25 June 2013

Story Originally Appeared in the Los Angeles Times

Discount supermarket chain Aldi USA is headed for Southern California, but unlike most of its competitors, it's skipping Los Angeles and aiming for the Inland Empire.

The company, which runs more than 1,200 stores in 32 states from the Midwest to the East Coast, is planning a $55-million Moreno Valley complex that will serve as its regional headquarters and distribution center, according to city documents. The operation is expected to create several hundred jobs.

The site probably will serve as Aldi's launchpad for its "expansion into California and the Southwest," according to a report this month from John C. Terell, Moreno Valley's interim community and economic development director.

In a statement Monday, Aldi confirmed that it is "in the initial stages of discussions to potentially locate a warehouse" in the city. Aldi, which is based in a Chicago suburb, revealed no other details about its plans.

Riverside County is appealing to the grocer, analysts said, because it has a greater concentration of the chain's target: low-income consumers.

"This is their market — they're looking for people who are strapped," BB&T Capital Markets analyst Andrew P. Wolf said. "The rents they're going to pay out there are going to be quite affordable."

Trader Joe's locations — which are run by another subsidiary of Aldi USA's umbrella company, Aldi International — are few and far between in Riverside County.

The financial considerations figure to be even more favorable given incentives included in a deal Aldi hammered out with Moreno Valley officials, according to a memorandum of understanding signed last week by Paul Piorkowski, regional vice president of Aldi International's California branch, and Tom Owings, the city's mayor.

The arrangement calls for an expedited amendment to the existing plan for the Westridge Commerce Center plot, along with an ombudsman assigned to Aldi to help guide the company through the development process. Review fees charged by the city would be capped at $5,000, according to the document.

Officials also expect Aldi to qualify for a yet-to-be-launched program offering large industrial clients a 20% discount off current utility rates, according to the memorandum.

The company's facilities will total 935,000 square feet and will include at least 200,000 square feet of refrigeration and a 24-hour warehouse situated between Eucalyptus Avenue and the 60 Freeway, according to officials.

Aldi is looking to invest at least $55 million in the project, which would create 200 new jobs, according to the memorandum. Terell said in his report that Aldi would also create several hundred additional jobs while running its delivery and contract operations.

Riverside County's unemployment rate is at 9.2%, compared with the 8.1% level statewide.

The chain's plans, which were first reported by Riverside newspaper the Press-Enterprise, probably will be reviewed by the City Council and the Planning Department, according to the memorandum.

"The company is anticipated to provide substantial economic benefits to the city and community through tax revenues and local expenditures by employees and corporate contracts," Terell wrote in his report. "As a regional headquarters, the company would also provide the city greater exposure far beyond the city limits."

Aldi, which said in its statement that it "is further developing its plans to expand to Southern California," has added an average of 80 new stores annually over the last few years.

Moreno Valley has many demographic advantages for Aldi, Wolf said.

More than 18% of the city's population lives below the poverty line. Residents make a median household income of $56,768 annually, according to Census Bureau data. Statewide, 14.4% of residents live in poverty. Californian households earn a median of $61,632 each year.

In the eastern half of the country, Aldi is known as a chain with a limited assortment of deeply discounted products, many of them private-label offerings. The company has said it cuts overhead costs by operating smaller stores, using natural lighting and encouraging customers to bring their own shopping bags.

"They try to be the lowest price in the market," Wolf said. "If you took a Trader Joe's and made it more for Wal-Mart customers, that's what Aldi is, like a dollar store for food."

Trader Joe's is run by Aldi Nord, a subsidiary of Aldi International. Aldi USA, which is operated by Aldi Sud, has been bandied about as a potential buyer for the Fresh & Easy grocery chain.British giant Tesco said in April that it planned to sell Fresh & Easy.

But Aldi USA shelves are light on organic and natural goods compared with Trader Joe's, which has no locations in Moreno Valley. Whole Foods Market Inc. also doesn't operate in the city.

Demand for health-conscious foods is more intense in the Los Angeles area, where providers such as Trader Joe's abound and the supermarket industry is notoriously competitive. For now, Aldi seems to be steering clear of the region.

"They're not going to have an appetite to butt heads right away with Trader Joe's," Wolf said. "They generally don't put their stores near each other. In terms of demographic, they're going after different customers."

24 June 2013

Alabama bankruptcy highlights challenges facing Detroit

Story Originally Appeared in The Detroit News

Washington — The nation’s largest municipal bankruptcy may be nearing a conclusion after 18 months in court and the Alabama county offers some lessons for Detroit if it is forced to file for Chapter 9 restructuring in the coming months.

Jefferson County filed for bankruptcy in November 2011, citing more than $4 billion in debt, largely from a troubled sewer project. It also has been hit with the loss of the source of 25 percent of its tax revenue and a public corruption scandal surrounding the sewer project. The county has sold off assets, continued to have layoffs since filing and closed a money-losing county-hospital. Under a deal announced this month, the county will spend the next 40 years repaying much of the debt it owes — though creditors agreed to forgive a significant chunk.

The filing topped the prior largest U.S. municipal bankruptcy — the 1994 filing of Orange County, Calif., with $1.4 billion in debt. But a Detroit filing would top Jefferson County multiplied by three to five times.

