Business Connection January 2013

A publication of

January 2013

Have space, will rent Warehouses in Columbus and Hope give customers flexibility

Contents

Also inside Toyota back on top . . . . . . . . . . . . . . . . . . . . . . . . . 6 Columbus Area Chamber of Commerce . . 10

On the cover

Gary Miller stands on a large forklift in the die storage area of Hope Warehouse. Photo by Greg Jones. Story page 4.

Businesses face health care changes . . . . . . 12 CyberMetrix page 8

On the move . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Mark McNulty column . . . . . . . . . . . . . . . . . . . . 17 Business leads . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Business indicators . . . . . . . . . . . . . . . . . . . . . . . 18

Talking with J.C. Penney’s CEO page 14

2 The Business Connection January 2013

Around the watercooler page 19

Comments should be sent to Doug Showalter, The Republic, 333 Second St., Columbus, IN 47201 or call 812-379-5625 or dshowalter@therepublic. com. Advertising information: Call 812-379-5652. Š2013 by Home News Enterprises All rights reserved. Reproduction of stories, photographs and advertisements without permission is prohibited.

Room to grow

Columbus, Hope warehouses give customers more storage capacity

By Barney Quick

Photos by Greg Jones

At top: Columbus Warehouse. Above: General Manager Melanie Case stands in front of one of the firm’s trailers with its signature blue forklift silhouette.

4 The Business Connection January 2013

Space is a resource for a business, but it’s also a cost. Whether it is more the former or the latter depends on the circumstances of the moment. In some instances, it may make sense to store inventory or equipment on-site.

At other times, it may be impractical or overly expensive. That’s when the area’s locally owned warehouses can be a solution.

There are two such operations: Columbus Warehouse & Cartage and Hope Warehouse. They store items ranging from finished parts headed to customer facilities, to parts in production, food items, machinery and tooling.

Columbus Warehouse has two locations, 80,000 square feet on the city’s north side and 200,000 square feet in Edinburgh. Its current fleet includes around 15 trucks and approximately 65 trailers. The staff includes a general manager, a dispatcher, a safety manager, a warehouse manager for the Edinburgh facility, drivers, warehouse

personnel and an on-site mechanic.

Melanie Case, a staff member since 1990, is the general manager. Susan Barker, the majority stockholder who founded the business in 1981 with her late husband, Ron, is retired from daily involvement. “I’m not a big titles person, but I assumed that position because customers wanted to talk to someone in that capacity,” says Case.

She explains that the reason a safety manager was needed was the proliferation of federal regulations affecting the trucking industry. CSA [Compliance Safety Analysis] 2010, a set of standards established in that year by the Federal Motor Carrier Safety Administration, requires documentation of aspects of trucking, such as driver fitness and performance history, cargo loading and securement, and vehicle maintenance.

Columbus Warehouse has a driver incentive program. “If you meet your compliance criteria for a month, you get a restaurant gift card in a drawing,” Case explains. “If you meet it for three months, you get a $100 bonus. You could conceivably get an extra $500 in a year.”

She says that when she joined the firm, it mainly used independent owner operators, but now has mostly staff drivers. “It’s a mix of over-the road drivers and day cabs,” she says. “Our guys are home every weekend, and they can be home a couple of nights a week.”

Being a woman-owned business in which three of four management positions are filled by women has proven to be a marketing tool. Some companies’ diversity and procurement departments stipulate quotas for the compositions of their vendor bases, and certification by the Women’s Business Enterprise National Council is something they look for. “I dropped it one year, and a lot of people asked, ‘Where’s your renewal certificate?’” says Case. “I haven’t let it lapse since.”

Other than that, the company’s marketing effort is rather low-key and organic. According to Case, “I think people find us through our existing relationships.”

Hope Warehouse, located between Hope and Columbus and accessible by county road, is an outgrowth of the close-knit family and business ties between three brothers and their recently departed father. The Millers had been the proprietors of Hope Hardwoods, a lumber business that patriarch Lowell Miller founded in 1972. They were

originally looking for a place to expand that business, but according to Hope Warehouse manager Gary Miller, “to find properly zoned land in this county to expand a sawmill operation is almost impossible.” One location they had considered, the warehouse’s current site, was a fully functional seed corn plant at the time. They purchased it and began converting it, still mulling its ultimate use. “Companies that found out we’d bought it started asking us about storing inventory,” says Miller. “We kind of fell into it backwards.”

Gary Miller mainly runs operations.

His wife, Sharene, shares part-time administrative functions with another woman. Gary’s brothers, Tom and Ben, are the other part owners. see warehouse on page 7

Top: The Columbus Warehouse Edinburgh location is a hub of activity at the loading docks. Above: Koda, a black Lab mix belonging to Sharene and Gary Miller, greets customers at Hope Warehouse.

Sharene Miller handles office responsibilities at Hope Warehouse.

Toyota on track to become world’s best-selling automaker again

By Jerry Hirsch Los Angeles Times

Toyota Motor Corp. appears poised to regain its position as the world’s largest automaker, a remarkable turnaround after years of safety recalls, huge federal fines and the Japanese earthquake.

In short order, surging sales have put that all in the rearview mirror.

Toyota is likely to sell 9.7 million vehicles in 2012, surpassing secondplace General Motors Co. by more than 1 million vehicles and setting a record for annual auto sales. That’s generating huge profits, with earnings tripling in the latest quarter to $3.2 billion and sales surging almost 20 percent compared with a year earlier.

The U.S. — where Toyota’s reputation suffered most through the recalls — is now a cash cow. Through the first 10 months of the year, the Japanese automaker sold more than 1.7 million cars and trucks in the country, a 30 percent gain and more than double the

industry growth rate.

“Toyota has done some smart things,” said Rebecca Lindland, an analyst with IHS Automotive. “They have concentrated a lot of time and effort on the U.S., which is incredibly important because they make so much money here.”

The Japanese automaker has launched 11 new or completely redesigned models in the U.S. in the last year, including new station wagon and commuter versions of its popular Prius hybrids. At the recent Los Angeles Auto Show, it launched a new-generation RAV4 sport utility vehicle. The current model is an aging vehicle facing stiff competition from newly redesigned offerings such as Ford Motor Co.’s Escape and Honda Motor Co.’s CR-V. Toyota has ramped up its factories in the U.S., opening a Corolla plant in Mississippi and expanding pickup truck manufacturing in Texas. And at the urging of chief executive and foundingfamily member Akio Toyoda, the auto-

Minivans fill the lot at a California dealership.

6 The Business Connection January 2013

maker is looking to inject some panache into its historically bland styling, especially for its Lexus luxury division.

Toyota now accounts for 14.4 percent of the U.S. auto market, up from 12.6 percent during the first 10 months of 2011. In retail — not including rental and fleet sales — the Toyota brand is the biggest in the U.S., outselling GM’s Chevrolet.

The company is expanding its factory network in the U.S. as part of a strategy to manufacture in regional markets and blunt the profit-eating consequences of the Japanese yen’s strong exchange rate with the dollar. It has put $1.4 billion into U.S. factories and equipment in the last year, adding more than 2,700 jobs, on top of the 1,300 positions created in the U.S. the previous year.

Toyota also is shipping more U.S.built vehicles abroad. In the first 10 months of this year, it exported 74,000 U.S.-built cars to Canada and Mexico and 29,000 to overseas markets. It is sending Kentucky-built Camrys to

MCT photo

South Korea and Indiana-built Sequoias to Saudi Arabia. Exports of U.S.-built Toyotas are on track to rise more than 50 percent this year.

