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SPECIAL REPORT: Laws, Regulations Crunching Businesses Trying to Survive

(Editor’s Note: First in a series detailing the issues business owners face as they navigate the COVID-19 crisis.)

As states around the country have begun to relax stay-at-home orders put in place to battle the spread of COVID-19, businesses and their employees are chomping at the bit to reopen and get back to work.

Or are they?

Of course they are, but owners know that, in the new post-COVID era, things aren’t going to be business-as-usual. Most states are going to add new requirements for the safety and health of workers and customers, and experts say a general fear about coming back too soon is likely to cause fear in workers returning to their jobs.

According to Timothy Williams, Vice Chairman of Pinkerton, a global provider of corporate risk management services and solutions, it’s largely a fear of the unknown.

“There’s a great deal of anxiety,” Williams said. “There’s so much we don’t know. We have generally accepted protocols to deal with other crises. We understand how to deal with an earthquake or a tornado. But there are still so many unknowns and so many variables with (COVID) that we’re going to have to be exceptionally patient as we reopen the economy.”

The anxiety is coming in waves from several different directions. Employers are concerned, for instance, about being able to comply with new safety standards that are almost certain to be imposed when they’re allowed to reopen.

Workplace safety the biggest concern
Having workers report back to a safe environment is going to be one of the paramount obligations for employers. Businesses will likely have to have adequate personal protective equipment in place, as well as policies about cleanliness and sanitization.

Occupational Safety and Health Administration (OSHA) regulations are certainly going to affect how companies do business. According to information on the OSHA website (www.osha.gov/SLTC/covid-19/standards.html), some of the more relevant requirements include:

  • OSHA’s Personal Protective Equipment (PPE) standards, which require using gloves, eye and face protection, and respiratory protection when job hazards warrant it.
  • When respirators are necessary to protect workers, employers must implement a comprehensive respiratory protection program in accordance with the Respiratory Protection standard.
  • The General Duty Clause requires employers to furnish to each worker “employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm.”

Denise Navarro, President/CEO of Houston, Texas-based Logical Innovations, Inc., said the requirements will likely vary by industry, but will still likely be, at a minimum, a financial stressor.

“For instance, I have noted that some businesses are restructuring and redesigning office layouts to accommodate continued social distancing,” Navarro said. “This could lead to additional costs and limited space.”

Workplace safety standards are going to be a focus. According to information provided by the Michigan OSHA, more than 300 workplace complaints were received March 30-31 alone.

What will new standards look like?
Steve Girard, a labor attorney with Grand Rapids, Mich.-based Clark Hill PLC, said OSHA inspectors will look at employers who had COVID-19-positive employees and ask if the company “did everything they could do” to protect employees. If OSHA determines such wasn’t the case, Girard warned, companies could face citations.

The problem with that, he said, is it’ll be an after-the-fact determination of whether companies did everything they could against a virus nobody has ever seen.

“You’re going have investigators after the fact doing some Monday morning quarterbacking and saying ‘you could have done more,’” Girard said.

What safety standards may be required is still a bit of an unknown, and most businesses are already setting up to meet projected requirements as best they can.

For instance, Mid-West Instrument – which develops proprietary designs manufactured for Original Equipment Manufacturers – is already, among other actions, voluntarily testing employees for temperatures at the start of shifts; locking visitors out of the building; requiring staffers to clean their own work areas; placing hand sanitizer throughout the building; offering cloth masks to every employee; and suspended all work-related travel.

Can business keep up with evolving standards?
Because Mid-West Instrument was identified as an “essential” business, the company has remained open during the stay-at-home order, and has only laid off two of its 40 employees. But business is down, and the company is waiting to hear about its loan under the Paycheck Protection Program.

More: Construction, Real Estate Activity Next Up for Reopening

More: Claims Continue to Flow as U.S. Unemployment Passes 30 Million

More: Town Hall Answers Questions as Businesses Get Ready to Re-Engage

Meanwhile, company officials worry about what the requirements will look like when the stay-at-home order is finally eased.

“As this is rapidly changing we do not know what new requirements may be implemented,” said Mid-West Instrument President Mike Lueck. “We are concerned that impractical safety requirements may be imposed which far exceed CDC recommendations.”

Workplace rules changed to benefit the employee could be problematic for employers, as well. For instance, Whitmer signed an executive order last month saying businesses can’t punish workers who stay home when either they or their close contacts are sick.

And Clark Hill’s Girard said worker’s compensation will likely be another big issue for essential employers operating now and non-essential employers when they reopen. Rules were changed last month, Girard said, that employers of first responders and healthcare providers who contract COVID-19 must prove by what Girard called “objective evidence” that the worker didn’t get it on the job before denying a claim.

Legal and political challenges are popping up over how states and individual companies are handling the pandemic. For instance, Illinois Gov. J.B. Pritzker was sued by a couple of business groups and by a state legislator for establishing a stay-at-home order (a judge ruled in favor of the legislator and issued a stay in that legislator’s favor).

An employee of a Tuscon, Arizona electrical company was recently awarded $1,600 because the company denied him paid sick leave after he was told by a doctor to self-quarantine.

And there was a lawsuit filed by a director of Eastern Airlines who was fired just days after requesting time off to tend to an 11-year-old child.

Lois M. Kosch, a partner in the employment law practice group for California-based Wilson Turner Kosmo LLP whose practice emphasizes the litigation of harassment, discrimination, wrongful termination, and wage and hour matters, said that, while the DOL wasn’t doing much enforcement at first, they are now.

“Enforcement actions are happening, whether from the government or private attorneys, so (businesses) should keep those obligations in mind,” Kosch said.

She said some 187 new labor laws have been passed as a result of COVID-19. For instance, the Families First Coronavirus Relief Act mandates paid sick leave and paid time off to take care of children.

There are also obligations under the Family Medical Leave Act to accommodate employees who have child care challenges. That law, Kosch said, entitles employees up to two-thirds of their regular pay, up to $200 per day.

That’s not going to help businesses already looking at balance sheets that aren’t exactly balanced.

“These additional costs in benefits and required payroll additives add to the already-stressed bottom line for some businesses that have been ‘on hold’ during this crisis,” said Logial Innvoations’ Navarro.

To pay unemployment or not to pay, that is the question
Unemployment assistance is turning out to be a double-edged sword. While it provides compensation for workers who lose their jobs, the additional $600 provided by the federal CARES Act can also make it easier for workers to stay off the job because the compensation is often better, particularly in some retail and restaurant businesses.

If the employer tries to bring them back, and they refuse because the money is less, the employee then loses the right to unemployment.

Kosch said recently updated guidance from the U.S. Department of Labor determined workers in that situation are not authorized to collect unemployment, including the $600 federal supplement.

But Dan West, president of the Livonia, Mich., Chamber of Commerce, said he’s still hearing from business owners there are “a lot of concerns” about workers coming back, particularly among restaurant owners.

“Restaurants had to lay off all their wait staff, so a lot of them have taken jobs at Amazon, Walmart, what have you, and may not come back,” West said. “I’m hearing owners are looking for means of bringing people back part-time so they can still get unemployment. There’s really no incentive to come back if they’re making more (on unemployment).”

Kosch pointed out that they won’t be, at least not for long.

“Without (the $600 federal incentive) they wouldn’t be making more than if they were working,” Kosch said. “I think letting people know if they decide not to come back to work when work has been offered to them they’re going to lose that federal supplement … might be a powerful motivator.”

The other thing about which business owners have expressed concern is a question of what the rules will look like when they are finally allowed to reopen. Governors in states like Georgia, Tennessee and Texas have already issued guidelines for re-engagement.

That’s a good thing, according to West.

“The uncertainty is the biggest thing … business people are planners,” he said. “Right now, that uncertainty makes it hard for them to plan. And they can’t work right now, and that makes it even more frustrating for them.”

New requirements could slow productivity
But it’s not just the state rules that trouble some business owners. Ted Barker, the president of Livonia, Mich.-based Shaw Construction and Management Company that employs some 20 workers, said he received a list of 20 requirements the Michigan Building and Construction Trades Council wants him to follow when reopening.

Among them are requirements for personal protective equipment (PPE), a specified COVID-19 site supervisor, asking employees to self-identify if they have symptoms, and having running water – “A lot of our sites don’t have running water,” Barker said — and soap on job sites.

“They feel this is a good baseline for future work in this environment and that it will provide the governor with assurance that the Michigan construction industry has the infrastructure, culture and training resources to safely return to work beyond the critical infrastructure projects currently underway,” Barker said. “The (COVID requirements) will cost dollars and has the strong possibility of slowing down productivity, which again will cost dollars to all involved. But I don’t know how we can get clearance to work without trying to inforce a new set of guidelines, either.”

