Crain's Detroit Business, May 16, 2022 by Crain's Detroit Business

THE CONVERSATION: Mario Morrow Sr. on the changing PR business. PAGE 22

SMALL BUSINESS SPOTLIGHT: Seasonal

companies wrestle with hiring woes. PAGE 8

CRAINSDETROIT.COM I MAY 16, 2022

Kelly to exit Russia; some firms hang on

“TIMES ARE TOUGH FOR MORTGAGE LENDERS WHERE BORROWERS FACE (A) STEEP RISE IN MORTGAGE RATES THAT SUPPRESSES REFINANCINGS.” Ken Leon, global director of equity research at CFRA Research

Overseas operations seek low profile BY KURT NAGL

At least half a dozen Michigan-based companies have quietly kept the lights on in Russia, raising questions about the optics and viability of continuing business in Vladimir Putin’s regime. From Benton Harbor-based appliance giant Whirlpool Corp. to Battle Creek-based cereal maker Kellogg Co., major manufacturers remain in Russia even after a wave of companies from the West have fled due to

RISING

Many legal questions remain unanswered

NEWSPAPER

See MORTGAGE on Page 20

AIMING HIGH Drone-inspection firm SkySpecs gets a big investment PAGE 3

CRAIN’S ILLUSTRATION/GETTY IMAGES

Mortgage companies prepare for even bumpier road ahead as interest rates jump, refinancings fizzle | BY NICK MANES when rock-bottom interest rates served as the fuel for surging profits. Those days are done, and the guidance for this current quarter offered by at least two of the companies suggests things will get tougher before they get easier. The 30-year fixed rate mortgage has surged well over a full percentage point since the first week in March, and now stands at 5.3 percent — standing at its highest in more than a decade

See RUSSIA on Page 21

Potential abortion ban concerns IVF industry

Rocket Cos. Vice Chairman and CEO Jay Farner (left) and Mat Ishbia, chairman and CEO of UWM, are retooling their companies for a higher-rate world.

UNCERTAINTY METRO DETROIT’S MORTGAGE LENDING GIANTS weathered the storm of profit-crushing interest-rate increases, some better than others, in the early part of 2022. But smoother sailing is still over the horizon. Rocket Companies Inc. in Detroit, Pontiac-based United Wholesale Mortgage LLC and Home Point Capital Inc. out of Ann Arbor each reported first-quarter earnings last week, and each have seen key metrics such as mortgage loan originations and profitability take significant slides from the heady days of early 2021

Russia's ongoing war on Ukraine. The companies are keeping up operations in Russia to varying degrees and for a variety of stated reasons, but the pressure is building as those with assets and employees in the country attempt to keep low profiles. Kelly Services Inc. announced Thursday it plans to exit Russia, where it has about 8,400 employees and $132 million in annual revenue, based on a review of the environment in Russia and with input from its board of directors and other stakeholders.

My wife and I have a big decision to make. Roughly 7 1/2 years ago, we entered our eighth and last cycle in our attempts at in vitro fertilization, the result of which were two healthy, and mischievous, twin boys. They’re almost 7. But the process left a half-dozen unused embryos that remain frozen in cryogenic storage. We’ve continued to pay the IVF clinic to keep those potential children safe, but after careful consideration we’re ready to keep our family to four. That leaves three options: donate those embryos to another couple struggling with fertility, donate them to science or destroy them. But fears that the U.S. Supreme Court could overturn the 1973 Roe v. Wade ruling have added uncer-

Dustin

WALSH

tainty for would-be parents and the providers trying to help them conceive. A high court decision to overturn Roe would make abortion illegal in some states, including Michigan, which would revert to a 1931 law that bans abortion in all cases except when the life of the mother is directly threatened. It could also alter the $8 billion U.S. IVF industry.

NOTABLE LEADERS IN EV Building a revolution PAGE 10

See IVF on Page 20

NEED TO KNOW

REAL ESTATE

THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` SCHLISSEL WILL GET $463K DURING YEARLONG LEAVE

sumer payment solution, according to a news release.

THE NEWS: The University of Michign has signed a settlement agreement with former president Mark Schlissel after he was fired earlier this year over an inappropriate relationship with an employee. Schlissel will be paid $463,000 for the one-year leave and retain the option to return as faculty with a yearly salary of $185,000.

WHY IT MATTERS: The deal continues a trend of old-line banks buying up financial technology companies.

WHY IT MATTERS: Schlissel’s agreement also includes an apology for his “poor judgment and the disruption that it caused,” the university said.

` HOME SALES, PRICES CONTINUE THEIR RISE THE NEWS: Rising interest rates did not dampen the metro Detroit housing market in April, where sales prices remain high and supply is still tight, according to two local measures. Realcomp, the multiple listing service, showed a median sales price of $245,000 for the region, up 8.9 percent from a year ago, while sales were down 8.7 percent. New listings were up slightly, after months of being down. WHY IT MATTERS: Interest rates have spiked from around 3 percent at the beginning of the year to over 5 percent now, making home purchases less affordable for many buyers.

` REVISION TO TERM LIMITS HEADED TO BALLOT ` SENATE CONFIRMS MSU’S COOK TO FED BOARD THE NEWS: The Senate confirmed Michigan State University economist Lisa Cook to serve on the Federal Reserve’s board of governors. Cook has a doctorate in economics from the University of California, Berkeley, and has been a professor of economics and international relations at Michigan State since 2005. WHY IT MATTERS: Cook’s approval on a narrow, party-line vote of 51-50 makes her the first Black woman to sit on the panel that governs the nation’s financial system.

` HUNTINGTON BUYS PAYMENTS COMPANY THE NEWS: Huntington National Bank has acquired San Francisco consumer payments company Torana Inc. for an undisclosed price. The acquired technology will launch as Huntington ChoicePay, a business-to-con-

THE NEWS: Michigan voters in November will decide whether to revise some of the country’s strictest legislative term limits and require state elected officials to report information about their finances to avoid conflicts of interest. Michigan’s 30-year-old term limits law, embedded in the state constitution, allows legislators to serve no more than 14 years, including three two-year House terms and two four-year Senate terms. The amendment would cap that at 12 years but allow longer terms in one chamber of the Legislature: six two-year House terms, three four-year Senate terms or a combination. WHY IT MATTERS: Supporters said it would enable new lawmakers — particularly in the House, where the speaker and committee chairs have only two or four years of experience before leading — to focus on their job and build relationships instead of immediately looking to run for the Senate or find work outside the Legislature.

Some Blues employees to leave Renaissance Center ` The trouble continues for the Renaissance Center as it stands to lose another occupant: A Blue Cross Blue Shield of Michigan division. It’s the latest blow for the complex, which last month also saw the departure of its third-largest tenant, global consulting firm Deloitte LLP. Crain’s obtained a memo distributed to BCBSM employees saying the nonprofit health insurer’s Health Plan Business is vacating the RenCen and moving employees from that division into the high-rise it owns at 600 E. Lafayette Blvd. It’s not known how many employees are impacted by the move and how much space in the Renaissance Center they currently occupy. BCBSM said in a statement: “Like many businesses, we are taking steps at this time to reintegrate remote workers back into the office environment. ... We have a long-term lease at Renaissance Center that runs through 2026, and we will continue to have employees based at RenCen throughout that term.”

