31 August 2010

County Entering Mediation over Wastewater Treatment Plant

Grand Traverse County is entering mediation over a dispute among firms responsible for designing and building a problematic wastewater treatment plant.

Evaluating the plant's effectiveness for the second time was Prein & Newho of Grand Rapids. After another extensive overview of the county's $7.8 million facility, their final report to the Grand Traverse Board of Public Works was delivered with no change to the first diagnosis.

Prein & Newho reconfirmed that former county attorney Michael Houlihan and the local septage treatment plant designer, Gourdie-Fraser Inc., failed to apply professional care when they overestimated the projected septage volume of the facility.

The overall issue at hand is: the plant takes in about half the septic tank waste volume that producers projected, and the operational costs greatly exceed what was forecasted.

“I think it’s becoming increasingly obvious that there was a lack of professional standards followed,” said a Township Supervisor. “I’m hopeful that we can mediate a fair settlement, and I believe we should be able to.”

The facility experienced a partial shut-down a month after opening in 2005. To add to the problems, the plant has estimated to lose roughly $400,000 this year and about $600,000 in 2011.

Prein & Newhof, along with Grand Traverse county officials met with the wastewater treatment plants designer, Gourdie-Fraser Inc. and The Christman Co., the two organizations that engineered and constructed the facility. The meetings come coupled with mediation to resolve the contract disputes originating from the process.

During the meetings, the responsible designers provided new information to the county, and Prein & Newhof revised its report as result, however not its conclusion.

“We still feel it is grossly inaccurate,” President of Gourdie-Fraser, Joe Elliot said of the new report. “We think they are trying to work backwards and build a foundation for a predetermined solution.”

In addition to the disputes, Grand Traverse County and Gourdie-Fraser/Christman have conflicting views of when the facility was complete under the contract as well as if the plant meets specific capacity requirements.

Elliot noted Gourdie-Fraser Inc. would prefer to avoid consulting with a Nashville mediation lawyer and has yet rule out the possibility of a cash settlement.

“Mediation will burn more money and more legal fees, and we would like to bring it to a resolution without doing that,” Elliot said. “A cash settlement is something we will talk about in the next bit, but right now I would say probably not.”

Prein & Newhof questioned certain decisions made by the designer of wastewater treatment plants in several other areas of the facility. However Elliot said the design process involved five local township supervisors who were responsible for oversight, in addition to Grand Traverse county officials and an outside engineer.

“There was a good design process, and it came up with fairly good conclusions,” Elliot commented. “In hindsight, they probably aren’t perfect, but there always are things you can do better when you look back.”

County officials advocate that the preparation, design and construction of the plant were done correctly and the facility’s problems are due to several of compounding issues, such as the economy. The Supervisor for Garfield County claimed that it is time to drop that stance.

“That reasoning is getting pretty thin,” he said. “The collapse established the thing as a failure, and its only gone downhill from there.”

27 August 2010

Autoworkers Adjust to Life Without Jobs Bank as GM, Ford Seek to Rebound‏


General Motors Co. gave Kevin Dorey’s father a paycheck for 34 years, kept him working near home and let him out in time for his kids’ football games.

“‘It’s steady’ -- that’s what my dad always told me about General Motors,” Dorey, 44, said over chicken wings and beer at the Beef ‘O’ Brady’s sports bar in his hometown of Saginaw Township, Michigan. “For me, it’s been anything but steady.”

Kevin Dorey worked at three plants in three years until his most recent location in Orion Township, Michigan, which required a 90-minute commute, closed in November. Previously, he would have received full pay during the layoff while GM revamped the factory for a new car. The United Auto Workers agreed last year to give up that benefit, known as the jobs bank, and the paychecks stopped coming in July.

Less employment security, lower starting pay and stricter work rules signal a new era for the jobs viewed as a ticket to the middle class since Henry Ford’s $5-a-day wage in 1914. The changes also mean GM, Chrysler Group LLC and Ford Motor Co. are free of the obligations that helped sink the industry in 2009 and can make money with lower sales volumes.

UAW President Bob King said in June that he’ll seek to win back benefits and rebuild the union’s power when contract negotiations begin next year. Automakers may seek even more concessions as sales remain close to a 30-year low.

In the meantime, autoworkers are adjusting to a new way of life in an industry where deliveries fell to 10.4 million vehicles in 2009, the lowest level since 1982, the year Dorey got his driver’s license. Sales averaged 16.8 million a year from 2000 to 2007.

Distant Transfers

Pedro Gonzales accepted a transfer in May from a GM plant in Pontiac, Michigan, to one in Lordstown, Ohio, to avoid a long layoff and slipping to the bottom of the list of workers to be recalled under new union rules.

For two months, he and three other workers stayed in a hotel and a two-bedroom apartment, where he slept on an air mattress in the living room. On weekends, he drove more than four hours to see his wife, mother and five children before moving them to Ohio this month.

“The people here are nice, and the work seems stable, so I decided to stay,” said Gonzales, 42, who assembles instrument panels for the Chevrolet Cruze small car. “I don’t want to move my family again.”

Rejecting Transfers

Workers previously were able to turn down transfers farther than 50 miles from their plant and remain in the jobs bank, said Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Michigan. There would have been 20,000 workers in the jobs bank at the start of 2010 if the program still existed, he said.

Laid-off employees with fewer than 10 years of experience now get partial pay for 26 weeks, while those who’ve worked longer can get paid for as much as a year. Workers then move to a transition support program, about equal to collecting unemployment, for an additional 26 weeks to one year, McAlinden said.

Wages also are declining, with new hourly production workers starting at $14 an hour instead of $28. The combined cuts reduced Detroit-based GM’s average labor cost to $58 an hour from $74 two years ago, McAlinden said. The new $14-an-hour workers, which could account for 20 percent of the labor force eventually, will drive GM, Ford and Chrysler’s hourly costs below the $56 for Toyota Motor Corp.’s most senior U.S. hourly workers, he said.

‘Solidly Profitable’

GM is now positioned to break even during troughs in demand, Chief Executive Officer Ed Whitacre, who will cede the title to Daniel Akerson next month, said in June. Ford, based in Dearborn, Michigan, will be “solidly profitable” in 2010, CEO Alan Mulally has said.

Those improved prospects are setting up a fight during contract talks in 2011. Ford, the only U.S. automaker that didn’t file for bankruptcy or receive government assistance last year, is seeking parity with GM and Auburn Hills, Michigan-based Chrysler, which won a freeze on wages for new hires until 2015 and a prohibition on some strikes for five years.

The union wants automakers to restore some of the pay raises, annual bonuses and cost-of-living adjustments it surrendered to keep the companies afloat last year.

“It’s really important to understand and stress that all the auto companies were profitable and successful paying the wages and benefits they did when they had good product and product the customer wanted,” King said in an interview at the UAW’s Solidarity House headquarters in Detroit. He declined to specify which benefits he’d seek in the negotiations and said he didn’t think it was possible to get back everything the union gave up.

Union leaders likely will be successful in clawing back some compensation and benefits, said Bob Schulz, an auto analyst for Standard & Poor’s.

“It’s going to raise costs, it’s just a question of how and how much,” he said.

‘Time Warp’

Union leaders and workers looking to win back concessions are stuck in a “time warp,” said David Littmann, senior economist for the Mackinac Center for Public Policy, a research organization in Midland, Michigan, that promotes free-market principles.

“They want to make things the way they were, and they’re not,” Littmann said.

The jobs bank, which had a combined 25,000 Ford, GM and Chrysler workers at its peak in the early 1990s, was originally designed to retain trained workers who were temporarily displaced by productivity or business cycles. The program later became a symbol of the benefits union workers received as the U.S. government debated approving funds to save the industry.

“It became the welfare mother who drives a Cadillac,” said Harley Shaiken, a labor professor at the University of California-Berkeley. “It became the symbol of what was wrong with welfare.”

The program’s stigma and the nation’s 9.5 percent unemployment rate will make it difficult for the union to win back some benefits, he said.

Dorey, who said he was never in the jobs bank, said he probably will be on the second shift when production at the Orion plant restarts next year. He’ll start work in the mid- afternoon and won’t get home until 4 a.m., leaving the divorced father little time to spend with his 11-year-old son.

“He’s at that point where we do a lot together,” Dorey said. “If I’m working second shift, how is that even possible?”

26 August 2010

Postal Workers Protest 5-day Delivery Plans in Detroit

Detroit News

Thousands of postal workers and supporters flooded downtown Detroit on Tuesday, protesting plans to nix Saturday delivery.

Chanting "Five Days, No Way," members of the American Postal Workers Union -- in town for a national convention at Cobo Center -- marched to Campus Martius with union officials and the Rev. Jesse Jackson to demonstrate against the proposal by the U.S. Postal Service. Congress still must sign off on the change, which postal officials say would save $3 billion.

