SEPTEMBER 24 – 30, 2012 Hospitals hungry under Bills aim ... · Pages 11-14 BY CHAD HALCOM...

REBOUNDINGIN RECOVERYNonprofitexecutives’ payincreasesreflectimprovingeconomy. Morein FinanceExtra, Pages 11-14

BY CHAD HALCOM

CRAIN’S DETROIT BUSINESS

The need for efficiency underhealth care reform may be lead-ing to a wave of consolidation andthe possible entry of more for-profit health care companies intoMichigan.

Crain’s reported Sept. 16 thatBeaumont Health System has beenapproached by for-profits Van-guard Health Systems Inc. and Hos-pital Corp. of America about a possi-ble sale. Vanguard, which ownsthe Detroit Medical Center, has alsoapproached Garden City Hospitaland Crittenton Hospital Medical Cen-ter in Rochester Hills on possibleacquisitions in the past year.

“In this day of health care re-form, everybody is talking witheverybody as part of strategicplanning,” said Mike Killian, vicepresident of marketing at Beau-mont, who called the HCA sale arumor.

“I can’t say it never will happenin the weeks, months and years tocome. But our board has not madeany decisions to talk with any-body. Management is not interest-

ed in selling to anybody.”Regardless of whether Beau-

mont is sold, hospitals are look-ing for growth to contend withcuts in Medicare payments overthe next few years and uncertain-ty over whether state legislatorswill vote to expand Medicaid by aprojected 500,000 people under thefederal Patient Protection and Af-fordable Care Act. Hospitals arecounting on offsetting Medicarecuts by replacing formerly unin-sured patients with additional

people covered by Medicaid andthose newly insured in 2014.

Other changes under reform in-clude hospitals working withphysicians and other providers tocontract as accountable care or-ganizations. ACOs have the po-tential to reduce costs and im-prove quality but place hospitalsand physicians at financial risk ifcosts exceed payments.

“This market is under-repre-sented by for-profits comparedwith other states, but Michigan isreally waking up to it now. Twoyears ago, when there was a lot ofthis (for-profit acquisition) in oth-er states, Michigan didn’t seem towant to touch it,” said GregoryDrutchas, principal at Detroit-based Kitch Drutchas Wagner Vali-tutti & Sherbrook PC and head of itshealth care practice.

“But the new trend in the com-

NE

WS

PA

PE

R

www.crainsdetroit.com Vol. 28, No. 40 S E P T E M B E R 2 4 – 3 0 , 2 0 1 2 $2 a copy; $59 a year

®

©Entire contents copyright 2012 by Crain Communications Inc. All rights reserved

African violencetouches autosupplychain

Electronics retailer unplugs Michigan search

Tom Henderson on how not to save Belle Isle,Page 4

Largest IT companies,largest architectural firms,Pages 18, 19

Inside

2 area defense contractorswin $665M in Army work

Two defense contractorswith operations in SoutheastMichigan will receive a com-bined $665 million to im-prove power output, technol-ogy systems and othercomponents of mainstayArmy ground vehicles.

The Army ContractingCommand at the U.S. ArmyTacom Life Cycle ManagementCommand in Warren last weekannounced plans to award a$383 million contract to Ster-ling Heights-based General Dy-namics Land Systems.

The contract will providefor improvements to embed-ded computing, power gener-ation, radio and other sys-tems in the M1A2 Abramstank. The new systems willbe installed for qualificationand approval, before futurecontracts buy the various up-grades for production tanks.

Navistar Defense LLC also an-nounced last week a $282 mil-lion delivery order fromTacom to make various im-provements to its MaxxProDash Mine Resistant AmbushProtected vehicles. TheMaxxPro is a vehicle contractprogram managed at Navis-tar’s engineering center inMadison Heights.

— Chad Halcom

This Just In

Page 3

Crain’s Lists

BY SHERRI WELCH


Use of incentive pay as a portion ofcompensation is returning to pre-reces-sion levels among the heads of fundrais-ing foundations, human services andarts and culture organizations.

That’s among the trends that emergedin Crain’s analysis of the compensation of35 of the region’s top-paid nonprofit exec-utives in 2010, the latest year for whichdata is available. The group comprisesthe CEOs of 10 grant-making foundations,

five fundraising foundations, 10 arts andculture organizationsand 10 human serviceorganizations.

Twelve of the execu-tives in that group re-ceived bonuses in 2010,up slightly from 11who received bonusesin 2008, which wereearned before the re-cession took hold, andeight in 2009.

New to the bonus club in 2010 was Paul

Bridgewater, president and CEO of theDetroit Area Agency on Aging 1-A with$44,760 in incentive pay. Detroit Zoo CEORon Kagan began earning incentive payin 2009.

The responsibility is on nonprofitboards to establish clear and measurablegoals for success for executives using in-dependent third-party analysis andknowledge of the local environment andtype of talent they are looking to attract,said Mark Davidoff, Michigan managing

AWARDScio

SEPT. 27 Dr. Robert D. Childs, ChancellorNational Defense University Information Resources Management College

KEYNOTE SPEAKER

Register TODAY by noon: www.crainsdetroit.com/events

Learn tips to prepare for a cyber-attack

2 – 7 p.m.

The Fillmore,Det.

Hospitals hungry underhealthreform

BY AMY LANE

SPECIAL TO CRAIN’S DETROIT BUSINESS

Communities may get some helpfrom Lansing in managing and im-proving one of the most criticaland costly pieces of their infra-structure — their aging sewer sys-tems.

On the move in the Legislatureare bills that would take about $654million remaining from a $1 billionenvironmental bond passed by vot-ers in 2002 and put it toward a newstate loan pro-gram and newgrant programfor sewers andstormwater sys-tems.

A central goal:Get more moneyflowing to com-munities so theycan be strategicabout planningneeded sewer infrastructure spend-ing, rather than strictly reactive.

“Most of the money that gets in-vested … tends to get invested in

Bills aim toflow funds to sewerprojectsNew loan, grantprograms sought

Incentive pay makes comeback among nonprofit execs

See Sewers, Page 22See Hospitals, Page 23

See Nonprofits, Page 24

Systems prowlfor acquisitions

Hersey

BEAUMONT HEALTH SYSTEM

For-profit companies are eyeingBeaumont Health System asinstitutions consider scaling up totackle changes in health care.

JEFF

JO

HN

STO

N/C

DB

Bridgewater

20120924-NEWS--0001-NAT-CCI-CD_-- 9/21/2012 6:41 PM

A BETTER PARTNERSHIP®

Southfield Macomb County Lansing Grand Rapids Holland Muskegon

Senior executives are invited to join Warner’s HR attorneys for an afternoon ofproblem solving, networking and discussion. This complimentary program includes:

Employment Strategy Conference

Benefits and Labor Law Solutions

Onl

ine

Now

September 24, 2012CRAIN’S DETROIT BUSINESS

Emergency manager: Loan wouldput Benton Harbor back in black

As part of his plan to fix BentonHarbor’s seemingly relentless bud-get problems, emergency managerJoseph Harris plans to ask the statefor a $7 million loan. The Herald-Pal-ladium in Benton Harbor reportedlast week that the “mostly power-less” City Commission passed a res-olution to support Harris’ decisionto seek the loan but failed to pass aresolution of support for his deficitelimination plan.

Harris said he will tell how the$7 million loan would be used inthe deficit plan. “To put the $7 mil-lion request in context,” The Her-ald-Palladium reported, “the city’s2010-2011 fiscal year general fundrevenue was $6.7 million, accord-ing to a December audit.”

The Michigan Department of Trea-sury encouraged Harris to create aplan that shows how long it wouldtake to pay off the city’s deficitswith the loan and one that showshow long it would take without theloan, he said. With the loan, thedeficits disappear in a year, leavinga rainy-day fund, he said. Withoutthe loan, it would take five years.

A train of thought: What helpsIndiana rail can help Michigan

So why were Michigan rail offi-cials happy that the federal gov-

ernment gave Indiana $71.3 mil-lion last week to ease congestionalong nearly 30 miles of track be-tween Porter, Ind., and the Illinoisborder? You haven’t taken Amtrakto Chicago, have you?

The 20-month project is expectedto begin in the spring, the FederalRailroad Administration said. Foryears, Michigan transportation ad-ministrators have tried to improvethe three rail lines to Chicago: thePere Marquette from Grand Rapids,the Wolverine from Pontiac and theBlue Water from Port Huron.

Tim Hoeffner, director of theMichigan Department of Transporta-tion’s Office of Rail, said the Indianaimprovements won’t reduce travel

time significantly. Rather, he toldMLive.com, it is part of an effort toreduce the number of delays.

Saginaw River community lands ananchor tenant: A floating museum

After 15 years of work, Es-sexville’s ship has come in. The re-cent arrival of the Navy destroyerUSS Edson means the SaginawRiver town is a step closer to open-ing the Saginaw Valley Naval ShipMuseum. (Note: If you were alongthe Detroit River on Sunday, Aug.5, you might have seen the nearly420-foot-long Edson being towed.)

John DeWyse, a member of the

museum’s board, called for mem-bers of the community to enlist inthe restoration effort. Meantime,the museum’s website says youcan plunk down $10 Saturday orSunday to board the ship’s deck.

MICH-CELLANEOUS� It once was billed as the tallest

building between Detroit and

Chicago, until the Amway GrandPlaza was finished in 1983. Lastweek, MLive.com reported that theMcKay Tower — today GrandRapids’ fifth-tallest building, hadbeen sold in May. The Borischfamily paid $10.5 million, MLivereported, citing city records.

� In the Oct. 10, 2011, issue,Crain’s Michigan Business report-ed at length on plans to turn a long-in-the-tooth section of downtownGrand Rapids into a $30 million,130,000-square-foot market. Lastweek, the board of the downtownmarket came up with an officialname for the downtown market:“Downtown Market.” Genius.

� The owner of movie theaters inBellaire, Petoskey, Gaylord, Macki-naw City and Cheboygan admittedin U.S. District Court in Grand Rapidsthat she failed to pay nearly $1 mil-lion in taxes. Elaine Dawson plansto plead guilty to tax evasion, TheAssociated Press reported.

MICHIGAN BRIEFS

In the Flint area, there’s hope that the state willdesignate the region a hub of technology businesscreation. In Midland, there’s a desire to be a recog-nized beachhead for companies in the materials andchemical industries.

Members of both communities advocated for andwant to be included in Michigan’s next — and possi-bly last — batch of SmartZones.

A bill signed into law in August would allow for upto three more SmartZones, expanding the roster of 15such areas around the state that cluster technology-based businesses, entrepreneurs and researchers.

SmartZones are designed to promote collabora-tions that include universities, industry, researchand community organizations, boosting entrepre-neurial activity and the commercialization of new

products. The zones can use tax increment financ-ing and offer benefits to businesses such as training,business planning, product development, grantwriting and access to state resources for early-stagetechnology companies.

The legislation also contains elements that con-form the 12-year-old SmartZone program to the ap-proach of Gov. Rick Snyder’s administration to eco-nomic development — built around regionalcollaboration and sharing best practices.

“What we were trying to do is look at how can weget our organizations around the state to do a betterjob of collaborating,” said Martin Dober, senior vicepresident of entrepreneurship and innovation at theMichigan Economic Development Corp.

— Amy Lane

3 and out? State’s newest SmartZones may be the last

CORRECTION� A Sept. 10 Business Diary item, listed under the “Contracts” heading,did not include the full name of Friedman Integrated Real Estate Solutions.

The name of the office development Friedman is managing is North TroyCorporate Park.

Find business news fromaround the state at crainsdetroit.com/crainsmichiganbusiness.

Sign up for Crain's MichiganBusiness e-newsletter at crainsdetroit.com/emailsignup.

20120924-NEWS--0002-NAT-CCI-CD_-- 9/21/2012 4:42 PM Page 1

PHOTOS FROM ISTOCKPHOTO.COM, THE ASSOCIATED PRESS. ILLUSTRATION BY JEFF JOHNSTON/CDB

September 24, 2012 CRAIN’S DETROIT BUSINESS

These companies have significant mention in thisweek’s Crain’s Detroit Business:AJM Packaging . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Altarum Institute . . . . . . . . . . . . . . . . . . . . . . . 1, 11AM General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Automotive Industry Action Group . . . . . . . . . . . . . . 3BAE Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Beaumont Health System . . . . . . . . . . . . . . . . . 1, 13Blue Care Network . . . . . . . . . . . . . . . . . . . . . . . . 13Blue Cross Blue Shield of Michigan . . . . . . 12, 14, 24Citizens Republic Bancorp . . . . . . . . . . . . . . . . . . . 6Crittendon Hospital Medical Center . . . . . . . . . 1, 24Deloitte . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Delta Dental Plan . . . . . . . . . . . . . . . . . . . . . . . . . 12DeRoy Testamentary Foundation . . . . . . . . . . . . . . 24Detroit Area Agency on Aging 1-A . . . . . . . . . . . . . . 1Detroit Educational Television Foundation . . . . . . . 14Detroit Institute of Arts . . . . . . . . . . . . . . . . . . . . . 24Detroit Medical Center . . . . . . . . . . . . . . . . . . . . . . 1Detroit Regional Chamber . . . . . . . . . . . . . . . . 13, 22Detroit Symphony Orchestra . . . . . . . . . . . . . . . . . 24Detroit Tigers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Detroit Zoo . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 12Eastern Michigan University Foundation . . . . . . . . 13Edsel and Eleanor Ford House . . . . . . . . . . . . . 12, 24Flagstar Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . 6Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Garden City Hospital . . . . . . . . . . . . . . . . . . . . . . . . 1General Dynamics Land Systems . . . . . . . . . . . . . . 25General Engine Products . . . . . . . . . . . . . . . . . . . 25Genesis Foundation . . . . . . . . . . . . . . . . . . . . . . . 24Gift Planning Associates . . . . . . . . . . . . . . . . . . . . 15Grand Valley State University . . . . . . . . . . . . . . . . 13Guidance Center . . . . . . . . . . . . . . . . . . . . . . . . . 13Hall Render Killian Heath & Lyman . . . . . . . . . . . . 23Harper-Hutzel Hospital . . . . . . . . . . . . . . . . . . . . . 13Health Alliance Plan . . . . . . . . . . . . . . . . . . . . . . . 13HHGregg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Hudson-Webber Foundation . . . . . . . . . . . . . . . . . 24Kitch Drutchas Wagner Valitutti & Sherbrook . . . . . 1Kresge Foundation . . . . . . . . . . . . . . . . . . . . . . . . 24Lear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Lentine Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Lormax Stern Development . . . . . . . . . . . . . . . . . . . 3Lutheran Social Services of Michigan . . . . . . . 14, 24Mercer (US) . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 24Michigan Infrastructure and Transportation Assn. . 22Michigan Nonprofit Association . . . . . . . . . . . . . . 13Michigan Opera Theatre . . . . . . . . . . . . . . . . . . . . 24NSF International . . . . . . . . . . . . . . . . . . . . . . . 1, 12O’Keefe & Associates . . . . . . . . . . . . . . . . . . . . . . 23Oshkosh Defense . . . . . . . . . . . . . . . . . . . . . . . . . 25Plunkett Cooney . . . . . . . . . . . . . . . . . . . . . . . . . . 23Quicken Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6St. John Providence Health System . . . 12, 13, 14, 24Society of Manufacturing Engineers . . . . . . . . . . . 14Southeast Michigan Council of Governments . . . . . 22Talmer Bank and Trust. . . . . . . . . . . . . . . . . . . . . . . 6Trinity Health . . . . . . . . . . . . . . . . . . . . . . . . . 12, 14United Shore Financial Services . . . . . . . . . . . . . . . 6United Way for Southeastern Michigan . . . . . . . . . 24University of Michigan . . . . . . . . . . . . . . . . . . . . . 11Vanguard Health Systems . . . . . . . . . . . . . . . . . . . . 1Visteon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Wayne State University . . . . . . . . . . . . . . . . . . . . . 15WDET 101.9 FM . . . . . . . . . . . . . . . . . . . . . . . . . . 15

THIS WEEK @WWW.CRAINSDETROIT.COM

Company index

Department index

Getting to workPeople on the move, job postingsand other career information canbe found at Crain’s Job Front at crainsdetroit.com/jobfront.

Crain’s Michigan BusinessSign up for the roundup of statewide news delivered to e-mail inboxes everyWednesday: crainsdetroit.com/getemail.

Tigers stalk near-record

home-gate numbers, Page 5

Inside

BANKRUPTCIES . . . . . . . . . . . . . . . . . 22

BUSINESS DIARY . . . . . . . . . . . . . . . . 16

CALENDAR . . . . . . . . . . . . . . . . . . . . 17

CLASSIFIED ADS . . . . . . . . . . . . . . . . 21

JOB FRONT . . . . . . . . . . . . . . . . . . . . 20

KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8

LETTERS . . . . . . . . . . . . . . . . . . . . . . . 8

OPINION . . . . . . . . . . . . . . . . . . . . . . . 8

OTHER VOICES . . . . . . . . . . . . . . . . . . 9

PEOPLE . . . . . . . . . . . . . . . . . . . . . . 20

RUMBLINGS . . . . . . . . . . . . . . . . . . . 26

WEEK ON THE WEB . . . . . . . . . . . . . . 26

BY CHAD HALCOM


A new military vehicle contractprogram in Warren could continueto fuel a legal battle between finan-cial titans Ron Perelman and IraRennert, the New York-based co-owners of AM General LLC.

That is, if the company assumesproduction on the replacement forthe Humvee.

AM General’s signature Hum-vee — the High Mobility Multipur-pose Wheeled Vehicle — has keptthe company flush with the cashthat Perelman and Rennert nowaccuse each other of siphoning offby way of loans and variouscharges.

That could end if AM General is-n’t awarded a production contractfor the Joint Light Tactical Vehi-cle, which will enter production tosucceed the Humvee starting in2015.

AM General, which has its engi-neering and product developmentcenter in Livonia, is one of threecompanies with pre-productioncontracts for the JLTV.

South Bend, Ind.-based AM Gen-eral has manufactured the Hum-vee ever since it was headquar-tered in Livonia and won theinitial $1.2 billion military con-

JLTV win mayextend fight of AM General co-ownersCurrent feud:Humvee funds

BY SHERRI WELCH


Consumer electronics and appli-ances retailer HHGregg Inc., whichhad been considering entry inmetro Detroit and other Michiganmarkets, has tabled its plans — atleast for now.

The Indianapolis-based compa-ny had been in negotiations withnumerous landlords aroundMichigan for the past six monthsor so, confirmed Chris Brochert, a

partner at West Bloomfield Town-ship-based Lormax Stern Develop-ment Co.

Lormax Stern was working withHHGregg on five Detroit-area loca-tions, but the company was “on-

again and off-again” before it final-ly indicated it would not be enter-ing any Michigan market at thistime, he said.

“We just wasted a lot of time anda lot of money, as I’m sure many

other landlords have as well,”Brochert said.

“We’ve leased or are in advancenegotiations on almost every sin-gle space we were working on forthem.”

The company did not say why itchose to halt its plans, Brochertsaid.

HHGregg said its “goal is to be-come a national retailer of appli-ances and electronics and as such

Electronics retailer HHGregg unplugs Michigan search

The U.S. government says thatbecause minerals used in vehiclemanufacturing might be fundingconflict in the Democratic Republic ofCongo, auto suppliers now mustaccount for the sources of the gold,tungsten, tantalum and tin that they use.

BY DUSTIN WALSH


Violence in the Democratic Re-public of Congo and eight sur-rounding African countriessparked U.S. regulatory action onminerals mined from the conti-nent, creating a ripple effectacross the Southeast Michiganautomotive industry.

While the auto industry’s expo-sure to minerals from thesemines is limited, adhering to thenew regulations requires exten-sive research, collaboration anddollars, local experts say.

A section of the Dodd-Frank WallStreet Reform and Consumer Protec-tion Act, passed in July 2010, re-quires public companies to reportdirect and indirect sources of “con-flict minerals” — tin, tantalum,tungsten and gold, typically usedin electronics — in filings with theU.S. Securities and Exchange Commis-sion beginning in 2014.

The U.S. government thinks theAfrican minerals are funding sev-eral violent, armed regionalgroups who have murdered, rapedand enslaved millions. Use of Con-golese tantalum for electronics,including for vehicles, has beencriticized frequently in the pastdecade by human rights groups.The disclosure rule is designed toexpose to public scrutiny compa-nies using conflict minerals.

The SEC said roughly 6,000registered companies will be af-fected by the rules, but that willtrickle down to tens of thou-sands more private companiesthat may or may not source min-

erals from Africa. The auto industry began due

diligence when the ruling was an-nounced in 2010, said Tanya Bold-

en, program de-velopmentmanager for cor-porate responsi-bility at the Auto-motive IndustryAction Group, aSouthfield-based industryorganization.But the industrycouldn’t develop

reporting measures until the regu-lations were finalized Aug. 22.

