27 February 2010

A Clean Energy Triple Play

Governor Granholm Posts to Huffington that Michigan Will Lead the Green Economy in America

"Just Try to Keep Up" she Warns!

Huffington Post

Last May, I first posted here about how Michigan would lead the green industrial revolution. Some folks scoffed at that idea. They said I was too optimistic. They said Michigan would never lead in a green economy.

We're working to prove them wrong.

Today, I was in Midland, Michigan, as the Dow Chemical Company announced over $1 billion in clean-energy expansions - which, combined with nine other projects announced today, will create over 17,000 new jobs. In three separate ventures, Dow will help create the future of wind, solar, and advanced-battery technology in Michigan's Great Lakes Bay Region - a triple play for our nation's clean-energy future.

First, Dow announced it is moving forward on a truly game-changing product: It will build a $600 million full-scale production facility for its DOW™ POWERHOUSE™ Solar Shingle in Midland. These shingles have the potential to transform the way consumers get power by turning a typical home roof into a true powerhouse in every sense of the word. What makes the product revolutionary is its easy installation - no different from an ordinary shingle. That's why it was one of TIME magazine's "50 Best Inventions of 2009". It's a win for Michigan, for consumers, and ultimately, for our planet.

Dow is also a key player in Michigan's bid to be the advanced-battery capital of the world. Its Dow Kokam joint venture is investing $342 million to build a large-scale manufacturing site to help power the hybrid and electric vehicles of the future. Since we passed the first-in-the-nation advanced-battery credits, Michigan has seen more advanced-battery activity than any other state, meaning up to 40,000 great new jobs by 2020.

Last, but certainly not least, Dow has been designated a Center of Energy Excellence, a program we instituted in 2008 to help make Michigan the North American center of the clean energy industry. As Michigan's seventh Center of Energy Excellence, Dow will partner with the Oak Ridge National Laboratory to help tackle a major challenge for the wind-energy sector: making strong, light carbon fiber materials available for applications like wind turbine blades. This is a great opportunity for Dow to find a solution that can be used throughout the wind-energy industry.

The DOW™ POWERHOUSE™ announcement is the latest in a series of solar wins for Michigan. Hemlock Semiconductor, the world's leading producer of polycrystalline silicon (the critical component of solar panels), has invested $2.5 billion in the Great Lakes Bay Region over the years, spurring other development. Also headquartered in Midland is the world's leader in silicon product research, Dow Corning, where crucial research into the solar products of the future is conducted.

In three separate ventures, Dow will help create the future of wind, solar, and advanced-battery technology in Michigan's Great Lakes Bay Region - a triple play for our nation's clean-energy future.

Other companies are following Dow Corning and Hemlock Semiconductor's lead. In Midland, Evergreen Solar opened a new solar plant last year, and is ramping up production of its new "string ribbon solar wafer" technology. Last October, Suniva announced it would invest $250 million in a new solar manufacturing facility in Saginaw County. And just in December, GlobalWatt decided to locate its newest solar plant in Saginaw -- choosing Michigan over a competing site in Texas, largely because so many solar businesses are already in the area.

But, that's not all. Since targeting clean energy as a major sector to help diversify and grow Michigan's economy in 2006, we've made great strides. In fact, just since I posted here last May, we've made progress toward turning the green industrial revolution into a reality in Michigan:

• In June, General Electric announced its new advanced technology and training center outside Detroit, where new renewable-energy products will be researched and developed... meaning thousands of great, green jobs for Michigan.

• In July, I issued an executive directive to reduce Michigan's greenhouse gas emissions by 20 percent by 2020 and 80 percent by 2050, because going green isn't just good for the environment - it's good business.

• In August, Vice President Biden announced over $1.35 billion in Department of Energy grants funded by the Recovery Act for Michigan advanced-battery manufacturers - the largest share of any state in the nation.

• In September, I traveled to Japan and met with key executives considering clean-energy projects in Michigan. My previous investment missions to Austria, Belgium, Germany, Israel, Japan, Jordan and Sweden have resulted in more than 10,800 jobs created and retained.

• In October, Michigan State University restructured its MSU Extension, maintaining its traditional focus on agriculture while expanding its role in renewable-energy projects. After all, now is the time to "Go Green!"

• In November, Michigan was proud to host the American Wind Energy Association's Small and Community Wind Conference and Exhibition in Detroit, with over 112 exhibitors from around the world.

• In December, General Motors announced it would invest $336 million in its Detroit Hamtramck Assembly plant to begin building the Chevy Volt later this year. GM has invested $700 million in the eight facilities across the state involved in Volt production.

• Last month, as the world's gaze shifted to the future of the American auto industry at the North American International Auto Show in Detroit, Ford announced an investment of $450 million in expanding electric vehicle initiatives in Michigan... including moving battery assembly work from Mexico to Michigan.

We're becoming the hub for advanced-battery technology. Our solar-energy industry is rapidly progressing. This year, we will aggressively pursue companies in the wind-energy sector to give Michigan the competitive advantage that is so successful for our battery and solar sectors. We will continue to focus on leading the way to a clean-energy future here in Michigan. We are building the new Michigan economy, piece-by-piece, town-by-town, in communities across the state. Just click here to see some more examples.

And so, as I wrote last May: "Watch - Michigan will lead a green industrial revolution. I invite you to watch us, encourage us, and join us.

And the doubters?

I encourage them to just try and keep up."

Jennifer M. Granholm was elected governor in 2002 and re-elected in 2006. She began her career in public service as a judicial clerk for Michigan's 6th Circuit Court of Appeals. She became a federal prosecutor in Detroit in 1990, and in 1994, she was appointed Wayne County Corporation Counsel. Granholm was elected Michigan's first female attorney general in 1998.

Since becoming governor, she has worked to grow and diversify Michigan's economy, create jobs, ensure world-class educational opportunities for every Michigan student, create universal access to affordable health care, and stand up for Michigan workers and families during tough economic times. While aggressively pursuing her top priority of putting Michigan families first, she has also worked to ensure that state government spends every penny efficiently and has successfully resolved more than $6 billion in budget deficits.

26 February 2010

$156M in Tax Credits Awarded to Create Michigan Jobs

The Detroit News

Lansing -- The Michigan Economic Growth Authority today awarded more than $156.7 million in tax credits for 10 corporate ventures and a brownfield redevelopment project expected to create 17,321 jobs.

The largest award -- $61.3 million in job creation tax credits over 15 years -- will go to Dow Chemical Co. for a Midland manufacturing facility to produce solar shingles. The project is expected to attract $249 million in private investment and create 6,100 jobs, including 1,275 at Dow.

Another $42 million in advanced battery tax credits will go to Dow Kokum, a joint venture between Dow and Townsend Kokam LLC, for a large-scale Midland facility to make cells and batteries for electric and hybrid vehicles. Dow Kokum has pledged $342 million in private investment for the project, which is expected to create 480 jobs.

The credit will help leverage a $161 million federal grant from the U.S. Department of Energy, and another $300,000 in training funds from the Michigan Department of Energy.

"Companies are choosing to invest and grow in Michigan because we are a great state in which to do business," Granholm said in a press release. "From solar shingles and advanced batteries to boats and scrap-tire recycling, we are creating a diversified economy where firms across a wide spectrum of industries are finding success and growing new jobs."

Other projects include a new research and development facility in Northville Township that will supply materials for lithium-ion battery cells, the re-launch of a facility in Cadillac that makes boats, and the expansion in Perry Township of a high-tech firm that provides automotive engineering and test development services.

The MEGA board also approved a brownfield redevelopment project in Brownstown Township funded by a state and local tax capture valued at $58,500. A vacant parcel next to National Wine and Spirits Inc. will be used to expand the company's warehousing and office operations. The project is expected to generate $26.5 million in capital investment and create up to 10 jobs.

25 February 2010

Michigan Farmers Want Climate Change Legislation

Bay City Times

A group of Michigan farmers has declared its support for federal climate change legislation they say would boost clean energy production in the United States.

They say the legislation is necessary to ensure the future of America's farming industry.

Maynard Beery, owner of Beery Farms in Mason, said in a statement released this week by Clean Water Action that extreme weather caused by climate change is already impacting crop yields. Berry said attempts by some in Congress to weaken the authority of the federal Environmental Protection Agency to regulate greenhouse gas emissions would have disastrous effects for his farm.

"We aren't going to solve anything by sticking our heads in the sand," Berry said. "We need to act on climate change, or else we're going to be in a world of hurt."

Berry made the statements during a press call hosted by hosted by Clean Water Action and 1Sky. The farmers discussed how their industry could contribute to greenhouse gas reduction through carbon sequestration in the soil, low-impact practices and leasing land for the placement of solar panels and wind turbines.

All this while the American Farm Bureau Federation doesn't "believe" in human-induced climate change.