The Postal Service contends it's facing a massive deficit due to declining volumes of mail because of electronic communications. It is eying Saturday because that day has the lowest volume of mail, and more than a third of businesses are closed.

Union member Michael Arrabito is against it.

"When the U.S. Postal Service was established by Congress in 1792, it didn't say anything about making a profit," Arrabito said.

"People rely on six-day-a-week delivery for prescriptions by mail and for checks."

William Burrus, president of the union that represents mail handlers, clerks and other workers but not carriers, said Congress should instead eliminate a portion of the 2006 postal reform act that requires the Postal Service to prefund health care benefits for future retirees. That costs $5 billion.

At Campus Martius, Michigan AFL-CIO President Mark Gaffney vowed, "We're going to win this fight because everyone who has a mailbox agrees with us."

Jackson, whose late father was a postal worker, urged the crowd to remember the issue when they vote in November.

"We are marching for jobs," Jackson said. "We intend to bring America back, and we want our mail delivered every day."

Detroit resident Darlene Rivers watched the marchers and signaled her support.

"I don't want them to cut back on delivery either," Rivers said. "Don't they know that not everybody has access to the Internet?"

Michigan Road Group Pushes for more Repair Money

The Detroit Free Press

A group that wants Michigan to spend more money on road repairs is taking a new approach to lobbying lawmakers.

The Michigan Transportation Team sent state lawmakers and those running for office in November maps of their own districts highlighting major roads that are in poor condition.

The group said today that inaction by lawmakers over the past two years will make the roads more than $1 billion more expensive to repair than they would have been otherwise.

The roads coalition includes business groups, road builders, transportation agencies, motorists, and Michigan concrete contractors.

Proposals to raise more money for roads have stalled in the Michigan Legislature, largely because lawmakers doubt residents would support higher taxes.

25 August 2010

Start-Ups Pitch Plans to Panel at NextWave

The Detroit Free Press

Groups aim to set course for new state economy 
Henry Ford's entrepreneurial spirit is alive and well in southeast Michigan.

On Tuesday, a group of Michiganders pitched their business plans to a panel of judges, hoping their start-up companies would be chosen for a spot at NextWave, a new for-profit business incubator in Troy that plans to invest in and help fledgling firms grow.

These would-be entrepreneurs have dreamed up everything from a vertical stacking garage door with storage racks to a new mobile communications app for doctors. All came to NextWave needing help with everything from marketing and mentoring to money.

It's unlikely that all eight start-ups will succeed, but together they signal that a new Michigan economy, one that's less dependent on making cars, is slowly gaining traction in the midst of the recession.

"Michigan is a very talented place," said Amjad Hussain, managing partner and founder of NextWave, which hopes to invest in at least 30 companies by launching a $25-million venture capital fund.

The eight start-ups, who were chosen from a pool of 20 applicants, will have to wait until next week to find out whether any or all of them will be selected for NextWave.

On Tuesday, these entrepreneurs took turns standing at the front of a small auditorium in NextWave's Troy office building. Each had 20 minutes to wow the judges with a business plan and answer questions in something that resembled American Idol minus the singing.

"At this stage in my life, I'm ready to follow my own passions," entrepreneur Thomas Talboys told the judges during his presentation. The pitch session even included two guest judges, Kathleen Ligocki, an auto industry executive, and Rich Sloan, co-founder of StartupNation.

Here's a brief rundown of some of the business plans being hatched:

• Store-n-Door: Talboys wants to reinvent the lowly garage door and give homeowners another place to store their stuff. His vertical stacking garage door is less expensive, quieter and 40% faster than what's found in most homes today. The doors also free up space for storage racks that can hang underneath garage ceilings.

• Build-A-Wear: Lisa McAree and her brother, Ken Ericson, want to make it easy for every young girl to be a fashion designer. They aim to sell pre-designed clothes patterns for tween girls that can be mixed and matched according to individual tastes. Think Build-A-Bear Workshop, except this involves clothes for real people. The duo plans to operate online first and then add retail stores.

• HosComm Systems: If Adil Akhtar, the chief of oncology at Beaumont Hospital in Troy, and Muhammad Ahmed, an Eastern Michigan University engineering professor, get their way, pagers will become a thing of the past at hospitals. They have created an app for smartphones that will give doctors, nurses and other health care professionals a better way to communicate, reducing medical errors and cutting costs. The system is to be tested in October at Beaumont.

• WealthExpress Trading Systems: Futures traders Tony Castiglione and Matt Dahn have devised an automated futures trading platform to help consumers and hedge funds boost their investment returns.

• IP Tech Works: Jason Pak and Jim English say today's patent searches can be done better, faster and cheaper. They hope to revolutionize the patent-search industry by deploying a new software program, low-cost patent researchers in India and Pakistan and a network of courier firms.

2 Michiganders Form Venture Capital Firm in Ann Arbor

The Detroit Free Press

Two Michiganders who worked in Silicon Valley plan to announce today that they have formed a new technology-focused venture capital firm in Ann Arbor that has already made its first investment in a local company.

Jason Townsend, 32, and Michael Godwin, 40, are part of a new wave of young venture capitalists in the state. The two recent graduates of the University of Michigan's Ross School of Business were managing directors of the Wolverine Venture Fund, a $5.5-million student-run venture fund.

They enjoyed working on the fund so much that they decided to launch their own and have gained the support of local veteran venture capitalists such as Mary Campbell.

Their new Resonant Venture Partners is part of a group that last week invested $1 million in Ann Arbor-based Scio Security, a computer security firm. Resonant was able to make the investment after quickly signing on its first investors, a wealthy family in Texas.

Resonant hopes to attract a total of $10 million from investors but Townsend acknowledges that fund-raising in today's environment is "extremely challenging." The fund aims to invest in 15 start-ups, mostly in Michigan.

24 August 2010

Brawl With Burkle Weighs On Barnes & Noble


Barnes & Noble continues to struggle with sluggish sales, as exhibited by its fiscal 2011 first quarter results, not to mention its fight with billionaire investor Ron Burkle, the legal fees of which have been taking big bites out of the bookseller's bottom line.

During the quarter sales at Barnes & Noble ( BKS - news - people ) reached $1.4 billion, ahead of the $1.2 billion reported in last year's corresponding period. By segment, Barnes & Noble store sales fell 2% to $1 billion, though its online sales increased by 42% to $145 million.

On the bottom-line side, the company reported a loss of $63 million, or $1.12 per share, well below last year's earnings of $12.3 million, or 21 cents per share. Excluding its legal expenses, the first quarter loss was $1.02 per share, in-line with previously issued guidance of $0.85 to $1.15 per share. Wall Street, which typically excludes one-time charges, had expected a loss of 80 cents per share.

"The company made significant strides executing its digital strategy during the first quarter, and all our key metrics on the digital business are well ahead of plan," said William Lynch, chief executive officer of Barnes & Noble. The firm is the creator of electronic reading device Nook.

No matter, investors weren't happy with the report as the company's shares dropped 5.6%, or 84 cents per share, to $14.14. Meanwhile shares of peers such as Borders Group ( BGP - news - people ) fell 6.7%, Books-A-Million ( BAMM - news - people ) 2.4% and Amazon.com ( AMZN - news - people ) 2.5%.

The company's board has been looking to sell the firm in order to increase shareholder value, but buyers have been hard to come by.

23 August 2010

Meet the Women behind the Electric Chevrolet Volt

USA Today

The most eagerly awaited car of the year is the Chevrolet Volt, the first next-generation extended-range electric car to hit the road. General Motors has a lot riding on the car, and it took a lot of workers to make it. Many of them were women in what has been traditionally the boy's club that was yesterday's auto industry. GM pulled together some biographies of some of the key women involved in the design of the Volt. Interestingly, each one is a mom. Here is what GM wrote about them:


Nina Tortosa, pictured above, is the lead aerodynamicist on the Volt team. Her team has spent more than 500 hours of time in the wind tunnel with the Volt, often testing and tweaking changes in 1 millimeter increments. While their work is done in small measures, the cumulative impact is significant: Nina estimates that aerodynamic development on the Volt extended the electric-only range by almost seven miles at highway speeds. She has two children, ages four and five. Nina was born in Barcelona, Spain, and graduated from Mounds View High School, just outside Minneapolis.


