gasoline produces. In addition, the Department calculated the average miles per gallon (mpg) used by a standard vehicle, the amount of carbon dioxide emitted by a single gallon of diesel, and the median mpg for a typical truck used for car shipping. In a matter of just one year, a auto transport company has the capability of preserving up to 2,926,000 gallons of fuel and cut greenhouse gas emissions by an astonishing 38,216,000 pounds.

United Road has taken such statistics seriously and is implementing ways to make better use of these figures. The company utilizes highly-efficient flatbed trucks and enclosed car carriers for its car shipping services. In addition, United Road uses advanced OVISS technology to further improve transit efficiency and timely delivery.

Another strategy United Road has applied to help the planet become greener is using auto transport terminals. The company has built several designated pick-up and drop-off locations found in major areas all throughout the country. This helps to reduce the length of trips that car haulers must take to each destination. In addition, United Road logistics planners work directly with automobile manufacturers and dealerships to ensure auto transport trucks are loaded to their fullest capacity.

United Road offers some of the lowest auto transport rates in order to make car shipping more affordable for the average individual. The company also strives to increase the overall awareness and benefits vehicle transporting, one example being the companies ties to eBay motors. In fact, United Road was awarded 2009 "Carrier of the year" and preferred carrier of eBay motors. Learn more about United Road and the benefits of auto transport.

Boeing contract to benefit Michigan aerospace industry

2011-03-03T14:47:00.001-05:00

Boeing's plan to construct up to 200 refueling aircrafts for the U.S. Air Force, after being awarded a $35 billion contract, is expected to be an economic boost for Michigan's aerospace industry.

The Chicago-based airline said the state will benefit from roughly 450 new jobs and an estimated $25 million in annual economic impact from the Boeing NewGen Tanker, called the KC-X.

Currently, Boeing has connections with over 280 Michigan suppliers, contributing to about $551 million in annual economic impact.

As of now, four manufacturers in the state stand ready to supply components for Boeing's NewGen Tanker. One Livonia-based manufacturer, LaSalle Electric Supply Co., will provide electrical standards, lighting products and tie straps for the new plane.

LaSalle currently provides lamps for the airline's 767 aircraft, as well as other parts for Boeing. The company's new innovation, the NewGen Tanker, is a multi-mission aircraft based on the design of Boeing's 767 commercial airplane but offers highly advanced technology.

Jim Gatward, president of LaSalle Electric Supply, claims that there is great interest in the project. "It does two things for us: extends the lifeline of the Boeing 767 aircraft platform for many years and all ancillary product and support that go into that aircraft."

Gatward noted Boeing's KC-X is hybrid of the Boeing 767, but the supplies LaSalle plans to contribute will remain the same.

"The feeling of anticipation is gone," said Gatward, "and everyone from here is excited that we can continue with the 767 platform."

The first phase of the deal, valued at $3.5 billion, calls for delivery of 18 aircraft by 2017, according to the U.S. Department of Defense. Gatward is currently unsure of whether more man power will be needed to meet the production demands.

"If that accelerates or the Department of Defense wants them sooner," he said, "we definitely could see hiring more people."

As prospective suppliers contemplate the possibility of taking on a larger workforce, the consideration of ESOP (Employee Stock Ownership Plans) services are being evaluated. Keeping workers happy with the right type of benefits is crucial to sustaining long-term success.

Even vehicle logistics providers are taking an interest in the state's aerospace progression. Auto transport companies are delivering new vehicles designed to help facilitate that manufacturing process.

Gavin Brown, executive director of the Michigan Aerospace Manufacturers Association, said that over the life of the Boeing NewGen Tanker contract, he forecasts $500 million in new business will go directly to aerospace companies in the state.

One Michigan company hoping to get into the mix is Sterling Heights-based RoboVent. The industrial company has just expanded its operations to support airplane spray booths for painting and finishing.

Brown projects the residual benefit for such suppliers to last up to 40 years due to the longevity of aircrafts and the demand for replacement components. The refueling tanker of the past, the KC-135, was commissioned all the way back to the era of the Eisenhower administration.

Boeing claims its NewGen Tanker to be more cost-effective to own and operate because it uses 24 percent less fuel than the competitor's plane. Such efficiencies could save U.S. taxpayers over $10 billion in fuel costs over the NewGen's 40-year service life.

