29 August 2012

Detroit-based Energy Drink Maker Investigated

by Peak Positions

Original Article appeared in Bloomberg News

The New York attorney general investigating three energy-drink makers including Detroit-based 5-Hour Energy, over marketing practices. 

Attorney General Eric Schneiderman in July subpoenaed PepsiCo Inc., maker of the Amp energy drink, as well as Monster Beverage Corp. and Living Essentials LLC of Farmington Hills, said the person, who declined to be named because the person wasn't authorized to speak publicly about the probe.

The 5-Hour Energy brand dominates the energy shot sector of the market.

Schneiderman's office is investigating the companies' marketing practices and ingredient disclosures, including whether energy drinks are improperly marketed as dietary supplements, the person said. The companies also don't disclose the true amount of caffeine in the drinks, the person said.

A spokeswoman for 5-hour Energy, said the company had no additional comment beyond an earlier bond offering filing.

"We will appropriately disclose any new, material information," she said Tuesday.

The parent company of 5-Hour Energy is putting together a $400 million bond offering to help it expand its product line and explore strategic acquisitions, according to the July bond documents.

In March, Living Essentials founder and CEO Manoj Bhargava joined the Forbes magazine's worldwide billionaire's list.

20 August 2012

Russian Activists Sue Madonna

by Peak Positions

Original story posted by the Associated Press

Russian anti-gay activists are suing Madonna for millions, after claiming they were offended by her support for gay rights during an August 9th performance in St. Petersburg.

Anti-gay sentiment is strong in Russia. In St. Petersburg, a law passed in February makes it illegal to promote homosexuality to minors, and the author of that law has pointed to the presence of children as young as 12 at Madonna's concert earlier this month.

Russian news agencies quote an attorney representing the nine activists, as saying the suit was filed Friday against Madonna, the organizer of her concert, and the hall where it was held, asking for damages totaling 333 million rubles, or nearly $10.5 million.

Responding to criticism that the plaintiffs were stuck in the Middle Ages, the lawyer said they were using civilized, modern methods to defend their rights. "No one is burning anyone at the stake or carrying out an Inquisition," the attorney was quoted as saying. "Modern civilization requires tolerance and respect for different values."

The complaint includes a video taken at the concert showing Madonna stomping on an Orthodox cross and asking fans to raise their hands to show the pink armbands in support of gays and lesbians that were distributed among the audience, the new agency reported.

Madonna's spokeswoman did not immediately respond to emails asking for the singer's reaction to the lawsuit.

Madonna also has angered conservative Russians with her support for punk band, Pussy Riot. Three members of the band were sentenced Friday to two years in prison for a protest inside Moscow's main cathedral against Vladimir Putin and his cozy relationship with the Russian Orthodox Church.

Madonna called on those who support freedom to condemn the unjust punishment handed down to the band.

Millage Sought to Offset Decline in Property Taxes

by Peak Positions

Original article appeared in the Detroit News

Wayne County, like much of the state, has witnessed an exceptional decline in property taxes. Residents of the WC Community College District will be asked in November to approve a millage of 1 mill for 10 years to offset the decline.

The community college — which has an enrollment of about 72,000 students on five campuses — has lost more than $30 million over the last two and a half years. The Chancellor attributed the loss to the economy and property devaluations, foreclosures and residents leaving Detroit. Unlike state universities, community colleges depend primarily on property taxes for operating revenue, along with tuition.

"We won't survive without it," said the Chancellor. "We just don't have a choice. It's about sustainability."

The 1 mill would cost a homeowner of a $50,000 home about $25 annually.

If approved, the mill would raise $18 million for the college's $103.5 million budget.

The remaining $12 million lost will be made up "creatively," according to university officials.

One item on the table is possibly closing the community college's eastern campus on Conner Road near Interstate 94.

Earlier this year, WCCCD raised tuition by $10 per credit hour, from $89 to $99. The increase means that students taking a 12-credit load will pay about $120 more per semester, officials said.

WCCCD currently levies 2.2 mills on residents in 36 townships and cities in Wayne County. One of the mills is permanent; the 1.2 mills is a 10-year millage that expires in 2015. But the community college cannot wait to seek a renewal.

The Chancellor said he hopes voters will approve the additional mill, and he expects they will.