The Farm Bureau maintains that "there is no generally agreed upon scientific assessment on ... carbon emissions from human activities, their impact on past decades of warming, or how they will affect future climate changes," according to Michigan Farm News.

The New notes, correctly, that "scientific institutions worldwide have concluded that human activity is causing global warming."

24 February 2010

GM's Deal to Sell Hummer to Chinese Company Falls Through

The Wall Street Journal

General Motors Co.'s Hummer line of beefy SUVs is headed for extinction after a deal to sell the brand to a Chinese manufacturer fell apart.

Would-be buyer Sichuan Tengzhong Heavy Industrial Machinery Co. said Wednesday it failed to win approval from Chinese regulators for its $150 million bid.

GM said it will begin winding down Hummer, a brand that until a couple of years ago was one the auto maker's biggest money makers.

The Hummer sale is the latest deal to fall apart for GM as the company works to shed brands around the globe. The auto maker's efforts to sell its Saturn brand unexpectedly collapsed last year; later the company reversed plans to sell its Opel European unit after months of intense negotiations failed to produce a favorable deal.

Tengzhong's efforts to get clearance to buy Hummer became entangled in China's complicated regulatory system, according to people familiar with the situation. On Wednesday, China's Assistant Commerce Minister Wang Chao said his ministry has never received an application from Tengzhong. The company, however, said it tried and failed to obtain approval.

"Tengzhong worked earnestly to achieve an acquisition that it believed to be a tremendous opportunity to acquire a global brand at an attractive price," the company said in a statement.

GM, in a statement, said it would begin as orderly wind-down of Hummer operations. The company said it will continue to honor Hummer warranties.

"We have since considered a number of possibilities for Hummer along the way, and we are disappointed that the deal with Tengzhong could not be completed," John Smith, GM vice president of corporate planning and alliances, said in a statement.

Hummer, evolved from the military vehicle known as the Humvee, was born in 1998 amid America's growing penchant for brawny sport-utility vehicles.

GM sold 9,046 Hummer SUVs in the U.S. last year, down from more than 71,000 in 2006, before gas prices soared and big trucks fell out of favor.

GM announced in June 2008 it was looking to sell the brand and, a year later, it appeared Hummer could find a second life with Tengzhong. Chinese approval for the deal was never a sure bet, given the government's recent efforts to press Chinese auto companies to make smaller, more efficient cars.

China's auto makers have grown quickly in recent years, and several have shown aspirations to expand by buying foreign firms. At the time, GM estimated the deal would save 3,000 U.S. factory jobs. Hummer has around 370 dealers globally, including 153 in the U.S.

23 February 2010

Michigan Wind Energy Conference Planned for April in Cobo Hall


Saginaw Bay area wind boosters take note: The 2010 Michigan Wind Energy Conference is blowing into Cobo Center in Detroit on April 20-21.

There will be breakout sessions and displays from small and large wind manufacturers. Attendees also will be able to hobnob with installers, consultants and other industry pros.

Organizers are still signing up exhibitors. Maybe a couple companies from our region will be there? Hello Affordable Green Energy and Accent Building.

Last year's conference drew more than 1,500 people from throughout the state and region and more than 25 exhibitors.

Expiring Small Business Administration Loan Breaks Would be Bad for Michigan Business

Jackson Citizen Patriot
The economic stimulus bill increased the SBA's guarantee on its flagship loans from the usual 75 percent to 90 percent, and reduced or eliminated fees on loans primarily used to finance real estate. These enhancements made SBA loans less risky for lenders and less expensive for borrowers.

On Nov. 23, the SBA ran out of the $375 million in stimulus funds that made the higher guarantee and fee reductions possible. Congress restored these enhancements Dec. 21, with $125 million in additional funding, but that money is expected to last only until Feb. 28, according to the Washington Business Journal.

In recent weeks, SBA lenders have rushed to submit their loan applications to the agency before this money ran out. The rush accelerated Feb. 11, when Senate Majority Leader Harry Reid, D-Nev., stripped funds for another extension of the SBA loan enhancements from the jobs bill scheduled for Senate action this week.

Automation Alley, a technology business association in Tory, Michigan, is concerned about the need for this program to promote small business lending and spur job creation in Michigan.

Automation Alley's Executive Director Ken Rogers participated in a follow-up to President Obama’s “Forum on Jobs and Economic Growth” last week and addressed the need to increase capital for small business by reauthorizing the program, increasing loan limits and reducing fees for small business.

In a phone interview with Michigan Job Search, Rogers said it's critical for Michigan small business that these loan guarantees be extended. "Small businesses are the nation's biggest job creators," he said, "creating 80-85 percent of new jobs."

Without these programs to incentivize lenders to provide loans to small business in order to allow them to expand, fill orders and hire, "everything comes to a crashing halt because banks just aren't lending," he said. "This program has opened the door to capital for small business. Without it, the door will slam shut."

Rogers said that there has been talk of adding an extension of the SBA loan breaks to the Senate jobs bill being taken up this week, as well as talk of passing a one-month extension before the program expires on Feb. 28. He hasn't heard anybody talk of wanting to kill the program.

"We hope common sense prevails and the loan breaks will continue," he said.

22 February 2010

Feds Have Evidence Kilpatrick Took Bribes

Detroit Free Press
Contractor said Kilpatrick got up to $100K, his father up to $290K; Kilpatrick's lawyer says he knows nothing of bribery accusation

THE KADO-KILPATRICK CONNECTION: Cobo Center contractor Karl Kado, bottom center, has told federal investigators that he was hit up for cash by Bernard Kilpatrick, bottom left, father of former Detroit Mayor Kwame Klpatrick, top, and by the ex-mayor's chief information officer, Derrick Miller, bottom right, according to records reviewed by the Free Press. Kado is set to be sentenced in March, after admitting that he bribed a Cobo official, who is now in prison, and a city official and an associate of that official, both unidentified. (Photos by Detroit Free Press; U.S. Marshals Office)

A contractor who pleaded guilty in an ongoing corruption probe in Detroit has told investigators that he handed as much as $100,000 in bribes to then-Mayor Kwame Kilpatrick in 2002, according to interviews and sworn documents reviewed by the Free Press.

The contractor, Karl Kado of West Bloomfield, also told the FBI he paid hundreds of thousands of dollars to the mayor's father, and thousands more to a close mayoral aide, according to the records and interviews.

Kado told authorities he paid Kwame Kilpatrick in four or five installments of about $20,000 each. Kado, who is awaiting sentencing for paying bribes to protect multimillion-dollar Cobo Center contracts, said he sometimes delivered the money in envelopes to Kilpatrick's office on the 11th floor at City Hall, and sometimes Kilpatrick dropped by Cobo to get the cash.

The allegations are significant because they show, for the first time, that the government has secured the cooperation of someone who says he gave payoffs directly to Kilpatrick.

Authorities obtained the information as part of a years-long, complex and wide-ranging investigation in Detroit and Southfield that has produced a series of public corruption charges and 10 guilty pleas.

In pursuing Kilpatrick, investigators tracked cash moving in and out of bank accounts and wiretapped the phone of his father, among others, while slowly trying to build a case.

FBI agents also contend in sworn statements that they have grounds to believe Kilpatrick and his associates used the mayor's office to run a criminal enterprise, a term the FBI reserves for organized crime and racketeering cases.

It remains to be seen whether Kilpatrick or his father will ever face federal charges.

Kilpatrick's attorney, James Thomas, said he does not know of any bribery accusations against his client. The mayor's father, Bernard Kilpatrick, did not respond to interview requests. Kado and his lawyer declined to comment.

FBI believes mayor used office in criminal enterprise

In their investigation of Kwame Kilpatrick, FBI agents are trying to prove that the ex-Detroit mayor and his associates used his elected office as a criminal enterprise to enrich themselves, according to sworn documents reviewed by the Free Press and interviews with people familiar with the probe.

It's not clear whether the federal government will ever bring charges against Kilpatrick.

But in trying to build a case of criminal conspiracy, federal authorities have scrutinized a variety of evidence they say they have gathered against Kilpatrick, his father and close associates of the former mayor, according to records and people familiar with the probe.

Authorities describe a variety of alleged bribes and extortion demands during Kilpatrick's years in office that, when taken together, could amount to racketeering violations under federal law. Allegations cited in government documents and culled from interviews include:

• That Kwame Kilpatrick accepted bribes of up to $100,000 from Kado, a businessman who had exclusive, no-bid janitorial and electrical-services contracts at Cobo Center and a sundry shop at the convention hall.

• That Kilpatrick deposited unspecified sums of cash into bank accounts without declaring the funds as income.

• That Bernard Kilpatrick received large amounts of money from contractors and business owners in return for official acts by the mayor; and that he pressured others to donate to his son's political or civic fund.