Just three years ago, Toyota was the second-largest auto seller in America, with 17 percent of the market, and was closing in on a crippled GM, which was struggling with the stigma of bankruptcy and a federal bailout. But Toyota was derailed in a series of recalls.

Just as the automaker started to recover, it was hobbled by the earthquake and tsunami in Japan, which upended Toyota’s manufacturing even on American soil. Toyota’s share of U.S. auto sales slid to 12.9 percent, well below GM’s and Ford’s.

Several factors have helped Toyota survive the recalls and disaster-related production shutdowns, said James E. Lentz, CEO of Toyota Motor Sales, the automaker’s U.S. marketing arm.

First, there was “the loyalty of our consumers as we went from the financial crisis to the recalls to the tsunami,” he said. “They stayed with us for the entire time.”

Lentz said Toyota also benefited from a leap in the number of redesigned and new models for the U.S. market. The new models included the Prius V station wagon, the Prius C mini-car, a new Avalon full-size sedan, an electric version of the RAV-4, the gas-powered RAV-4 just revealed, and the Scion FR-S sports car, which has received top reviews by the automotive press.

This year, the automaker will introduce 19 new or updated models that it expects will account for about 40 percent of its sales. Last year, new or refreshed models made up just 7 percent of Toyota’s U.S. sales volume, Lentz said.

“This was more than just changing sheet metal,” he said. “There is a lot of improvement to interior and exterior styling, drivability and technology.”

When Consumer Reports issued its annual predicted reliability report in November, Toyota’s three brands — Scion, Toyota and Lexus — swept the top spots. Moreover, 16 of the Toyota brand’s 27 models earned the magazine’s highest rating, and the Prius C earned the top reliability score overall.

warehouse continued from page 5 They opened for business on Aug. 13, 1996. “We had one customer, and it used about 75 percent of our space,” says Gary Miller. “It would be great to expand in an orderly way, but we got our customers from all kinds of places.”

Currently, there are three buildings and a total of 250,000 square feet. Miller says that the separate buildings allow the company more versatility, since it serves a variety of customers.

“Of course, most manufacturing around here is tied one way or another to the automotive industry,” he says.

“Our goal has been to keep our mix 50 percent automotive and 50 percent from other sectors. We don’t always achieve that.”

Hope Warehouse has a well-developed system for tracking each particular stack, row, pallet and item in its buildings. That’s important, given that they deal with tens of thousands of part numbers. The Millers have established 11 fields of identification, such as lot numbers, colors and weights. “Our customers want to know that their inventory is accessible,” says Gary. “In some cases, we’re an extension of their manufacturing facility.” He observes

Andy Dempsey, a 10-year Hope Warehouse employee, moves material into the warehouse.

that “you can wrap your head around this business pretty easily, but you have a lot of responsibility.”

The warehouse stores machines and tooling for various customers. One area is stacked with stamping dies. “We learn a great deal about the industries around

here,” he says. “Manufacturers have to hold on to tooling long after a product model’s production run. For example, for a while we stored an exhaust gauge for a ’65 Mustang.” Some companies have duplicate machines and store the spare at Hope Warehouse. Partially

finished components have become a more common item as more customers embrace lean manufacturing and don’t want to devote their own space to that use.

Salvage companies and insurance companies occasionally approach Miller about payloads from wrecked trucks or shipments that have been refused by receiving parties. The warehouse recently stored a substantial quantity of canned jalapeno peppers from such a situation.

The company uses local haulers for local shipments. Customers make their own trucking arrangements for longer runs.

Marketing consists of radio and newspaper ads. Hope Warehouse also supports area school athletic programs.

Miller is candid about the economic conditions of the last few years. “It’s been a tough climate,” he says. “It definitely requires good planning.”

Reflecting on the main source of fulfillment he derives from running a warehouse, he says, “I’m a service guy by nature. When a company turns its needs over to me and things flow well, that gives me some pretty good satisfaction.”

January 2013 The Business Connection 7

Test-driving innovation

CyberMetrix prides itself on helping engineers find global solutions

By Barney Quick

The interesting thing about a company positioning itself to be a one-stop solution to its customers is that, as CyberMetrix President Peter Palladino says, “The more things we do, the more we’re asked to do.”

The progression of its product offerings from its 1992 inception has been from software for engine testing, to the hardware to go with it, to turnkey test cells delivered to sites of customers’ choosing, to testing services provided at CyberMetrix. That momentum is fueling even further innovation.

CEO Christine Mullholand says that consulting services, such as test facility design, controls, data acquisition and assessing test enterprise effectiveness, are in the works. “Our mix provides virtually everything that engineers need,” she says. “It allows us to compete globally against the best in the business.”

“The three main things engineers try to optimize are performance, fuel economy and emissions,” says Executive Vice President Jack Riester. He says that engineers strive for improvement in all three areas and avoid trade-offs that sacrifice one or more of them.

To that end, CyberMetrix tests not only whole engines, but various aspects of them, such as turbochargers and emissions systems.

One test area at the company’s facility heats exhaust systems to the point that, according to Riester, “everything in the enclosed space is glowing red.

Then we spray water on it, to simulate the condition of a passing vehicle throwing a spray on a rain-soaked highway,” thus providing data on the behavior of materials in situations of abrupt environmental change.

Other types of CyberMetrix tests determine the efficacy of such considerations as durability, cold starting, particulate emissions, filter management systems and gas blending.

The company’s core technologies — data acquisition and control, systems integration, modeling and simulation, 8 The Business Connection January 2013

photos by Joey Leo

At top: Garrett McCormick and Cherian Olikara work at the DAQCenter, a data acquisition system utilizing virtualization technology to reduce the number of computers needed, saving energy, cost and space requirements. Above left: Pete Palladino and CEO Christine Mullholand sit in the main lobby at CyberMetrix in Columbus. Above center: Wesley Eastwood works at his soldering station. Above right: Paul Hapunowicz and Garrett McCormick examine products.

and data analysis — build on one another. The knowledge accumulated from years of building engines and testing them using older methods has been used to create reliable models on computers. Riester says this has dramatically reduced the time it takes to develop a new engine.

Computer networking also makes information available in real time. “If an engine is built in England, but the chief engineer is in Columbus, he’d like to know test results in a matter

of minutes,” says Riester. He further notes that CyberMetrix can remotely support its test-cell systems anywhere in the world.

When test facilities are dispersed all over the world, data integrity is obviously of paramount importance. “At the end of the day, the question ‘How good is my engine?’ has to be answered accurately,” Riester explains. “When you test a given engine in one location, say, Brazil, a test of that engine in another country, say, China, has to be exactly

the same. Not close; exactly the same.”

The staff at CyberMetrix is just a little under 50 people. They work flexible hours largely driven by the particular projects on their plates at any given time.

Much of its activity is undertaken with partners. Force Construction, for instance, was heavily involved in the delivery and setup of a turnkey test cell provided to Cummins Inc. Since what CyberMetrix does is rather unique, training and education

needed to prepare for a position there is very broad and likewise a bit unconventional.

“There are various ways to go about cultivating an employee at a company like ours,” Riester observes. “”You can teach a mechanical engineer to write software, or you can have a software engineer learn about engines. In our experience the various members of the team have to have a broad set of skills.”

The firm recruits at area engineering schools, such as Rose-Hulman and Purdue. Riester notes that, just as soonto-be-graduates have a highly competitive attitude toward career days, “you have to practically build a trade-show exhibit to stand out from the other companies scouting for these people.”

CyberMetrix recently entered into a $2.9 million licensing agreement with Purdue University’s School of Mechanical Engineering. Students at Purdue’s Ray W. Herrick Laboratories will be able to use the company’s CyFlex software, providing them with a substantial advantage in terms of experience when they graduate and begin careers.

