Merger Makes Business 'Cents'

April 14, 2008
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When the merger of Muskegon’s two hospitals was announced two weeks ago, Eagle Alloy co-owner Mark Fazakerley was named chairman of the new board of trustees of Mercy Health Partners, after heading the board for Mercy General since January.

“I see myself as an advocate for 425 families in their health care,” said Fazakerley, referring to Eagle Alloy employees. “I want the best health care Muskegon can provide.”

And that is what he thinks the merger will do. As an independent hospital riding a financial seesaw, Hackley’s ability to keep up with equipment updates and advances in health care would have been compromised by rising costs and declining bond ratings, Fazakerley said. “Hackley could have survived for quite some time, that goes without saying,” he said. “Their services would have declined over time and maybe their ability to buy the latest, updated equipment. I would guess that, over time, their ability would have been less strong to continue.”

Right off the bat, Fazakerley said, there will be savings in adding Hackley’s needs to the purchasing program of new owner Trinity Health of Novi. With 43 hospitals, Trinity Health can command procurement discounts that Hackley alone could not obtain, he said. And Hackley’s debt load, placed at $33.3 million in an IRS filing for the 2006 tax year, will be eased by renegotiating bonds under Trinity Health’s top-notch rating. “That is going to save a tremendous amount of interest,” Fazakerley added.

  • Grand Rapids Community College’s Secchia Institute for Culinary Arts inducted two new members to its Hospitality Hall of Fame this month. GRCC instructor and pastry chef extraordinaire Gilles Renusson was especially excited (picture that) to introduce and induct Charlie Gamboni, a Kellogg engineer in Battle Creek who has invented a variety of portable equipment pieces for the GRCC students to use while competing in culinary Olympics across the country and around the globe.

Richard Dingel, owner of Sunriver Resort in Sunriver, Ore., also was inducted, having been cited for his training for student interns.

  • By the time the powdered sugar settles over the antitrust litigation that is pitting retailers, including Meijer Inc., against major chocolate candy manufacturers (see story on page 7), the lawyers may end up the biggest winners, says Daniel Low, a Washington, D.C., antitrust attorney who specializes in consumer goods and retail. Low told the Business Journal that the eventual settlement in the case could run into many multi-millions — per plaintiff.

Lawyers began sniffing around for plaintiffs late in 2007, shortly after the Canadian government released documents about its investigation into the alleged conspiracy, Low said.  “The civil lawsuits are purely relying on that,” he said, noting that the number of lawsuits in U.S. federal courts had climbed to 71. He said that a week ago, the Judicial Panel on Multi-District Litigation consolidated pre-trial action on the cases under Pennsylvania’s Middle District federal court, where The Hershey Co. is located.

The U.S. antitrust law, the Sherman Act, allows plaintiffs to collect three times the amount of damages, Low noted, although such suits often are settled before they get to trial. Meijer’s lawsuit didn’t include a damage estimate. “Larger companies with larger stakes take a more cautious approach to getting involved,” Low explained. “Typically when they file suit, they don’t really know what the damages are. You don’t ever know till you get the documents from those companies that would reveal that.”

A 2005 study of price-fixing lawsuits found that the average overcharge was 20 percent to 30 percent, he added. Wholesale chocolate sales were $10.6 billion in 2007, according to the National Confectioners Association; 20 percent of that, multiplied over the five years the conspiracy is alleged to have occurred, then tripled, comes out to a whole lot of candy bars. Low is blogging about the situation at cgplitigation.blogspot.com.

  • Paul Goebel Group has joined with the YMCA of Greater Grand Rapids to sponsor Suits From Suits, a program to collect and distribute gently used swimsuits for boys and girls, ages 6 to 10.

“It’s estimated that the approximately 15,000 children, ages 6 to 10, who live in the core city of Grand Rapids have never taken a water safety class to develop a healthy respect for the water,” said Meg Goebel, president of the Paul Goebel Group. “They’ve never taken swimming lessons that will keep them safe as they have fun in the water. And they don’t have proper swimwear. This is why Paul Goebel Group is underwriting the cost of providing 150 children with swimsuits, water safety instruction, swimming lessons and transportation to the YMCA.”

Paul Goebel Group is encouraging business professionals (aka “Suits”) throughout the area to participate in the program either by donating swimsuits or making a $50 contribution that will provide a child with swimwear, aquatic safety training and swimming lessons. Donated suits are being collected at several drop-off locations: David D. Hunting Family YMCA, Wolverine World Wide Family Branch, Gainey Family YMCA, Visser Family Branch and the Waters Building. Financial donations to Suits From Suits can be sent to the YMCA of Greater Grand Rapids.

  • Apparently the Business Journal is not the only organization to give RoMan Manufacturing Inc. its props as an entrepreneurial success. On the heels of a BJ profile on the company’s operations in December, the firm has been named the 2008 Michigan Jeffrey Butland Family-Owned Business of the Year by the U.S. Small Business Administration. Robert Roth, president and CEO, is the second generation of the family to operate the business.

“RoMan Manufacturing has been successful by setting high standards and remaining flexible in meeting the changing needs of its worldwide customers,” said Richard Temkin, SBA Michigan district director. “It is small businesses like RoMan Manufacturing that play a big role in Michigan’s economy, and I am proud to proclaim it as the (award-winner).”

Roth will receive the award during the fourth annual Michigan Celebrates Small Business award dinner at the Lansing Center on April 24.

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