"People recognize the importance of what we do," he said.

But not everyone agrees.

"I believe in education and I believe people need to get training," said one member of the Wayne County Taxpayers Association. He went on to accuse the District of wasting and abusing taxpayer funds.  

Young Entrepreneurs at Disadvantage

by Peak Positions

Original article appeared in the Detroit News
Innovative businesses often face a variety of challenges starting out. This is the case in Michigan and around the country (stories and litigation are bubbling over, from Chicago's gourmet donut trucks to New Orleans' new-wave Latin American cuisine) in the form of mobile food vendors — often run by immigrants, young entrepreneurs and people forced out of bricks-and-mortar restaurants since the recession. Cities are scrambling to protect their profitable existing restaurants from "competition" through expensive licenses and location prohibitions on food trucks — leading to the sad, now-national case of a 13-year-old hot dog entrepreneur in Michigan.

In claustrophobic business environments, those who are creative will try and find ways to better their situation. In 13-year-old's case, he mowed lawns until he could afford to buy a hot dog cart. As his parents are both unemployed, his mother due to her epilepsy and his stepfather (who suffers from multiple sclerosis) due to recent layoffs, it was essential that the boy pitch in. After investigating permits and saving for equipment, Nathan was told on his first, proud day of business that despite the property owner permitting him to operate in his private parking lot, he was being shut down because he was violating the city's zoning ordinance.

The Holland mayor told the boy that the ordinance was to protect downtown restaurant owners, who asked that the "success of the downtown district not be infringed upon by those who don't share in the costs of maintaining the attractiveness of that space." The boy and his mother have moved into a homeless shelter due to depleted funds. His stepfather cannot join them due to his MS, which requires narcotic treatments not allowed in the shelter.

Repressing the human entrepreneurial spirit with restrictions and punishments provokes fear.

What will restaurants need protection from next? There's always popcorn in movie theaters, or vending machines, or even the restaurant next door. Michigan is not even the ideal environment for food truck vendors. Many of our cities are in financial decline and losing population. In the 2007 economic census, there were 16,781 restaurants and bars in Michigan, and just 48 "mobile food services."

Yet there are empty, cheap properties in our cities where restaurants can find it much better than they would find in many other states.

But rather than allow organic cooperation between citizens, we tolerate an environment where small business owners are beggars fighting for scraps.

It's as true now as it ever was. If de Tocqueville were still taught in public school history classes, perhaps we'd remember his warning: "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."

Try explaining that to a 13-year-old boy.

Future of Energy

Article originally appeared in Traverse City Record Eagle.
Energy, transportation, and packaging can be high costs for a business. As these costs continue to increase and uncertainty grows, it's important for businesses in our region to look at how to best utilize all available resources and options.
The Traverse City Area Chamber of Commerce works to be a convener to help identify best practices and opportunities. A recent example is DTE Energy's pursuit of a natural gas vehicle fueling station in Traverse City. To the Chamber, it made sense to see what other organizations could benefit from this opportunity, and how it could play a role in the Chamber's objective to keep more money flowing in the region versus exporting it elsewhere.
The Chamber commissioned a study with funding from DTE to look at two of the area's largest transportation providers: Traverse City Area Public Schools and Bay Area Transportation Authority. The  six-month process reviewed current costs for both TCAPS and BATA and compared those costs to best practices used by other agencies around the country. The recently released report found that 20 percent of transit fleets in the United States are using compressed natural gas (CNG) and that more than 2,800 school busses had already been converted to CNG in other districts.
The report looked out 10 years at costs of busses, fuel, infrastructure changes to maintenance facilities, and the cost for a fueling station. The report showed that after an initial capital outlay for the fueling station, both TCAPS and BATA will see savings on fuel costs. These savings will materially impact the daily expenses and services provided by both agencies.
Does conversion work? The Blue Water Transit operation in Michigan's thumb converted its fleet to CNG and saw immediate savings on fuel costs. In other areas around the state DTE has installed more than 16 fueling stations. It's using in excess of 200 CNG vehicles in its own fleet and working to provide fuel for fleets of other businesses.
What's next for developing a CNG station in northern Michigan? Both TCAPS and BATA need to work on a timetable and commitment to phasing in the purchase of CNG vehicles. The report showed that for best cost savings these purchases should be part of the regularly budgeted replacement of current vehicles.
The Chamber believes that there is opportunity in times of economic uncertainty. That means looking at all of the resources available. The Chamber and several of its community partners see the potential conversion of fleets to CNG as one step in the right direction. However, each organization realizes more needs to be done to ensure a reliable energy future. To that extent, the Chamber's collaborative energy policy continues to be relevant and — working with its partners — the Chamber will continue to seek ways to best utilize available resources and develop the region's energy future.