The industry continues to enlistits purchasing and legal depart-ments to identify mineral sourcesthrough the supply chain inpreparation for public reporting,Bolden said.

“We’re still creat-ing awareness

in the supply base,” she said.“Companies can map down a fewtiers (of suppliers), but this legis-lation is making them define itdown much, much farther, andthey can easily lose visibility (inthe supply chain) before you getdown to the smelter.”

Besides the Republic of Congo,the other countries in the conflictarea are Republic of Angola, Re-public of Burundi, Central AfricanRepublic, United Republic of Tan-zania, Rwanda, South Sudan,Uganda and Republic of Zambia.

But it’s the cost and possibleloss of competitive advantagethat have suppliers worried, saidJeff French, audit partner atGrant Thornton LLP in Milwaukeeand Midwest lead for the firm’sconflict minerals services.

African violence touchesautomotive supply chain‘Conflict minerals’ rules increase costs, red tape

See Minerals, Page 23

We just wasted a lot of time and a lot of money.

Chris Brochert, Lormax Stern Development Co.”

“

See JLTV, Page 25

See HHGregg, Page 24

Perelman Rennert

Bolden


Trash is a perpetual blighton the natural beauty ofBelle Isle.

That the Detroit CityCouncil rejected as “stu-pid” the proposed dealbetween Mayor DaveBing and Gov. Rick Sny-der to have the state takeover control of Belle Islegave me a sense of déjàvu.

More on that later.“They started celebrating before

they gave it to us. I don’t under-stand how Mayor Bing could co-sign this,” said council PresidentCharles Pugh.

“This has no benefit to the city,other than some new sheds. Hell,we could buy some new sheds onour own,” he said.

No benefit? Really? As one whospends a lot of time on the islandyear-round, who has been on everybike path and trail, who knowswhere the raspberries grow in theforest in the middle of the island inearly summer and who knowswhere the secret beach is, I canonly say:

Mr. Pugh, have you ever been onthe island on a Monday morningin the summer to see the pyramidsof trash and been back on aWednesday to see that they re-main?

Have you ever walked gingerlythrough the fields of poison ivythat no one has bothered to trimback, growing profusely on andalong the footpaths the fishermenuse to get to their fishing holes onthe eastern end of the island?

Did you ever see the hundreds oftrees that the National FootballLeague folks planted on the islandin 2006 as part of their carbon off-set program? The ones that friedand died because no city employ-ees ever watered them or removedthe plastic tubes the saplings sat inand died when the sun beat downon them?

Did you ever see the dead treesthat blow over during storms andthen lie there for months?

Have you ever been in the woods,walking along the canal where pad-dleboats and canoes for rent used tofloat slowly by? That canal is nowclogged by trees that have fallendown over the years and by thegarbage thrown or blown in.

Have you ever seen the potholesor disintegrating pavement — doesthe Grand Prix ring a bell? — orbeen on the bike paths that runthrough the woods and are nearly

impassable in their utterdisrepair?

I’ve seen all thosethings. I used to play onthe island with mygrandparents in the1950s. A favorite memorycirca 1954 is them rent-ing a pony and carriageone day and me cracking

the reins to get the pony running.He ran too near a big tree and upwe went on one wheel, my nanascreaming and me laughing.

A sadder memory is watchingthose historic, beautiful horse sta-bles fall into terminal disrepairduring the 1970s and 1980s whenMayor Coleman Young thought apolicy of benign neglect wouldturn the island into such a sadstate that he would have no opposi-tion getting a casino on the island.

I used to play softball tourna-ments on the island when I man-aged the Detroit Free Press softballteam in the 1970s and 1980s. I’ve rundozens of 5K and 10K races there. Ifinished a bunch of Free Pressmarathons by collapsing on thegrass at the finish line that used tobe at the west end of the island.

When I coached the fundraisingmarathon running team for theAmerican Diabetes Association, Iused to insist that one of our twice-a-week group training runs be onthe island.

That used to strike the mostlysuburban, mostly white womenwho had signed up for training aspreposterously weird, even stupidand reckless, until they’d runthere a few times on midweekevenings and came to love thebeauty of a run there, through thewoods and along the river.

So, when I stick my nose into thecity’s business when it comes toBelle Isle, it’s not theoretical.

If Belle Isle, the city’s supposedjewel, could use a helping hand,think how much help the otherparks, the ones that aren’t jewels,could use. The help City Councildoesn’t want them to get because itdoesn’t want Belle Isle workers re-assigned.

Under terms of the proposedBelle Isle agreement, as reportedby the Free Press and The DetroitNews last week, the state’s Depart-ment of Transportation would be re-sponsible for the bridge and roads,would provide energy updates fora variety of buildings, would beef

up security — I doubt I’d find statecops sleeping in their cars at thefar east end of the island, past thelighthouse, unlike the city copswho frequent the site for a snooze— and would renovate picnic shel-ters, bathrooms, the fishing pierand golf course.

The downside? Visitors, whonow use the park for free, wouldneed a $10 annual park passport.

Despite what was promised to bemillions in improvements over thecourse of the 30-year lease, the pro-posal was dead on arrival.

“I am an absolute no,” said coun-cil member James Tate. “Some-times folks take your kindness fora weakness. What we have in frontof us is way beyond disrespect. It’sstupid. It was a terrible attempt ofshoving it down the people’sthroats and our throats.”

“I got the sense the state wroteit. It is a very one-sided docu-ment,” said Kenneth Cockrel Jr.

As for my sense of déjà vu?In 1992 or so, I was in Ed McNa-

mara’s office for an interview.His phone rang. It was Mayor

Young’s office. So he took the call,got in a word or two, had a look ofserious exasperation on his faceand hung up.

Turned out, McNamara hadbeen on the island for a function afew days earlier and had been ap-palled at the garbage overflowingall the bins.

The Wayne County executivehad, he told me, called the mayorafter his visit and offered to havecounty employees remove thegarbage each week. He wouldn’tput out a release about it. Hewouldn’t charge the city. It wasjust something that could be doneout of a sense of civic duty fromsomeone in a position of powerhigh enough to do it.

McNamara told me the mayorhad said he’d get back to him, andnow someone had.

I’m paraphrasing McNamara,but whoever had called from themayor’s office basically said: Keepyour hands off our jewel. Keepyour nose out of our business. Wedon’t need the county butting intoour affairs.

“Can you believe it?” McNama-ra asked me.

Oh, yeah. Easy. No problem.A version of this column original-

ly appeared as a blog atwww.crainsdetroit.com.

2012 AIAG Quality Summit AwardsWINNERS!Congratulations

A ROUND OF APPLAUSE FOR:

Michael BeuerleinMark BraunLori Busha

Shawn CapserMichael Down

Su Glesner

Keith HansonRick King

John KreucherPhil MikulaFred Smith

Stanley Zhou

www.aiag.org #AIAG

AIAG would like to congratulate the following group of volunteers for winning Outstanding Achievement Awards for their dedication to the

field of quality management in the global automotive arena.

The Engineering Society of DetroitEngineering & Technology

The premier recruitment fair for engineers,scientists & tech professionals

Suburban Collection Showplace, Novi

CONNECT SUCCEED GROWNNECT SUCCEED GRO

Job Fair

Made in MI: Engineering Tomorrow'sWorkforce Leadership Breakfast

OctSuburban Collection Showplace, Novi

ESD and its Institute will convene a dynamic panel featuring key leaders from business, labor, government, and

academia to address the engineering shortage in Michigan and workforce dev

Visit www d rg today for more information or to register for either event.#employeeswanted


With friends like City Council,Belle Isle doesn’t need enemies

Tom Henderson

TOM HENDERSON/CRAIN’S DETROIT BUSINESS


ANDREW TEMPLETON/CRAIN’S DETROIT BUSINESS

Opening Day set the pace for numerous sellouts this year at Comerica Park. The Tigers’ season willbe in the top three in franchise history for attendance.


Thanks to Susan Cooper,Beaumont has the fi rst

Women’s Urology Centerin the Midwest.

A Not-for-Profi t Provider

Find out how you can save lives, too. If you wouldlike to make a gift, please go to our website atfoundation.beaumont.edu or click on the codewith your phone.

Behind all of the innovations in women’s health atBeaumont are people like Susan Cooper. A communityleader and a long-time member of our Board of Directors.

Because of her generosity, we were able to found acenter to successfully treat pelvic pain and otherurological conditions that affect 43% of women.

Our Women’s Urology Center has helped hundreds ofpatients from around the country – and from as far awayas Europe and South America. A combination of leading-edge research and treatment in a comforting environmentis helping women who suffer from interstitial cystitis,incontinence and other intimate female problems.

In addition, Susan has been a powerful force in thefight against breast cancer. She was the co-founder ofthe Drive to Beat Breast Cancer, a major philanthropicinitiative of Beaumont’s Comprehensive BreastCare Center.

Susan Cooper is an inspiration to all of us at Beaumont.She reminds us that it doesn’t take a medical degree tosave a life. All it takes is a heart.

Beaumont Women’s Urology Center –

Gift from Susan E. Cooper

BY BILL SHEA


Regardless of whether the Detroit Tigersmake the playoffs, the team remains on paceto record the second- or third-best home at-tendance in franchise history.

That fan surge could mean as much as $32 million in new revenue for the Tigers.

While the results on the scoreboard haveoften disappointed fans, attendance thisyear has been bolstered by the sale of 22,000full-season tickets, up from slightly morethan 15,000 in 2011.

Through Friday, the team was averaging37,584 fans per game at 41,255-seat Comerica

Park, whichwould translateinto 3,044,304 fansfor the 81-gamehome schedule.The average wasdragged down byThursday after-noon’s 34,635 forthe 12-4 loss to theOakland A’s, but itwas expected toincrease with theweekend’s gamesagainst the Min-nesota Twins.

The second-best Tigers atten-

dance is 3,047,139 from 2007, the year afterthe team’s unexpected trip to the World Se-ries. The all-time Tigers attendance recordis 3.2 million in 2008, a surge fueled by theoffseason acquisition of slugger MiguelCabrera. The team also sold its most-everseason tickets, an estimated 27,000, thatyear.

Detroit saw its third-best attendance lastseason with 2.6 million fans (32,617 pergame) at Comerica Park, which the Tigersmoved into for the 2000 season after playingat Tiger Stadium since 1912.

The team could finish with more than405,000 more tickets sold this season than in2011, which back-of-the-envelope math sug-gests is an extra $32 million in gate revenuefor the team.

A single fan is worth $80.49 per game tothe Tigers, according to the annual Fan CostIndex published before the season by theChicago-based sports research firm TeamMarketing Report.

The calculation is derived by using thefirm’s formula, based on a family of four go-ing to a game, and applying its metrics to asingle fan: A fan at Comerica Park buys aticket at $31 (average price), a beer for $8.75,a pop for $4.25, a hot dog for $5.50, parkingfor $5, a program for $5 and a hat for $20.99.

While not a precise figure, the index givesa decent idea of how much revenue each fangenerates for the Tigers.

Detroit finished 95-67 last year and was es-timated in March by Forbes.com to havemade $8.2 million in operating income onrevenue of $217 million.

The run on season tickets was sparked byfans excited over a team that featured the de-fending American League MVP and CyYoung winner in pitcher Justin Verlander,and a lineup built around Cabrera andPrince Fielder, who was signed in Januaryto a 10-year, $214 million free-agent contract.

A pennant race over the final weeks of theseason makes for must-see baseball, while ateam considerably ahead or behind in thestandings can be less compelling when itcomes to selling tickets, baseball insiderssay.

“It seems to me that the Tigers have beenin the pennant race all along, with a little bitof ups and downs,” said Andrew Zimbalist,professor of economics at Smith College andauthor of several sports finance books, in-cluding May the Best Team Win: BaseballEconomics and Public Policy.

Fans also may be interested in watchingCabrera’s pursuit of the first Triple Crown— one hitter leading his league in batting av-erage, RBIs and home runs — since CarlYastrzemski of the Boston Red Sox in 1967.

“They’re not at all out of the race,” Zimbal-ist said. “They’ve got the best hitter in the ALin Cabrera. He’s exciting. You’ve got the bestpitcher in the AL in Verlander. You’re still incontention. This is an exciting team.”

The Tigers have 10 games left and todaybegin their final home stand, a four-game se-ries with the Kansas City Royals.

Detroit’s final six games are three-gameroad trips to Minnesota and Kansas City,with the regular season ending Oct. 3.

Bill Shea: (313) 446-1626, [email protected]: @bill_shea19

Disappointments aside, Tigers onprowl for near-record home gate

DETROIT TIGERS

Miguel Cabrera fueled theall-time Tigers attendancerecord of 3.2 million in2008.

COUNTING THE CROWDSince manager Jim Leyland was hired in2006 and the Tigers began boosting playerpayroll spending and appeared in the WorldSeries that year, Detroit has been in theupper third for attendance among MajorLeague Baseball’s 30 teams:Year Total Average MLB rank2006 2,595,937 32,048 10th2007 3,047,139 37,619 4th2008 3,202,645 39,538 3rd2009 2,567,185 31,693 11th2010 2,461,237 30,385 12th2011 2,642,045 32,617 10th2012* 2,781,222 37,584 5th* Through 74 home games


Deposit and credit products provided through Fifth Third Bank. Member FDIC. Equal Housing Lender. Lending is subject to credit review and approval. © Fifth ThirdBank 2012.

The curious bank.

We don’t.

We see you as an individual.

With the guts to run a business.

Which makes us curious how you do it.

And how we, as your bank, can help

you do it better. What makes your

business special? What is its true potential?

How do you actually get paid? It’s how

we can generate ideas that work for you.

Like integrated payables and receivables

solutions that may help you improve cash

flow. Or, perhaps, financing options you

never knew existed. We don’t think a

bank can do that without being curious.

Learn more at 53.com/BusinessIdeas

We’re Fifth Third Bank.

IS THIS HOW YOUR BANK SEES YOU?


Mortgage firms pleased with latest Fed move; banks are mixedBY TOM HENDERSON


Troy-based Flagstar Bancorp Inc.(NYSE: FBC) has been quick tobenefit from the announcement bythe U.S. Federal Reserve System thatit was launching a third round ofmonetary policies to stimulate thenational economy.

The Fed’s Open Market Commit-tee made the announcement ofwhat is termed quantitative eas-ing, or QE3, on Sept. 13. The nextday the bank’s share price movedabove $1 for the first time sinceMay 4, going from 95 cents to $1.01,and last Friday, it hit a one-year

high of $1.21. Ithas traded aslow as 46 centsin the last 12months.

The New YorkStock Exchangehas told thebank it needsto have itsshare priceabove $1 for 30successive trading days by the endof the year or face delisting. Itshareholders are expected to ap-prove a proposal today for a 10-for-1 reverse split, “but if the stockstays above $1, we may not have to

do it,” said Michael Tierney, presi-dent of Michigan operations.

The Fed announced that itwould extend near-zero rates untilat least mid-2015 and as long afterthat as needed until U.S. unem-ployment falls from 8.1 percent toless than 7 percent. It also an-nounced it would buy at least $40billion of mortgage-backed securi-ties each month from other finan-cial institutions.

Mortgage companies welcomedthe news, although reviews weremixed among bankers.

Tierney was happy to see theFed give assurances that low rateswill continue for nearly three

years, at least, and happier at mar-ket reaction for his bank.

“Investors came to the conclu-sion that the mortgage business isgoing to be good,” he said. “Ourtheory is institutional investorsdid their homework about whowould benefit from the Fed’s an-nouncement.”

Tierney said the Fed announce-ment has him leaning further to-ward finding more space to househis growing number of mortgagebankers. In the first six months,the bank did $23.7 million in loanoriginations, about double what itdid in the same period last year.

Last January, the bank signed a

lease for 95,000 square feet in theTroy Officentre complex on BigBeaver Road, not far from compa-ny headquarters on Corporate Dri-ve near Crooks Road.

Tierney said that space is nearlyfull, and executives have been try-ing to decide whether to leasemore. Knowing rates will stay lowuntil at least mid-2015 makes atleast a short-term lease on anothersite more likely.

David Provost, president, chair-man and CEO of Troy-based TalmerBank and Trust, saw the Fed an-nouncement as a mixed blessing.He said that eventually banks willneed interest rates to be higher be-cause higher rates allow banks tomake a bigger profit on the spreadbetween what they pay to borrowand what they charge borrowers.

Provost said the bank expectshome loans to increase substan-tially from the current 250 amonth. It did about 150 a monthlast year.

Cathy Nash, CEO and presidentof Flint-based Citizens Republic Ban-corp Inc., told Crain’s following theannounced acquisition on Sept. 13of her bank by FirstMerit Corp. (Nas-daq: FMER) that the reason for thesale was that the bank was margin-dependent and that continuing lowrates left little chance to generatedecent returns for shareholders.

Mat Ishbia, president of the Unit-ed Wholesale Mortgage division ofBirmingham-based United Shore Fi-nancial Services LLC, said he had ex-pected the Fed to announce stimu-lative monetary policies but washappily surprised by the news.

“There’s no downside for us.This will help grow the economyand get consumers better loanrates. There’s already a lot of refi-nancing going on, and this willmean more, and it will help otherpeople afford more of a house.”

Ishbia said the timing affirmsthe recent decision by the compa-ny to sign a long-term lease for100,000 square feet for a new head-quarters in Troy, with an optionfor an additional 100,000 squarefeet to accommodate expansion.

But he said the company’sgrowth plans would have re-mained in effect regardless.

“Our growth plan is based oncapturing market share throughbetter service, but this certainlyhelps,” he said.

Bob Walters, chief economist atDetroit-based Quicken Loans Inc.,the state’s largest mortgage origi-nator, with about $30 billion lastyear, took a cautious approach tothe Fed announcement.

“After the Fed announcement,mortgage bonds increased aboutone-half point, which equates toabout one-eighth of a percent inrate. So the initial reaction hasn’tbeen a game changer,” he said.

“Longer term, the Fed is sayingthey will do what they need to doto attempt to keep mortgage rateslow. That’s good news. But, bor-rowers shouldn’t think this meanslong-term rates will stay this lowindefinitely. If the economy startsto heat up, or if inflation raises itsugly head, we could see rapid andpainful increases in long-termmortgage rates.”

Tom Henderson: (313) 446-0337,[email protected]. Twitter:@tomhenderson2

Tierney


DROID RAZR MAXXby MOTOROLABuilt to go the distance withbattery life to spare

$19999No rebate required. New 2-yr. activation required.

DROID XYBOARD 10.1 by MOTOROLA

A 4G LTE powerhouse ofproductivity and play

With Microsoft Office 365 on America’s Fastest 4G Network,you can keep your business moving as fast as you do.

GET EVERYONE ON THE SAMEPAGE AT THE SAME TIME.

CLOUD-BASED ACCESS TO YOUR IMPORTANT DATAWITH MICROSOFT® OFFICE 365

1.800.VZW.4BIZ(4249)verizonwireless.com/microsoftoffice365

Visit any Verizon Wireless store today totalk about our Small Business solutions.

Activation/upgrade fee/line: Up to $35. IMPORTANT CONSUMER INFORMATION: Subject to Major Acct. Agmt., calling plan and credit approval. $6/mo/user license. Available only for business accounts with 5 to 49 lines. Subject to Microsoft end user license agmt. Max 50 end user licenses per account. First month free offer issued as bill credit. Up to $175 ($350 for advanced devices) early termination fee/line & add’l charges apply to device capabilities. Offers & coverage, varying by svc, not available everywhere; see vzw.com. Limited-time offer. Restocking fee may apply. While supplies last. DROID is a trademark of Lucasfilm Ltd. and its related companies. Used under license. LTE is a trademark of ETSI. 4G LTE is available in more than 300 markets in the U.S. © 2012 Verizon Wireless. F3470

MONTH FREE$6/mo applies thereafter unless customer cancels.

Valid: 8/6/12 — 10/31/12.

DBpageAD.qxp 9/5/2012 9:20 AM Page 1


Re: Canada’s pitch for new bridge Take a trip over the Ambas-

sador Bridge and drive out HuronChurch Road, where it lets out tothe new Essex Parkway, whichends at the proposed bridge’sCanadian end. The Canadianshave removed dozens of housesand businesses to make way forthe Parkway that will carry all thecar and truck traffic. All the Cana-dians have to do is to prohibit trucktraffic on Huron Church Road, andthe Ambassador Bridge is done.

jg48386

Re: L. Brooks Patterson pays fine, calls not buckling up ‘a mistake’

Oakland County Executive L.Brooks Patterson reminded us oftwo important points. First, thelaws of physics apply to everyoneequally. Second, while many high-level officials might try to usetheir position of power to weaseltheir way out of paying the $65fine, Brooks proved yet again that

he is a respectable leader who holdshimself to the same standards aseveryone else.