Britta Gross is director of Global Energy Systems and Infrastructure Commercialization. She is working to prepare utilities and to get communities across the country "plug-in ready," not just for Volt but for the wave of electric vehicles predicted to be on the horizon (Global Insight estimates that plug-in electric vehicles and battery-electric vehicles could represent 20 to 60 percent of the market by 2030). This includes working with state and local governments on purchase incentives, with utilities to develop smart-grid and smart-charging technologies, and companies and municipalities to iron out home charging processes and to install charging stations at work places. Britta has two children, age 12 and 17; growing up, she lived in Kansas City, Chicago, and Baton Rouge.


Pamela Fletcher is the chief engineer for Volt and Plug-In Hybrid Propulsion Systems. She is responsible for the integration of the propulsion system components, including the lithium-ion battery pack, electric motors, and onboard engine generator, to ensure the cars meet customer expectations and business requirements. For the Volt this means creating an electric car with extended-range capability. Pamela has three children, ranging from 24 to 27 years of age; she grew up in Sarahsville, Ohio.

As for marketing and manufacturing:


Cristi Landy is the Volt product marketing manager. Cristi holds a degree in electrical engineering, and was part of the team that developed the Volt Concept in 2006. Currently, she acts as a liaison between Engineering and Marketing. As an example, Cristi helped identify the features and capabilities of the smart-phone application for Volt owners. This feature allows the driver to remotely heat/cool the cabin while the Volt is still plugged into the wall charger. This is much more efficient that using power from the battery for heat or air conditioning, extending the electric-only range of the Volt. Cristi has twin boys, age 10; growing up, she lived in Brookfield, Wis., and Jacksonville, Fla.


Teri Quigley, pictured below, is the plant manager at Detroit-Hamtramck Assembly. Teri is responsible for preparing the plant and executing the launch of the Chevrolet Volt on the same assembly line as the Cadillac DTS and Buick Lucerne. This includes production changes to accommodate the installation of the Volt's unique powertrain, including the training and safety protocols to install the Volt's six-foot long, 400-pound lithium ion battery pack. Teri has four children, ranging in age from 14 to 26, and has two grandchildren; she grew up in Dexter, Mich.

20 August 2010

Employment Numbers Vary Widely State to State


Michigan manufacturing jobs stabilize

U.S. government data released on Friday showed employment conditions varied widely from state to state in July, indicating that the economic recovery may not be consistent across the country.

The jobless rate fell in 18 states and the District of Columbia in July from June, while it rose in 14 states and was unchanged in 18 states, the Labor Department said.

Compared to a year earlier, the jobless rate fell in 27 states and rose in 20.

North Dakota, buoyed by a strong natural resources sector, again had the lowest rate in the country, at 3.6 percent. Nevada remained the state with the highest unemployment rate, at a record 14.3 percent.

Michigan followed with 13.1 percent, but the state also had the largest increase in employment from June, adding 27,800 jobs.

For many months Michigan, home to major U.S. automakers, suffered the highest jobless rate in the country, but since the start of the year the rate has slowly dropped.

Most of the jobs gains in July were in manufacturing. But the state labor department said that even without new factory jobs the July payrolls number was the highest of the year.

"Michigan's manufacturing job market has stabilized thus far in 2010," said Rick Waclawek, director of the state's labor bureau. "Automakers and suppliers minimized July retooling layoffs reflecting streamlined production schedules, strong vehicle sales, and lean inventories."

Altogether, the number of jobs increased in 37 states and in Washington, DC.

North Carolina lost the most jobs in July, at 29,800, followed by New Jersey.

Over the year, payrolls grew in 30 states and Washington, DC, and dropped in 19 states.

In Georgia, the unemployment rate declined to 9.9 percent. But it was still the 34th straight month in which the state's jobless rate exceeded the national one, currently 9.5 percent.

"Georgia's job market continued to deteriorate," said State Labor Commissioner Michael Thurmond in a statement.

"Although the unemployment rate remained virtually unchanged, a growing number of discouraged workers dropped out of the workforce," he said.

Nationally, the employment picture remains a confusing jumble. On Thursday, the U.S. Labor Department reported new jobless claims hit a nine-month high last week.

Also on Thursday the head of the U.S. Congressional Budget Office, Douglas Elmendorf, said the U.S. jobless rate will not drop below 5 percent until 2014. The rate has been gradually declining after hitting 10.1 percent in October, a high not seen since 1983.

Florida highlighted the uneven labor market. In July the state, which was hurt especially hard by the housing market downturn, saw its unemployment rate rise to 11.5 percent while the number of jobs increased by 5,700.

Pennsylvania added 3,400 jobs in July, bringing the number of private positions created in the state since the beginning of the year to 52,400. But the state's unemployment rate also rose to 9.3 percent.

More than 8,400 Pennsylvanians were working on nearly 200 highway and bridge repair projects funded by the federal economic stimulus plan in July, Governor Ed Rendell said.

"Hiring is occurring, but we need to accelerate the pace and do more to put Pennsylvanians back to work by making targeted investments in our transportation infrastructure that will create tens of thousands of jobs," he said.

19 August 2010

Lawrence Products Inc. Receives National Awards



    * Arcadia Health Care, a local provider of home care services in 11 locations throughout Michigan, including Kalamazoo, was recently awarded accreditation by the Accreditation Commission for Health Care Inc. The accreditation status recognizes Arcadia for its high level of competency and for excellence in customer satisfaction.


    * For the seventh consecutive year, Lawrence Products Inc., an electronic media company with locations in Galesburg and Grand Rapids, has received national awards for its video production work. 2010 Communicator Awards were won in the categories of ‘best documentary’ for their project “The War on Cancer,” done for Van Andel Institute, and for ‘best use of graphics’ for their project “Navteq Icon Animations,” done for Stap and NavTeq. Two Telly Awards were won in the categories of ‘best sales video’ for the project “Metro 40,” done for Landscape Forms, and for  ‘best production company real’ for work done in connection with Lawrence Product’s “25th Anniversary Demo.”


    * Janice Maatman has been appointed to serve on the Board of Directors of Family & Children Services. Maatman is the director of Nonprofit Education Programs in the School of Public Affairs and Administration at Western Michigan University. She began her membership on the Board in March 2010.

    * Kalamazoo County Prosecutor Jeff Fink has been re-elected to the Board of Directors of the Prosecuting Attorneys Association of Michigan. Fink will serve a one-year term through July 2011.

    * Julie VanderNoot, manager of volunteer services for Bronson Methodist Hospital, has been elected to a three-year term as president for the Association for Healthcare Volunteer Resource Professionals. VanderNoot will serve as president of the national association in 2012.

GM Files for Landmark IPO to Repay Bailout


General Motors filed for an initial public offering of stock on Wednesday, clearing a key hurdle toward repaying taxpayers for a controversial bailout just over a year after its bankruptcy.

Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citigroup have been selected as the lead underwriters for the IPO by the top U.S. automaker.

GM's initial filing with U.S. securities regulators did not say how many shares would be sold or give an expected price range for what will likely be one of the biggest IPOs ever.

GM filed for an IPO of up to $100 million. That does not represent the full amount that GM hopes to raise, people familiar with the situation have told Reuters. GM could raise up to $20 billion in its IPO, the people said.

Attention has increasingly focused on the amount the IPO will raise, and if it will be enough, as some suggest it should be, to repay taxpayers on the hook for the controversial bailout.

"If GM is valued in that $60 billion to $70 billion range, that gets the taxpayer paid back. But the question is, is that achievable for a company that is a year out of bankruptcy...?" said Brad Coulter, director of O'Keefe and Associates.

"Personally, I think they should wait and prove out their earnings," Coulter added.

Scott Sweet, senior managing partner of IPO Boutique, agreed GM has a lot to prove before investors should consider it a worthy investment.

"They still have problems and their problems are large," Sweet said.

"One of them specifically is in Europe. They missed the chance to sell Opel. As a result, they're losing several hundred million dollars. It's an ongoing problem and it's an albatross right now. They're likely only going to be able to get dimes on the dollar for Opel now. They brought in all these new managers and they still couldn't clean it up," he added.

The automaker said it planned to list the shares on the New York Stock Exchange and the Toronto Stock Exchange.

Trading in GM shares is expected to start between late October and the U.S. Thanksgiving holiday, which is the fourth Thursday in November, according to people involved in the process. A stock offering in late October would mean trading would start just before the November congressional elections.

The Obama administration wants to be able to cast the $50 billion GM bailout as a financial success in the face of public skepticism and Republican political opposition.

How to Play the GM IPO and the Auto Industry


General Motors filed for an initial public offering of stock on Wednesday, clearing a key hurdle toward repaying taxpayers for a controversial bailout just over a year after its bankruptcy.

The initial filing with U.S. securities regulators did not say how many shares would be sold or give an expected price range for what will likely be one of the biggest IPOs ever. It filed for an IPO of up to $100 million. That does not represent the full amount that GM hopes to raise, people familiar with the situation have told Reuters. GM could raise up to $20 billion in its IPO, the people said.