"For every $100,000 to $150,000 in revenue a good aerospace manufacturing company receives in orders, a job is created," Brown said. "The tanker program will result in thousands of new jobs when you look at the financial impact — $500 million over the lifetime of the contract. — Aerospace manufacturing workers are amongst the highest paid in manufacturing."

Progression of the like will greatly aid those companies that have been working to become AS9100-certified, ranging from auto makers to suppliers of microfiber cleaning cloths.

One such company is Fraser-based Fairlane Tool Co., a supplier of aerospace landing gears and other related components. Fairlane supplies the landing gear for airplanes like the F-22 and F-35, to name a few.

Fairlane Tool, after waiting months for approval, just recently received its AS9100 certification.

Aerospace companies like Boeing and Northrop Grumman Corp., based in Los Angeles, are not even considering vendors that are not AS9100 certified, Brown added.

"This opens up the door for us to deal with Boeing and do contract work with them," said Fairlane Tool's quality manager Mike Gordon Jr. "You don't even get to talk to Boeing unless you have AS9100 certification... it's very crucial. It definitely could not have happened at a better time."

Until now, Fairlane Tool was working with the Tier 1 suppliers rather than directly with the original aerospace manufacturers. Without the middle man, the next step for Gordon and Fairlane tool is to "start placing bids with Boeing."

"If we win a bid, which could take three months or so, we would add about 10 people," he said. "And that's just us; it doesn't affect the other companies around us."

Gordon said his company is working with Michigan Works, a state agency that helps unemployed workers, to aid the recruiting process.

"This will definitely create an influx of a whole bunch of cash into the area," Gordon said. "It's a trickle effect — from Boeing, to people like us, to the steel companies and truck drivers."

Several other companies in Michigan are to benefit from Boeing's contract. Some of which include Honeywell Aerospace in Boyne City, Eaton Corp.'s aerospace division plant in Jackson, and the Grand Rapids plant of Evendale (Ohio-based GE Aviation Systems).

Tax credit supporters of Michigan's film incentive prepare for battle

2011-03-03T11:29:00.001-05:00

By recruiting powerful lobbyists and gathering compelling economic data, advocates of the film tax credit are prepping for to battle the potential demise of Michigan's film industry incentive.

Supporters plan to convince Legislative and administrative officials, who are hinting at dropping a number of tax credits in an effort to improve the state's business tax structure, to maintain some of the film incentives.

Crain's Michigan Business News asked Lt. Gov. Brian Calley why the administration did not conduct a cost-benefit analysis of such tax credits before moving toward their potential cut. "The approach has been to first fix the environment for everybody before addressing special circumstances," responded Calley.

On the other side of the debate, tax credit advocates argue that they can create a powerful case.

Michigan Film First, a coalition of Michigan's film industry leaders, has hired Truscott Rossman LLC, a communications firm in Lansing to help in the fight to save film tax credits.

"We will have people contacting lawmakers, saying they were out of work, now have found a job, have training, and what that means is that they have a future," said the president of the firm John Truscott.

Truscott added that the team of advocates plan to utilize a recent study by Ernst & Young which discovered in 2010, for every $1 of film tax credit cost, $5.94 of sales by Michigan businesses were generated. Also of value from the study is that state film productions employed 5,606 Michigan residents in 2010, paying out $66.9 million in wages and salaries to these individuals. The study was commissioned by convention and visitors bureaus for Detroit, Grand Rapids, Ann Arbor and Traverse City.

"It's an extremely compelling case, and it represents the most recent numbers," Truscott said. "This is an industry that's been growing steadily ... and it has a lot of potential to help a lot of communities."

In addition to local communities, many key industries in the state benefit from more Michigan-based movie production. Some of which include companies in auto transport are benefiting from the increased need of vehicle logistics services. Also growing are small business near the areas of film production.

Tom McMillin, a state representative R-Rochester Hills, is a critic of the film tax credit. He claimed that the study fails to consider that money given as refundable tax credits "could otherwise have been used by all other Michigan businesses if we hadn't cut the checks."

McMillin added that "paying 42 percent of any industry will result in losing money for taxpayers."

The film tax incentive includes up to a 42 percent refundable tax credit of a production company's expenditures within the state. According to the Michigan Film Office, the state paid $95 million in film tax credits as of the end of 2010, in addition to $209.4 million approved but not yet disbursed for 2011.