Remus

Re: Area hospitals are growing, selling their own produce

When I was hospitalized atBeaumont a few years ago, all Iwanted from the kitchen was a rawvegetable. Preferably a green pep-per. Alas, there was none to be had. Ihope this changes things.

esther

This is a transformation in itsearly stages. The effects go way be-yond the $20,000 in savings due to, Iassume, growing vs. buying theproduce. There are the potential ef-fects on patients’ health and the

Seek the best: Payfor nonprofit execs

re nonprofit executives overpaid? Maybe some are. Just like in the for-profit sector, peo-ple aren’t paid according to their worth. And a vigor-

ous advocate for the 99 percent might review the list of top-paid nonprofit executives in this week’s issue (see Page 14) andthink so. The temptation is to expect nonprofit executives towork at “charitable” rates.

But if the goal is for nonprofit organizations to achieve thebest results in whatever mission they are pursuing, whywould you not seek — and pay for — the best talent possible?

That’s the question Dan Pallotta, founder of the Breast Cancer3-Day fundraising events, posed Sept. 14 in The Wall Street Jour-nal essay “Why Can’t We Sell Charity Like We Sell Perfume?”

Pallotta argued that nonprofits should compete aggressive-ly for talent and pay for results. He pointed to congressionalcritics of paying the then-CEO of the Boys & Girls Clubs ofAmerica nearly $1 million in 2008, including catch-up pay-ments for retirement. Pallotta noted that over her tenure, thatexecutive tripled the nonprofit’s revenue to $1.5 billion. If any-thing, she may have been underpaid.

Closer to home, the compensation of Cornerstone Schoolsfounder W. Clark Durant became a campaign issue this yearduring his unsuccessful run in the Republican U.S. Senate pri-mary; his Democratic critics thought it was too generous. Yetdonors who paid Durant’s salary publicly said they believedDurant was worth every dime because of his passion and fund-raising abilities for the schools.

By benchmarking with comparable positions within andoutside of Southeast Michigan, boards might find their execu-tives are underpaid.

Detroit Institute of Arts CEO Graham Beal, for example,leads the pack on our list among arts and cultural organiza-tions in Southeast Michigan, with total 2010 compensation of$426,000. This was after he led the $158 million renovation andground-breaking overhaul of how the museum’s collectionswere displayed. And it doesn’t reflect his most recent role inthis year’s successful millage campaign. Bloomberg News hasreported New York museum directors with packages of morethan $2 million; the director of the Art Institute of Chicagoearned $836,000 in 2008.

Salary information for top executives of publicly tradedcompanies is public information. So, too, for nonprofit organi-zations as part of the public purpose that justifies their tax-ex-empt status.

The information reported this week can help nonprofitboards benchmark their own compensation practices and per-haps ask themselves whether their executives are, in fact, paidfor results.

The city of Detroit is going to gobankrupt.

Plan on it, and do whatever youhave to do so there will be no sur-prises in your business.

After seeing the government ofDetroit in action once again lastweek, it is painfully obvious thatthose in charge are either oblivi-ous or don’t care about the direc-tion they are taking this city.

I must admit, I always had somesecret hope that they could pull thecity out of the financial hole. It wastime for an intervention, andeveryone would see the light. I

thought there would bean awakening of justhow serious this is andyou’d see a new begin-ning.

I was just kidding my-self. And they are justkidding themselves andthe citizens of Detroit.

We are about a footfrom the precipice;we’re heading over thecliff. And sadly, no oneseems to care.

It’s just a matter of time — andnot much time, at that.

I’ve always kiddedthat a benevolent dicta-tor is probably the bestform of government,only if I get to pick thedictator. Well, the feder-al judge who will handlethe city’s bankruptcymay not be benevolent,but he or she will be adictator.

After watching ourgovernment at work

last week, I realized that it’s a lostcause.

Business needs to figure out

what will happen when (not if)bankruptcy is filed. What will wehave to do in our community tocontinue to function and run ourbusinesses?

I am not sure of the motives ofour political leaders. All I know isthat they, all of them, continue toignore the obvious and seem in-tent on spitting in the eye of any-one who would like to help thecity.

It’s better to sink on your ownthan perhaps take a handout fromsomeone who might not only knowa lot more than you do but is will-

ing to aid a drowning swimmer. When Detroit is thrown a life

preserver, those in authority dis-card it because they are sure thatthey can survive on their own.Well, they’re wrong, and they’regoing to drag the city into the fi-nancial quicksand for their ownmisguided agenda.

This city cannot survive untilthe next election. In fact, when thecity files for bankruptcy, I don’teven know if they’ll have an elec-tion. That might just be postponedindefinitely.

It’s too bad.

Crain’s Detroit Businesswelcomes letters to the editor.All letters will be considered forpublication, provided they aresigned and do not defameindividuals or organizations.Letters may be edited forlength and clarity.Email: [email protected]

I’m reserving a table on the Titanic

A

From www.crainsdetroit.comReader responses to stories andblogs that appeared on Crain’swebsite. Comments may beedited for length and clarity.

LETTERS

OPINION

KEITH CRAIN:

TALK ON THE WEBState horse racing regulators overreachEditor:

I found the Michigan Briefsarticle “Horse racers claimstate aims to rein in theirrights” (Sept. 17) most informa-tive. It exposed the arrogance ofMichigan regulatory officialswho believe that the Bill ofRights is nothing more than aset of legal loopholes to be dis-missed and not a foundation ofprinciples that is a prerequisitefor the establishment of a fairand orderly society.

Dennis WolfeWest Bloomfield Township

See Talk, Page 9



from moving away.“No one strategy will, by

itself, revitalize the Detroitregional economy,” hesays. “However, nothing ismore powerful to remakingDetroit as a center of inno-vation, entrepreneurshipand population growththan embracing and in-creasing immigrant popu-lations.”

The problem with this thinkingis that it misunderstands the roleimmigrants play in an economicrevival. They aren’t the engine forgrowth. They are only the fuel, al-beit a high-octane one. The differ-

ence is crucial.The newcomers are very good at

finding and seizing openings in aneconomy that the native-born resi-dents don’t see or don’t want. Thisis one reason cities should removethe barriers keeping immigrantsaway. But first these opportunitieshave to exist.

When they do, in a city like De-troit that has lost population, theloss is reversed rather quickly asimmigrants move in to captureopenings left by departing resi-dents. A 2003 Brookings Institu-tion study found that five of sixmetropolitan areas, including NewYork, with the biggest exodus of

residents in the 1990s also had thelargest influx of foreigners. Bycontrast, Detroit and other RustBelt cities have experienced onlyoutflows since the 1960s.

Why? New Yorkers were mostlyleaving for greener pastures else-where, while Detroit’s residentsare mostly fleeing to escape a lackof opportunities.

It turns out, immigrants aren’tpioneers whose survival dependson conquering an inhospitable fron-tier. Yes, they can put up with fargreater hardship than the native-born, but they aren’t clueless in-genues who are easily seduced.They have word-of-mouth networks

that alert them to places that offerthem the best economic and socialfit, making it difficult to plunk themanywhere and expect results.

So what should Detroit, Balti-more and other struggling citiesdo to become more attractive toimmigrants? Offer them a decentquality of life at an affordableprice. This means improvingschools, tackling crime, creatingan entrepreneur-friendly climateand keeping taxes reasonable.

In short, fix the economic en-gine first.

Shikha Dalmia is a Detroit-basedsenior analyst at Reason Founda-tion.

Many U.S. cities caughtin a spiral of economic de-cline think they have a res-cue plan: an influx of immi-grants. Officials arecarrying out policies aimedat attracting foreigners inhopes that their energy anddrive will reverse decadesof population losses and setthe stage for a revival.

Such thinking is abreath of fresh air — and the polaropposite of the restrictionist ragethat has led Arizona and otherstates to adopt draconian tactics tochase away such people. But immi-grants aren’t miracle workers whocan fix any broken economy. Theirabsence often signals that citieshave taken a wrong turn. Rollingout the welcome mat won’t get aplace back on track without funda-mental reform.

The notion that immigrants canrevive dying cities isn’t new.Cleveland started trying to get its“fair share” of the foreign-bornfrom traditional immigrant mag-nets such as Los Angeles, NewYork, San Francisco and Houstonabout a decade ago.

Its efforts petered out, but otherstruggling cities have recentlyjumped on the immigrant bandwag-on.

In Baltimore, Mayor StephanieRawlings-Blake wants to attract10,000 new families, including for-eigners, within 10 years. To thisend, she has barred authoritiesfrom asking city residents abouttheir immigration status. Themayor, a Democrat, is also offeringnutrition and exercise programsin Spanish, an overture that wasanathema to her predecessor.

In Detroit, former Democraticstate Rep. Steve Tobocman runsthe nonprofit Global Detroit thathas raised $4 million to investigateways to attract and retain immi-grants. The group is experiment-ing with programs to connect low-income immigrant and minorityentrepreneurs with lenders thatoffer loans without collateral. Heis also seeking ways to keep for-eign students in local universities

Immigrants are the (partial) answerOTHER VOICES:

Shikha Dalmia

R&D that will go into making im-plementation of greenhouse tech-nology more efficient. Congrats,Henry Ford, on having the vision topursue the R&D now for new ideas.

Mitch

Hmm. A $1 million donationthat saves $20,000 per year. Won-der if that is the net (potential)benefit after paying the full-timefarmer employed. May be a niceidea, but not an economical idea.

William J

Re: Federal Reserve Bank leader says Feds must stimulate economy

Banks need to relax lending re-quirements responsibly; that is,avoid the mistakes of the past but getdollars flowing back into smallbusinesses that have been unableto tap into the billions of dollars ly-ing around and earning no interest.

john md

■ From Page 8

TALK CONTINUED


T h e Cardthat rolls withyour cash f low.

For a limited time, get a 2% Discount consisting of a 1.5% Early Pay Discount plus, for the first 6 months,

get an extra 0.5% on all purchases, up to $250,000 spend.

GET A 1.5% EARLY PAY DISCOUNT TAKE UP TO 60 DAYS TO PAY WITH NO INTEREST

1-866-977-PLUM OPEN.COM/PLUM

Early Pay Discount: Pay any portion of your balance within 10 days of the statement closing date and get a 1.5% discount on

virtually all purchases made that month. The discount will appear as a credit on the following billing statement. Extra Daysto Pay: Pay at least 10% of the balance from new activity on your billing statement plus the entire amount of any previously

deferred payment by the Payment Due Date on that statement and Defer Payment of the remainder of that balance until the

closing date of your next billing cycle with no interest. Other terms and restrictions apply. Visit open.com/plum for details.


BY SHERRI WELCH


s the economy began to slideinto recession four yearsago, Altarum Institute knew it

had to do something if it wantedto keep its CEO.

The Ann Arbor-based healthsystems research and consultingorganization competes not onlywith other nonprofits, but alsowith for-profits.

“We benchmark executive payagainst that of like con-tract research and con-sulting organizations,(and) blend the marketdata” from nonprofitand for-profit peers “toensure it is reflective ofthe competition weface,” said board Chair-man Robert Kelch, spe-cial assistant to the

president and retired executivevice president for medical af-fairs at the University of Michigan,in an email.

In 2008, Altarum Presidentand CEO Lincoln Smith’s com-pensation lagged about 51 per-cent behind the pay of the chiefexecutives at similar organiza-tions, Kelch said.

So the board began providingincreases, primarily throughbonuses, to close the gap. Be-tween 2008 and 2010, Smith’s com-pensation increased 198 percentto $1.04 million from $348,858.

As of 2010, the gap between hispay and his peers’ was narrowerbut still 39 percent, Kelch said.

Smith’s compensation surgereflects a wider local trend:Nearly two-thirds of the top-paidnonprofit executives in the re-gion saw pay increases in 2010 astheir organizations continued torecover from the recession andstrove to retain top leadership.

One quarter saw double-digitincreases in 2010, the most re-cent year for which numbers areavailable from mandatory non-profit regulatory filings with theInternal Revenue Service. Crain’sexamines nonprofit executivecompensation biennially.

Smith was among the benefi-ciaries of the trend of nonprofitsspending to keep executive tal-ent in 2010. His total compensa-tion increased nearly 31 percentin 2010 alone, driven by a nearly$300,000 bonus.

His bonus was related to im-

proved organizational perfor-mance, as well as the need tobring his compensation nearerto market rates, Kelch said.

Altarum’s goal is to performbetter financially than three-quarters of its competitors, hesaid. While top peers at that 75thpercentile grew their organiza-tions at an average rate of under9 percent between 2008 and 2009,Altarum grew at a rate of 22 per-cent, even excluding the acquisi-tion it made in 2009, he said. Itsrevenue increased from $42 mil-lion in 2008 to $72 million in 2010.

“Over the last five years, Al-tarum has consistently rankedin the top quartile in terms ofgrowth,” Kelch said.

And Smith’s salary increasesreflect that.

Pay recoveryThe large pay increases reflect

a return to pre-recession com-pensation models, said Ed Stein-hoff, a partner at the Detroit of-fice of national human resourceconsulting firm Mercer (US) Inc.,


DPS saves withonline auction

Detroit Public Schools estimates ithas saved nearly $1 million onpurchasing costs in the four monthssince its new procurement chiefbegan using online reverse auctionmarketplace company FedBid Inc. tobuy some of its supplies.

Tracy Joshua, who joined thedistrict as chief procurement andlogistics officer earlier this year afterserving as executive director of globalsourcing at New York-based Bristol-Myers Squibb, said the district triedFedBid.com as a pilot program in lateMay and early June, then became apermanent online purchaser for thefiscal year starting July 1.

The district pays nothing to use theservice, although Vienna, Va.-basedFedBid collects a hosting fee after eachauction transaction. Detroit is the firstschool district in the nation to use theservice, in which it posts a procurementorder where vendors can competeonline to become lowest bidder.

“It runs the gamut, everything from Ato Z in terms of running a school,” shesaid. “And some services have gone upfor bids as well — we’ve had a degreeof success with that. But mostly it’shelped us find various goods.”

Joshua said FedBid is just one ofseveral new school district approachesto purchasing since she assumed theprocurement post. Others includemore than 20 new “strategic categoryteams” that coordinate supplysourcing by category of products, andcentralizing purchases at a districtlevel that used to be handled byindividual schools or departments, tofind savings through scale.

The district expects to shave about$5 million from its total procurementcosts this fiscal year, and Joshua saidabout $3 million of that savings couldcome through FedBid. That includes$800,000 to $1 million in savings todate, including a single classroomhandbook purchase order that savedDetroit schools about $100,000 ormore than half the total cost.

“Several technology companies hadapproached us about addingtechnology to our resources. But whatwas unique about FedBid was theywere willing to do the pilot program withus and didn’t require us to purchaseany software,” she said. “They werealso willing to invest resources with thedistrict. They’ve been sending teams towork with us and to make sure we wereproficient in using their tool.”

Joshua said the Detroitcollaboration will allow FedBid toeventually offer services to otherschool districts, municipalities andpossibly some of the Detroit area’slargest private employers.

A study published last month atSoutheastern Louisiana Universityfound that the Alabama-based ArmyContracting Command, which has amajor purchasing center at the U.S.Army Tacom Life Cycle ManagementCommand in Warren, has saved nearly$150 million on more $1 billion worthof acquisitions since 2007 via FedBidreverse auctions.

Ext ra

Bouncing backImproving economy puts a spring into pay packages of nonprofit execs

nonprofit compensation report

Kelch

See Pay, Page 12

ISTOCKPHOTO.COM

A

REPORTER’S NOTEBOOK

Chad Halcomcovers litigation,higher educationand defense. Call (313) 446-6796or write chalcom

@crain.com.

Chad Halcom

CLOSER LOOK� Expect moreCEO turnover,smaller raises,Page 13

� PatriciaMaryland of St.JohnProvidenceHealth Systemgot a 35 percentincrease incompensation.Snapshots ofexecs’ pay,Page 14� Buy a reporton more than90 Michigannonprofits for$69, www.crainsdetroit.com/lists

Maryland


a subsidiary of Mercer LLC.“Whether it’s a for-profit organi-

zation or a not-for-profit organiza-tion, we definitely saw a recovery inpay levels to more historical levelsduring that time period,” he said.

The average base pay increasethe past several years for top non-profit executives has been fairlylow at about 3 percent, he said.That aligns with the median basepay increase of about 2 percent in2010 among the nonprofit execu-tives on Crain’s list.

“But when you start looking at

total compensation, which includesannual bonuses, and for some of thelarger health care systems’ poten-tial long-term incentive awards aswell as deferred compensation, I’mnot surprised to see double-digit in-creases,” Steinhoff said.

In 2008 and 2009, for the mostpart, bonus payments were ex-tremely low because of the down-turn, he said.

The change from 2008 to 2010 re-flects the economic recovery andassociated payment of bonusesand long-term incentives that were

more aligned with historicalbonus levels than with 2008 levels.

Larger increases also may sig-nal a nonprofit’s moves to bring anexecutive up to market-rate pay,Steinhoff said.

But when the books close on2011 and 2012, “you’ll probably seethe typical 3 percent or so increas-es in base pay and bonuses,” andnot so many of the larger increas-es. (See story, Page 13.)

Nonprofits can get extensions ofup to 11 months after the close oftheir fiscal year to file their 990

forms, which contain compensa-tion data for their chief executives,with the IRS.

Bonuses tip scaleBonuses continued to figure

prominently in the compensationpackages of local nonprofit execu-tives in 2010, led by incentiveawards such as $548,454 to NSF In-ternational Inc. CEO Kevan Lawlorand $645,161 to Trinity Health Corp.CEO Joseph Swedish, who was thehighest-paid nonprofit executive in

Southeast Michigan in 2010. His to-tal compensation was $3.6 million.

Also seeing sizable bonuses in2010 were Thomas Fleszar at DeltaDental Plan of Michigan with $789,500in incentive pay, Patricia Marylandof St. John Providence Health Systemwith a $931,214 bonus and DanielLoepp at Blue Cross Blue Shield ofMichigan with a $1.28 million bonus.

Loepp’s incentive pay, com-bined with a 13 percent base payraise, increased his total compen-sation 56 percent in 2010.

The percentage increase isskewed because Loepp gave back$340,000 in incentive pay in 2009,said Blues director of corporate af-fairs Helen Stojic via email.

Had Loepp taken the $340,000bonus in 2009, his pay would haveincreased by 31 percent in 2010.

“(2010) was the first time Loeppreceived long-term incentives for aprior completed performance cy-cle in which he served as CEO forthe full cycle,” Stojic said.

As with Altarum’s CEO, the sig-nificant pay increase was “to bringhim closer to the market medianfor executives in comparably-sizedcompanies,” she said.

“Mr. Loepp’s total compensationhas been below that of his marketpeers,” Stojic said.

The increase in Loepp’s pay alsoreflects the Blues’ strong companyperformance in terms of member-ship, technology improvementsand cost savings, among otherthings, she said.

The bonus award opportunityfor senior executives is typicallydouble-digit, Steinhoff said, and afairly large percentage of totalcompensation.

Also, “to go from a zero bonus orsmall bonus to a fairly large bonuswould be a double-digit increase,”he said.

Incentive programs are designedto align executive pay with compa-ny performance, Steinhoff said.

“So in down years, pay will bemuch lower. And in good years,the payout will reflect the compa-ny’s performance.”

Base pay boostSubstantial base pay increases

also played a role in keeping non-profit executive compensationcompetitive.

Kathleen Mullins, president ofthe Edsel & Eleanor Ford House inGrosse Pointe Shores, saw a 16 per-cent increase in base pay, and HealthAlliance Plan CEO William Alvin gota 21 percent increase, putting hisbase compensation at $466,597 andtotal compensation at $707,537.

Detroit Zoo director and CEORon Kagan saw his base pay in-crease by nearly a third in 2010,bringing it to $292,009. A bonus of$25,650 in 2010 also helped bringhim closer to his peers.

Once again, the increase was in-tended to keep Kagan competitivewith his peers.

“Between 2008 and 2009, thecompensation committee of theboard did a compensation study,and Ron’s salary was increased$50,000 based on (that,)” said zooCommunications Director Patri-cia Janeway Mills in an email.

Sherri Welch: (313) 446-1694,[email protected]. Twitter: @sherriwelch

Doctor’s orders: lower stress, higher returns.

t r u e s t o ry

34977 woodward avenue, suite 200 birmingham, mi 48009 248.530.6202 87 7.530.0555

The medical practice had the familiar hallmarks of an investment quandary. Its physicians were highly educated,respected, successful and accustomed to calling the shots. Including where and how to invest wealth—theirown, as well as their practice’s 401(k). But being a first rate doctor (or any other high level professional)doesn’t always translate into being a first rate wealth manager. So unconfident were some about thewisdom of their investments that they were checking their stocks between surgeries.Talk about short-term positions.

Someone had a sensible idea: call Greenleaf Trust. We met with the doctors, introducedthem to our client-centric team model, and described in detail our holistic approach towealth management. Within days, many had become clients and we were asked tomanage the practice’s 401(k). Over time, we repositioned their investments soas to properly diversify and better position their portfolios for growthpotential. All’s well that ends well, you might say,but there’s another chapter to this story.

