Welcome to the Sept. 19 Monday Business Briefing, your private business intelligence digest from Insider Louisville.

Executives ousted at KentuckyOne

kentuckyone-health-logoTwo KentuckyOne Health presidents and several vice presidents abruptly departed last week, sources close to the organization told Insider Louisville.

In an email over the weekend, Barbara Mackovic, a spokeswoman, would only confirm that presidents at Frazier Rehab Institute and Saint Joseph Mount Sterling hospital were departing, and that the organization had eliminated the chief physician executive and chief nursing officer in favor of local chief medical officer and chief nursing officer leadership and collaboration via systemwide councils.

She said the moves were designed to cut costs, though she did not say by how much, and to redirect resources closer to where patients receive care.

As for the departed leaders at the rehab center and Saint Joseph hospital, Mackovic said the organization had “identified leaders to carry forward the excellent work and continue to deliver quality patient care.”

“KentuckyOne Health is strong and continues to deliver on our vision to bring wellness, healing and hope to all across Kentucky,” Mackovic said in her email. “These changes will make us stronger in the future and we look forward to experiencing success through our new structure of local-focused leadership.”

She did not respond to follow-up questions regarding the names of the departed leaders, whether their positions were eliminated or if successors had been appointed.

On its website, KentuckyOne Health lists Velinda Block as its chief nursing officer. In September 2013, it named Dr. Damian Alagia III its chief physician executive and chief medical officer. In September 2015, the organization named Bruce Tassin the president of Saint Joseph hospital, and as recently as December 2014, Randy Napier was president of Frazier Rehab Institute.


KentuckyOne Health, part of Colorado-based Catholic Health Initiatives, was created by the merger of the former Jewish Hospital & St. Mary’s HealthCare and Saint Joseph Health System. It has a joint operating agreement for the University of Louisville Hospital and James Graham Brown Cancer Center.

Almost since its inception, the nonprofit health system has been plagued by financial difficulties, racking up losses of about $300 million in fiscal years 2010 to 2014, according to IRS records.


Ruth Brinkley

In February of last year, shortly after CEO Ruth Brinkley said the nonprofit had to improve its performance by more than $200 million by the end of 2015, the organization announced layoffs.

Mackovic said the financial performance of KentuckyOne Health has improved, but she declined to say whether it is profitable, or how much the staffing changes were expected to save.

This summer, after physicians complained that hundreds of layoffs were compromising patient safety, the state investigated and issued a statement of deficiencies after three patients had received inadequate care. The Cabinet for Health and Human Services said KentuckyOne Health could lose its certification with the Centers for Medicare and Medicaid Services — though Mackovic told IL that a follow-up report was positive and that the organization would not lose its certification. She could not be reached to answer whether she would share that follow-up report. Boris Ladwig

Ford announces deal with high-end audio company

The display with which Ford announced its partnership with Bang & Olufsen last week in Detroit. | Photo by Boris Ladwig.

The display with which Ford announced its partnership with Bang & Olufsen last week in Detroit. | Photo by Boris Ladwig.

Ford Motor Co. is partnering with luxury Danish audio company Bang & Olufsen, which will make high-end speakers available in all Ford models starting next year.

The automaker made the announcement last week at its Further with Ford event in Dearborn, Mich., its annual show about new Ford products and trends in automotive and other industries.

The partnership is a coup for Ford — because B&O audio systems typically come only in luxury vehicles such as Audi — and for B&O it marks a foray into a high-volume global auto brand.

Ford will make high-end speakers available in all its vehicles through B&O’s mass market line B&O PLAY.

Gorm Haldor Jørgensen

Gorm Haldor Jørgensen

Gorm Haldor Jørgensen, a B&O spokesman, told IL that while the company typically designs products for the home (including a pair of 8,200-watt speakers that will set you back $80,000), B&O PLAY targets a younger audience, “the urban creative,” with mobile options, such as the more reasonably priced $150 H3 earphones. Jørgensen is director of Harman’s MAGIC Center of Competence, which is responsible for B&O automotive products.

Jørgensen said that for Ford, B&O will use design, materials and craftsmanship based on its existing products to develop unique systems for each Ford automobile. Design and placement of the speakers will be optimized for each of Ford’s vehicles, he said.

Jørgensen said the agreement represents a big opportunity for the Danish company because it makes inroads into a global brand, while Ford customers will have access to an elevated user experience through premium sound.

Ford wouldn’t say how much the audio systems in Ford vehicles will cost. It’s safe to say it’ll be less than what a B&O “advanced sound system” costs in Germany for the Audi A6, which is 6,000 euros, or about $6,750. That would boost the price of a Ford Fusion by about 33 percent. “Av!” (That’s “ouch” in Danish.) —Boris Ladwig

Hot laps in the Ford Focus RS

Speaking of Ford’s event in Dearborn last week: Some Louisville-made products, including the Escape and the Super Duty, got good exposure — but visitors to the Dearborn Development Center stood in long lines to take a hot lap around the track in a 350-horsepower Focus RS, driven by none other than race car driver Ben Collins, aka The Stig.