The company’s first customer was Cummins, and the working relationship

with CyberMetrix’s particular niche.

Its major competitors are in Austria, Germany and Belgium.

While CyberMetrix has hundreds of test systems in technical centers in the U.S., Britain, Mexico, Brazil, India and China, the company feels it’s just beginning its global expansion. To that end, it recently hired Robert McFarland as vice president of business development.

He was previously the founder and CEO of Digalog Corp. and a strategic planning director at AVL. He will help develop the firm’s global sales force.

The company feels that its competitive edge lies in its flexibility. “We can reconfigure our products to meet virtually any testing requirement,” says Riester. “Customers put a high value on our flexibility.”

Mullholand says a great deal of the satisfaction she derives from her role at CyberMetrix comes from the caliber of the staff. “It’s just a delight to be around people who think at that level,” she says.

Riester says that’s the source of his confidence in the company’s prospects.

“We’re successful largely because we have some of the best and brightest in the industry.”

Adam Watson adjusts the setting on a fuel measurement system computer.

between them is still close. Mullholand, Palladino and Riester are all Cummins alums.

Since then, its client list has grown to include some of the nation’s most notable engine and powertrain manufacturers and research organizations such as the Indiana University cyclotron

facility, among others. One of its more interesting projects has been for the U.S. Geological Survey. CyberMetrix developed a system to monitor the Earth’s magnetic field under conditions such as solar storms.

Riester points out that there is no other company in the United States

At this special time of the year we would like to thank all of our clients for their patronage over the last 50 years and wish everyone

(812) 372-7829

Jeff Bohman

jboham@jwinsurance.com

Mike Bonham

Front Row Left to Right: Faye Michael, Lori Burton, Suzie Shaw, Connie Oliver.

Middle Row Left to Right: Andy Simms, Paul Schultz, Steve Boggs, Rain Barker, Tom Currens Back Row Left to Right: Steve Meredith, Bill Glick, Don Prince, Bob Banister, Scott DeDomenic.

Not Pictured: Bob DeDomenic.

Mbonham@jwinsurance.com

Securities offered by J.J.B. Hilliard, W.L. Lyons, LLC Member NYSE. FINRA & SIPC

436 Washington Street Columbus IN 47201 • 812-372-7892

January 2013 The Business Connection 9

chamberc January 2013

New members Indoor Comfort Solutions Bryan Blankenhorn 812-418-8180 bhorn70@hotmail.com 919 23rd St. Columbus, IN 47201 Stonegate Mortgage Ken Hundley 812-565-1072 khundley@stonegatemtg.com 4550 Jonathan Moore Pike Columbus, IN 47201 Tastemakers & Taskmasters Steven Joslin 812-599-8152 stevenjoslin@msn.com 431 Sixth St. Columbus, IN 47201 Yo MaMa Frozen Yogurt and More Co. Beth Miller 812-799-0560 froyomama247@gmail.com 3780 W. Jonathan Moore Pike Columbus, IN 47201 Bannockburn Securities LLC Richard K. Jones 513-745-0723 10250 Alliance Road, Suite 214 Cincinnati, OH 45242 www.bannockburnsecurities.com Humphrey CPA Group LLC Rod Humphrey 317-435-3447 445 N. Pennsylvania, Suite 941 Indianapolis, IN 46204 www.humphreycpagroup.com

Monthly publication of the Columbus Area Chamber of Commerc

Facilitated by Jack Hess

Entrepreneurship & Innovation Series

Igniting the power of your

Starting in February, join other entrepreneurs and small business owners for a oneof-a-kind experience. In today’s world of big business, many entrepreneurs at one time or another may feel that they are left sitting on the sidelines. Now you can have a chance to learn key practices to help you build and grow your business.

FUSE is designed to teach entrepreneurs

and small business owners important principles of entrepreneurship and innovation that may be applied to their own business.

They will then have the chance to apply these principles to their business and review them with experienced mentors.

This series will consist of eight small group break-out sessions facilitated by Jack Hess, Institute for Coalition Building, and

is only bein is limited. T for Columbu members an includes all and meals. P able to a lim pay for serie www.fuselea

Chamber annual meeting The Chamber is pleased to announce our 2013 annual meeting keynote speaker, Peter Kageyama. He is the co-founder and producer of the Creative Cities Summit, an interdisciplinary event that brings together citizens and practitioners around the big idea of the city.

Kageyama is the former president of Creative Tampa Bay, a grass-roots community change organization. He has spoken all over the world about bottom-up community development and the amazing people who are making change happen. He will be discussing his book: “For the Love of Cities.”

The annual meeting will take place on Tuesday, Feb. 26, at the Clarion Hotel & Conference Center. Registration for this community event can be made at www.columbusareachamber.com/events.

More information is available at www.columbusareachamber.com.

www.columbusa

connection

ce • 500 Franklin Street • Columbus, IN 47201 • 812-379-4457

r small business.

ng sold as a series. Registration The enrollment fee is only $495 us Area Chamber of Commerce nd $595 for nonmembers, which sessions, instructional materials Partial scholarships will be availmited number of participants to es event fees. Register online at adership.com.

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Growing BUSINESS. Growing people.

Third House will be in session The Columbus Area Chamber of Commerce’s annual Third House sessions will begin at 7:30 a.m. Monday, Jan. 28 in the Cal Brand Meeting Room at City Hall. These sessions are open and free to the public. The Third House Sessions provide an outstanding opportunity to meet the legislators who represent you and your businesses during the legislative session. If you have any questions, please call the Chamber at 379-4457.

Ribbon cutting Tastemakers & Taskmasters 430 Sixth St. 599-8152 Mayor Kristen Brown performed the ribboncutting ceremony for Tastemakers & Taskmasters. Owners Maria Grote and Steven Joslin, family, customers and members of the Chamber Action Team were also present.

Tastemakers & Taskmasters is a design-based service company that includes interior design, retail design, real estate styling, organizational services and event planning.

Calendar Register for all Chamber events at www.columbusareachamber.com/ events or call 812-379-4457.

Jan. 11 — TEN Talk. 8 to 9:30 a.m., Visitors Center. Free to attend; reservations required Jan. 28 and Feb. 4, 11, 18, 25 — Third House Session. 7:30 to 9 a.m., City Hall. No charge to attend.

Feb. 8 — TEN Networking Roundtable. 8 to 9:30 a.m., Visitors Center. Reservations requested.

Save the date Columbus Area Chamber of Commerce Annual Meeting 11:30 a.m. to 1:30 p.m.

Feb. 26 Clarion Hotel and Conference Center Featuring Peter Kageyama Register online at www.columbusareachamber.com/events

By Joyce M. Rosenberg The Associated Press

NEW YORK — Rose Wang looks at her staff of 70 employees and wonders if she’ll have to lay off some of them to comply with the health care law.

The owner of Binary Group Inc., an information technology firm based in Alexandria, Va., is one of many small business owners who will be required to provide health insurance for her staffers under a provision of the law that goes into effect on Jan. 1, 2014.

Wang already provides insurance, but she has struggled with premiums that have soared as much as 60 percent annually, so she requires employees to contribute to their coverage. She’s worried because she doesn’t know how much she’ll have to pay under the Affordable Care Act. Wang’s worry is a gut-wrenching dilemma that many small business owners are concerned that they may face.

Companies must decide before the start of 2014 what they’ll do to comply with the law. Right now, no one knows how much the insurance will cost, and owners aren’t sure if they’d be better off not buying it and paying a government penalty of $2,000 per worker. Some owners are even threatening to defy the law. The big challenge for most small businesses is that they just don’t have enough information to make concrete plans.

