Crain's Detroit Business - December 19, 2011 - (Page 17)

December 19, 2011 CRAIN’S DETROIT BUSINESS Page 17 Bloggers on the beat TALK ON THE WEB 2011 Crain’s readers made plenty of comments on our stories throughout the year, many of them quite insightful, others amusing. Here is a sampling: This project would have been a disaster, a bottomless money pit. Tgg If we cannot manage to keep a baby rail system like the People Mover in operation, in the heart of the region’s anchoring city, what makes us think things like the M1 light-rail project will be sustainable? J.T. Pedersen DUSTIN WALSH: Price-fixing and politics Automotive is the “Scooby Doo” of industry — stumbling into one sticky situation after another. After a near collapse, auto suppliers have found themselves smack dab in the middle of an ever-expanding price-fixing investigation. Clearly, authorities on three continents have a case: Furukawa Electric Co. and three executives pleaded guilty to the tune of Dustin Walsh $200 million. Also, Livonia-based TRW Automotive Holdings Corp. spent $13 million on lawyers last quarter. That doesn’t happen if everything is copasetic. But does a case equal justice, or is it just politics? The investigation spilled across product lines including windshield wipers, tooling and safety systems. “As described in the information filed in the Furukawa case, this was hardcore, pernicious price fixing that can only mean inflated prices on the parts that are found on all of our cars,” Sharis Pozen, acting assistant attorney general, told the American Bar Association 2011 Antitrust Fall Forum last month. However, the dozens of experts I chat with weekly are up in arms. Automotive is the most top-down industry on Earth. Automakers are kings and suppliers mere players in their courts. Carmakers divvy up contracts on more than just price: capabilities, manufacturing location, market share control, etc. “Margins are razor thin. That leaves little profit for shareholders,” equity analyst Richard Hilgert said. “Where they think that antitrust could be that (easy to hide) in an industry like this is ridiculous.” The Department of Justice assumed a 10 percent profit margin on Furukawa’s wire harness business. Anyone in the business can tell you a 10 percent margin is nearly unheard of. Margins in all Furukawa divisions were below 3 percent, and even negative, the past four years. Margins at TRW — which at this time is being investigated, not indicted — were just over 8 percent last year and negative the two previous years. So to what end are prices being fixed? Justice is expected to bring down more charges by year’s end as the government continues its quest to destroy players in an industry it spent billions to save only a few years ago. I’ll leave this to Groucho Marx: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.” Ruh-roh. Reporter Dustin Walsh’s blog on auto suppliers, steel, higher ed and Livingston and Washtenaw counties can be found at www. crainsdetroit.com/walsh Re: 5 questions with Andy Appleby Appleby is chairman and CEO of General Sports and Entertainment LLC in Rochester, which in January 2008 bought Derby County FC Ltd., an English professional soccer team (and its 33,597-seat Pride Park Stadium) for $100 million. Fans didn’t take well to Americanstyle marketing of the club. You are no longer welcome at Derby County Football Club. Get out of our Club Re: Pure Michigan marketing shifted The Michigan Economic Development Corp. and Michigan Strategic Fund gave a three-year, $5.63 million contract to handle the Web, media, public relations and digital marketing work for Pure Michigan to the Birmingham office of Weber Shandwick, the sister agency of McCann Erickson, which has a $2.28 million contract with the MEDC to do the campaign’s creative work. Pure Michigan is strictly state welfare for chamber of commerce types who would rather buy lobbyists and corrupt politicians instead of paying their own advertising and promotions. It is time for chamber of commerce members to pay for their own advertising, just as our Michigan business has done successfully for over 25 years. Accommodator Re: Crain on public broadcasting Can’t disagree more with Keith Crain. Sorry, but access to educational television without ads is important to the well-being of our kids. And not everyone can afford cable. Anne Osmer Re: What happened to democracy? Keith Crain’s column about strong public protests against government policies. People in the streets? Well, of course it’s not enough. But it’s promising. Frank Joyce Re: ECD CEO resigns, plans 20% cut in workforce From a pure engineering standpoint, their technology is really cool — but if it can’t be sold for a profit, what good is it? Wayne Re: Lutz to help Durant campaign An 80-year-old auto guy helping a 62-year-old guy who looks 80 try to convince 20-somethings to vote against a 57-year-old guy. Just great. troyresident Re: Newt Gingrich is not your friend Reporter Nancy Kaffer’s blog on Gingrich’s idea to create a taxfree Detroit. There is no savior coming for Michigan or Detroit, we have to grow our way out of this mess. DC Red Wing Re: Ex-DPS exec gets five years for taking kickbacks Who knew that the risk manager for DPS was one of the riskiest employees on the payroll? John Galt Re: Mullin to return $200K severance I would like to vote out of office the idiot who would sign such a contract. Turkia Mullin is not the one to be vilified. Robert Slattery Re: Bridge bickering turns nasty The latest oxy-Moroun: “Champion fair competition — preserve my monopoly.” normhy Re: Christmas tree; no Christmas fee This reader reacted to a story about how a USDA “checkoff” program to help boost the sales of fresh Christmas trees dried up after conservatives called it a Christmas tree tax. Why is the government needed to promote Christmas tree consumption? I’ve got a bunch of valentines I need to sell. Who do I go see about that? Where’s a Federal Register when you want one? Freedom Trinity Re: Woodward light rail Our readers had plenty to say throughout about mass transportation and the leaders who talked about it. Light rail needs to cross Eight Mile Road and reach as many people as possible in order to be economically sustainable. WolfCat I sure hope L. Brooks Patterson and Mark Hackel were there (at a meeting where mass transit was discussed). We need to start acting as a region. 313 Light rail is a best practice of big cities across the U.S. and the world. We cannot compete with them in any meaningful way without it. Grand Circus Park Finally, a little bit of common sense from our elected officials. The Voice of Michigan Business As Michigan’s leading statewide business advocacy organization, the Michigan Chamber of Commerce is on the job every day, standing up for businesses of all sizes and types in the legislative, political and legal process. Business Advocacy Political Action Member Services Re: Vandenberg’s story still relevant This responded to a column about how Sen. Arthur Vandenberg, a Grand Rapids native, worked the art of compromise. Yes, the genius of bipartisanship. It is not the compromise that is the problem, but crafting it in such a way that everyone is equally disappointed. I wonder what ever happened to that notion, the idea that compromising for a collective good is not a sin. Timothy Dinan Join the Michigan Chamber of Commerce. Call (517) 371-2100 or visit www.michamber.com Leading Businesses. Moving Michigan Forward. Local: (517) 371-2100, Toll Free (800) 748-0266 www.michamber.com http://www.us-park.com http://www.us-park.com http://www.qwikpark.com http://www.qwikpark.com http://www.airlinesparking.com http://www.airlinesparking.com http://www.michamber.com http://www.michamber.com http://www.michamber.com http://www.crainsdetroit.com/walsh http://www.crainsdetroit.com/walsh

Table of Contents for the Digital Edition of Crain's Detroit Business - December 19, 2011

Crain's Detroit Business - December 19, 2011