• That Kado paid at least $30,000 in bribes to mayoral aide Derrick Miller, including $10,000 for a trip to Europe.

• That Miller told a local businessman he would be punished for backing a political opponent when Kilpatrick sought re-election. Shortly afterward, the businessman's commercial vehicles started getting ticketed in Detroit -- with the directive to do so allegedly coming from the mayor's office.

FBI agents have said they believe these activities and others constitute a criminal enterprise -- wording that indicates the government is trying to build a case under the Federal Racketeer Influenced and Corrupt Organizations Act, or RICO, which has been used to prosecute a pattern of crimes by public officials, Wall Street swindlers and, most notably, Mafia families.

A RICO case -- if it ever materializes -- would expose Kwame Kilpatrick to far greater potential punishment than others who have been charged in an ongoing metro Detroit public corruption probe. Defendants in RICO cases can face up to 20 years on each count.

Peter Henning, a Wayne State University law professor and former federal prosecutor, said building a RICO case may explain why federal prosecutors have spent years investigating Kilpatrick.

"It wouldn't be surprising if it took two or three years to build a case," Henning said.

Kilpatrick did not return phone and e-mail messages seeking comment Friday and Saturday. James Thomas, his criminal defense lawyer, said Friday he did not know of any bribery accusations against his client in the federal corruption probe.

"I am not aware of any direct payment that was ever made to Kwame Kilpatrick," said Thomas, who helped defend Kilpatrick against perjury-related charges in the text message scandal. "And frankly, I'd be surprised to see it.

"But I'm not going to try my case in the media. There hasn't even been an indictment yet. If Mr. Kilpatrick is charged, we will try our case in the court and not in the press."

Bernard Kilpatrick and Miller could not be reached for comment.

Kado provides specific evidence

In the long-running metro Detroit probe, which has already produced 10 guilty pleas, the government has talked to scores of people, subpoenaed bank and business records, and obtained court approval to wiretap phone conversations of Bernard Kilpatrick, then-aides to the mayor and others.

The most specific evidence to come out against Kwame Kilpatrick in the government documents and in interviews involves Kado, the onetime Cobo Center contractor. He is set to be sentenced in March, after admitting that he bribed a Cobo official, who is now in prison, and a city official and an associate of that official, both unidentified.

It is unclear what, if any, evidence federal authorities have to corroborate Kado's claim that he bribed the ex-mayor.

Kado, 69, declined to be interviewed Friday, as did his lawyer.

But the records reviewed by the Free Press show that Kado began to secretly cooperate with the government's long-running investigation of city hall corruption well before he was criminally charged in August 2008.

Kado offered the FBI the following account:

He said Kilpatrick initially approached him in 2001, when he was first running for mayor, and asked for Kado's support. Two or three days later, Miller, Kilpatrick's longtime friend, visited Kado at Cobo, where Kado ran a sundries shop.

Kado said he turned over $10,000 for the election.

Kado told agents that after Kilpatrick won election, he was hit up for cash by Kilpatrick's father, Bernard. Kado said he decided to pay because he believed Bernard Kilpatrick -- who had set up a consulting business just 10 days before his son took office -- could get Kwame Kilpatrick to help Kado resolve any problems at Cobo.

Kado estimated that he paid Bernard Kilpatrick as much as $290,000 between 2002 and 2005. The Free Press previously reported that federal authorities have tried to determine whether Bernard Kilpatrick was involved in payoff schemes to steer city business to contractors, and whether he illegally passed along money to his son.

In September 2005, the U.S. Attorney's Office wrote to Kado that he was a target of its corruption probe. Kado said he showed the letter to Bernard Kilpatrick, who rented office space from Kado in a building on East Jefferson, and asked him for advice about hiring a lawyer.

He said Bernard Kilpatrick asked whether he knew who the government was investigating. Kado said he wasn't sure, but said that Bernard Kilpatrick could be a focus. He said he then told Bernard Kilpatrick he couldn't give him any more money because the FBI was after him.

Thirty to 40 minutes later, according to Kado's account, Bernard Kilpatrick approached Kado in the parking lot and told him he could get Kado another 10 years at Cobo if he was willing to work together. Kado said he declined, telling Bernard Kilpatrick not to worry about it.
$10,000 here, $10,000 there for an aide

According to Kado's account, he also told FBI agents that Miller, the city's chief information officer under Kilpatrick, pressured Kado to give a piece of his lucrative electrical contract at Cobo to Miller's relative, who had been lobbying Kado for work.

Kado said he balked and contacted Bernard Kilpatrick to complain. After that, the relative stopped coming around Cobo.

Kado said he later regretted rebuffing Miller, believing he may have damaged his relationship with the mayor's close friend. So, at a party in the Palmer Park neighborhood in late 2003 or early 2004, Kado said, he gave Miller an envelope with $10,000 in cash.

Miller wanted more, Kado told authorities, and asked him for another $10,000 so he could attend a European auto show. Kado said he paid the money in late 2004.

Miller has not been criminally charged by the feds.

In August 2008, well after Kado began talking with the feds, he was charged with felony tax violations in connection with bribes at Cobo.

Last June, he admitted that he failed to report $270,000 from his sundry business that he used to bribe a Cobo Center director, an unnamed city official and that official's associate to protect no-bid contracts that generated about $1 million a year in profits for Kado. When he is sentenced in March, Kado faces a mere zero to six months in prison because of his cooperation.

RICO case has pros and cons

Federal RICO law defines a criminal enterprise as "any group of six or more people" who engage in a pattern of crimes such as bribery, extortion, money laundering, mail, or wire fraud."

"Such groups maintain their position through ... corrupt public officials, graft, or extortion, and generally have a significant impact on the people in their locales," the FBI says on its Web site.

In the records reviewed by the Free Press, federal agents listed at least eight people who they say participated in the Detroit conspiracy. The list included Kwame and Bernard Kilpatrick, and Miller.

To date, a dozen people have been charged in the Detroit-area corruption probe, with 10 pleading guilty. They have faced bribery and other charges carrying up to five-year prison terms.

Should Kilpatrick be charged under RICO, he will face up to 20 years on each count, if convicted. The government could also seize whatever assets Kilpatrick has left after state authorities finish collecting from him in the text message scandal.

David Griem, a Detroit criminal defense lawyer and former federal prosecutor, said pursuing a RICO case gives prosecutors two advantages.

"You increase or enhance the potential penalties if they are convicted, and it paves the way for forfeiture," Griem said, referring to the government's ability to seize any property that may have been purchased with criminal proceeds.

But, he said, a racketeering prosecution also "greatly complicates the case and makes it more difficult to prove."

Feds also may build money case

Government documents suggest the FBI also is investigating possible money-laundering or tax evasion by the ex-mayor.

Kilpatrick, who has been under criminal probe by the Internal Revenue Service, made several cash deposits, which he kept under $10,000 -- the level that would trigger automatic scrutiny by federal bank regulators, the documents reviewed by the Free Press say. The cash was deposited without being reported as income, the records contend. Authorities say Kilpatrick also paid credit card bills with cash.

Griem said the government would likely look closely at possible money laundering when someone makes cash deposits and also pays their bills with cash, particularly if the person is not running a cash-intensive business.

"If there is a pattern of such activities, this will certainly come under the scrutiny of federal investigators," Griem said.

Feds Outline Plan to Nurse Great Lakes to Health

USA Today

TRAVERSE CITY, Michigan  —  The Obama administration has developed a five-year blueprint for rescuing the Great Lakes, a sprawling ecosystem plagued by toxic contamination, shrinking wildlife habitat and invasive species.

The plan envisions spending more than $2.2 billion for long-awaited repairs after a century of damage to the lakes, which hold 20% of the world's fresh water. The Associated Press obtained a copy of the document, which Lisa Jackson, head of the Environmental Protection Agency, was releasing at a news conference Sunday in Washington.

"We're committed to creating a new standard of care that will leave the Great Lakes better for the next generation," Jackson said in a statement.

Among the goals is a "zero tolerance policy" toward future invasions by foreign species, including the Asian carp, a huge, ravenous fish that has overrun portions of the Mississippi River system and is threatening to enter Lake Michigan.

Others include cleanup of the region's most heavily polluted sites, restoring wetlands and other crucial habitat, and improving water quality in shallow areas, where runoff from cities and farms has led to unsightly algae blooms and beach closings.

Also promised is a strategy for monitoring the ecosystem's health and holding federal agencies accountable for carrying out the plan.

During his 2008 campaign, Obama pledged $5 billion over a decade toward fulfilling a Great Lakes cleanup wish list developed by a coalition of agencies, scientists and activists.

Congress last year approved his request for a first installment of $475 million. The newly released plan assumes yearly appropriations of the same amount through 2014, except for the $300 million President Obama requested this month in his 2011 budget.