15 August 2012

Harsens Island Stunned as Owner of Only Ferry Service Announces Plans to Retire

Story first reported from freep.com

For the 1,200 full-time residents of Harsens Island, the car ferry run by Champions Auto Service is their only year-round link to the mainland.

They use it to get to work, travel to doctor appointments and go shopping. Children depend on it to get to school.

So residents of the island at the mouth of the St. Clair River were shocked Tuesday when news began to trickle out that Champions' owner wants to retire and shut down the ferry service.

David Byson didn't give the Michigan Public Service Commission a date for when he would end the ferry service.

"That's awful. We have to have a way to get across," said Adele Raska, a 25-year island resident. "Everybody has to go across, whether you want to or not. We have to go to shop, we have to go to doctors, we have to go for everything."

Although many residents have small boats and there is a tiny airstrip on the island, the ferry service is the only public transportation to the mainland, operating even in the midst of winter.

There is only a scattering of restaurants and small businesses on the 16-square-mile island, which is part of St. Clair County's Clay Township. The island's marshy interior is ringed by both year-round and vacation homes, with its population swelling to about 5,000 in the summer.

Byson, who couldn't be reached for comment Tuesday, notified the MPSC in a July 28 letter that he intends to retire.

On Tuesday, the MPSC announced it was launching an investigation into transportation to the island. The MPSC wants to ensure a smooth transition from the current service to whatever service may replace it, said spokeswoman Judy Palnau.

The commission gave Champions Ferry 120 days to submit a proposal for transportation to and from the island, Palnau said.

After that is submitted, the agency's staff will write a report with recommendations by March 1.

Even the township wasn't notified of Champions' intent until the MPSC posted its notice.

"It took us by surprise to us here at the township. We didn't know anything about it," said Clay Township Supervisor Tom Krueger. "The only information we have is on the MPSC website."

There have been threats to close the ferry in the past, Krueger said. Champions also sought a rate hike in May from the MPSC, but was denied.

Ambassador Bridge owner Manuel (Matty) Moroun has talked about building a bridge between the island and mainland, but Krueger said that idea seems to have died as Moroun fights to stop a second bridge to Canada.

"Even though he's a private business, I do believe he's an essential service, and I don't believe the MPSC would let him just shut down," Krueger said of the ferry service.

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13 August 2012

Wind Energy in Michigan 'On the Edge of a Cliff'

Story first reported from freep.com

With the auto industry on the verge of collapse in 2008, former Michigan Gov. Jennifer Granholm and other state officials were eager to diversify the economy and create thousands of jobs by making a big push into alternative energy.

To capitalize on the state's strengths, they focused in particular on the manufacturing of parts for wind turbines.

But four years later, the drive to grow a new sector built on clean energy has lost momentum with little to show, the victim of turbulent industry conditions, Washington politics and what some critics would call misguided government policies.

Several high-profile projects have encountered significant delays and have yet to launch full-scale production. They include a manufacturing plant for large wind turbines in Saginaw, a new foundry in Eaton Rapids to make iron parts for wind turbines and an innovative ethanol plant in the Upper Peninsula.

In late June, one of the state's major solar industry players, United Solar Ovonic, was liquidated.

Even some of the wind turbine parts suppliers that have successfully launched production have seen a sharp drop in orders because of uncertainty over whether a production tax credit that expires at the end of December will be renewed. Ventower Industries in Monroe started building giant wind turbine towers late last year in a new factory, but its business would be three times larger if the tax-credit situation was resolved, said Scott Viciana, the company's vice president.

"The wind industry is on the edge of a cliff," said Matt Kaplan, associate director of IHS Emerging Energy Research, a consulting firm in Cambridge, Mass. Although, wind turbine repair companies are doing well compared to manufacturing companies, because repair is less costly than replacement.

