FUNDING FOR A GOOD IDEA!

Granholm announces business development program

Thursday, July 31, 2008

By JIM IRWIN
Associated Press Writer

DETROIT (AP) Gov. Jennifer Granholm on Thursday announced the launch of a program aimed at attracting, retaining and developing small to medium-sized businesses in Michigan.

The Invest Michigan program is financed with $300 million of the state's $58 billion in pension fund assets, divided into two funds of $150 million each.

The Growth Capital Fund will make direct investments of $2 million to $7 million in venture capital and expanding companies, while the Michigan Opportunities Fund will make direct investments of $10 million to $40 million in potential acquisitions and buyouts.

A Business Leadership Council chaired by Penske Corp. CEO Roger Penske will assist the fund managers. Penske, who appeared with Granholm at Thursday's announcement, said the council would review investment proposals, evaluate management and capital requirements and meet with entrepreneurs to discuss their companies' goals and strengths.

Information technology, health care and automotive components are among the businesses that could benefit from the infusion of investment capital, Penske said.

State Sen. Nancy Cassis, chair of the Senate Finance Committee, raised several questions about the Invest Michigan program's goals, risks and effectiveness.

''Once again, state government is picking winners and losers instead of providing relief to all struggling businesses,'' Cassis, R-Novi, said in a statement. ''Is this plan safe? That's the most important consideration at a time of great economic uncertainty, when pen its efforts. He also noted that Goodyear's shift away from low-end tires to high-end tires with higher profit margins also helped improve earnings.

Goodyear's international businesses increased sales 18 percent over the same quarter last year and represented about 60 percent of the company's sales for the current quarter. That made up for poor sales from the North American Tire division, which fell 6 percent.

Deutsche Bank analyst Rod Lache wrote in a report Thursday that Goodyear's international results were so strong that the company should post earnings of more than $2 per share for the year even without contributions from its North American segment.

Earnings from continuing operations were up 159 percent from the same period a year ago. The company sold its engineered products business last year, which accounted for $27 million in profits in the 2007 second quarter.

Shares of Goodyear rose 10 cents, or 0.51 percent, to $19.66 in afternoon trading.

Goodyear has about 70,000 employees and makes products in more than 60 factories in 26 countries.

On the Net:

http://www.goodyear.com
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