Crisis could crush morale
What owners should really be concerned about, according to Pinkerton’s Williams, is the culture that will exist once restrictions are eased. Morale could be a problem, and business leaders are going to have to be acutely aware of the emotional states of their employees.

“There’s a lot of anxiety around the world, let alone in the United States, about ‘do I have a job,’ ‘do I want to go back to work when I can get paid a little more in the interim?’

“Some have lost coworkers and relatives and haven’t had the chance to grieve,” Williams added. “You’ve got a lot of emotions coming into this, and a lot of fear, because it’s a scenario where we don’t have complete information and may never have.”

Mid-West Instrument’s Lueck agrees about the morale, and says Michigan officials, including Whitmer and Attorney General Dana Nessel, haven’t helped the situation with what he calls “aggressive statements.”

“This has been a real issue due to … their total lack of recognition of critical manufacturers supplying to medical gas industry, oil and gas, power generation, military and safe distribution of drinking water,” Lueck said. “This has raised the stress level of many employees who question if we should remain open even though almost all of our products support industries listed (as) essential critical infrastructure workers.”

Fear will also play a role as workers return with concerns about contracting COVID-19 in the workplace. Sonya Bielecki, owner of HR Professional Support Services and a consultant for Express Employment Professionals, doesn’t believe there’s any way to completely reduce an employee’s fear of COVID-19 or the chance they’ll contract it in the workplace.

She said company leadership, “regardless of their personal opinions on COVID-19,” must present a coordinated message to the staff. The other idea she suggests is for employers to prepare a formal communication to workers outlining all of the safety steps they’ve taken.

“If you can prove to an employee that you’ve made CDC and OSHA requirements happen and you’re taking all the steps to keep them safe, that’ll reduce a lot of fears,” Bielecki said. “But the communication has to go out before their return.”

Pinkerton’s Williams agreed communication is the key when there are so many of what former Secretary of Defense Donald Rumsfeld called “unknown unknowns,” things we don’t know that we don’t know.

“That’s perfect for how we are today … It’s not going to be easy,” Williams said. “Communicating with employees several times a day routinely with current information about what we know and what we don’t know would help a great deal with morale.

“If we can be extraordinarily patient in these times with ourselves, with our customers … I think that will keep the security issues at a minimum, and it’s really going to pay off in morale issues,” he added. “People are on edge, anxious. We’re in uncharted territory for our generation. That’s why that ‘high-touch’ (by telephone and conference calls) and very frequent communications that are forthright is going to be very important.”

SECURE Act 2.0 Looks to Improve Retirement Benefits for American Workers

With an economy still sputtering along with an inflation rate north of 6% and a burgeoning number of baby boomers inching their way toward the ends of their careers, workers could be forgiven for worrying about how they’ll make it in retirement.

Congress did their part to try to lessen that fear by passing the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 late last year.

It’s an extension of the original SECURE Act, signed into law in 2019 by then-President Donald Trump. Both the original act and it’s successor passed with high bipartisan support.

“In 2019, Congress passed the original Secure Act, which also expanded access to retirement accounts for workers,” Corie Wagner, Senior Editor, Industry Research at SeniorLiving.org in Los Angeles, told Forbes Magazine. “Similarly, one of its goals was to help Americans save more money for retirement. However, millions still feel very unprepared financially for life in retirement, so those original provisions may not have gone far enough.”

Chris Burke, senior consultant for retirement plans for Detroit-based Lovasco Consulting Group, said the need for an updated version of the SECURE Act was driven by a “constant objective” in Congress to simplify retirement plans and “make them a better fit.”

“The goals were to try and expand retirement plan access and make it easier for both employees and employers,” said Burke, who got his juris doctor from Wayne State Law School and a bachelor’s degree from the University of Michigan. “(SECURE Act 2.0) was a combination of three different proposals that came together, and it was really done at the last minute last year. There were some particular congressmen and women who were going to retire at the end of the year, so if it didn’t get done at the end of last year, it wasn’t going to get done at all.”

Burke, who in 2002 and 2003 was named by the National Association of Plan Advisors as a top 100 advisor in the country under 40 years old, was the keynote facilitator in a webinar, “SECURE Act 2.0: What Employer’s Need to Know,” put together by the Naitonal Association of Business Resources in partnership with the Best & Brightest Programs, Corp! Magazine and MichBusiness.

Burke said the new act is a combination of three different bills that came together. There were a lot of provisions that were proposed; some didn’t make it in, but “for the most part, the provisions that were passed were talked about for over a year.”

“All of these had to have bipartisan support,” Burke said. “There were eight committee members who hashed out the final language, from both sides of the aisle. Nothing in it is controversial on either side of the aisle; it had support on both sides.”

According to Burke, the legislation’s main goals are:

  • To boost plan formation among small employers.
  • Expand retirement plan coverage; offering retirement plans to part-time employees
  • Increase retirement savings
  • Encourage employees to save
  • Simplify some plan corrections
  • Allow employees access to emergency savings in retirement plans

“I think there was an effort to kind of Roth-ify defined contribution plans because it helps to raise revenue,” he said. “I think we’re going to continue to see that.

“Our government’s debt situation – this isn’t a poltical statement at all, I think this is gonna be an issue regardless of what happens politically – from a debt to GDP ratio we’re not in a great spot with federal finances and it’s projected to get worse,” he added. “I think pulling forward some of that tax revenue is going to be a continued theme in the future.”

In what Burke called a “unique aspect” of SECURE Act 2.0 is the fact it’s phased in over several years. Some provisions are immediate, others don’t become effective until 2024 and 2025.

Provisions effective this year include:

  • Roth Employer Contributions — Employers may now choose to offer matching or nonelective contributions as Roth contributions.

While the act makes these effective this year, Burke said they aren’t likely to become a factor until late summer.

“The IRS still has questions to answer about the plan,” Burke explained. “There’s a lot to think through for the IRS. The pros to this: it provides more tax diversification for employees. And from an employer’s standpoint, it helps them offer a more robust retirement package.”

  • Small Incentives for Contributing to a Plan –– Applaud good savings behavior by offering small rewards to employees who participate in a 401(k) or 403(b) plan. In the retirement industry, this is casually referred to as the “gift card” section.
  • Tax Credits — For new retirement plans, companies with up to 50 employees can claim up to 100% of the start-up administration costs (max $5,000). And for employees who make less than $100,000, employers can claim an additional $1,000 per person, to which employers could apply the credit toward a matching contribution (max $50,000).

Provisions available in 2024, according to Lovasco, include:

  • Roth-Required Catch-Up Contributions — For participants over age 50 looking to max out retirement savings through catch-up contributions, if the employee earns more than $145,000, those contributions must be Roth contributions. If the employee earns less than $145,000, they can choose either pre-tax or Roth contribution type. Reminder: Plans need to allow for Roth contributions in order for this to be available.
  • RMDs Not Required for Roth 401(k) and 403(b) Accounts –– Retirement plan savings in designated Roth 401(k) and 403(b) accounts are no longer subject to RMD rules. This means employees’ accounts can continue growing tax-free.
  • Emergency Withdrawals — An employee may claim a personal emergency and access up to $1,000 from their retirement plan. They can take one distribution per year and have the option to repay it within three years. They can take another distribution if repaid and have another personal emergency expense. If not repaid within three years, they cannot take another distribution.
  • Matching Student Loans — For employees who are paying down student loans, employers will be able to apply the retirement plan’s matching formula to that repayment amount and deposit the match into the workplace retirement savings plan. This helps the employees save for retirement while getting out of debt.

Burke pointed out that a study done by Fidelity showed employer-sponsored student loan assistance can reduce employee turnover by some 78%. But a poll taken during the webinar showed that 78% of respondents said their companies “weren’t considering this yet.”

“I think this is an area where employers underrate the impact it can have on retention,” Burke said. “I know retention has eased up as a need, given the state of the economy, but this could be really sticky in terms of keeping employees engaged or even at the organization, so it’s something I recommend (companies) think about.”

  • Force-Out Rollover Limit — Under current law, employers may transfer former employees’ retirement accounts from a workplace retirement plan into an IRA if their balances are between $1,000 and $5,000. This section increases the upper limit from $5,000 to $7,000.
  • Automatic Portability –– This provision makes it easier to move retirement accounts from a former employer to a new employer. By allowing for automatic portability, it helps to reduce future missing participant issues, supports employers with clean participant data, and helps employees by consolidating retirement savings accounts.
  • “Side Car” Emergency Savings Account –– New payroll deduction account that is for short-term emergencies. Non-highly compensated workers could be automatically enrolled at 3% and save up to $2,500 in this Roth account. They can access the account tax and penalty-free.  