Under the proposed deal with three major creditors approved by the Jefferson County commission earlier this month, creditors would get about 80 cents on the dollar — far more than Detroit’s emergency manager is proposing to pay Detroit’s creditors. The deal is expected to be filed by June 30 and take effect by November. It still needs approval of a bankruptcy judge. The commission must still approve deals with other creditors.

The Jefferson County case shows Detroit may face major bills for decades as it refinances much of its debt and tough choices about what city assets to sell. Even local governments that win key procedural victories early in bankruptcy can still face 18 months or more in bankruptcy amid creditor challenges and complex negotiations.

Jefferson County, with 660,000 residents including Birmingham, is 55 percent white and 42 percent African-American. It spent several years trying to avoid bankruptcy, making rounds of painful budget cuts, furloughs and layoffs.

In February, Jefferson County voted to sell a county-owned nursing home to raise $11 million.The Birmingham News reported last week that the county is now considering 30 percent increases in sewer rates.

Jefferson County will sell $1.9 billion in new debt called capital appreciation bonds that the Wall Street Journal said will require the county to ultimately pay $6.9 billion over four decades of financing.

The bonds are criticized by many officials as too expensive and the Michigan legislature in 1994 banned the use of the bonds for new school construction, citing the high overall costs.

Robert Brooks, a finance professor at the University of Alabama, said he’s not convinced that Jefferson County will be able to handle the debt repayment schedule after it exits under the current terms.

“The idea is that optimistically we are going to grow into our ability to pay this back. We could be back in bankruptcy in four to five years,” Brooks said. “ When Detroit was going through this, I’m sure someone was telling them how easy it would be to repay these obligations ... The real issue is people leading Detroit have to make hard decisions, not political ones,” Brooks said.

Kenneth Klee, a lawyer for Jefferson County, said Detroit’s first big hurdle if it files for bankruptcy is quickly setting an “eligibility hearing.” Any city or county filing for bankruptcy must establish it is eligible to file for bankruptcy and creditors can try to drag out the process.

Klee said Detroit needs to be prepared for an expensive bankruptcy. “They are going to need a war chest and resources,” he said. In Jefferson County, he said the costs would be about $1 million a month, but could be much higher for Detroit.

“The creditors will try to bleed the debtors.” Setting a fast hearing also improves morale for the city, he said.

After cutting $90 million over three years, Stockton, Calif., filed for bankruptcy in June 2012 after it was faced with $26 million in deficits. In the run-up, Stockton, the largest U.S. city to file for court protection, faced 22 percent unemployment while property values fell 50 percent; median home prices fell from $422,000 in 2006 to $140,000 in 2012; the city cut its workforce 25 percent, including 20 percent of police and 30 percent of firefighters.

Last week, Stockton officials unveiled a plan to hike the sales tax to 9 percent from the current 8.25 percent to raise money to pay for more police and raise money to exit bankruptcy. If approved by the city council Tuesday, it would go to the voters in November.

Douglas Bernstein, a Plunkett Cooney managing partner and bankruptcy attorney, says no one municipal bankruptcy case mirrors what Detroit might face. Jefferson County has a stronger “revenue stream and they’re not running a city,” Bernstein said.

“One of the huge disadvantages is you’ve never had a true city anywhere near the size of Detroit filing for Chapter 9.”

Klee said Detroit — like Jefferson County — will need to get “community buy-in” for a bankruptcy restructuring. Klee, who was one of the lawyers that made a pitch to represent Detroit in restructuring efforts, thinks the city has no choice but to file for bankruptcy and will need state help.

“The state is going to have to convince the surrounding counties (or cities) to annex some of the land and to take over the real estate in exchange for transfer payments,” Klee said.

21 June 2013

Shhh: Pratt & Whitney pioneers quieter jet engine

Story Originally Appeared in Detroit News

Snyder blasts Senate for shelving Medicaid bill
'Take a vote, not a vacation,' governor tells fellow party members

Lansing — Republican senators dealt Gov. Rick Snyder’s agenda a major setback Thursday when the Senate declined to vote on a massive expansion of the Medicaid health insurance program for the poor in the face of conservative opposition.

With a narrow timetable for Michigan to decide whether it will add more than 400,000 low-income residents to its Medicaid rolls, Snyder offered an unusual criticism of fellow Republicans on Thursday for adjourning for a two-month summer recess.

“Take a vote, not a vacation,” Snyder said about Senate Republicans. “I call on Michiganders to stand with me, (and) I ask you to sustain that effort until we get that ‘yes’ vote.”

The Senate’s GOP caucus met twice Thursday but lacked the support of half of its 26 senators to bring up the bill for a floor vote. The bill would have expanded the income eligibility cap for Medicaid coverage to all childless adults earning about $15,000 annually. Most of the 1.9 million Michiganians currently on the Medicaid rolls are children, seniors and disabled adults.

Several Republican senators said they need more time to digest the impact of adopting the federally funded Medicaid expansion and cost controls attached by the GOP-controlled House.

“They’ve dumped a truck full of horse manure on our driveway, and we have to figure out what to do with it,” said state Sen. Mark Jansen, R-Grand Rapids.

In recent weeks, tea party activists have threatened to field primary challengers against Republican senators who vote to expand Medicaid — a key component to lowering the number of uninsured Americans under President Barack Obama’s Affordable Care Act.

“I think that the tea party today effectively killed our ability to cover half a million people in the state of Michigan,” said Senate Minority Leader Gretchen Whitmer, D-East Lansing.

