october 2006 tma detroit volume 1, issue 5 newsletter tma ... · turning around the michigan...

We’re heading into the start of our 2006/2007 season with a full head of steam. Having added 60 new members in 2006, the Detroit Chapter has grown to over 260 members and is now one of the largest chapters in North America along side Dallas, Philadelphia and Toronto. Only the New York and Chicago chapters are larger. Yes, our cynics contend the only reason Detroit TMA grows so fast is because of the poor Michigan economy. While that may a part of the reason, I also like

to think it’s because we put on quality programming at an affordable price. We have two real good events planned for this fall. The first involves an October 18th panel discussion on “Turning Around the Michigan Economy”. The panel is headed by Phil Power from The Center for Michigan. Phil is a leading, non-partisan voice in trying to bring about positive change to Michigan and one of Phil’s recent articles is included in this newsletter. Joining Phil on the panel will be Dana Johnson, Chief Economist from Comerica, and Jim Donaldson, Vice President of Business Development at the Michigan Economic Development Corp. On November 16th, TMA and the Association for Corporate Growth are joining together to bring in Harvey MacKay, author of numerous best selling business books including Swim With the Sharks Without Being Eaten Alive and Dig Your Well Before You’re Thirsty: The Only Network-ing Book You’ll Ever Need. Harvey is a top, in demand speaker and it’s only through the generous contributions of our sponsors that we are able to bring such an event to Detroit. I look forward to seeing everyone at the October event at the Detroit Athletic Club. Please feel free to approach any of our TMA board members with ideas for events or improvements to how we operate. Sincerely,

Brad Coulter, Amherst Partners, LLC TMA Detroit Chapter President

FROM THE CHAPTER PRESIDENT

TMA Detroit

T U R N A R O U N D M A N A G E M E N T A S S O C I A T I O N

Volume 1, Issue 5

October 2006

Corporate Sponsors 2

Featured Turnaround Articles

3,8, 13

Event Highlights 20

Education Connection 21

Save the Date 22

Utilizing the TMA Web 25

Members in the News 25

TMA Membership Application

26

New Members 27

Inside this issue:

• Oct. 18th - 5:30 p.m. DAC - Phil Power on Turning Around the Michigan Economy.

• Oct. 26th - 4:30 p.m. TMA/RMA Royal Oak Fifth Avenue Billiards - “Lender Horror Sto-ries”.

• Nov. 16th - 5:30 p.m. TMA/ACG host at the Troy Marriott - Harvey Mackay, author and high profile speaker includes a book signing.

Upcoming Events:

TMA Detroit Newsletter

2

Turnaround Management Associa tio n

SILVER SPONSORS

6001 N. Adams Rd., Ste. 205 Bloomfield Hills, MI 48304

Phone: 248-593-4810 Fax: 248-593-6108 Email: [email protected] www.turnaround.org



Special thanks to the newsletter committee: Joel Applebaum, Jennifer Brewer, Parker Lapp, Bob Mollhagen, Chuck Moore, Cory Thompson and Dan Wollschlager.

Many Thanks to our 2006-2007 Sponsors

Barefoot, Cramer & Associates LLC

Operating Consultants

GOLD SPONSORS

Michigan’s Law Firm



FEATURED TURNAROUND ARTICLES

3

Detailed Turnaround Strategy, Check Profit Improvement Tools, Check Execution, Whoops Lessons from the Detroit Tigers By Brian G. Connors, Conway MacKenzie & Dunleavy

As the turnaround industry continues its widespread growth and becomes seasoned, dare I say it, mature, there are few tricks of the trade left that aren’t already known and/or practiced by a considerable number of academics and practitioners. As such, a compre-hensive company turnaround plan, once a tremendously exciting value add proposition, is losing some of its original luster as it is viewed as a required mandatory first step (still critically important) just to have the opportunity to attempt to restore value and long term viability for the troubled company and its underlying stakeholders. If you happen to read Automotive News, Crain’s Detroit Business, TMA’s Journal of Corporate Renewal, The Daily Deal, automo-tive analyst reports, etc., you will immediately be up to speed on all the latest industry paradigm shifts, globalization, low cost coun-try sourcing, plant rationalizations, and methods of optimizing throughput at the lowest possible cost. Read further and you will know exactly which plants Ford needs to cut, how many employees Delphi needs to shred, etc. Many of the available turnaround and operating strategies have become most transparent. Professional baseball strategy has also evolved into a more technical appreciation of what specific factors/operating metrics most contribute to a team’s success. For example, the ability to measure the effectiveness of “clutch hitting” is more precisely measured by relative hitting success with men in scoring position rather than the simple RBI (runs batted in) statistic. Likewise, total on base percentage is the better metric to measure your lead off hitter than simply batting average. One would anticipate that all 30 Major League Baseball organizations theoretically have the same available knowledge regarding what needs to happen to increase the like-lihood of winning ball games. They all, by now, have performed detailed case studies on how the Minnesota Twins and Oakland Athletics have won consistently during the last several years with relatively modest player payrolls. Why, then, do certain baseball teams win up to 30 or more games than many other similarly situated teams over the course of a sea-son? Shouldn’t we have competitive parity (every team winning close to 81 of the total 162 games) in this scenario? Or alterna-tively, if all baseball teams’ talent was accurately measured by total player payroll, shouldn’t the Yankees always win the World Article continued on page four...