Among the physicians, one’s spouse had agingparents whose investments were being handled

by a national brokerage firm. The account was reasonably wellmanaged by the father, but upon his death the widowed wife was

ill-equipped to assume a financial decision-making role. The brokershowed little empathy, and seemed uninterested in meeting with her grown children.

Again, the sensible idea arose: call Greenleaf Trust. From that day forward, what became apparent wasthat our interest in the well being of the family was equal to our interest in the well being of their assets.At the family’s request, we carefully transferred their investments from the brokerage firm to Greenleaf

Trust, shielding them from unwarranted fees, maddening bureaucracy and further duress. We adjustedtheir holdings and overall plan, so that generational trusts could be established for the future benefit of third

and fourth generations. Every decision we made was focused on their well being, and they apparently agreed.The entire family ended up moving their respective assets to Greenleaf Trust.

We’re the first to say not every investment strategy needs a secondopinion. But with client satisfaction rates approaching 100%, and ourunwavering focus on integrity and trust, it is safe to say our clients feelbetter about their financial health. Call us if you’d like to learn more.We’ll gladly make a house call.

Financial Security from Generation to Generation


Finance Extra: Nonprofit Compensation

Pay: Improving economy puts spring into execs’ pay packages■ From Page 11


Crain’s top-paidnonprofit execu-tives joinedtheir organiza-tions between2008 and 2010.Four joined in2010, the mostrecent year forwhich mandato-ry financial doc-uments are

available.Among the new faces in 2010:� Sandy Baruah replaced Richard

Blouse Jr. at theDetroit RegionalChamber.

� Thomas Ste-vick succeededinterim CEODonald Lopp-now and formerexecutive direc-tor RonaldMiller at EasternMichigan Univer-

sity Foundation.� Kevin Klobucar replaced

Jeanne Carlson at Blue Care Net-

work.� Kari Walker

replaced Leroy“Michael” LottJr. at the South-gate-based Guid-ance Center.

Between 2008and 2009, theheads of fourother nonprofitson the list of top-

paid nonprofit CEOs also changed: � Susan Burns took over St. John

Providence Health System Founda-

tions, succeeding interim CEODeborah Condino.

� Eugene Michalski succeededBeaumont Health System’s KennethMatzick, who topped Crain’s 2010nonprofit executive list with a $6.6million deferred compensationpayout.

� Thomas Malone, M.D., replacedIris Taylor as head of Harper-HutzelHospital.

� William Alvin succeededFrancine Parker as CEO of HealthAlliance Plan.

— Sherri Welch

New faces atop the organization-al charts will be a trend in comingyears at local nonprofits.

The 2012 Michigan NonprofitCompensation and Benefit Surveyfrom the Dorothy A. Johnson Centerfor Philanthropy at Grand Valley StateUniversity and commissioned by theMichigan Nonprofit Association sug-gests there will be more turnovercoming among top nonprofit exec-utives around the state.

That’s because more than half oftop executives are nearing or pasttraditional retirement age.

Of the 391 nonprofit executivedirectors or CEOs who respondedto a question about their age on thesurvey, 158 (40 percent) said theywere age 50-59 and another 100 (26percent) said they were age 60-69.

Change already has been underway. Eight of those listed among

Ourr r u

r r r u r r

ur

care partner?

The Right Plan for a Healthier You™

u

Gerry Myersr ess

u ru u

u u

1-800-530-9071u r



Expect more turnover at the top in coming years

Executive raises looking low for 2011;male CEOs do better

Industry watchers don’t expectto see much change in compensa-tion trends for local nonprofit ex-ecutives when all of the numbersare in for 2011.

Not all nonprofits have reportedcompensation data for calendar2011, since they can get extensionsof up to 11 months following theclose of their fiscal year. But a sur-vey completed by the Dorothy A.Johnson Center for Philanthropy atGrand Valley State University earlythis year points to static compen-sation at nearly a third of respond-ing nonprofits, and low increasesat others.

The Michigan Nonprofit Associa-tion commissioned the 2012 Michi-gan Nonprofit Compensation andBenefit Survey.

Of 342 nonprofits responding toquestions about their top execu-tives’ 2011 compensation, 152 (44percent) said they did not givetheir CEO a raise, and 102 (30 per-cent) gave their CEO a raise of 2percent to 5 percent.

Respondents reported a medianpay increase of 2 percent for execu-tives who did receive a raise lastyear, said Teresa Behrens, direc-tor of special projects, CommunityResearch Institute/Johnson Cen-ter for Philanthropy, via email.

“This is virtually unchangedfrom the 2010 survey, suggesting athree- to four-year plateau in non-profit compensation,” she said.

Also of note: On average, malenonprofit CEOs received a bonusof $10,614, and female CEOs re-ceived an average bonus of $6,145.

And average pay increases were3.38 percent for male CEOs and2.19 percent for female CEOs, ac-cording to the report.

The report didn’t provide rea-sons why male executives receivedcompensation increases at a high-er rate than women, but did notethat a higher percentage of maleCEOs in large nonprofits respond-ed to the survey.

— Sherri Welch

Baruah Klobucar Burns




Licensed Beverage ExperienceIn Your Corner.

Chris Baker

� Metro Detroit � Grand Rapids � Kalamazoo � Grand Haven � Lansing

TOP-PAID NONPROFIT EXECUTIVESCrain’s Detroit Business creates this biennial list of the region’s top-paid nonprofit CEOs or top executives based ontax form research. Figures reflect 2010 calendar year compensation reported in IRS 990 forms. Total compensationincludes deferred compensation, benefits and other types of compensation. Top earners are listed by categorybelow. To buy an expanded report, including financial data on more than 90 Michigan nonprofits and their topexecutives, for $69, visit crainsdetroit.com/lists.

Incentive TotalBase pay pay compensation

Arts, community and cultureGraham Beal, Detroit Institute of Arts $351,137 $35,000 $426,699Anne Parsons, Detroit Symphony Orchestra $270,000 0 $363,591Rich Homberg, Detroit Educational Television Foundation $285,870 $33,500 $346,509Patricia Mooradian, The Edison Institute Inc. (The Henry Ford) $264,815 $50,000 $341,158

BusinessDoug Rothwell, Business Leaders for Michigan $404,355 $25,000 $491,061Beth Chappell, Economic Club of Detroit $234,520 0 $282,486Sandy Baruah, Detroit Regional Chamber $256,025 0 $281,426Mark Tomlinson, Society of Manufacturing Engineers $253,836 0 $273,560Terry Barclay, Inforum $176,748 $13,124 $201,748

Fundraising foundationsW. Clark Durant, The New Common School Foundation $508,000 0 $558,214*Susan Burns, St. John Health Foundation $279,109 $29,866 $331,226Melinda Callahan, Presbyterian Villages of Michigan Foundation** $140,660 0 $140,660Ruth Stephens-Collins, Crittenton Hospital Medical Center Foundation $95,873 0 $105,009* Includes $33,000 in reportable compensation paid by New Common School Foundation, $50,214 estimated other compensation from thefoundation and related organizations and $475,000 from Genesis Foundation earned as an independent contractor.** Callahan left the organization in February 2012; Paul Miller is now president

Grant-making foundationsRichard Rapson, The Kresge Foundation $470,000 0 $610,679Ira Strumwasser, Blue Cross Blue Shield of Michigan Foundation* $180,250 $94,304 $461,368C. David Campbell, McGregor Fund $332,269 0 $421,474Mariam Noland, Community Foundation for Southeast Michigan $369,835 0 $421,126* Ira Strumwasser’s bonus was awarded for his role as vice president of Blue Cross Blue Shield of Michigan

Health careJoseph Swedish, Trinity Health Corp. $1,240,774 $645,161 $3,645,385Daniel Loepp, Blue Cross Blue Shield of Michigan $1,272,690 $1,276,033 $2,756,687Nancy Schlichting, Henry Ford Health System $1,201,258 $455,663 $2,116,049Patricia Maryland, St. John Providence Health System $866,565 $931,214 $1,825,510

Social ServicesMichael Brennan, United Way for Southeastern Michigan $342,353 $50,000 $456,508Reid Thebault, YMCA of Metropolitan Detroit $192,368 $184,999 $454,860Mark Stutrud, Lutheran Social Services of Michigan $262,634 $20,000 $402,034Barbara Nurenberg, Jewish Vocational Services and Community Workshop $270,212 0 $331,834

Nontraditional/otherKevan Lawlor, NSF International $360,871 $548,454 $1,077,613Lincoln Smith, Altarum Institute $265,342 $299,700 $1,039,011Jane McNamara, GreenPath Inc. $416,274 $128,534 $590,883

SNAPSHOTS

� Novi-based Trinity Health Corp.CEO Joseph Swedish was thehighest-paid nonprofit executive in2010, with total compensation of$3.6 million, despite a 4.6 percentdecrease in his total compensationyear over year. His compensationincluded a bonus of $645,161 in2010, down from a bonus of $1.6 million in 2009.� Rich Homberg, president andgeneral manager of DetroitEducational TelevisionFoundation/Detroit PublicTelevision, received a bonus of

$33,500, up from a $16,500 bonusthe year before. He received a carallowance in 2010 as one of hisfringe benefits.� Patricia Maryland, head of Warren-based St. John Providence HealthSystem, got a 35 percent increase inher total compensation in the form ofa bonus of $931,214 in 2010.� Mark Tomlinson, executivedirector and CEO of the Dearborn-based Society of ManufacturingEngineers, took a 23 percent paycut in 2010, brought about by poorbusiness conditions.

� Lutheran Social Services ofMichigan’s top executive, MarkStutrud, had a reported 34 percentincrease in pay in 2010 that wasdriven by a supplemental executiveretirement plan allocation of$106,442, money that he willreceive upon retirement. � Daniel Loepp at Blue Cross BlueShield of Michigan received a $1.28 million bonus in 2010,bringing his total compensation tonearly $2.8 million and making himthe second-highest-paid executiveon Crain’s list.

Swedish Homberg Maryland Tomlinson Stutrud Loepp


MICHIGAN CHAPTER’S MAN OF THE YEAR.

Ryan LaFontaineLaFontaine Automotive Group

The Leukemia & Lymphoma Society congratulates this year’s winners and all the

candidates who competed for the title. Their efforts and commitment have made

an impact in the search for cures and effective blood cancer therapies.

www.mwoy.org/mi 888.HELP.LLS

THE LEUKEMIA & LYMPHOMA SOCIETY

C NGRATULATES


BY BILL SHEA


Detroit public radio stationWDET 101.9 FM quickly apologizedto financial donors earlier thismonth after an anonymous inter-nal complaint about the ethics ofan on-air fundraising campaign.

As part of an effort to preservethousands of musical perfor-mances and interviews on decay-ing digital audio tapes, the stationin late July airedshort spots that con-trasted the sound offailing tapes withpreserved versions.

However, the au-dio was not a literaldepiction of the audiopreservation process,the station’s generalmanager said, andthat prompted con-cern from a staffmember who thoughtthe radio spots seek-ing donations to savethe tapes might bemisleading.

The audio was notbefore-after of a preserved tape, anddidn’t indicate that, but used exam-ples of bad tape and preserved tape.

Explanatory apology letters of-fering refunds were sent to anyonewho donated money while thespots aired on WDET, but nonesought to get their money back,said Matt Lockwood, director ofcommunications for Wayne StateUniversity, which holds the sta-tion’s license and provides it freespace on campus.

“No one wanted their moneyback; no one felt like they were de-ceived,” he said. “We’re totallytransparent with our donors. Itwas a legitimate concern, and itwas addressed immediately.”

The station raised $40,000 from150 donors while the spots wereplayed, but it’s unknown howmuch of the money was linked tothat specific campaign because thedonations aren’t coded that way,Lockwood said.

“Some of it just may have beenlisteners making a general gift,”he said, adding that 10 differentfundraising spots for the tapes

aired sporadically throughout theday during the campaign.

WDET General Manager J.Mikel Ellcessor sent the letter todonors Aug. 3.

He explained that the spots “pre-sented a range of sounds that typi-fy DAT decay and near-failure” aspart of WDET’s “Digital Music Ex-pansion Campaign.”

Ellcessor also laid out the sta-tion’s ethical concerns.

“First, please understand thatWDET places thehighest premium onintegrity, and wouldnever knowingly im-plement a programthat would in anyway mislead a donoror our listeners. Sec-ond, while there wasno intent to mislead,it is understandablethat our activitiescould be construedas misleading, andfor this we apolo-gize,” he wrote in theletter to donors.

The universityhired Shelby Town-

ship-based fundraising consultan-cy Gift Planning Associates LLC to an-alyze the situation and thestation’s response.

“My opinion is that thisfundraising appeal was conductedforthrightly and ethically,” wroteRick Kress, the firm’s owner, in aSept. 14 letter to Ellcessor.

The letter did say the on-air spots“could have been qualified furtherwith words like ‘this is an exam-ple,’ or ‘this simulation demon-strates what we need to do.’ ”

WDET’s campaign to have itstapes preserved and catalogedsought donations ranging from $45to $1,000.

Among the examples it listed atwdet.org of in-house studio perfor-mances preserved included songsby Tori Amos and Patti Smithfrom 1994, the White Stripes from1999 and Coldplay in 2003.

Donations make up $1.5 millionof WDET’s $3.3 million annual op-erating budget.

Bill Shea: (313) 446-1626,[email protected]. Twitter:@bill_shea19

WDET apologizes todonors after complaintabout fund drive’s ethics

My opinionis that this

fundraisingappeal wasconducted

forthrightly andethically.

Rick Kress, Gift Planning Associates LLC

”

“

Warren-based Lentine Groupopened its Detroit center of opera-tions, bringing up to 200 employ-ees into the city.

The 32,000-square-foot building,at 5761 Trumbull Ave. near WayneState University, now housesLentine Group affiliates LeComUtility Contractors Inc., Golden DentalPlans and UnionCircle.com.

About 100 employees havemoved. About 50 more have beenhired by LeCom, a utility contract-ing company. Another 50 will behired by UnionCircle.com, a social

network for members of laborunions, Anthony Lentine, vicepresident of LeCom and GoldenDental Plans, said in a statement.

Lentine said its Warren head-quarters will continue to house thecompany’s bookkeeping services.Likewise, other Lentine offices,warehouses and network affiliate lo-cations are not affected by the move.

Joseph Lentine, president ofLeCom and Golden Dental Plans,said his father built the Detroitsite in 1986 to house a formerLentine Group company.

Lentine Group opens Detroit base


Presented by

CLIMBING THE BRIC WALL—OPPORTUNITIES WITH BRAZIL, RUSSIA, INDIA AND CHINA

OCTOBER 16 2012Join us on-site at UHY’s Farmington Hills office or on-line via webcast

On-site Program 7:30AM–12:30PM EST

YOU’RE INVITED

Please join us as we convene a panel of experts to discuss inbound investments into the BRIC countries including a general overview of the business climate and economic conditions, opportunities and potential threats of doing business in the country, tax issues and considerations, pitfalls when starting a business in the country, employment considerations, entitystructure and tax planning considerations.

Dennis Petri, CPAPartner & International Liaison

On-line Webinar8:00AM–11:45AM EST

REGISTRATIONPre-registration for this complimentary program is required. Complimentary breakfast and lunch will be provided. Space is limited.Multiple registrations are welcome. To reserve your seat contact Courtney Gray via email [email protected] or phone 586 843 2633. Please declare either on-site or on-line. Webinar log-in instructions will be released to registered attendees at a later date.

“The economic growth hasdecelerated in the BRICcountries due to a slowingglobal economy but there arestill tremendous opportunitiesto invest as these countriesaccount for more than 25%of global GDP.

”


BUSINESS DIARYACQUISITIONS

Universal Truckload Services Inc.,Warren, announced that it will ac-quire LINC Logistics Co., Warren, anasset-light provider of custom-devel-oped third-party logistics.

CONTRACTSFriedman Integrated Real Estate So-lutions LLC, Farmington Hills, an-nounced it has been appointed receiv-er and manager for Pecos PointeApartment Homes, Las Vegas, by

LNR Partners, Miami, Fla. Also,Friedman has been retained by22630 Haggerty Road AssociatesLLC, Farmington Hills, for the exclu-sive leasing and management of Or-chards Executive Park, FarmingtonHills, and has been selected as receiv-er of the Onyx Office Plaza in South-field by CW Capital LLC, Needham,Mass.Evigia Systems, Ann Arbor, and theU.S. Department of Energy’s ArgonneNational Laboratory, Argonne, Ill., fi-nalized a licensing agreement under

which Argonne’s patented applica-tion-specific radio frequency identifi-cation sensor/seal technology and itscustom-developed ARG-US softwaresuite will be further developed andmarketed by Evigia as a comprehen-sive nuclear- and hazardous-materialhandling solution.ImageSoft Inc., Southfield, was hiredby the Monroe County Road Commis-sion, Monroe, to install software togenerate work orders for road repairsusing electronic forms; FresnoCounty, Calif., to undertake a docu-ment redaction project in conjunctionwith Extract Systems in the county’senvironmental health division; Ing-ham County Probate Court, Lansing,to convert from a legacy application toImageSoft’s iJustice paper-on-demandplatform; Ohio Department of Veter-ans Services, Columbus, Ohio, to in-stall an OnBase document manage-ment system in its human resourcesdepartment; and Ohio EnvironmentalProtection Agency, Columbus, to im-plement an enterprise-wide OnBasedocument storage and retrieval sys-tem with public portals.Advomas, Troy, a Medicaid assis-tance company, has named TheBerline Group Inc., Bloomfield Town-ship, as its agency of record for allmarketing communications.The Whitehall Group LLC, Troy, amanagement firm, entered into anagreement with the McLean Group,McLean, Va., a middle-market invest-ment bank, to further expand its U.S.market client service capabilities. Lambert, Edwards & Associates Inc.,Detroit, an automotive public rela-tions and investor relations firm, an-nounced it has added Search OpticsInc., San Diego, a national digitalmarketing firm, to its roster ofclients.

Signature Associates Inc., South-field, has been awarded the represen-tation of 28 acres of vacant land atWest Hamlin and South Adams roadsin Rochester Hills, by Aragona Prop-erties, Clinton Township.

EXPANSIONSLakeside Software Inc., BloomfieldHills, announced it has opened a re-gional headquarters for Europe, theMiddle East and Africa, at 59-60Thames St., Windsor, Berkshire, UK.Website: www.lakesidesoftware.com.Market Strategies International,Livonia, has launched Market Strate-gies Qualitative, anaffiliated consul-tative insight boutique.Greek Islands Coney Restaurants,Birmingham, West Bloomfield Town-ship and Farmington Hills, opened anew location at 306 S. Main St., Ply-mouth. Telephone: (734) 335-6303.Website:www.greekislandsconey.com.

JOINT VENTURESKelly Services Inc., Troy, and TempHoldings Co. Ltd., Tokyo, haveformed a joint venture, TS KellyWorkforce Solutions, Hong Kong.

MOVESReGroup Advisors Inc. moved from2000 Town Center, Suite 1900, to 24901Northwestern Highway, Suite 609,Southfield.Dads And Moms of Michigan, a503(c)(3) nonprofit family court edu-cation organization for metro De-troit, moved from Waterford Town-ship to 7285 Orchard Lake Road, WestBloomfield Township. Telephone:(313) 492-7143. Website: www.dad-sandmomsofmichigan.org.

NAME CHANGESLuftig & Warren International Inc.,Troy, has changed its name to WarrenStrategies Inc.

NEW PRODUCTSBillhighway.com, Troy, announcedthe availability of Billhighway Con-nect, payment processing softwarethat integrates with existing nonprof-it donor software and accounting,payroll, banking and database sys-tems. Billhighway Connect inte-grates fully with Salesforce.com andis available via the Salesforce AppEx-change. Website: billhighway.com.Fifth Third Bank, Southfield, haslaunched RevLink Collect patientpayment receivables software forhospitals and health care organiza-tions. Website: www.53.com.The Murray Percival Co., AuburnHills, a national electronics distribu-tor, announced the addition of IBLVapor Phase soldering to its lineup ofprinted circuit board assembly andrepair capital equipment offerings.Website: www.murraypercival.com.Creative Edge Nutrition Inc., MadisonHeights, a nutritional supplementcompany, announced that its brandScience Defined Nutrition has formu-lated, designed and developed threenew products, Thyrozine, Inova andHype, for exercise enthusiasts. Web-site: sciencedefinednutrition.com.

NEW SERVICESPositive Creative Infusion ConsultingLLC, Novi, a marketing and sales con-sulting firm, has launched a newwebsite: www.positivecreativeinfu-sion.com.Automotive Industry Action Group,Southfield, introduced the PoweringPerformance on Demand member-ship program, a membership benefitspackage designed to provide automo-tive manufacturers and supplierseasier access to the tools needed toboost their rebound from the reces-sion by educating their workforce, in-creasing quality and improving costsin the global supply chain. Website:www.aiag.org.