The automaker said it planned to list the shares on the New York Stock Exchange and the Toronto Stock Exchange. Trading in GM shares is expected to start between late October and the U.S. Thanksgiving holiday, which is the fourth Thursday in November, according to people involved in the process.

So what does this mean for investors?

Guy Adami, managing director at Drakon Capital, likes the GM IPO for the auto industry. He recommends looking at BorgWarner [BWA  47.07  ---  UNCH  (0)   ], which is an auto parts manufacturer based in Auburn, Hills, Mich. The stock is pushing against a 52-week high, Adami said. UBS put it on a conviction buy list. He thinks valuations are "reasonable" and being as we're in a benign tape, he thinks BWA is the way to go.

Buy Ford Motor Co. [F  12.20  ---  UNCH  (0)   ] if the share price drops to $11.50, said Pete Najarian, co-founder of optionMONSTER.com. He thinks that could happen because there is "a lot of appetite" for the GM deal. Ford's share price could fall if investors leave for GM.

What Ford has going for it that GM doesn't, said Joe Terranova, chief market strategist at Vitrus Investment Partners, is Alan R. Mulally. Adami agreed and praised the 61-year-old Ford executive.

18 August 2010

GM Said to Consider Sale of Preferred Stock With IPO


General Motors Co. may sell preferred stock alongside its initial public offering of common shares, according to a draft of its regulatory filing and two people briefed on the plan.

GM would get proceeds from the preferred offering and will not sell shares itself in the common offering, according to the draft and the people, who declined to be identified because the filing hasn’t been publicly released. The Detroit-based automaker will seek to raise $12 billion to $16 billion in the IPO, a person familiar with the plan said last week.

The initial offering would be the second-largest in U.S. history, behind Visa Inc.’s $19.7 billion IPO in March 2008. Outgoing Chief Executive Officer Ed Whitacre has pushed to end government ownership of the company, which received a $50 billion taxpayer bailout following its bankruptcy in June 2009.

The U.S. Treasury will offer some of the common shares it holds in GM, according to the people, who verified details of the IPO registration draft that may be modified before its final version is filed with the Securities and Exchange Commission this week. The offering is code-named “Project Dawn,” according to the document.

Randy Arickx, a GM spokesman, declined to comment, as did Mark Paustenbach, a spokesman for the Treasury.

The preferred shares were added to attract hedge funds and other new investors because the shares have attributes of both debt and equity, the people familiar with the plans said.

NYSE, Toronto Exchange

The common shares will be listed on the New York Stock Exchange and the Toronto Stock Exchange, while the preferred stock would be listed on the NYSE, according to the draft and the people. The preferred shares will be convertible to common stock at a price that wasn’t specified and are contingent on the completion of the common share sale, according to the details in the draft confirmed by the people. The proceeds will be used for general corporate purposes.

GM aims to sell a fifth of the Treasury’s 304 million shares, two people familiar with the plan said in June. That would cut the government’s stake to less than 50 percent.

Whitacre, 68, said last week that he would step down as CEO Sept. 1 and as chairman at the end of the year, ceding both titles to Dan Akerson, a managing director of the Carlyle Group. Akerson, 61, has been on GM’s board since July 2009 and previously served as chairman and CEO of XO Communications, Nextel Communications and General Instrument Corp.


The Treasury, which retained veto power over GM on the selection of underwriters and fees, agreed to have JPMorgan Chase & Co. and Morgan Stanley of New York lead the offering, people familiar have said, while other banks including Bank of America Corp. and Citigroup Inc. are also involved in the IPO.

Goldman Sachs Group Inc. of New York didn’t get a top role even after offering to accept a fee of 0.75 percent, which was then imposed by the government on all underwriters, people familiar have said.

GM also has obtained a revolving line of credit worth as much as $5 billion from a group of at least 15 banks, including Morgan Stanley, JPMorgan, Citigroup, Bank of America and Zurich- based Credit Suisse Group AG, a person said last week.

The automaker may hold the offering in November, people familiar with the matter have said. The automaker also may sell stock owned by Canada and a union-led retiree health-care trust, a person familiar with the matter has said.

17 August 2010

UAW President Finds Perfect Candidate in Virg Bernero


Behind most high-level political candidates are kingmakers — people you might not know very well but who shape agendas and wield a great deal of influence in election campaigns.

In Lansing Mayor Virg Bernero’s improbable quest to become Michigan’s next governor, new United Auto Workers President Bob King is deftly playing the role of political power broker.

Behind in the polls just days before the Aug. 3 primary, Bernero captured the Democratic nomination for governor by portraying himself as the champion of the blue-collar worker who was mad as hell and not going to take it anymore.

And stoking Bernero’s “angry mayor” persona was King, who, by some accounts, is now calling many of the shots in the campaign.

Some say this could be the last stand of organized labor, which has seen its membership,  cash and political clout dwindle over the past decade.

“Organized labor has an awful lot to lose in this election,” said Craig Ruff, senior policy fellow at Public Sector Consultants in Lansing.

Installed as the UAW’s president in June, King is vowing to revitalize the labor movement, which took a serious hit in the Great Recession.

King’s first public act as president was to lead a march in downtown Detroit, protesting Wall Street greed that he blamed for triggering a financial meltdown that pushed General Motors Co. and Chrysler Group LLC into bankruptcy.

King may have found the perfect candidate in Bernero, who has made Wall Street the bogeyman in his quest for the governor’s seat.

“I will never stand for working people being thrown under the bus while Wall Street makes out like bandits,” Bernero said in his primary election victory speech.

Bernero also railed against government for its enactment of trade policies he said have resulted in the outsourcing of hundreds of thousands of middle-class jobs.

But his main target was “The Man,” greedy corporate interests that have profited mightily from the fruits of working-class labor.

It shouldn’t come as a big surprise that his message resonated with voters and catapulted him into a November match-up against Republican Rick “The Nerd” Snyder.

Michigan lost nearly 1 million jobs during the Great Recession, about one of every four jobs in the state.

Multiply the losses by the number of folks hurt by those lost jobs — spouses, children and extended family — and you have millions of disaffected people in this state.

Bernero’s challenge will be in continuing to capitalize on the frustration of those who lost jobs while showing he can promote the interests of the Michigan employers who shed those jobs.

King faces a similar balancing act.

He struck a conciliatory tone in a recent speech, saying “there is no group of people more committed to the success of the auto industry than the union and our members.”

It will be interesting to see whether Bernero likewise softens his high-decibel rhetoric in the fall campaign. If he does, you can likely attribute it to King’s influence.

Catching up with: Rex Bell, President of Miller-Davis Co.


Rex Bell, president of Miller-Davis Co., has led the Kalamazoo construction management and Michigan concrete contracting company since 1996.

“I have overall responsibility for the successful operation of the company with emphasis on corporate leadership, including the implementation of operational improvements and business development strategies,” Bell said.

Bell started with the company 33 years ago, working first as a field engineer supervising  concrete construction at job sites in Illinois and Indiana. He also worked as a project engineer and project manager, chief estimator and vice president of estimating for the company.

The Peru, Ind. native earned a bachelors degree from Purdue University in 1977.

He serves on the boards of directors for several local organizations and institutions, including  the Construction Industry Advisory board for Western Michigan University’s Civil Engineering Department, the Kalamazoo Regional Education Service Agency Foundation, Kalamazoo Communities in Schools, Kalamazoo Rotary Club and Associated General Contractors of Michigan.

Book on his nightstand?
“A Failure of Nerve: Leadership in the Age of the Quick Fix,” by Edwin Friedman.

Who gave you the best piece of life advice and what was it?
“It is difficult to identify one single ‘best piece of life advice’ because I have had many family members, teachers, pastors and others who have provided excellent advice and support. Furthermore, with every year that passes I learn new life lessons and get great advice. But, so far, one lesson taught by my family has been foundational for me: You have the potential to do anything that you want to do, and no matter what you do, always do it to the very best of your ability.”

What’s been your biggest professional success?
“Helping our company work through the recent recession while adding new business with new clients and improving our construction services.”

Tell us something about your company that would surprise people?

“We once had an office in Beverly Hills, Calif.”

What’s the biggest challenge your company faces?

“Complacency and lack of creativity.”

If you could have lunch with any famous person who would it be and why?

“Aside from the obvious Biblical figures, probably Abraham Lincoln because he seems to have been such a courageous and determined leader and because of his relatively unique leadership style.”

Papermaking Days Appear Over at Sappi's Muskegon Mill Site


If anyone in Muskegon was under the impression that someone would again be making paper at 2400 Lakeshore, Sappi Fine Paper North America seems to have ended those hopes.