The incentives Michigan put into place are responsible for attracting some $648 million in movie-making investments.

Screenwriter and coordinator of the screenwriting program in the University of Michigan Department of Screen Arts and Cultures, Jim Burnstein, and vice chairman of the state film office advisory council, both said the film tax credit helps Gov. Snyder's objective to "reverse the brain drain, revitalize Detroit, and help small businesses create more jobs."

Burnstein said, in the past, his MBA degree students left Michigan upon graduating, however the "migration stopped in its tracks" as students saw a burgeoning film industry in the state of which they wanted to be a part.

Burnstein, a top proponent of the film industry tax incentive, said parts of the tax credit can be reduced, but a proposed $25 million grant program to replace the film credits is "the death of that law."

House Rep Reverses Statement Of Possible University Closures In MI

2011-03-03T10:40:00.001-05:00

The chair of the House Appropriations Subcommittee on Higher Education ignited a heated controversy after mentioning that some universities in the state may be closing due to Michigan's large budget deficit.

However after Rep. Bob Genetski, R-Saugatuck told Crain’s Detroit Business News that the potential shut down of one or two public universities was "a real possibility," he revoked his statement.

Rep. Genetski flipped is comments, telling Lansing's Gongwer News Service that he had no intentions of cutting the funds for any universities.

Prior to his backpedaling statement, on Monday the chair said to Crain's that some of the state's public universities, including Oakland University, Eastern Michigan University, University of Michigan-Flint, and Ferris State University, may be closing as Michigan follows through with budget cuts. "Unless the economy turns around big time, it's a very real possibility," he said.

Genetski added that the state's three research universities - Michigan State University, the University of Michigan and Wayne State University - are safe from closure.

"The research institutions have a bigger niche than everyone else right now and are pretty well-defined," the chair said. "We'd be looking at some of the regional institutions."

In the interviews conducted by Crain's Detroit Business News, Genetski said closing one or two regional universities would help to maintain minimal tuition hikes at the remaining colleges.

"Really, we're trying to buffer cuts to all schools by closing an institution or two," he said. "Otherwise, we're going to have a bunch of public universities that no one can afford to attend."

Eric Keldermen, a reporter for the Chronicle for Higher Education based in Washington D.C., thinks otherwise. Shutting down an institution would have the opposite effect on tuition, he said.

The closure of just one university would result in more students attending existing universities, which would force these schools to expand capacity and hire staff before increasing enrollment. One potentially optimistic outcome from a closure would be the efficiency of offering more opportunities in the way of online MBA courses.

"We want to reward colleges that keep tuition low, but what you're going to do is cause increased demand on other campuses, and what they are going to do is raise tuition," Keldermen said.

The communications officer at Ferris State University, Marc Sheehan, added that universities across the state are driving up enrollment and tuition costs across the board and closing a university would cause bottlenecks in education. Compounding the concerns are more limited professional programs that only select universities offer, like Michigan MBA degrees or PhD's.

Enrollment at Ferris has steadily grown 32 percent over the past decade for the mid-Michigan university, from 10,930 students in 2001 to 14,381 students in 2010. The university has also experienced tremendous growth in its MBA courses.

Shutting down any of Michigan's universities would lead to fewer graduates in the state, claimed Michael Boulus, executive director of the Presidents Council, State Universities of Michigan.

In an email to Crain's, Boulus wrote "If we close colleges, we will have fewer graduates — there is very little room for expansion at the other schools. In other words, if Genetski wants to close two schools, then are we willing to tell students and the employers who depend on these regional universities for graduates that they will have to go elsewhere for education and training?"

Also weighing in on the topic was Gov. Rick Snyder. He shot down the idea of closing any universities in Michigan.

"We shouldn't walk away from our universities," he told Lansing's Gongwer. "I'm a big advocate, long-term, of, we need more students going through our universities. Higher ed's important in our state. ...We've got a great group of institutions, and I hope they all can successfully navigate through the challenging times we all face together."

In a series of hearings with university presidents, which is to stretch throughout March, a subcommittee plans to evaluate these as well as other budget-related matters.

Proposing to shut down a university would be opposed by community leaders because educational institutes are powerful drivers to the local economy, Kelderman said.