NEW SERVICESProQuest LLC, Ann Arbor, is expand-ing its digital national securityarchive with newly declassified files.Japan and the United States: Diplo-matic, Security, and Economic Rela-tions, Part III, 1961-2000 continues aseries that provides digital access tomemoranda of conversations be-tween U.S. presidents and theirJapanese counterparts, presidentialdecision documents, intelligenceanalyses, and intergovernmentalcommunications central to U.S. for-eign policy, intelligence and securityissues. Website: www.proquest.com.

STARTUPSNykanen Dorfman PLLC, a full-servicelaw firm specializing in real estate,litigation, property tax and businessissues, at 33493 W. 14 Mile Road, Suite100, Farmington Hills. Telephone:(248) 629-0880. Website: www.nyka-nendorfman.com.

DIARY GUIDELINESSend news releases for BusinessDiary to Departments, Crain’sDetroit Business, 1155 GratiotAve., Detroit, MI 48207-2997 orsend e-mail to [email protected]. Use any Business Diaryitem as a model for your release,and look for the appropriatecategory. Without completeinformation, your item will not run.Photos are welcome, but we cannotguarantee they will be used.


Headquarters: 2301 West Big Beaver Road | Suite 525 | Troy, MI 48084 | 800.456.1500 | www.talmerbank.com

Want to growyour business?

Start with bankers whogrew up in business.Don’t let our local, community focus

fool you. We offer the sophisticated

commercial lending products and

experienced senior lenders the big

banks do, along with something

they don’t – the personal service and

responsiveness only a community-

based bank can deliver.


CALENDARtor of Automotive News; and others.MGM Grand, Detroit. $275 includesmeals, sessions and awards reception.Contact: Alfreda Weathers, (313) 842-3883; website: www.rainbowpush.org.

DiversityNEXT Kick-Off Event. 7:30-10a.m. Oct. 4. Inforum. DiversityNEXT

is a network of professionals repre-senting all industries, dedicated topromoting the advancement ofwomen in the workplace through in-novative thinking and sharing of bestpractices. Meritor Inc., Troy. Freemembers, $25 nonmembers. Contact:(877) 633-3500; website: www.inforum-michigan.org.

TUESDAYS E P T . 2 5

Opportunities in the Automotive Indus-try for Software and Internet Entrepre-neurs. 5-8 p.m. SI Detroit. With JohnHater, GM Ventures; Chris Stallman,Fontinalis Partners; Massimo Baldini,Livio Connect; and others. Hosted byEmily Doerr, manager of Small Busi-ness Programs at the Detroit RegionalChamber. Wayne State UniversityCollege of Engineering. Free. Registerat www.sidetroit.com.

WEDNESDAYS E P T . 2 6

Commercialization Breakfast Panel.8:30-10:30 a.m. Sept. 26. Macomb-OUIncubator. With Technology High-way’s Francis Criqui, principal andPMO; Robert Horvath, vehicle launchlead; James Masiak, principal andproduct technology; Margaret Palmer,business development officer; andJohn Rupp Sr., principal and produc-tion processes. Macomb-OU Incubatorat Velocity Center, Sterling Heights.Free. Contact: Joan Carleton, (586)884-9324; email: [email protected].

Open Pitch Night. 6-8 p.m. TechTownDetroit. First 15 entrepreneurs to signup onsite get three minutes to pitch aDetroit-based business followed bytwo minutes open Q&A. Centaur Bar,Detroit. $5. Contact: Diane Love-Suvada, (313) 483-1302, email:[email protected], website: www.openpitchnight.eventbrite.com.

THURSDAYS E P T . 2 7

Crain’s CIO Conference. 2-7 p.m.Crain’s Detroit Business. With David

Behen, CIO, stateof Michigan;Steve Carrington,senior vice presi-dent and CIO,Valassis Commu-nications Inc.;Greg Davidson,CIO, Urban Sci-ence; and others.The Fillmore, De-troit. $99 CDBsubscribers, $85in groups of 10 or

more, $125 nonsubscribers, $123.50with CDB subscription offer. Contact:Kacey Anderson, (313) 446-0300; email:[email protected]; website:www.crainsdetroit.com/events.

Design & Construction Trends in theAutomotive Industry. 11 a.m.-2:30 p.m.Society for Marketing ProfessionalServices Michigan, McGraw-Hill Con-struction. With Glenn Hoffrichter,Chrysler LLC; Roger Gaudette, FordLand; MariKay Scott, General MotorsCo., Wayne Bills, SmithGroupJJR; andRick Haller, Walbridge Aldinger. Mod-erated by Ron Worth, SMPS nationalpresident and CEO. TechShop Detroit,Allen Park. SMPS member $55, non-member $90, student $30. Contact:Laura Westphal, (313) 442-8493; email:[email protected];website: www.smps-mi.org.

Lin Cummins Shares Tools forSuccess. 6-9 p.m. The Association for

Women in Com-munications De-troit Chapter.With Lin Cum-mins, presidentand CEO, LinCummins Con-nections Inc.BirminghamBloomfield ArtCenter, Birming-ham. $28 AWCmember, $35nonmember. Con-

tact: (866) 385-1784; email: [email protected]; website:www.womcomdetroit.org.

Top of Troy: Troy’s Women ofInfluence. 8-9:30 a.m. Troy Chamber of

Commerce,Health AlliancePlan. With Hort-ensia Neely Alber-tini, owner, presi-dent andchairman, GlobalLT; Maureen Hu-ber, CFO andmanaging direc-tor, Trubiquity;Ronia Kruse, pres-ident and CEO,OpTech LLC;

Anna Maiuri, principal and energy, en-vironmental and regulatory practicegroup leader, Miller, Canfield, Pad-dock and Stone PLC; moderated byJulie Garrisi, manager governmentand community relations, Meritor.MSU Management Education Center,Troy. $18 Troy Chamber members, $23nonmembers. Contact: Jaimi Brook,(248) 641-8151; email: [email protected]; website: www.troychamber.com.

COMING EVENTSFall Engineering & Technology JobFair. 2-7 p.m. Oct. 1. Engineering Soci-ety of Detroit. Suburban Collection

Showplace, Novi. Free ESD members,$15 nonmembers (includes a one-yearfree membership to ESD; offer goodfor new members only). Contact: (248)353-0735; website: www.esd.org.

Debate on “Protect Our Jobs” ballotmeasure. 5:30-8:30 p.m. Oct. 2. Labor andEmployment Relations Association. Adiscussion of the proposed amendmentto the Michigan Constitution. With RichStudley, president-CEO of MichiganChamber of Commerce, and Ken Brock,manager of the Campaign to ProtectWorking Families. The SouthfieldWestin Hotel. $40 LERA members; $50nonmembers. Contact: (248) 355-1744;email: lera @cousenslaw.com; website:leraweb.org. Register at www.leraweb.org/detroit-reservations bySept. 27.

National Encore Entrepreneur MentorDay. 9-11:30 a.m. Oct. 2. AARP, U.S.Small Business Administration.Opportunity for entrepreneurs age 50-plus to connect with mentors sharingsmall-business experience. Tech-Town, Detroit. Free. Limited to 50 par-ticipants. RSVP by Sept. 26. Contact: (877) 926-8300; website:www.aarp.org/startabusiness.

Inno-Vention Conference. 6:30-8:30p.m. Oct. 3, 7:30 a.m.-4 p.m. Oct. 4, and9-11 a.m. Oct. 5. Medical Main Street.With L. Brooks Patterson, OaklandCounty Executive, Thomas Novelli,Medical Device Manufacturers Asso-ciation, and others. Royal Park Hotel,Rochester. $95 includes all events.Contact: Nicole Thomson, (248) 858-7995; email: [email protected];website: medicalmainstreet.com.

Global Automotive and Energy Summit— Economic Parity: One Voice, One

Goal. 8 a.m.-9 p.m.Oct. 3, 9 a.m.-1p.m. Oct. 4. Rain-bow Push Auto-motive Project.With Steve St. An-gelo, vice presi-dent of manufac-turing, TotoyaMotor Engineer-ing & Manufactur-ing N.A.; DianaTremblay, vice

president of manufacturing, GeneralMotors Co. North America; Judge GregMathis; Peter Brown, publisher and edi-

ARCHITECTS CELEBRATE40-YEAR DESIGN LEGACYThe National Organization ofMinority Architects will celebrateits 40th anniversary by hosting its2012 national conference, ALegacy Driven by Design, at theWestin Book Cadillac, Detroit.Hosted by the NOMA Detroitchapter, the event will includepresentations, networking events,tours of Detroit architecturallandmarks, a masquerade ball atthe Charles H. Wright Museum andan awards banquet.Entry is $275 for NOMA members,$375 for nonmembers, $175 forguests and $160 for students.Events are scheduled for 8 a.m.-9p.m. Oct. 17, 7:30 a.m.-9:30 p.m.Oct. 18, 7:30 a.m.-6 p.m. Oct. 19and 8 a.m.-10 p.m. Oct. 20.Deadline for hotel rooms is Sept.25. For details and to register, visitwww.noma.net.

Behen

Cummins

Albertini

Tremblay



ALL BUSINESSES ARE NOT ALIKELet us customize a communications solutionthat’s the right fit for you.

Build the Business Phone and Internet bundle that works best for you with pricing options to fit your needs.

Call 1-877-282-9098 to scheduleyour FREE consultation today!

brighthouse.com/business©2012 Bright House Networks. Some restrictions apply. Serviceable areas only.

Service provided at the discretion of Bright House Networks. DET

CRAIN'S LIST: LARGEST ARCHITECTURAL FIRMS Ranked by 2011 revenue

Rank

CompanyAddressPhone; website Top local executive(s)

Revenue($000,000)2011/2010

Number ofregisteredarchitects

local/national

$ valueof projects($000,000)2011/2010 Notable projects Detroit area

1.SmithGroup Inc. (SmithGroupJJR)500 Griswold St., Suite 1700, Detroit 48226(313) 983-3600; www.smithgroupjjr.com

Jeffrey HausmanDetroit office directorand Carl Roehlingpresident and CEO

$177.1$179.7

42227

$2,950.0$3,000.0

Comerica Park, Detroit Institute of Arts renovation and expansion, Detroit Medical Center SinaiGrace Hospital EDICU and Radiology expansion, Detroit Metropolitan Airport McNamara Terminal,Ford Field, Grace Lake Corporate Center, Guardian Building Wayne County Corporate officerelocation, Henry Ford Health System Innovation Institute, Karmanos Cancer Institute CancerResearch Center and Walt Breast Center, Oakland University Human Health Building, United Wayfor Southeastern Michigan headquarters relocation

2.Ghafari Inc.17101 Michigan Ave., Dearborn 48126(313) 441-3000; www.ghafari.com

Yousif Ghafarichairman

123.087.5

1837

1,500.01,000.0

Various projects for Ford, General Motors, College for Creative Studies, Wayne State University,Schoolcraft College, Cranbrook Educational Community, U.S. General Services Administration

3.URS Corp.27777 Franklin Road, Suite 2000, Southfield48034(248) 204-5900; www.urscorp.com

Ronald Henryvice president andmanaging principal

38.645.2

NANA

NA650.0

NA

4.Harley Ellis Devereaux Corp.26913 Northwestern Hwy., Suite 200, Southfield48033(248) 262-1500; www.harleyellisdevereaux.com

Michael Coopermanaging principal,Detroit office

34.236.9

2865

500.0500.0

Detroit Medical Center Cardiovascular Institute, Crittenton Hospital Medical Center, Wayne StateUniversity Chemistry Building, Oaklawn Hospital surgery addition, Mercy Hospital surgery addition,U.S. EPA - Heavy Vehicle Test Cells

5.Albert Kahn Family of Cos. (Kahn)7430 Second Ave., Detroit 48202(313) 202-7000; www.albertkahn.com

Charles Robinsonpresident and CEO

28.022.2

3133

1,000.0750.0

Detroit Public Schools East English Village Preparatory Academy, Detroit East Riverfront RiverWalk,Cobo Center expansion and renovation program, Detroit Zoo Penguin & Puffin Conservation Center

6.Hobbs + Black Associates Inc.100 N. State St., Ann Arbor 48104(734) 663-4189; www.hobbs-black.com

William Hobbspresident, CEO andCOO

18.515.6

2226

915.0897.0

University of Michigan South Hospital, St. Mary Mercy Hospital

7.Orchard, Hiltz & McCliment Inc.34000 Plymouth Road, Livonia 48150(734) 522-6711; ohm-advisors.com

John Hiltzpresident

18.221.3

15

25.051.0

Rochester Hills salt storage facility, Farmington Hills water tower, Belleville Yacht Club, ScioTownship pump station

8.Rossetti Associates Inc.2 Towne Square, Suite 200, Southfield 48076(248) 262-8300; www.rossetti.com

Matthew Rossettipresident and CEO

16.015.0

13NA

650.0620.0

Cobo Center, Ford Field, Palace of Auburn Hills, Compuware Building, Domino's Pizza WorldResource Center, Greektown Casino Hotel, Wayne State University Welcome Center

9.Integrated Design Solutions LLC1441 W. Long Lake Road, Suite 200, Troy48098(248) 823-2100; www.ids-troy.com

Paul Stachowiakpresident

15.314.7

NANA

350.0320.0

Detroit Medical Center Pediatric Specialty Center, Chrysler Great Lakes Business Center, Universityof Michigan Law School South Hall, Michigan State University Eli and Edythe Broad Art Museum,University of Michigan Alice Lloyd Hall, Michigan State University Wells Hall addition

10.Quinn Evans Architects Inc.219 1/2 N. Main St., Ann Arbor 48104(734) 663-5888; www.quinnevans.com

Larry Barrpresident and CEO

12.513.4

1231

205.0225.0

Sherbrooke, Michigan Central Station, Woodward Garden Venue, WSU McGregor Pool

This list of leading architectural firms is an approximate compilation of the largest such firms in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, informationwas provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual revenue figures may vary. NA = not available.

LIST RESEARCHED BY BRIANNA REILLY■ An expanded version of this list can be purchased at crainsdetroit.com/lists.



CRAIN'S LIST: LARGEST INFORMATION TECHNOLOGY COMPANIES Ranked by 2011 revenue

Rank

CompanyAddressPhone; website Top executive(s)

Revenue($000,000)

2011

Revenue($000,000)

2010

Full-timelocal

employeesJan. 2012

Percentage revenue from IT industrysegment Type of business

1.Compuware Corp.1 Campus Martius, Detroit 48226(313) 227-7300; www.compuware.com

Peter Karmanos Jr.executive chairman

$1,009.8 $928.9 1,994 79 R&D computer software21 sophisticated computer services

Software and professional services

2.Stefanini TechTeam Inc.27335 W. 11 Mile Road, Southfield 48033(800) 522-4400; www.stefanini.com/EN

Antonio MoreiraCEO, North Americaand Asia-Pacific

750.0 600.0 1,000 100 sophisticated computer services Offshore, onshore and nearshore IT managed services, systemsintegration, consulting and strategic staffing

3.Syntel Inc.525 E. Big Beaver Road, Suite 300, Troy 48083(248) 619-2800; www.syntelinc.com

Bharat DesaichairmanPrashant Ranadepresident and CEO

642.4 532.1 85 IT outsourcing, knowledge process outsourcing, applicationdevelopment and management, e-business services, architectureconsulting and support, IT infrastructure management, cloudcomputing, data warehousing and business intelligence, applicationtesting, migration solutions

4.Logicalis Inc.34505 W. 12 Mile Road, Suite 210,Farmington Hills 48331(866) 456-4422; www.us.logicalis.com

Vince DeLucaCEO

585.0 638.6 B 270 International provider of integrated information and communicationstechnology solutions and services

5.Tata Technologies Ltd.41050 W. 11 Mile Road, Novi 48375-1302(248) 426-1482; www.tatatechnologies.com

Patrick McGoldrickCEOWarren Harrispresident and COO

275.0 150.0 625 Engineering and design, product lifecycle management and productdevelopment IT services, proprietary software and knowledge-management software systems

6.Vision Information Technologies Inc.(VisionIT)3031 W. Grand Blvd., Suite 600, Detroit 48202(877) 768-7222; www.visionit.com

David SeguraCEOChristine Ricepresident

239.0 230.0 362 IT managed services, IT staffing and vendor management

7.Strategic Staffing Solutions Inc.645 Griswold St., Suite 2900, Detroit 48226(313) 596-6900; www.strategicstaff.com

Cynthia Paskypresident and CEO

220.0 205.0 683 Consulting and staff augmentation services, vendor managementprograms, executive search services, call center technology and adomestic IT development center

8.Altair Engineering Inc.1820 E. Big Beaver Road, Troy 48083(248) 614-2400; www.altair.com

James Scapachairman and CEO

212.0 172.0 524 Global software and technology, engineering simulation, advancedcomputing, enterprise analytics and product development

9.CareTech Solutions Inc.901 Wilshire Drive, Suite 100, Troy 48084(248) 823-0800; www.caretech.com

James Giordanopresident and CEO

157.8 154.0 600 Information technology and Web products and services for more than200 U.S. hospitals and health care systems

10.Acro Service Corp.39209 W. Six Mile Road, Suite 250, Livonia 48152(734) 591-1100; www.acrocorp.com

Ron Shahanipresident and CEO

133.0 130.0 1,207 5 product sales and leasing45 R&D computer software40 sophisticated computer services10 training and product support

Staff augmentation (IT, engineering, office support), outsourcing and ITand engineering consulting

11.Urban Science Applications Inc.400 Renaissance Center, Suite 2900, Detroit 48243(313) 259-9900; www.urbanscience.com

James Andersonpresident and CEO

125.0 106.0 306 40 R&D computer software50 sophisticated computer services10 training and product support

Global retail marketing consulting

12.HTC Global Services Inc.3270 W. Big Beaver Road, Troy 48084(248) 786-2500; www.htcinc.com

Madhava Reddypresident and CEO

116.0 113.0 180 Application development and maintenance, business processmanagement, document and content management and PMO services

13.Iconma LLC850 Stephenson Hwy., Suite 612, Troy 48083(888) 451-2519; www.iconma.com

Claudine Georgemanaging member

103.2 88.7 124 Professional staffing and project-based services

14.Diversified Computer Supplies Inc.4435 Concourse Drive, Ann Arbor 48108(800) 766-5400; www.dcsbiz.com

Joseph Hollensheadchairman, presidentand CEO

98.5 89.2 43 Distributor of imaging/printer supplies

15.Tweddle Group Inc.24700 Maplehurst, Clinton Twp. 48036(586) 307-3700; www.tweddle.com

Andrew Tweddlepresident and CEO

85.0 65.0 350 Publisher of automotive OEM owners and service information

16.BlueWater Technologies Group Inc.24050 Northwestern Hwy., Southfield 48075(248) 356-4399; www.BlueWaterTech.com

SuzanneSchoenebergerpresident

76.0 65.0 140 Design, engineering and implementation of custom technologysolutions for live events, video conferencing, experiential marketing,interactive displays, lead generation capabilities

17.Synova Inc.1000 Town Center, Suite 700, Southfield 48075(800) 799-9625; www.synovainc.com

Tim Manneypresident

74.2 70.0 250 Custom software development, maintenance and support, SAPTechnologies, SAP Enterprise applications, SAP performancemanagement, mobile applications development for financial andtelecom verticals, cloud enabling of organizational resources

18.Dass International Inc. (Netlink)999 Tech Row, Madison Heights 48071(248) 204-8800; www.netlink.com

Dilip DubeyCEO and co-founderAnurag ShrivastavaCTO, president andco-founder

71.5 28.4 90 Information technology, supply chain services and solution andbusiness process solutions

19.Epitec Inc.24800 Denso Drive, Suite 150, Southfield 48033(248) 353-6800; www.epitecinc.com

Jerome SheppardCEOJosie Sheppardpresident

51.0 37.6 750 Technology staffing and computer services

20.Jawood Business Process Solutions LLC32270 Telegraph Road, Suite 200, Bingham Farms48025(248) 833-8000; www.jawood.com

Lynn Mustazzapresident and CEO

48.7 35.5 288 5 product sales and leasing85 sophisticated computer services5 training and product support5 other

Information technology and business process consulting solutions

21.Lowry Computer Products Inc.9420 Maltby Road, Brighton 48116(800) 918-2672; www.lowrycomputer.com

Michael Lowrypresident and CEO

44.0 40.0 77 50 product sales and leasing10 R&D computer equipment10 R&D computer software10 sophisticated computer services20 training and product support

IT systems integrator

22.Modis Inc.3000 Town Center Drive, Suite 2600, Southfield48075(248) 357-4200; www.modis.com

Carl Luckevice president

41.5 33.4 420 100 other IT staffing

23.Plex Systems Inc.1731 Harmon Road, Auburn Hills 48326(248) 391-8001; www.plex.com

Mark Symondspresident and CEO

40.4 31.2 235 Develops software for manufacturing industry

24.Secure-24 LLC26955 Northwestern Hwy., Southfield 48033(800) 332-0076; secure-24.com

Matthias Horchco-CEO andco-founderMike Jenningsco-CEO

40.0 28.0 250 100 sophisticated computer services Managed hosting, enterprise cloud computing and IT outsourcing forlarge organizations and midmarket companies

25.FutureNet Group Inc.12801 Auburn St., Detroit 48223(313) 544-7117; www.futurenetgroup.com

Perry Mehtapresident and CEO

32.6 33.9 64 General construction, environmental, technology

This list of leading computer companies is an approximate compilation of the largest such companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties that research, design, manufacture or invent equipment or software, plus companies that providesophisticated computer services such as systems design, programming and information retrieval. It is not a complete listing but the most comprehensive available. Companies based elsewhere are listed with the address and top executive of their main Detroit-areaoffice and are ranked by their revenue in the five-county area. Unless noted, the companies provided the information. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Actual revenue figures mayvary. NA = not available.B Fiscal year March 2010-February 2011.