The company says its will have a Sept. 29 auction of its papermaking machinery in Muskegon.

Sappi permanently closed its Muskegon mill in July 2009 and put the 119-acre site on Muskegon Lake up for sale with hopes of selling to a papermaker  who is not a competitor.

But, a year later, Sappi has hired LiquiTec Industries of Mequon, Wis., to sell its assets to the highest bidder at the public auction. The equipment for sale includes paper machine No. 4. Company officials said the remaining paper machine No. 5 already has been sold outside of the auction.

"It's disappointing," said Steve Keglovitz, a former Sappi worker and president of the plant's labor union, adding that former workers have been told that machine No. 5's new owner is taking it to Mexico. "I knew they were not doing anything that would keep papermaking in the plant."

As LiquiTec sells equipment in the company's wood yard, pulp mill, bleach plant, coating kitchen, finishing operation and laboratory, it seems that Sappi has not found a buyer for the entire paper mill.

Sappi spokeswoman Amy Olson said the company has no new information on the sale of its Muskegon mill. Sappi is a global papermaking company headquartered in Johannesburg, South Africa, with its North American headquarters in Boston.

Economic developers familiar with Sappi's attempts to sell its mill property say there are multiple parties interested in the company's Muskegon real estate. They indicate that the paper mill's large power plant is one of the most valued assets remaining because it can burn wood waste, a renewable fuel.

However, buyers are only interested in portions of the site, which has nearly a mile of shoreline on Muskegon Lake, the economic developers say. An environmental agreement between Sappi and any prospective buyer will be a major issue for the parties to resolve, they say.

Since closing last year, Sappi has come to a severance agreement with its former union -- United Steel Workers of America Local 1015. At the time it closed, the plant employed 190 union and salaried employees. Over the plant's 109-year history, it had employed as many as 1,200 workers.

The company also agreed to a property tax abatement settlement with the city of Muskegon. Sappi is paying local taxing units $1.25 million in back taxes and the city of Muskegon an additional $500,000 for an "economic development fund," the parties agreed in May. The company had 10 industrial tax abatements that were granted based on specific employment levels that are no longer being maintained.

"We certainly understand the need for Sappi to sell its assets within the property," Muskegon Mayor Steve Warmington said. "But the city continues to work with the company on a resolution of who will eventually purchase the land and how it will be used in the coming decades."

The community debate on what should happen with the Sappi property is ongoing.

Some believe, with 13.9 percent unemployment in Muskegon County, the site needs to continue to generate manufacturing jobs.

"We want to still create jobs out there," Keglovitz said. "We need to hold Sappi accountable for keeping the powerhouse. It could be the beginning of something new if energy companies are looking at it."

Others call for the cleanup of the century-old industrial site and redevelopment of the property into condominiums, a marina and water-based businesses.

Fastest Growing Car Brand in America? Buick

Advertising Age

While the focus at General Motors Co. in the last several months has been on the change to VP-Marketing Joel Ewanick, on re-shaping Chevrolet and Cadillac, and on the automaker's impending initial public offering, very quietly the Buick brand has become a driving force for the company.

A new design and a marketing shift to a younger audience have helped U.S. sales of Buick's Enclave, Regal and LaCrosse skyrocket since last year -- and even more so in China, where it is the No. 1 brand.

To steal a line from the classic Oldsmobile campaign, this is not your (grand)father's car any more.

Then again, that campaign didn't increase sales of Oldsmobiles that much, so it remains to be seen if the Buick surge can be sustained. But Mr. Ewanick is confident that the brand is back.

"Buick is just nothing but blue sky," he said. "It's the fastest-growing brand in America, and we're selling LaCrosse as fast as we can get them. It's a great success story."

After 25 years of a precipitous free-fall, GM sold 137% more Buicks in July of 2010 than it did in July of 2009. Through the first seven months of this year, sales are up 60% over the first seven months of last year. GM is on track to sell more than 148,000 Buicks this year, more than the 102,306 from last year and the 137,197 in 2008.

While any comparisons to such an abysmal 2009 are going to skew positive, it's still better than any other brand in the country. But how did that happen? How has the brand stuck -- fairly or unfairly -- with the tag of being a "senior citizen's car" turned its fortunes around?

"It's a change in design that appeals to younger people," says Charles Krome, writer and analyst for Autotropolis.com. "It's much more up to date and comparable to what's out there on the market. And GM is really making an effort to get past that whole 'grandfatherly' car thing with the marketing to younger customers."

Much was made of GM's decision last year to end its relationship with golfer Tiger Woods (prior to his much-publicized personal problems) and to stop sponsoring the Buick Open. The flailing economy was at fault, and also GM's subsequent need for a $50 billion government bailout, but in some respects it was a calculated move. Golf skews old.

Along with the design, the marketing is part and parcel. GM is positioning Buick as a luxury brand -- often comparing it to Lexus and Acura -- and reaching out to younger buyers while maintaining an Average Joe pricing structure. The average age of a Buick buyer has dropped from 64 to 61 in the past 18 months, according to autoguide.com. That's still high compared to the average mid-50s buyer for Lexus and Acura, but it shows Buick's commitment to marketing to a younger audience.

Including, obviously, social media. GM in June launched a website, momentoftruth.com. Created by digital agency Digitas, it invites comments about the 2011 Buick Regal -- good, bad or indifferent. One woman wrote, "Isn't Buick Regal just a car for Jersey-ites in their 80s?", while another wrote on Buick's Facebook page, "A definate [sic] American eyebrow raiser that says HMMMMM!!! I Love It!!"

The company has also hosted get-together parties in several cities and handed out Flip video cameras for attendees to record their thoughts on the car. The videos are then posted to the site.

"Straightforward advertising is what they had been doing, letting the car be the hero, talking about the features, letting people see the styling," Mr. Ewanick said. "What we need to do in quick order is to start to frame and define what that brand is going to stand for. We're working on that right now."

For traditional advertising, Leo Burnett handles Buick's brands, including the crossover Enclave. According to Cars.com, it was the re-designed, re-badged Enclave that began the Buick's resurgence in 2008. Noting that the automotive press and car junkies are less than enthused by the re-badging process -- which is basically taking one brand's grille and putting it on another model and re-naming the vehicle -- Cars.com said Buick went to great lengths to differ the Enclave from the GMC Acadia and Chevy Traverse, saying "that formula was, and remains, a sales success."

In a comparison between the 2010 Enclave, the 2010 Acura MDX 3.7 liter and the 2010 Lincoln MKT, Cars.com wrote, "The Enclave beats its competitors in many categories -- including some of the most important. It's not the quickest or most nimble, but it's more than competent. The most important features to the crossover buyer are roominess, comfort, efficiency and quality. The Enclave is one of the best models GM makes, and, in this comparison, the editors' choice."

Mr. Ewanick also credited Buick's dealer network for the sales increase, saying, "That dealer network is underestimated; it's one of the best there is. You give them good product, they can sell it. That's what they've been asking for for years. We are going to see design and marketing work together. I don't know why it's never been done like that before."

Ford, GM Brands Top Customer Satisfaction - Study

The Wall Street Journal

One year after chaos engulfed the U.S. auto industry, American consumers say cars built by Ford Motor Co. and General Motors Co. are the tops when it comes to vehicle satisfaction.

Ford's Lincoln-Mercury and GM's Buick brands took the No. 1 and No. 2 spots, respectively, in the American Customer Satisfaction Index released Tuesday. Lincoln-Mercury had an 89% customer satisfaction average while Buick was 88%.

This was the first time U.S. auto makers have held the two top spots in the survey. BMW, Cadillac and Mercedes-Benz all finished together with an 86% average.

"It was not long ago when Detroit's products were clustered at the bottom of the industry," said Claes Fornell, founder of the ACSI. "Although very few automakers improved this year, the domestic ones are either steady or have lost less in customer satisfaction compared to international competition."

The results are a boost to two of Detroit's Big Three auto makers. Both Ford and GM have endured their own challenges during the past year as consumer demand remains sluggish. GM took the hardest hit when it filed for bankruptcy last year. Ford is also planning to dissolve its Mercury brand by the end of the year.

Chrysler Group LLC. the smallest of the Detroit auto makers which also filed for bankruptcy and merged with Fiat SpA, didn't fare as well. Its Jeep brand finished in last place and its Dodge nameplate was second to last. The Chrysler brand finished 15th out of the 19 ranked brands.

Nissan Motor Co. showed the biggest customer improvement with a 5.1% improvement over the prior year.

"Although the near future looks promising for General Motors and Ford, at least in a competitive sense, the near term for the economy does not look bright," Fornell said. "Labor markets show no sign of improvement, financial markets are edgy and consumers are cautious at a time when more household spending would be desirable."