The 41-page plan sets out ecological targets and specific actions to be taken by 16 federal agencies working with state, local and tribal governments and private groups.

Among the goals it seeks by 2014: finishing work at five toxic hot spots that have languished on cleanup lists for two decades; a 40% reduction in the rate at which invasive species are discovered in the lakes; measurable decreases in phosphorus runoff; and protection of nearly 100,000 wetland acres.

It also will help save species such as the lake sturgeon, a prehistoric fish that can reach 8 feet long and 200 pounds but is endangered because of overharvesting and habitat degradation. The plan promises to provide 25,000 young sturgeon for stocking programs.

Combined with enforcement of environmental rules and new ones where needed, officials said the plan would help make Great Lakes fish safe to eat, their waters suitable for drinking and swimming, and their native plants and animals thriving.

The lakes provide drinking water to more than 30 million people and are the backbone of a regional economy dependent on tourism, outdoor recreation, shipping and manufacturing.

"We now have a golden opportunity, even a once-in-a-lifetime opportunity, to make huge progress," Wisconsin Gov. Jim Doyle, co-chairman of the Council of Great Lakes Governors, said in a telephone interview Saturday. "We've been talking about this for a long time. Now the federal government is putting some real resources behind it."

Jeff Skelding, director of the Healing Our Waters-Great Lakes Coalition, which represents environmental groups across the region, praised the plan's commitment to long-range funding for the restoration but said Congress should boost Obama's 2011 spending request to $475 million.

The coalition also says too much restoration money is being diverted to fighting Asian carp, which could endanger the region's $7 billion sport fishing industry by gobbling plankton and unraveling the food chain.

An "all-out effort" is needed to keep the carp out of the lakes, but funding should come from elsewhere in the federal budget, the coalition said.

Cameron Davis, EPA's senior adviser on the Great Lakes, said about $58 million in restoration funds would go to the carp battle this year. But invasive species programs are getting less restoration money than other needs such as toxic cleanups and habitat improvements, he said.

20 February 2010

Kilpatrick Fails to Make Restitution Payment to Detroit

The Washington Post

In this Jan. 20, 2010 file photo, former Detroit Mayor Kwame Kilpatrick appears during his restitution hearing in Detroit, in Wayne County Circuit Court. Judge David Groner has given Kilpatrick until the close of the business day Friday, Feb. 19, 2010, to make a $79,011 restitution payment to the city of Detroit for felonies he committed as mayor. Kilpatrick agreed to pay $1 million in restitution in late 2008 but later requested his monthly payments be reduced. (AP Photo/Paul Sancya, File)

DETROIT -- The prosecutor who forced Kwame Kilpatrick out of the Detroit mayor's office said he violated his probation by missing a Friday deadline to make a $79,011 payment toward his $1 million restitution to the city.

Kilpatrick could face jail or prison as a consequence. His lawyers had warned he couldn't afford the payment: Money orders worth only $14,048 were dropped off at the Wayne County Circuit Court bond office on his behalf.

"We expect that a violation-of-probation warrant will issue," Wayne County Prosecutor Kym Worthy said in a statement. "When that comes we will be prepared to attend any hearings." Her office said the warrant could come in the "near future."

Kilpatrick, who now lives and works in the Dallas area, could be sent to jail if a judge finds he violated his probation in a criminal case that ended his political career.

He must pay $1 million to Detroit after pleading guilty to obstruction of justice in a civil trial. This latest legal mess centers on an order to make special payments - $79,011 this week and $240,000 in April - after a judge said Kilpatrick was dishonest about his finances.

The Michigan Court of Appeals refused to immediately block those payments Friday but said it will consider hearing the case after reading a transcript of a Jan. 20 hearing in Wayne County Circuit Court.

Messages seeking comment were left with Kilpatrick's lawyers. One of them, Michael Alan Schwartz, told WJBK-TV that the "city will be a big loser" if the ex-mayor is sent to jail.

"Who's going to gain out of this?" Schwartz said.

Kilpatrick is a salesman for Covisint and has been making monthly restitution payments of $3,000. But prosecutors learned he and his wife have had other money, including $240,000 in loans, live in a rented mansion and drive fancy SUVs in Texas.

In 2008, Kilpatrick pleaded guilty to obstruction of justice and no contest to assault in a plea deal that rose from a text-messaging sex scandal and perjured testimony at a 2007 trial involving police officers.

He resigned after nearly seven years as mayor, served 99 days in jail and agreed to restitution.

CEO of CMS Energy Tapped to Chair Business Group

Jackson Citizen Patriot

A group of high-level business leaders focused on moving Michigan forward has tapped David Joos, president and CEO of CMS Energy, as its new board chairman.

Joos has been involved with the group, Business Leaders for Michigan, since its inception last year. Its goal is to make Michigan a ``Top Ten'' state for job and economic growth.

``We want to see some action,'' Joos said.

The group is made up of about 75 CEOs, board chairmen and senior executives at businesses around the state that represent more than $1 trillion in revenue and employ more than 300,000.

``We're just citizens interested in making progress,'' Joos said. ``We think we represent a lot of people.''

The member-led organization unveiled a five-point turnaround plan for the state last year. Joos said he was pleased to see Gov. Jennifer Granholm include some of the group's ideas -- including tax reform -- in her state budget proposal last week.

But he said more work needs to be done. Not all of the group's ideas are being considered, and some of Granholm's proposals don't go far enough to address the long-term structural issues the state is facing, Joos said.

Last year, Granholm relied on a great deal of money from the stimulus bill to balance the budget and plans to do so again this year. But Joos said that money won't be around forever.

``It's important to not only have a balanced budget for 2011, but to address the structural reforms so we don't find ourselves in the same circumstances in 2012,'' he said.

Joos will succeed Domino's Pizza mogul David Brandon as chairman of the Business Leaders for Michigan board. Brandon plans to step down March 1, after being named the new athletic director at the University of Michigan.

19 February 2010

Bill Ford Says He Feels Akio Toyoda’s Pain Over Toyota Recalls


Ford Motor Co. Executive Chairman Bill Ford, great-grandson of the company’s founder, said he is certain that fellow scion Akio Toyoda is taking Toyota Motor Corp.’s recall crisis personally.

“Any time anything happens to Ford, it’s personal, good and bad, and I’m sure he feels the same way,” Bill Ford said yesterday. “Other people can resign and go home and do other things. But when your name is on the building and you have the history and the passion, you’re in for the long haul.”

Bill Ford said he hasn’t offered advice to Toyoda, who is the grandson of Toyota’s founder and became president last year. Bill Ford, 52, said he and Toyoda, 53, have come to know each other during the Toyota executive’s visits to the U.S. The two share the same birthday, May 3.

“The last thing he needs is me calling him right now,” Bill Ford said after a speech to the Livonia Chamber of Commerce in suburban Detroit. “I admire him and I think he’s a good executive. I’d like just to catch up when things settle down a little bit.”

Toyoda is scheduled to hold a press conference in Tokyo today to speak on quality and the progress of the recall of the Prius hybrid, the company said Feb. 15. He has met twice with reporters in Japan to apologize for the recall of 8.5 million vehicles worldwide.

‘Deeply Disappointed’

“I take personal responsibility,” Toyoda wrote in a Washington Post column on Feb. 9. He wrote that he was “deeply disappointed” by defects suspected to lead to unintended acceleration.

Mike Michels, a U.S. spokesman for Toyota City, Japan-based Toyota, said Toyoda was unavailable for comment.

When Akio Toyoda’s grandfather, Kiichiro, branched out into autos in 1937 from the family’s Toyoda Automatic Loom Works, he coined the word “Toyota.” He changed “da,” the character for “field” in Japanese, to “ta” in part to play down the perceived rural sound of the family name.

Ford Motor struggled to win back buyers’ trust when Firestone tires on Explorer sport-utility vehicles shredded a decade ago, leading to rollovers and deaths. Bill Ford cast himself in TV commercials in 2002 to help the Dearborn, Michigan-based automaker recover.

“When we had our Firestone event, I thought it was important then to communicate forcefully and frequently,” Bill Ford said. The TV spots included historical footage of company founder Henry Ford.

Ford Motor rose 20 cents, or 1.8 percent, to $11.32 yesterday in New York Stock Exchange composite trading. The shares have advanced 13 percent this year, compared with a 13 percent decline for Toyota in Tokyo.

‘No Joy’

Bill Ford said that while Ford Motor takes “no joy” in Toyota’s troubles, the U.S. automaker is beginning to win new customers. Ford Motor’s U.S. sales rose 25 percent last month.

Ford Motor, which had net income of $2.7 billion last year, has said it will earn money this year on a pretax basis and be “solidly profitable” in 2011. The company posted losses of $30 billion from 2006 through 2008 as sales collapsed for the SUVs on which it depended upon for profits.