Provisions available in 2025 include:

  • Improving Retirement Plan Access for Part-Time Workers  — Long-term, part-time employees who meet the eligibility requirements will be allowed to save through the company’s retirement plan. For part-time employees, it is important to have a good time-tracking system in place because eligibility rules are retroactive. The stated eligibility rules are for employees who work for two consecutive 12-month periods, during each of which they have at least 500 hours of service. Employers are not required to match contributions. Effective January 1, 2025.
  • Automatic Enrollment and Escalation| Retirement Savings on Autopilot  — All new 401(k) and 403(b) plans are required to automatically enroll participants and auto-escalate savings. The employer will set the initial deferral amount between 3 – 10%, and the deferral amount increases by 1% up to 10 – 15% retirement savings per year.  
  • Higher Catch-Ups for 60 – 63 Years Old Employees — Employees between 60 – 63 years old looking to maximize retirement savings will be allowed to increase their catch-up contribution to $10,000 in 401(k), 403(b), and governmental plans. The catch-up must be a Roth contribution for individuals who make more than $145,000.  

The American Retirement Association issued a press release extolling the virtues of SECURE Act 2.0.

“We are grateful to the many members of Congress and staff who worked tirelessly to get SECURE 2.0 included in the omnibus legislation enacted this week,” Brian Graff, CEO of the American Retirement Association in Washington, DC, said in the release. “This important legislation will enhance the retirement security of tens of millions of American workers—and for many of them, give them the opportunity for the first time to begin saving.”

According to Forbes, SeniorLiving.org conducted an online survey last spring of 1,028 U.S. adults. The group’s website says, “While 7 in 10 American workers had never heard of SECURE 2.0 legislation, they support many of its retirement savings provisions.”

Burke said a couple of things in the legislation – provisions for automatic enrollment and automatic increases – may not be popular, but they likely are necessary. Lovasco recommends both as “strong best practices.”

“Some people think those are invasive practices, but this is the problem we’re trying to solve,” Burke said. “Retirement savings are not nearly good enough in the U.S., and the employer is in the best position to impact that from a plan design standpoint.

“If you don’t stick up for your employees, they’re probably not going to stick up for themselves, and nobody else is, either,” he added.

What do retirement savings look like in the U.S. Burke said a Vanguard survey shows the average plan participant has a $112,000 average balance, while the median balance is only $27,000. Imagining a 4% withdraw rate recommended by most financial planners, a plan with a $100,000 balance yeileds about $4,000 a year.

“I don’t need to tell you that’s not nearly enough money to be able to retire,” Burke said. “Some of the rationale behind this bill is to improve the situation.”

Whitmer Signs ‘Restoring Workers’ Rights’ Bill Package Into Law

LANSING, Mich. — Governor Gretchen Whitmer signed the ‘Restoring Workers’ Rights’ bill package restoring and protecting workers’ rights in Michigan last week.

Officials said House Bills 4004 and 4007 and Senate Bill 34 strengthen labor laws to protect workers’ safety, keep government from getting in the way of negotiations between businesses and workers, and empower workers to advocate for better working conditions and wages. 

The bills also restore prevailing wage, ensuring the best value on infrastructure for Michigan taxpayers and raising wages for working people, helping them support their families and improve their quality of life.

“Today, we are coming together to restore workers’ rights, protect Michiganders on the job, and grow Michigan’s middle class,” Whitmer said. “Michigan workers are the most talented and hard-working in the world and deserve to be treated with dignity and respect. These bills will protect health and safety, ensuring healthcare workers can put patient care ahead of profit, construction workers can speak up when there’s a safety issue, and employees can call attention to food safety threats and other problems. Let’s continue delivering for working people and ensuring Michigan is open for business.”

House Bill 4004 and Senate Bill 34 restore provisions helping workers collectively bargain, without government interference, for better working conditions, higher wages, and safer workplaces. 

According to a nonpartisan economic study, workers’ wages in states without strong worker protections are 3.1 percent—on average, $1,600—lower per year than in states with strong worker protections, after adjusting for differences in cost of living.

House Bill 4007 restores prevailing wage on all state projects, creating good-paying jobs and ensuring hard-working people can earn a decent standard of living, take care of their families, and have a secure retirement. Reinstating prevailing wage will put more money in people’s pockets and guarantees Michigan gets the well-trained, skilled workforce to build safe, reliable infrastructure.

“Today is a historic win for workers everywhere, and this is the first time any state has been able to do this in almost sixty years,” said Senator Darren Camilleri (D-Trenton), sponsor of SB 34. “We were so proud to get this to the governor’s desk, and even prouder to see it signed into law—this is tangible proof that the Republican attack on organized labor has failed. We’re entering a new chapter in Michigan.”

State Launches New App to Prevent Opioid Overdoses

LANSING (Capital News Service) — The Health and Human Services Department has launched OpiRescue, an app designed to help the general public reverse opioid-related overdoses. 

Angie Smith-Butterwick, the manager of the department’s substance abuse, gambling and epidemiology unit, said OpiRescue provides educational tools and resources about opioids. 

The app helps users recognize genuine overdoses and other medical emergencies, Butterwick said. 

Butterwick said OpiRescue provides the department with data showing where opioid misuse is being reported and allows the department to know where resources are most needed in Michigan. 

The department is paying for the app.

OpiRescue also includes a feature that locates where to find naloxone, the medication that can reverse overdoses, as well as nearby treatment centers

“While the app is targeted at recording those overdoses out in the community, it also has a whole host of resources within the application itself,” Butterwick said. 

A find naloxone button shows nearby pharmacies that have naloxone for distribution without a prescription.

It has additional resources for community agencies that distribute naloxone for free, she said. 

Butterwick said that OpiRescue is for general public use.

“While we do want everybody to call first responders, if they find somebody suffering from an overdose, it’s far more important to have the general public, friends, family members and loved ones of individuals who are using opioids to be armed with this tool,” she said. 

Aric Dowling, the commander of the State Police prevention services program, said OpiRescue will help his department with people who struggle with substance abuse. 

“Any tool that helps our troopers and officers assist people — anything that we can get– our officers are extremely happy to have that assistance,” Dowling said. 

“We didn’t have methods to really help somebody. All of these extra avenues give us the tools that we need to do more than just arrest somebody, but to try to get them help so we have a positive impact in their life,” he said.

“Instead of responding to an overdose, and that’s it, we can help try to get them somewhere where proper professional services are available for treatment,” he said.”

Dowling said an advantage of the State Police Angel Program that he heads is people can come into any state police post and get connected to recovery treatment services without fear of arrest.

Jaden Beard is a writer for Capital News Service. 

Ronald McDonald House Expands to Serve More Families

GRAND RAPIDS, Mich. — Leaders of the Ronald McDonald House (RMH) announced the More Rooms, More Love campaign, a $2 million fundraising effort to expand and renovate the House at 1323 Cedar, NE in Grand Rapids.

Funds will be used to add eight additional private rooms, renovate the kitchen and dining areas, update laundry facilities, completely overhaul the playground and improve other facility amenities. Construction, to be managed by EV Construction, is planned for later this year.  When renovations are complete, the updated House will serve more regional families that travel to Grand Rapids for medical care from sixty-five counties throughout Michigan.  

Founded in 1990, the Ronald McDonald House provides a ‘home away from home’ for families with critically ill or hospitalized children that need a place to stay while their child recovers.  The RMH staff and volunteers provide a free stay in private rooms along with meals, play space for siblings, and supports for families facing challenging circumstances.

The 19,000 square foot facility is located on five park-like acres, a short drive from DeVos Children’s Hospital. The House has seventeen bedrooms with private baths; two are isolation equipped and three are handicap accessible. Common rooms include a large family-style kitchen with four complete cooking areas, a dining room, great room with fireplace, sitting room, sunroom overlooking the backyard that has a playground area and a walking path and a children’s playhouse, a laundry room, and recreation room.

At today’s public announcement of the fund drive, Andrew Grashuis, campaign co-chair, invited the public to join in the fundraising effort which will continue through the end of the year.  

“Since our founding over thirty years ago, we’ve helped over 10,000 families at the House.  Unfortunately, due to lack of space, we’ve also had to turn away another 5,000 families,” said Grashuis.  “As Grand Rapids’ medical reputation has grown, so has the demand for space at the House. We’re incredibly proud that we can take the burden off of families that have to travel to Grand Rapids for medical care for their children. If we can provide a nice, safe place to stay, good meals, and a place for respite during a time of high stress for parents, we know we’re doing good and valuable work.”

