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7/9/2010
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JULY 12-18, 2010
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CRAIN’S CLEVELAND BUSINESS
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THEINSIDER
THEWEEK JULY 5 – 11 The big story: If the Cleveland Cavaliers are going to win an NBA championship, they’ll need to do it without LeBron James. The two-time league MVP announced last Thursday night on ESPN that he’s leaving the Cavs for the Miami Heat, where he’ll try to atone for past playoff flameouts by teaming with a star who actually has won something, Dwyane Wade, and the Heat’s other big free-agent signing, Chris Bosh. Cavs owner Dan Gilbert promised in an over-the-top letter to fans that Cleveland will win an NBA title before the Heat win another one. See more, Page One. Buying spree: Cliffs Natural Resources announced nearly $900 million in acquisitions as it prevailed in its efforts to buy Canada’s Spider Resources for $125 million (Canadian), while unveiling a $757 million acquisition of INR Energy, a coal company with mining operations in West Virginia. The Canadian acquisition increases Cliffs’ ownership and control of major chromite deposits in Ontario. The mineral is an important ingredient in high-end steel made by many of Cliffs’ existing ore and coal customers. The INR deal will boost Cliffs’ already considerable coal-mining holdings, which include mines in West Virginia, Alabama and Australia. New opportunity:
AT&T said it plans to make an investment of $120 million in Akron to build a data center that will process information sent via mobile phones. The center will be in an existing AT&T data center on Opportunity Parkway. The company eventually may make additional investments at the data center, which will serve Ohio and states to the east. The state’s passage of the Ohio Telecom Modernization Act helped AT&T make the decision to build the facility. The law, which Gov. Ted Strickland signed in June, deregulated some aspects of the landline telephone business in Ohio.
Clean slate: The long-delayed audits of Cuyahoga County government should be released soon, freeing the county to issue new debt, including a $325 million bond issue for the planned convention center and medical merchandise mart in Cleveland. Cuyahoga County administrator James McCafferty announced at last Thursday’s county commissioners meeting that the audits of county finances for 2007 and 2008, held up because of the federal corruption probe into county government, should be released within the next week. “They are clean, and we are able to move forward,” Mr. McCafferty said. Judgment day: Goodyear Tire & Rubber Co. said it is considering its options after the Nevada Supreme Court upheld a $32.2 wrongful death verdict against the company. A jury before the Clark County (Nev.) Circuit Court granted the verdict in February 2007 in the case of 10 people who were traveling from Nevada to Kansas in a 15passenger Ford van in August 2004. A Goodyear Load Range E tire on the vehicle blew out, causing the vehicle to roll over. Three people in the vehicle were killed, and the other seven were injured. This and that: Venture development group JumpStart Inc. made two more investments, bringing its total for fiscal 2010 to 13 — the most it has made in any fiscal year. The nonprofit invested $250,000 in CoverMyMeds LLC of Twinsburg, which will use the money to continue developing a technology to help physicians submit various forms to insurers after coverage of a patient’s prescription has been denied. JumpStart also invested $100,000 in Echogen Power Systems, which already had received $400,000 from the organization’s investment arm. Akron-based Echogen is developing an engine meant to convert waste heat to electricity.
REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS
Grad students jump at an opportunity ■ Every journey begins with a single hop. A group of graduate students at the University of Akron have raised the first chunk of capital for the new Hop-On Student Venture Fund, which will invest in technology companies in Northeast Ohio, focusing mainly on the biomedical, polymer and green technology industries. The group earlier this year received a $10,000 donation from Richard Pogue, senior adviser at Cleveland law firm Jones Day. It now aims to raise a total of $100,000 for the nonprofit fund, the name of which plays off the university’s kangaroo mascot. The fund plans to make investments of $10,000 to $25,000 and aims to finance two companies before the end of the year. Any gains from investments would go back into the fund, which plans to give special attention to proposals Kirsanow from university students. The Hop-On Student Venture Fund has been in the works for two years, ever since John Myers, an executive-in-residence with the foundation, heard about a similar program at Miami University. The original student managers who helped design the fund have graduated, but now four new managing partners oversee the fund. The 12 students playing a role with the fund are studying different subjects; that includes the four managers. Al Neighorn is working to earn his doctorate in urban studies and public affairs, Ashish Jagtiani is
WHAT’S NEW COMPANY: Nutek LLC, Chagrin Falls PRODUCTS: Simply Soy and Simply Soy Grill Cleaning Wipes Everyone loves grilling in the summer. And nobody loves cleaning the grill. In response to that simple fact, Nutek, a maker of environmentally friendly cleaning products, has introduced Simply Soy, a biodegradable degreaser, and Simply Soy Grill Cleaning Wipes. The company says users can spray interior grills and grates with the Simply Soy foaming spray and watch grease and grime start to bubble. Simply Soy wipes are made from soy grown in the United States. The grill wipes are 100% biodegradable and feature recyclable packaging. They feature an extra-large, cloth-like wipe that will not shred during use, the company says. Nutek’s products are on the shelves of retailers including Home Depot and Ace Hardware. They’re also available for purchase on the company’s web site. Nutek says it has developed its proprietary soy formulations after testing nearly 40 blends. The company claims the forumulations “outperform the competition on friction and lubricity, while providind excellent rust inhibition.” For information about the company, visit www.nutekgreen.com. Send information about new products to managing editor Scott Suttell at ssuttell@crain.com.