“Over the last 10 years, we’ve had a lot of really, really difficult moments as a company and I have had personally,” Bill Ford said. “You feel it personally. It’s not a job. It’s your whole life.”

GM Saving $10.7 Billion Means Cash for Truck Upgrades


General Motors Co. said it has slashed $10.7 billion from annual costs, freeing up money for marketing and vehicle upgrades while boosting Chief Executive Officer Ed Whitacre’s push for a 2010 profit.

The expense cuts include reduced interest payments from the elimination of debt, the offloading of union retiree bills and $6.7 billion from steps such as chopping jobs, getting rid of plants and dropping half of GM’s U.S. brands, according to company documents and Randy Arickx, a spokesman.

The estimate is the first public tally of GM’s savings from a new labor accord and its 2009 bankruptcy compared with the previous year. Uses for the proceeds include spending more on a redesign of the Chevrolet Silverado and GMC Sierra pickups that may cost as much as $1 billion, an executive directly involved with the plan said.

“GM has come to the realization that customers are more perceptive than the old GM used to think,” said Eric Noble, president of CarLab, an Orange, California-based automotive consultant that specializes in product planning. “The only way to win is to gain an advantage in product quality.”

New models still may not be enough to meet Whitacre’s goal of keeping U.S. market share at about 20 percent. Detroit-based GM will have to make up lost sales from shedding 4 of 8 domestic brands, overcome a history of 20 declines in U.S. market share in 23 years and erase any stigma in buyers’ minds from last year’s federal bailout.

Opel Cash

The biggest U.S. automaker also faces cash needs such as its Feb. 9 pledge to invest 11 billion euros ($15 billion) at Germany’s Opel by 2014. GM provided 650 million euros in fresh Opel funding in January through accelerated payments for engineering work.

Losses at GM totaled about $88 billion through last year’s first quarter from the end of 2004, spurring the effort in the automaker’s U.S.-backed restructuring to shrink operations to help return to profit.

“A new and better balance sheet” is driving the increases in spending on products and marketing, Vice Chairman Bob Lutz said in an interview, without giving figures. “You couldn’t exist in this business cutting marketing budgets to near zero.”

In addition to the $6.7 billion in savings from chopping so-called structural costs, GM reaped $1 billion more by shedding debt, with annual interest costs this year of about $1.5 billion compared with $2.5 billion in 2008, Arickx said.

A United Auto Workers contract provision that took effect Dec. 31 saved about $3 billion more by shifting retirees’ health costs to a UAW-run trust.

Whitacre Strategy

Diverting some of the $10.7 billion in savings to refresh GM’s vehicle lineup and lure new buyers is intended to support the strategy set by Whitacre, 68, who added the CEO’s title to his chairman’s duties on Dec. 1.

Investors and U.S. officials are watching because Whitacre has said he wants to repay $5.7 billion in outstanding federal loans by June and that GM may sell stock this year. On Jan. 6, he said he expects “positive net income” in 2010, accelerating predecessor Fritz Henderson’s timeline for a 2011 profit.

“I’m pretty bullish on GM,” said John Wolkonowicz, an analyst at Lexington, Massachusetts-based IHS Global Insight. “They have taken a lot of cost out and they are improving their products.”

GM’s 8.375 percent notes due in July 2033 rose 0.31 cent to 28.25 cents on the dollar at 3:50 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

GM more than doubled its budget for the large-truck program, in part because of the automaker’s savings, said the executive involved with the project, who asked not to be identified because the details aren’t public.

Truck Upgrades

The Sierra and Silverado, along with the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade sport-utility vehicles, will receive new styling, more-efficient engines and lighter- materials to improve fuel economy, two executives said. Last updated for the 2007 model year, the trucks and SUVs originally were supposed to get only cosmetic improvements, one of them said.

A spokesman, Pat Morrissey, declined to comment about GM’s plans for truck changes.

GM’s additional resources also will help pay for developing new products such as the Cadillac XTS Platinum concept car, a large luxury sedan that may reach showrooms in 2013 and is intended to compete with models such as Bayerische Motoren Werke AG’s 7-Series.

The XTS probably will include a plug-in hybrid version, said one of the executives.

A refreshed vehicle roster may allow GM to take advantage of the recalls that have spurred a U.S. sales freeze for eight models from Toyota Motor Corp., which seized the global sales crown in 2008. Adding production to meet any market-share gains or stronger industry demand would increase labor costs, said Renee Rashid-Merem, a GM spokeswoman.

Trimming Debt

GM had $46 billion in debt in 2008. Borrowings ballooned to $94.7 billion when the company was in bankruptcy last year, GM said on Nov. 14. The debt has been cut to $17 billion, half what Ford Motor Co. owed on Dec. 31.

As part of its restructuring, GM pushed through a plan to cut manufacturing plants to 34 at the end of this year from 47 in 2008. Dealerships were targeted to fall to 3,600 from 6,000 with the dumping of the Saab, Pontiac, Hummer and Saturn brands to focus on Chevrolet, Cadillac, Buick and GMC.

The savings in structural costs more than doubled the $5.1 billion reduction by Ford, the only major U.S. automaker to avoid bankruptcy last year.

Most of the savings for GM came in North America, the company’s Arickx said. Based on projected production in the region of 2.8 million vehicles, the benefit would equal about $3,800 for each car and light truck.

“A lot of the structural cost improvements were things that they left behind, like plants and brands that they didn’t need,” said Maryann Keller, president of Maryann Keller & Associates in Stamford, Connecticut. “That’s what bankruptcy is supposed to do.”

New Housing Starts on the Rise in SE Michigan


New housing starts in southeastern Michigan showed signs of life in January with the highest number of building permits issued since September, according to data released Wednesday by Housing Consultants Inc.

Building permits for single-family homes and other units in the nine counties of southeastern Michigan rose to 211, compared to 85 during the same month a year ago, an increase of 148.2 percent.

The Clarkston-based Housing Consultants tracked a 234 percent in increase in Wayne County to 117 new building permits from just 35 in the same period a year ago. Macomb saw a 240 percent increase to 34 permits from 10. Oakland had a 50 percent improvement to 27 from 18.

That was welcome news for an industry that has been in a tailspin the last three years.

"It simply couldn't have been as bad as last year," said Michael Stoskopf, CEO of the Building Industry Association of Southeastern Michigan. Housing permits have nose-dived for the past three years and the January numbers are still a third of what they were prior to the housing crash.January is the second consecutive month to show larger-than-expected increases in home building, particularly single-family home permits, according to data provided by the trade association.Further improvement is expected. For the six-month period from January to June 2010, the association forecasts a 32 percent increase in the number of single-family home permits to 458, compared with 347 permits issued during the same six-month period one year ago.

The increase can be attributed, in part, to the extension and expansion of the federal home-buyer tax credit program, Stoskopf said. First-time home buyers can get a credit of as much as $8,000 if they close a deal by April 30; those who already own a home may be eligible for up to $6,500.

Additionally, employment and work force levels have leveled off -- meaning the job loss has slowed in recent months -- and housing inventories are shrinking, especially those of foreclosed homes and lower-priced properties.

"The market has been decimated for two years," said Byrne Benson, president of Housing Consultants. "For houses under $200,000, there is no inventory."

Most permits issued last month were for homes in the below-$200,000 price range, Building Industry Association data shows. The next most active market is the $200,000 to $500,000 range.

Housing starts last month improved nationally as well, with single- and multi-family housing starts up 2.8 percent in January compared with December, and up 21.1 percent from a year earlier, according to the latest monthly report by the Commerce Department's U.S. Census Bureau.

Single-family home starts nationwide rose 1.5 percent in January from December, and jumped 35.6 percent from January 2009.

Still, many area builders said Wednesday the market has far from recovered and at least three smaller builders said they had not yet seen an uptick in business.

"You still have to self-finance" building new homes, said James Clarke, president of Robertson Brothers, a builder in Bloomfield Hills who has seen work improve. Robertson Brothers will likely file more new building permits in the next few months than it did in all of last year, Clarke said. Larry Cohen, president of Cohen Homes LLC, said new federal regulations for appraisals are "a mess" and are hindering a rebound. Many builders complain the use of out-of area appraisals -- as allowed under the new law -- is thwarting a recovery because of the appraiser's lack of knowledge of the market translates into lower appraisals that kills deals. "I wouldn't say the recovery has taken a firm hold," Stoskopf said. "The industry has been decimated by job loss and we do not yet see when there will be many jobs returning."

18 February 2010

Granholm Proposes New Tax on Services; Businesses React

WZZM Grand Rapids
Thursday Governor Jennifer Granholm unveiled her final budget plan for Michigan and it includes tax increases to offset budget problems. Granholm unveiled her budget in front of a joint session of House and Senate Appropriations Committees.