"I would argue that the legislators in those areas are going to be resistant because those are big employers in their region and students are big spenders in the region," he said.

Budget constraints have resulted in significant proposals in many states throughout the country.

Legislators in Texas have proposed shutting down four community colleges and cutting financial aid for incoming freshmen. Arizona's governor has proposed slashing funding for public universities by 20 percent and 50% of allocations to community colleges.

Fortunately, no public university in U.S. has been closed because of budget constraints, said Kelderman. The creation of a state public university system or a regional board of governance system, like those in California, is an option to aiding the deficit, he added.

"Michigan's campuses have more autonomy than any other state has," Kelderman said. "Combining some of the administrative campuses is a more plausible idea."

Genetski told Crain's that a current bill exists proposing a state system, but the bill is expected to see opposition by Michigan's research universities whose boards are protected under the Michigan Constitution.

Ferris State, UM, Grand Valley State University and Oakland University were scheduled to testify today in front of the House and Senate subcommittees on higher education.

February automotive sales jump over 20%

2011-03-02T14:34:00.001-05:00

February was marked one of the strongest months for auto sales in the past year. Aggregated data from major automakers formed industry estimates that February sales figures jumped 20 percent overall. That's almost 1 million more vehicles compared to last year.

"The consumer is back to the showrooms," said an analyst with Barclays Capital.

Big three car maker, General Motors, said that compared to 2010, U.S. sales for February increased nearly 46 percent to 207,028 vehicles.

General Motors added that its retail sales for the month were even better. According to the automaker, that is the highest year-over-year increase in the retail market in the company's history (a 70 percent growth over February 2010.)

"Our plan was to get off to a quick start this year, and we did just that," said GM's sales chief Don Johnson. "Having the right vehicles in inventory, combined with aggressive advertising and targeted consumer marketing, has been the key to our success in the first two months of this year."

The automaker's spike in sales was largely a result of "very large incentives offered by the manufacturer for the second month in a row," the analyst at Barclays Capital wrote in a report. He added that General Motors was offering better incentive to buy while the company's management "reiterated its commitment to keep its incentives in line with the industry for the year."

According to an analyst at TrueCar.com, the industry incentive averages were the lowest for a February since 2007.

Ford, another big three automaker, said its overall sales in February increased 14 percent to 156,626 vehicles compared to last year's February. Economy cars for Ford, such as the Focus and Fiesta, more than double. The company claimed high gas prices could be a result of the small vehicle sales.

In addition, low auto transport rates have helped minimize shipping costs for major industry players. This has helped dealerships carry more inventory for buyers to consider.

Toyota reported sales in February 42 percent (141,846 vehicles) better over last year. Barclays Capital analysts warned that the major spike in sales for Toyota was notably deceptive. The company suffered sales due to last year's safety issues which made February's year-over-year comparison appear over-inflated.

Officials at Toyota were still happy with the numbers: "After two months of improving sales, we feel good about the way 2011 has started," said a Toyota vice president.

Nissan North America's sales for the month rose almost 32 percent to 92,370 vehicles. This set a new record for February sales in the U.S. for the company.

Michigan's Chrysler Group reported a 13 percent increase in February sales (95,102 vehicles.)

This month's positive reports from the automotive market impact the bottom line for many other sectors tied to the industry. Auto transport companies, insurance providers, and select government organizations are also seeing sales improvements.

2011-03-02T09:33:00.004-05:00

NEED AN OCCASION TO WEAR THAT UGLY DRESS AGAIN?

Associated Press
Close to 140 mostly Michigan moms who turned the clock back 20, 30, or in some cases, more, years in an annual get-together they affectionately call the Mom Prom.

Most prom, wedding, and bridesmaid’s dresses are stashed in a closet after it’s big night. But that doesn’t have to be the case according to the Detriot family lawyers at Chasnik and Graff Attorneys at Law who specialize in divorce law. What better way to say goodbye to your old life then to go out the way you came in by having a party and wearing that wedding dress. Ugly bridesmaids and old prom dresses are welcome too. These types of dresses were all worn again recently for an event that gives mothers a charitable excuse to squeeze back into their youth.

Now in its sixth year, the ladies-only gathering encourages women to dive into their closets and pull out prom, bridesmaid and even wedding dresses - that are decades old in some cases - for a night of dancing, drinking and reminiscing while raising money for worthy causes. The event has brought in thousands of dollars for cancer research and charitable groups, and is inspiring similar events in other states.