Series and the Oakland A’s be perennial losers? How do smaller market teams like the St. Louis Cardinals consistently make it to the post-season? If the Tigers’ payroll is only slightly higher in 2006 than in 2005, (adding key free agent pitchers Kenny Rogers and Todd Jones but shedding outfielder Bobby Higginson’s high priced salary) shouldn’t we expect total victories for the Tigers to only be slightly higher than the 71 wins earned in all of 2005? INDEED, WHAT IN THE WORLD HAPPENED WITH THE TIGERS IN 2006? The Winner’s Edge What are the key ingredients separating the winners from the losers when the playing field is so level? It is quite simple: superior lead-ership and flawless execution of the game plan. As turnaround professionals, how do we foster this winning environment for our clients? Communication First, one needs to ensure the leaders of the company continuously communicate the plan and current situation, inclusive of detailed interim steps and near immediate feedback on financial and operating performance against plan. Communications should occur fre-quently with all stakeholders (equity, secured creditors, unsecured creditors, customers, management and employees). Not communi-cating effectively and consistently will cause confused middle managers to spend significantly more time navigating through the incon-sistent rumors and updating resumes, leaving precious little time to execute a plan they don’t fully comprehend. Understanding and buy-in (by the key day-to-day decision makers) of the turnaround plan is critical. Jim Leyland, manager of the Tigers, never minces words in evaluating the Tigers’ performance and the near term plan. His direct com-munication style ensures that players constantly know where they stand and what each one of them individually needs to do to contrib-ute to the team’s success. If he thought they collectively stunk, he would let them know immediately, as he did in mid-April when the Tigers were meandering with a 7-7 record. After Leyland’s harsh words, the Tigers went on to win 28 out of the next 35 games en route to their first post season appearance in 19 years. Prioritized and Simplified Goals Second, goals need to be prioritized and simplified to ensure success. Yes, as turnaround practitioners, we all have our laundry list of 25 - 30 action items that can potentially enhance profitability and cash flow. But attempting to blindly apply all action items to each unique client will only result in overload, frustration and company execution that is half-baked and incomplete. The company’s re-sources and energy should be devoted to the top 3-5 specific action steps that will most significantly effectuate the sustainable turn-around. For example, General Manager Dave Dombrowski made upgrading the Tigers’ pitching capabilities a top priority for 2006. Under a new manager, new pitching coach, the acquisition of Kenny Rogers and Todd Jones, and the emergence of rookies Justin Verlander and Joel Zumaya, the Tigers were able to lead the entire major league in pitching effectiveness (lowest earned run average or ERA). Effec-tively executing in this area was the critical cornerstone of the Tigers’ amazing resurgence in 2006.

4

...continued from page three

Article continued on page five...



Maximize your Talent Third, leaders need to effectively evaluate and deploy internal talent in the most productive manner and upgrade with outside talent as necessary. Managers and employees should be put in a position to succeed and leverage their particular strengths. For instance, many of the Tigers’ batters have a reputation of being impatient and not drawing many walks. But the team has much more success when these hitters are allowed to aggressively swing the bat (playing to their strengths) as opposed to the more conventional batting strategy of trying to be patient and taking a few pitches before swinging (a strategy that works well for many other teams but not the Tigers). Similarly, in the midst of a turnaround, now is not the time to ask the talented but very quiet product engineer to lead the com-pany’s revamped sales force in obtaining new business. Instead, it is incumbent upon the leaders to instill a burning urgency and enthusiasm in the company’s key players to reach their fullest potential. Those who don’t respond to the new attitude and the de-manding tempo of a turnaround in progress should be replaced. Final Lesson The old adage of plan your work and then work your plan applies equally in turnaround scenarios as well as sports. Consider a common scenario where the logical value enhancing profit improving plan is developed by well qualified turnaround professionals that makes imminent sense. Then, the turnaround professionals turn the reins over back to the existing company management. Without active hands-on leadership, the momentum falters, the communication is lacking and the company, all too often, miserably fails to execute. More and more, creditor and equity stakeholders recognize this trend and will require management changes and third party CRO appointments to ensure the critical execution phase of the turnaround plan is directed by superior leadership. As turnaround pro-fessionals, we should strive to continually develop our leadership/execution skills to favorably impact our clients in the same man-ner Dave Dombrowski and Jim Leyland have done with the Detroit Tigers in the 2006 season. Brian G. Connors, Managing Director, CPA, ABV, CTP has over 17 years experience in turnaround management and restruc-turing consultation including automotive, manufacturing, packaging, contracting, real estate and home products industries. He has served in both consulting and interim financial management roles, primarily representing debtor companies and private equity firms. He can be contacted at (248)433-3100 ext. 226 or at [email protected].

