GR Confidential

March 19, 2007
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In a post-Jack Abramoff world, it is surprising that politicos don’t recognize the enormous potential for e-mail conversations to create public embarrassment.

The mystery development e-mail exchanges between Mayor George Heartwell and development wingman Peter Secchia, unearthed last week by Commissioner Rick Tormala, seem no more a violation of Heartwell’s famous confidentiality agreement than the dozens of media interviews he gave in support of the project, but it might be the worst political crisis to face city chambers since Commissioner James White’s loan from Jack Buchanan killed a parking ramp in 2005.

As his re-election campaign begins, the mayor is suddenly linked to Secchia’s disparaging remarks against the local daily, city commissioners and the building trades, the latter of which voiced their displeasure at last week’s city commission meeting.

Challengers can use the e-mails to say the mayor aided the land assemblage efforts of mystery developer Duane Faust, planned to fix the price of city-owned land, conspired against organized labor, and shared information with the city’s powerbrokers that he had not with the city commission — which, in theory, might have saved the city the $99,000 spent marketing 201 Market Ave. SW.

Then it came out that the confidentiality agreements of Heartwell, City Manager Kurt Kimball and Deputy City Manager Eric DeLong were never seen by City Attorney Phil Balkema, who is now working with Tormala and Commissioner Roy Schmidt to ensure such a sticky situation never happens again.

“George should not be perpetuating the myth that this city is controlled by a small group of people,” said Tormala, who told the Business Journal he has not yet decided whether he will run for mayor.

Watching at home, Mark London, who was lambasted for refusing to sign a confidentiality agreement as a condition of selling the downtown building in which he now operates a strip club, told the Business Journal he “felt vindicated.”

**Heartwell isn’t the only pol in a pinch. With Gov. Jennifer Granholm signing a compact for the Gun Lake Casino, House Speaker Pro Tem Michael Sak, D-Grand Rapids, is now forced to choose between the governor from his party and the anti-casino interests in his district.

One of the most charismatic politicians in the region, the term-limited Sak likely has a higher office in his not-too-distant future, provided he doesn’t alienate his party or his base too much.

**On the heels of Comerica’s announcement that it’s moving its headquarters and 200 jobs from Detroit to Dallas to invest more heavily in the growth markets of the southern states, Fifth Third Bank announced plans to invest more than $100 million over the next three years to build 30 to 40 new bank branches in the eastern Michigan region and create 350 new jobs.

The first of the new banking centers will be located in the city of Detroit. Two more new branches will open in Detroit in April and another in 2008.

“Southeast Michigan is a growth market for Fifth Third Bank,” said Greg Kosch, president of Fifth Third, Eastern Michigan.

To that, Dave Girodat, senior vice president of commercial banking for the state’s eastern region, added: “We recognize that the Michigan economy is tough right now, but history proves that Michigan is a ‘pull yourself up by the bootstraps’ state that won’t be down for long. As a business we can either retreat or invest for growth. We choose growth.”

**While representatives from the automotive industry were gearing up to meet with Congress last week on proposed changes to Corporate Average Fuel Economy standards and make a pitch for government aid to address fuel economy issues, Kristin Zimmerman of General Motors Public Policy Center was speaking on the same subject to members of a the local chapter of the American Marketing Association during a luncheon at The Grille at Watermark Country Club.

“This is a chance for the Big 3 and others to sit down and say, ‘We want to be part of the solution,’” said Zimmerman. “We need to reduce our dependence on petroleum and diversify our energy supply. Energy diversity is where the business of tomorrow is for us, and we will focus on electric vehicles.”

As reported in the Business Journal’s online edition last week, GM — long maligned for killing the electric car — is betting its future on fuel diversity. If the industry evolves the way GM hopes it will, ethanol reform will likely be the first step, but far from the last.

In January, the company fractured its hybrid strategy with the introduction of the Chevrolet Volt concept vehicle, a next-generation hybrid using its E-Flex platform.

The E-Flex vision is an electric motor powered by an engine, electrical plug or a lithium-ion battery. A significant improvement upon GM’s EV1 electric car concept, the first E-Flex entries to market will be able to drive 40 miles (the maximum daily commute of 78 percent of U.S. workers) before employing the use of the engine, a potential 640 miles per gallon. The buyer will be able to select between using petroleum, ethanol and possibly clean-burning biodiesel.

With the eventual adoption of lithium-ion batteries, E-Flex should remove the vehicle from the energy grid entirely; eliminating internal combustion entirely and any need to plug the vehicle into municipal electricity.

When this happens, GM expects the change in the automotive industry will be massive. Supplying and reclaiming batteries will provide an entirely new industry, while the position of petroleum suppliers and traditional automotive suppliers will decrease dramatically. The E-Flex platform does not have a transmission, for example, removing a large segment of the supplier base.

For that to occur, Zimmerman said that the automotive industry will likely take uncharacteristic political stances, positioning itself against Big Oil on issues of alternative fuel and taxation — possibly even lobbying for higher taxes on gasoline.

**Journalists, unlike bankers, often are mathematically challenged. So when sponsor Huntington Bank questioned the attendance figure reported in the Journal last week for the Top Women Owned Business luncheon, we hauled out the calculator. Yes, that would be more than 220 lunch guests, not the 120 reported last week.    

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