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COMMERCE

FINANCE

SkySpecs aims high with new investment

SkySpecs, which makes software for drones inspecting renewable energy infrastructure, landed $80 million in new investment. | SKYSPECS

Renewable energy-focused drone company closes on $80 million fundraising round BY NICK MANES

An Ann Arbor-based drone software company focused on the rapidly growing renewable energy sector is flying high with the close of an $80 million fundraising round. SkySpecs Inc. announced the Series D funding Thursday morning, led by Goldman Sachs Asset Management out of New York City. The company’s software is used by companies in the renewable energy sector for the inspection and general maintenance of

wind turbine infrastructure. The funding catapults SkySpecs, which maintains an international presence, into the upper echelon of Michigan technology startups in terms of capital raised. To date, SkySpecs has raised $120 million, said CEO Danny Ellis, a Crain’s 40 under 40 honoree last year. The added funding from Goldman Sachs and other investors allows SkySpecs to continue rolling out the software to users in the growing renewable energy space so they can continue

making “data-driven decisions,” Ellis said. “And this capital allows us to go solve some of the hardest problems with customers and partners of ours all across the globe,” Ellis told Crain’s in an interview last week. “And with more capability to go faster and into different products.” Ellis declined to disclose a valuation at which the round was raised, but two investment sources separately See SKYSPECS on Page 18

“OUR FOCUS, FIRST AND FOREMOST, IS HOW DO WE SOLVE HARD PROBLEMS IN RENEWABLE ENERGY?” — Danny Ellis, CEO, SkySpecs

Regulators put a cork in Wine.com’s direct sales to Michigan BY CHAD LIVENGOOD

California-based online wine retailer Wine.com has ceased direct shipments to Michigan customers after state alcohol regulators found the company violated multiple state laws and is not an actual winery, despite years of selling directly to customers. An investigation by the Michigan Liquor Control Commission found a subsidiary of the San Fransisco-based retailer called Wine.com of Texas LLC was selling more bottles of wine to Michigan customers than state law allows, shipping unregistered wine and allowing another company to use its license. “The violation also included charges related to the company not meeting the qualifications for continued licensure with a Direct Shipper license because it was shipping wine that it did not manufacture,” the MLCC said in a statement to Crain’s. A 2005 law allowing out-of-state wineries to ship directly to Michigan customers caps vintners at selling a maximum of 13,500 liter bottles — or 1,500 9-liter cases — of wine annually to customers in Michigan that the winery produces itself. Wine.com is an online retail marketplace, not a winery. However, its subsidiary, Wine.com of Texas LLC, had obtained a direct shipper license in October 2015 and had grown into one of the leading outof-state sellers of direct-to-customer wine, state records show. In 2021, Wine.com of Texas LLC shipped 176,795 bottles of wine to Michigan buyers, the second-most of any out-of-state seller and more than 12 percent of all remote sales of wine last year, state records show. State records show in 2020, when e-commerce sales soared during early pandemic lockdowns, Wine.com of Texas LLC shipped more than 225,000 liter bottles of wine to Michigan customers — more than 16 times the legal limit for a direct shipper licensee. See WINE.COM on Page 18

FOOD & DRINK

House of Pure Vin aims to bolster bottom line with new offerings BY JAY DAVIS

The COVID-19 pandemic was not kind to House of Pure Vin in downtown Detroit, but owner Regina Gaines is fighting back. Gaines, who opened her wine shop on Woodward Avenue in 2015, is adding a 20-seat outdoor patio, a chef-curated food menu and full bar to help bolster business. The added elements will help offset retail sales lost over the last two years, Gaines said. The retail part of House of Pure Vin’s business is down 30 percent, Gaines said. She said her business lost about $120,000 in revenue in 2020 because

of the pandemic — a figure that would have been about $175,000 if not for state and local grant programs. “Yeah, things may seem normal in the neighborhoods, but not downtown,” Gaines said. “People aren’t in their offices. Even restaurants aren’t opening until 4 o’clock. There’s only a few places open for lunch. Normal to me is the person taking a casual walk at lunch and stopping in. It’s companies buying cases (of wine) for work parties. I’m next to a WeWork and in front of Bamboo Detroit where a lot of people meet and they’re just not there.” The added offerings are key for

House of Pure Vin owner Regina Gaines is making changes to help boost business at her downtown Detroit wine shop. | HOUSE OF PURE VIN

House of Pure Vin, Gaines said. She had hoped to have an additional Class C liquor license, which allows her to offer a full bar, in place in summer 2020, but the pandemic changed that. “We’ve finally been able to activate another revenue stream,” she said. “I don’t know if the old streams, like selling cases of wine to individual customers, that made a difference in hitting a goal or making a profit will come back.” The new patio, which adds to indoor seating for 70, will open Memorial Day weekend. See OFFERINGS on Page 18 MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 3

REAL ESTATE INSIDER

New riverfront park likely to spur real estate spinoffs It took every ounce of strength I had not to include an otter pun in this opening sentence. But you oughta know the second sentence is a whole otter matter. Kirk The Ralph C. PINHO Wilson Jr. Centennial Park broke ground last Tuesday after having been in the works for several years. By 2024, the 22-acre park on the west Detroit riverfront is slated to feature a bear slide (long discussed in the Crain’s newsroom); an otter slide (yes, otters have returned to the Detroit River after more than a century-long absence); and a slide in the form of a beaver (which the Michigan Department of Natural Resources is killing on Belle Isle nearby to control the population, not eliminate entirely, mind you). Other features in the $75 million park: Yes, even more slides, swings, trails, a treehouse, a replica of Fort Wayne and an outdoor classroom. In short: It’ll have a bunch of goodies for kiddos around town. This comes a little over a month after ground was broken on the Southwest Greenway, a nearly mile-long below-grade trail being built connecting southwest Detroit neighborhoods to the riverfront. While these two projects are obviously huge quality-of-life measures, important amenities for residents in the area hopefully for generations to come, there are also other — er, otter — implications for the two projects. Among them: Real estate. First of all, the amenities are likely to help drive up nearby property values. Slews of studies ranging from the mid 19th century to today have been done showing that the proximity of a public park near a home increases values. Good news for their owners. But secondly, they should almost certainly be key catalysts for development in the area, if all goes as planned, said Mark Wallace, president and CEO of the nonprofit Detroit Riverfront Conservancy spearheading the effort to completely remake the Detroit riverfront. “The riverfront conservancy has always kept track of economic development on the riverfront since we got started,” Wallace said. “We certainly see the public space we’re building as critical infrastructure for Detroit, and we see these as amenities for everyone who lives in the city and certainly within walking distance of these parks. The west riverfront contains some of the most underutilized lands anywhere in the state, and we would certainly love to see this be a stimulus for economic development.”

The site of the future Ralph C. Wilson Centennial Park on the west Detroit riverfront. | KIRK PINHO/CRAIN’S DETROIT BUSINESS

A pair of slides created in the form of an otter and a beaver are expected to be at the new Ralph C. Wilson Centennial Park on Detroit’s west riverfront. | MONSTRUM

developers and landlords like Dan Gilbert and Matt Lester and Aamir Farooqi and Moddie Turay, as well as “buy, hold and flip” investors like Hany Boutros. The popularity of the Detroit RiverWalk and its programming have fueled much of that interest the last few years. “There are a lot of local and regional players who see value in waterfront property,” Wallace said. A large, brand new park and the Southwest Greenway — which one official described as a version of the “Dequindre Cut, on steroids” — could be catalysts to new development in “THE RIVERFRONT CONSERVANCY HAS the area. ALWAYS KEPT TRACK OF ECONOMIC With the exDEVELOPMENT ON THE RIVERFRONT SINCE ception of the Riverfront TowWE GOT STARTED.” ers high-rises overlooking the — Mark Wallace, president and CEO, river, Gilbert’s Detroit Riverfront Conservancy The Assembly We’ve seen the effect the building project and a pair of Dennis Kefalliout of the east riverfront has done for nos-owned residential buildings at nearby investor interest: Apartments West Jefferson and Fort Street, and on have been built (although not nearly as West Lafayette, residential options many as have been floated the last few within a couple blocks of the park are years as Detroit remains a tough mar- somewhat limited. Per the city’s The Neighborhoods ket to develop in) and properties have traded hands at a steady clip both to website, there are just seven homes in 4 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

the West Side Industrial neighborhood — aptly named — where the park is located. (Of note, of course, is that before the mid 1950s there was much more housing in the area but it was cleared for industrial use.) Housing of course becomes more abundant going north from the site into the Corktown, Mexicantown, Hubbard Richard and Hubbard Farms neighborhoods. On the rental side of things, that could soon change as some projects, such as the redevelopment of the former Joe Louis Arena site, have quietly — but very visibly — have gotten underway. The west riverfront took a back seat to the east riverfront for several years and, now that the east portion is nearing completion stretching roughly from the Renaissance Center to Belle Isle, attention can be turned stretching from the RenCen to the Ambassador Bridge. “One of the exciting things is there are a lot of families, a lot of seniors, and a lot of kids in southwest Detroit and, I think that Ralph Wilson Park, when combined with the Southwest Greenway, will be incredibly accessible for all of them,” Wallace said. “I’m hoping we will see a significant amount of economic development that doesn’t negatively impact the people who have

Developer David V. Johnson received the Lifetime Achievement Award from the Michigan chapter of the Urban Land Institute | ULI MICHIGAN

been living here for generations.” But it’s not just the park, said Marc Nassif, senior managing director in the Detroit office of BBG, a Dallas-based appraisal firm. “The parks and recreational amenities have, in my opinion, more of a compounding impact on the employment centers than they do necessarily as a standalone impact on property values,” Nassif said. “I think here is some bump in value, in rental rates, near those amenities, but when coupled with employment hubs like what’s happening with Ford in Corktown, the impact gets even more magnified.”