Americans for Prosperity, a conservative group planning to target House Republicans who voted for the Medicaid bill last week, hailed the Senate’s inaction Thursday.

“This is a win for Michigan taxpayers,” said Scott Hagerstrom, state director of AFP Michigan. “My hat’s off to Senate Republicans for standing up to the governor of their party.”

The federal government’s offer to cover all expansion costs through 2016 and gradually fall to 90 percent by 2020 would save the state more than $200 million a year. Snyder proposed putting half of the savings in a trust fund to cover the state’s added costs in later years.

Senate Majority Leader Randy Richardville, R-Monroe, acknowledged the bill likely had the minimum 20 votes to pass — 12 Democrats and eight Republicans — but said he was reluctant to hold a vote without the support of half or 13 of the chamber’s 26 Republicans.

“I want to make sure this is truly bipartisan,” said Richardville, who added the bill isn’t dead and would be reviewed by a summer work group.

Whitmer noted the Senate passed legislation creating a regional transit authority in Metro Detroit and a Detroit lighting authority last year with more Democratic votes than GOP votes.

“It‘s baloney,” Whitmer said of the GOP’s 13-vote threshold. “It’s an excuse not to do something that they, for whatever reason, didn’t want to get done.”

Richardville said he needed more Republican votes because this is a statewide issue. The development was a setback for Snyder, who cut short a trade mission in Israel, flew back to Michigan overnight Wednesday and spent Thursday lobbying reluctant Republican senators to support the bill.

The Snyder administration has said passage of the legislation Thursday was vital to get federal approval of proposed changes to the state Medicaid program before a nationwide expansion begins this fall.

At a Capitol press conference Thursday, Snyder was flanked by leaders of state medical and business associations that support the expansion.

“Real people with real needs will die as a consequence of the failure to provide access to care,” said Dr. Fred Van Alstine, president of the Michigan Academy of Family Physicians.

Snyder said he didn’t even change his clothes after arriving back in Michigan, just putting in his contacts and shaving before returning to the Capitol to lobby Republican senators. He often was emphatic in his support of Medicaid expansion during the press conference, thanking the GOP-controlled House for approving it.

While Snyder urged Michiganians to be positive about their lobbying, Richardville said Snyder’s remarks about the Legislature’s scheduled summer break ran counter to the governor’s mantra of “relentless positive action.”

“I’m just not really sure how that’s relentlessly positive,” Richardville told reporters after the session.

About 26 states so far are planning to expand Medicaid. Most have Democratic governors. While most Republican governors oppose Medicaid expansion, Snyder is among more than a half-dozen GOP governors who back expansion.

Like Snyder, Govs. Jan Brewer of Arizona and John Kasich of Ohio have fiercely battled GOP-controlled Legislatures to adopt the expansion.

Brewer, a tea party favorite who refused to sign unrelated bills until her party complied on Medicaid, signed Arizona’s expansion into law Monday. Prospects of Kasich winning Medicaid expansion before the Ohio Legislature’s summer break appeared dim this week.

State Sen. Patrick Colbeck, R-Canton, who opposed the Medicaid expansion, said the Michigan Legislature should “push back” against the Affordable Care Act mandates and direct individuals to private insurers through the health insurance exchanges that will be set up under the federal law.

“Because ours is going to be free-market-based, our costs would be lower,” Colbeck said.

Even if the Medicaid legislation is approved in the fall, it would face another hurdle. The federal government would have to agree to Michigan’s proposed requirement that able-bodied adults with incomes between 100 percent and 133 percent of the poverty level contribute up to 5 percent of their income toward their medical care. Another federal waiver would be needed to require the contribution be raised up to 7 percent after four years in the program.

The Senate is scheduled to meet again on Aug. 27. But state Sen. Roger Kahn, R-Saginaw, a physician who has championed the expansion, said Richardville could call back senators earlier.

This prospect is complicated by the scheduled installation of new carpeting in the Senate chamber during the summer. But Kahn said the Senate could meet elsewhere, such as Michigan State University’s Kellogg Center.

“It’s my belief that the politics trumped the policy in this case,” Kahn said. “But if there’s one thing I’ve learned about politics, it’s when they tell you it’s over, it’s not over.”

18 June 2013

Year without helmets sees motorcycle injury claims rise

Story Originally Appeared in The Detroit Free Press

Michigan’s year-old law allowing motorcyclists to go without helmets appears to be leading to more injuries — and more severe injuries — when measured by insurance claims, according to a new study.

The Arlington-based Highway Loss Data Institute compared medical payment losses from the 2010 and 2011 riding seasons with the 2012 season. Overall, there were about 12% more claims, while the average claim — a measure of injury severity — rose from $5,410 to $7,247, according to the institute, which compiles claims data with the Insurance Institute for Highway Safety.

After adjusting for several variables, including that helmetless riders must carry an extra $20,000 in coverage, the data showed a 22% jump in “claim severity” after the law change, according to the report.

“By allowing some motorcyclists to ride without helmets, this data suggests when they crash, they are more severely injured,” said David Zuby, chief research officer at the institutes.

Claims data don’t include injury details and are limited only to claims for injuries for motorcycle operators.

In April 2012, a new law allowed motorcyclists 21 and older to ride without a helmet. That made Michigan one of 28 states with helmet laws covering only some riders, usually those under 18.

A jump in insurance claims isn’t surprising, and it reflects previous studies that have linked weakened helmet requirements to an increase in fatalities and hospital admissions, according to the study’s authors.