The survey breakdown has Lincoln-Mercury at 89%; Buick with 88%; BMW, Cadillac and Mercedes-Benz at 86%; Lexus with 85%; GMC, Honda and Toyota at 84% and Ford, Hyundai and Nissan at 82%.

Volkswagen had 81% followed with Chevrolet, Chrysler, Kia, Mazda with 80%. Dodge had 78% and Jeep was 77%.

ACSI's data are collected via phone interviews with respondents age 18 to 84. Each company's score represents an aggregate of 250 individual phone interviews. ACSI reports scores on a zero to 100 scale at the national level. It also produces indexes for 10 economic sectors, 45 industries, and more than 225 companies and federal or local government agencies

16 August 2010

Enbridge CEO Says Spills are an Inherent Risk of Oil Pipelines


In the mid-morning hours of July 26, Patrick Daniel, the president and CEO of Enbridge Inc., was in his Calgary office, preparing for a board of directors meeting the next day when Steve Wuori, a close colleague, walked into the room with unsettling news.

“He said, ‘We have a spill in Michigan,’” Daniel said, referring to Wuori, vice president for liquids and pipelines for Enbridge, “A lot of things started going through my mind. But the first was a great concern.”

In a 30-minute interview with the Kalamazoo Gazette on Saturday, Daniel, who has been at the helm of Enbridge for the past 10 years, spoke about his company’s response to the oil spill, whether  the BP disaster in the Gulf of Mexico brought more attention on his company than it would have if the gulf incident never happened and how this event — one of the largest oil spills in Midwest history — has changed him.

Details of the spill were few and far between on that Monday morning. What the company did know was that the river was running high due to heavy rain in the days prior to the spill.

“We knew that the extent of the spill would be larger than it otherwise might be,” Daniel said. “There was, again, a deep concern and a need to get there as quickly as possible with all of our resources.”

Daniel and Wuori raced home to grab field equipment and pack suitcases. The two then got on an Enbridge jet and arrived in Michigan on Monday evening. Driving on I-94 on his way to the spill site, Daniel could smell the crude oil that at that time was stretching bank to bank on the Kalamazoo River, making its way downstream from the Marshall area.

Daniel then took a brief tour of the spill site in Marshall Township. It was too dark to see the black crude. That would have to be left for the next day, the beginning of one of the most challenging stretches of his professional life.

'Deep concern'
At daybreak on July 27, he flew over the river, noting the volume of oil on the surface of the water. The company estimates that about 840,000 gallons spilled, but the federal government has pegged the amount at more than 1 million gallons.

Patrick Daniel

Age: 63

Hometown: Edmonton, Alberta

Position: President and chief executive officer of Calgary, Alberta-based Enbridge Inc., a job he’s held for 10 years.

Education: Bachelor of Science degree from University of Edmonton; master’s degree in chemical engineering from University of British Columbia; advanced management program at Harvard University.

Personal: Married with two sons.

Enbridge Inc.

    * Enbridge is one of the largest pipeline companies in the world, with 5,500 miles of liquid pipeline and 12,400 miles of natural gas pipeline in the United States. It’s also one of the largest corporations in Canada.

    * Last year, the company grossed nearly $1.6 billion in Canadian dollars.

    * The company expects to have $12 billion in new oil, natural gas and green energy projects online by next year.

“Deep concern is the only was I can describe it,” he said of his first look at the river.

In the days since then, the company has come under criticism from nearly all fronts.

U.S. Rep. Mark Schauer, D-Battle Creek, has opened a formal Congressional investigation into how the spill happened and if Enbridge was not adhering to pipeline safety and operational regulations. A hearing has been set for Sept. 15.

The U.S. Environmental Protection Agency took over emergency operations for the spill early on, citing Enbridge’s slow initial response. The agency has several times rejected the company’s long-term remediation and testing plans for the areas affected by the spill.

Documents from federal agencies charged with regulating pipelines surfaced revealing that regulators had called into question Enbridge’s pipeline integrity maintenance programs on its 6B pipeline, which runs from Griffith, Ind. to Sarnia, Ontario, and on which the ruptured section is located.

Journalists from around the state and nation descended on the area, peppering Daniel with questions at every opportunity and questioning if the company knew of the spill hours before it reported it. Two lawsuits could be filed against the company seeking millions of dollars in damages.

The oil spill killed fish, birds and small mammals. It coated riverbanks and floodplains in tar-like blackness. It made people who live close to the river wary about groundwater contamination, air pollution and reduced property values.

When asked if there would have been such an intense light shone on the company had the BP event had never taken place, Daniel said he doubted it.

“Probably not,” he said. “In the aftermath of BP there is a heightened level of public awareness. The one thing that will be the same is the level of follow-up, not only in the response to the spill but in the level of follow-up on pipeline integrity and remediation.”
Added Daniel, “We’ve always been in compliance with those (maintenance and monitoring) plans.”

Staying here
And he has tried to calm the anxieties of the people most affected by the spill.

After a recent public meeting in Battle Creek, he was surrounded by concerned area residents, calmly answering their questions as many more stood outside the circle, observing him as he spoke in slow, measured tones akin to his management style, which is “transparent and approachable,” he said.

Daniel hasn’t left the area since arriving, and stays in a motel room. He’s met with people almost daily at two community centers the company has opened in Battle Creek and Marshall, in their living rooms and on their front porches.

A few weeks ago, he announced that the company would purchase the homes of those had their houses for sale and live within 200 feet of the river who believed the spill had reduced their property values. So far, three homeowners have stepped forward.

The company has taken 800 claims from people who believe the spill negatively affected them, and will continue to take claims well into the future.

More than 1,000 Enbridge employees and contractors — as well as EPA workers — have contained the oil and began an aggressive cleanup that should last months.

“It may sound surprising, but I’ve been just amazed at how warm and friendly and understating everyone is considering the mess that we made,” Daniel said. “It’s been nothing but support.”

Still, Daniel said he feels no personal guilt for the spill.

“It was an accident,” he said.

He declined to say whether or not any Enbridge employees were or might be disciplined for the spill, citing an ongoing National Transportation Safety Board investigation into the cause of the spill. He was also mum on how much the company has spent so far on cleanup efforts and claims.

The last time Enbridge had a spill of the size in Marshall Township was in 1991, when 630,000 gallons of oil spilled from a pipeline near Grand Rapids, Minn. Daniel insists that Enbridge’s reputation in the pipeline industry has not taken a hit as a result of the July spill.

“Our reputation in terms of our response has been very much validated,” he said. “We are an honest, approachable and transparent company.”

Emotions run high
What has Daniel learned over the past several weeks from the people, the river and the inherent risks that are always there with pipeline operations, no matter how prepared a pipeline company is?

At the moment, no one personal take-away is lodged in his mind.

“It’s something I’ll have to reflect on as time passes,” he said.

But that’s not to say that he hasn’t been personally moved by the stories he’s heard about how the oil that spilled from his company’s pipeline has devastated areas and soiled cherished memories.

“Often the meetings started with anger, which is appropriate, and a lot of emotion,” he said. “Emotion that we have disrupted their lives and in some cases their landscapes. Maybe it was a favorite tree. Maybe it was a memory of the river and it being quiet, peaceful.”

If there is one thing that the people of the region have learned about the oil spill, it’s that there are pipelines beneath their communities, near their waterways and close to some of their homes.

That’s a reality that exists in the modern industrialized world, Daniel said, but not one he takes lightly.

“The value and importance of energy to society is so critical,” he said. “We all wish that we didn’t have to have pipelines. And we all wish that we didn’t have to experience accidents. We must remain vigilant.”

Daniel is an avid outdoorsman. He’s a hiker, a mountain climber and an avid fly fisherman, spending much of his time outdoors in the Canadian Rockies, near Calgary, and where he’s climbed several mountains.

He’s told people in the area affected by the spill that once he leaves and the river makes its comeback, he plans on returning to the area to share it with them in a way that it was meant to be enjoyed.

“I’ve told people I’d like to drop in a dry fly into the water and see what I can find,” he said. “I’d like to go fishing with them.”

'Touchback' Continues Hollywood's Economic Boost to West Michigan


 'Touchback' is being filmed at the high school football field in Coopersville, Michigan
From caterers to port-a-potty companies, crane operators to grocery store directors, area businesses say film productions are pumping money into the local economy and keeping them busy.

The Family Fare grocery store in Coopersville, 1181 W. Randall St., was raided Tuesday by "Touchback" production members filming scenes at the area high school football stadium.

"They wiped us out of all the ice," store director Mike Farrell said.