David V. Johnson gets lifetime honor Developer David V. Johnson received the Lifetime Achievement Award from the Michigan chapter of the Urban Land Institute last week. He is the chairman and CEO of Victor International Corp., which has developed 43 luxury residential commu-

nities and resorts with an eye toward sustainability. Past award recipients include Robert Larson, Jerome Schostak, A. Alfred Taubman, Wayne Doran, Edsel B. Ford II, Peter Karmanos Jr., Sidney Forbes, Dan Gilbert and John Rakolta Jr. “David’s unique vision and life-long passion to build the highest quality developments has resulted in the most innovative, award-winning communities that have consistently led the industry,” Bobby Taubman, co-chair of the ULI Michigan Lifetime Achievement Award, said in a statement. “His ability to understand the customer, and create programming and amenities that provide exceptional experiences, have allowed his communities to achieve wonderful outcomes for all constituents. David has spent a lifetime pushing boundaries and mentoring colleagues. ULI Michigan is very proud to honor him with its Lifetime Achievement Award.” Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

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COMMENTARY

Expanding Michigan’s EITC will help working families BY NICK KHOURI

GETTY IMAGES/ISTOCKPHOTO

EDITORIAL

Voters given chance at reform. Let’s use it T

strictest in the nation, and has drawn fire recently from business and economic development leaders who say it stands in the way of advancing a common agenda for attracting and retaining investment. The proposed ballot measure isn’t perfect and could be confusing for voters since it covers a lot of territory and is hard to reduce to a sound bite. But if reducing churn and increasing the experience of leadership in each house is the right goal — and it should be — it’s a step in the right direction. Just as important is a provision in the proposed new amendment that would shed some long-needed light on lawmakers’ personal finances and business connections. It would require lawmakers, the governor, the lieutenant governor, the secretary of state and the attorney general to file annual financial disclosure reports starting in 2024. Michigan is among just two states where legislators do not have to disclose personal financial information and positions with outside organizations, businesses, nonprofits, unions and the like. The disclosure requirements being sent to the ballot are somewhat weaker than those being sought as part of a petition drive. Language requiring the disclosure rules to be at least as strict as those for Congress was removed, for example, as was a requirement involving disclosure of property transactions, according to Gongwer News Service. But we’re encouraged that lawmakers are putting any reform on the ballot at all. Voters shouldn’t hesitate to take them up on the invitation.

MORE ON WJR ` Crain’s Executive Editor Kelley Root and Managing Editor Michael Lee talk about the week’s stories every Monday morning at 6:15 a.m. Mondays on WJR 760 AM’s Paul W. Smith Show.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited for length or clarity. Send letters to Crain’s Detroit Business, 1155 Gratiot Ave, Detroit, MI 48207, or email crainsdetroit@crain.com. Please include your complete name, city from which you are writing and a phone number for fact-checking purposes. 6 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

GETTY IMAGES

he partisan storm clouds over the Michigan Legislature broke open this week to let in a brief, surprising sliver of sunshine. In an unexpected move, lawmakers advanced a chance for voters to decide in November whether they want to relax the state’s strict term limits and require more transparency in how elected officials report their spending. The doubled-barreled shot of potential reform came with no debate or notice, but we’re not complaining. Both measures, if approved by voters this fall, are a positive step toward easing the partisan gridlock that’s ultimately making Michigan less competitive. The Legislature on Tuesday unveiled the proposed constitutional amendment and placed it on the statewide ballot within hours. It means a ballot committee of business and labor groups backing the measure do not have to collect roughly 425,000 voter signatures, freeing BOTH MEASURES, them to promote the vote in the fall. IF APPROVED BY actual Mi ch iga n’s 30-year-old term limVOTERS THIS its law allows legislaFALL, ARE A tors to serve no more than 14 years. That POSITIVE STEP includes a maximum TOWARD EASING of three two-year House terms and two PARTISAN four-year Senate GRIDLOCK. terms. The amendment would allow them to serve up to 12 years: six two-year House terms, three four-year Senate terms, or a combination. Supporters say it will allow new lawmakers to focus more on their jobs and building relationships without being term-limited out soon after they’ve really learned the ropes. The existing term limits law is one of the

t’s rare that a tax policy in Michigan enjoys broad bipartisan support. Lansing is now debating that rare example, an expansion of a tax credit aimed at working families. What if I told you a sinNick Khouri was gle tax law change in Michigan could: the Michigan ` Provide simple and efstate treasurer fective tax relief for from 2015 Michigan working famithrough 2018 lies. In fact, it has a long and senior vice president of DTE track record of being one of government’s most Energy. Khouri important anti-poverty currently serves programs. on the board of ` Directly support MichiMichigan Future. gan’s small business community. ` Give an important boost to the state’s long-term economic growth. The Earned Income Tax Credit is a refundable federal tax credit, available only to working taxpayers with special supports for those with children, established over 40 years ago with support from both Democrats and Republicans. Michigan, like 30 other states, provides a state income tax credit tied directly to the requirements of the federal credit. First established in 2006, Michigan’s EITC has ranged from 20 percent of the federal credit, to 6 percent today. Senate Bill 417, sponsored by State Sen. Wayne Schmidt, would gradually increase Michigan’s EITC to 30 percent. And that’s the tax cut proposal finding strong support from business groups — including nearly a dozen local chambers of commerce, from Midland to Detroit, along with the Michigan Manufacturers Association, Small Business Association of Michigan, the Health Care Association of Michigan, Michigan Restaurant and Lodging Association, religious organizations, and local service groups like United Ways around the state. Michigan’s EITC provides a tax cut, not a new state program, to Michigan’s working families. Very little bureaucracy is required,

meaning more of the dollars end up supporting families. There are three key reasons I fully support SB 417: ` The EITC has a proven track record of pulling people into the workforce. Especially these days, as Michigan employers struggle to find workers, the EITC increases the after-tax financial benefit of work. In contrast to other government programs, families must work and file a federal income tax form to be eligible. This return-to-work incentive benefits all employers, especially the state’s small businesses. ` An increase in the EITC directly supports struggling Michigan families. It provides direct support for those in need — and more relief to those most in need. It’s no secret that for decades, the state and national economy has generated a record number of jobs, but lacks good paying jobs, such as jobs that can support a middle-class family. By some measures, nearly 40 percent of Michigan families do not earn enough to support a family with basic necessities. In addition, while it will take years for the full economic impact of the pandemic to play out, the past two years have only increased the lack of good paying jobs and growing inequity. VERY LITTLE Many families use the EITC for just a few BUREAUCRACY IS years, as a hand up, REQUIRED, not a handout. ` Increasing the EITC MEANING MORE can act as a catalyst OF THE DOLLARS for overall economic growth. Long-term END UP economic growth is SUPPORTING determined by the number of workers FAMILIES. and productivity. Decades of research has shown the EITC is effective in drawing people back into the labor force. In this way, all Michiganders benefit from an increase in the EITC. The EITC is a win for Michigan families, employers, and the overall state economy. A broad coalition of more than 80 business groups, nonprofits, and foundations has come together to support an increase in the EITC, for the reasons outlined above. Now is the time for the Legislature and Gov. Gretchen Whitmer to increase the Michigan EITC and pass SB 417.

Sound off: Crain’s considers longer opinion pieces from guest writers on issues of interest to business readers. Email ideas to Managing Editor Michael Lee at malee@crain.com.