“The life-saving effect of helmets is well documented,” Zuby said.

By looking at neighboring states, study authors said they were able to sort out variables such as the weather and the economy, both of which could affect the number of miles by motorcyclists in a season.

As the economy picks up, it is important that researchers recognize its impact on motorcycle use.

With an upswing in the economy, Zuby said, “people are driving further and there are more crashes.”

What is not clear is whether some riders who prefer not to wear a helmet were on the road more often as a result of the law change, resulting in the increase in claims, he added.

Glamorous or grueling? Jet-setting can be both

Story Originally Appeared in USA TODAY

NEW YORK — Samantha DiGennaro had a resolution at New Year's.

The founder and CEO of New York-based public relations firm DiGennaro Communications was determined that at a time when many tend to friendships and business via Facebook, Skype and Twitter, she would spend more time, face to face, with her far-flung clients.

"That was my commitment, so I've been flying all over the country," says DiGennaro, 43. "So many people are constantly plugged in, and that's important, but that does not beat the power of face-to-face interaction and communication."

To help business people work smarter on the road and in the office, USA TODAY is looking at how many executives, like DiGennaro, can work more efficiently and is offering their tips to help others.

DiGennaro has a wealth of advice on how to make business travel more productive and pleasant. This year, she's been on the road more than she's been home, traveling to Istanbul and Milan in just the last four weeks

"Over time, you learn this works more effectively than that; this saves more time than that," she says.

DiGennaro enjoys traveling for fun. But she acknowledges that hopscotching across the globe for work can be stressful.

"No matter how free-spirited you are or how much wanderlust you have, it's an entirely different experience than traveling for pleasure," says DiGennaro, who also flies back and forth to her second office in Santa Monica, Calif., to London, where she has a partner agency, and to attend conferences important to her executive clients.

"It's a lot of having to be on," she says, "constantly moving, constantly entertaining, eating out three meals a day, not necessarily having time to squeeze in a workout or exercise. So I love to travel, but travel is not always easy."


First things first is the packing. No matter how far she's flying or how long she'll be away, DiGennaro tries to travel with a carry-on to avoid waiting on checked luggage. She takes clothes that don't have to be ironed and uses cloth shoe bags to separate them. "I might have all of my shirts in one pouch and all of my dresses in another," she says. "Then I can unpack pretty easily."

She carries chargers and adapters for her electronics. Except for her contact lens solution, toothpaste and makeup, DiGennaro tends to travel toiletry-free. That eliminates the worry over airport security screeners who decide a too-big bottle of shampoo needs to be tossed or checked. She buys anything else she needs when she arrives.

She recently bought luggage with wheels that allow her to roll it in front or beside her, instead of just pulling it along. "I have to move quickly," she says, "and so luggage matters."

So does having clearance to pass through airport checkpoints more quickly. DiGennaro belongs to the U.S. Global Entry trusted traveler program, which means she gets to use special "pre-check" lanes that don't require passengers to take off their shoes or take out their laptops.


When traveling for business, DiGennaro thinks that a trip on a private jet trumps commercial flying because of the "privacy, the ability to get work done."

She realizes that's not an option available to everyone. So the next best thing is a seat in business class. DiGennaro will veer toward coach if a client is buying her ticket. But when paying her own way, "I'm more likely to maneuver to get an upgrade."

"The difference between the business-class experience and the economy experience is astounding," she says. "Everybody's respectful of everybody's space. There's a higher probability sitting in coach that somebody ... is going to sit next to you and not take a social cue that you need to get your work done or you want to read your book."

When booking, DiGennaro often tries to get a flight that offers Wi-Fi to get work done. She also aims for the first flight of the day when traveling from New York to the West Coast in case bad weather causes delays.

Returning home to New York, however, she tends to fly at night, when she expects airports to be a bit less crowded and chaotic.

On the ground, she'll often just hail a taxi rather than rent a car "so that I can sit back and relax and not worry about ... finding streets I don't know," she says. "Travel is stressful enough. I feel that's one way to take a little edge off."

Mobile apps can also be helpful, says DiGennaro. She particularly likes Uber, the on-call car service, Four Square and Google maps on her iPhone so she can quickly orient herself in an unfamiliar city.


She's found it a harder to stick to a healthy diet on the road. If her client prefers the local rib joint to a salad bar, she has to go with the flow.

She also says she finds she drinks more on the road than at home. So the trick, she says, is "knowing your limits and when to stop. Knowing that I wouldn't be having a third glass of wine if I were at home, so there's no reason to have a third glass of wine while I'm away."

To try to keep fit, she packs yoga pants and flip-flops. "The most important thing is to always be prepared with exercise clothes, so the option at least is there," she says. She also packs her vitamins in plastic baggies or a pill case, to save room in her luggage.

DiGennaro prefers her business trips to be back to back. "I personally would rather be on the road for two and a half to three weeks straight and get everything done ... than to have to fly back and forth five and six times in a month," she says.

But, she says, she will squeeze in a weekend of fun. In March, for instance, she went skiing with friends in Aspen between business trips to California and Texas.

On flights with no Wi-Fi, DiGennaro considers the working part of the day done. She'll use that time to acknowledge a relative's anniversary or an employee's promotion with a handwritten note. Or, she'll listen to a meditation podcast.