He and other experts predict that 2012 will be a record year for the installation of wind turbines as companies rush to take advantage of the tax credit before it ends. On the flip side, however, the number of installations could plummet to record lows next year, Kaplan said.

The tax credit isn't the only headwind facing wind turbine parts manufacturers. Just like in the solar industry, the wind industry has too much production capacity, which is driving turbine prices lower. That's good for the growth of wind energy but puts pricing pressure on turbine parts suppliers. Kaplan forecasts that the industry is on the verge of consolidation.

In Michigan, the alternative energy industry lost a key proponent when Granholm left office at the end of 2010. She tried to transform the state into a manufacturing hub for wind and other renewable-energy industries, providing millions in grants, tax credits and other incentives to entice companies to the state. A team of economic development officials worked to grow green jobs.

Today, Michigan has 35 wind-related manufacturing plants, according to the American Wind Energy Association. In 2010, the state had nearly 80,000 green jobs, which accounted for 2.1% of its total employment, a U.S. Bureau of Labor Statistics study found.

The growth of the alternative energy industry has always been dependent on government subsidies. Critics, such as the Mackinac Center in Midland, have long opposed this assistance, arguing that these business ventures should be based on market forces.

Under Gov. Rick Snyder, programs specifically designed to spur the growth of the alternative energy industry no longer exist. The state revamped its economic development strategy with the goal of treating all industries equally.

"We're doing what we can to help all industries in Michigan be competitive," said Steve Bakkal, director of the state's Energy Office. He contends that successful companies will be those that are supplying products for multiple industries, not just wind or solar.

But at the moment, several projects that are trying to break new ground in the alternative energy field have run into difficulties.

Two years ago, Northern Power Systems announced plans to manufacture large wind turbines, something that had never been done in the state. So far, the Vermont-based company has made and sold only two prototypes of its next-generation turbines to a wind farm in the Upper Peninsula.

The uncertainty over the future of the production tax credit has caused customers to delay placing new orders, said Douglas Prince, Northern Power's chief financial officer.

The company's leased facility in Saginaw is "kind of in standby mode right now," Prince said. "We're hopeful the market will recover."

In central Michigan, a plan to make iron parts, which are called castings, for wind turbines at a new foundry in Eaton Rapids has also been delayed. The foundry was supposed to open at the end of 2011, promising lower-cost and higher-quality castings. But it ran into management, financing and other problems.

Eaton Rapids Castings hopes to start production this fall but still needs to find additional investors, said Lennart Johansson, the company's CEO and one of its owners.

To offset the uncertainty in the wind business, the foundry plans to make castings for other industries. It has scaled back its initial production volumes.

To be sure, the outlook isn't completely bleak. A few ventures are making progress, most notably Energetx Composites in Holland. The company, which has nearly 80 employees, won an order to build more than 200 large wind turbine blades for a customer it cannot name, said David Slikkers, Energetx's chairman.

He and other family members saw blade manufacturing as a natural fit because they have been building boats for decades as the owners of S2 Yachts. "We have been composite fabricators for 50 years," Slikkers said.

And near the Port of Monroe, Ventower expects to have built 15 towers for large wind turbines by this fall. It occupies a new factory on a former industrial landfill and has hired 53 employees. But the industry slowdown caused by the tax credit situation is holding back its growth.

"I would have orders booked through the bulk of next year if the tax credit was not an issue," Viciana said.

More Details: Hitting a Green Wall

Here are some of the high-profile alternative-energy business ventures in the state that have shut down or run into significant delays:

* Northern Power Systems' large wind turbine plant: The Saginaw plant has yet to launch production and is operating with a skeleton crew.

* Eaton Rapids Castings: Foundry to make iron parts for large wind turbines in Eaton Rapids has been delayed. It is still trying to get financing.

* United Solar Ovonic: The maker of solar roofing materials filed for bankruptcy in February and sold its assets at the end of June.

* Mascoma's cellulosic ethanol plant near Kinross in the Upper Peninsula: Groundbreaking was supposed to occur this summer. The company says construction will start at year's end after engineering design work is completed, contracts are awarded and financing is finalized.