PEOPLE

Honigman’s new COO to be based in Chicago office Announcement comes after one-third of its Chicago lawyers moved to legal giant DLA Piper BY CHAD LIVENGOOD

Detroit-based law firm Honigman LLP has hired a new chief operating officer who will be based in Chicago, two weeks after one-third of its lawyers in the Windy City jumped ship to global legal giant DLA Piper. Veteran law firm executive Thomas Gaughan joins Honigman’s C-suite from ArentFox Schiff LLP in Chicago. Gaughan was a co-chief operating officer at ArentFox Schiff, following the merger of Arent Fox LLP and Schiff Hardin LLP earlier this year. He joined Schiff Hardin in 2018 as the Chicago-based firm’s COO. Gaughan, a veteran of law firm C-suites, was previously the COO at Baker McKenzie and the CFO at DLA Piper Gaughan and Locke Lord. Honigman CEO David Foltyn said the hire of Gaughan is meant to underscore the 74-year-old firm’s commitment to its business in Chicago, which is headed by managing partner Kristen Boike. “We thought with Chicago being such an important part of our growth and our growth plan that we’d prefer to have him there,” Foltyn told Crain’s. “(Gaughan’s) experience is vast ... and he really brings to us the kind of enthusiasm and entrepreneurial spirit and pragmatism that we value here.” Gaughan replaces longtime Honigman COO Robert Kubic, who is retiring and had headed the Detroit law

CRAIN’S AWARDS

firm’s daily operations since 2008. The Alexander Group, an executive search firm, led a nationwide search for a new COO. Kubic was involved in the search for his successor and will assist in a transition period for Gaughan, Foltyn said. Last month, 27 Chicago-based attorneys in Honigman’s private equity and M&A practice left the firm in one fell swoop for DLA Piper. The poaching from a global law firm left Honigman with about 40 attorneys based in its Chicago office, with practices focused in corporate fi-

fore the recent departure of the four Chicago-based partners and their 23 associates to DLA Piper, Foltyn said, Honigman’s leadership decided having an executive based in Chicago would be beneficial to the firm. “We just thought it was sensible to have somebody from leadership present in Chicago on a daily basis,”

“WE THOUGHT WITH CHICAGO BEING SUCH AN IMPORTANT PART OF OUR GROWTH AND OUR GROWTH PLAN THAT WE’D PREFER TO HAVE HIM THERE.” — David Foltyn, CEO, Honigman

nance, private equity, real estate, insurance recovery, life sciences, intellectual property and patent litigation. Gaughan had offered to move to Detroit and work out of Honigman’s downtown offices, Foltyn said. But be-

Foltyn said. Also last week, Honigman announced it has hired veteran federal commercial fraud prosecutor Denise Barnes to join its Investigations and White Collar Defense Practice in Washington, D.C. Barnes previously was a trial attorney in the U.S. Department of Justice’s Commercial Litigation Branch, Fraud Section, focused on complex white collar and regulatory investigations. Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

VI SI ON

Last chance to nominate for 40 Under 40 It’s your last chance to nominate an outstanding business leader under 40: Nominations close May 20. We’re looking for the overachievers who have started (and sold) companies, reached the C-suite and made nonprofits stronger while giving back to the community and mentoring others. To submit a nomination, visit crainsdetroit.com/nominate. Candidates will be invited to complete a more in-depth application by Friday, May 27. Winners will be featured in a special section of the Sept. 12 issue of Crain’s Detroit Business and recognized at our annual Celebration of Crain’s 40 Under 40 event in November. Questions? Contact Special Projects Editor Amy Bragg: abragg@ crain.com.

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MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 7

SMALL BUSINESS SPOTLIGHT

Small businesses shift gears to compete for seasonal workers

THE HEAT IS ON IN SEARCH FOR SUMMER EMPLOYEES

RS Lawn Care, a small business owned and operated by Livonia resident Ryan Shiplett, has begun overstaffing as a way to combat current labor issues. “Getting people to come to work every day is hard,” Shiplett says. RYAN SHIPLETT

Jay

DAVIS

For small business owners who depend on the warmer months for the majority of their revenue, time is money. Landscaper Ryan Shiplett has gone so far as to offer his workers bonuses for punctuality. Shiplett, 41, who owns Livonia-based RS Lawn Care and Plymouth-based My Fertilizing Co., recognizes he has a short window each year to maximize his company’s earnings. So in addition to the on-time bonuses, he’s increased his employees’ wages by 20 percent over the last two years — and raised his prices to keep up. “It’s been hard for me to fire people, because we’ve been having such issues finding new help, so I did this as a way of thinking outside the box,” Shiplett said of the bonus. “It’s very black and white. If you’re a minute late, you don’t get (the bonus). Lots of guys don’t get the bonus. We want everyone to hit their bonuses, but it hasn’t been worth it for us to let people go who show up late.”

From landscapers, restaurants and summer camps to house painters, public relations firms and swim clubs — they all need additional help each summer. And they’re all competing for a smaller pool of workers, whether it’s students on break or adults looking for full-time or supplemental income. Businesses are using financial incentives like higher pay and signing bonuses as well as some now-sought-after perks like flexible hours and hybrid office-remote work models to attract talent. The COVID-19 pandemic and subsequent labor shortage issues have made it difficult for small businesses to attract and maintain adequate staff, forcing some, like Shiplett, to keep on some less-than-desirable employees to maintain their businesses. Some are over-hiring to ensure shifts are covered and with an eye on the possibility of staffing issues again once fall comes and seasonal workers go back to school or other jobs. Shiplett has added some seasonal help to his full-time landscaping

and fertilizing staff. His workers also do some snow plowing in the winter and holiday lights installation and removal. “In the summer, some guys don’t think they make as much as they should, but when the winter comes, they get a full salary,” said Shiplett, who employs 24 people between his two companies. “We’re just trying to keep people motivated and employed.” Adding to full-time payroll takes away some flexibility, according to Matt Piszczek, Wayne State University assistant professor of management. Still, Piszczek, who specializes in employee relations and human resource management, sees seasonal employment as a major benefit to small business owners because it allows them to avoid hiring too many full-timers who may not be needed in the off-season. However, small and seasonal businesses are facing new staffing problems, Piszczek said. See SEASONAL on Page 9

“IT’S VERY BLACK AND WHITE. IF YOU’RE A MINUTE LATE, YOU DON’T GET (THE BONUS). LOTS OF GUYS DON’T GET THE BONUS. WE WANT EVERYONE TO HIT THEIR BONUSES, BUT IT HASN’T BEEN WORTH IT FOR US TO LET PEOPLE GO WHO SHOW UP LATE.” — Ryan Shiplett, owner, RS Lawn Care and My Fertilizing Co.

CRAIN’S PODCAST `Michael Greiner, Oakland University assistant

professor of management, talks about the summer hiring landscape on crainsdetroit.com/podcasts

READ ALL OF CRAIN’S SBS PROFILES AT CRAINSDETROIT.COM/SMALLBUSINESSSPOTLIGHT 8 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

HELP WANTED Following are tips small business owners can use to entice workers to sign on for seasonal and full-time work: Accommodate staff: Consistency in scheduling has become more attractive to prospective employees. A constantly changing schedule is enough to make them look elsewhere for work. Small business owners should look at giving staff the option for a regular schedule. Value current employees: Retention is the simplest way to prevent a staff shortage, so employers need to place a premium on ensuring workers know how valuable they are. That feeling of loyalty could serve as a competitive advantage for a small business battling against a larger competitor. Upward trajectory: Polls suggest a lack of opportunity for advancement was the main reason people left jobs in 2021. Promotions and development opportunities are highly valued by staffers, who will seek growth elsewhere if they don’t see opportunities at their current employer. SOURCES: OAKLAND UNIVERSITY AND WAYNE STATE UNIVERSITY

FOCUS | SMALL BUSINESS SPOTLIGHT

SEASONAL

From Page 8

“Businesses are generally facing the opposite problem. They need more full-time staff over the long term, not just temporary help over the summer,” he said. “Competition for seasonal workers will be stark this year, but rather than thinking of them as a stopgap to wait out the ‘Great Resignation,’ businesses may want to consider this as an opportunity to convert some of those seasonal workers into permanent employees in order to fill now-persistent gaps.” To fill those gaps, businesses like Shiplett’s and Mike’s on the Water in St. Clair Shores are over-staffing to ensure jobs are covered and in hopes those hired will stick around when an extra shift or full-time position opens up. “You’ve got to over-hire,” Mike’s on the Water Manager Jaci Wilson said. “In the restaurant business, you get people, kids and adults, who are excited about the job. That changes once they see how hard it is. You know people are going to leave, so you essentially have to have backups for situations like that.” Mike’s on the Water has a staff of about 70 to cover seating for 300 guests on two levels when its rooftop deck is open Memorial Day weekend through Labor Day. Wilson said staffing levels so far this season are better than she anticipated, but she knows that can change at any time. In a tight job market, more people have become comfortable quitting, putting many small businesses in a tough spot, according to Michael Greiner, Oakland University assistant professor of management, So even though it may hurt their bottom line, small business owners must have a larger contingent of employees if they hope to continue to deliver services. Wilson said higher wages have helped, but she would not disclose how much Mike’s has hiked pay over the last two years. Staff is happier, too, she said, which is a point of emphasis now for business owners. “You get the kids coming in, and they’re excited about work. They like working here,” Wilson said. “We try to make it like that for everybody. It’s something we have to look at now. It’s not all about money, either. People want to know they’re cared about.