"It's a good opportunity to calm the mind down," she says. "There are a lot of people out there who dread flying ... (but) how often do we sit still for five hours? We're all moving at this fast pace. Enjoy that sitting still. It's a nice thing."

Michigan governor prods GOP lawmakers to expand Medicaid

Story Originally Appeared in The Detroit News

Snyder tries to woo lawmakers to increase access, not cap coverage

 Mackinac Island — Gov. Rick Snyder is redoubling his efforts to get lawmakers this month to approve expanding the Medicaid health insurance program for the poor before the Legislature recesses for the summer.

Snyder said Friday he has invited U.S. Health and Human Services Secretary Kathleen Sebelius to meet with Republican lawmakers to consider a House GOP proposal to put a four-year lifetime cap for able-bodied adults to be on Medicaid.

As state policymakers and business leaders departed Mackinac Island on Friday after the Detroit Regional Chamber's annual three-day policy conference, Snyder said Medicaid expansion is a more pressing issue for the Legislature to address before its scheduled June 27 summer adjournment than raising new revenues for roads.

"I would say it has more urgency," Snyder told reporters after wrapping up a policy conference that focused on education, immigration and Detroit's future.

Michigan's fiscal year starts Oct. 1, when the federally funded expansion would begin, so officials need time to get federal approval for changing the program to the Legislature's liking, Snyder spokeswoman Sara Wurfel said.

Snyder's original proposal to expand the Medicaid program under the federal government's terms was rejected by fellow Republicans who want to place new restrictions on the taxpayer-funded insurance program.

The federal government has promised to pay for expanding access to the program to individuals earning up to $15,282 annually (or $31,322 for a family of four) through 2017. Then the state gradually would be expected to cover 10 percent of the costs.

"If we take this money, it's not going to be on their terms, it's going to be on our terms," Senate Majority Leader Randy Richardville, R-Monroe, said Friday.

But federal officials have signaled they won't approve a four-year lifetime cap on Medicaid enrollment, and Snyder has questioned the legality of such a restriction.

"That would be a challenge," Snyder said of getting federal approval. The governor recently met with federal health officials in Washington, D.C., about the House GOP plan after lawmakers did not include his $1.3 billion Medicaid expansion plan in the 2014 state budget.

Democratic lawmakers, who support the Medicaid expansion included in President Barack Obama's health care law, claimed Friday that Republicans want to pass their proposal and blame the Obama administration for rejecting it.

"It's not a constructive solution to actually getting something done here," said House Minority Leader Tim Greimel, D-Auburn Hills.

Greimel said debate on Medicaid expansion is dominated by a minority of House Republicans and that business groups and most lawmakers "want to enact something that's going to stick."

House Speaker Jase Bolger, R-Marshall, denied Friday that his caucus wants to pass a Medicaid plan that they know won't be allowed by the federal government.

"That's absolutely untrue," Bolger said. "What we've put forward is very reasonable."

The Legislature is scheduled to work until June 27 before recessing for July and August, although House leaders have indicated they wanted to leave Lansing by June 13. Lawmakers have two work days scheduled in July and August.

Former state Sen. Gilda Jacobs, president and CEO of the Michigan League for Public Policy, said opponents of expanding Medicaid may try to stall and run down the legislative clock.

"It makes no sense to drag our feet into the fall because it's going to take time to get started," said Jacobs, who supports Medicaid expansion. "If they want to make this happen before they break for the summer, they can do this if there's the will."

Some lawmakers are concerned an overhaul of transportation funding could take a back seat to Medicaid in June.

House Transportation Committee chairman Wayne Schmidt said Friday he may hold committee votes as early as Tuesday on bills to change the way gasoline and diesel are taxed.

"I just want to get some wind back in the sails," said Schmidt, R-Traverse City.

"We got the budget done. Now we've got to get back to roads."

At the Mackinac Policy Conference forum Friday, Richardville said he is optimistic lawmakers could tackle both issues this month.

"We have to decide if we want to be big boys and girls and take on these problems … or punt them down the road," Richardville said.

As economy improves, businesses now working hard to retain talent

Originally Appeared in Detroit Free Press

As the economy picks up, companies are hiring again and putting a priority on keeping the workers they have, a recent survey finds.

That’s good news if you are looking for a job — or hoping to get more out of the one you have.

“The attitude has gone from telling employees, ‘Be thankful you have a job,’ to companies asking, ‘How do you hold on to the valuable talent you have?’ ” said Sal Vittolino, a spokesman for global consulting firm OI Partners-Action Management, which conducted the survey. “The name of the game is retention.”

Of the 154 companies surveyed in May, 58% reported they added or plan to add workers this year. Just 8% expect to cut staff. The state’s unemployment rate, which was 8.4% in April, has been trending down.

At the same time, a third of all employees plan to look for new jobs this year, according to a study by Harris Interactive.

To hold on to good workers — some waiting for years for the chance to change jobs — companies of all sizes are offering employees better compensation and benefits, more flexible hours, tuition reimbursement and even handwritten notes of encouragement.

One of the most popular incentives offered to retain and recruit workers is career coaching and development, which to some employees is worth even more than money.

Some companies are offering compensation increases of 10%-25%, said Anup Popat, CEO of Systems Technology Group in Troy, which is working to retain employees and recruit talent.

Companies weigh the cost of keeping a worker with losing one, which, according to a report by the Society for Human Resource Management, can be twice the employee’s salary.