The Governor's main proposal is to reduce the sales tax from 6% 5.5%. But the tax would be expanded to include services which is expected to bring in more than $500 million in additional revenue next year.
The proposed tax has Michigan business owners sitting up and taking notice.

"I just felt sad. Like I said, I think everybody talks about how our government has taken a wrong path and it's broken and to add more tax burden on the backs of Michigan residents I don't think is the right answer," said Larry Walt, the president and owner of Design 1 Spas in Grand Rapids.

Walt's spas offer a variety of services to clients ranging from hair cuts and manicures to facials and massages. Regardless of what they come in the door for, the would leave with a little less cash if the expansion goes through.

Walt thinks a service tax is unfair to Michigan residents and business owners alike.

Right now the sentiment is Michigan is a tough place to run a business and a tough place to live and there is more people leaving than staying," he said. "I think the government needs to take a look, whether you are Republican or Democrat, and say what is best for Michigan. If that means cutting drastically government expenses you need to do what it takes to make people want to be here. "

Gregory Lewis, a tattoo artist and body piercer at Mystery Ink in Grand Rapids worries if clients will scale back on the services they buy when faced with an added cost.

"Yeah because tattoos aren't necessarily a necessity. It may hurt business a little bit. We just won't know until it all happens," he said.

Granholm says the sale of services make up 66% of consumer spending in Michigan. She says expanding the sales tax, among other things, would solve school funding problems.

"It would significantly solve the structural problems of the school aid fund into the future," she said.

The Governor proposes that some services including health care, social assistance, education, real estate, new construction, insurance commissions and services directly connected to business operations be exempt from the service tax.

"If you are going to tax service then you tax all service," said Walt, who thinks it is unfair for the state to pick and choose what type of services are exempt. "Where do you draw the line. Is real estate more important than other services? Or health care? Obviously it is a big issue but if we just want to be fair to everybody, if we are going to tax service then tax service and it is fair to everybody because it is across the board."

Governor Granholm says even with the expansion Michigan would have one of the lowest sales tax rates in the country. Only 5 states will have lower sales tax.

Government Demands Toyota Recall Documents


Carmaker to Idle 2 U.S. Assembly Plants

WASHINGTON — The Transportation Department on Tuesday demanded documents related to Toyota's massive recalls in the United States to find out if the automaker acted swiftly enough. Toyota, meanwhile, said it will idle production temporarily at Texas and Kentucky plants over concerns the recalls could lead to big stockpiles of unsold vehicles.

The legal documents demand that Toyota tell the government when and how the company learned of the safety defects in millions of vehicles over the entrapment of gas pedals by floor mats and sticky accelerators. The documents were delivered to Toyota on Tuesday and the company must respond within 30-to-60 days or face fines.
The intensifying government investigation of Toyota and production halts at its assembly plants represented another sign of the ripple effect the recall of 8.5 million vehicles has had on the world's No. 1 automaker. Toyota faces separate probes by the Obama administration and Congress as it struggles to maintain its loyal customer base and its reputation for safety and quality.

Toyota said it was halting production temporarily in San Antonio, Texas, and Georgetown, Ky., to address concerns that too many unsold vehicles may be building up at dealerships because of the large recalls.

Company spokesman Mike Goss said the Texas plant, which builds the Tundra pickup truck, would take production breaks for the weeks of March 15 and April 12. The Kentucky plant, which makes the Camry, Avalon and Venza vehicles, plans to take a non-production day on Feb. 26 and may not build vehicles on three more days in March and April.

Toyota employs 1,850 workers at the San Antonio plant and about 6,850 at the Georgetown facility.

In late January, Toyota halted production of recalled brands throughout the United States for about a week.

The information requests from the government, similar to a subpoena, follows criticism from consumer groups that the Transportation Department was too soft on automakers and failed to fine the companies or seek detailed information from them through subpoena powers.

Transportation Secretary Ray LaHood has defended his department's handling of the Toyota investigation, calling the Japanese automaker "a little safety deaf" about the safety problems. LaHood said the government urged Toyota to issue recalls and sent federal safety officials to Japan to warn company officials of the seriousness of the problems.

Under federal law, automakers must notify the DOT's National Highway Traffic Safety Administration within five days of determining that a safety defect exists and promptly conduct a recall.

Government investigators are looking into whether Toyota discovered the problems during preproduction or post-production of the affected vehicles, whether their recalls covered all affected vehicles and whether the company learned of the problems through consumer complaints or internal tests.

Federal officials are focusing on the two major issues behind the recalls — gas pedals that can become lodged on floor mats and pedal systems that are "sticky," making it harder for drivers to press on the pedal or ease up on the gas.

The information requests seek detailed timelines on when Toyota first became aware of the problems, how they handled complaints, how much they have paid out in warranty claims over pedal problems, internal communications about pedals and company officials involved in making decisions about the issue.

NHTSA also wants to know how seriously Toyota considered the possibility that electronics of the gas pedal system may play a role. The company has said tests show that the electronics were not to blame. But federal safety officials want to know how Toyota dealt with complaints that might not be related to floor mats or sticking pedals.

Kathleen DeMeter, the director of NHTSA's Office of Defects Investigation Enforcement, wrote that the agency was "seeking to determine whether Toyota viewed the underlying defects too narrowly...without fully considering the broader issue of unintended acceleration and any associated safety-related defects that warrant recalls."

Congress is also investigating. The House Oversight and Government Reform Committee is holding a hearing on the Toyota recalls on Feb. 24 and the House Energy and Commerce Committee has scheduled a Feb. 25 hearing. Toyota Motor North America chief executive Yoshi Inaba, LaHood and NHTSA Administrator David Strickland are expected to testify at both meetings.

The Senate Commerce, Science and Transportation Committee has scheduled a March 2 hearing but has not yet announced its witness list.

Toyota has stepped up its lobbying ahead of the hearings by highlighting its workers and U.S. production.

It flew production workers into Washington a day before a blizzard last week to highlight the company's commitment to quality and safety. The company also received help from the governors of four states with Toyota plants — including Kentucky Gov. Steve Beshear — who called on Congress to be fair to the automaker.

Toyota has been fixing vehicles under recall. Toyota Vice President Bob Carter told reporters at the National Automobile Dealers Association convention in Orlando, Fla., on Monday that the company had repaired about 500,000 of the 2.3 million vehicles recalled over a potentially sticky gas pedal.

Toyota president Akio Toyoda is expected to answer questions in Japan Wednesday about the company's recalls.

17 February 2010

Toyoda Will Skip Testifying Before U.S. Congress


Toyota Motor Corp. President Akio Toyoda plans to skip testifying before the U.S. Congress about the company’s recalls, potentially heightening criticism of his handling of the carmaker’s crisis.

Toyoda said he hasn’t decided on his schedule for his U.S. visit. North American President Yoshimi Inaba will attend the hearings in Washington this month. Toyoda told reporters today in Tokyo he may consider attending if he is asked by Congress.

Toyoda, the 53-year-old grandson of the company’s founder, is struggling to repair Toyota’s image after recalling almost 8 million vehicles. The company will put a brake override system on all future models and will fix the braking systems on as many as 80 percent of its best-selling Prius hybrids by month’s end.

“It’s a questionable decision for Toyoda to avoid the hearings,” said Tatsuya Mizuno, director of Mizuno Credit Advisory in Tokyo. “His absence will likely have more of a negative effect on the company’s image than if he were to go.”

Toyoda was invited to a Feb. 24 hearing into the automaker’s handling of recalls by Representative Darrell Issa of California, the senior Republican on the House Oversight and Government Reform panel.

‘Not as Eager’

It’s “telling” that Toyoda will appear only by “formal invitation,” said Kurt Bardella, an Issa spokesman. “Toyoda is not as eager to give Congress and the American people answers as we first thought,” Bardella said.

The U.S. is traditionally the automaker’s most profitable market. Toyota, which has lost over $31 billion in market value since a Jan. 21 accelerator-pedal recall, placed advertisements in Japanese newspapers today apologizing and promising to complete repairs as soon as possible.

“Unless Toyoda appears at the Congress, things won’t settle,” said Koji Endo, managing director at Advanced Research Japan Co., a Tokyo-based equity research firm.

The automaker set up a global quality committee, headed by Toyoda, and will appoint a chief quality officer at each of the company’s regions, Toyoda said. The new committee will have its first meeting on March 30, he said. The company will also appoint a third party to test its electronic throttle system.

“I haven’t been trying to hide from the press,” said Toyoda. “I’m sorry that my late appearance made the situation worse.”

‘Major Weakness’

Toyota’s slow reaction to the crisis shows “a major weakness,” Anil Valsan, global director of automotive research at Frost & Sullivan in London, said in a Bloomberg Television interview.