If Wang can’t afford the insurance, she says that some of her staffers may have to go.

“I would have to say, ‘Look, guys, you’re family to me in many respects, but this family also depends on having the kind of cash flow available to keep the lights on and keep employing most of you,’” Wang says. “It would have to come down to that.”

Not providing insurance and paying the penalty is another alternative.

“That’s what we’re going to decide by 2014, if the math is so obvious it’s cheaper for us to do the $2,000 per head,” she says.

The health care law generally requires that companies with 50 or more full-time workers provide health insurance for their staffers. If they don’t provide any insurance, they’ll have to pay the $2,000 penalty for each worker on their payroll. If they buy insurance, but it doesn’t meet the government’s tests for affordable coverage, they’ll have to pay $3,000 for each worker whose coverage isn’t deemed affordable. If that seems confusing, that’s just the beginning. There’s a labyrinth 12 The Business Connection January 2013

Business owners face health care dilemma Rose Wang, owner of an information technology firm, worries about the changes in health care requirements.

of other details that include plans that can be “grandfathered” in and a maze of other fine points that small business owners are trying to decipher.

In some industries, owners are considering cutting employees’ hours to under 30 a week, which would take those workers out of the jurisdiction of the law. Restaurant owners are looking at that option after Darden Restaurants Inc. said in October it was going to try changing the mix of full-time and parttime workers at its restaurants, including Red Lobster and Olive Garden.

When full-timers leave, Darden will consider replacing them with part-timers, spokesman Rich Jeffers says.

Hurricane Grill & Wings, a restaurant franchise with five companyowned restaurants, is also thinking of lowering the number of hours that its servers and other hourly employees work. That would exempt them from having to be covered under the law. President Martin O’Dowd says the company would have to monitor the quality of its service and food to be sure there’s no impact on customers if

workers are unhappy with their shorter work-week. But he’s not anticipating any problems.

Hurricane CEO John Metz recently said the company was considering adding a 5 percent surcharge to customers’ bills starting in 2014 to cover the costs of health care for full-time workers. But since the plan was reported in the news media — and generated negative comments on some websites — O’Dowd now says that it was “hypothetical.”

“That is not in our plans,” he says.

Even though some key details of the health care overhaul haven’t been worked out — like how much insurance offered through the exchanges will cost — there is already a lot of information to sort through. Figuring out the details is keeping human resources consultants and benefits brokers busy.

“It is like a sleeping giant woke up,” says Pamela Ross, owner of New York-based Atlantic Human Resources Advisors. “They are very much paying attention because so many regulations kick in for 2014.”

There are so many unknowns about

Associated press

the law that Campus Cooks is hiring an employee to determine what the company’s options are and how much they’ll cost. The provider of dining services for fraternity and sorority houses in the Midwest, Florida and Texas, has 125 employees.

“I don’t know what’s in the law,” says Bill Reeder, president of the Glenview, Ill.-based company. “I’m really hiring someone whose job, in part, for the next six months is to figure out this thing.”

Reeder says he can’t afford to offer insurance now, and that’s something he regrets. And he says he might have to pay the penalty if turns out to be cheaper than providing coverage.

He says he knows this much: “I’m not approaching this by cutting hours or raising prices.”

Whether Reeder pays the penalty or buys coverage, Campus Cooks will have to come up with money to cover the expense. “We have to look at our business and see how to run it more efficiently, We have to renegotiate our see health care on page 13

Ellen Macy has joined JCB as assistant vice president, trust officer. She has over 18 years of banking experience, most recently with First Financial Bank, and formerly worked at Irwin Union Bank and Trust, where she held the position of assistant vice presiEllen Macy dent, trust officer.

In her new role with JCB, she will be responsible for the administration of investment management and trust accounts, including trusts, estates, guardianships, agencies and retirement plans. She attended Indiana State University and completed series I, II and III of the Cannon Trust School.

Her office will be at the JCB West Hill Banking Center on Jonathan Moore Pike.

Keith Luken has joined MainSource Bank as a mortgage loan originator for the Columbus area. He will be responsible for promoting the bank’s growth through the expansion of mortgage lending and cross-selling other products and services.

Luken attended Ball State University and Sandler Sales Training and has 33 years of banking experience.

Aaron Miller, assistant chairman of humanities in the School of Liberal Arts & Sciences at Ivy Tech health care continued from page 12 food costs, cut office expenses, streamline our technology,” he says.

Some small business owners, who already provide insurance, are looking at the law and weighing paying penalties against continuing to provide insurance that is more expensive.

One risk though is that dropping coverage may send a message to employees that the owner doesn’t care about them.

That could lead some workers to quit.

“They’re looking at that and saying, ‘Well, if I stop providing benefits for my people, am I going to lose good

Community College – Columbus/Franklin, has received a doctorate in history from Miami University in Oxford, Ohio. His dissertation title was “Glorious Summer: A Cultural History of Aaron Miller Nineteenth Century Baseball.”

Steven Bardonner, chairman of the mechanical engineering technology, engineering technology, and design technology departments at Ivy Tech Community Steve Bardonner College – Columbus/ Franklin, has been promoted to interim dean of the School of Technology & Applied Science and Engineering Technology. As interim dean, he will represent the school and the college to students, parents, professional organizations, secondary and post-secondary articulation partners, business and industry, and other relevant constituencies.

Dr. David Thompson was recently named Columbus Regional Hospital chief of staff. Nominated by his peers and voted into office by the active medical staff, Thompson will serve a two-year term. A surgeon with Southern Indiana Surgery, he has been chief of staff-elect for the past two years.

He succeeds Dr. Jason May, an emergency medicine physician with Emergency Physicians Inc. of Columbus, who moves into the pastchief-of-staff role.

Dr. Amanda Dornfeld was named chief of staff-elect and will fill the chief of staff position in 2015. The family practice medicine physician with Sandcrest Family Medicine is the first female physician to be elected chief of staff-elect in CRH history.

Columbus resident Wendell Solomon was honored for achieving 3 million miles of safe driving at J.B. Hunt Transport. He is one of only 49 J.B. Hunt drivers to achieve this honor. A J.B. Hunt truck driver since 1989, he currently drives for the comWendell Solomon pany’s Intermodal business unit. As a thank you for his service to the company and commitment to safety, J.B. Hunt awarded him a $20,000 bonus.

Dana Carson of Re/Max Real Estate Professionals recently was named to the Re/Max Hall of Fame, a recognition awarded each year to successful agents who have earned more than $1 million in commissions during their careers with the company. In 2011, Dana Carson less than 2 percent of all Re/Max affiliates earned the award.

Carson has been working in the real estate industry more than 25 years and has extensive experience in residential sales, relocation and land.

people to my competitors who may not be taking the same approach?” Ross says.

Companies that won’t be bound by the new law but that do provide insurance will be looking to see if they can save money through the exchanges.

Matt Helbig provides insurance to the 10 full-time employees at Big River Running Co., his chain of three running and walking shoe stores in the St. Louis area.

He’s waiting to see the cost of insurance on the exchanges before deciding what to do.

“If it were cheaper, we’d probably drop insurance through us, and we’d probably give them a raise to cover what we had been covering.”

Some small business owners are thinking about paying the penalty because they genuinely believe they won’t be able to afford to buy insurance, says Allen Nassif, president of Northern Benefits, an insurance brokerage serving small businesses in New England.