LIST RESEARCHED BY BRIANNA REILLY


Find your next customer in the Middle East.

Automation Alley can take you there.

Looking to boost your global competitiveness and expand into two of the world’s fastest-growing markets? Join Automation Alley’s trade mission to Qatar and the United Arab Emirates, two nations with high demand for Michigan-made products, services and technologies.

$6,995 for Automation Alley Members $7,775 for non-members. Participation is limited to eight companies. Deadline to register is November 7, 2012.

care of all planning and details before, during and after the mission.

Be sure to ask us about the State Trade and Export Promotion program (STEP) to see

December 7-14, 2012 | Doha, Abu Dhabi and Dubai

For more information, email [email protected] or call us at 800-427-5100.


PEOPLE

JobFrontCrain’s Job FrontVisit www.crainsdetroit.com/jobfront to search for jobs, post a résumé or find talent.

ADVERTISINGKyle Wittbrodt to director of opera-tions, Pals Investment Group I LLC,Waterford Township, from office man-ager, Monthly Shopper Inc., Water-ford Township. Monthly Shopper wasacquired by Pals Investment.

EDUCATIONMark Barteau todirector, Universi-ty of Michigan En-ergy Institute,Ann Arbor, fromsenior viceprovost for re-search and strate-gic initiatives,Newark, Del.

HEALTH CARESanthosh Madha-

van, M.D. to medical director, inpatientrehab unit, DMC Rehabilitation Insti-tute of Michigan, Detroit, from privatepractice, Southfield.

MARKETINGLisa Blackwell to director of accountservices, health care division, DBAWorldwide, Rochester, from president,

Huron Valley Schools Board of Educa-tion, Highland Township.

Matt Jones to social media manager,J.R. Thompson Co., Farmington Hills,from KraftMaid brand manager, Mas-co Cabinetry, Ann Arbor.

NONPROFITSVictoria Edwardsto director of de-velopment, Kick —The Agency forLGBT AfricanAmericans, De-troit, from cooper-ative housingmanager, TownSquare Coopera-tive Inc., Detroit.

REAL ESTATERonald Henry to senior vice president,health care sector, Plante Moran Cre-sa, Southfield, from managing princi-pal, Michigan region, URS Corp.,Southfield.

SUPPLIERSKathleen Schroeder to vice president,information services and support pro-duction, R.L. Polk & Co., Southfield,from senior director of European in-formation systems.

IN THE SPOTLIGHTOakland County Community MentalHealth Authority, Auburn Hills, hasnamed Willie Brooks Jr. CFO. He

succeeds RickGrove, whonow is theagency’sdirector offinance-auditandcompliance.Brooks, 51,had been abusinessanalyst forJawood

Management Associates, BinghamFarms. He is an adjunct professorat Walsh College, Troy.Brooks earned a Bachelor of Artsin psychology from William TyndaleCollege, Farmington Hills, and aMaster of Arts in economics andMaster of Science in finance fromWalsh College.

Brooks

Barteau

Edwards


BY DUSTIN WALSH


Visteon Corp. announced lastweek that it would sell its climatecontrol business to its Halla Cli-mate Control Corp. joint venture forcash as South Korea’s Mando Corp.plans an initial public offering toacquire Visteon’s stake.

In a conference call with in-vestors Wednesday, interim CEOTim Leuliette said the focus is onconsolidating Visteon’s climatecontrol operations into those ofHalla, which together account for$4 billion in sales annually. Cur-

rently, Visteon attributes $800 mil-lion from its own engineering, hesaid.

Visteon saidthe transactionwould achieveits long-term ob-jective of con-solidating itsclimate opera-tions into onecompany. Themove would im-prove how thebusiness interacts with global cus-tomers and increase corporate liq-uidity, the investors’ presentation

said. Halla will become the No. 2player in the global automotiveclimate business with a 13 percentmarket share, Leuliette said.

Visteon owns 70 percent of Hal-la — which will become Halla-Vis-teon Climate Group. The businesswill be led by the Korean manage-ment team and traded on the KoreaExchange (KRX). The transactionis expected to close in the firstquarter of 2013, Leuliette said.

It’s unclear whether Visteonwould maintain climate controlstaff at its Van Buren Townshipheadquarters.

Jim Fisher, director of corpo-

rate communications, wrote in anemail: “There will likely be somerecalibration of our U.S. presenceas we proceed with this plan.We’ve not announced any specificchanges with regard to our corpo-rate offices in the U.S.”

Mando continues to say it ispursuing Visteon’s stake in Hallaand to do so established a Chineseholding company, Mando ChinaHoldings Ltd., listed on the HongKong Stock Exchange, Bloombergreported Thursday.

Mando plans to sell a 25 percentstock equivalent of its company ina November IPO with intentions

to raise $223 million to buy Vis-teon’s stake, sources toldBloomberg.

However, Leuliette said that de-spite media reports, he has heardlittle from Mando on acquiringVisteon’s stake.

“It’s a solid and capable busi-ness,” Leuliette said. “But as I’vesaid, we’re not in the business ofmaking car parts; we’re in thebusiness of making money fromcar parts, and this business doesnot fit.”

Dustin Walsh: (313) 446-6042,[email protected]. Twitter:@dustinpwalsh

Visteon to sell climate control business to joint venture Halla

FINANCIAL SERVICES

BUSINESSES FOR SALEAUCTIONS OFFICE SPACEVACANT LAND

GENERAL GENERALCOMMERCIAL PROPERTIES

WATERFRONT PROPERTY

POSITIONS AVAILABLE

POSITIONS AVAILABLE

REAL ESTATE

JOB FRONT

MARKET PLACE

Call Us For Personalized

Service: (313) 446-6068

FAX: (313) 446-1757

E-MAIL: [email protected]

INTERNET:www.crainsdetroit.com/section/classifieds

PAYMENT: All classified ads must beprepaid. Checks, money order orCrain’s credit approval accepted.Credit cards accepted.

CLOSING TIMES: Monday 3 p.m.,one week prior to publication date.Please call us for holiday closing times.

Confidential Reply Boxes Available

See

Crainsdetroit.com/Section/Classifieds

for more classified advertisements

Call or email today for informationon a custom advertising plan!

[email protected]

Advertise yourProducts and Services inCrain’s Detroit Business

Call or email today for informationon a custom advertising plan!

[email protected]

(517) 676-9800www.sheridanauctionservice.com

(517) 676-9800

27 Michigan LENDER-OWNED Properties

Building LotsRental Houses

Recreational Tracts

ONLINE-ONLY AUCTIONSSept 24th, 26th, 27th

Preview and bid online!

��

��

��

��

�� !��"��#��$� �%��&

'()&%*��*)'��'+,� ��#,�-�.�!��$��$��.��&/�

��

�� !�"

'*%�&�+

� #$%!��&��'�"�(�&��

Lease/Sale Priced Right! Plug-and-Play

• Entire building - 11,200sf or 2805sf per floor

• Originally built in 1900, completely renovated in 2003 • Open floor plan, exposed ceilings with spiral duct work

• Parking available with building

Scott H. Cairns (248) 538-4800

www.hscre.com

"Forestville" - 700 Ft. Lake Huron, 20 acres lakeside 20acres behind. Majestic overlook very private, secluded.Beautiful ravine @ N. End. Treed throughout property, natu-ral walk down to untouched shoreline. Call 248-645-5340.

LIVE AND WORK INPETOSKEY AREA

� Profitable Business� 72 Slip Marina� Growth Potential� 50 Businesses for sale

(231) 409-9119 Call anytime between 7am & 10pm 7 days a week!"420 Howard St., Petoskey, MI 49770

Joe Blachy

***TECHNICAL SALES ENGINEER - NOVI MI*** TEXAS INSTRUMENTS is looking for people to fillEngineering Positions working with semiconduc-tor technologies. We are recruiting @ various edu-cation and experience levels. Apply for this job us-ing the link: http://tinyurl.com/9jy2lf6. Some posi-tions may require some travel. EOE

CBS Radio Detroit seeks Account Executives. Musthave prior success selling, willingness to prospect and

strong closing skills. Please visit: cbsradio.comto apply. EOE.

Opus One BuildingDowntown Detroit

5,000 to 20,000 square feet565 E. Larned facing RenCen$11.00 per square foot Gross

(includes electrical & janitorial)Some free parking

Call Exclusive Realty313.963.7653

Lake Erie Waterfront in Newport, MI.

List price $425,000.00��100 ft. of Lake Erie frontage w/no flood insurance.��Built in 2000 w/3,600 sq. ft., main floor master suite.��Fireplace, 3 bed/2.5 bath, rec. room (poss 4th)��Back-up generator & automated home lighting��Detroit 35 min. & Toledo 30 min

Craig Bollerud, Associate Broker, GRI, ABRRE/MAX Masters, Inc.

(734) 783-0900 or (734) 770-9336 cell www.CraigBollerud.com

Senior Mechanical Engineer Mercedes-Benz has the following jobopportunity available in Redford, MI: Senior Mechanical Engineer - Req #SME48239: Responsible for designingE-Motor components for Daimler futurehybrid and e-drive vehicles. Submit resumes to MBRDNA, Attn: HRDepartment, 850 Hansen Way, Palo Alto,CA 94304. Must reference job title and Req# to be considered.

LAND ACQUISITION & NEW HOMECONSTRUCTION NEEDED OUTSIDE OF MICHIGAN

Seeking aggressive, motivated foreign businessmanwith either residential building and/or development ex-perience in U.S. to assist with land acquisition andnew home construction outside of Michigan. Also needassistance with immediate relocation outside of WestMichigan. Respond to [email protected].

NOW HIRINGDirector of Operations &

30+ Account Executives! Infinity Contact is expanding to Ann Arbor!

Competitive base pay PLUS Commission!GROW WITH US IN YOUR CAREER!

Apply Online Today... InfinityContact.com/Careers

Great Business Opportunity: Successful Restaurant/Bar inMacomb County looking for serious buyers that want to stepinto a thriving business & location. Confidentiality agreementrequired prior to any business information released. Inquireat [email protected] for more information.

REFERRERS: EARN A

CASH BONUSup to $4,000 when a hire is made

crainsdetroit.com/jobfront

|JOB FRONT


Leuliette



Given the changes in the financial marketplace, your life insurance policies may not be performing as intended.

A periodic analysis and review can:

• Save premium dollars

• Improve, extend or guarantee your coverage

• Generate cash

• Make sure your plan is on track

BIRMINGHAM, MI 248.731.9500 WWW.SCHECHTERWEALTH.COM

What’s that ticking sound?

Call for a complimentary analysis and review.

UPCOMINGPARTNER EVENTS

Crain’s partners with a variety oforganizations on events and

special subscription offers for their members.Please visit their websites below.

Meet the Buyers: A Procurement Matchmaking Event. Meet with buyers from Federal, State, and

Local Governments. This event SOLD OUT last year!

This half-day program is designed to help small

businesses begin or expand their business with

government agencies. Meet buyers, understand

buying requirements and how to get into

the buying system — A great way to introduce

your company, your products and/or services

and get exposure!

Nov. 13 • 8 a.m. - 1 p.m. • Schoolcraft College

$25 each. Registration required. Call

(734) 462-4438, or email [email protected]

Employment Strategy ConferenceSenior executives are invited to join Warner’s HR

attorneys for an afternoon of problem solving,

networking and discussion. In this complimentary

program, we’ll review and discuss the best and

most cost-effective ways to provide benefits to your

workforce and attract new talent, all while adhering

to ever-changing regulations and, most importantly,

protecting your company’s reputation and bottom line.

Oct. 2 • 11:30 a.m. - 5 p.m. The Townsend, Birmingham

Complimentary. Registration required.Visit

WNJ.com/2012_EmpConf or call 616.752.2326

THE MILLER LAW FIRMa professional corporation

Our firm specializes in litigation:• Complex Commercial and Business• Shareholder and Partnership• Automotive Supplier• Class Actions• Employment• Family Law and Probate Litigation

950 West University Drive, Suite 300Rochester, Michigan 48307

(248)841-2200millerlawpc.com

The following businesses filed forChapter 7 or 11 protection in U.S.Bankruptcy Court in Detroit Sept. 14-Sept. 20. Under Chapter 11, a compa-ny files for reorganization. Chapter 7involves total liquidation.G&D Investment Properties LLC, 14465Countryview Drive, Southgate, volun-tary Chapter 11. Assets and liabilitiesnot available.S.C.C. Enterprises Inc., 18945 BedfordDrive, Clinton Township, voluntaryChapter 7. Assets: $310; liabilities:$561,149.69.

— Ryan Kelly

BANKRUPTCIES

Sewers: Bills target aging systems■ From Page 1

the chronic problems, and thechronic problems are the most ex-pensive ones. It’s kind of like we’realways chasing our tail,” saidChuck Hersey, director of the planand policy group at the SoutheastMichigan Council of Governments anda member of an advisory commit-tee that last September made recommendations that form the basisfor the legislation. SEMCOG alsohas led in the bills’ development.

“What we need to do is start get-ting in front of the train and investsome money in asset manage-ment,” Hersey said.

Stakeholders in the legislationsay a big challenges in local sewerinfrastructure is a lack of gooddata about the health of most localsewer systems; a comprehensiveSoutheast Michigan report hasn’tbeen developed for a decade. Butthey say local asset managementprograms, encouraged in the legis-lation, would help.

Under House Bills 5673-5676, ap-proved by House committee lastweek, communities could getgrants for a variety of tasks, in-cluding development of a programthat would assess a system’s condi-tion, needs, potential funding andschedule for improvements.

It’s an approach that Gov. RickSnyder backs. In his October specialmessage on infrastructure, Snydernoted the recommendations of theadvisory committee and said he sup-ports changes in the future invest-ment of bond dollars — including agrant program to reduce long-termcosts through asset managementand stormwater programs.

Gary Mekjian, director of publicservices for the city of FarmingtonHills, said it’s “like knowing yourcar, and what’s the condition ofyour car. If you don’t know whatcondition your assets are in, whatcondition your sanitary sewer isin, then how can you possiblymanage any kind of a capital im-provement program?”

Mekjian is also a member of thewater, infrastructure and environ-ment committee at the MunicipalLeague, which supports the legisla-tion. He said Farmington Hills isassessing its sewer system,through a video inspection oppor-tunity provided by Oakland Coun-ty’s flushing and cleaning of thecity system, which the county op-erates and maintains.

But other communities may notbe able on their own to fund thecosts of hiring a contractor to flushand clean the sewers, videotapeconditions and provide reports —activities that could add up to sev-eral hundred thousand dollars,

Mekjian said. “And that’s just tounderstand the condition your sys-tem is in.”

The new grant program set upby the legislation could also beused for development of manage-ment plans to treat stormwater, orto plan and design any part of asewage collection and treatmentsystem or a stormwater collectionor treatment project. The state cur-rently has a much smaller grantprogram for some of these purpos-es but not asset management, andgrants in the current program arelimited to $1 million.

The new program has a $2 mil-lion cap; grants of up to $1 millionwould be available to cover up to90 percent of a municipalities’costs, and an additional $1 millionin grant funding could cover up to75 percent of community costs.

The bills would also provide fora state-designed loan program thatwould make loans for constructionof sewer pollution control projectsor needed upgrades. The programis designed to be less cumbersomethan an existing revolving fundthat provides low-interest loans tomunicipalities and authorities forsuch purposes.

That state revolving fund, whichis subsidized by federal funds,state match, and loan repayments,has been criticized for loan appli-cation regulations and other com-ponents that some say can be time-consuming and costly but requiredby virtue of the federal support.

For example, Hersey said, appli-cants must address and satisfy along checklist of issues, and manyof them may be unrelated to theproject work, like whether there isdisruption of archeological or his-torical significance.

The idea is that the state could setits own terms for a separate loanprogram that utilizes only statebond money, and it could have few-er regulations and be easier for com-munities to access. The larger cur-rent revolving fund would still exist,providing another financing option.

Sonya Butler, chief of the re-volving loan section in the Michi-gan Department of EnvironmentalQuality’s resource managementdivision, said the administration

has not yet determined the newloan program structure but woulddo so after the bills’ passage.

The legislation doesn’t prescribehow the $654 million would bedivvied up between the new loanand grant programs.

The advisory committee recom-mended about half of the money goto each use, but the state has flexi-bility to allocate the money as itsees fit.

Butler said the state could alsoput more money into the currentrevolving-fund program, shouldfederal support decrease. The DEQdoes not yet know when the newgrant and loan programs would beoperating.

In 2001, a sewer infrastructure-needs report from SEMCOG pro-jected that over the subsequent 30years an additional $14 billion to$26 billion would be needed inSoutheast Michigan alone to main-tain and improve sewage collec-tion and treatment systems.

Those numbers may well now behigher, Hersey said.

Tiffany Watrous, director of gov-ernment relations at the Detroit Re-gional Chamber, said the legislation“will stimulate investment intoimproving these sewer systems…which is something we support.”

Also in support is the MichiganInfrastructure and Transportation As-sociation, which has for yearspointed out the need to investmore money in sewer infrastruc-ture and fix aging undergroundwater and sewer systems.

Lance Binoniemi, MITA vicepresident of government affairs,said Michigan’s underground sys-tem “is sort of the unknown prob-lems of our infrastructure. It’seasy to see a pothole or a deterio-rating bridge, but quite often wedon’t see the underground prob-lems that we have.”

Binoniemi said MITA hopes thebills will pass the Legislature bythe end of the year and that pro-grams will be operating for nextyear’s construction season.

The House bills await action bythe full House; a similar Senatepackage, SBs 1155-1158, receivedtheir first committee hearing lastweek.



When it’s joint replacement...why go anywhere else?The world’s most advanced technology and most experienced surgeons are right here.

Call 855-220-2663 or visit beaumont.edu.

“The cost of compliance is just a reallybig issue,” French said. “It’s tough to pre-dict the costs, and companies aren’t alwaysprepared to take on those extra costs.”

The initial cost of compliance for U.S.companies is estimated at $3 billion to $4 bil-lion, with ongoing compliance costing be-tween $206 million and $609 million, accord-ing to the SEC. But theNational Association of Manu-facturers says the costs willbe much higher — $9 billionto $16 billion.

Mel Stephens, se-nior vice president ofcommunications forSouthfield-based LearCorp., said while Leardoes not directly useany of the materials,the supplier still mustfind its exposureamong its own suppli-ers.

“We know we probablyuse some, but they’re notmaterials we use at the top(of our supply chain),”Stephens said. “This indus-try has a long supply chain, so while (theseminerals) are not used on our end, it’s still abig process to find out all of the things thatget supplied to us and what is used.”

Many suppliers, including Southfield-based Federal-Mogul Corp., Valeo North Ameri-ca and TRW Automotive Inc., deferred com-ment to AIAG.

The supply base is largely made up ofsmaller, nonpublic suppliers, and they fearthat reporting to customers will causethem to lose competitive advantage,French said.

“Suppliers are doing things to be as costcompetitive as they can, as efficient as theycan,” he said. “If you have to disclose someof those details to your customers, youworry that information could get out to thewhole supply chain, which would be an is-sue from a competitive angle.”

Large public companies have until May31, 2014, to make initial filings on conflictminerals and small public companies haveuntil 2016, according to the regulations.

French and Bolden urge companies tojoin one, or several, of the industry pro-grams designed to address the issue of con-flict minerals.

Ford Motor Co. has conducted a survey ofits supply base and will require suppliercontent reporting to help Ford meet theregulations, Kristina Adamski, purchas-ing, supplier and legal communicationsmanager, said in an emailed statement.

“The causes of conflict in the region arecomplex, as are global supply chains; weknow that solutions to these challengeswill not be simple,” she said in the email.“That is why Ford is working with multi-ple stakeholders, including in the automo-tive industry, to address supply chain con-cerns in a comprehensive way.”