Collins whiplashed passengers through some tight turns and drifted about a wet surface before hitting a top speed of 110 mph in a sloping curve.

Those who made it to the proving grounds even got to take an RS around a short track (about 20 seconds long — at least for some) — though tight corners required drivers to keep the hot hatch, which has all-wheel drive and an insane grip, in second gear. Some drivers (we won’t say who) got a little overzealous on their second lap around the track and smashed a few cones. The Stig would not have approved — but he was too busy leaving rubber marks on the asphalt. —Boris Ladwig

Humana recognized for helping employees get healthier

best-employers-for-healthy-lifestyles-awardHumana was named by an industry group among the top five companies that promote healthy lifestyles among their employees.

The National Business Group on Health honored Humana among 55 U.S. employers for having the nation’s best employee well-being programs, according to a press release. The Best Employers for Healthy Lifestyles awards recognize employers that display “exceptional commitment to improving their employees’ physical health, productivity and overall quality of life.”

The group also presented Humana with one of five top honors awards. The others went to Aetna (the insurer that wants to buy Humana), CNO Financial Group, Fidelity Investments and Boeing Co.

The award is based on metrics including job satisfaction, community involvement and emotional health. Humana said it won the top honor “for achieving strong results in these broader areas of focus and for connecting employee, family, and community well-being to business performance.”

“We’re tremendously proud to receive this honor,” Humana President and CEO Bruce Broussard said in the release. “Since helping people toward achieving their best health and lifelong well-being is our shared purpose at Humana, we know we must start at home and lead by example.”

Humana said that since 2012, 42 percent of employees have eliminated health risks and improved their health, and those who have lost weight have shed more than 100 tons, while the prevalence of pre-diabetes has been cut by 20 percent. The company said it has received the results in part by giving employees paid volunteer time off, flexible work arrangements and financial counseling.

Judges said that “Humana’s focus on financial well-being, resilience and emotional well-being, community and social connections, as well as job satisfaction and overall physical health offer an example and challenge to other employers striving to improve employee health, well-being and productivity.” —Boris Ladwig

Glassdoor: If you want your money to go far, live in midsize Midwestern cities

Screenshot from Glassdoor.

Screenshot from Glassdoor.

Louisville is among the top 10 cities in which low real estate prices make your pay go the farthest, according to an analysis by jobs and recruiting site Glassdoor.

The site compared the top 50 largest cities’ median base salary to its median home value, and found that midsize cities, especially in the Midwest, fared better than larger cities, especially those at the coasts, where tight housing markets make properties very expensive.

The site compared salary and home value because housing costs are the biggest expense for Americans, about 33 percent on average.

If you want your money to go far, Glassdoor said, you want to live in places such as Indianapolis, Cincinnati and Louisville (all in the top 10) — and avoid (no surprise, there) Boston, New York and San Francisco.

Louisville had a cost of living ratio of 39 percent, with a base salary of $54,000 and a median home value of $137,500. Detroit, which ranked No. 1, had a ratio of 50 percent, with a median base salary of $61,500 and a median home value of $123,100. Ratios for cities in spots two through nine ranged from 46 percent (Memphis) to 39 percent (Kansas City).

In San Francisco, meanwhile, the rate was 11 percent, with a median base salary of $88,000 — but a median home value of $806,600 — more than double the median home value in New York City, which had a ratio of 18 percent.

“This report shows that where you live and how much you earn are directly tied to one another,” Glassdoor Chief Economist Andrew Chamberlain said. “Though there are certainly other financial factors to consider when taking into account total cost of living, this data reinforces that pay typically goes further in midsized cities versus big metropolitan areas where there is often tighter competition for housing.” —Boris Ladwig

GE Appliances recalls 220K clothes washers because of fire danger

ge-appliances-top-load-washerGE Appliances is recalling about 220,000 South Korea-made top-load clothes washers because an electrical component can overheat and cause the units to catch fire.

The company and the Consumer Product Safety Commission urged consumers who have the GE Profile high-efficiency washers to stop using them immediately and to unplug them. Customers can have them repaired by contacting GE at 877-830-9732 weekdays between 8 a.m. and 5 p.m. or at geappliances.com; customers can click “recall information” at the bottom of the page.

The Louisville-based company has received 71 reports of washer components burning or catching fire, and three fires have caused $129,000 in property damage.

Model numbers include WPGT9350, 9360 and 9150. The machines were sold at Best Buy, Lowe’s, Sears, Home Depot and other stores between June 2003 and October 2011 for $900 to $1,400. —Boris Ladwig

Yum China Holdings board of directors named

Louisville-based Yum Brands has announced the nine individuals who will lead its China spinoff as it gets its feet underneath it.