Nassif also says he has clients who have more than 40 employees and who are holding back from hiring because,

Merrill Smith of Greensburg has joined Letts Hardware and Equipment as a sales representative. A graduate of Purdue University School of Agriculture, he has worked in the agriculture field his entire career and is a former sales representative for Premier Swine.

Brian Isaacs, a sales specialist with Aquatic Control Inc. in Seymour, recently received a 20-year service award, and Joey Leach, an aquatic biologist and applicator, was recognized for 10 years of service to the company.

Isaacs works in sales to distributors and applicators in Indiana, Illinois and Kentucky. Leach is a licensed aquatic applicator serving east-central Indiana, a staff biologist and does plant identification, water testing and fish surveys.

Jay and Lois Johnson, owners of Building Concepts of Indiana in Columbus, recently received the 2012 Commercial Building of the Year Award from Borkholder Buildings in recognition of work done in connection with the new Amity Fire Station in Johnson County.

One of 50 authorized Borkholder dealers in five Midwestern states, Building Concepts is a general contractor specializing in pre-engineered building design and construction.

Allen Purtlebaugh has recently joined Columbus Carpet & Linoleum, LLC. He has over 12 years experience in the flooring industry. He will assist clients by providing budgets, estimates, custom design and project management from conception through completion.

Dustin Craig has been named president of Papa’s Family, parent company of Papa’s Deli locations on Third Street and Washington Street and Papa’s Grill on Jonathan Moore Pike.

Owners Harry and Patsy Hill founded the company more than 20 years ago.

— Staff Reports

when they reach the 50-employee threshold, they’ll have to start paying for insurance.

But some owners are not worrying about the cost.

“We think it’s important to provide our employees with health care,” says Chap Gage, president of Susan Gage Caterers in the Washington, D.C., area.

The company already provides insurance for its 110 employees, and Gage doesn’t see the law as affecting the business.

“We’ll react and comply with everything we need to do,” he says.

January 2013 The Business Connection 13

associated press photos

A customer looks at merchandise at a J.C. Penney store in New York.

J.C. Penney CEO tries to change the way we shop

By Anne D’Innocenzio AP Retail Writer

NEW YORK — J.C. Penney CEO Ron Johnson seems unfazed that the department store chain’s mounting losses and sales declines have led to growing criticism of his plan to change the way we shop. Perhaps that’s because this isn’t the first time during Johnson’s 30-year career that he’s attempted what seemed impossible.

People predicted he’d fail at selling high-end housewares and designer dresses at discounter Target, but shoppers still flock there years later for cheap chic goods. Likewise, almost no one believed that the Apple stores he designed to sell the consumer electronics giant’s gadgets would make money. Yet Apple’s retail operations have become the most profitable in the industry.

At the time, both decisions seemed radical. Now, they each are viewed as strokes of genius.

But Johnson’s latest gamble is shaping up to be his biggest. He’s not 14 The Business Connection January 2013

Ron Johnson

only aiming to reverse the fortunes of Penney, a 110-year-old chain that has had sales declines in four of the past five years as it’s struggled to adapt to changing consumer tastes and shopping habits. He’s also attempting to do

something no other retailer has before: reinvent the department store from the ground up.

Since leaving Apple to become Penney’s CEO, Johnson has been overhauling everything from the retailer’s pricing to its merchandise to its stores.

He got rid of most sales. He’s brought in hip brands. And he’s replacing rows of clothing racks with small shops that make the stores feel like outdoor mini malls.

But since Penney started the changes, the chain has reported three consecutive quarters of big losses on steep sales declines. Its stock has lost more than half its value. Its credit rating is in junk status. And critics are beginning to doubt that Johnson has what it takes to make the chain cool.

“He’s trying to start a retail revolution without an army of consumers behind him,” says Burt Flickinger, III, president of a retail consultancy.

“Penney will suffer dire financial and competitive circumstances as a result.”

But Johnson, 53, a Midwest native

who speaks about his vision for J.C. Penney Co. with boyish enthusiasm, is undeterred: “Lots of people think we’re crazy. But that’s what it takes to get ahead.”

The beginnings Virtually no one questioned Johnson’s savvy when it was announced in June 2011 that he was leaving his role as Apple Inc.’s senior vice president of retail to take over the top job at Penney, a chain that had gained a reputation in recent years of having un-hip, boring stores and merchandise. To the contrary there were lofty expectations for the man who had made Apple’s stores hip places to shop and before that, pioneered Target Corp.’s successful “cheap chic” strategy.

Johnson, who says that his biggest inspirations in life are “sunrises” and “smiles,” spent several months before becoming Penney’s CEO traipsing across the globe to find ideas on how to transform the company. On the itinerary: meetings with executives at

trendy retailers and designers such as Gap, J. Crew, Diane Von Furstenberg and Ralph Lauren.

During these trips, Johnson hatched an idea to make Penney stores appealing not only to its core of middleincome shoppers, but also to new groups of younger and higher-income customers. Johnson decided to focus on three areas: price, merchandise and the stores.

Johnson started as Penney’s CEO in November 2011. In his first couple of months in the role, he hired big-name executives whom he trusted. Among them, Michael Francis, a top Target executive whom he’d met while he worked there, was brought in as president to help redefine Penney’s brand.

Johnson’s boldest move came on Feb. 1 when he rolled out new pricing in Penney’s 1,100 stores. That’s virtually unheard of in retail, where significant changes are typically tested in a few locations for several months before being rolled out nationally.

Johnson says that Penney didn’t have several months to waste. Testing would’ve been “impossible,” he says, because Penney needed quick results.

Johnson’s plan was designed to wean customers off the markdowns they’d become accustomed to, but that eat into profits. He ditched the nearly 600 sales Penney offered throughout the year for a three-tiered strategy that permanently lowered prices on all items in the store by 40 percent, and offered monthlong sales on select items and periodic clear-

ance events throughout the year.

Penney, based in Plano, Texas, also stopped giving out coupons and banished the words “sale” and “clearance” in its new “fair and square” advertising campaign. The ads were colorful and whimsical: In one spot, a dog jumped through a hula hoop that a little girl held. The text read: “No more jumping through hoops. No coupon clipping.

No door busting. Just great prices from the start.”

Teaching shoppers

Johnson’s plan received a warm reception at first. Investors began pushing Penney’s stock up after he announced the plan. It rose nearly 25 percent to peak at $43 in the days after the plan was rolled out in February.

Analysts used words like “visionary”

and “revolutionary” to describe the plan.

The honeymoon didn’t last. After most of Penney’s coupons and sales disappeared, so did its customers. And the ads didn’t help: They were praised for being entertaining, but criticized for not explaining the new pricing.

Walter Loeb, a New York-based retail consultant, says Johnson acted in haste and sprang the changes on customers too soon. “The customer isn’t accustomed to such drastic change,” he says.

The first sign that things were falling apart came in May when rival Macy’s Inc. told analysts that sales were rising at its stores that share malls with Penney locations. A week later, Penney posted a $163 million quarterly loss.

Revenue plunged 20 percent to $3.15

billion. The number of customers visiting stores fell 10 percent.

Wall Street didn’t like the changes any more than Main Street did. A day after it posted the loss, Penney’s stock fell nearly 20 percent — its biggest one-day decline in four decades — to $26.75. That same month, Standard & Poor’s Ratings Services lowered its credit rating to junk status.

Johnson asked investors to be patient and reiterated his confidence in his plan. But a few weeks later, he fired Francis, who’d been in charge of marketing the new pricing. Johnson, who wakes up at 4 a.m. without an alarm clock, took over that responsibility and brought back the word “sale” in ads.

But things kept getting worse.