At MIPRO, a Milford software consulting firm, Vice President Larry Zagata said he and other executives often thank consultants with personal notes of appreciation, and sometimes even gift cards so that they can take their spouses to dinner.

“The cost of turnover in our industry is very high,” Zagata said. “You’ve got to do the little things.”
Making a change

For workers, the improving economy and new hiring gives them the confidence and the opportunities they need to change jobs or seek a new position within a company.

Ed Lucas, who sought career advancement, a better schedule and a less-stressful workplace, said he left his job as a junior underwriter at JPMorgan Chase in Troy three months ago to become an assistant underwriter at Michigan Mutual in Southfield, a much smaller, but rapidly growing, mortgage lender.

During his interview, he saw a manager taking extra time to help a subordinate, an act that helped persuade him to make the change, he said.

“I was willing to take less to be a part of the company,” said Lucas, 35, who has worked in financial services for 18 years and acknowledged the switch made him uneasy at first. “I was at a crossroads. I just wanted to be a part of a team that wanted to expand.”

At the same time, other mortgage lenders are trying to recruit from Michigan Mutual.

“Our people are getting called, and a measure of how we’re doing is: Do they leave?” said Hale Walker, Michigan Mutual’s senior vice president and co-founder. “People typically don’t quit a company, they quit a boss — or manager.”

Ari Kresch, CEO at 1-800-LAW-FIRM in Southfield, said employees “stay at places where they are happy.”

To help keep his lawyers content, he built an indoor office track. They use it to stay fit — and hold what he called walking conferences.
Competition abounds

These days, the job market is so competitive even the experts who advise executives are having to offer more to keep employees.

Charlie Fleetham, the president of the small management consulting firm Project Innovations in Farmington Hills, said he recently granted an employee tuition reimbursement of about $1,200.

It was a small price to pay, he said, considering what it might cost to replace that person later.

Steve Barone, CEO of information technology company Creative Breakthroughs in Troy, said the business tries to create a culture where workers feel valued, get along and have fun. A few days ago, the employees decided to take a break and went to Cedar Point in Sandusky, Ohio, to ride roller coasters.

Barone stressed that it’s important to hire workers at competitive pay and benefits and that helps keep them from leaving later.

“It’s deflating if you lose somebody because you thought you could save a dollar or two on them. So we don’t do that,” he said. “We treat them well when things are bad and good — and their career development is thought out and on track.”

Dan Gilbert calls PulteGroup's CEO a 'punk' over Atlanta move

Story Originally Appeared in The Detroit News

Friday’s news that the PulteGroup Inc. — one of the nation’s largest home builders — will move its Bloomfield Hills headquarters to Atlanta in 2014, prompted immediate public criticism from Quicken Loans’ Dan Gilbert.

“If rumor true @Pultehomes is moving HQ to Atlanta then punk CEO & invertebrate board even worse than its P&L (profit and loss) last 5 years & that’s hard to do,” Gilbert tweeted just before 1 a.m. Friday morning.

Gilbert, who owns more than a dozen Detroit buildings, moved the headquarters of Quicken Loans to downtown Detroit in 2010.

A Quicken Loans spokeswoman declined additional comment Friday afternoon.

Asked to respond to Gilbert, James Zeumer, Pulte’s vice president, investor relations and corporate communications, said the company will keep some workers in Michigan but noted that much of its business is now in the southeast.

“In the end, this move will bring us closer to our customers and a larger portion of our investment portfolio. The southeast has grown to represent 37 percent of our 2012 closings and 43 percent of invested capital, so we see this as the right move for the future of the organization,” he said. “I would also reiterate that we will maintain our local homebuilding operation in Michigan. That staff of about 54 will continue their excellent work building and growing this market, and some of current corporate employees may find opportunities within that organization.”

Bill Pulte, grandson and namesake of the company founder, tweeted “PulteGroup moving 200 people was news to us, but we’re happy they’ll keep some large operations in MI. As a family, we are committed to MI.”

Via Facebook, Oakland County executive L. Brooks Patterson said he was “disappointed” in the company’s decision to move.

“However, we respect any company’s right to determine its future,” Patterson’s statement said. “Oakland County continues to attract thousands of sustainable, high-paying jobs in the knowledge-based economy through our Emerging Sectors, Medical Main Street, and Automation Alley initiatives. Oakland County is helping to drive Michigan’s economy.”

Robert Filka, CEO of the Home Builders Association of Michigan, said Friday that the move “doesn’t mean a whole lot for homebuilding in Michigan.”

“They are still going to build homes in Michigan,” Filka said. “Corporate headquarter location decisions, for publicly traded companies, can be influenced by lots of factors.

“The fact is our state has a multitude of small and medium-size builders. And while we certainly would rather they keep their corporate headquarters here, our industry is on the rebound in Michigan and I don’t see any gap that is left.”

Kellogg reaches settlement over Mini-Wheats claim

Story Originally Appeared in The Detroit News

 New York — Kellogg has agreed to pay $4 million to settle a class-action lawsuit over the marketing claims it made for Frosted Mini-Wheats.

The company, which also makes Frosted Flakes, Eggo waffles and Pop Tarts, was sued for saying that the cereal improved children’s attentiveness, memory and other cognitive functions.

Kellogg says in a statement that the ad campaign in question ran about four years ago and that it has since adjusted its messaging to incorporate guidelines set by the Federal Trade Commission. The company, based in Battle Creek, also noted that is “has a long history of responsible advertising.”