Toyota was unchanged at 3,380 yen at the close of trading in Tokyo. The stock has declined 19 percent since Jan. 21. While Toyota stock may decline further, most of the company’s woes are “already factored in” to the share price, Valsan said.

The company’s American depositary receipts, each representing two ordinary shares, fell $1.62, or 2.1 percent, to $74.39 at 9:53 a.m. in New York Stock Exchange composite trading.

Toyota said yesterday it plans to provide all the information requested by the U.S. National Highway Traffic Safety Administration, after the agency urged the company to provide documents showing whether recalls were carried out in a “timely manner” as required by law.

Falling Sales

Toyota said U.S. January sales slid 16 percent as a recall put some of its most-popular models off limits, while General Motors Co. and Ford Motor Co. reported increases that beat analysts’ estimates. The company said yesterday it’s cutting production at two U.S. factories to avoid a buildup of unsold cars.

The carmaker faces at least 49 lawsuits filed on behalf of customers in the U.S. and Canada seeking a range of damages in sudden-acceleration cases. It also faces at least 13 lawsuits brought by individuals claiming deaths or injuries.

The world’s largest carmaker has called back almost 8 million vehicles on five continents and 437,000 hybrids including the Prius, the top-selling vehicle in Japan. Toyoda’s first press conference came on Feb. 5 and he met the press again on Feb. 9 to announce fixes to the Prius.

“I think the company’s sales expanded faster than we were able to train personnel,” Toyoda said.

Toyota earlier this month said it plans to sell 7.18 million vehicles globally for the year ending in March, down 5 percent from a year ago.

Tacoma, Camry, Corolla

In addition to recalls related to unintended acceleration and brake problems with the third-generation Prius, Toyota is recalling 8,000 Tacoma pickups and about 7,000 Camrys. U.S. safety officials are reviewing Toyota’s Corolla, the world’s best-selling car.

Toyota is reviewing the power steering of the Corolla and will recall it if defects are found, Executive Vice President Shinichi Sasaki told reporters today.

Toyota has been investigating reports that Prius owners driving at low speeds on bumpy or icy roads may experience moments when the car continues to coast for about a second after the brakes are applied, because of the anti-lock brake system. The carmaker said it received complaints about Prius brakes through dealers starting in the last few months of 2009.

Highway Officials Credit Federal Stimulus for 280,000 Construction Jobs


A new report, Projects and Paychecks: a One-Year Report on State Transportation Successes under the American Recovery and Reinvestment Act finds that more than 280,000 jobs were created or maintained by the stimulus, and total employment from projects, which includes direct, indirect and induced jobs, reaches almost 890,000 jobs.

The study, released  by the American Association of State Highway and Transportation Officials (AASHTO) finds that one year after the passage of the stimulus bill, state departments of transportaion have put 77 percent of the $34.3 billion provided for highways and transit out to bid on 12,250 transportation projects. Several Michigan projects were profiled in the report.

Construction trade unemployment in Michigan last year probably topped 40 percent, according to Kirk Steudle, the state’s transportation director.

 “ARRA funding brought much-needed transportation investment to Michigan, and these projects kept Michigan's construction industry operating at a time when virtually no private investment was occurring in the state," Steudle said. "ARRA funding allowed Michigan's construction industry to stay viable until there is a recovery in the private sector, which will make it easier for them to mobilize as the economy improves."

Michigan has 501 projects under contract and 253 projects completed as a result of the American Investment and Recovery Act. A detailed listing of all Michigan projects funded by the stimulus is available on the M-DOT website.

"Projects and Paychecks proves just how big a role stimulus is playing to keep Americans working," said John Horsley, AASHTO executive director. "This study proves transportation projects can deliver hundreds of thousands of jobs for America."

Toda America One Step Closer to Battery Plant in Battle Creek


Toda America announced the conclusion of a $35 million award contract with U.S. Department of Energy, half of its total $70 million planned investment in the proposed Battle Creek, Michigan, manufacturing plant.

Toda America plans to build its manufacturing plant of cathode materials for lithium-ion batteries in Battle Creek, Michigan, as soon as the site remediation work is completed and regulatory approvals are obtained in the next few months.  Toda expects to complete Phase 1 and plans to start its operation in February 2011, bringing up to 148 new jobs to the area.

The company has been working with the state of Michigan and the city of Battle Creek to finalize various agreements and financial incentives for the manufacturing plant in Battle Creek based on the planned job creation and capital investment.

The project is expected to add 50-60 direct new jobs, and up to a total 148 new jobs including 91 indirect jobs according to the MEDC.

16 February 2010

Business Briefs

Former head of GM's European division joins Tata Motors

Tata Motors Ltd . hired Carl-Peter Forster, the former head of General Motors Co.'s European division, as chief executive officer to help the Indian company manage global operations after purchasing Jaguar Land Rover. Forster, 55, will be responsible for the two British luxury brands as well as Tata's truck, bus and car operations.

Forster left GM in November after opposing the automaker's decision to back out of an agreement to sell a majority stake in the German Opel unit to a group led by Magna International Inc.

Metro area's housing inventory drops sharply

Monthly data by Realcomp II Ltd ., a Farmington Hills-based real estate data service, showed the bloated inventory of homes and condos dropped sharply in Metro Detroit last month: by 27 percent in Oakland, 28 percent in Macomb and 33 percent in Wayne, compared to January 2009.

Chrysler asks Sterling Heights for more time

Chrysler Group LLC is asking the Sterling Heights City Council for an extension to negotiate the transfer of ownership of an assembly plant to continue to receive $8.2 billion in annual tax abatements.

Mayor Richard Notte said the council will likely agree tonight to give the automaker as much as 30 more days to complete negotiations to transfer ownership from the bankrupt estate to Chrysler Group.

Huntington Bank Makes Changes to Boost Small Businesses


GRAND RAPIDS -- Huntington Bank is changing the way it measures small business owners who need a loan.

The Columbus, Ohio, based bank said it will pump an estimated $360 million in a three-year push to broaden loans to small business owners in West Michigan. And it plans to add seven business bankers in the region to help expand the program.

One big change, said West Michigan president Jim Dunlap, is a new lens for looking back.

"We traditionally look back at financial performance over several years. That works in normal times," Dunlap said Monday. "But many companies had substantial stress on their earnings in 2009. If we look backwards like we normally would, very few would be able to qualify under the traditional approach."

Instead, Huntington will look for more recent trends, similar to the reporting option chosen by many local public companies -- improvement from one quarter to the next.

"We put in an underwriting process that allows us to use much more current performance, like Q1 2010, for example," Dunlap said.

Using an estimated loan amount of $150,000, the West Michigan share could underwrite 2,500 local businesses. The push is part of a $4 billion, three-year initiative across Ohio, Michigan, Indiana, Pennsylvania and West Virginia.

"We know that small businesses generate 65 percent of new jobs, and we want to help our area recover by jump-starting small business hiring," CEO Steve Steinour said, in announcing the initiative.

Business owners will still need to show a solid plan, recent profitability, and an effort to retool for a changing market. Some loans through the bank will tap federal Small Business Administration programs.

"We participate in about 15 of them in Michigan, to take full advantage where there are matching funds or loan guarantees," Dunlap said. "As of Jan. 1, we were the No. 1 SBA lender in Michigan, in the number of loans and the dollars extended."

Steinour is also coming to Michigan for a roundtable this spring, but he will spend the day in the eastern half of the market. Far more small business owners in that region are wholly dependent on one or two customers in the auto industry, Dunlap said.

By definition, small businesses have under $15 million in sales. And Dunlap has a ring-side seat on the region's business climate. He chairs the Right Place economic development group.

"2009 was a watershed event for everyone," Dunlap said. "Most everybody was suffering when they went through this. "If a small business is coming out of it, they should get credit for that."

15 February 2010

Kroger Stores Giving Back

The Detroit Free Press

TODAY'S SUBJECT: Kroger Salvation Army bread drive

THE CAUSE: Kroger will contribute one loaf of 24-ounce Kroger White Buttercrust Bread to the Salvation Army Bed & Bread Club program for every loaf that customers purchase through Feb. 28 at Detroit-area stores. Kroger has also set up coin boxes at every register to collect donations on behalf of the program throughout February. In addition, the grocery chain is teaming up with radio station WOMC-FM (104.3) and the Dick Purtan Radiothon on Feb. 26 to benefit the Salvation Army Bed & Bread Club. This radiothon, in its 23rd year, is the largest promotion of its type in Michigan and the largest single-market, one-day radio fund-raising event in the country.

BACKGROUND: The Salvation Army Bed & Bread Club program brings food, shelter and services to people in need within the Detroit area, providing them with their basic needs and helping them to get back on their feet. Through the Salvation Army facilities and Bed & Bread trucks, almost 5,000 meals are served each day.