In one day, the production team spent a couple thousand dollars on ice, fruit, vegetables and refreshments, Farrell said. The store even had to go to  its Allendale affiliate to replenish its stock of mini-Gatorade bottles.

Producer Lisa Kearns said the production will spend millions in the area on everything from gasoline and hotel rooms to restaurants and entertainment.

"This becomes your home (while filming)," Kearns said, adding the area and its residents have been "fabulous."

These temporary residents are hiring, too.

Around 75 percent of "Touchback" hires were local or in-state, Kearns said.

The state film industry put 8,000 people to work in 2009, said Rick Hert, commissioner of the West Michigan Film Office, and he expects that figure to grow this year.
Related content
• More coverage of 'Touchback' filming in Coopersville

Hundreds are being employed in Grand Rapids, many of whom would otherwise be collecting unemployment, Hert said.

"We're building an industry, really from scratch," he said. "We've got enough going on that people are remaining active."

Count Ed de Jong in that group. The Grand Rapids camera and crane operator has worked on a handful of movies and is pulling 12-hour days on the "Touchback" set, shooting interviews for the DVD bonus features.

His 27-foot camera crane, which he says is the region's longest, is being used to film a major scene in the film.

De Jong defends the tax incentives worth up to 42 percent of a film's production costs, which critics claim are too generous and mainly create temporary jobs.

"The economic value to the state is hard to measure, but it's huge," de Jong said. "Do you want a percentage of $400 million in production expenses, or nothing?"

The industry has a substantial ripple effect on other sectors of the local economy, said Ken Droz, Michigan Film Office communications consultant.

"Businesses are benefiting," he said.

Michigan's budding film industry has "definitely helped" Plummer's Disposal Service, said president Nick Plummer.

By the numbers

Nearly $400 million: Filming expenditures in-state since tax incentives began in April 2008

69 million: Estimated tax credit program costs to state for projects completed in 2009, not counting infrastructure tax credits

8,000: Michigan film industry jobs in 2009

Sources: Michigan Film Office, Associated Press

The Byron Center business is providing portable bathrooms for both "Touchback" and "30 Minutes or Less," filming in Grand Rapids. It also worked on a couple of Curtis "50 Cent" Jackson's productions here.

"It's been really good for us," Plummer said.

When "30 Minutes or Less" hits the silver screen, area moviegoers may recognize the Brass Works Building, 648 Monroe Ave. NW, in the backdrop of the Ben Stiller-produced movie. Scenes were filmed on the roof and in hallways and a tenant's office last week.

The business center's owners, CWD Real Estate, were paid a fee for its use. Nick Koster, vice president of operations, declined to reveal the amount, but said it was an opportunity to earn revenue and generate buzz for the site.

"You want to have your building known and noticed," Koster said.

The tax rebate got Kearns' attention, but West Michigan's skilled, growing crew base has her considering the area for more productions.

"It keeps us coming back," Kearns said.

14 August 2010

GM Board Said to Press Whitacre to Go or Stay Years to Aid IPO


General Motors Co.’s board and bankers pressed Chief Executive Officer Ed Whitacre to either leave the automaker or commit to stay for years more to help them sell investors on the company’s initial public offering, three people with direct knowledge of the talks said.

Whitacre didn’t want to remain for an extended period and agreed to let director Daniel Akerson, 61, take his place, said the people, who asked not to be identified because the discussions were private. Akerson will succeed Whitacre as CEO on Sept. 1 and as chairman at the end of the year.

“Whitacre is 68 and sooner or later you would have to address that in the road show for the IPO,” said Joe Phillippi, principal of AutoTrends Inc., a consulting firm in Short Hills, New Jersey. “Investors would ask, ‘What’s the succession plan?’”

Selim Bingol, a GM spokesman, declined to comment.

Akerson, a managing director of the Carlyle Group, will give GM a longer-term executive to lead the company as it works to free itself from the U.S. government’s 61 percent ownership after last year’s $50 billion taxpayer bailout. The company is seeking to raise $12 billion to $16 billion this year in an initial public offering, said a person familiar with the plan.

GM’s underwriting banks and the U.S. Treasury raised the issue of Whitacre’s departure plans at one of the first IPO due- diligence meetings in Detroit in late June, said two of the people familiar with the talks.

IPO Meetings

Among the first questions the bankers asked Whitacre were how long he’d stay and what transition plan was in place, said the two people. Whitacre told them he didn’t know how long he planned to remain CEO, said the people, who had direct knowledge of the discussions.

Whitacre also avoided answering the question when asked by bankers at JPMorgan Chase & Co. and Morgan Stanley, which are leading the offering, in subsequent IPO meetings held through July, said the people.

Whitacre told the board at a meeting last week that he only planned to stay through the end of the year and didn’t want to remain chairman after that time, the people said. The board selected Akerson because there wasn’t time for an outside search, the people said.

The final decision to appoint Akerson to both positions was made Aug. 10, and the Treasury was informed the same day, said one of the people. GM may say Akerson will stay on at least three years, the people said.

One of his key jobs will be to groom a successor and build a strong management team, said two other people familiar with the matter. Chief Financial Officer Chris Liddell, 52, and North America President Mark Reuss, 46, are both viewed as potential CEOs, those people said.

No ‘Long-Timer’

Whitacre declined to comment when asked by reporters about the length of his tenure during an industry conference on Aug. 5 in Traverse City, Michigan.

“I think everybody knows at my age I’m not a real long- timer,” he said. “But am I having a good time? Yes. Do I enjoy working with people? Yes? Do they like me? Most of them, I think.”

Jeffrey Sonnenfeld, associate dean of the Yale School of Management and head of the Chief Executive Leadership Institute, questioned GM’s explanation for the departure.

“This is not a planned succession as it’s being spun,” he said. “This is not the way it’s done with an IPO. The IPO should be delayed until GM gives the full story behind the leadership change.”

Akerson has been on GM’s board since July 2009 and previously served as chairman and CEO of XO Communications, Nextel Communications and General Instrument Corp. He currently is on the board of American Express Co.

‘Public Service’

Whitacre, known for building AT&T Inc. into the biggest U.S. provider of telephone service, had described steering the nation’s largest automaker after bankruptcy as a “public service.”

“Ed’s vision of simplifying the business, of giving people the authority and accountability to do their jobs and keeping them focused on designing, building and selling the world’s best vehicles has served a new GM extremely well,” Akerson said yesterday on a conference call.

GM reported second-quarter net income of $1.54 billion yesterday as vehicle sales and production increased. Profit rose 44 percent from $1.07 billion in the first three months of the year. Revenue increased 44 percent from a year ago to $33.2 billion on growing sales of the Buick Excelle in China and Chevrolet Equinox in the U.S., the company said yesterday in a statement.

‘Right Track’

“Results like these make it clear that the new GM is on the right track with good momentum behind us and a bright future ahead of us,” Whitacre said yesterday. “And also it gives me a lot of confidence to begin transitioning in new leadership at General Motors.”

Whitacre said GM’s board had been aware that he planned to leave after turning the company around and that he has accomplished what he set out to do.

GM probably will file an IPO registration statement with the U.S. Securities and Exchange Commission today or possibly on Aug. 16, said a person familiar with the plan who asked not to be named because the discussions are private.

GM’s IPO would be the second-largest in U.S. history, behind Visa Inc.’s $19.7 billion initial offering in March 2008. The automaker aims to sell a fifth of the Treasury’s stake, reducing the U.S. to a minority owner, two people familiar with the plan said in June.

13 August 2010

'Boss is back': Ford Mustang Boss 302 unveiled for 2012

USA Today

It didn't take Ford long to come up with the first special edition of its powerful new Mustangs. Today it announced the Boss 302, as throwback to the original of 1968.

The Boss 302 will be a 2012 model, the first one so far unveiled by the Blue Oval. It will be priced somewhere between a Mustang GT and Mustang GT 500 when it goes on sale next spring, says Ford Vice President Jim Farley.

To show off the new Boss, Ford bused a bunch of reporters covering the Pebble Beach Concours d'Elegance and the other car events around Monterey, Calif., today over to the Mazda Laguna Seca raceway to give them an unveiling and demo. Ford Honchos Mark Fields and Jim Farley roared in and in the third Boss 302 -- Parnelli Jones, who set racing records with the original car 40 years ago.

"The Boss is back," Fields said. "We developed this vehicle to live up to the original."

For power -- and that's really what this is all about -- a Ford team tinkered with the 412 horsepower 5-liter V-8 from the 2011 Mustang GT:

By adding more intake, revising camshafts and tuning the twin independent variable camshaft timing, Ford was about to coax out 440 horsepower and 380 lb.-ft. of torque. Yet it says the Boss offers a smooth idle and low-end torque for comfortable around-town driving.