The cheering group of more than 100 women jammed to 1980s music and beyond Friday, proudly donning a metallic rainbow of chiffon, satin and sequins.

The event owes its origin to the puffy pink number that the event organizer wore to her senior prom. The 41-year-old was so amused by the gown when her mother gave it back to her several years ago that she wore it to her friends' Academy Awards watch party. It was a hit, and about a dozen friends agreed to don their tacky, dated dresses for a night of dinner and dancing designed to raise money for charity.

After a local newspaper columnist caught wind of the get-together, the event organizer was inundated with calls from women interested in attending the next outing. So in 2007, she held the Mom Prom in the gym at her church in Canton Township, and after women paid $10 each to attend, she dropped off an $820 check at a local homeless shelter.

Since then, she has consulted for an event in Seattle last year and one scheduled for April in Middletown, N.Y. She's also heard from mothers interested in hosting similar parties in Indiana,

Her event this year raised more than $3,000 for the Society of St. Vincent de Paul and the HHT Foundation, which works toward finding a cure for a genetic disorder that causes blood vessel abnormalities. Past recipients include the Barbara Ann Karmanos Cancer Institute and First Step, a group working to combat domestic and sexual violence.

The crowned Mom Prom queen, donned the aqua-colored dress that her late mother wore to a wedding in 1991. "I really miss her," said the 46-year-old Canton resident who works in advertising.

Women boasted about the camaraderie and unique atmosphere of the event, and an added perk is you're not worried about your husband not wanting to dance.

The future of Michigan Works relies on Senate's budget decision

2011-03-01T11:11:00.001-05:00

Michigan Works, the statewide agency for work force development, could possibly be shut down if a proposed budget by the U.S. House of Representatives is passed, according to a story at the Lansing State Journal.

The budget proposal is awaiting the Senate's approval; both sides continue to seek a budget agreement to maintain the government's funding. In the instance that a measure is not passed within the next few days, the government's funding will cease as of March 4.

The proposal passed by the House would cut over $3.6 billion in funding for the Workforce Investment Act after July 1. In addition, the budget proposal will rescind $175 million for the current year. Michigan Works, which aids about 3 million residents in Michigan, relies heavily on that act for financial support. The agency assists all types of prospective employees and hiring organizations in sectors ranging from auto transport services to manufacturing and production.

So what direction could the state's unemployed residents take for work force development and retraining?

Currently, many of those individuals won't be able to rely on the Trade Adjustment Assistance program for help. This program, which offers extended training, additional unemployment benefits and health care assistance to workers who lost their jobs due to foreign competition, expired in January. As of now, Congress is deadlocked about the program's renewal.

"Democrats are pushing to restore funding, while Republicans want the White House to move on three trade deals before signing on." according to the Detroit News.

U.S. Rep. Sander Levin (D-Royal Oak) and Rep. Gary Peters (D- Bloomfield Township) are pushing a vote on the measure, however the vote has not been scheduled.

The states Governor, Rick Snyder, has signed a letter to the Senate inquiring that the Michigan Works program be extended.

In the case of federal funding cuts, continuing the program that partially funds retraining efforts under the state's No Worker Left Behind program "becomes a big challenge because of the budget situation we're in," Snyder told The News.

A proposed cut on Michigan's film tax credit may hinder production incentives

2011-02-28T16:41:00.003-05:00

Movie makers in the Michigan film industry are questioning the cap Governor Rick Snyder proposed for the state's incentive-based film tax credit.

As part of Synder's first budget proposal, the Michigan Governor added a limitation on the amount of funds allocated for the film tax credit to $25 million. That's less than 20% the amount the state paid out to the industry in 2009.

The drastic reduction in tax funds is raising the eyebrows of many Michigan filmmakers and activists.

"Putting a $25 million cap would severely curtail Michigan's attractiveness to the film and television industry and create a severe limitation," said the senior vice president for state government affairs.

Producers who choose Michigan to shoot their big screen masterpieces are eligible to recoup up to 42 percent of production expenses totaling over $50,000 through the program.

The film tax credit was first introduced in 2008 by the former Governor Jennifer Granholm as an effort to increase major film production in Michigan - a plan that potentially offers many indirect benefits to the state's commercial interests.