5

...continued from page four

The opinions expressed in this article are solely those of the author and do not constitute any opinion on the part of the TMA.

6

Daubert Challenge – Opposing Attorneys Trojan Horse



ADVERTISE WITH TMA DETROIT

7






8

Automotive Suppliers: How to Stay in the Game BY NANCY COLAH A changing and dynamic marketplace means great opportunity for some companies and failure for others. The unprecedented changes occurring in the US and European manufacturing sectors do not appear to be coming to an end soon. Extraordinary market pressures stemming from global commercial expansion are taking their toll on many manufacturers. Manufacturing companies are getting hit particularly hard these days as the result of marked, economic shifts that are damaging to their cost structures. Dramatic increases in raw material costs and oil prices due to growing global demand, coupled with the disadvantages faced by maturing companies with older, unionized workforces and outdated plants, and the stepped up structural production shifts to other regions of the world are putting strain on such companies. Some US and European manufacturing companies are struggling to not only compete and be successful, but to stay viable. The struggle is especially evident in manufacturing segments that are already facing a host of other problems. The automotive industry’s reach is sweeping, touching one in approximately ten jobs in the US, with growing numbers globally. Its troubles run deep. Fierce competition limits pricing and the market is increasingly fragmented on both sides of the Atlantic as imports are gaining ground in each territory. In the US and Europe, the fight is between the long standing giants with the smaller, newer, and foreign players. In 2005 GM and Ford, two of the largest domestic North American automakers, had a combined operating loss of $11.8 billion. In the first quarter of 2006, their combined operating losses reached half a billion dollars. Not surprisingly, the pain felt by the automotive manufacturers trickles downstream into their supply chains. In addition to the pressures cited above, production cuts, management missteps, and over-leverage are the primary causes of distress. Additional pain and suffering for suppliers is often caused by narrow customer bases, lack of synergistic or long-term strategies, poor manufacturing execution, and non-competitive cost structures. As a result, many Tier 1s are having their day in bankruptcy court- Collins & Aikman, Tower and Dana, to name a few. The impact is also spilling into non-manufacturing automotive suppliers’ areas such as car haulers and small to mid-size players with low technology, commodity level automotive products. In this space, downsizing, bankruptcies and wind-downs are seemingly everyday occurrences. It is worthy of note that this turmoil exists in an industry where demand for vehicles has remained relatively strong at 16.93 million units in 2005 and an expected 17.15 million in 2006, which would make it one of the best years ever. All of these problems are present in a growing U.S. economy where the latest report from the U.S. Department of Commerce stated that GDP increased at a rate of 5.3% in the first quarter of 2006, over a 3.5% increase in 2005.

Article continued on page nine...



9

So how does one best position their company for the future? How can one stay viable, grow and prosper? How does an automotive supplier stay in the game? The keys to success in this dynamic environment are conceptually simple but some-times difficult to put on paper and even more complex to execute. These key management principles are:

1. Understand where you are going. This usually hinges on where you have been and where you are today. Are you going to move the company into broader product categories or stay more focused? Are technology and innovation rewarded for your product or is low cost more important? Answering these questions involves basic strategic analysis. In addition to knowing your own company, you need to understand your competition, your direct customers and your products’ end-user. There also needs to be alignment within the organization, as well as communication throughout. Finally, you should be able to envision the path that will get you where you want to be. It’s a balance between a) recognizing and seizing opportunities and understanding the cost and risk associated with them, b) knowing what is reality versus a dream, and c) being willing to change without changing too much. Takata, a $4 billion global manufacturer of automotive safety systems, had its humble roots in producing textiles and para-chute materials. Growth and success like this take vision, strategy, and the fundamental pursuit of a chosen direction.