"The decision to build a modern Boss was not entered into lightly," said Derrick Kuzak, a Ford group vice president. "The entire team at Ford felt the time was right and with the right ingredients, the world-class 2011 Mustang could support a successful, race-bred, worthy successor to the original Boss 302. For us that meant a production Mustang that could top one of the world's best – the 2010 BMW M3 – in lap times at Laguna Seca. We met our expectations."

The new Mustang has a race-inspired clutch with upgraded friction materials transmits power, and a short-throw, close-ratio six-speed manual transmission.

To set Boss apart looks-wise, each car will have either a black or white roof panel, coordinated to the color of a side stripe. The Boss will come in Competition Orange, Performance White, Kona Blue Metallic, Yellow Blaze Tri-Coat Metallic and Race Red.

Other differences, Ford says, are aimed at reducing drag:
Up front, a unique fascia and grille are highlighted by the blocked-off fog lamp openings and aggressive lower splitter, a version of the design used – and proven – on the Boss 302R race car. The front splitter is designed to function at high speeds by efficiently managing the air under and around the car. It helps to reduce underbody drag and front end lift while more effectively forcing air through the Boss-specific cooling system. At the rear of the car, the spoiler was chosen to complement the front aero treatment and minimize overall drag.

    As if it weren't exclusive enough, Ford plans to offer some Boss 302 Laguna Seca editions. An edition of an edition. whew.

New GM Chief Akerson Known as a Pragmatic Leader‏


For the last year, General Motors has been under the leadership of a former telecommunications executive with no tolerance for indecision or distractions, Edward E. Whitacre Jr.

In that regard, much will feel familiar when he is succeeded next month by Daniel F. Akerson, who was making a name for himself at MCI and Nextel as Mr. Whitacre was building the empire that became AT&T.

Having held top jobs at a string of companies and more recently working for a buyout fund with a mandate to spot opportunities, Mr. Akerson has a knack for parachuting in, surveying the landscape and making operational and financial changes.

He joined the automaker’s board just over a year ago as a representative of the government and remains largely unknown within the company. An outsider, he has bristled at what he considered some of the ineffective ways of the old G.M., say people close to the board.

Mr. Akerson said Thursday that he and Mr. Whitacre “share a common vision” for G.M. and that the automaker was headed in the right direction as it reported its largest quarterly profit in six years.

As the fourth chief executive for G.M. in less than two years, Mr. Akerson will need first to sell investors on the slimmed-down company’s potential and then eliminate the government’s 61 percent ownership stake. G.M. is expected to file soon for an initial public offering that could be one of the biggest in history, after its quick bankruptcy sponsored by the government last year.

“Akerson is first rate in understanding finance, but he also is an operating guy,” said Howard Anderson, who has followed the telecommunications industry since founding the Yankee Group, a research firm, in 1970.

Mr. Anderson, now a professor at the Massachusetts Institute of Technology’s Sloan School of Management, named for one of G.M.’s founders, said he expected Mr. Akerson to put more fight into G.M., which for decades has watched smaller, aggressive companies steal its market share and profits.

“The world is divided into defenders and attackers, and G.M. has been a defender,” Mr. Anderson said. “Akerson has run attackers. He is going to essentially turn General Motors into a next-generation attacker.”

Those who know Mr. Akerson say he was driven by the challenge, perhaps one of the biggest in the business world today, and the desire to do something that would help the American government.

“He thinks this is very much in the national interest,” said Kenneth I. Chenault, the chief executive of American Express, where Mr. Akerson has served as a director for 15 years.

Mr. Chenault described Mr. Akerson as a quick study with strong strategic skills and a “fierce competitive drive.”

“What you have in Dan is an outstanding leader who is just relentlessly focused on driving results,” Mr. Chenault said. “He’s willing to go against conventional wisdom, and I think that’s something that the automotive industry needs.”

Mr. Akerson, 61, is now the head of the Carlyle Group’s global buyout business, the largest of the investment firm’s four divisions.

He is one of several G.M. directors, along with Mr. Whitacre and David Bonderman, another top private equity executive, who were often critical of old G.M. practices and urged faster, more sweeping changes in management and business practices, according to people briefed on the matter who were not authorized to discuss the board’s deliberations.

“Since joining the G.M. board, my admiration for this company and my appreciation for this industry have grown tremendously,” Mr. Akerson said Thursday in a conference call. “We still have important work ahead of us, but I am confident that we are building the foundation for G.M.’s long-term success.”

Before joining Carlyle in 2003, Mr. Akerson held various top jobs in the telecommunications industry. He was chief executive of Nextel Communications and the chairman and chief executive of XO Communications, where he supervised a bankruptcy and turnaround. Earlier, at MCI, he oversaw the creation of marketing efforts such as the “Friends and Family” calling plan and 1-800-COLLECT.

He also briefly worked at the buyout firm Forstmann Little, and during his stint there served as the chief executive of General Instruments.

A graduate of the United States Naval Academy and the London School of Economics, Mr. Akerson was recruited to Carlyle by one of the firm’s founders, William E. Conway Jr., who also worked as a senior executive at MCI.

Mr. Akerson began at the buyout shop as a senior adviser to the firm’s portfolio companies, as it began to bring in high-level executives with operating expertise. He soon became the co-head of the firm’s American buyout operations, and he rose to global head of the buyout business in July 2009.

“Dan Akerson is one of the most exceptional executives in the country and will serve both G.M.’s interests and our national interest well,” Mr. Conway said in an e-mail. “He has played an incredibly valuable role at Carlyle. We will miss him.”

The Washington Post, in a 2000 profile of Mr. Akerson, relayed a story about his once being so impatient with doctors who were treating his gall bladder at a German hospital that he removed the tubes from his arm, checked out and flew back home to the United States.

12 August 2010

GM's Whitacre Steps Down as CEO


General Motors Co. Chief Executive Officer Ed Whitacre, who led the largest U.S. automaker from bankruptcy to two straight profitable quarters, will step down as CEO on Sept. 1 and be replaced by director Dan Akerson.

Akerson, 61, also will take over the 68-year-old Whitacre’s role as chairman at the end of the year, Detroit-based GM said today. The 6-foot-4-inch Texan nicknamed “Big Ed” joined the automaker in July 2009, the month it emerged from bankruptcy, and replaced Fritz Henderson as CEO in December.

Akerson, a managing director of the Carlyle Group, will take over GM as it works toward freeing itself from the U.S. government’s 61 percent ownership after last year’s $50 billion taxpayer bailout. The company is seeking to raise $12 billion to $16 billion this year in an initial public offering, said a person familiar with the plan.

“Dan Akerson is a very good person to take the company through the IPO,” Rebecca Lindland, an analyst at IHS Automotive, said on Bloomberg television. “While he hasn’t led a traditional manufacturing company before, he certainly has the credentials to lead any company going through changes in its financial structure.”

Whitacre, known for building AT&T Inc. into the biggest U.S. provider of telephone service, had described steering the nation’s largest automaker after bankruptcy as “a public service.”

“Ed and I share a common vision,” Akerson said today on a conference call.

Second-Quarter Profit

GM today reported second-quarter net income of $1.54 billion as vehicle sales and production increased. Profit rose 44 percent from $1.07 billion in the first three months of the year. Revenue increased 44 percent from a year ago to $33.2 billion on growing sales of the Buick Excelle in China and Chevrolet Equinox in the U.S., the company said today in a statement.

“Results like these make it clear that the new GM is on the right track with good momentum behind us and a bright future ahead of us,” Whitacre said. “And also it gives me a lot of confidence to begin transitioning in new leadership at General Motors.”

GM’s IPO would be the second-largest in U.S. history, behind Visa Inc.’s $19.7 billion initial offering in March 2008. The company aims to sell a fifth of the Treasury’s stake, reducing the U.S. to a minority owner, two people familiar with the plan said in June.

Credit Line

GM also has obtained a $5 billion revolving line of credit from a group of at least 15 banks as of last night New York time, said the person. More than half are named in the draft of the document as underwriters, including Morgan Stanley, JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Credit Suisse Group AG.

The automaker last month agreed to buy subprime lender AmeriCredit Corp. for $3.5 billion to help it reach more customers with leases and loans to borrowers with faulty credit records. Whitacre had wanted to buy or start a lending arm before a fourth-quarter initial public offering, people familiar with the matter said in May.

Akerson has “been involved in every decision that has been made,” said Joe Phillippi, principal of AutoTrends Inc., a consulting firm in Short Hills, New Jersey. “You can say the management moves at GM are as much his as Ed Whitacre’s.”

Akerson is unlikely to start changing GM’s management and is the “least disruptive” of the changes at the top of GM since March 2009, he said.