Ellen Carpenter, Executive Director of the Ronald McDonald House, shared that the campaign has received significant support from area hospitals, local and regional foundations, area businesses, and generous community donors.  

“We have been so fortunate to receive gifts to this important campaign.  Our Campaign Cabinet joins me in thanking the community for their meaningful gifts.  We now invite the broader community to help us complete this campaign effort.  We welcome gifts of all sizes,” said Carpenter.

Today’s announcement marks the beginning of the public phase of the $2 million campaign.  Gifts can be made via the Ronald McDonald House’s website at https://rmhcwm.org/donate/.

“This is an exceptional opportunity for the community to rally around families with sick children,” added Lindell Hoff, campaign co-chair. “This is one more way that Grand Rapids can show its hospitality to our friends from other cities and can add value to our exceptional medical community.

Gustafson Appointed VP, COO of Ilitch Sports + Entertainment

Ryan Gustafson has been appointed vice president and Chief Operating Officer for Ilitch Sports + Entertainment, the company announced in a press release Friday.

Chris McGowan, who joined Ilitch Holdings in late 2021 as the company’s president & CEO, will be leaving the organization.

“I’m confident the leadership of Ryan Gustafson and our executive team will continue providing a world class sports and entertainment experience for our fans and guests,” said Chris Ilitch, CEO, Ilitch Companies. “I thank Chris McGowan for his hard work and leadership. He is leaving IS+E in a great position and set up for continued future success.”

In announcing his departure, McGowan did not give an indication of his future plans.

“I have made the difficult decision to step down,” said McGowan. “I am grateful to Chris Ilitch for giving me the opportunity to work for the Red Wings and Tigers and thank everyone for the collaboration, passion, and true dedication to this company – it is something very much appreciated.

“I wish the organization continued success in the future and I have full confidence that Ryan Gustafson will be an outstanding leader,” he added.

Gustafson previously was Senior Vice President of Business Operations Strategy with IS+E, having joined the organization in February 2022. In that role he focused on project management, operational support, and business development strategy to drive future growth, including spearheading many of this off-season’s ballpark enhancements at Comerica Park. 

“This is an incredible opportunity to lead the talented colleagues throughout IS+E including a world class senior leadership group that will continue with the mission of Amazing, Inspiring and Uniting our fans through the power of sports and entertainment,” Gustafson said.

Gustafson’s background in sports includes nearly 15 years of strategic planning and revenue generation experience. Prior to joining IS+E, he served as a strategy consultant at Elevate Sports Ventures and Pegula Sports and Entertainment and was the Team President of the Seattle Dragons (XFL) where he led all business operations.

Prior to that, he served as Vice President, Strategy and Development for the Seattle Sounders, where he oversaw all revenue-generating areas for the club, and as Vice President, Strategy, and Innovation for the San Diego Padres. Ryan earned his undergraduate degree at the University of Puget Sound and his MBA from Harvard Business School.

Ford Expects $3 Billion in EV Losses as it Rolls Out New Financial Reporting System

NEW YORK – Ford Motor Co. expects to lose some $3 billion on its electric vehicle business in 2023, a loss for which it figures to more than make up for as EVs become increasingly popular.

The figures were included in a release from Ford on Thursday, when the automaker walked investors, analysts and others through how the company is now organized and operating – and will report financial results – based on three new global business segments that are focused on different automotive customers, rather than by geographic regions.

Leaders also summarized ways that the segments will deliver exceptional value to their respective customers and, together, for other Ford stakeholders:  Ford Blue with iconic gas and hybrid vehicles, Ford Model e via breakthrough digital capabilities and electric vehicles, and Ford Pro with products.

“We’ve essentially ‘refounded’ Ford, with business segments that provide new degrees of strategic clarity, insight and accountability to the Ford+ plan for growth and value,” CFO John Lawler said.  “It’s not only about changing how we report financial results; we’re transforming how we think, make decisions and run the company, and allocate capital for highest returns.”

Lawler said the teach-in helped investors and analysts develop new models for projecting, tracking and valuing the individual and collective performances of Ford’s new segments, after decades of the business being managed and reporting financial results by regional markets.

Ford Controller Cathy O’Callaghan highlighted how three principles guided the new segmentation:

1)    Fairly representing the business models of each segment

2)    Giving the Ford Blue, Ford Model e and Ford Pro teams both the latitude and accountability for their success, and

3)    Being easy to understand and simple to execute, so that everyone can see how Ford is generating value for customers and other stakeholders.

“This wasn’t a simple proforma spreadsheet exercise,” O’Callaghan said.  “It represents nearly a year of disciplined work by hundreds of Ford people to help us capture the huge strategic opportunity of Ford+ and provide unique transparency into our business.”

During the event and in supporting material available online – including recast segment results for 2022 by quarter and full-year 2021 (summary attached) – Ford explained how assets are assigned and revenue and costs are reported across the segments. 

The company also described accounting for products supplied between segments.  For example, vehicles sold by Ford Pro to its commercial customers will be manufactured by Ford Blue or Ford Model e.

Additionally, Ford:

  • Reiterated a 10% margin target for company adjusted EBIT (earnings before interest and taxes) by the end of 2026.
  • Confirmed that, among the new business segments, Ford Blue and Ford Pro are both solidly profitable and well-positioned for growth.
  • Repeated its 8% EBIT margin objective by late 2026 for Ford Model e, which is tied to planned global electric vehicle production run rates of 600,000 units by the end of 2023 and two million by the end of 2026.
  • Said the contribution margin of Ford Model e’s first-generation EVs – representing revenue minus certain variable costs – is expected to approach break-even this year, but be more than offset on an EBIT basis by higher investments in new EV products and manufacturing capacity
  • Reiterated that it anticipates full-year adjusted EBIT to be $9 billion to $11 billion – and adjusted free cash flow to be about $6 billion – based on assumptions outlined in the fourth-quarter 2022 earnings release on Feb. 2, and,
  • Provided 2023 segment-level EBIT expectations:  about $7 billion for Ford Blue, a modest improvement from last year; a full-year loss of about $3 billion for Ford Model e; and EBIT approaching $6 billion for Ford Pro, nearly twice its 2022 earnings.

Ford plans to announce first-quarter results on Tuesday, May 2.

On May 22, Ford will host its next Capital Markets Day in Dearborn.  On that day, executives will provide extensive updates on the strategic potential and progress of Ford+ and the company’s rapidly expanding capabilities in software and services, along with deep dives into plans and key performance indicators for each of the business segments.

Sixth Generation Camaro Bows Out, Chevy Announces Final Collector’s Edition

2024 Chevrolet Camaro with Collector’s Edition package. Pre-production model shown. Actual production model may vary. Available in summer 2023.

DETROIT – After nine strong model years in the market, with hundreds of thousands sold, the sixth generation Chevrolet Camaro will retire at the conclusion of model year 2024. The final sixth generation Camaros will come off the assembly line at the Lansing Grand River Assembly Plant in Michigan in January.

Available in coupe and soft-top convertible variants, this latest generation Camaro is known for supreme athleticism and composure. Magnetic Ride Control became available on the Camaro SS in the sixth generation and track-focused 1LE packages proliferated through all levels of the lineup for the first time. The ultimate street-legal track Camaro, the 650 horsepower ZL1 1LE, produced the fastest time for any Camaro around GM’s Milford Road Course at the company’s Milford Proving Ground in Michigan.

Whether it is picking up awards for on-road performance, or race wins and championships at tracks across the world, Camaro has demonstrated Chevrolet’s ability to win in the most demanding environments.

“As we prepare to say goodbye to the current generation Camaro, it is difficult to overstate our gratitude to every Camaro customer, Camaro assembly line employee and race fan,” said Scott Bell, vice president, Global Chevrolet. “While we are not announcing an immediate successor today, rest assured, this is not the end of Camaro’s story.”

Chevrolet will celebrate this storied nameplate with the addition of the Collector’s Edition package on the 2024 Camaro RS and SS, and on a limited number of ZL1 equipped vehicles available in North America. The Collector’s Edition pays homage to Camaro, resurfacing ties that date back to the development of the first generation Camaro in the 1960s, most notably the program’s initial code name: Panther.

More information on the 2024 Camaro line and Collector’s Edition package will be available closer to the start of orders this summer.

Since our founding days with Louis Chevrolet, performance always has been and will continue to be an integral part of Chevrolet’s DNA. From Corvette to Colorado and Silverado ZR2, to Tahoe RST and Blazer EV SS1, the brand will continue to offer a range of exhilarating vehicles for the street, the track and off-road.