2. Run a tight ship. This step is obvious but, again, very challenging to do. You must ensure your com-

pany’s operational processes are correct and optimized. Control over costs is crucial. There are many terms and derivations for this concept that are employed in manufacturing settings: lean manufactur-ing, kaizen, continuous improvement, etc. For example, think about what happens when inventory levels aren’t managed across multiple plants. In one example, several separate plants were account-able for maintaining their own inventories; however, because many of the inventory items were the same across plants, this led to an overstock situation. The solution was relatively simple—have the plants maintain one consolidated inventory system from which they could draw (and share). This kept absolute levels down, reordering costs minimized, and ensured better management of purchase quanti-ties. Efficient material processing is another area where cost control can be an issue. For instance, a company was using high tonnage presses to manufacture parts that could have more cheaply been out-sourced to a vendor with low tonnage presses. The cost and expertise to maintain the high tonnage press at low volume far outstripped the cost to outsource the work, even when one considered the cost of the press as sunk.

3. Execute, execute, execute. Simply put, implement the plans you have, on time, efficiently and cor-

rectly. Organizations and people need to be held accountable and if the plans are found to be flawed, adjusted accordingly. You don’t have to be perfect or hit home runs every time, but you need to strive to be better than most, most of the time. One of the many problems companies have with execution is they put too much on their plates and then fail to accomplish what they set out to do. Another problem is clear direction—it is hard to reach your destination when you cannot see the path through the trees. Magna International is a solid example of accountability and plan execution as the separate companies under Magna operate rather autonomously and profitability, aggressively pursuing and achieving best in class status.

Article continued on page ten...

...continued from page eight



10

4. Be flexible. Innovate. To stay relevant, manufacturing companies need to adapt quickly to changes,

both internally and externally. They either need to seek out a special niche or innovate. When compa-nies don’t adapt quickly enough, they fail to grow, develop a diverse customer base or invest in new technologies. You can find yourself without a book of business even after 25 years of successful op-eration. On the other end of the spectrum in the automotive supply base is Gentech, producer of auto-matically dimming mirrors, among other things. Gentech’s innovation of this unique, must-have prod-uct for many auto manufacturers has made it an exceptionally strong player. Additionally, its ongoing efforts are geared toward developing the next new breakthrough product.

5. Get help if you need it. Smaller to medium-sized companies these days are not necessarily (nor should they be) equipped with the specialized knowledge, expertise or time to make the operational improvements needed to stay in the game. Sometimes you need an independent view of processes, problems, and business plans. While extremely valuable, such third party help or consulting services can be expensive, so you should pinpoint the most problematic areas that will derive the greatest bene-fit. Managing such services should be handled as you would any added expenditure, with prudence and a clear understanding of scope and deliverables.

The fates of companies that fail to consider these tactics can be disastrous. For example, a company operating outside of North America, serving large automotive manufacturers, established a greenfield site in North America to manufacture prod-ucts for the same customers. The company’s vision of a North American presence was flawed in that they believed it could operate and prosper without putting the appropriate resources (management, financing, operating plans) in place or executing a well thought out business plan. After a short time, the supplier was hemorrhaging cash, lost support from its parent com-pany and was struggling to make shipments. With production at risk on an hour by hour basis, the company worked with financial, operational and strategic advisors to meet deliveries, stabilize operations and reduce its cost structure. The com-pany was eventually positioned to be sold, but not without significant loss to the parent company and other interested parties. It’s clear how employment of the steps above would have impacted the outcome. Some business failures are inevitable and some are just plain bad luck. Very few companies can say they have outlasted a generation. Typically these companies were not well prepared to go to the next step, ready to adapt to change, or aware that they should. US and European manufacturing companies are dealing with some of the greatest upheaval in decades and the turmoil will likely not abate in the near term. However, some business failures are preventable, and with a strong focus on basic management principles, they will have the best chance for survival and even success. And who knows what the future will ultimately bring…besides more change? The primary sources for this article include the Center for Automotive Research, the U.S. Department of Commerce - Bureau of Economic Analysis, CSM Worldwide and various company reports. Nancy Colah is a senior director at BBK.