The motives behind the program include attracting more jobs, in addition to enhancing state's image as it has become synonymous with the decline of the manufacturing sector in American. Such tax credits have attracted the creation of movies like "Detroit 187" and "Gran Torino."

Since the program's launch in 2008, 133 projects have wrapped in Michigan with $365 million in incentives approved and $95.6 million already paid to production companies, according to data from the Michigan Film Office, which disburses the tax credits. The production of those films resulted in over $648 million spent in the state since the program took full effect.

In addition to the direct affect the tax incentive has had on Michigan movie production, the film credit has improved business in various other industries - indirectly. For instance, Michigan furniture manufacturer Case Systems was able to capitalize on few high volume purchases in accordance with the tax credit.

Currently, there are applications for over $93 million in tax credits pending at the Michigan Film Office for 2011. However, warnings are being announced that if the tax breaks are cut, Michigan's talent base for movie making may soon be headed to other areas like Hollywood. One production in particular has been already pulled out of the state.

"It's safe to say that a number of our companies may not consider Michigan in the mix anymore because of the uncertainty as to whether they would be able to obtain a portion of the credit," said Michigan's senior vice president of government affairs. "The potential for a mass exodus is real given those parameters," Stevenson said.

He acknowledged that most film producers were lured by the size of state's tax credit since 40 states have film industry incentives in place and most are competitive, if not quite as generous as the credit in Michigan.

The governor's proposal would limit tax incentives to $25 million for fiscal 2012 and 2013. The budget is still pending approval by the state legislature, but many officials on the conservative side have argued that Michigan cannot afford the tax credit in the face of a $1.8 billion budget deficit.

On the liberal end of the fight, proponents are arguing that the tax credit has a positive impact in many sectors beyond the arts, ranging from auto transport companies to unique Michigan-based boutiques.

The move has displeased over 5,000 state residents who were employed by the film industry in 2010. Plans for a new film studios near Detroit could be jeopardized, prompting over 1,000 Michigan residents to meet on the issue. Mitch Albom and actor Jeff Daniels were among the powerful voices behind the assembly.

Accelerate your career search by earning one of these promising degrees

2011-02-08T15:43:00.001-05:00

Wouldn't it be wonderful to hear the words: "So can you take the job?" shortly after you earn your degree? By choosing the right degree, you just might be able to select your ideal job of choice.

According to the National Association of Colleges and Employers (NACE), your major is the most significant factor in determining your employment status come graduation. Review, highlight, and study these five degrees that offer grads great odds for getting hired - almost immediately.

#1 - Accounting Degree
New regulations in accounting practices, which were recently passed by Congress, have made this credential even more valuable. According to a 2010 survey by NACE, 47 percent of accounting majors earn a job prior to graduation.
Related Careers and Salaries:
Accountants: $59,430
Personal Financial Advisors: $69,050
Financial Analysts: $73,150
Did You Know? According to a 2010 survey by Universum Group, the Big Four accounting firms (KPMG, Ernst & Young, PricewaterhouseCoopers, and Deloitte) finished just short of Google and on top of companies like Apple, Microsoft, and Goldman Sachs on a list of "dream employers" for students going for a bachelor degree in accounting.

#2 - Business Degree
Businesses will pave the road out of an economic slump, and they will need new workers to help make it happen. Over 45 percent of students pursuing a bachelors degree in business administration discovered a job prior to graduation, according to NACE.
Related Careers and Salaries:
Insurance Underwriters: $56,790
Administrative Services Managers: $73,520
Financial Managers: $99,330
Did You Know? According to the U.S. Department of Education, degrees related to business made up 21 percent of all bachelor's degrees awarded in 2008.

#3 - Computer/Information Systems Degree
Over 44 percent of bachelor degree CIS students were given at least one job offer prior to graduating in 2010, according to NACE.
Related Careers and Salaries:
Computer Support Specialists: $43,450
Network Systems Analysts: $71,100
Computer Scientists: $97,970
Did You Know? Large tech companies like Facebook and Apple have ramped up their hiring in Silicon Valley. For the IT industry, this was an increase in jobs for the first time in nearly two years in September 2010.