Fred Hu, founder of Primavera Capital Group, will serve as chairman of the board, as previously announced. The other board members are as follows:

  • Micky Pant, chief executive of Yum China Holdings
  • Peter A. Bassi, former chairman and president of Yum Restaurants International and current lead director for BJ’s Restaurant and Potbelly Sandwich Works
  • Christian L. Campbell, owner of Christian L. Campbell Consulting LLC and former senior vice president, general counsel, secretary and chief franchise policy officer of Yum Brands
  • Ed Chan Yiu-Cheong, vice chairman of Charoen Pokphand Group Company Ltd.
  • Edouard Ettedgui, nonexecutive chairman of Alliance Française, Hong Kong and nonexecutive director of Mandarin Oriental International Ltd.
  • Louis T. Hsieh, director and senior adviser to the chief executive, and former chief financial officer and president of New Oriental Education and Technology Group
  • Jonathan S. Linen, director for Yum Brands and Modern Bank N.A., former adviser to the chairman of American Express Company, and former vice chairman of American Express Company
  • Zili Shao, co-chairman of King & Wood Mallesons – China

Yum China Holdings will be an entirely separate company operating Yum Brands’ subsidiaries KFC, Pizza Hut and Taco Bell in China, but pay royalties to Yum Brands. It will get its own stock symbol, YUMC, on the New York Stock Exchange when the spinoff takes place at the end of next month.

The new board will be expected to play a role in steering the ship as Yum Brands tries to regain and gain further footing in China amid rising competition and a market that can still be somewhat volatile.

IL previously reported that Yum Brands signed a $460 million deal with two Chinese investors for a minority stake in Yum China Holdings. —Caitlin Bowling

Local chamber wants Louisvillians to talk about their city with more swagger

To combat the local skills gap, the local chamber of commerce wants to redouble its marketing efforts to recruit young talent — but it also wants Louisvillians to celebrate innovation (and failure) and to talk about their fair city with a little more Texas swagger.

A local contingent of 124 Louisville business, civic and government leaders returned from Austin, Texas, last week, after learning about how that city created an entrepreneurial atmosphere, attracted young talent and established a reputation for vibrancy. The trip was organized by Greater Louisville Inc.

Kent Oyler, the organization’s CEO, told IL that the visit reinforced the need for Louisville to improve the way it markets itself to young, talented workers and entrepreneurs. But it also germinated some new ideas, including closer collaboration among schools and businesses, better communication about the benefits of public-private infrastructure investments and celebrating risk-taking and failure.

Austin, Texas skyline. | Courtesy of Wikimedia Commons.

Austin, Texas skyline. | Courtesy of Wikimedia Commons.

“GLI is putting a major push on talent attraction,” Oyler said.

A couple of weeks ago, the chamber started a talent attraction site for recruiters so that they can better market the city to potential employees. The chamber is working on a site targeted at potential employees to help them better understand the benefits of living in Louisville, which include that they would be able to afford bigger apartments and have more disposable income even with a smaller wage.

Kent Oyler: "There's not another job I'd want."

Kent Oyler

The message, Oyler said: “New York is exciting. Go and visit. Live in Louisville.”

Oyler recently told IL that to fill the city’s more than 30,000 open jobs it has to attract more people.

Some of those open jobs, he said, could also be filled by local people who have  been displaced and are willing to obtain new skills. While the labor force participation rate in Louisville is higher than the state average, too many people remain on the sidelines, Oyler said.

But, he said, if people have the proper soft skills — showing up for work on time, not taking drugs, proper communication skills — they can get help locally, at the Louisville Urban League and Code Louisville, for example, to acquire additional hard skills, such as an associate degree or a technical certification, to find a job here that pays a living wage.

Everyone in Louisville who wants a job has a really good shot if they put in a little bit of effort, Oyler said.

Beyond those concrete steps, Oyler said the city and its residents also must try to change their culture, to stop being afraid to brag and to shed their susceptibility to schadenfreude when other people’s bold business bets fail.

Austinites have a lot of confidence about their city, which helps them improve their city’s reputation and increase its mystique, but also pushes them to achieve their goals, Oyler said. In some cases, the people of Austin talk with a swagger about their city that may overstate its actual importance. For example, he said, Austinites told Louisville visitors in 2000 that they had more music venues than any other city — although Louisville actually had more.

Louisvillians, by nature, tend to be a little more subdued, Oyler said.

“When it comes to talent attraction, that’s not serving us well,” he said. “It’s serving Austin very well to have swagger.”

The CEO also said that Louisvillians must work on celebrating innovation and the failure that sometimes comes with it — rather than snickering when someone fails. In baseball, players who score a hit for every three at bats are celebrated, Oyler said, and entrepreneurs who take risks and fail some or even most of the time should not be ridiculed — but championed.

“That’s not the culture we have,” he said. “And it would serve us well.” Boris Ladwig