So six months after he rolled out Penney’s plan, Johnson tweaked pricing. On Aug. 1 — just days before Penney posted another big loss on a second consecutive quarter of disappointing revenue — Johnson eliminated one tier of the pricing plan: the monthlong sales. He also brought back another taboo word: clearance.

Johnson says the original three-tier strategy was too confusing for customers. “We got too tricky,” he said.

He also vowed to better communicate Penney’s pricing to shoppers.

As part of that, Penney rolled out ads that were in stark contrast to the spots it used to introduce the plan. For instance, a TV spot touted free haircuts for students during the back-to-school see jcp on page 16

From 1 store to 1,100 A look at J.C. Penney’s milestones: 1902: James Cash Penney, son of a Baptist preacher and farmer, opens The Golden Rule, a dry goods and clothing store in Kemmerer, Wyo. The name was based on his guiding principle of building a business through serving the community with fair dealing and honest value.

1913: Incorporated in Utah as the J.C. Penney Co. Inc., and the Golden Rule name was phased out.

1914: Headquarters moves from Salt Lake City to New York City.

1929: Begins selling shares as a publicly traded company.

1951: Store sales exceed $1 billion for the first time.

2009: Opens its first store in Manhattan.

1971: James Cash Penney dies at age 95.

2010: Becomes the exclusive retailer of Liz Claiborne and Claiborne in the U.S. and Puerto Rico. Exits catalog business. Introduces mobile coupons.

1979: Catalog sales pass $1 billion for the first time.

2011: Ron Johnson, a former Apple executive, becomes CEO.

1992: Headquarters moves to Plano, Texas.

2012: Implements a new pricing strategy that eliminates hundreds of coupons and sales in favor of everyday lower prices. Begins rolling out new shops in stores to turn the stores into mini-malls of sorts.

1963: Issues its first catalog.

1994: Launches jcpenney.com, its online store.

2005: Penney’s e-commerce business surpasses $1 billion in sales.

— Associated Press

January 2013 The Business Connection 15

JCP continued from page 15 shopping period.

“We thought, ‘Why are we trying to teach customers a new language to shop?” Johnson told The Associated Press. “We’re just trying to be straightforward.”

But his decision to get rid of monthlong sales hurt more than it helped.

On Nov. 9, the company posted its third consecutive big quarterly loss and revenue decline. Johnson says one big factor that dragged sales down was the elimination of the monthlong sales, which he says confused shoppers who like to compare prices.

Johnson says Penney lost $20 million a week in sales associated with getting rid of the monthlong events for a total sales loss of $260 million for the quarter. On the news, Standard & Poor’s dropped Penney’s credit rating deeper into junk status.

Johnson, who says the company will now show the suggested price of clothing from other manufacturers on price tags alongside Penney’s price, doesn’t seem to be panicking. In a meeting with analysts following the release of the company’s results, he chalked Penney’s poor performance up to a learning experience.

“This was another quarter of unbelievable learning for us at J.C. Penney,” he says. “Each quarter, we learn a lot, we adapt, we try to move forward.”

Store of the future

Some critics say Johnson’s plan is falling apart because he chose to overhaul pricing before working to improve Penney stores. Indeed, Penney stores have long been seen as unappealing and it’s merchandise as dowdy.

But Johnson says the focus on pricing was no mistake. One of the men he has admired most in his life was Steve Jobs, co-founder of Apple and his former boss. He says Jobs taught him the importance of doing things well “one at a time” and “not getting ahead of yourself.”

Johnson, who wears khakis and jeans to the office most days, says he knew he wanted to bring in hip names like Vivienne Tam and Joe Fresh to Penney.

But those brands, Johnson reasoned, wouldn’t put their wares in stores as long as Penney offered hundreds of sales each year.

“Nobody is going to put their brand in a place (where) they’ll devalue it or take 50 percent or 60 percent off and sell it on coupons,” he told investors in September.

16 The Business Connection January 2013

With pricing in place, Johnson shifted his focus to Penney’s stores and merchandise. In the fall, Penney began replacing nearly half of its merchandise in stores with new lines like Betsey Johnson’s Betseyville, which features trendy items such as $45 leopard print platform pumps and $24 lace rompers.

To showcase Penney’s new merchandise, Johnson also reimagined its stores into mini malls of sorts. He plans to divide stores into 100 shops that highlight different brands or types of merchandise. Each shop will be like its own small store, with different merchandise and signage.

Surrounding the shops will be extrawide aisles that Johnson calls “streets.”

Along those pathways will be ice cream and coffee bars and wood tables with built-in iPad tablet computers that shoppers can use to surf online. In the middle of it all, a Town Square will offer activities like Pilates.

Johnson says the stores, which will carry about 25 percent less merchandise, will be places where shoppers can hang out. The hope is that the longer they stay, the more they’ll buy.

Penney already has started the remake of its stores. In recent weeks, 10 shops have been launched for such brands as Liz Claiborne, Levi’s and Penney’s new JCP line of casual clothes

in 700 of its 1,100 stores. Johnson aims to have 100 shops in those 700 stores by the end of 2015. The remaining 400 stores are in small towns and won’t feature the full makeover.

In September, Johnson took 300 analysts and reporters on a tour of a 30,000-square-foot prototype of the complete Penney store of the future, which Johnson calls the “art studio.”

He says he likes to stop by the prototype, on the third floor of a Penney store in a Dallas mall minutes from Penney’s headquarters, before he goes to work each day.

Penney is starting to see some positive results from the makeover it began.

The company says so far that it has converted about 11 percent of the

floor space to shops-within-stores. The shops’ average sales are more than double the sales in the rest of the store.

And some customers are beginning to come back. Michael Pelaez, a 27-yearold who rarely shopped at Penney before the new shops opened, says he likes the retailer’s new Levi’s shop and its predictable pricing. “It’s forcing me to browse,” says the pharmaceutical supplier worker who lives in Hialeah, Fla. “What used to be an hour and a half at the mall has turned out to be an hour and a half at J.C. Penney.”

That some customers are responding to the redo is no surprise to Johnson, who insists his plan will work. “It’s really hard to transform things,” he says. “But that’s what we’re going to do.”

Not everyone believes that’s possible.

Michael Exstein, an analyst at Credit Suisse, recently downgraded Penney’s stock to “underperform” from “neutral.” Exstein wrote that Penney “must find a way to significantly slow the sales decline within the next six months.”

But Johnson still has supporters.

During an interview with CNBC after the company’s last earnings report, William Ackman, an activist investor whose hedge fund Pershing Square Capital Management has a 17.8 percent see jcp on page 17

coach’s corner

Creating a culture of accountability One of the most common complaints that I hear from business owners and their teams is the lack of accountability in the business. Like everything else in a business, accountability starts at the top, and business leaders need to model accountability for their teams and then begin the process of Mark McNulty building accountability systems throughout the organization.

Being accountable to your team means doing what you say, when you say you will do it, and owning your results. Building accountability systems takes time, but without them, it is hard to leverage your team to grow your business and your profits. In addition, lack of accountability will drive your best employees away and make it easy for your worst performers to hang around and help you slowly shrink and devalue your business.

“There is nothing hardhearted about holding people accountable for high standards and making tough, agonizing decisions concerning yesterday’s heroes who no longer contribute. It’s tough love. Leaders must care enough about their people, their futures, and the welfare of the organization. You’re not getting paid to maintain anyone. You are paid to lead and stretch them. Do your jcp continued from page 16 stake in Penney, said that he’s giving the turnaround several more years to work.

He also said, however, that there is a limit to how far the board and the CEO would let sales fall.

“If it’s not working, we will make changes,” says Ackman, who joined Penney’s board in early 2011 and pushed other board members to choose Johnson as CEO last year. “He’s not this doctrinaire guy.”