More than 80 Kroger stores in the Detroit area are participating in the program and offering the 24-ounce loaf for $1.39, with a goal to donate 17,500 loaves of bread. Last year, Kroger teamed up with its customers and WOMC to contribute 15,732 loaves. This is Kroger's fifth year participating in the program.

ON GIVING: "A loaf of bread can go a long way in feeding the hungry by providing a basic food essential," said Rick Going, president of Kroger's Michigan division. "Kroger is committed to addressing the hunger issue in the communities we serve."

Price Breaks: Good for Travelers, Bad for Innkeepers

Detroit Free Press
Hyatt, Ritz-Carlton could undergo changes in an impending shakeout

Good news for travelers in or to southeast Michigan! Hotel room rates are falling!

And the biggest bargains are at the fanciest lodgings: Average room rates dropped 16% during 2009 at high-end local hotels with names like Ritz, Hyatt, Westin and Townsend.

What's good for the traveler, however, is punishing for the innkeeper.
Looks like we're on the verge of a major shakeout in the Detroit region's hotel market, because of the auto industry's upheaval, a credit crunch and a growing room glut as Detroit's new casino-hotels opened just when demand was tanking.

The Hyatt Regency Dearborn, a premier conference and convention hotel with 772 rooms and 62,000 square feet of meeting space, "is one of the first major hotel properties nationwide that's come on the market since the big downturn," said Rick George of HREC Investment Advisors, which was recently hired to handle the sale.

After paying $40 million for the Hyatt in 2007, the hotel's current Dallas-based owner is in default on its debt. The hotel posted an operating profit of $4.4 million in 2008, but swung to a $1.3-millon loss last year and the owner stopped making debt payments last June.

George said the hotel, which he expects will sell for $13 million to $15 million, "can do pretty well" when the economy improves, because the new owner will get it "for pennies on the dollar." He said it's unclear when the market will improve, though, and whether Hyatt will continue to run the hotel. That depends on how much a new owner is willing to invest.
Under pressure

"There are going to be some victims" of the local shakeout, said Chuck Skelton, president of Hospitality Advisors Consulting Group in Ann Arbor.

Marginal hotels will shut down and even the best properties may get new owners or new names.

"I think the Ritz-Carlton in Dearborn is probably destined to carry another flag," Skelton said. "It's probably under a lot of pressure. I think it will be on the market."

Hotel room rates are under such pressure in metro Detroit that even the best luxury names, like the Ritz, can't command prices high enough to cover the costs of providing the ultra-luxury service and amenities that world travelers expect from a Ritz.

"There are a lot of rumors flying around," said Vivian Deuschl, vice president of public relations for Ritz-Carlton, "but it's nothing more than speculation.

"For now it's business as usual," she added. "We know that Detroit is a very, very difficult market."

Detroit is not alone. Last week, Ritz-Carlton said it will close its Ritz-Carlton Lake Las Vegas hotel in May.

Total hotel revenues in the metro Detroit market plunged 19.3% last year to $578 million, down from $716 million in 2008, according to Smith Travel Research. Average occupancy fell from 55% to 48% last year.

And to make matters worse, as demand was falling, the total number of hotel rooms in the Detroit region grew by 3,000 in the past two years, from 39,400 in early 2007 to 42,500 by mid-2009.
Less lavish, less travel

It would be nice to think that Detroit will experience a big resurgence of demand for hotel rooms, restaurants and other hospitality services as the auto industry stabilizes and the Cobo Center convention center is upgraded and expanded.

Don't bet on it, though. Truth is, our hotel capacity was built for a time that no longer exists, when Michigan's population was growing and local companies were entertaining lavishly.

Here's another ominous trend for the travel business. Skelton said many 25- to 40-year-olds are more comfortable sitting in front of a camera and video screen for a teleconference than they are with hitting the road with face-to-face contact and hassling with airport security.

Travelers finding bargain rates at hotels may be happy, but there just aren't enough of them to keep the innkeepers prosperous.

12 February 2010

Denise Ilitch Passes on Governor Contest


Detroit businesswoman Denise Ilitch opted out of the governor's race Wednesday and former state Treasurer Bob Bowman took a step toward jumping into a Democratic contest rife with uncertainty.

After four weeks of taking a serious look at running for governor, Ilitch bailed out of the contest, saying she didn't have enough time to prepare for a strong bid. But she left open the possibility of joining the Democratic ticket as a candidate for another statewide office.
Meanwhile, Bowman was preparing to file papers to form an exploratory committee to run for governor, according to a spokesman.

"Bob Bowman has received very positive and encouraging feedback the last couple of weeks and is preparing to make an official announcement soon," said Bob Kolt, an Okemos-based public relations consultant.

Bowman was treasurer under former Gov. James Blanchard from 1983-90. He heads up Major League Baseball's interactive media division and lives in Connecticut, but has a house in Harbor Springs.

Bill Rustem, president of the Lansing-based Public Sector Consultants Inc. public policy think tank, said Ilitch's announcement makes it more likely that a candidate such as Bowman, House Speaker Andy Dillon or someone whose name hasn't yet surfaced will climb into the race.

"There's no runaway leader in this race," he said.

Ilitch was the leading Democratic candidate in recent polling, based mainly on name identification, according to pollsters.

"This takes away the ad hoc front-runner," said Bill Ballenger, editor of Inside Michigan Politics newsletter. "Right now we have two what I think most people believe are second-tier candidates in the field and waiting for Godot."

Ilitch's decision leaves state Rep. Alma Smith of Salem Township and Lansing Mayor Virg Bernero as the only announced Democrats in the race. Dillon also has formed an exploratory committee and is expected to announce his candidacy soon. Former Genesee County Treasurer Dan Kildee also is considering a bid.

Five Republicans are running for governor: Oakland County Sheriff Mike Bouchard, Attorney General Mike Cox, state Sen. Tom George of Kalamazoo, U.S. Rep. Pete Hoekstra of Holland and Ann Arbor businessman Rick Snyder.

Waiting game

National Democrats also are playing a waiting game in the wake of Ilitch's exit.

The White House and the Democratic Governors Association has interviewed potential Michigan Democratic gubernatorial candidates but haven't backed one, and both appear to be waiting for a strong candidate to emerge before deciding how to help.

Ilitch said in a teleconference call with the media she needed six or eight months "at least for planning prior to hitting the ground running" and setting up a grassroots campaign. She had only a month to prepare, after presumptive frontrunner Lt. Gov. John Cherry decided not to run. She said the compressed time frame likely will be a challenge for other Democratic candidates. The primary election is less than six months away, on Aug. 3.

"Being an outsider, I felt I started from scratch," Ilitch said.

Pollster Bernie Porn, whose survey earlier this month had Ilitch as the only Democrat with double-digit support among voters at 23 percent, questioned whether Ilitch had the credentials to run for governor.

"She's familiar with education issues as a regent at the University of Michigan," Porn said. "But does she have much experience that would lend itself to managing state government?"

Ilitch, 54, is an attorney, a jewelry designer and magazine publisher. She's former president of her family's pizza and entertainment empire.

She said she hasn't been asked by party officials to run for another office such as lieutenant governor or attorney general, but said, "I will always keep any opportunities for helping Michiganders open."

She did not announce an endorsement of any other candidate, saying only she'll support the eventual Democratic nominee.

'Not a layup for either party'

Asked whether the Democratic candidate needs to be able to self-fund a campaign, Ilitch said anyone who runs needs to rely mainly on citizens and vested interests for funding. Bowman, who took with him $35 million in stock options when he left his job as chief of ITT Corp. according to published reports, is seen as a candidate who could at least jump-start a gubernatorial bid with his own money.

The conventional wisdom that says 2010 likely will be a bad year for Democrats did not weigh into Ilitch's decision, she said.

"The research and homework I've done ... doesn't support that conclusion. This is a Democratic state," she said, adding the race "is not a layup for either party."

John Tramontana, spokesman for the Michigan Democratic Party, said about Ilitch: "We feel she would have been a great candidate for the Democratic Party and for Michigan. Unfortunately, voters will not get to learn more about her and her campaign. But we respect her decision."

Ilitch said "it was very humbling and exciting" when President Barack Obama stopped by a meeting she had with White House officials last month. She said she and Obama "talked about Michigan's future."

In a prepared statement released Wednesday, Ilitch said: "Through a methodical planning process, I saw that the message, resources and many key endorsements would be there, but concluded that the compressed election year calendar would not allow me to run the kind of campaign for governor I believe Michigan needs at this time. And that stubborn fact is the one and only reason why I am not running for governor today.

"Though I will not run for this office now, I will keep the door open to other opportunities, as I believe that public service is the highest calling."