...continued from page nine





10

GALAXIE CORPORATION

“Worldwide Metalworking Equipment Specialist”

Plant Buyouts

Appraisals Stocking Dealer

Warehouse Facilities

MDNA, AMEA, TMA Member

Glen Glowczewski Plant Acquisitions

4935 Hannan Road, Wayne, Mi 48184 Phone: (734) 727-0600

Web: www.galaxiecorp.com Email: [email protected]

http://www.galacorp.com/�

mailto:[email protected]�




10



13

DON'T GET JIVED BY PROPOSAL 5: K-16 school finding plan is a cynical shell game that won't help kids September 14, 2006 By Phil Power As you flip through the channels these days, you're likely to see ads featuring cherubic and hopeful faces in classrooms, with an announcer solemnly intoning phrases like, "we cannot compete in a global economy unless we dramatically improve edu-cation." Sounds pretty good, doesn't it? It's an attempt to sell you on the so-called "K-16" initiative that will appear on the November ballot as "Proposal 5." If passed, K-16 would require the State of Michigan to provide annual funding increases to match inflation to local public elementary, middle and high schools, intermediate school districts, community colleges and universities. Early polls show solid support: 65 percent in favor, 25 percent opposed, 10 percent not sure. But unfortunately, the amendment isn't really about teaching at all. Instead, it's mostly about requiring taxpayers to pick up the rapidly increasing costs of school employee pensions. Stripped of all the cynically misleading verbiage, K-16 really should be renamed "No school retiree left behind." And should this turkey pass, K-16 would have two extremely bad consequences for Michigan. First, it would take the pressure off local school officials, school boards and local voters by shifting responsibility for tough financial decisions to the state government. Second, most of the new dollars K-16 is supposed to produce for kids' education will be gobbled up by school employee pen-sions. What we are really looking at is a shell game. Yet it is one with a powerful come-on. The spin revolves around the superficially attractive idea that schools, community colleges and universities should be guaranteed annual increases equivalent to at least the inflation rate. (Now about three percent.) The suggestion is that the money will go to more teachers, smaller classes and so forth. But that's not where most of it would go. The biggest allocation comes from clever language that caps local districts' contributions to pensions for retired teachers and school employees. Mind you, it doesn't cap the pensions . . . Just what the local folks will have to pay. Who pays for the uncapped increases in pension costs? Article continued on page fourteen...


T U R NA R O UN D M A N AG E M EN T A S S OC I A TI O N

14

The state, meaning you, the taxpayer. Back in July, the Senate Fiscal Agency, the bean-counting arm of the state senate, estimated a first year total price tag of $566 million if the K-16 measure were approved. Of this, $372 million (nearly two-thirds of the total!) would go directly to school retirement funds. Nobody I've talked to, including supporters of the K-16 proposal, disputes this analysis, by the way. The reason school boards, superintendents and teacher unions are so hell-bent on shifting so much of their local liabilities to the state is because costs of retiree health care and pension benefits are eating them alive. In 1991, the cost of school retiree pensions and health care equaled about 11 per cent of school payrolls statewide. Today, the retiree cost is 17 per cent and growing rapidly. According to projections by the non-profit, non-partisan Citizens Research Council of Michigan, for every dollar paid to working school employees in 2020, the taxpayers will have to fork over 32 cents for retiree health care and pensions. It's not as though this problem should have surprised anyone paying attention. Back in 2004, then-Michigan School Superin-tendent Tom Watkins warned the state Board of Education that "Combining increased pension contributions and health bene-fit costs for working employees leaves little room for increased spending directed to teaching and learning even if the econ-omy improves." Citizens Research Council also suggested - fruitlessly, it turns out - reforms that would help blunt the problem. These in-cluded lowering pension benefits for all new employees, greatly tightening costly early retirement benefits, increasing em-ployee contributions for pension and health care and greatly tightening rules for retiree health care. Some education groups note that local school districts can't make those reforms because school employee retirement plans are governed by state law. So, their argument goes, the state should pay the pension freight for local school employees be-cause the state sets the rules for the pension system. They say it's not fair for the state to set the rules and then pass all the costs on to someone else. And they say the state perpetrated a nasty wrong on local districts more than a decade ago when a little-noticed provision in Proposal A first passed all those pension funding responsibilities from the state down to the local districts. But adopting K-16 would just add to the pile of bad public policy without dealing with the root problem. K-16 would pretty much allow local districts to throw the ticking time bomb of school employee pensions back into the state capitol and plug their ears when the bomb goes off. The reasonable answer, then, is for all parties involved - teacher unions, school administrators, local school boards and the Legislature - to openly acknowledge the pension crisis and work together on reforms. At the end of the day, K-16 as pro-posed is an avoidance tactic misrepresented as something that helps kids. And, until there is reform, a Michigan school employee can work as few as five years to qualify for full health benefits upon retirement! Even the few remaining optimists at the United Auto Workers union, not to mention the automakers, would turn white at that kind of juicy perk.

...continued from page thirteen

Article continued on page fifteen...