Chevrolet campaigns the sixth generation Camaro in a variety of series, including NASCAR, IMSA, SRO, NHRA and the Supercars Championship. Camaro will continue to compete on track, working with motorsports sanctioning bodies to ensure Chevrolet’s presence in racing moving forward.

“Chevrolet’s products and our relationship with our customers benefit from motorsports,” said Jim Campbell, Chevrolet U.S. vice president, Performance and Motorsports. “Our plan is to continue to compete and win at the highest levels of auto racing.”

Expert: Bank Investors the Victims in Collision of Extreme Fiscal, Monetary Policies

The collision of extreme fiscal and monetary policies has finally arrived, with the victims being investors in banks with narrowly focused deposit, lending, and securities portfolio strategies.

To be sure, the collapse last week of Silicon Valley Bank (SVB), Silvergate Capital, and now, Signature Bank, highlights the troubling confluence of emergency pandemic related spending, a surge in deposits, tighter monetary policy, and a plunge in confidence.

Key Takeaways:

  • Unfortunately, markets have not yet proved discerning, and the leading indexes for banks and regional banks have come under significant pressure in recent days. 
  • While we would like to think the worst is behind us, experience tells us otherwise. It is conceivable that some of the banks currently under the most pressure may find the FDIC at their doorstep in the coming days and weeks.
  • Yet, we do not view these developments as systemic contagion, like the experience of the Great Financial Crisis (GFC) in 2008 and 2009.
  • Over the past 15 years, the banking industry has been on a journey of stress testing, higher capital ratios, and restructuring with lower risk and less leverage, thereby more insulated from economic and market risks.
  • In addition, regulators have stepped up in this crisis to support depositors of the failed banks. The Federal Reserve created a new Bank Term Funding Program that will offer loans for up to one year to banks in return for high quality collateral, like U.S. Treasuries. In addition, the central bank has eased terms for banks seeking loans at its discount window.
  • Though financials large and small will likely remain under pressure in the near-term, we suspect that investors will eventually become more discerning, and look for opportunities with banks, large and small, with depressed prices and broader lending, deposit, and investment strategies than the niche players that have either failed or remain under significant pressure.

We maintain our Market Weight preference for the Financial Services sector, which makes up about 12.0% of the S&P 500® Index. Our base case has warned of a retest of the October lows, and these developments may provide the catalyst. Yet, we believe the combination of regulatory support and increased awareness of most broadly diversified banking models within the Financial Services sector will enable the banking industry, and the equity market, to eventually find support and price in recovery.

Our fair value estimate for the S&P 500® Index remains in the range of 4,100 to 4,200 – yet this move is unlikely to be linear.

Bank Volatility
To be sure, the collapse last week of Silicon Valley Bank (SVB), Silvergate Capital, and now, Signature Bank, highlights the troubling confluence of emergency pandemic related spending, a surge in deposits, tighter monetary policy, and a plunge in confidence.

Pandemic related fiscal measures saw bank deposits in the U.S. surge by approximately $5 trillion between 2020 and 2021, with weak loan demand resulting in approximately 20.0% of that amount being lent out. The rest was invested in U.S. Treasury and government sponsored mortgage-backed securities or held as cash. Accounting rules state that banks must designate securities held as either “available for sale” (AFS) or “held to maturity” (HTM). Selling HTM securities is complicated, given “marked to market” pricing requirements, which can accelerate the need for a capital raise.

The massive amount of liquidity invested by banks came under pressure last year once the Federal Reserve began raising interest rates. This resulted in “unrealized losses” in the securities books for these institutions, complicating their ability to respond to the funding requests of depositors.

SVB was unique in that it relied extensively on HTM treatment for its growing securities portfolio. In addition, it had a narrow lending and deposit focus catering almost exclusively to venture capital and technology firms. SVB experienced sudden and overwhelming pressure once depositors wanted their money back and was forced to sell securities at a loss to meet depositor demand for funds. Consequently, inadequate liquidity and insolvency quickly resulted, and the Federal Deposit Insurance Corp. (FDIC) took control of SVB midday on Friday, leading to the second largest bank failure in history. Silvergate Capital failed last Wednesday, and we wake up Monday morning to discover that Signature Bank was also taken over by the FDIC.

Not surprisingly, these developments have led to a surge in market volatility. Stock prices plunged and U.S. Treasuries caught a safe-haven bid. As is typical, traders quickly circled those other financial institutions with similarly narrow focused business models and an HTM emphasis on their securities portfolios. 

Unfortunately, markets have not yet proved discerning, and the leading indexes for banks and regional banks have come under significant pressure in recent days. See chart: KBW and Regional.


While we would like to think the worst is behind us, experience tells us otherwise. It is conceivable that some of the banks with narrowly focused business models may find the FDIC at their doorstep in the coming days and weeks.

Yet, we do not view these developments as systemic contagion, like the experience of the Great Financial Crisis (GFC) in 2008 and 2009.

Bank regulation and stress testing over the past 15 years has resulted in fortified balance sheets, improved capital positions, and stringent lending standards all aimed at the prevention of systemic risk. Of course, unforeseen events like a global pandemic and emergency fiscal spending of more than $6 trillion with an expanded Fed balance sheet of greater than $8 trillion leads to unchartered territory, resulting in imbalances, particularly for narrowly focused financial institutions. But investors should keep in mind that despite the near-term volatility affecting the industry, most regionals and “big” banks have strong balance sheets, healthy income statements and diversified deposit and lending activities, suggesting the current crisis is idiosyncratic and not systemic.

When viewed through the lens of “systemic importance” many of the larger U.S. regional banks, though sitting on unrealized losses, have much lower deposit betas (interest rate risk) and lower deposit outflow risk than SVB. The group’s net interest margins remain high and possess large reserves with “available-for-sale” holdings that can be used as additional sources of liquidity, should they become necessary. Moreover, the largest U.S. “big” banks also hold large unrealized gains/losses positions, but the impact of this is not likely to be more than an earnings drag given their regional and business line diversification, low deposit betas, allocation to reserves, broad trading assets, and primarily “available-for-sale” holdings.

John Lynch is chief investment officer for Comerica Wealth Management.

Existing-Home Sales Surged in February, Ending 12-Month Streak of Declines

WASHINGTON — Existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020, according to the National Association of REALTORS. Month-over-month sales rose in all four major U.S. regions. All regions posted year-over-year declines.

Total existing-home sales,1 https://www.nar.realtor/existing-home-sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. Year-over-year, sales fell 22.6% (down from 5.92 million in February 2022).

“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”

Total housing inventory2 registered at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.

“Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.”

The median existing-home price3 for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.

Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.

First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 20224 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.

All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.

Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.

Distressed sales5 – foreclosures and short sales – represented 2% of sales in February, nearly identical to last month and one year ago.

According to Freddie Mac, the 30-year fixed-rate mortgage(link is external) averaged 6.60% as of March 16. That’s down from 6.73% from the previous week but up from 4.16% one year ago.

Single-family and Condo/Co-op Sales
Single-family home sales soared to a seasonally adjusted annual rate of 4.14 million in February, up 15.3% from 3.59 million in January but down 21.4% from the previous year. The median existing single-family home price was $367,500 in February, down 0.7% from February 2022.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 440,000 units in February, up from 410,000 in January but down 32.3% from one year ago. The median existing condo price was $321,000 in February, an annual increase of 2.5%.

“Owning a home provides a path to long-term financial security and is a vehicle by which to transfer wealth to future generations,” said NAR President Kenny Parcell, a REALTOR® from Spanish Fork, Utah, and broker-owner of Equity Real Estate Utah. “REALTORS® deliver expert guidance, objectivity and professionalism to consumers during the complex process of purchasing a home.”

Regional Breakdown
Existing-home sales in the Northeast improved 4.0% from January to an annual rate of 520,000 in February, down 25.7% from February 2022. The median price in the Northeast was $366,100, down 4.5% from the previous year.

In the Midwest, existing-home sales grew 13.5% from the previous month to an annual rate of 1.09 million in February, declining 18.7% from one year ago. The median price in the Midwest was $261,200, up 5.0% from February 2022.

Existing-home sales in the South rebounded 15.9% in February from January to an annual rate of 2.11 million, a 21.3% decrease from the prior year. The median price in the South was $342,000, an increase of 2.7% from one year ago. In the West, existing-home sales rocketed 19.4% in February from the prior month to an annual rate of 860,000, down 28.3% from the previous year. The median price in the West was $541,100, down 5.6% from February 2022.

Data Shows Credit Card Debt at Record High as Fed Raises Rates

The consistent raises in its key interest rates from the Federal Reserve may not be having much of an effect on how people are spending their money.