Piszczek

Greiner

Everybody’s got different things going in, so we have to be aware of that and meet them in the middle. Unhappy people are more likely to quit faster now.”

Opportunities, expectations change A Small Business Association of Michigan survey of 500 small businesses conducted April 19-27 found 68 percent of respondents reported difficulties remain in hiring and maintaining staff. Some 70 percent of those small business owners reported they have increased wages this year in an attempt to attract and maintain workers. Along with staffing, supply chain issues and inflation continue to be hurdles for small business owners, according to the report. Greiner believes Michigan businesses will see a bump in hiring this summer, with the ongoing labor shortage giving high school and college students lots of opportunities. “Because the job market is so tight,” he said. “You’re going to see employers looking for basically warm bodies to fill just about every job they can.” Piszczek, though, says the number of workers seeking seasonal work for supplemental income is likely to be lower than previous years. Expectations for good treatment of employees, he said, has shifted significantly since the outbreak of COVID-19, and competition for workers is higher. “Especially lower-wage workers as seasonal employees tend to be,” Piszczek said. “Finding seasonal help might be tougher this summer and businesses will be competing against each other for that help. Industries such as child care or food services, where being understaffed can seriously affect revenues, may be hit harder compared to those where revenue is less tied to staffing.” The Michigan Department of Technology, Management and Budget in a report released May 2 found teenagers 16-19 years old will have

ample opportunity this summer to secure employment. The report found there will be 238,500 teens in that age group expected to take on jobs. To help smooth the way, the state Department of Labor on May 12 hosted an informational webinar to aid employers to prepare for an infusion of young workers. Detroit’s Parks & Recreation department in late April and early May hosted three jobs fairs to fill seasonal positions including lifeguard, swimming instructor and recreation program coordinator. Pay runs $9.87-$18.45 an hour with some positions eligible for an increase to $15 an hour on July 1. Meanwhile, Huron-Clinton Metroparks is offering a $1,200 bonus to attract seasonal help.

Power shift Moves being made by small business owners suggest they are looking to regain some of the control they had on staffing pre-pandemic. Some sort of compromise between employer and employee could lead to a possible end in staffing woes, Greiner said. “Right now, the employees just have a lot of power in terms of the bargaining and frankly, over the last 40 years or so, that’s been pretty rare in the American job market,” Greiner said. “I think it’s kind of an eye-opening experience to find the employees are in the kind of position where they can demand higher wages, demand better benefits. “The biggest adjustment employers need to make right now to survive this whole thing is they need to accept that employees do have the bargaining power right now and to essentially meet employees where they are rather than demand things they did previously.” Wilson believes fairness and equality will become the norm. “More than anything that’s happened the last two years, I think that’s the biggest issue. People just want you to be fair. that’s where all the pay increases are coming from. You’ve got to be fair with your staff,” the restaurant manager said. “Things are going to go up and down no matter what — revenue, staff. If you know how to run your business, you’ll be OK.” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

FINANCE

Comcast relaunches $1M small business program in Detroit, surrounding areas BY NICK MANES

Small business owners in Detroit and surrounding communities will have another shot at $10,000 grants from one of the country’s largest telecommunications companies. Philadelphia-based Comcast announced Thursday that Detroit is among the cities in which it is again implementing the Comcast Rise grant program, which provides funding to eligible small businesses, largely women and minority-owned, in Detroit and elsewhere. First announced in early 2021 and being brought back again, the telecom and internet service provider

will award a total of $1 million to 100 small businesses owned by women, people of color and other minorities in Detroit, Highland Park and Hamtramck. Detroit was one of five cities selected for the program, with the others being Atlanta, Pittsburgh, Philadelphia, and the Twin Cities area, according to a news release. Comcast will award a $10,000 grant to 100 local businesses from the Comcast Rise Investment Fund, for a total of $5 million across 500 businesses. This brings the amount awarded under the program to $16 million to date.

The application period for the program will run June 1-14. The Rise program, however, can go beyond just money, according to Michelle Gilbert, a vice president and spokesperson for Comcast in Michigan The grant program aims to help fill gaps for typical small businesses, such as restaurants, where owners don’t necessarily have expertise in areas such as cybersecurity. Comcast as a company can help provide some of that through the program, Gilbert said. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

A F e e - O n l y We a l t h M a n a g e m e n t G r o u p

Michigan’s #1 Financial Advisor by both Barron’s* and Forbes** Charles C. Zhang CFP®, MBA, MSFS, ChFC, CLU Founder and President

Charles is the highest ranked Fee-Only Advisor on Forbes’ list of America’s Top Wealth Advisors**

www.zhangfinancial.com 101 West Big Beaver Road, 14th Floor Troy, MI 48084 (248) 687-1258 Minimum Investment Requirement: $1,000,000 in Michigan $2,000,000 outside of Michigan. Assets under custody of LPL Financial, TD Ameritrade, and Charles Schwab *As reported in Barron’s March 12, 2022. Rankings based on assets under management, revenue generated for the advisors’ firms, quality of practices, and other factors. **As reported in Forbes April 7, 2022 and August 16, 2021. The rankings, developed by Shook Research, are based on in-person and telephone due diligence meetings and a ranking algorithm for advisors who have a minimum of seven years of experience. Other factors include client retention, industry experience, compliance records, firm nominations, assets under management, revenue generated for their firms, and other factors. See zhangfinancial.com/disclosure for full ranking criteria.

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LEADERS IN EV We’re living through a shift in the automotive sector that may be as profound as the invention of the automobile itself: the electric vehicle revolution. Crain’s Notable Leaders in EV are heading up the charge at automakers and suppliers large and small, developing innovative battery technology and charging solutions, implementing electrification plans for businesses and cities and training up the next generation of EV leaders. DARYL ADAMS

ERICH BANHEGYI

President and CEO, The Shyft Group

Head of Regional Business Unit Electrification, Bosch North America

When Daryl Adams joined The Shyft Group seven years ago, he sought to reinvent the nearly 60-year-old manufacturer of chassis and bodies. Under his leadership, the company announced in 2021 that it would bring to market an all-electric, modular chassis platform for medium-duty trucks and open a dedicated electrification research and development center. Earlier this year, the company debuted an all-electric, medium-duty delivery van that it plans to bring to market by mid-2023. “… Nobody else has the capability to manufacture both the chassis and the bodies like Shyft. When they told us they could make 2,500 units of the EV chassis the first year, we told them, ‘That’s not going to be enough,’” said Brad Sigmon, commercial fleet manager of Sales at Randy Marion Automotive Group in North Carolina. Adams is a member of the Detroit Public Safety Foundation board and chair of the Lansing Economic Area Partnership board.

Before taking on his current role, Erich Banhegyi helped develop Bosch’s first electric motor program. For this, he was technical project lead and then director of EM-Motive, a joint venture between Bosch and Daimler. Banhegyi, who holds two patents for hybrid vehicles, manages the 65-member team responsible for electric drives, power electronics, battery components and related services. “We’ve won significant electrification business with big OEMs based in major part on the leadership of Erich,” said Rich Kohler, director of Marketing and Product Management at Bosch North America. “Erich has been instrumental in helping Bosch put EV ‘power to the road,’ setting the foundation for the success Bosch is experiencing now. And not only Bosch, but he’s truly laying the essential groundwork for the entire EV community, adding to the successful rollout of EVs everywhere in the foreseeable future.”

METHODOLOGY: The leaders featured in this report were selected from nominations by a team of Crain’s Detroit Business editors based on their career accomplishments, track record of success in the field and effectiveness of their efforts, as outlined in a detailed application form. The honorees did not pay to be included on the list. Notables in EVs was managed and written by Leslie D. Green. For questions about this report, contact Special Projects Editor Amy Bragg: abragg@crain.com.

THOUGHT LEADERSHIP FORUM

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HOW CONSUMERS ENERGY IS LEADING MICHIGAN’S EV TRANSITION locations across Michigan, making it possible for long-distance travelers to charge and get back on the road in less than 30 minutes. Within two years, we plan to have 100 more fast charging locations, and more than 2,000 chargers in homes and businesses powering EVs across the state.