15


But adopting K-16 would just add to the pile of bad public policy without dealing with the root problem. K-16 would pretty much allow local districts to throw the ticking time bomb of school employee pensions back into the state capitol and plug their ears when the bomb goes off. The reasonable answer, then, is for all parties involved - teacher unions, school administrators, local school boards and the Legislature - to openly acknowledge the pension crisis and work together on reforms. At the end of the day, K-16 as pro-posed is an avoidance tactic misrepresented as something that helps kids. And, until there is reform, a Michigan school employee can work as few as five years to qualify for full health benefits upon retirement! Even the few remaining optimists at the United Auto Workers union, not to mention the automakers, would turn white at that kind of juicy perk. Even some of the proponents of K-16 admit in private that they never expected the measure to wind up on the ballot. They figured they could put enough public pressure on the legislature and governor to get them to cave in without resorting to an initiative. Remember, they turned out nearly 12,000 demonstrators on the Capitol grounds for the purpose last June. But neither Gov. Jennifer Granholm or the legislature buckled, if only because it would be terribly irresponsible to require unending, built-in inflation increases for anything, even education. So where does leave us? Only with the familiar, sickening feeling that once again, entrenched special interests are sneakily trying to snag public fi-nancing. This time, they have the gall to pretend it's all for the kids. For shame! Phil Power is a longtime observer of politics, economics and education issues in Michigan. He would be pleased to hear from readers at [email protected]. These opinions and others expressed in Phil Power's columns are individual opin-ions and do not in any way represent official policy positions of the Center For Michigan.

...continued from page fourteen

https://webmailcluster.perfora.net/xml/webmail/mailDetail;jsessionid=91C8EF53ADFC5F61F4A8E4C1E74A0765.TC130a?__frame=_top&__lf=AdresseUebernehmenFlow&__sendingdata=1&resyncFolder.Doit=true&resyncFolder.TreeID=leftNaviTree&createMail.Action=create&createMail.To=ppower%40hcnnet.com&__jumptopage=mailNew&__CMD%5bmailDetail%5d:SELWRP=resyncFolder&__CMD%5bmailDetail%5d:SELWRP=createMail�




TMA Detroit members are saddened by the recent death of fellow member Chris Mayone. Chris was Vice President and Commercial Finance Account Executive of National City Bank Business Credit, and was formerly with NBD and Barclays Bank. Chris will be remembered as a kind and genuine person who left a positive impact on everyone he met. Chris died suddenly in late August due to a heart attack he suffered while running. Chris was 44 years old, and left his wife, Sharon and two children, Sidney and Joey, ages 14 and 11 respectively. At the TMA mixer, we collected contributions to the educational trust fund set up to provide for Chris' children. All of these individual contributions plus a contribution from the TMA will be pre-sented together to the family as a gift from those who knew him through TMA. For those who did not attend the mixer, but would like to send a contribution, please send it to: Mayone Children Educational Trust Fund c/o 2600 Crooks Road Troy, MI 48084 Checks should be payable to Mayone Children Educational Trust Fund.

10

17






18

GETTING TO KNOW YOU

Behind the Scenes, Extras We Thought You Might Like to Know About Tony Flanagan:

• Current position and company: Managing Director of AlixPartners • Areas of expertise:

Restructuring, business advisory and forensic accounting • Representative clients/matters: Federal Mogul/financial advisor to company; Oxford Automotive/financial advisor to secured creditors; financial advisor to numerous middle market companies • Last book read: The Kite Runner • Favorite vacation destination: Maui, Hawaii • What would we find you doing when you are not at work: Playing/chasing my children • Top three sports/activities: Golf, running, reading • Michigan or Michigan State? I have degrees from both universities, but my allegiance is to MSU



19

GETTING TO KNOW YOU

Behind the Scenes, Extras We Thought You Might Like to Know About B.N. Bahadur:

• Member of TMA since 1991 • Current position and company:

Chairman, BBK, Ltd. • Areas of expertise:

Management & Financial Consultant, specializing in performance improvement, turnarounds and crisis management.

• Representative clients/matters:

Automotive, manufacturing, steel, transportation, retail, commercial, construction, finance, and mortgage lending matters.

• If I was not in my current profession:

I would be teaching. • What would we find you doing when you are not at work:

Reading and traveling • Person I'd most like to have lunch with:

Henry Kissinger or Rudolph Giuliani • Michigan or Michigan State:

Michigan • Worst job I ever had:

None, from each job you take something with you, whether it be good, bad, or indifferent, and apply some of that in your next en-deavor, resulting in continuous growth.



20

EVENT HIGHLIGHTS

TMA Detroit hosted the 2006-2007 Fall Kick-off event at the Big Rock Chophouse in Birmingham. It was a free member which included an open bar and hors d’oeuvres. It was one of our largest attended mixers with almost 100 attendees.