According to a report from the Associated Press, credit card debt is “already at a record high, and more people are carrying debt month to month.”

While the Fed’s interest rate increases are meant to fight inflation, they’ve also led to people paying higher annual percentage rates on their credit card debt. The Fed announced Wednesday that it would increase rates by another quarter-point.

According to the AP, 46% of people are carrying debt from month to month, up from 39% a year ago, according to Bankrate.com, an online financial information site.According to Bankrate, the average credit card interest rate is up to 20.4%, the highest since their tracking began in the mid-1980s.

A new poll by The Associated Press-NORC Center for Public Affairs Research finds 35% of U.S. adults report that their household debt is higher than it was a year ago. Just 17% say it has decreased. Roughly 4 in 10 adults in households making under $100,000 a year say their debt is up, compared with about a quarter in households making more than that, according to the AP.

Data also shows more people are now falling behind on payments.

“The more than half who pay in full each month are clearly doing a lot better than the almost half who don’t,” Bankrate analyst Greg McBride told the AP. “Those who tend to carry balances tend to be younger people, people making lower incomes, and those with lower credit scores. Another factor contributing to rising debt is inflation, which means the cost of day-to-day living is outpacing paychecks.”

Cadillac Launches Year-Long Celebration Commemorating 20 Years of V-Series Performance

Front view of the fourth generation Cadillac V-Series lineup.

As three Cadillac V-Series.R hybrid race cars prepare to start the IMSA WeatherTech SportsCar Championship and FIA World Endurance Championship races at Sebring this weekend, Cadillac is also kicking off a year-long celebration for its V-Series performance sub-brand, which celebrates its 20th anniversary in 2024.

The Cadillac V-Series performance sub-brand was launched at Sebring International Raceway in March 2004 with the race debut and subsequent first win of the CTS-V.R race car in the SCCA Pro Racing World Challenge GT race. This forged a transformative legacy at Cadillac, driven by a symbiotic relationship between the brand’s championship-winning motorsports program and the road vehicles it influenced.

“Nearly 20 years ago, Cadillac made a bold move with V-Series that continues to resonate,” said Global Vice President of Cadillac Rory Harvey. “From the racetrack to the road, V-Series has transformed Cadillac and helped redefine performance luxury for thousands of enthusiasts. Over the next 12 months we will celebrate V-Series with a number of significant moments.”

New products and features commemorating the 20th anniversary of V-Series are planned over the next 12 months, with more information to be announced throughout this period.

The 20th year of V-Series is also a big one for Cadillac Racing, which has expanded with the all-new, electrified Cadillac V-Series.R prototype race car competing internationally in the IMSA WeatherTech SportsCar Championship and FIA World Endurance Championship. The Cadillac V-Series.R represents the start of the fifth generation of V-Series.

In addition, Cadillac will return to the 24 Hours of Le Mans in June for the first time in more than 20 years, competing with three cars for the overall win in the historic endurance race.

The inaugural production V-Series — the 2004 CTS-V — was developed on the racetrack and previewed on Germany’s famed Nürburgring circuit. It was the first of 13 V-Series sedan, coupe, roadster and SUV models to follow.

All V-Series vehicles benefit from the performance technologies and learnings from nearly 20 years of winning on the racetrack.

“Our championship-winning race team brings an uncompromising eye for detail that is channeled into every production model,” said Brandon Vivian, executive chief engineer, Cadillac. “The result are vehicles that weave power, craftsmanship and innovative technologies into engaging, involving driving experiences.”

Today’s lineup includes the CT4-V and twin-turbocharged CT4-V Blackwing, the CT5-V and the supercharged CT5-V Blackwing, and the supercharged Escalade-V. With 682 horsepower (508 kW), the Escalade-V currently wears the crown of Cadillac’s most-powerful production model ever, while the CT4-V and CT5-V Blackwing models offer the ultimate balance of road-going performance luxury and track capability.

The 20th anniversary celebration will conclude at Sebring in March 2024 – 20 years after the first CTS-V won on the track. More information about the anniversary will be shared on Cadillac.com and the Cadillac V-Series Instagram account throughout the year.

In Wake of Another Fed Rate Hike, Unemployment Applications Fall

If Federal Reserve Chairman Jerome Powell is hoping the Fed’s consistent interest rate hikes would slow the job market down, he’s likely been disappointed.

U.S. applications for unemployment benefits were down again last week and remaining at historically low levels.

Jobless claims in the U.S. for the week ending March 18 dropped by 1,000 to 191,000 from the previous week, the Labor Department said in statistics released Thursday.

The four-week moving average of claims also fell, dropping by 250 to 196,250 and remaining below the 200,000 threshold for the ninth straight week.

The statistics follow the news on Wednesday that the Federal Reserve was continuing its year-long fight against high inflation by raising its key interest rate by a quarter-point.

Fed Chair Jerome Powell stressed that the central bank remains focused on fighting high inflation, which could require additional rate hikes, the Associated Press reported.

Yet he also signaled that the Fed might not need to impose a lengthy string of increases if more banks were to reduce their lending to conserve cash. This could slow the economy, hiring and inflation, Powell said.

Last month, the government reported that employers 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation, according to the AP. The unemployment rate rose to 3.6%, from a 53-year low of 3.4%.

In its latest quarterly projections, the Fed predicts that the unemployment rate will rise from its current 3.6% to 4.5% by year’s end, a sizable increase historically associated with recessions.

About 1.69 million people were receiving unemployment benefits in the week that ended March 11, an increase of 14,000 from the previous week. That number is close to pre-pandemic levels.

Expert: Understanding the Stakeholder is Key to Communication

Erich Kurschat was sure he’d done a great job, given a great presentation.

He’d done his research and put together his bullet points and stepped into his boss’s office with every intention of “wowing” her. At the end of the five-minute presentation, she was very glassy-eyed.

“She very kindly said, ‘You’re saying a lot and none of it makes sense to me,’” Kurschat recalled. It reminded him of one of his favorite quotes, from playwright George Bernard Shaw: “The single biggest problem in communication is the illusion that it has taken place.”

Kurschat, a connection coach and the owner of Chicago-based Harmony Insights, which specializes in helping companies improve communication skills among their employees, told the story to an enthusiastic audience at a recent webinar, “You’re on Mute: Why you aren’t being heard and what to do about it,” hosted by the National Association for Business Resources in partnership with the Best and Brightest Programs, Corp! Magazine and MichBusiness.

That brief conversation with his boss showed Kurschat how difficult it can be to put together a cohesive conversation. Her reaction, he said, was “unfathomable to me.”

“For me it was so clear, I had done all this research, in my head I understood exactly what I wanted to say,” said Kurschat, who received a bachelor of arts degree from Kenyon College in Gambier, Ohio. “And yet it turned out I wasn’t speaking a language that was going to make sense to her from the very beginning.”

In his career, he has learned the speaker often gets through such conversations and thinks, ‘I don’t’ know if anything I’ve said landed.’

“What I’m hearing back from people is what I intended to communicate,” Kurschat said. “It’s not the speaker who defines whether something has been communicated effectively, it’s the listener.”

Like so many others, Kurschat had been doing the bulk of his communicating virtually – “I can’t tell you how many virtual conferences, how many virtual networking events I’ve attended,” he said — during the covid pandemic.

For a guy who falls into the 25% to 40% of the general population he says identifies as being on the introverted side of things, Kurschat didn’t necessarily mind being virtual.

“I came together with introverted friends and we realized the last couple of years have been comfortable for us in some ways,” he said. “I was a little bit more comfortable with things. I felt like my social schedule was a little bit lighter, I didn’t have as many obligations, I was connecting with people virtually instead in person, something that can be a little more comfortable for me.”

It was an interesting insight for Kurschat, who firmly believes everyone has different ways of connecting – and communicating – with one another. Knowing that, and learning to adapt to speak a language others can relate to, is the key to good communicating, according to Kurschat.

When the global pandemic came along and many of the conversations people were having were on Zoom or Microsoft Teams or Go to Webinar “much more often than we’d been doing before.”

That’s when a phenomenon that hadn’t been involved before became more prevalent in the discussion. How often, Kurschat asked his audience, has someone started to speak and heard the phrase, “You’re on ute?”

“So many of us have been several seconds, if not minutes, into a conversation or something that we’re saying and someone in the audience is flailing wildly because we’re on mute,” Kurschat said. “That hinders communication. We take ourselves off of mute and we assume we’re being heard thereafter. It’s not necessarily the case. Just because there are words coming out of your mouth doesn’t mean they’re resonating with your audience the way you intended them to.”

As it turns out, he pointed out, up to 93% of the meaning of what people are saying comes through in nonverbal communication. As soon as the video goes off, it makes communication that much more difficult.