* Astraeus Wind Energy: In 2010, company announced plans to make spar caps for wind turbine blades in Port Huron. It is still in the testing phase.

* Danotek Motion Technologies: Was supposed to start making generators for large wind turbines last year. The company says production will begin this fall in Canton. It has 28 employees, down from 45 at the end of 2010.

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08 August 2012

Lodge Owners Weight Choices After Devastating U.P. Wildfire

Story first reported from detnews.com

Luce County— The foundations of what used to be the Rainbow Lodge are still there, but little else remains. Even its cement walls have been burned so badly in the Duck Lake wildfire that they can't be reused.

Six weeks after emergency crews contained the blaze — a fire which consumed nearly 50 structures — owners Richard and Kathy Robinson are facing a major decision about whether to rebuild this place, a small tourist outpost near the shore of Lake Superior for 40 years.

"We're going to have to keep cleaning up and see what happens," Richard Robinson said while walking through the debris that used to be his home, his lodges and his cafe.

Following a three-week wildfire that spent late May and half of June rolling through 21,000 acres of land in northern Luce County, the wildlife and people who call this area home are moving forward. For nature, there are no decisions to be made — it does what it does.

But for the human residents and property owners in this part of the Upper Peninsula, there are tough calls ahead. The fire caused more than $4 million in damage.

Michigan's Department of Natural Resources already has made some choices, opting to sell off roughly 10,000 acres of fire-damaged timber to private harvesters to the tune of $515,855.

Those were easier choices than what to do with the thousands of burned, naked and remaining dead trees that have no value as a fuel source, building materials or paper.

"Those trees will stand probably five to 10 years or so before they come down," said Paul Gaberdiel, a DNR forest fire supervisor based in Newberry, as he drove past acres of charred landscape last week.

"There is a seed bank just laying in the soil there — seeds that have been dropped in the past that are just waiting for their chance to grow."

Other areas that have been clear-cut within the last decade or so may need some help. In these areas, trees had not reached cone-bearing age and may require reseeding or a process called scarification, which seeks to stir up damaged soil to expose its minerals.

"Our forestry staff has been on the ground since the later stages of the fire assessing reforestation needs, some of which won't become clear until probably next spring," said Don Johnson, a DNR fire management specialist.

And there is always the next fire to worry about. Johnson said there are indications parts of the state will see below-average rainfall in August and as much as a 50 percent chance of above normal temperatures across Michigan.

"This means the current drought is unlikely to ease much in the foreseeable future," he said. "It also means we are anticipating a fall fire season, which we do not always have."

Loss of lodge affects many

Residents such as the Robinsons are the other part of the human equation up here. In a sparsely populated area, the loss of a cornerstone business such as their Rainbow Lodge can have an impact on many people.

"They used to say 'All roads lead to the Rainbow,'" Kathy Robinson said.

The business served as a launching point for many tourists interested in hiking, fishing and canoeing along the Two-Hearted River or boating in Lake Superior. In the winter months, the lodge's gas pump and the cafe's chili, hamburgers and pasties drew in the snowmobiling crowd.

Paradise resident Ben Musielak has been grooming the three-leg snowmobile trail — between his town, Grand Marais and Newberry — for more than a decade. With the potential loss of the gas pump located at the Rainbow Lodge, that trail may have to be moved.

"There is no fuel up there, so why run the snowmobilers through there anymore?" asked Musielak, 63.

And the loss is being felt beyond the local community. In the days before the fire, the Rainbow's Facebook page had 360 "likes," Robinson said. Today, there are 1,385.

Tecumseh resident Barbara Rymal is one of them. She has been traveling to Luce County for years and would like to see the Rainbow return. But she can understand why it might not.

"How many people are going to be camping in that area anymore?" she asked.

Some state forest campgrounds in the area — at Culhane Lake and Pike Lake — remain closed after the fires, but could reopen soon. The Mouth of the Two-Hearted River State Forest Campground reopened Friday after being shut down for a month and a half.

Jomay Bomber, a director of the Newberry Area Chamber of Commerce, said many of the local inns and motels weren't as devastated by the loss of business as the fires drew a large influx of emergency workers to the area in the early part of the summer.

"But we have people who own vacation cabins up here, or family cabins handed down through the years, that burned down," she said. "And many of those did not have insurance."