On its website, Kellogg now says that Frosted Mini-Wheats are full of fiber and that they “fill you up first thing and help keep you focused all morning.”

If approved by the court, the law firm representing consumers says the settlement will result in cash refunds for up to three boxes of cereal purchased during the time of the advertising in question. People may seek reimbursement of up to $5 per box, with a maximum of $15 per customer, according to the settlement.

Kellogg Co. said customers can visit www.cerealsettlement.com to submit a claim for a refund. The claims are for boxes of Frosted Mini-Wheats purchased from Jan. 28, 2009 to Oct. 1, 2009.

Wal-Mart pleads guilty for California hazardous waste

Story Originally Appeared in The Detroit News

San Francisco — Wal-Mart Stores Inc. will pay $81 million after pleading guilty to criminal charges the company dumped hazardous waste across California, a company spokeswoman said Tuesday.
Wal-Mart entered the plea in San Francisco federal court to misdemeanor counts of negligently dumping pollutants from its stores into sanitation drains across the state, spokeswoman Brooke Buchanan said.
As part of the plea, the company will pay the substantial fine that also will cover charges in Missouri.
The plea agreements announced Tuesday end a nearly decade-old investigation involving more than 20 prosecutors and 32 environmental groups.

In 2010, the company agreed to pay $27.6 million to settle similar allegations made by California authorities that led to the overhaul of its hazardous waste compliance program nationwide. The state investigation began eight years ago when a San Diego County health department employee saw a worker pouring bleach down a drain.

In another instance, officials said a Solano County boy was found playing in a mound of fertilizer near a Wal-Mart garden section. The yellow-tinted powder contained ammonium sulfate, a chemical compound that causes irritation to people’s skin, eyes and respiratory tract.

“We have fixed the problem,” Buchanan said. “We are obviously happy that this is the final resolution.”
Court documents show the illegal dumping occurred in 16 California counties between 2003 and 2005. Federal prosecutors said the company didn’t train its employees on how to handle and dispose hazardous materials at its stores.

The result, prosecutors say, was that waste was tossed into local trash bins or poured into the local sewer systems. The waste also was improperly taken to one of several product return centers throughout the United Sates without proper safety documentation.

Buchanan said employees are better trained on how clean up, transport and dispose of dangerous products such as fertilizer that are spilled in the store or have their packages damaged.

For instance, workers are armed with scanners that tell them whether a damaged package is considered to contain a hazardous material and are trained on how to handle it, she said.

Nike cuts ties to Livestrong, Lance Armstrong's charity

Story Originally Appeared in USA TODAY

AUSTIN, Texas (AP) — Nike, which helped build Lance Armstrong's Livestrong cancer charity into a global brand and introduced its familiar yellow wristband, is cutting ties with the foundation in the latest fallout from the former cyclist's doping scandal.

The move by the sports shoe and clothing company ends a nine-year relationship that helped the foundation raise more than $100 million and made the charity's bracelet an international symbol for cancer survivors.

But the relationship soured with revelations of performance-enhancing drug use by Armstrong and members of his U.S. Postal Service team.

According to Livestrong and Nike, the company will stop making Livestrong apparel after 2013, but will honor the financial terms of their deal until it expires in 2014.

Financial terms were not released.

Nike dropped its personal sponsorship of Armstrong last October after U.S. Anti-Doping Agency exposed the team doping program and portrayed Armstrong as its ringleader. And after years of denials, Armstrong admitted earlier this year he used performance-enhancing drugs to win the Tour de France seven times.

Officials at Livestrong, which announced the split on Tuesday, said the foundation remains strong and committed to helping cancer patients worldwide through its survivorship programs.

Armstrong, who started the charity in 1997 as the Lance Armstrong Foundation, was pushed off the board of directors in October and the organization later changed its formal name to Livestrong.

In a statement, Livestrong officials said the foundation is "deeply grateful" to Nike.

"Together, we created new, revolutionary ways of thinking about how non-profits fuel their mission and we're proud of that," the foundation said.

Livestrong officials say the charity remains on solid financial ground.

"This news will prompt some to jump to negative conclusions about the foundation's future. We see things quite differently. We expected and planned for changes like this and are therefore in a good position to adjust swiftly and move forward with our patient-focused work," the foundation said.

The foundation said it reduced its budget nearly 11 percent in 2013 to $38.4 million, but said Tuesday that revenue is already 2.5 percent ahead of projections. The foundation also noted that last month, it received a four-star rating from Charity Navigator, which evaluates charities based on financial health, accountability and transparency.

First U.S. store shows new direction of Amway

Story Originally Appeared in Detroit Free Press

After becoming a global powerhouse in 100 countries and territories with fewer untapped countries left, it isn’t surprising Amway is doubling down on the place it all began — the U.S. market.

That includes opening its first U.S. store at the New York Mets’ Citi Field several weeks ago. Amway has stores in China and other places but didn’t think it needed any here until now.

“Around the world we have used physical locations to support Amway’s business and let people go there to better understand what we do,” said Doug DeVos, president of the company.

Amway was aided by independent business owners (IBOs) who sell its vitamins, health and beauty, household and other products.

“What you are seeing in New York is the start of our doing more in the U.S,” he said. “We will keep developing that idea with a number of locations and decide what is the best way to go.”