“We have to figure out how to get beyond the button,” he said. “Zoom and other platforms put this button out there that says ‘unmute,’ so we hit unmute and we assume what we’re saying is landing with our audience.”

The real work, he points out, comes in the attempt to get beyond the button. The first step is identifying the stakeholder, and then figuring out how that stakeholder can best be communicated with.

“There’s not much we can do without first identifying who we are attempting to serve … Communication involves two people, so with whom am I trying to communicate?” Kurschat said. “We often resort to the Golden Rule when it comes to communication. People communicate in different ways, have different references. There’s this cognitive diversity … how we prefer to connect are aspects of diversity that are less easy to see at times but are just as important.

“If we’re taking a cookie-cutter approach … we are going to connect with a smaller percentage of our audience. A much larger percentage are going to say, ‘I’m not sure I get it,’” he added.

The same principles people apply to communication in their personal relationships can be applied in professional settings, as well.

“I’ve devoted my life to my wife … It’s important I speak a language that’s meaningful and impactful to her,” Kurschat said. “We can do that same sort of thing in the workplace. We should choose a language that’s going to be meaningful to our stakeholders.”

It’s where assessments can come in handy, and there are several out there – Kurschat is a “huge DiSC nerd,” preferring the assessment tool DiSC (Dominance, influence, Steadiness and Conscientiousness) – that function as a common language for “having this vitally important discussion of how we do our best work and how we connect meaningfully with other people.”

According to Kurschat, each person brings a different preference, and that’s where the cognitive diversity comes in.

“If we’re taking a cookie-cutter approach to our communication, we’re only connecting with a small subset of people,” he said. “We have to then come to figure out what makes other people tick, what their tendencies are. Once we understand ourselves, we have to come to understand our audience.”

Kurschat offered a few ways to do that:

  • Author Stephne Covey said, “Seek first to understand, then to be understood.” “It’s so easy to come into conversations regardless of what your professional position is and be so enthusiastic about life and what you do that you begin speaking,” Kurschat said. “The person in front of you is, and should be, the most important stakeholder in your world at that time. If you don’t know what their challenge is, how can you begin to serve them in any meaningful way?”
  • Pay attention to a stakeholder’s work space.
  • Watch the stakeholder’s nonverbal communication “There are different ways you can observe from nonverbal communication and get a sense of what style our stakeholder might prefer,” Kurschat said.

The goal is to gain a starting point, to get a sense of what the audience needs.

“If it’s what we bring naturally, that’s a match made in heaven,” Kurschat said. “But if we have to adapt, it gives us a place to start.

“There is no substitute for sitting down with somebody and asking them very pointed questions,” he added. “Quite often, we’re wearing what we value – our tendencies and preferences — on our sleeves. We just have to be more observant. If we’re not intentional … we apply the Golden Rule and treat others the way we would like to be treated … it’s difficult work.

The challenge becomes how do we … get out of our own way to come to understand this congnitive diversity, this diversity in lived experiences, in how we do our best work and connect with others.

Once you understand you, and understand your stakeholders, the last piece is to adapt.

“So many of us resort to what comes naturally,” Kurschat said. “But what if the effort and time you put into adapting to speak someone else’s language meant they felt seen, they felt heard, appreciated and respected? “I would argue that is well worth any time and effort and discomfort that we have to endure, because someone else walks away feeling seen, heard and appreciated. That’s so valuable.”

Amid Banking Turmoil, Fed Raises Interest Rates Another Quarter-Point

Anyone who thought the trouble experienced by the U.S. banking system in the last couple of weeks would cause the Federal Reserve to slow down on its rate hikes was apparently mistaken.

In the wake of two of the biggest bank failures – Silicon Valley Bank and Signature Bank – in U.S. history, the Fed announced Wednesday it was raising its key interest rate by another quarter-point.

The announcement, which came after the Fed’s policy meeting Wednesday, included support for the state of the banking system.

“The U.S. banking system is sound and resilient,” the Fed said in a statement after its latest policy meeting ended.

Fed officials did allow, however, that the financial stress caused by the two bank failures is “likely to result in tighter credit conditions” and “weigh on economic activity, hiring and inflation.”

It’s also possible the Fed could be close to ending its streak of rate hikes. The Associated Press reported the Fed removed language from its statement that had previously indicated it would keep raising rates at upcoming meetings. The statement now says “some additional policy firming may be appropriate” – a weaker commitment to future hikes, the AP reported.

And in a series of quarterly projections, the policymakers forecast that they expect to raise their key rate just one more time – from its new level Wednesday of about 4.9% to 5.1%, the same peak level they had projected in December, the AP reported.

Wording in the statement seemed to indicate, however, that its fight against inflation isn’t over. It said hiring is “running at a robust pace” and noted that “inflation remains elevated.” It removed a phrase, “inflation has eased somewhat,” that it had included in its previous statement in February.

At a news conference following the policy meeeting, Chair Jerome Powell said, “The process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”

The Fed’s signal that the end of its rate-hiking campaign is in sight may also soothe financial markets as they digest the consequences of the U.S. banking turmoil and the takeover last weekend of Credit Suisse by its larger rival UBS, according to the AP.

The Fed’s benchmark short-term rate is at its highest level in 16 years.

Blackford Capital Named M&A Dealmaker of the Year by ACG Detroit

Grand Rapids, MI, March 20, 2023Blackford Capital, a leading lower middle market private equity firm, today announced the company has been named “M&A Dealmaker of the Year” by the 8th Annual M&A All Star Awards presented by the Association for Corporate Growth (ACG) Detroit chapter.

“We are thrilled and honored to be named M&A Dealmaker of the Year. This recognition is a testament to our growing reputation for excellence in the lower middle market private equity industry,” said Martin Stein, Blackford Capital’s founder and managing director. “Our unique approach to deal sourcing and financing combined with rigorous post-acquisition operational involvement and a highly effective approach to governance has resulted in some of the best and most consistent returns in the lower middle market.”

2022 was one of Blackford’s most successful years since the firm’s founding in 2010. In the past year, Blackford has displayed a high level of deal activity, portfolio company performance, and fundraising trajectory. The firm has built a group of diversified portfolio companies that generate more than $550 million in annual revenues across 10 U.S. states, Germany and China, employing more than 2,000 employees.

Blackford’s current family of seven portfolio companies includes:

  • Mopec, a full-service, full-line manufacturer of pathology and mortuary equipment;
  • Aqua-Leisure Industries, a leader and pioneer in water sport leisure product development and aquatic goods;
  • Design Environments, a full-service interior design, sourcing and installation firm;
  • Starfire Direct, leading direct-to-consumer companies in the firepit and patio sector;
  • Artificial Turf Supply, a manufacturer, distributor and internet-based supplier of high-quality synthetic and artificial turf systems;
  • Burgaflex, a leading provider of tube and hose assemblies for the OEM heavy-duty truck market, and
  • Davalor Mold, an injection molding and tooling business focused on occupant safety components for the automotive industry.

“I appreciate everyone on the Blackford team for their hard work to make this achievement happen and am thankful for the long-standing trust of our investors,” said Stein. “We are committed to helping our portfolio companies grow by continuing to leverage our expertise and experience and to creating more value for our investors.”

The ACG Detroit chapter has approximately 400 members dedicated to driving middle-market growth. Filled with company leaders, private equity professionals, investment bankers, attorneys, advisory consultants and more, ACG Detroit strives to provide the best resources and networking opportunities to build connections and relationships to drive the growing community.

Blackford Capital will be recognized alongside other M&A All Star Awards winners at the ACG Detroit award ceremony on Tuesday, May 2. The award presentation will take place at The Townsend Hotel in Birmingham, Mich., from 6:00 – 8:30 p.m.

GM, Stellantis Among Investors in Holographic Display Startup

MILTON KEYNES, UK —  Envisics, pioneer and global leader in dynamic holographic technology announced receiving over $50 million as part of its Series C strategic funding round.

The round was led by Hyundai Mobis – a strategic investor from the Series B round in 2020 – with additional investments from new strategic shareholders InMotion Ventures, the investment arm of Jaguar Land Rover, and Stellantis.

Envisics’ holographic technology enables market leading Augmented Reality Head-Up Displays (AR HUD), an advanced display technology that is fast becoming a must-have feature for auto makers and consumers alike.

“Since our Series B funding round, we have focused on growing Envisics into a key enabler for next generation mobility experiences,” said Envisics’ CEO and founder, Dr. Jamieson Christmas. “The caliber of our investors demonstrates the significance attached by global automakers to the transformation of vehicle interfaces and interior architectures.