The road less traveled That Johnson is taking a risky approach with Penney is no surprise.

After receiving an economics degree from Stanford University and an MBA from Harvard Business School in 1984,

best to motivate and equip these people to perform, but if they don’t, you must stop hugging and burping them and take swift, appropriate action to cut your losses.”

— Dave Anderson, author of “No-Nonsense Leadership” To start creating your business’s culture, revisit your vision, mission and values/culture. What do they say about your company and the need for accountability? Take a look at how you use these documents. Are they simply framed and hung on the wall in the lobby of your office, or are they integrated into every single aspect of your business? Get your team involved in the development of your values/culture, as they need to feel ownership.

“In putting together your standards, remember that it is essential to involve your entire team. Standards are not rules issued by the boss; they are a collective identity. Remember, standards are the things that you do all the time and the things for which you hold one another accountable.”

— Mike Krzyzewski, basketball coach Now it is time to match the different sets of roles and responsibilities in your business with the accountability measures that will apply. Each role in the business should have a very clear set of responsibilities and corresponding results that are expected when those he turned down a lucrative offer from investment bank Goldman Sachs for a manager trainee job at the now-defunct Mervyns department store chain and then worked his way up to vice president of merchandise at Target.

In 1998, when he signed a deal with architect Michael Graves to develop a line of affordable housewares for Target, it was the first time that an upscale designer’s products would be sold in a mass market discount store.

Industry watchers predicted the strategy would fail. After all, people didn’t shop at a discounter for designer brands.

“Back then, design was something for affluent people,” Johnson told fashion executives recently.

But the partnership, which was fol-

responsibilities are properly executed.

Each person needs to have clearly defined measures of their performance that they agree to be held accountable to. After that, it is very simple.

Provide your team with the tools they need to perform their roles, define the desired results for each person/team, measure their actual results and hold them accountable to achieve the results.

I have spoken to many business owners who have done a pretty good job of getting to the point of defining their expectations, only to stop one yard short of the goal line and not hold their team accountable. They don’t want to be the bad guy and call someone in to discuss their failure to hit a target. They would rather be the good guy who listens to their excuses and reasons for failing to perform to the standards.

While it can be uncomfortable to hold someone accountable, you must be the leader they need and not their friend and co-conspirator. Here are a few ways to get started: • Stop accepting excuses, reasons and blaming others. It is no longer acceptable for anyone to say that it is not their fault.

“New cadet, you are allowed four responses: ‘Yes, sir,’ ‘No, sir,’ ‘No excuse, sir,’ and ‘Sir, I do not understand.’ New cadet, what are your four responses?”

It takes a couple of tries before the neophytes learn the codes. It will take lowed by deals with other designers like Isaac Mizrahi, redefined discounting.

Even discount king Wal-Mart followed a variation of the strategy.

Success at Apple wasn’t much easier for Johnson. When he and Jobs introduced the idea of opening retail locations, it was resisted by nearly everyone on Apple’s board. Board members looked at Gateway, a competitor that was in the midst of closing stores, as proof that the strategy wouldn’t work.

Even Johnson’s now-popular Genius Bar, a place within Apple stores where customers can get hands-on technical support, was seen as radical. It ran counter to the retail industry’s practice of hiding “repair” areas in the stores.

“No one thought it would work,”

a little longer for them to stop trying to explain things. In that phrase, “No excuse, sir” (or “ma’am”) is an early, critical lesson. Take responsibility for your actions. Always. No matter what the consequences.

— Ed Ruggerro, author of “Duty First” • Once your team is accepting responsibility, then start coaching them to perform better. Teach them how you want them to approach their work, their roadblocks, the exceptions that get in the way. Ask them questions, get them talking about their own results and what they are going to do to improve.

• Follow up. Review performance regularly, both at the team and individual levels. Don’t let too much time go by without a discussion about performance and accountability, or you will have to start all over again.

• When you run into that employee who is simply unable to accept responsibility, no matter how much coaching you provide them, make the easy decision to do the hard thing. Don’t sacrifice your team and your business to one bad apple. Be accountable to your team for your actions.

Mark McNulty is a business coach with ActionCoach Business Coaching. He can be reached at 372-7377 or mark@ coachmark.biz.

Johnson told analysts earlier this year.

“There wasn’t one positive believer.”

The first Apple store, which opened in 2001 in Tyson’s Corner mall in Virginia, became a hit. Others across the nation followed. There are now 394 stores in 13 countries.

“Apple has changed the way to buy a computer. And we did that by thinking completely differently about every aspect of the retail business,” Johnson says.

It’s his “go get ’em” attitude that serves Johnson well, say those who know him. “If he believes in something wholeheartedly, there is not a person on this planet that could sway him,” says Francis, the former Penney president.

January 2013 The Business Connection 17

BUSINESS LEADS

NOVEMBER

n COMMERCIAL BUILDING PERMITS

CONTRACTORS 2812 SF REST

M/I HOMES OF INDIANA OWNER/ CONTRACTOR

5240 N US 31 COMMERCIAL ADDITION $10,000 KENNY GLASS OWNER DRIFTWOOD BUILDERS CONTRACTOR COM ADDN

5555 INWOOD DR COMMERCIAL ADDITION $21,430 T.I.E.M. OWNER FORCE CONSTRUCTION CO INC CONTRACTOR TIEM/ADDITION

6133 HERON CT $263,000 RES/NEW M/I HOMES OF INDIANA OWNER/ CONTRACTOR

1900 MCKINLEY AVE COMMERCIAL ADDITION $200,000 CUMMINS INC. OWNER TAYLOR BROTHERS CONSTRUCTION CONTRACTOR CUMMINS CTC MIL EXPANSION 1607 CENTRAL AVE COMMERCIAL REMODEL $64,000 STERNS, STEVE OWNER CCI ROOFING CONTRACTOR COM ROOF 1607 CENTRAL AVE COMMERCIAL REMODEL $32,000 STERNS, STEVE OWNER MARSHALL MECHANICAL CONTRACTOR REPL HVAC 333 8TH ST COMMERCIAL REMODEL $65,000 SHEPHERD INSURANCE OWNER HOOKER, THOMAS E CONTRACTOR COM REMODEL 2000 SF 2020 NATIONAL RD NEW COMMERCIAL BUILDING $800,000 BOYETT, BROCK/JACK IN THE BOX OWNER PERRY BUILDING

3009 N NATIONAL RD COMMERCIAL REMODEL $14,961 EPSTEN, DAVID COMPANY OWNER VERSATILE CONSTRUCTION GROUP CONTRACTOR COM REMODEL 3043 SF 433 4TH ST COMMERCIAL ADDITION $24,000 SCHWARZE, KURT OWNER/ CONTRACTOR EXT AWNING 350 SF 13570 W LAKE RD COMMERCIAL ADDITION $38,000 S CENTRAL LUTHERAN CAMMP ASSOC OWNER/CONTRACTOR CAMP LAKEVIEW BATHHOUSE ADD

n RESIDENTIAL BUILDING PERMITS 5975 CONIFER CT $215,700 RES/NEW SKAGGS BUILDERS INC OWNER/ CONTRACTOR 6116 HERON CT RES/NEW

n Certificates to do business under assumed name Dolling Sun Raes 3862 N. Tudor Court Pat Carothers, Basketmaker 5869 W. State Road 46

4920 N 1000E $350,000 4468SF RES/GAR/ATT KELLEMS, RICHARD OWNER THOMPSON HOMES OF COLUMBUS CONTRACTOR

B&J Tax Service 3920 25th St. Precision Restorations 1612 N. Ridgewood Drive Superior Drywall 603 W. Park Drive, Edinburgh

3851 SYCAMORE BEND CT $300,000 RES/NEW PHILLIPS DEVELOPMENT INC OWNER/ CONTRACTOR

Bob Middendorf Electrical and Handyman Service 11985 W. Georgetown Road L5 Contracting 8343 N. Dena St.