Dan Wollschlager of BBK, I. William Cohen of Pepper Hamilton and Steve Howell of Dickinson Wright all smile for the camera.

What a great night at the Big Rock! Maynards Industries, Detroit Gold Sponsor, attend the opening mixer. From left to right, Al Loewenstein, Wade Tulk, Taso Sofikitis, and Jason Levy.

Cheers! From left to right, TMA Detroit Past President, Patrick O’Keefe, Brian Connors of Conway MacKenzie & Dunleavy, Steve Dicker, National City, and board member Russ Long of O’Keefe & Associates

As seen at the mixer - John Cauffiel of Galaxie Corporation, J.P. Murphy of Berry Moorman and Glen Glowczewski of Galaxie Corporation.

21

EDUCATION CONNECTION

NEW THIS YEAR: CPE WILL SOON BE AVAILABLE FOR ATTENDING TMA EVENTS

The TMA Detroit Board gives special thanks to the following

attendees to help make our CTP program a success




Mark Aller Trace Venture Associates, LLC Gerald Barefoot Barefoot, Cramer & Associates LLC Aleksandra Bozic

Leon Bunch

William Byrne LaSalle Bank Midwest

Larry Casselman Huntington National Bank Jack Cochran Morris-Anderson & Associates Ltd. Gregory Coppola BBK Gregory Gallagher Barefoot, Cramer & Associates LLC John Gburek Glass & Associates Ken Jacobson Amherst Partners, LLC Douglas Kearney Conway MacKenzie & Dunleavy Glenn Kushiner Conway MacKenzie & Dunleavy William LeRoy Compass Business Advisors, LLC Myles MacDonald

Kenneth Ollwerther Glass & Associates Allen Schaar FTI Palladium Partners Jerry Sepich Glass & Associates Uli Seuster Norelli & Company Daniel Skedel BBK, Ltd. Nancy Terrill Loughlin Meghji & Co. James Zumstein BBK

22

Upcoming Events

October 18, 2006 - Detroit Athletic Club - 5:30 p.m. The Detroit Chapter will have a panel discussion hosted by Phil Power on "Turning Around the Michigan Economy". Mr. Power is the founder of The Center for Michigan, a leading non-partisan think tank on Michigan economic and political issues. Cocktails and Hors D’oeuvres will be served. October 26, 2006 - Fifth Avenue Billiards in Royal Oak - 4:30 p.m. TMA and RMA are hosting "Lending Horror Stories". The panelists are Bill Byrne of LaSalle Bank, a workout lender and Jon Sasnowski of Comerica, a middle market lender. Together with an additional panelist they will discuss troubled loan stories. November 16, 2006 - Troy Marriott - 5:30 p.m. Please welcome Harvey Mackay to Detroit as TMA and ACG (Association for Corporate Growth) host a joint event including a book signing. Harvey Mackay is author of five New York Times best-sellers. His first two books - Swim With The Sharks Without Being Eaten Alive and Beware The Naked Man Who Offers You His Shirt are among the top 15 inspirational business books of all time. In total, Harvey’s books sold over 10 million copies worldwide.

5:30 – 6:00 p.m. – Registration 6:00 – 7:15 p.m – Speaker 7:15 – 9:00 p.m. – Cocktails and Hors D’oeuvres Pricing: $75 for TMA and ACG members and $95 for non members TMA International October 11-14 - 2006 Annual Convention - JW Marriott Orlando, Florida ABI Nov. 30-Dec. 2 - 18th Annual Winter Leadership Conference—Scottsdale, Arizona




SAVE THE DATE

23



TMA Detroit

The traditional North American automotive industry is experiencing a significant financial crisis. Suppliers face increased material and labor costs, drastic and rapid competition from low wage manufacturing regions, increased responsibility for product and process development costs—all while experiencing declining prices for their goods and services. This has created great distress among many suppliers. In past years, financial institutions have shied away from investing in the automotive industry. However, several investment institutions have recently identified financial opportunity in the auto-motive sector. This conference will examine the pathways to restructuring and develop a vision of what a successfully restructured domestic industry may look like. Importantly, the conference will also identify financial models and strate-gies that may guide the industry in the coming decade.