a doctoral student in mechanical engineering, and Beth Harry and Meredith May are going for master’s degrees in business administration. — Chuck Soder
The ultimate bench player ■ Peter Kirsanow testified before Congress at the Supreme Court nomination of solicitor general Elena Kagan, the fourth time the attorney at Cleveland law firm Benesch, Friedlander, Coplan & Aronoff has made an appearance when a nominee for the high court was under consideration. Mr. Kirsanow, a Republican appointee to the U.S. Commission on Civil Rights, testified about Ms. Kagan’s record regarding employment and civil rights issues. Mr. Kirsanow, who has written for the conservative publication National Review, said he was concerned about Ms. Kagan’s “significant dearth of experience” on the bench, but he described the nominee as “very bright.” “She’s smart; I think she’ll do a decent job on the court,” he said. “Hers is the most low-key (hearing) of the four in which I’ve participated.” Mr. Kirsanow also testified in the hearings for Justices Samuel Alito and Sonia Sotomayor and Chief Justice John Roberts. — Arielle Kass
Want to know what the survey says? Participate ■ Here’s a survey where you can help your-
self while also helping the survey takers — but you need to act fast. Team NEO and The Corporate University at Kent State University’s Stark campus jointly are conducting their bi-annual Northeast Ohio Starting Wage and Benefits Survey. Besides gleaning data on starting wage rates (rather than the feds’ typical average wage data) for nine industry sectors, the current installment of the online survey also asks questions about the current and expected work force needs of Northeast Ohio employers. Team NEO is asking companies and organizations in the region with 25 or more employees to respond to the survey by July 21. Employers fitting that profile can visit http://www.surveymk.com//s/neowagesurvey to complete the survey. The inducement to help? Only firms that respond will have access to survey data early this fall. — Mark Dodosh
Bet he’s finished audits faster than this dollhouse ■ For Pat Mullin, who is leaving his job as longtime managing partner of the Cleveland office of Deloitte & Touche, retirement finally will give him a chance to get out of the doghouse. Err, make that the dollhouse. For 31 years — since his daughter was born, if you must know — Mr. Mullin has been building a dollhouse for her. While the house is 90% finished, and he receives compliments from friends who see it, Mr. Mullin said he long has known that it wouldn’t be completed while he held a job. “I always said it would be my first project in retirement,” he said. That comes May 31, 2011. — Arielle Kass
BEST OF THE BLOGS Excerpts from blog entries on CrainsCleveland.com.
Your best bet for a double dip is at the ice cream parlor ■ U.S. government bond yields “are signaling almost no chance of the economy slipping into another recession even as stocks and commodities tumble,” according to a Bloomberg story that cited research from the Federal Reserve Bank of Cleveland. “The 2.34 percentage point gap between yields on two-year and 10-year Treasuries is more than double the 20-year average and about the same as in 2003, just before gross domestic product rose 3.6%,” Bloomberg reported. “The so-called yield curve suggests growth won’t slow to less than 1% and about a 12% chance of a recession in the next year,” according to the report by Joseph G. Haubrich, head of the banking and financial institutions group at the Cleveland Fed, and Kent Cherny, a researcher. In their report, Messrs. Haubrich and Cherny wrote that the expected chance of the economy being in a recession next year, though still small, has risen in each of the last two months. But they say it “might not be advisable to take these numbers quite so literally, for two reasons. … First, this probability is itself subject to error, as is the case with all statistical estimates. Second, other researchers have postulated that the underlying determinants of the yield spread today are materially different from the determinants that generated yield spreads during prior decades.”
Take note: Orchestras are operating with job openings ■ Not that it will help the millions of people
who are unemployed, but it turns out there’s a sector of the economy with lots of job openings: major orchestras. The New York Times reported July 6 that ensembles including the Cleveland Orchestra, the New York Philharmonic, the Boston Symphony Orchestra and several others are looking for players. Cleveland, The Times said, has four full-time job openings and one parttime position. “These posts, naturally, are rarefied and have little to do with the normal job picture nationwide,” the newspaper reported. “But the number of openings prompts the question of why so many spots stand vacant in a market glutted with talented musicians looking to move up to better orchestras or just to find jobs.” The economy clearly has had an effect, as it’s “cheaper to leave jobs unfilled and to pay substitutes, who usually receive close to the minimum base pay and fewer benefits,” The Times said.
When parties throw parties, the sites don’t really matter ■ It would seem the main reason Cleveland is among the four finalists for the 2012 Democratic National Convention is because the party wants to do everything possible to keep Ohio in the Democratic column. But a piece in The Washington Independent said there’s no real correlation between a convention site and a host state’s eventual vote in a presidential election. “Indeed, after examining several decades’ worth of conventions and elections, Michael Berry and Kenneth Bickers — political scientists at the University of Colorado, Denver, and Boulder — found ‘no evidence that hosting a national nominating convention has any discernible effect on the ultimate vote in that state.’”