Consumers Energy is excited to help make this Sarah Nielsen is transition affordable and Consumers Energy’s executive director We’re collaborating with convenient. We expect overseeing electric other energy providers, too. to be able to support vehicle programs. As part of the Midwest EV powering 1 million EVs Charging Infrastructure in the communities we Coalition and the National serve by 2030. To make Electric Highway Coalition, Consumers this transition as seamless as possible, Energy is partnering to build a national we’re developing the charging network charging network so that EV owners can that’s necessary for widespread EV travel the country, confident that they can adoption. charge along interstate routes. Energy providers like us are essential to building a strong charging infrastructure More EVs, of course, will mean increased energy use as drivers shift from gas to across the country. One way of electricity. Consumers Energy is already supporting infrastructure is through planning for this growing demand to rebates to customers installing charging ensure energy is available when and stations, making EV adoption much where it’s needed. The most important more affordable. At Consumers Energy, step we’re taking is working with EV we’ve provided more than 1,600 rebates to residential and commercial customers. drivers to steer them toward overnight charging when the electric grid can easily This includes 36 public fast charging

10 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

provide more energy. We’re doing this with plans that include lower rates during lower-demand hours, also saving money for drivers and all customers.

CONVENIENT

Finally, energy providers play a key role in ensuring that the electricity drivers use to power their cars is increasingly clean, protecting both customers and the environment. At Consumers Energy, we’re committed to reducing emissions, through both EV adoption and the power sources that fuel EVs. By investing in solar and other forms of renewable energy, and accelerating the end of coal, we will be able to power electric vehicles cleanly and reliably. We are committed to net zero carbon emissions from electricity we provide to Michigan homes and businesses by 2040. Our state’s automakers have made big commitments to electric vehicles that will roll off Michigan assembly lines over the coming decades. We’re doing our part to provide those EVs with clean, affordable energy and move the automotive industry’s transformation into the fast lane.

CEO

“R arie in h effic cle

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HOW MICHIGAN IS CREATING A COMPETITIVE MOBILITY WORKFORCE thoughtfully aggressive approach, Michigan’s global standing could also change. So, we have designed an approach that wins threefold:

Trevor Pawl is the Chief Mobility Officer for the State of Michigan and leads Michigan’s Office of Future Mobility and Electrification.

Despite this disruption, Michigan has remained a global leader in how people and goods move. Michigan’s mobility industry, which includes electric vehicles, contributes $125 billion to the state’s economy and accounts for 23% of gross state product.

One in every five jobs in Michigan is mobility-based. We’re building affordable EVs, smarter roads, and better transit solutions. But, new jobs alone aren’t enough to claim global leadership. They must be paired with a diverse and skilled workforce. The good news: competition for mobility talent is heating up. And without a

1. Securing good-paying, local manufacturing jobs as the auto industry transitions from internal combustion engines to batteries 2. High-tech talent and growing our state’s software prowess 3. Investing in smarter, greener infrastructure and transit

All three are required to claim larger shares of the EV supply chain, and the brains that come with it. The early returns on this approach are promising. Michigan’s auto companies have created more than 20,000 wellpaying jobs since 2019. This includes the largest investment in General Motors history. $7 billion and 5,000 jobs that will stay in Michigan and produce EVs. The Michigan Department of Labor

and Economic Opportunity created the Michigan Revolution for Electrification of Vehicles (MiREV) program to help companies build customizable EV job training academies. And to support Michigan’s software prowess, the state, Ford, Google, and the City of Detroit are working to activate the Michigan Central Innovation District, an innovation hub that will hold 5,000 hightech workers. We’ve also put a call out to the world’s best engineers to come to Michigan and tackle some of the most pressing issues our cities face. Through the Michigan Office of Future Mobility and Electrification, companies can receive grants to deploy solutions that overcome local transit and infrastructure barriers. Today’s mobility industry rewards the best combinations of workers, infrastructure, transit, and technology. By embracing an approach that develops a robust manufacturing and high-tech workforce, we are creating something bigger than the sum of its parts: a value proposition that is uniquely Michigan.

“ T HE FU T U RE OF M OB IL IT Y W IL L B E SHAP ED IN M ICHIGAN .” Dreaming. Innovating. Growing. It's how Michigan talent is making an impact on the world in key industries. From tech to mobility to advanced manufacturing, there's a different kind of hustle here. Expand your business in Michigan and get access to support, camaraderie and new opportunities. Make the move at michiganbusiness.org/pure-opportunity

12 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

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We are living through an unusual decade; a time when the systems and preferences that were never supposed to change are evolving on many fronts — when considering this transformation, the seismic shift occurring in the mobility and electrification industry is top-of-mind.

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ALISYN MALEK

WILLIAM MCCOY

VUK MILOJKOVIC

CHAD MORLEY

Executive Director, Coalition for Reimagined Mobility

Founder and CEO, Vehya LLC

CEO, BASF Toda America

William McCoy worked in the real estate and car automotive dealership industries before founding Vehya, an electrical contractor and EV charger service provider, with his wife, Marissa. The company is championing EV adoption through infrastructure and workforce development. Under McCoy’s direction, Vehya has installed more than 100 residential EV chargers since its founding last year. His company is training the workforce needed by pairing high school students and adult learners with electricians. It also has an online platform to connect EV professionals with jobs.

“The electric vehicle market in North America continues to grow due in large part to the advancement in battery technologies. Central to this effort is Vuk and his team at BASF Toda America (BTA), who are … operating the largest NA commercial-scale cathode active materials ma nu f a c t u r i n g facility right here in Battle Creek,” said BTA Site Manager Wir Wong. Vuk Milojkovic leads a team of about 100 people. They are also responsible for developing next-generation CAM materials in Ohio and establishing world-scale CAM production, supporting the domestic EV battery supply chain. He also implemented measures to improve the use of BASF’s manufacturing assets, increasing the production and supply of cathode material by 30 percent. In addition, BASF Toda America launched a high school internship program under Milojkovic’s direction and held a food drive that delivered 900 pounds of food to the South Michigan Food Bank.

Senior Vice President of Automotive & Transportation, Jabil

Exec Ren Ener

Alisyn Malek and her team of 10 employees are reevaluating mobility and transportation policy worldwide for autonomous shared and electric mobility transportation, such as electric ride-shares, buses, scooters and bikes. She recruited Jim Farley, CEO of Ford Motor Company; Mary Nichols, former chair of the California Air Resources Board; Thierry Mallet, CEO and chair of TransDev; and Jared Cohon, president emeritus of Carnegie Mellon University, as co-chairs. Previously, Malek launched May Mobility, an autonomous electric transportation company. The Smithsonian named Malek one of its 10 female innovators to watch in 2019. “(Her) experience and achievements in electric and autonomous vehicles span the gamut from the largest companies in the world (working on the Chevy Bolt at GM) to the smallest (co-founding the startup May Mobility). It is specifically because of this range that she has been on the front lines of changes in transportation that are impacting how the next century will unfold,” said Reilly Brennan, general partner of Trucks Venture Capital.

GLOBAL SALES OF ELECTRIC VEHICLES REACHED 6.6 MILLION, OR 8.6 PERCENT OF ALL NEW CAR SALES, LAST YEAR — MORE THAN DOUBLE THE MARKET SHARE IN 2020. International Energy Agency

MICHIGAN HAS 974 ELECTRIC VEHICLE CHARGING STATIONS. U.S. Department of Energy

THOUGHT LEADERSHIP FORUM

Chad Morley leads 8,000 people in Jabil’s $2.2 billion automotive, commercial truck and bus, rail and construction, mining and agriculture businesses. In 2018, Morley developed a strategy to help the $31.8 billion manufacturing solutions provider meet global automakers’ shift toward vehicle electrification. This strategy includes environmental testing for high-voltage systems and “designing next-gen L2 stationary chargers for a successful European-based charging company that sells directly to automakers.” Morley’s division committed to funding the Greenlight Detroit Fund II, a network of cities across the country that provides opportunities to children, youth and families in poverty, for the next four years. “Chad and his leadership team have built an organization with strong powertrain technology expertise, global automotive-grade manufacturing capabilities and robust supply chains,” said Trevor Neumann, Jabil’s vice president of Automotive & Transportation.

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LEMON LAW IN THE AGE OF ELECTRIC VEHICLES The still-developing technology and supply chains for Electric Vehicles (EVs) have spawned a new age in Lemon Law and Consumer Protection actions. In particular, EVs are subject to claims related to battery defects, vehicle range, software and availability of replacement parts.