WHEN: Tuesday, October 24 - Reception and Dinner Wednesday, October 25 - Full Day Session

WHERE:

The Ritz-Carlton Dearborn 300 Town Center Drive

Fairlane Plaza Dearborn, MI 48126

(313) 441-2000 For accommodations, please ask for the CAR conference rate of $149.00

To view the conference agenda and to register, please click on this link: http://www.cargroup.org/investorsupplier/index.html We hope you will join us for this exciting new conference!

http://www.cargroup.org/investorsupplier/index.html�

24



TMA Detroit

2006 ADVERTISING INFORMATION

General: The Detroit Chapter’s Newsletter is published four times per year. The current publication months are January, April, July, and October. The Newsletter is mailed to all Detroit Chapter members (over 200) and others on the Detroit Chapter events mailing list (approximately 400). The Newsletter also appears on the Detroit Chapter website (ads will appear in black and white). Each edition of the Newsletter is also mailed to regional members of guest organizations whose members overlap with TMA, including the Association of Insolvency and Restructuring Advisors (AIRA), the Risk Management Association (RMA), the Midwest Business Brokers and Intermediaries (MBBI) , the American Bankruptcy Institute (ABI), and the Association for Corporate Growth (ACG). The deadlines for submission of ads for 2006 is as follows:

Inquiries may be directed to Jennifer Brewer at 248-593-4810 or [email protected] Ad Rates: Ad Description Actual Size (w x h in inches) Price Full page 7.5 x 10 $875 Half page 7.5 x 5 - horizontal or $500 3.75 x 10 - vertical Quarter page 3.75 x 5 $315 Eighth page 3.75 x 2.5 $190 The Newsletter Committee has approved a discount of 25% for any organization advertising in three of

the four annual issues. Prepayment for the three issues is required to receive the discount.

Ad Specifications: 1. Ads must be e-mailed pdf or jpeg format to [email protected]. 2. In the subject line of the email please put “TMA Newsletter Ad_Issue Date”.

Example: TMA Newsletter Ad_April 2006 3. In the body of the e-mail, please state: • What program the ad was created on • Direct contact information of the person who created the ad in case there are any issues.

Publication - 2006 January April July October

Ad Submission Due Date December 5 March 15

June 1

September 1

Publication - 2006 January April July October

Ad Submission Due Date December 5 March 15

June 1

September 1

25

UTILIZING THE TMA WEBSITE

Miscellaneous Items at Hand • For added convenience, you can now register for events online at www.turnaround.org. • Click on chapters, then click on Michigan, and to the left of the screen, click on the link with the event you

wish to attend and complete your information using a credit card for payment. • Know someone interested in joining TMA? Click on membership, then application, and print either a hard

copy to mail or fax, otherwise, you can apply right online, or use the TMA 2006 Membership Application on page 19 of the newsletter.

__________________________________________________________________________________

MEMBERS IN THE NEWS

Congratulations!

• Goodman Factors, LTD has named Jim Gillespie as Vice President and Business Development Officer for the Great Lakes Region

• Chuck Moore of Conway MacKenzie & Dunleavy was quoted in The Detroit News on September 23, 2006 and Bloomberg on August 18th regarding separate issues in the auto industry.

• Patrick M. O’Keefe of O’Keefe & Associates was elected to the International TMA Board of Directors and was also elected as Vice Chair of the Presidents’ Council.

• Barbara Rom of Pepper Hamilton was designated as one of "The Best Lawyers in America" according to a national survey of over 7,500 attorneys.

• Sheryl L. Toby of Dykema Gossett was designated as one of "The Best Lawyers in America" (Bankruptcy and Creditor-Debtor Rights Law) through an exhaustive peer-review survey in which thousands of the top lawyers in the U.S. confidentially evaluate their professional peers.




27

Turnaround Management Associa tio n

6001 N. Adams Rd., Ste. 205 Bloomfield Hills, MI 48304

Phone: 248-593-4810 Fax: 248-593-6108 Email: [email protected] www.turnaround.org



Special thanks to the newsletter committee: Joel Applebaum, Jennifer Brewer, Parker Lapp, Bob Mollhagen, Chuck Moore, Cory Thompson and Dan Wollschlager.

NEW MEMBERS

Adrian Balinski TouchStone Asset Management Emilio Brahmst

James Gillespie Goodman Factors LTD

Jay Houston Jay D. Houston and Associates

Constadinos Tsitsis Silverman Consulting Patrick Zurlinden Citigroup - Smith Barney

Kevin Costello Comerica Bank

Aaron Headley TouchStone Partners

Lawrence Fox JPInvest LLC

Julie Karmazin

Don Engle Oswald Companies

Graham Hiscock Graham’s Turnaround Leadership

John Cauffiel Galaxie Corporation Leon Bunch Barefoot Cramer & Associates

Nancy Colah BBK

october 2006 tma detroit volume 1, issue 5 newsletter tma ... · turning around the michigan...

Documents