The direct selling behemoth — started 54 years ago by pals Rich DeVos and the late Jay Van Andel from their west Michigan homes as they sold health supplements — is now run by their sons. The privately held company is owned by the two families.

Amway, with sales of $11.2 bilion in 2012 and 21,000 employees (4,000 in west Michigan) is run by DeVos — youngest son of co-founder Rich DeVos, and Steve Van Andel, eldest son of Jay Van Andel, who serves as chairman.

Doug DeVos seems to have followed his father in assuming the more outgoing role at the company.

Doug DeVos will be among speakers at this week’s Detroit Regional Chamber Policy Conference at Mackinac Island, where he’ll talk about the state’s future.

When it comes to Amway’s past and future, combining sports and health products has proven a winning formula. Rich DeVos and family own the NBA’s Orlando Magic.

When asked about Detroit — where Amway signed on as presenting sponsor of the NHL’s Detroit Red Wings — and whether the Motor City could be next in line for an Amway store, DeVos said: “Who knows where it (the relationship with the team) goes? We have a great relationship with a great family (the Ilitches, who own the Red Wings and Detroit Tigers).”

Amway’s New York City store is intended to be a meeting space for Amway's IBOs but tons of product like Nutrilite and Artistry are on hand. The store is small compared to ones in China, where thousands congregate.

China put Amway on the map and remains its largest market, representing about a third of its sales.

DeVos just penned an article in Harvard Business Review’s “How I Did It” feature in which CEOs talk about how they confronted an issue. He wrote how Amway adapted its business model because of government changes.

“Being forced to change our model in China helped us realize that we need to regularly adapt to succeed in different markets,” DeVos wrote. “By the time the Chinese government lifted its direct-selling ban in 2005, Amway had equipped itself with new strategies for global growth and emerged as China’s market leader.”

Amway’s footprint in China is hard to miss.

Zhao Weiping, China's new consul general to the Midwest, who was in Lansing on Tuesday to meet with Gov. Rick Snyder, took time out to talk about Amway.

“Amway has been very successful in China and making great profits,” he said.

Inspiring the entrepreneurial spirit is another mission to DeVos.

“Entrepreneurship is the backbone of a thriving economy,” he said. “Supporting the spirit of entrepreneurship and ensuring that we have the right environment for business is very important.”

Keeping up with the company’s talent needs has also been a challenge. Amway isn’t alone in that, which is why DeVos and other CEOs got together in a rather unique program to bring in more young people.

Come back next week to find out more about the effort.

Michigan teens will face job shortages

Story Originally Appeared on The Detroit News 

Michigan parents, prepare yourselves: With a 22.9 percent teen unemployment rate heading into the summer of 2013, your jobless kids might be making frequent withdrawals from the Bank of Mom & Dad for their vacation spending cash.

There are a number of factors at work: More competition from older jobseekers, for instance, has put young and inexperienced applicants at a competitive disadvantage. But also at fault are a series of ill-conceived minimum wage mandates at the state and federal level, which raised the cost to hire and train the teens who fill those jobs.

Those same teens can only hope that President Obama and Congress won't make it worse by following through on another proposed increase.

Nationally, teen unemployment has been above 20 percent every summer since 2009. That's four straight summers — soon to be five — of record teen unemployment. And tellingly, they've all occurred during or since the 40 percent hike in the federal minimum wage between 2007 and 2009.

The timing is more than just coincidence. Writing in 2010, economists at Miami and Trinity Universities estimated that — even accounting for the effects of the recession — at least 114,000 young adults lost job opportunities as a direct result of the federal wage hike. (Other economists have put that figure above 300,000.)

Percentage-wise, this came out to a 6.9 percent drop in teen employment in the states affected by all three stages of the federal wage hike. For those teens with less than 12 years of schooling, the relative drop in employment was even higher at 12.4 percent.

One need only look at the businesses where teens are employed to understand why. Nearly 40 percent of the nation's employed teens work in the leisure and hospitality industry (think restaurants, movie theaters, and hotels), while another 25 percent work in retail jobs at grocery stores, service stations and the like.

These types of businesses aren't exactly rolling in the dough. Their profit margins are generally 2 or 3 cents on every sales dollar. Sudden spikes in labor costs — like a 40 percent jump in the minimum wage in two years — leave these businesses with two options: Raise prices, or reduce costs.

When raising prices isn't an option — good luck with that in a rough economy — the only other option is to provide the same product with less service. This might mean having waiters or waitresses bus their own tables, or opting for a self-service alternative to young grocery baggers.

The data bears this trend out: Teens' share of employment in the leisure and hospitality industry dropped by over 20 percent between 200 and 2011. In retail, it's fallen by nearly 30 percent over that period.

This makes it all the more baffling that wage hike advocates in Congress, seeking to fulfill the president's State of the Union call for higher rates would raise the minimum wage by another 40 percent to $10.10.

This may be good politics, but it's certainly not good policy. Teens — whether in Michigan or anywhere else — start climbing the employment ladder through their first summer jobs. Further minimum wage hikes only postpone their ability to get these jobs, which research shows hurts their future earnings, employability, and professional development.

That might not seem pressing to the teens who will just lie on the beach or lounge on the couch for the next three months. But it is much more concerning for their parents, who want nothing more than a good future for their kids — and maybe even some peace and quiet between now and September.

Michael Saltsman is the research director at the Employment Policies Institute.