Ford is a member of the Public-Private Al-liance for Responsible Minerals Trade, theElectronic Industry Citizenship Coalition’s Con-flict-Free Smelter Program, and others, to

address the issue. The electronic industry smelter program

provides audits of smelters and refinersaround the globe to ensure they are not us-ing minerals from the conflicted region.

“If we are able to have visibility throughthe supply chain to the smelter and knowthat we’re working with an audited smelter

who doesn’t do business ina conflict region, we havethe ability to comply withthe spirit of the legislation,”Bolden said. “There aretools in place to comply; wejust need to get everyone onboard.”

AIAG also announcedthis month that it had col-laborated with 24 membercompanies, includingFarmington Hills-basedRobert Bosch LLC and Ford,to develop the iPoint Con-flict Minerals Platform, aWeb-based data manage-ment tool to help track thesupply chain.

“It’s clear that we can-not do what is required

without the cooperation of the entire sup-ply chain,” Bolden said. “The resourcesthroughout the supply chain are not thesame, so it was important to develop com-mon tools to create cooperation.”

Mapping the supply chain has ancillarybenefits as well, such as helping suppliersand automakers understand how to reactto risk, Bolden said. For instance, it wouldhelp avoid shutdowns from disasters —natural or otherwise.

“Companies have long known that whathappens around the world does impact thebusiness,” Bolden said, referencing the2011 earthquake and tsunami in Japan thatcrippled the supply chain. “The world issmaller now, and we do have to understandour business to a degree that we are able torespond responsibly and act, whether it’san armed conflict or a tsunami or a flood.”

However, industry experts are worriedthe conflict minerals regulation is just an-other in a never-ending stream of new, ex-pensive-to-comply government interfer-ence, French said.

Retail companies and manufacturerswith revenues exceeding $100 million do-ing business in California are already re-quired to report, under the California Trans-parency in Supply Chains Act, on whethertheir supply chain supports slavery or hu-man trafficking across the globe.

“People are worried that there will be anexpansion of these types of regulations,” hesaid. “This could be the tip of the iceberg interms of regulatory guidelines makingsure their supply chain is meeting whatany one government’s standards of busi-ness should be.”

AIAG is hosting an event, “Conflict Min-erals: An Industry Briefing,” on Thursdayat its headquarters in Southfield. Go toAIAG’s website, www.aiag.org, to register.

Dustin Walsh: (313) 446-6042,[email protected]. Twitter: @dustinpwalsh

pensation market stimulates not only for-profits to start looking for acquisitions, butnonprofits might start looking to the marketin order to not lose a competitive advantageto the for-profits.”

As margins get tighter and garneringcash from operations gets tougher, expertssaid, fewer health care providers will beable to resist the appeal of private equity orpublic company capital to fund much-need-ed equipment purchases or building renova-tions. This too could spur for-profit conver-sions and acquisitions.

Currently, for-profits account for just sev-en of Michigan’s 134 community hospitals,and about 13,200 of their nearly 222,000 em-ployees statewide, according to data fromthe Michigan Health & Hospital Association.

They are the five DMC hospitals belong-ing to Vanguard, Pontiac-based Doctors Hos-pital of Michigan and Marquette General Hospi-tal, which was nonprofit until a sale lastmonth to Duke Lifepoint LLC in a deal valuedat $483 million, including about $125 millioncash. Michigan had no for-profit hospitalsjust four years ago.

Eight of the 18 bidders on debt-saddledMarquette were for-profits, according to areport on the proposed sale by Michigan At-torney General Bill Schuette.

“It’s becoming very difficult for the inde-pendent hospital to stay viable and still beindependent. And Marquette was a verygood example,” said Michael Boudreau,managing director at Bloomfield Hills con-sulting firm O’Keefe & Associates and a trans-actional adviser to some health care compa-nies.

“Now we’re starting to see that same kindof pressure moving upstream, even occa-sionally to the size of a Beaumont-typeprovider.”

Boudreau said O’Keefe has served as anadviser on at least seven hospital mergersand acquisitions in the past two years, pre-dominantly in the Midwest, compared withaveraging just one such transaction peryear a decade ago.

Joshua Nemzoff, CEO of New Hope, Pa.-based Nemzoff & Co. LLC, which has handledat least 200 hospital deals in the past 30years, said nonprofit hospitals usually ex-plore a sale only when they think they can’tsurvive. Several in that position thatthought the Affordable Care Act would stemthe financial drain of their uncompensatedcare are having a rude awakening, he said.

“A lot of hospitals who thought the ACAwas going to be their savior, and they’vefound, if anything, it’s more of a neutral-cost kind of reform,” he said. “Uninsuredswere supposed to move into a category ofcompensated care, but Medicare reimburse-ment is declining, unemployment is highand managed care organizations will be-come more competitive in their pricing. Sothey’re right back where they started from.”

Not everyone in the market is warming upto for-profits and their cash. The CEOs of Gar-den City and Crittenton confirmed the Van-guard talks but have said previously thosehospitals are not for sale.

And Beaumont, which could add morethan 1,744 licensed beds, 18,000 employeesand more than 3,000 physicians to Michigan’s

for-profit contingent, has “no deal on thetable” and management has not shown inter-est in a sale, Killian said. DMC declined tocomment on the Beaumont rumor, andCrain’s was unable to contact HCA.

Mark Kopson, chairman of the health careindustry group at Bloomfield Hills-basedPlunkett Cooney PC, also said Michigan maybe seen as a fertile ground for acquisitionsdue to the under-representation of for-profitowners. Medicaid expansion under the ACA(Blue Cross Blue Shield of Michigan has esti-mated Medicaid could add more than 450,000patients in the state) and the need to find ef-ficiency through scale are also driving merg-er-and acquisition talks, he said.

Plunkett Cooney was local regulatorycounsel for Duke LifePoint in the Marquetteacquisition. Kopson would not discuss thatdeal, but did say access to private equitycapital and cost pressures on independenthospitals are “factors present in almost allfor-profit acquisitions” of nonprofits.

“Michigan was almost universally lookedon before Vanguard (buying DMC) as a non-profit provider state, and has lagged in thistrend,” he said. “And one of the factors hospi-tals have to consider is the access to capital,which private equity firms have. And one ofthe drivers for that is the constant need forcapital improvements.”

Beaumont had a 54 percent drop in net in-come to $35.5 million in 2011 from $78 millionin 2010, fueled by dwindling investment in-come on its stock market investments, eventhough revenue increased to about $2.18 bil-lion. Net income also slid in 2011 for HenryFord Health System, Oakwood Healthcare Inc., St.John Providence Health System and Trinity Health.

Beaumont executives have said the compa-ny was able to pare expenses more than 11percent since it lost money after the globalmarket collapse in 2008. But the hospital alsoenjoys a quality-of-care reputation that wouldadd to its appeal in the acquisition market.

HCA (NYSE: HCA) has been on the huntrecently, adding more than a dozen hospi-tals in the past three years, and like Beau-mont it enjoys a quality reputation, with 80of its hospitals ranked among the top 10 per-cent nationwide.

Mark Lezotte, shareholder in the businessand transactional practice at the Troy officeof Hall Render Killian Heath & Lyman PLLC, saidan increase of accountable care organiza-tions and hospital participation in theMedicare Shared Services Program will putan increase focus on saving money as ameans to greater government compensation.

“Payment mechanisms that are startingto happen will place a premium on coordi-nation and communication efficiency, andyou’ll see more of a focus on measured out-comes than on (billing) activity. That’s go-ing to put a focus on scale and coordinationamong providers in the system to avoid du-plicative services,” he said.

“Access to capital is important becauseMichigan hospitals will need to expand andmodernize and find cost controls under thenew law. Those things are starting to hap-pen now in the market, and some of themwon’t be cheap.”

Chad Halcom: (313) 446-6796,[email protected]. Twitter: @chadhalcom

Hospitals: Systems on prowl■ From Page 1

Minerals: Rules raise costs■ From Page 3

It’s tough topredict thecosts, and

companiesaren’t

alwaysprepared

to take on thoseextra costs.

Jeff French, Grant Thornton LLP”

“



SPEED.ACCURACY.

RESPONSIVENESS.Award-winning CIOs have a lot in

common with Quicken Loans.

Congratulations to the Crain’s Detroit CIO Award Winners.

we explore options in differentmarkets,” said Jeff Pearson, se-nior vice president of marketingat HHGregg, in an emailed state-ment.

“We do not have any firm com-mitments for the Detroit marketto share at this time.”

HHGregg stores, which aretypically about 30,000 squarefeet each, sell flat-panel televi-sions; premium video productsincluding cellphones, tablets,GPS devices, iPods and otherMP3 players; name-brand appli-ances; audio products; and fur-niture at competitive prices, ac-cording to the company’swebsite. It competes with suchretailers as Best Buy and RadioShack.

Announcements of HHGreggopenings in other markets indi-cate each store creates from 60 to120 jobs.

The city of Roseville, whichwould have seen one of the newelectronics and appliance stores,was also left perplexed by HH-Gregg’s decision not to move intothe market for now.

City officials said the compa-ny contacted the city in June toprovide preliminary plans for anew store at 13 Mile and LittleMack, a former Circuit City loca-tion, expected to open in June2013.

HHGregg was seeking a heightvariance because the entryway itplanned for the store would havebeen taller than the 40-foot limitRoseville has for such structures,said building director Glenn Sex-ton.

The company wasn’t seekingany tax incentives, he said.

Sexton said he followed upwith the company earlier thismonth to check on the status ofthe project, and that’s when hewas informed that the companyhad “to put (its) market entry onhold for now,” he said.

Sexton said that HHGregg’s di-rector of real estate, Steve Nikel,wrote in an email, “While we aredisappointed, we had to post-pone our efforts in the Detroitarea; hopefully, we will be ableto revisit your market in the fu-ture.”

HHGregg has been on an ex-pansion path this year. Accord-ing to its website, it operatesmore than 218 stores in Alaba-ma, Delaware, Florida, Georgia,Illinois, Indiana, Kentucky,Maryland, Mississippi, New Jer-sey, North Carolina, Ohio, Penn-sylvania, South Carolina, Ten-nessee, Virginia and WestVirginia.

The company entered Missouriand Wisconsin in mid-Septem-ber, with stores in St. Louis andGreen Bay and three others ex-pected to open this fall near Mil-waukee.

It also expanded with two newstores in Illinois and announcedplans to open new stores this fallin Port Richey, Fla., and Atlanta,Ga., this fall.

Sherri Welch: (313) 446-1694,[email protected]. Twitter:@sherriwelch

HHGregg:Unplugged■ From Page 3

partner Deloitte LLP.Davidoff spent 20 years as an ex-

ecutive at nonprofits, includingTrinity Health Corp. and the JewishFederation of Metropolitan Detroit,and today serves on nonprofitboards, including the Detroit Insti-tute of Arts and the United Way forSoutheastern Michigan.

“I think boards understand andappreciate that they will andshould pay to attract and retainthe right talent for the right time,”he said.

“An increasing number of non-profits are adopting a compensa-tion philosophy that includes in-centive pay,” said Ed Steinhoff, apartner at the Detroit office of na-tional human resource consultingfirm Mercer (US) Inc., a subsidiaryof Mercer LLC.

“They want to assure that payand performance are aligned. … Ifyou take an element of compensa-tion and make it variable, based on(organizational) results … you’renot overpaying in the poor yearsand underpaying in the goodyears.”

Incentive pay isn’t prevalentamong foundation executives. Theonly executive among foundationleaders to earn a bonus for worktied to her role was St. John Provi-dence Health System FoundationsPresident Susan Burns, with justunder $30,000 in incentive pay thatyear for leading the foundation’sfundraising efforts.

That’s not including IraStrumwasser, who earned hisbonus for work as vice president ofBlue Cross Blue Shield of Michigan.

Nineteen of the executives re-ceived raises in 2010. Ten saw paydecreases and four had pay

freezes. Two could not be com-pared year to year.

The median base pay changeamong those executives was 2.44percent between 2009 and 2010. Themedian increase in total compen-sation was 2.73 percent, outpacingthe national average of 2 percentas reported by the Chronicle ofPhilanthropy. And the mediansalary was $293,483.

FoundationsThe highest-paid traditional

nonprofit executives were amongfoundation leaders, followed bythose in human services and, final-ly, those in arts and culture.

Kresge Foundation President andCEO Rip Rapson was the top earn-er with total compensation of$610,679, followed by W. Clark Du-rant, $558,214, for his work as pres-ident of the New Common SchoolFoundation and as an independentcontractor top executive of GenesisFoundation.

Among grant-making founda-tions, none of the executives saw a

decrease in base pay in 2010, andjust three of the 10 saw decreasesin their total compensation.

Arthur Rodecker, trustee of theSouthfield-based DeRoy Testamen-tary Foundation, had the largest to-tal compensation decrease, at 2.41percent, which dropped his salaryto $156,152.

The biggest increase amonggrant-making foundation chiefswas a nearly 9 percent total com-pensation boost for Hudson-WebberFoundation President and CEODavid Egner, whose compensationrose to $384,560 in 2010. His basepay increased from $296,144 to$322,000 in 2010, an 8.7 percentboost, as he took on the added re-sponsibility of also overseeing the$100 million New Economy Initiative,an economic development initia-tive funded by 10 foundations andadministered by the CommunityFoundation for Southeast Michigan.

Ruth Stephens-Collins, presi-dent of Rochester Hills-based Crit-tenton Hospital Medical Center Foun-dation, saw an 18.3 percent declinein total compensation, dropping itto $105,900 in 2010.

She subsequently left the foun-dation, which former longtimePresbyterian Villages of MichiganFoundation President MelindaCallahan took over in February.

Human servicesTwo-thirds of the top-paid hu-

man service executives saw an in-crease in their total compensationin 2010; a third saw pay cuts.

Michael Brennan, president andCEO of United Way for Southeast-ern Michigan, was the top earneramong them with total compensa-

tion of $456,508, followed closelyby Reid Thebault at the YMCA ofMetropolitan Detroit, who earned$454,860 that year.

Lutheran Social Services of Michi-gan’s top executive, Mark Stutrud,had a reported 34 percent increasein pay in 2010 that was driven by asupplemental executive retire-ment plan allocation of $106,442.

Arts and cultureAmong arts and culture organi-

zations, half got raises that year,led by Kathleen Mullins, presidentof the Edsel & Eleanor Ford House inGrosse Pointe Shores, with a 17percent increase in her total com-pensation, bringing it to $229,248.

The top executives of three artsorganizations that were strug-gling in 2010 to find sustainableoperating funding and/or to payoff debt, saw pay cuts or freezes.

Detroit Institute of Arts DirectorGraham Beal’s total compensa-tion dropped by nearly 4 percentin 2010, though his base pay in-creased 7.4 percent that year andhis bonus increased to $35,000from $33,000 in 2009.

Reflected in his base pay in-crease was the January 2010restoration of a temporary 8 per-cent pay cut that Beal took duringthe last six months of 2009, saidAnnmarie Erickson, COO, in anemail.

The drop in Beal’s total compen-sation can also be attributed to theexpiration of a housing allowancein 2010 that Beal had earlier re-ceived, she said.

Detroit Symphony Orchestra Presi-dent and CEO Anne Parsons’ basepay was frozen at $270,000, but hertotal compensation decreasedslightly with shifts in her benefits.And Michigan Opera Theatre Presi-dent David DiChiera’s pay wasfrozen in 2010.

Sherri Welch: (313) 446-1694,[email protected]. Twitter:@sherriwelch

Bill Shea helped report this story.

Nonprofits: Incentive pay makes a comeback■ From Page 1

THE FULL REPORTThe 2012 Nonprofit ExecutiveCompensation Survey containscompensation data on more than90 Michigan nonprofits, includingapproximately 175 executives, inan Excel spreadsheet. Thespreadsheet includescompensation information for2010 and 2008 and is especiallyuseful for nonprofit boardmembers or nonprofit executiveslooking for information aboutcompensation trends. It can bepurchased for $69 atcrainsdetroit.com/lists.

AJM Packaging addswarehouse in Detroit

Bloomfield Hills-based AJMPackaging Corp. closed earlier thismonth on the purchase of a316,000-square-foot warehousingand distribution center on Fuller-ton Street in Detroit.

New York-based industrial andoffice real estate acquisition firmAshley Capital LLC, which has an of-fice in Canton Township, sold thebuilding to AJM affiliate Epco LLCfor an undisclosed sum. BloomfieldHills-based Forum Group LLC repre-sented AJM in the transaction.

AJM, a manufacturer of private-label and branded paper productssuch as paper plates, cups, bowlsand bags, plans to fill at least 40,000square feet of space and may growits presence as business needs dic-tate or as space becomes available,said founding Principal MikeZiecik of Forum Group. More than80 percent of the building is occu-pied by lease tenants, includingDetroit-based CTC Distribution.

— Chad Halcom


opment work on its Blast-ResistantVehicle-Off Road, or BRV-O, propos-al for JLTV. Competitors LockheedMartin Corp. in Bethesda, Md., re-ceived $66.3 million and OshkoshDefense in Wisconsin received $56.4million for the same work on theirown JLTV offerings.

The ultimate winner of a pro-duction contract could receivemore than $5 billion for JLTV pro-duction starting in 2015, as the U.S.

Army and Marine Corps expect toorder more than 25,000 units to re-place part of their Humvee fleets.Allied governments might alsomake JLTV purchases under theU.S. Department of Defense ForeignMilitary Sales program.

Chad Halcom: (313) 446-6796,[email protected]. Twitter:@chadhalcom

Crain’s New York Business con-tributed to this story.

tract for it in 1983. A long-running licensing deal for

General Motors Co. to produce thecivilian equivalent Hummer, H2and H3 vehicles in the commercialmarkets ended when GM retiredthe brand in 2010. AM General alsohad a contract with Oak Park-basedAzure Dynamics LLC to retrofit lowvolumes of Ford Transit Connectvans with electric powertrains, un-til Azure filed for bankruptcy andclosed its doors earlier this year.

But in the past two years alone,the U.S. Tacom Life Cycle Manage-ment Command in Warren hasawarded AM General at least $1.9billion in contracts to produce ormodify more than 9,000 militaryHumvees for the U.S., Jordan,Afghanistan and other govern-ments. Humvees have beenshipped to nearly 50 U.S.-alliedgovernments around the world.

Majority owner Perelman, 69,and co-owner Rennert, 78, accuseeach other in a Delaware court oftaking away more than $280 mil-lion from cash-rich AM General byway of loans, management feesand royalties.

Suit follows suitIn a suit filed at the Delaware

Court of Chancery in late June, AMGeneral Holdings Inc. alleges Ren-nert and his company, New York-based Renco Group Inc., withdrew$109 million by borrowing fromAM General at below-marketrates that are “unfair and disad-vantageous to the company.”

Renco Group countersued Perel-man and his holding company,MacAndrews & Forbes Holdings Inc.,accusing the Perelman company ofdiverting $175 million by chargingAM General excessive manage-ment fees and royalties.

The Perelman lawsuit allegesRennert and his family’s invest-ment company treat AM General“as a convenient drive-thru tellerto which they pull up and askthemselves for as much money asthey like.”

The Rennert suit claims Perel-man and his holding company areknown to “have repeatedly usedtheir control of enterprises to un-fairly enrich themselves at the ex-pense of minority stakeholders.”

Renco also alleges the holdingcompany has extracted $105 mil-lion in royalties and $16.2 millionin “management fees” from AMGeneral subsidiary General EngineProducts LLC, which has adminis-trative offices in Livonia and anassembly plant in Ohio.

General Engine Products manu-factures a 6.5-liter diesel enginethat it sells to AM General for theHumvee. But the Rennert suit al-leges Renco remains entitled to allprofits from General Engine ac-cording to terms of the joint ven-ture agreement that allowed forthe Perelman acquisition.

Rennert, who is worth $5.4 bil-lion, according to Forbes, boughtAM General in 1992 for $133 mil-lion and sold a 70 percent stake toPerelman, who is valued at $12 bil-lion by Forbes, for $935 million in2004. Only $110 million of thattransaction was in cash.

The wars in Iraq and Afghanistanspurred enough demand forHumvees for Perelman’s holdingcompany to receive $1.7 billion indistributions from AM General

through last year, according to theRenco Group suit.

Rough times elsewhereAM General also thrived as a

portion of both men’s investmentportfolios at a time when some oftheir ventures hit rough patches.

In 2010, Perelman handed credi-tors control of Panavision, the movie-camera maker he’d owned since1998 that was buckling under heavydebt, according to the Renco suit.

Rennert’s empire also has chal-lenges, according to the Perelman-led AM General Holdings suit. InMay, RG Steel filed for bankruptcyonly a year after Rennert acquiredthe manufacturer for $1.2 billion.

He also lost control of a metalsrefinery in Peru, which at onepoint last decade generated one-third of Renco Group’s revenue. ARenco subsidiary closed the facto-ry in 2009, and the next year a cred-itor put the division into involun-tary bankruptcy proceedings.