#4 - Engineering Degree
Engineering students find jobs quick - often times prior to graduation. In addition, engineering graduates, even entry-level, earn handsome salaries that exceed many MBA degrees. According to a separate NACE survey, eight of the top 10 highest-paid majors are related to engineering.
Related Careers and Salaries:
Civil Engineers: $74,600
Chemical Engineers: $ 84,680
Petroleum Engineers: $108,020
Did You Know? The first wireless telephone patent was issued in 1908 to an engineer named Nathan B. Stubblefield. He also ran a school founded on a farm that is now coined Murray State University.

#5 - Health Sciences Degree
According to NACE, nearly 39 percent of health sciences majors have earned a job offer before graduating in 2010. The U.S. Department of Labor estimates that health care will provide over 3 million new jobs through 2018.
Related Careers and Salaries:
Medical Assistants: $28,300
Health Information Technicians: $30,610
Registered Nurses: $62,450
Did You Know? Many careers in the health care sector are available to those with just an associate's degree. But for students, like those seeking a bachelor degree in nursing, will need a full four years under their belt.

(*All salary data comes from the U.S. Department of Labor and is based upon median salaries for 2008.)

Chrysler plans to pay UAW workers a $750 "performance award"

2011-02-01T08:59:00.002-05:00

Next week Chrysler plans to pay its UAW and CAW employees an average "performance award" of $750, based on the automaker's 2010 operating profit of $763 million. This all comes at a surprise to investors given the fact Chrysler lost $652 million after interest expenses and other restructuring obligations.

Workers who get paid by salary, except for the top 50 executives of the company, also will receive the award, a Chrysler spokeswoman said early in the week. Because the company still has debt of $5.8 billion to the feds, the U.S. Treasury can restrict senior management's compensation.

"The obligation to our people was much greater than the need to improve our bottom line profitability." said the company's CEO Sergio Marchionne."It was absolutely owed that we treat our people properly,"

Praising the idea of the performance award is Chrysler's VP of the UAW department, General Holiefield.

"This certainly shows the character of the new Chrysler to give recognition to the UAW Chrysler workforce," said Holiefield. He also mentioned that some employees would receive a payment in excess of the $750 average, while other workers would receive less, depending on their eligibility.

The Michigan automaker reported a $199 million net loss for the last quarter, but a $198 operating profit when interest expenses and taxes are excluded.

For the entire year of 2010 Chrysler reported a net loss of $652 million, but a better than projected operating profit reaching $763 million.

The core reason for the company's large difference in net loss and operating profit is the interest expense due to government loans. That interest accumulated to $329 million in the fourth quarter and $1.23 billion for all of 2010. CEO Sergio Marchionne has spoken with investment bank Goldman Sachs about ways to refinance some of those loans at a lower interest rate.

Such financial adjustments likely occur before Chrysler can follow through with an IPO that would allow the U.S and Canadian governments to sell shares in Chrysler. The U.S. owns 9.2% and Canada owns 2.3%.

Marchionne and CFO of the company Richard Palmer said Chrysler projects to earn a net profit of between $200 million and $500 million for 2011, without having to refinancing the federal loans. Excluding interest expense, management expects its operating profit to more than double from $763 million last year to $2 billion in 2011.

But the burden of Chrysler's financial aid from the government remains heavy. Palmer added that those loans carry an average interest rate of 11%.

Chrysler's loan interest could see an increase this year. The automaker is waiting for word from the U.S. Department of Energy on an application for a $3.5 billion loan, which would fund new projects to improve the fuel economy of future vehicles.

Last week, neighboring automaker Ford said it would award its 40,600 UAW workers an average of $5,000 in profit-sharing. Chrysler has not paid profit-sharing since 2005, when its UAW workers received an average of $650.

Marchionne elected to the call the payment "performance award" rather than "profit-sharing", because it is difficult to mention profit sharing when you have a negative figure at the bottom line, he added.

Chrysler reported a net loss of $199-million for the fourth quarter, but an operating profit of $198-million when interest expenses and taxes are excluded.

“I want to express my gratitude to everyone for their hard work as we move forward towards the achievement of our goals,” Marchionne said in his e-mail. “You are the authors of this success. I want to thank you for your dedication, your creativity and your willingness to embrace change without which these results would not have been achieved. "

For the full year, Chrysler reported a net loss of $652 million, but a better-than-expected operating profit of $763 million. Additionally, the company still maintains key relationships with large clients, in sectors like transportation services and auto transport.