Promised Range

To reduce “range anxiety,” manufacturers tout the distances their EVs can travel on a single charge. However, as any veteran owner of an EV can attest, range varies significantly depending on speed, ambient temperature Michael A. Sneyd and use of cabin climate is a Member of Kerr controls. Consumer Russell and chair of the protection and truth-inBattery Defects and Intellectual Property Degradation advertising laws can be practice group. used against OEMs with Batteries in an electric inflated promises of range, vehicle are large, complex especially if such claims and very expensive. In order to entice are not qualified with prominent notices apprehensive purchasers to try EV that actual range varies significantly ownership, manufacturers have offered depending on conditions and use. extended warranties on EV batteries, usually applicable up to 100,000 miles. Software However, over time, battery capacity inevitably becomes diminished making Electric vehicles are impressive pieces the extended battery warranties fodder of technology, implementing software for Lemon Law claims against EV for telematics and distribution of the manufacturers. To mitigate against a battery’s power, in addition to the wide flood of warranty claims and litigation, array of electronics common in all OEM warranties will typically allow modern vehicles. Due to the complexity for degradation of up to 40% before and novelty of such software, local the warranty will require a battery dealers may not have the expertise replacement. or experience to remedy significant

software issues on a timely basis. With most Lemon Laws requiring a full refund if the vehicle is out of service for 30 days, software issues can easily lead to Lemon Law claims. Availability of Replacement Parts As Electric vehicles gain in popularity, some automakers have struggled to keep up with demand. Available parts are funneled to new production, leaving few components available for use as replacement parts. Of course, these issues have been greatly exacerbated by recent global supply chain issues. Failure to have replacement parts available could lead to liability under applicable Lemon Laws. As the auto industry transitions to electric vehicles, Lemon Law attorneys are also adjusting their practices. Manufacturers of electric vehicles will need to carefully manage their warranty language, marketing materials, authorized service centers and supply chains to protect themselves against the next wave of Lemon Law litigation.

A track record of results. We understand the region. We know what moves Michigan. We are committed to the community.

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kerr-russell.com Convergence — Detroit From Above by Brian Day

MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 15

WEISONG SHI

GLENN STEVENS

DEAN TOMAZIC

JONATHAN WOODSUM

LINDA ZHANG

Chair of the Wayne Mobility Initiative, Associate Dean for Research and Graduate Studies for College of Engineering and Director of the Connected and Autonomous Research Laboratory, Wayne State University

Executive Director, MICHauto; Vice President of Automotive and Mobility Initiatives, Detroit Regional Chamber

COO, FEV North America Inc.

President, Barton Malow Co.

Dean Tomazic is responsible for 400 employees in FEV’s U.S. business units. The company provides mobility and energy management-related engineering services. A decade ago, Tomazic initiated changes to R&D to focus on battery, e-motor and power electronics. And under his leadership, FEV updated corresponding test facilities for e-motor, e-axle test benches and battery emulators. “Dr. Tomazic is responsible for all of FEV’s engineering projects as well as the continuous innovation that sustains the future of FEV as a leading engineering service provider. His area of responsibility includes the development and ‘productionization’ of gasoline and diesel powertrains for passenger cars, light-duty and heavy-duty applications, as well as vehicle calibration and certification for the U.S. market,” said FEV president and CEO Patrick Hupperich. Big wins include testing the Lucid Air, an electric vehicle from Lucid Motors, on the FEV chassis dyno in Auburn Hills. The company has also partnered with Hyliion to develop a class 8 truck.

“Under Jon’s leadership, Barton Malow Company is partnering with the leading manufacturers in the market to help usher in the next generation of EVs. Despite our significant growth in this sector with projects of unique size and scale, Jon has managed to maintain our commitment to quality and safety that has made Barton Malow a trusted name within the automotive industry for decades,” said Ryan Maibach, president and CEO of Barton Malow Holdings. Barton Malow is constructing the $5.8 billion BlueOval SK Battery Park, twin battery plants on a 1,500acre campus in Kentucky, for Ford Motor Co. and SK Innovations. The construction company is also the builder of record for two Ultium Cell facilities for General Motors and LG Energy Solutions, including a $2.3 billion, 2.8-million-square-foot facility in Ohio and another in Tennessee. Jon Woodsum is a founding member of the University of Michigan’s Construction Board of Advisors. He is also a member of Legatus, an organization for Catholic business leaders, and the Detroit Cardinal Club.

Chief Engineer of the F-150 Lightning, Ford Motor Co.

When the U.S. Department of Transportation and National Highway Traffic Safety Administration decided to provide online training in automotive technology for NHTSA’s Office of Defects Investigation, they contacted Weisong Shi. “Dr. Shi is a world-renowned expert in Edge computing, where he is using this technology to advance mobility research and development,” said Wayne’s Dean of Engineering Farshad Fotouhi. After working closely with Shi and other leadership at the Mobility Academy, NHTSA decided to provide training in machine learning and artificial intelligence, electric vehicle technology, battery technology and autonomous vehicle technology. Shi’s team of 60 will also be working with SEMCA on the state’s recently announced Michigan Revolution for Electrification of Vehicles Academy grant. The $5 million grant is for prehire and post-hire education and training in automotive mobility and electrification industry technologies.

As a volunteer in 2006, Glenn Stevens worked with industry colleagues to write the business plan for MICHauto, a nonprofit launched in 2007 to grow Michigan’s auto industry. Stevens, who became executive director in 2014, collaborates with OEMs, suppliers, colleges and universities, state agencies and others to work toward that goal. In 2015, Stevens led the creation of the Michigan Mobility Initiative, an alliance between MICHauto, the Michigan Department of Transportation, Michigan Economic Development Corp. and others to prepare Michigan for electrification, autonomy, mobility and connected vehicles. In 2016, he co-founded the Detroit Mobility Coalition, which leads the Michigan High-Tech Talent initiative and partners in MiREV. “Glenn is a champion and leader of the EV revolution — a connector of people, a builder of coalitions, a strategist and dot connector who whispers revelations to business executives, journalists and other influencers critical to Michigan’s quest to lead the new era of mobility,” said Ron Fournier, president of Truscott Rossman.

Time magazine featured Linda Zhang on the cover of its November 2021 issue. Automotive News named her a 2021 Rising Star and the Chicago Auto Show’s What Drives Her award program named her a 2022 Rising Star Award. Zhang, who leads more than 100 employees, is responsible for delivering Ford’s first all-electric F-150. Under Zhang’s direction, the pickup can provide backup power for a house for up to 10 days. It can also “share range” by charging another vehicle. Now, Zhang is working to nearly double the production capacity of the F-150 Lightning to meet the demand of about 200,000 reservations for the light-duty truck. “Linda is the most intelligent and hardest working person I know, but what sets her apart is her intense focus on the customer and her leadership abilities to the team that is launching one of the most important vehicles in Ford’s history,” said Jasen Turnbull, F-150 Lightning marketing manager at Ford. In addition, the F-150 Lightning received Popular Science magazine’s Best of What’s New 2021 Award.

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Know a young leader making extraordinary contributions at work and in the community? Nominate them for Crain's 2022 class of 40 Under 40. Past honorees have founded companies, taken nonprofits to new heights, distinguished themselves in state and local government and more. Winners will be profiled in a Sept. 12 special section and celebrated at our annual 40 Under 40 event this fall.