A MacAndrews & Forbes spokes-woman denied the suit’s allega-tions: Perelman “is a long-term in-vestor who focuses on intrinsicvalue. The outlook of each of the op-erating companies is strong, witheach having their best year ever.”

Production at stakeAM General is one of three con-

tract award winners in a 27-month pre-production contract onthe JLTV. The company received a$64.5 million award Aug. 22 for engi-neering, manufacturing and devel-


www.crainsdetroit.comEDITOR-IN-CHIEF Keith E. CrainPUBLISHER Mary Kramer, (313) 446-0399 [email protected] PUBLISHER Marla Wise, (313) 446-6032 or [email protected] EDITOR Cindy Goodaker, (313) 446-0460 or [email protected] EDITOR Jennette Smith, (313) 446-1622 or [email protected], DIGITAL CONTENT STRATEGY NancyHanus, (313) 446-1621 or [email protected] DEPUTY MANAGING EDITOR Daniel Duggan, (313)446-0414 or [email protected] EDITOR Bob Allen, (313) 446-0344 [email protected] MICHIGAN EDITOR Matt Gryczan, (616) 916-8158 or [email protected] EDITOR Gary Piatek, (313) 446-0357 [email protected] DESIGNER Jeff Johnston, (313) 446-1608or [email protected] EDITOR Brianna Reilly, (313) 446-0418,[email protected] PRODUCER Norman Witte III, (313) 446-6059, [email protected] SUPPORT Robertta Reiff, (313) 446-0419; YahNica Crawford, (313) 446-0329NEWSROOM (313) 446-0329, FAX (313) 446-1687 TIP LINE (313) 446-6766

Daniel Duggan, deputy managing editor: Coversreal estate. (313) 446-0414 or [email protected] Greene, senior reporter: Covers health care,insurance, energy utilities and the environment.(313) 446-0325 or [email protected] Halcom: Covers litigation, higher education,non-automotive manufacturing, defensecontracting and Oakland and Macomb counties.(313) 446-6796 or [email protected] Henderson: Covers banking, finance,technology and biotechnology. (313) 446-0337 [email protected] Shea, enterprise editor: Covers media,advertising and marketing, the business of sports,and transportation. (313) 446-1626 [email protected] Skid, multimedia editor. Also covers thefood industry and entertainment. (313) 446-1654,[email protected] Walsh: Covers the business of law, autosuppliers and steel. (313) 446-6042 [email protected] Welch: Covers nonprofits, services, retailand hospitality. (313) 446-1694 [email protected]

SALES INQUIRIES: (313) 446-6052; FAX (313)393-0997SENIOR ACCOUNT EXECUTIVES: Matthew J.Langan, Tamara Rokowski ADVERTISING SALES Christine Galasso, LoriTournay Liggett, Dale Smolinski CLASSIFIED SALES (313)-446-0351EVENTS DIRECTOR Nicole LaPointeDIRECTOR, INTEGRATED MARKETING Eric CedoSALES PROMOTION MANAGER Karin PitroneEVENTS COORDINATOR Kacey AndersonSENIOR PRODUCER FOR DIGITAL/ONLINEPRODUCTS Pierrette DaggMARKETING ARTIST Sylvia KolaskiSALES SUPPORT Suzanne Janik, YahNica CrawfordMARKETING COORDINATOR Jenny GriffithPRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Larry Williams

MAIN NUMBER: Call (877) 824-9374 or [email protected] $59 one year, $98 two years.Out of state, $79 one year, $138 for two years.Outside U.S.A., add $48 per year to out-of-staterate for surface mail. Call (313) 446-0450 or (877) 824-9374.SINGLE COPIES: (877) 824-9374REPRINTS: (800) 290-5460, ext. 125; (717) 505-9701, ext. 125; or [email protected] FIND A DATE A STORY WAS PUBLISHED:(313) 446-0406 or e-mail [email protected]

CRAIN’S DETROIT BUSINESS IS PUBLISHED BYCRAIN COMMUNICATIONS INC.CHAIRMAN Keith E. CrainPRESIDENT Rance CrainSECRETARY Merrilee CrainTREASURER Mary Kay CrainExecutive Vice President/OperationsWilliam A. MorrowGroup Vice President/Technology,Manufacturing, Circulation Robert C. AdamsVice President/Production & ManufacturingDave KamisChief Information Officer Paul DalpiazChief Human Resources OfficerMargee KaczmarekDirector of Audience Development Operations Michelle RothG.D. Crain Jr. Founder (1885-1973)Mrs. G.D. Crain Jr. Chairman (1911-1996)EDITORIAL & BUSINESS OFFICES:1155 Gratiot Ave., Detroit MI 48207-2732; (313)446-6000Cable address: TWX 248-221-5122 AUTNEW DETCRAIN’S DETROIT BUSINESS ISSN # 0882-1992is published weekly, except for a special issue thethird week of August, and no issue the third weekof December by Crain Communications Inc. at1155 Gratiot Ave., Detroit MI 48207-2732.Periodicals postage paid at Detroit, MI andadditional mailing offices. POSTMASTER: Sendaddress changes to CRAIN’S DETROIT BUSINESS,Circulation Department, P.O. Box 07925, Detroit,MI 48207-9732. GST # 136760444. Printed inU.S.A.Entire contents copyright 2012 by CrainCommunications Inc. All rights reserved.Reproduction or use of editorial content in anymanner without permission is strictly prohibited.

REPORTERS

ADVERTISING

CUSTOMER SERVICE

Army official: Procurement budget likely to hit 10-year low

AM General: JLTV win may extend owners’ fight■ From Page 3

BY CHAD HALCOM


Local defense contracting com-panies can expect the military’sprocurement budget to stabilizeat its lowest level in 10 years, a se-nior procurement official saidlast week — and that’s if Congresscan avert automatic spendingcuts.

Barring sequestration — theautomatic cuts that take effectwithout congressional interven-tion next year under the federalBudget Control Act of 2011 — theU.S. Army Tacom Life Cycle Manage-ment Command in Warren projectstotal contract spending will beabout $10 billion in the fiscal yearthat starts Oct. 1.

That’s off from $14 billion inprojected spending this fiscalyear and $17 billion in fiscal 2011,Executive Director Harry Hallockof the Army Contracting Com-mand told attendees Tuesday atthe National Defense Industrial As-sociation Michigan Chapter’s fallbusiness event at the Troy Marriott.

But Hallock said actual Tacomspending in fiscal 2012 is just over$9 billion right now and shouldfinish at around $10 billion, mean-ing fiscal 2013 spending would beroughly flat compared with thisyear.

Tacom contract spending onground vehicles, weapons, engi-neering, services and other pro-grams totaled about $11 billion in2004 but reached its all-time highof $31 billion in fiscal 2008.

But the Tacom projection as-

sumes Congress can adopt spend-ing cuts by year’s end that wouldavoid the automatic cuts of morethan $100 billion a year betweenfiscal 2013 and 2022 under the 2011act. About half of the automaticcuts are expected to target de-fense.

“I tend to be the optimist, and Ibelieve someone is going to blinkfirst,” Hallock said, “becausethere’s so much downside tosomeone not blinking.”

The Army also projects that arecord 22 major systems fundedthrough Tacom will shift over thenext five years from productioninto post-production repair andrefit “sustainment” programs,where federal funding tends to bespottier.

These include the Abrams bat-tle tank of Sterling Heights-basedGeneral Dynamics Land Systems; theFamily of Medium Tactical Vehi-cles, managed through OshkoshDefense’s technical center in War-

ren; the Bradley armored vehicleof BAE Systems Inc., which housesits Heavy Brigade Combat Teamunit in Sterling Heights; and themilitary Humvee of AM GeneralLLC, which houses its engineeringand product development centerin Warren.

“But many other actions cometogether around that transition,like terminating a program orsustainment contracts to main-tain” equipment, he said. “So adecrease in total budget fundingdoesn’t necessarily translate intoan (equal) decrease in total con-tracting.”

General Dynamics Land Sys-tems topped the list of largestcontract recipients in the pastyear at just over $2 billion, ac-cording to Tacom data. But $187million of that went to Ladson,S.C.-based Force Protection Inc.,which GDLS acquired this year.The runner-up was BAE Systemsat $857 million, followed byOshkosh at $806 million.

Among the leading small-busi-ness contractors managed by theTacom Office of Small BusinessPrograms, the top recipient wasCarrollton, Texas-based Critical So-lutions International Inc., maker ofthe Vehicle Mounted Mine Detec-tor, with $116 million. The highest-ranked Michigan-based small-business contractor was MadisonHeights supplier SSI TechnologyInc. at No. 9, with $26 millionawarded in the past year.

Chad Halcom: (313) 446-6796,[email protected]. Twitter:@chadhalcom

I tend to be theoptimist, and I

believe someone isgoing to blink first(before automaticcuts happen).

Harry Hallock, U.S. Army Contracting Command

”

“

“ “They are not just patent lawyers, but our trusted advisors.

JAMES SCAPA, CEO Altair Engineering

YOUNG BASILE.

WWW.YOUNGBASILE.COM

INTELLECTUAL PROPERTY ATTORNEYS

Advisors to the world’s most innovative companies.

ANN ARBOR • TROY • SILICON VALLEY



Popovichnamed to postsat Henry Ford

ohn Popovich, M.D.,president and CEO ofHenry Ford Hospital, has

been named executive vicepresident and chief medicalofficer of Henry Ford HealthSystem, system CEO NancySchlichting announced. Hewill replace Mark Kelley,M.D., who is retiring as thesystem’s CMO and as CEOof Henry Ford Medical Group.

Bill Conway, M.D., willserve as interim executivevice president and CEO ofthe health group during thesearch for a successor.

COMPANY NEWS� Troy-based Flagstar

Bank has signed a five-yearlease for a full-servicebranch in the One DetroitCenter building, the formerheadquarters of ComericaInc. Flagstar is also doublingthe space of a small branchon West Warren Avenuenear Wayne State University.

� Stik.com, a social mediacompany using the Facebookplatform to help users getrecommendations fromfriends on such profession-als as money managers, realestate agents, lawyers anddentists, announced that ithas moved from San Fran-cisco to the emerging techhub in the Madison Building.

� Ann Arbor-basedCarlisle/Wortman Associates,Detroit-based SmithGroupJJR,Ann Arbor’s Fontaine UrbanDesign LLC, Northville-basedMcKenna Associates and Roy-al Oak’s LSL Planning Inc.were five planning firmschosen by the Aerotropolis De-velopment Corp. to help theagency market potential de-velopment and redevelop-ment sites throughout theaerotropolis region, whichincludes Detroit MetropolitanAirport and Willow Run Airport.

� Royal Oak-based TasteLove Cupcakes was featuredin a re-aired episode of theFood Network’s “CupcakeWars.” Taste Love says itsappearance on the show inApril propelled the compa-ny to profitability.

� India’s Mahindra &Mahindra Ltd. opened a tech-nical center in Troy, the con-glomerate’s first in NorthAmerica, to provide designand consulting services forautomotive customers in theregion and support its auto-motive and tractor engineer-ing operations in India, Au-tomotive News reported.

� Southfield-basedGuardian Alarm Co. has ac-quired several thousandhome security accounts ofDetroit-based Allstate AlarmSystems Inc. and Alert Alarm

Inc. in Royal Oak for anundisclosed amount.

OTHER NEWS� Wayne County Com-

missioner Kevin McNamara,D-Belleville, has been ap-pointed by that board to beits lone appointee on theseven-member Wayne Coun-ty Airport Authority. He re-places Bernard Parker, D-De-troit, whose term ends Oct.1. Also, the airport authori-ty has named interim CEOTom Naughton to the perma-nent post. He was appoint-ed as the interim in Octo-ber 2011 after the authorityvoted to fire Turkia Mullin.

� Unable to reach agree-ment on a new labor deal,the National Hockey Leaguelocked out its players. Lo-cal analysts say the DetroitRed Wings franchise is bet-ter equipped than manyother teams to weather thepotential financial hit.

� Henry Ford West Bloom-field Hospital became the lat-est Southeast Michiganhealth care facility to offerfresh produce to its patients,hiring a resident farmer andopening a greenhouse togrow organic produce.

� A study by the Michi-gan Department of Communi-ty Health and conducted bya University of Michigan re-searcher says Michigan’sban on smoking in bars andrestaurants has not signifi-cantly hurt sales at thoseestablishments.

� The Detroit City Councilis considering a plan to ex-tend the Dequindre CutGreenway north throughEastern Market.

� The state’s new Michi-gan China Center in Shanghaiwill target foreign invest-ment attraction, exporttrade development and edu-cation initiatives.

� The Detroit SymphonyOrchestra edged past thisyear’s fundraising goal of$12.32 million by reaching$12.332 million. The num-ber of donors, at 9,287, is up15 percent from last year.

� Oakland County Execu-tive L. Brooks Patterson wasdischarged from McLarenOakland Hospital in Pontiacbut will continue his recov-ery from injuries in an Aug.10 auto collision at an undis-

closed location.� Home prices gained 7.2

percent in July from a yearearlier, Detroit’s biggestjump in more than a dozenyears, according to themortgage-data firm FNC Inc.

� Bloomfield Hills-basedUrban Campus CommunitiesLLC broke ground on the $30million Union at Dearbornapartment complex, acrossEvergreen Road from theUniversity of Michigan-Dear-born campus.

� The Detroit Lions willpartner with five Detroitnonprofits to focus on com-munity health, wellness andworkforce development.The partners are PlayworksDetroit, Eastern Market Co.,Goodwill Industries of GreaterDetroit, Hatch Detroit and theDetroit Lions Academy.

� Michigan Senate Insur-ance Committee ChairmanJoe Hune introduced billsproposed to overhaul BlueCross Blue Shield of Michigan.

� The U.S. Department ofLabor has awarded HenryFord Community College inDearborn a $15 milliongrant to help expand high-tech job training and op-portunities for manufactur-ing workers whose jobswere lost or sent overseas.

� An art and design grad-uate of the University of Michi-gan and her husband, Pennyand E. Roe Stamps of Miami,are making a $32.5 milliondonation to the newly re-named Penny W. StampsSchool of Art and Design.

� Four finalists havebeen picked for the 2012Comerica Hatch Detroit con-test, which awards $50,000to one entrepreneur whohas an idea for a Detroit-based retail business.

� Detroit’s WXYZ-Channel7 on Wednesday will begintelecasting Bounce TV, aimedat black audiences, on over-the-air digital Channel 7.3.

� Opening statementswere heard in the corrup-tion trial for former DetroitMayor Kwame Kilpatrick andhis co-defendants.

� Sentio LLC of Southfieldand Ablative Solutions Inc. ofKalamazoo will share the in-novator of the year award atMedical Main Street’s firstmedical device conference,Inno-vention 2012, Oct. 3-5 atRochester’s Royal Park Hotel.

t was, apparently, War-ren Buffett who startedthe courting process

that brought 5-Hour Energycreator Manoj Bhargava intothe Giving Pledge, the groupof billionaires who agree togive at least half of theirwealth to charity.

But after the “Oracle ofOmaha” started the talkswith Bhargava, it was Mi-crosoft founder Bill Gateswho closed the deal.

“Warren Buffett orga-nized the first meeting,which was fairly small, inChicago,” Bhargava said.“And then Bill Gatesreached out to me and saidhe’d like to talk. We met inNew York, had a very nicechat, and he recruited me.”

The Seattle-based GivingPledge now encompasses 92families, with the an-nouncement of 11 new mem-bers last week. They includ-ed Bhargava and QuickenLoans Inc. founder DanGilbert, who declined to beinterviewed on the topic.

Forbes estimatesGilbert’s net worth at $1.9billion and Bhargava’s at$1.5 billion.

Despite the recruiting ef-forts from America’s tworichest people, Bhargavasaid that, in the end, it wasthe mission itself that soldhim on the idea. He hasagreed to pledge 90 percentof his wealth to charity.

“They have a great model,and what I admire aboutthem is that they view all hu-man life as being equal, asopposed to some groups thatview people in rich coun-tries as being more equal,”he said. “These guys get it.”

In the letter Bhargavawrote, which is posted ongivingpledge.org, hesummed it up this way:“My choice was to ruin myson’s life by giving himmoney or giving 90-plus per-cent to charity. Not much ofa choice. Service to othersseems the only intelligentchoice for the use of wealth.The other choices, especial-ly personal consumption,seem either useless orharmful.”

Girls Night Out gatheringcontinues growth

Who are Tanya Allen, MaryCallaghan Lynch, Lisa Calvin,Christine Catalanotte, LynneGolodner, Cheryl Haithco,Christine Kiernan, Linda Jen-nings, Yodit Mesfin-Johnson,Beth Morrison, JacquelineNorthrop, Teresa Rodges, LisaRosenbaum, Joyce Suber andPaula Tutman?You can callall of them community ac-tivists. Some are artists,journalists and businessleaders. You can also callthem, without fear of beingchastised as politically in-correct, the Merry Band ofGoddesses.

That’s how they werebilled on the invitation forthis Friday’s fourth annual“Global Girls Night Out,”what promises to be a rock-ing, bonding, meta-net-working night out at TheHenry, Dearborn, formallyknown as the Ritz-Carlton.

The annual gatheringcontinues to grow.

The first Global GirlsNight Out drew about 30women. The second brought150. Last year it was 425,

RUMBLINGS WEEK ON THE WEBF R O M W W W . C R A I N S D E T R O I T . C O M , W E E K O F S E P T . 1 5 - 2 1

Colbert: Gauntlet is thrown

5-Hour Energyboss: Buffett,Gates good sell I

J

BEST FROM THE BLOGSR E A D T H E S E P O S T S A N D M O R E A T W W W . C R A I N S D E T R O I T . C O M / B L O G S

Who would everhave thought in thegloomiest days of therecession that in 2012,a prosperous bank onthe grow would rathercome to Flint thanChicago because of howhealthy the auto industryis?”

“Why choose Flint over Chicago?

Josh McManuscreated a Facebookgroup called ColbertDoes Detroit (and socan you!) in an effort toget (TV talk host)Stephen Colbert tocome to Detroit andwalk the meanstreets.”

“

with substantially morethan that expected to haveregistered for this year’sevent by last Friday’s dead-line, organizers said.

“Everyone over the age of21 with two X chromosomesis invited,” the invitationread. “The Global GirlsNight Out group is a non-partisan, multiethnic, so-cially and economically di-verse group of women.We’re not incorporated orofficially recognized in anyway. We’re not a club or anorganization. We’re a groupof gal-pals who’ve gotten to-gether to make this babyhappen.

“Every woman in atten-dance is a friend of a friendand a potential friend, ac-quaintance or business con-tact. Our sole purpose is tobring women together in aspirit of sharing to relaxand have fun with a sensethat women should not bein competition with one an-other except fairly in busi-ness and athletics.”

Survey: When dealers call,Ally lends a better ear

Who’s the quickest lenderto respond to auto dealerstrying to line up credit foran eager buyer?

That’s what Crain’s sisterpublication AutomotiveNews wanted to know.

And the winner? Detroit-based Ally Bank, in an unsci-entific survey that drew 102dealer responses. Thirty-seven percent said Ally wasthe quickest to respond,whether by phone or online.Next came Chase at 25 per-cent, Capital One at 21 per-cent and Ford Motor Credit at20 percent.

BITS & PIECESJeffrey Kopp, a partner in

the litigation department atDetroit-based Foley & Lard-ner LLC, has been given the2012 Unsung Hero Awardfrom the State Bar of Michi-gan.

Reporter Tom Henderson’s blog about accounting,banking, venture capital and high tech can be foundat www.crainsdetroit.com/henderson

Reporter Nathan Skid’s Detroit-area restaurant blogcan be found at www.crainsdetroit.com/skid

Crain’s HouseParty guestsgather Thursday atthe home of JeffAntaya, CMO andpartner at PlanteMoran, at WillysOverland Lofts inMidtown. Antayawas one of 25hosts for theevent, which drew532 attendees. More photos atcrainsdetroit.com/housepartygallery.

AARON ECKELS

CRAIN’S CELEBRATES SEVENTH ANNUAL HOUSE PARTY


Healthy employees are happy, productive employees.

Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

Adding Blue DentalSM and Blue VisionSM coverage to a medical plan from the Blues means value for your business.

One health care companyOne point of contactOne eligibility fileOne premium paymentOne I.D. card for Blue Cross members

That’s one convenient health plan that will save you time and hassle.

Even better, having medical, dental and vision coverage with the Blues means we know you, because we handle all of your health care needs.

To learn more about how Blue DentalSM and Blue VisionSM can add value to your business, call 313-448-5632, or contact your Blues-contracted agent or your account manager.

WNpageAD.qxp 8/8/2012 5:16 PM Page 1

SEPTEMBER 24 – 30, 2012 Hospitals hungry under Bills aim ... · Pages 11-14 BY CHAD HALCOM...

Documents

Transcript of SEPTEMBER 24 – 30, 2012 Hospitals hungry under Bills aim ... · Pages 11-14 BY CHAD HALCOM...