All of the area's main tourist attractions, including Tahquamenon Falls and the Culhane Lake and Pike Lake campgrounds, are open.

The fire never came closer than four miles to the Tahquamenon Falls Brewery & Pub, but the business was forced to close for five-days and cost owner Lark Carlyle Ludlow $65,000 in revenues. Despite this, the dry conditions that created the setting for the Duck Lake fire are less worrisome to her than the pattern over the last few years that brought less snow than usual.

For businesses like hers and the Robinson's, fewer snowmobilers mean less money to be made.

"It's been an interesting time in the last few years," Ludlow said. "Economically, the area has really suffered. We need Mother Nature to be more cooperative with the snow."

Fire part of natural cycle

For nature, there are no decisions to be made. Fire is just part of the cycle out here. Residents in neighboring Schoolcraft County know it after seeing the largest fire in modern state history — more than three times the size of the Duck Lake — back in 1976.

Nature begins the regeneration process long before the flames are extinguished. The jack pines that make up so much of the fire-scorched acreage here start their regeneration when the heat of the flames melts resins coating their outside. Days later, when they've dried, they open and release their seedlings to the ground.

Even the white and red pines up here take calamities such as fire in stride. After seasons of great stress, such as drought conditions, fires and excessive temperatures, or diseases, the trees will generate more cones for regeneration the following year as a means of continuing the species in a location.

On the dirt and mud roads crossing the more than 20,000 acres in Luce County swallowed by the fire, more signs of nature starting its next cycle exist. New-growth ferns, a sharp green against the blackened soil, cover the forest floor. Elsewhere under the charred tree limbs, there are starts of new blueberry bushes, and in some areas, new oaks sprouting.

"It will happen, but it will happen slowly," said David Neumann, a silviculturist with DNR's Forest, Mineral and Fire Management Division. "You won't see forests of the same character there for potentially 30 or 40 years."

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Back to School Spending to Average $688 Per Child

Story first reported from detnews.com

Despite long-term spending cutbacks, Metro Detroit retailers say families are picking up handfuls of snazzy notebooks, preppy sweater vests and trendy messenger bags as they prepare to send their children back to school.

Parents who have held the line on back-to-school spending in recent years are relaxing those reins a bit, experts say, which may mean more willingness to invest in computers, clothing and shoes for K-12 children.

"It's an opportunity for some folks to loosen up and to do some shopping they might not otherwise do," said Ted Vaughan, partner with consulting firm BDO USA LLP's Retail and Consumer Products practice in Dallas.

This year's trends include "Angry Birds" folders and geometric designs and patterns for the elementary set. Tweens are targeted with brightly colored shirts and skirts. And teens are going for the clean-cut, "One Direction" boy-band-inspired togs and gear.

After holding back for some time, families are finding last year's backpacks and other leftover gear are just too worn out for another go-around, according to the National Retail Federation, an industry trade group. Its marketing survey group estimates that parents with children in grades K-12 will spend an average of $688 to outfit students, up 14 percent from $603 in 2011.

But the retail group anticipates and experts agree that parents will expect contributions from older children, especially if they want the latest and greatest in terms of new products.

"Students appear to be contributing more to the overall family get-ready-for-school budget, given increased demand among students driven by Internet advertising and social media," said Mark Davidoff, Michigan managing partner for Deloitte LLP.

"This level of demand, which includes a desire to use the latest technology such as smartphones and tablets in their studies, is a level of demand that parents don't want to or can't satisfy on their own."

Retailers from department stores to office-supply chains to off-price discounters depend on back-to-school shopping from July through September to bolster their balance sheets. Spending this year for children ages 6 to 17 is expected to top $30.3 billion, according to the National Retail Federation.

Sales are predicted to improve nationally, in part because of a surge in school enrollment. But Michigan's declining school enrollment and aging population probably will mean less for southeast Michigan stores, Metro Detroit demographer Kurt Metzger said.

It also means retailers such as Connie's Children's Shop in St. Clair Shores have to do more to counter the trend, mostly with coupons and other in-store and online incentives to draw people through their doors.