Borders Group to delay payments to remain liquid

2011-01-31T09:47:00.001-05:00

Borders Group announced on Sunday that it plans to delay paying some of its bills, which are due at the close of January, to help "maintain liquidity" while attempting to finish the restructuring of its debt.

Last week, Borders confirmed commitment for $550 million in financial assistance from General Electric Capital. The financing is subject to conditions that include securing $175 million from other lenders and resuming store closures.

The nation's second largest book chain laid off 45 employees, most of them at the company's headquarters. Last month, Borders delayed payments to publishers as it began seeking new financing. Compounding the situation, earlier this month the chain said payments would be delayed to "vendors, landlords and others."

Borders said in a statement on Sunday that the company "understands the impact of its decision on the affected parties, but ... is committed to working with its vendors and other business partners to achieve an outcome that is in the best interest of Borders and these parties for the long term."

Shedding light on the case is one St. Louis business attorney, "The company is taking some risky moves to become more financially solvent, which should provide a very interesting outcome."

The book chain has about 19,500 employees nationwide, mostly throughout 650 Borders and Waldenbooks stores. Borders has shown a loss of almost $800 million since 2006.

Bloomberg News reported that resources from GE does not factor out a possible bankruptcy reconstruction.

"They have a long way to go before seeing any major improvements" said a Salt Lake City business lawyer who is also following the case.

Meijer seeks settlement with insurance providers

2011-01-21T12:56:00.001-05:00

After a court battle that revealed some of Meijer's secret payouts to Acme government officials, the Grand Rapids-based retailer has settled a lawsuit with its insurance providers.

Meijer solidified a settlement with American Home Assurance Co. out of New York - a company that sued in the summer of 2010. American Home Assurance said it was not responsible for more than $2.2 million of the $4.4 million in payments Meijer made to Acme officials that derived the retailer's illegal campaigning in Acme.

Insurance lawyers from both sides told the court judge that they need 30 days to finalize a mediation deal. The attorneys also declined to comment on any specifics of the settlement.

"The settlement is about as confidential as it can get" said one Oklahoma City insurance lawyer who has been tracking Meijer's legal issues from the beginning.

Last year, Meijer's top lawyers had mistakenly revealed the settlement amounts paid to Acme officials. The exposed legal documents revealed that Meijer paid the former Acme treasurer $2 million and another Acme supervisor $700,000.

New York's American Home argued that it was not responsible to pay for Meijer's public, $1.5 million settlement with five Acme commissioners and trustees because the retailer publicized "known false information" about the officials, failed to offer information about the lawsuit, and did not utilize it underlying coverage held by another entity.

As a response, Meijer counter-sued American Home Assurance as well as its insurance broker (Marsh U.S.A. Inc.)

"Meijer's legal disputes are panning out to be an interesting turn of events" said a Tucson insurance defense lawyer who is following the case.

The insurance claim dispute effectively resolved two lengthy mysteries in Meijer-Acme story: the 2007 legal settlement with the former Acme treasurer and the subsequent unannounced deal with the Acme supervisor.

Meijer later paid out $190,000 due to civil fines for violating State campaign finance regulations. The county prosecuting attorney awaits a state Supreme Court decision to see if he can prosecute unidentified individuals at Meijer who allowed the illegal activity.

Chrysler CEO Says ‘Successful Transformation’ Is Under Way

2010-11-11T01:50:00.000-05:00

Bloomberg

Chrysler Group LLC, the U.S. automaker operated by Fiat SpA, has laid the “groundwork for a successful transformation,” the companies’ chief executive officer said today.

Sergio Marchionne, CEO of both Chrysler and Fiat, addressed workers in a message obtained by Bloomberg on the day the U.S. automaker raised its operating profit forecast for the year and said its net loss narrowed to $84 million in the third quarter.

“The changes we are bringing about are beginning to enter into the DNA of the company,” Marchionne said in the message. “You can tell by how the language and tone of conversations have changed, by the long hours people are working, and by the way teams form and function.”

Shawn Morgan, a Chrysler spokeswoman, confirmed the memo was sent.

“We knew when we began this reconstruction process that the road back would be a long one,” Marchionne said. “We’ve hit some key milestone and we’ve made progress in important areas. We have laid the groundwork for a successful transformation. I ask you to continue to have faith in your leadership.”