13101 W BAKER HOLLOW RD $600,000 6373SF RES/BAS/GAR THOMPSON, TODD/AMANDA OWNER OAK GROVE CONSTRUCTION CONTRACTOR

Artistic Audio & Productions 16463 E. Lakeshore Drive South, Hope Granny Bea’s 6103 S. Jonesville Road

8700 W GEORGETOWN RD $350,000 RES/NEW CUSACK, FREDERICK N OWNER

Miracle Garage Doors 3230 Hillcrest Drive N&J Janitorial 3250 Heritage Road

5021 WEST QUINCY CT $209,500 RES/NEW SKAGGS BUILDERS INC OWNER/ CONTRACTOR

Traylor Writing Services Center 3025 25th St. Verizon Wireless 1269 N. National Road

977 WESTCREEK DR $413,000 NEW RES DREES HOMES OWNER/CONTRACTOR

Tans N Strandz 10020 N. U.S. 31 Ste. B

Business Indicators for Bartholomew County

Percent changes Oct 12/ Oct 12/ Description Oct 12 Sep 12 Oct 11 Sep 12 Oct 11 Labor Force

42,074

41,866

38,890

0.5

8.2

Household Employment

39,782

39,579

36,124

0.5

10.1

Unemployment Rate (pct)

5.4

5.5

7.1

—

—

— Center for Business and Economic Research, Ball State University 18 The Business Connection January 2013

Burt’s receives certification

Medical errors drop

Burt’s Termite and Pest Control Inc. was recently certified in using heat treatment for the extermination of bed bugs. Three employees, Doug Foster, Bob Schafstall and Brandon Foster, have undergone extensive training in the safe use of heat systems to rid homes and businesses of bed bugs and other pests.

Burt’s has served Columbus, Seymour and the surrounding areas since 1973.

INDIANAPOLIS — A new report finds that Indiana hospitals and other health care facilities have slightly reduced their number of medical errors.

The Indiana State Health Department’s 2011 Medical Errors report says the number of reported events fell to 100 last year from 107 in 2010. Bed sores were the most common event for 2011, followed by surgery on the wrong part of the body and foreign objects left in bodies after surgery.

The 41 patients with bed sores was the highest number since 2005.

But 2011’s 17 patients with foreign objects left behind were the fewest ever. Doctors performed surgery on the wrong part of the patient in 18 cases.

Around the watercooler

Company chooses Brownstown BROWNSTOWN — E&H Tubing Inc., doing business as Indiana Steel and Tube, a mechanical and structural tubing manufacturer, announced plans to locate its operations here, creating up to 56 new jobs by 2015.

Recently, E&H Tubing acquired the assets of Indiana Steel and Tube Inc., which had operated in Brownstown for the last four years. E&H Tubing is leasing the two former Indiana Steel and Tube facilities and will continue to produce mechanical steel tubing, structural steel tubing and all-coated products.

E&H Tubing, which shares common ownership with Charter Steel Trading Co., manufactures steel tubing used in a wide range of products, including racking systems, chain link fences, patio furniture, agriculture equipment and satellite products. The company has already hired machine operators, fork truck operators and packaging positions and plans to add additional positions as part of a second shift in the upcoming months.

The Indiana Economic Development Corp. offered E&H Tubing up to $400,000 in performance-based tax credits and up to $40,000 in training grants based on the company’s job creation plans.

Kroger lifts forecast NEW YORK — Kroger Co. is raising its earnings outlook for the year after the nation’s largest traditional supermarket chain reported a third-quarter profit that topped Wall Street expectations.

The company, which also operates Food 4 Less, Fred Meyer and Dillon’s, said it earned $316.5 million, or 60 cents per share, for the three months ended Nov. 3. That compares with $195.9 million, or 33 cents per share, a year ago. Not including special items, the company earned 46 cents per share.

Total sales rose 6 percent to $21.81 billion.

Interest in reform fades

Analysts on average expected an adjusted profit of 43 cents per share on revenue of $21.55 billion, according to FactSet. Revenue at supermarkets open at least a year, a key gauge of a retail chain’s performance, rose 3.2 percent.

Vectren fined EVANSVILLE — State utility officials have ordered Vectren Corp. to pay a $100,000 fine and make safety improvements over a natural gas explosion that destroyed a southern Indiana home and injured six people.

The Indiana Utility Regulatory Commission issued the order after the agency’s review of actions leading up to the November 2011 explosion in New Albany. The agency found that crews for a subsidiary of Evansville-based Vectren Corp. damaged the gas line while doing drilling work and didn’t alert emergency officials before the explosion an hour later.

Vectren spokeswoman Chase Kelley tells the Evansville Courier & Press that the company takes full responsibility for the explosion and has made safety changes. Only one of those hurt in the explosion needed overnight hospitalization.

Tenneco expansion LIGONIER — An auto parts manufacturer plans to spend $18.5 million to expand its northeastern Indiana operations after winning a contract to supply emission control parts to Chrysler. The

News Sun reports plant manager Doug Bonecutter says hiring for about 100 new workers at the factory will start in January.

The Lake Forest, Ill.-based company already has some 430 workers at a factory in the city about 40 miles northwest of Fort Wayne. Tenneco says it will lease and equip a 50,000-square-foot facility. Tenneco also has factories in Elkhart and Angola.

The city is working with Tenneco on a nearly $2.3 million bond issue to help finance the expansion.

Elkhart to raze eyesore ELKHART — A shuttered northern Indiana factory that’s long been an eyesore will soon be a thing of the past.

Elkhart Mayor Dick Moore says the city has secured funding to raze the old Walter Piano building, which has been abandoned for years and was damaged by an August fire.

The Elkhart Truth reports the city expects demolition to begin early next year.

Moore says he hopes to transform the 3.2-acre property into a green space by early next summer. The city also hopes to market and redevelop the property as a high-tech industrial park.

The mayor says the building’s demolition is bittersweet because it’s provided jobs in the city since the 1900s. But he says the decision to raze it marks a new effort to revitalize the area.

INDIANAPOLIS — The effort to reform local government in Indiana, prompted by a 2007 bipartisan report that recommended eliminating townships and making other changes, is headed for the dustbin of history.

For the past five years, Republican Gov. Mitch Daniels led the charge for local government reform at the Statehouse. He persuaded the General Assembly to enact about a third of the 27 recommendations contained in the Kernan-Shepard report, including eliminating most township assessors, consolidating purchasing and reducing conflicts-of-interest among government employees and local elected officials.

But Daniels knows a reluctant Legislature and the state’s new governor won’t be as committed to — as he put it — dragging Indiana’s local governments out of the 19th century and into the 21st century, as he was.

County OKs bond RICHMOND — A food-processing company that plans to restart a closed factory in eastern Indiana is getting a $50 million assist from local officials.

The Wayne County Council approved the bond issue as part of Sugar Creek Packing Co.’s plans to expand and refurbish the former Really Cool Foods plant near Cambridge City.

Sugar Creek Chief Financial Officer Tom Bollinger told county officials that the company planned to spend $64 million on the project and expected to have 400 workers processing pork and chicken products after the plant becomes operational by mid-2014.

— Staff and Wire Reports January 2013 The Business Connection 19

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