“Our solutions are an exceptional fit for OEM requirements and provide platforms that enable the creation of unique brand experiences,” he added. “Envisics stands apart as the only company that has created and delivered dynamic holographic technology as a viable product at scale.”

Mitchell Caplan, President of Tarsadia Investments and Chairman of Envisics Inc., said his company, early investors in Envisics, has seen “both an acceleration of their technology and a shift in the market towards AR HUD solutions.”

“This latest funding round gives Envisics the runway needed to realize the commercial potential of dynamic holography in the auto industry and beyond,” Caplan said.

Hyundai Mobis is a leading global automotive Tier-1 supplier that is enabling the transformation of the in-car experience through the development and fusion of new technologies.

“Hyundai Mobis is very pleased to continue our strategic partnership with Envisics to jointly develop AR-HUDs and to improve the in-car experience,” said Younghoon Han, Vice President and Head of Electronic Control and Convenience, Hyundai Mobis. “Hyundai Mobis expects to provide next-generation AR-HUDs with cutting-edge holographic technology, and to deliver an intuitive, safe, and convenient HMI to global automakers by strengthening our partnership with Envisics.”

General Motors will be the first company to deploy the Envisics 2nd Generation AR=HUD technology, debuting in the 2024 Cadillac LYRIQ.

“Our collaboration with Envisics is moving into production this year, as we add AR[1]HUD technology to the all-electric 2024 Cadillac LYRIQ,” said Sandy Lipscomb, Senior Manager, Ultifi Design at General Motors. “This innovation will further elevate the driving experience in the LYRIQ, adding a second plane of graphics that gives drivers more immersive information integrated within their natural field of vision.”

Facebook Parent Meta Cutting Another 10,000 Jobs

For the second time in less than six months, Facebook parent company Meta is announcing a round of layoffs.

After cutting 11,000 jobs back in November, Meta has announced it will cut another 10,000 jobs this spring in what CEO Mark Zuckerberg called a “restructuring” in a statement posted to Meta’s website.

In addition to the new layoffs, Meta said it will not fill some 5,000 open positions.

“This will be tough and there’s no way around that,” Zuckerberg said in his message to employees.

The moves come after Meta and other tech companies hired aggressively over the last two years. IBM, Microsoft, Amazon, Salesforce, Twitter and DoorDash have all recently announced layoffs

Zuckerberg said Meta will reduce the size of its recruiting team and make further cuts in its tech groups in late April, and then its business groups in late May.

“As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs — and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision,” Zuckerberg said. “At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.”

Unemployment Claims Drop; Fed Considers Next Steps

After applications for unemployment assistance rose last week by more than they had in the last five months, requests for help dropped last week.

According to statistics released by the Labor Department, applications for unemployment claims in the U.S fell by 20,000 for the week ending March 11. Last week’s claims totaled 192,000, down from 212,000 the previous week.

The four-week moving average of claims also fell, dropping by 750 to 196,500, remaining below the 200,000 threshold for the eighth straight week.

Claims remain historically low despite the continued interest rate hikes put in place by the Federal Reserve in its effort to tamp down inflation. After its February meeting, the Fed raised its main lending rate by 25 basis points, the eighth straight hike.

Fed chair Jerome Powell had indicated more hikes were coming, but the failures of Silicon Valley Bank and Signature Bank last week – two of the top three largest bank failures in U.S. history – have left experts wondering if the Fed would raise rates again.

The Fed’s rate increases are meant to cool the economy, labor market and wages, thereby suppressing prices. But so far, The Associated Press reported, none of those things have happened, at least not to the degree that the central bank had hoped.

Inflation remains more than double the Fed’s 2% target, and the economy is growing and adding jobs at a healthy clip.

The technology sector is one place where the job market isn’t as strong. IBM, Microsoft, Amazon, Salesforce, Twitter and DoorDash have all recently announced layoffs, and Meta – the parent company of Facebook – this week announced it would lay off 10,000 employees, after dropping 11,000 back in November.

About 1.68 million people were receiving jobless aid the week that ended March 4, a decrease of 29,000 from the week before, the AP reported.

U.S. Economy Exceeds Expectations, Adds 311,000 Jobs in February

Chair Powell’s semiannual testimony before Congress and labor market data releases dominated the economic calendar this week.

Powell noted recent data had reversed the softening economic trends observed in the past few months, some of which he attributed to unseasonably warm weather in January. He reiterated the labor market was very tight and inflation well above the Fed’s target. Powell testified “the ultimate level of interest rates is likely to be higher than previously anticipated” and “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes”.

His attitude has changed since the Fed’s decision last November, when he said that how high rates ultimately go and how long they stay there is more important than how much the Fed hikes at any single meeting.  They also contradict Chair Powell’s assertion at the January 2023 interest rate decision meeting press conference that the disinflationary process had begun. Financial markets swiftly raised the odds of a 0.50 percentage points (pp) hike at the March interest rate decision meeting to around 75% following Powell’s testimony. The odds of a 0.50 pp hike fell to below 50% following the release of the softer wage inflation data today, which lessened the likelihood the Fed will have to hike faster to fight inflation.

The U.S. economy added 311,000 jobs in February, exceeding consensus expectations for a 200,000 gain. Prior two months’ employment figures were revised down by a combined 34,000 jobs. More Americans looked for jobs last month, pushing the labor force participation rate higher by 0.1% to 62.5% and the unemployment rate by 0.2% to 3.6%. Average hourly earnings rose 0.2% in February, below forecasts for a 0.3% increase and was up 4.6% from a year-ago in February compared to 4.4% in January.

The Job Opening and Labor Turnover Survey (JOLTS) reported 10.824 million job openings in January, a decline of 410,000 from the upwardly revised 11.234 million vacancies in December. Other details of JOLTS also showed the labor market cooled: The number of hires was unchanged; Employees who voluntarily quit decreased, indicating waning employee confidence in labor market mobility; and Layoffs and discharges increased.

Bill Adams is senior vice president and chief economist at Comerica. Waran Bhahirethan is a vice president and senior economist at Comerica.

T-Mobile Acquiring Mint as Part of $1.35 Billion Deal

BELLEVUE, Wash. – T-Mobile US announced that it has entered into a definitive agreement to acquire Ka’ena Corporation and its subsidiaries and brands: Mint Mobile, a successful direct-to-consumer prepaid wireless brand in the U.S.; Ultra Mobile, a unique wireless service offering international calling options to communities across the country; and wholesaler Plum.

With this deal, the brands’ exclusive use of the Un-carrier’s largest, fastest and most reliable 5G network will continue, the company announced in a statement posted to its website.

T-Mobile is acquiring the brands’ sales, marketing, digital, and service operations, and plans to use its supplier relationships and distribution scale to help the brands to grow and offer competitive pricing and greater device inventory to more U.S. consumers seeking value offerings. The Un-carrier will also be able to leverage Mint’s industry-leading digital D2C marketing expertise as part of its broader portfolio to reach new customer segments and geographies. The Mint and Ultra brands are complementary to the company’s current prepaid service offerings Metro by T-Mobile, T-Mobile branded prepaid and Connect by T-Mobile.

“Mint has built an incredibly successful digital direct-to-consumer business that continues to deliver for customers on the Un-carrier’s leading 5G network and now we are excited to use our scale and owners’ economics to help supercharge it – and Ultra Mobile – into the future,” said Mike Sievert, CEO of T-Mobile. “Over the long-term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile. We think customers are really going to win with a more competitive and expansive Mint and Ultra.”

“Our brands have thrived on the T-Mobile network, and we are thrilled that this agreement will take them even further, bringing the many benefits of 5G to even more Americans,” said David Glickman, founder and CEO of Mint, Ultra and Plum. “This transaction validates our meteoric success and will unite two proven industry innovators committed to doing things differently in the wireless industry.”

“Mint Mobile is the best deal in wireless and today’s news only enhances our ability to deliver for our customers. We are so happy T-Mobile beat out an aggressive last-minute bid from my mom Tammy Reynolds as we believe the excellence of their 5G network will provide a better strategic fit than my mom’s slightly-above-average mahjong skills. I am so proud of the entire Mint team and so excited for what’s to come,” said Ryan Reynolds.

Following the deal’s close, Mint’s founders David Glickman and Rizwan Kassim will remain onboard at T-Mobile to manage the brands, which will generally operate as a separate business unit. Owner Ryan Reynolds will continue on in his creative role on behalf of Mint.

Reynolds talked about the deal in a Twitter post.

“I never dreamt I’d own a wireless company and I certainly never dreamt I’d sell it to T-Mobile.” Reynolds said in the tweet. “Life is strange and I’m incredibly proud and grateful.”


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