Early birds flocked to Connie's, known for its apparel, shoes and accessories, said owner Denise Kort. The store experienced a sales jump in June, Kort said, mostly because she offered customers a 20 percent coupon and discounts on school uniforms. In late July, she sent out another coupon worth $10 off a $50 purchase encouraging people to "jump-start your back-to-school shopping."

"I wait all year long for August," said Kort, the second-generation store owner. "They tend to browse in June and July, surveying what they might need and setting a budget. Then they come back in August to buy the essentials."

Department stores have made inroads in the back-to-school season, according to the National Retail Federation.

"We see shoppers coming here and starting their school and seasonal shopping," said Phil Whitsel, spokesman for Birch Run Premium Outlets near Flint.

"Shoppers continue to be value-oriented, so the outlets continue to grow in popularity and serve local shoppers -- those who travel within a 45 to 60 mile radius to go seasonal shopping -- as well as many Canadian visitors."

Due to an increase in demand, Gorman's Home Furnishing and Interior Design recently expanded its Home Office/Small Office shop to include brand names such as Jesper, Hooker and Sligh Desk.

"Sales of desks, both for students and the home and small office, pick up as we near the fall season," said Gorman's President Tom Lias.

Although the weak economic growth has changed the way people spend, parents view going back to school as an investment, said Melinda Crump, a spokeswoman for financial information company Sageworks Inc. Stores offering even small discounts will attract frugal consumers looking for a bargain.

Retailers and shopping-center owners are coming up with new ideas and online tools that help students find the "right" looks for them. As a result, chains emphasizing new lines that help create one-of-a-kind outfits are pulling students into their stores.

"Girls are dressing up more and the guys are into tailored looks," said Linda McIntosh, corporate director of communications and marketing for the Somerset Collection, the high-end shopping destination in Troy.

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01 August 2012

GM, Ford Sales Fall, Chrysler is Up

Story first reported from USA Today

General Motors kicked off the second half of the sales year with a whimper, reporting a 6% decline in sales in July compared to a year ago. GM blamed lower sales to rental fleets.

But there was some good news. GM says its Cadillac unit saw 21% higher sales due to the popularity of its CTS, Escalade, SRX and the new XTS.

"Cadillac hit a home run and our newest Chevrolets and Buicks are performing very well," said Kurt McNeil, vice president in charge of U.S. sales in a statement. "Signs of a housing recovery and good news on consumer confidence and household income should help keep the light vehicle selling rate in the 14-million range and drive seasonally higher truck sales as we move toward fall."

GM says that it's sales of 201,237 vehicles reflected a 3% decline in sales to individual customers in showrooms and a 41% dropoff in sales to rental car fleets. Automakers generally frown upon rental-car fleet sales as low-profit arrangements.

GM touted other bright spots, too. Buick Verano sales have increased every month since the compact was launched in December. Sales of the small Chevrolet Sonic were strongest since its introduction, no small feat given lower gas prices. The even smaller Spark just went on sale.

Ford Motor

Ford's sales slumped 4% in July and like GM, it blames lower sales to rental and corporate fleets.

But there was good news in the showrooms: Ford's U.S. retail sales increased 2% in July versus year-ago levels, driven by strong retail customer demand for fuel-efficient vehicles.

Ford's Fusion midsize sedan, which is due to be replaced soon by an updated model, exceeded its best-ever July sales record last month. Just in time for summer fun, Mustang sales rose 8%.

The Explorer crossover SUV had its best sales month since 2006. And the big F-Series pickups had their 12th straight month of sales increases.

Turbocharged EcoBoost-equipped F-150s made up 42% of retail sales mix in July.

Chrysler Group

Chrysler Group sales rose 13% in July compared to the same month in the previous year, which the automaker says was its best performance for the month since 2007.

Rebounding Chrysler says it saw gains in each of its divisions --Chrysler, Jeep, Dodge, Ram Truck, and Fiat. It was the 28th straight month of gains.

"We again demonstrated our disciplined and methodical approach to growing sales and profits," said Reid Bigland, CEO of the Dodge brand and head of U.S. sales.

The gain was driven in part by two models that set sales records July: the Chrysler 200 mid-size sedan and the Dodge Journey full-size crossover. Sales of the award-winning Journey were up 69%. In a good sign for the U.S. economy, Ram pickup sales gained 17%. Pickup-truck sales are often a sign that construction is rebounding.

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