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2/5/2010
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$1.50/FEBRUARY 8 - 14, 2010
Vol. 31, No. 6
Study: NE Ohio’s logistics off course Local trade advocate reveals shortcomings within area’s distribution hub; other cities steam ahead By JAY MILLER jmiller@crain.com
A study due out this month from a local economic development cooperative says Northeast Ohio has fallen far behind Columbus and
the Toledo area as a center for the transportation and distribution of cargo from around the world. It lays the blame for that lag on a lack of coordinated regional planning for logistics and freight-related transportation improvements.
“(The study) points out a deficiency we have” in Northeast Ohio, said Ron DeBarr, president of the study’s sponsor, the Northeast Ohio Trade & Economic Consortium, or NEOTEC, in Kent. “It seems like Northeast Ohio is coming up short.” NEOTEC was created in 1996 to coordinate and bolster the economic development efforts of six counties in the southern tier of Northeast Ohio. Since then, it has expanded its scope
by operating a foreign trade zone and by doing research on economic development issues for the broader region. Its report says the Columbus and Toledo regions have done a good job developing their logistics infrastructures by securing state and federal money for highway and rail improvements and by linking with freight railroads. These planning efforts have spurred investments in
freight transit terminals by the railroads, and have attracted new businesses, notably distribution centers for retailers, and new jobs. “By comparison, Northeast Ohio has no such ambitious projects,” the report’s executive summary says. “Nor does it have equivalent governmental, industry and university support for planning, defining niche markets and developing new business See LOGISTICS Page 4
Recall creates inventory log jam for Toyota dealers Vehicles awaiting fix languish on sellers’ lots By DAN SHINGLER dshingler@crain.com
JASON MILLER
Michael Matoney, executive director of New Directions, a nonprofit that provides substance abuse treatment for teens, is encouraged by local foundations’ efforts to foster collaboration among nonprofits.
STRENGTH IN NUMBERS Foundations spearhead collaboration among nonprofits as demand for services rises, and funds become scant By SHANNON MORTLAND smortland@crain.com
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See NONPROFITS Page 6
– Ken Schneider, co-owner, Metro Toyota in Brook Park Mr. Gile said. Fixing customer cars first, though, means his own inventory will wait to be repaired and sold. And that’s a costly proposition. Mr. Gile said about 75% of his inventory of roughly 200 cars is affected by a recall of the problem accelerators, which have been blamed for causing vehicles to speed up unexpectedly. He estimated the average dealer cost of those vehicles at about $25,000 each — leaving him with about $3.75 million in inventory he could not yet sell. Other Toyota dealers are in the same position when it comes to See TOYOTA Page 18
INSIDE Franchisors entering new territories It is estimated that there will be more than 900,000 business-format franchise establishments in the U.S. in 2010, a 2% increase from the previous year. Indeed, some local entrepreneurs are finding that the business model pays off, allowing them to grow faster than they might have been able to on their own. Read Amy Stoessel’s story on Page 13.
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onprofits in Northeast Ohio face two challenging certainties: Money is tight and the need for the services they provide has climbed. To help address those challenges, a cluster of local foundations has established the Cuyahoga County Human Services Strategic Restructuring Pilot Project.
The project is an effort led by 15 foundations that aims to determine ways for local nonprofits to work together to reduce overhead expenses and, therefore, provide more services to the needy, said Denise San Antonio Zeman, executive director of Saint Luke’s Foundation and co-chair of the project. Under the initiative, the foundations involved pooled $400,000 and hired three consultants to take nonprofits
In an era where companies have worked to keep inventory levels low, Cleveland-area Toyota dealers such as Chuck Gile face a pricey dilemma they don’t prepare students for in business school — what to do with inventory that can’t be sold at all. Mr. Gile, co-owner of Motorcars Toyota in Cleveland Heights, was among the dealers who spent much of last week awaiting parts and instructions to fix problem accelerators in many Toyota vehicles. They also watched hundreds of cars sit idle on their lots, awaiting fixes and the chance to be turned from ongoing expenses into revenues the dealers need. Mr. Gile already had determined that the first repair kits he receives would go into cars already owned by customers. “They had confidence in us when they bought the vehicle, and we have to restore that confidence,”
“You can’t tell someone who’s had five Toyotas not to buy another Toyota, because they have faith in the product.”
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