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COMMERCE

Michigan formula plant causes dangerous supply chain ripples Abbott Nutrition plant in Sturgis shut down since mid-February over bacterial infections BY DUSTIN WALSH

The widespread infant formula shortage due to the government shutdown of the Abbott Nutrition plant in Sturgis is creating dangerous situations for parents and the pediatricians that tend to their babies. The plant has been shut down since mid-February after a U.S. Food and Drug Administration investigation discovered serious food safety violations. The investigation was launched after four infants contracted Cronobacter sakazakii, a rare and deadly bacterial infection, after consuming formula made at the Sturgis plant that led to recalls of some of its formulas. Abbott maintains its plant is not the likely source of the bacteria. While the FDA works to address the issues and reopen the plant, the shortage continues to impact the most vulnerable, local pediatricians told Crain’s. The biggest impact is to infants requiring specialized formulas with specific amino acids that act as a major source, if not the sole source, of nutrition for children with metabolic disorders. These disorders impact a person’s ability to break down proteins, effectively eliminating the ability to consume traditional foods, including breast milk. These specialized formulas are produced at plants like Abbott and sold to consumers via pharmacies. “For children with special formula needs, they will do very poorly if they don’t get the right formula,” said Uzma Shah, the new chair of pediatrics at the Henry Ford Medical Group, who most recently served in pediatrics leadership at Harvard Medical School and Massachusetts General Hospital. “Pharmacy stocks are about half of what they should be and right now manufacturers can’t keep up with demand, creating a real problem for these babies.” Abbott has boosted production

A House member holds a can of Similac infant formula during a news conference about the shortage of baby formula outside the U.S. Capitol in Washington, D.C. on Thursday, May 12. | BLOOMBERG

out of its Ohio plant, which predominantly makes standard formula, and is working to ship product from its plant that makes specialty products like those of its Sturgis plant from production in Ireland. However, the U.S. has a 17.5 percent tariff on imported formula, so those shipments will likely not be profitable for the company. Parents are seeking workarounds for the products, including ordering from overseas vendors in Europe. But Jule MacPherson, a pediatrician at Kidology Pediatrics in Troy, warns of potential dangers in imports. “I have had patients who’ve gotten formula from Europe, but it’s not FDA regulated,” MacPherson said. “I urge them to proceed with caution. The nutrients are usually a little different and might not meet their needs and there are concerns with

shipping long distances. There is no guarantee that formula stayed at an appropriate temperature. I discourage parents from overseas formulas.” There have also been examples of parents cutting the formula with water to make it last longer, but that’s extremely dangerous, Shah said. Formulas are mixed to exact infant need and adding water can cause serious health risks, most commonly seizures. Regular formulas, sold on grocer shelves, are also in short supply due to the closure, but there are alternative options, both pediatricians said. After six months of age, some babies can safely transfer temporarily to cow’s milk, Shah said. Those older than six months can also generally tolerate infant formulas in some cases, if available. Todd Robinson, director of marketing for Busch’s Fresh Food Market,

which has 16 stores across Southeast Michigan, said shelves remain sparse for formula but that has been a constant during the pandemic since last year. “We’re down considerably, but our (formula) sales are basically the same as 2021,” Robinson said. “We keep ordering but the supply chain just doesn’t have the product.” Robinson said while the stores are out of popular formula brands, such as Abbott’s Similac, many private branded formulas remain in stock. MacPherson said private label brands, such as Meijer and others, offer a worthy alternative for parents. Meanwhile, Abbott announced Thursday it hoped to reopen its Sturgis plant in the next two weeks, which should start to alleviate shortages in two months. Reopening is dependent on approval from the FDA. Last month,

Abbott reported that worldwide sales for its pediatric nutrition dropped 20.6 percent on a reported basis in the first quarter due to the formula recalls. Abbott said that once restarted, the Sturgis facility would begin production of EleCare, Alimentum and metabolic formulas first, and then begin production of Similac and other formulas. President Joe Biden spoke with baby formula manufacturers and retailers Thursday about supply chain disruptions and the safety recall. The president discussed with executives from Gerber and Reckitt how they could increase production and how his administration could help, and talked with leaders from Walmart and Target about how to restock shelves and address regional disparities in access to formula, the White House said. The scant supply of infant formula has congressional Democrats scrambling to address the issue, Bloomberg reported. House Majority Leader Steny Hoyer, D-Md., called the shortage “a real problem and we’re hearing from a lot of people on this.” After top House Democrats discussed the issue in closed-door meetings Wednesday morning, Energy & Commerce Committee Chair Frank Pallone, D-N.J., announced the committee’s oversight panel will hold a May 25 hearing on it, and Pallone said he’ll also meet with the FDA “to try to determine what they can do better.” “We’re looking to see if we need to have legislation, have a hearing and see what can be done to increase the amount of formula available,” he told reporters. — Crain’s Chicago Business contributed to this report. Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

OBITUARIES

Robert Vlasic, who built family’s pickles into top brand, dies BY SHERRI WELCH

When Robert Vlasic sold his family’s Vlasic pickles business to Campbell Soup Co. in 1978 for a reported $33 million, he did something unheard of at the time. Vlasic asked for a seat on the company’s board. That was very unusual for a small company that was acquired by a dominant Fortune 500 company like Campbell, his son Bill Vlasic said Thursday. The Dorrance family that controlled Campbell Soup Co. at the time was so impressed by Vlassic that they made him chair of their board, said Bill, the retired Detroit bureau chief for The New York Times. “While that may have seemed like something unusual to people who didn’t know him, I wasn’t surprised,” Vlasic said. “He became as passionate about the soup business as he was about the pickle business and all of his businesses.” Robert Vlasic, who built his fami-

ly’s hometown Vlasic pickles business into a national brand before selling it, died May 8 at the age of 96. Beyond his success in business, Vlasic was a Robert Vlasic noted philanthropist, lay leader in the Catholic church and proud leader of the family he had with his late wife Nancy. After graduating from Culver Military Academy in Indiana, he served in the U.S. Navy during WWII and earned an engineering degree from the University of Michigan in 1949 before joining his family’s pickle business, which launched as an extension of the family’s creamery business . He established the first Vlasic pickle plant in Imlay City, building the company into the country’s top pickle brand known for not only its pickles but also its bow-tie-wearing cartoon stork commercials.

He joined Campbell’s board and served as chairman from 1988-93. In 1998,Campbell Soup spun off Vlasic Foods, which reached sales of about $1.5 billion the year before.Today, the Vlasic brand operates as part of Conagra Foods. Pickles weren’t Vlasic’s only focus. He also founded other ventures, including Troy-based technology company O/E Systems Inc. and leasing and real estate development interests. As a businessman, Vlasic was tough and demanding and never accepted anything less than the best, his son Bill said. “But he had a heart and really cared about his employees...(and) his customers.” His management approach of accepting just one piece of paper from his businesses each week to force managers to focus on what was most important (like the amount of pickles shipped, overtime and pricing) was immortalized in the 1996 book “Profit Secrets from a No-Nonsense CEO” by Gary Sutton, Crain’s De-

troit Business reported that year. Bill Vlasic said he was always starstruck by people who gravitated to his father, like Henry Ford II — who made his father the first non-Ford chairman of Henry Ford Hospital — Cardinal Adam Maida, the late Pulte Homes Founder William Pulte, Metro Detroit dealership owner Martin “Hoot” McInerney and ASC Inc. Founder Heinz Prechter. “With my dad, if you were a friend, you were a friend for life,” Vlasic said. That extended to the institutions the elder Vlasic revered, he said. Vlasic supported many charitable causes, especially those related to education, health care and his Catholic faith. He made philanthropic gifts to his alma mater, the UM School of Engineering, as well as other nonprofits on whose boards he held leadership roles, including Henry Ford Hospital and Cranbrook Educational Community. He was also a member of the finance council of the Catholic Archdiocese of Detroit.

Vlasic had many opportunities to move to the East Coast or other places, his son said. But he never wanted to leave Detroit. “He loved Detroit. No question about it,” Bill Vlasic said. “We’re grateful. We owe him more than a debt; we owe him to live the right way and do the right thing.” Vlasic is survived by sons Jim, Bill, Rick, Mike and Paul Vlasic; 17 grandchildren; and five great-grandchildren. He was preceded in death by his wife Nancy and sister Sally Blakeley. Visitation is set for 4-7 p.m. May 27 at A.J. Desmond & Sons in Royal Oak and a funeral Mass at 11 a.m. May 28 at St. Hugo of the Hills Stone Chapel in Bloomfield Hills, presided by Maida. Memorial contributions can be made to the Catholic Archdiocese of Detroit, Henry Ford Health, University of Michigan College of Engineering and Cranbrook Educational Community. Contact: swelch@crain.com; (313) 446-1694; @SherriWelch MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 17

SKYSPECS

From Page 3

put a likely value for the company at between $250 million and $300 million. The company had a valuation of nearly $70 million as of last March, according to Pitchbook, which tracks funding in the venture investment and startup space. SkySpecs has approximately 230 employees. Joining Goldman Sachs in the investment round were a subsidiary of NextEra Energy Resources, as well as other existing SkySpecs investors including Statkraft Ventures, Equinor Ventures, Evergy Ventures, UL Ventures and Huron River Ventures in Ann Arbor. “There is a growing need amongst renewable asset owners to improve asset efficiency and better manage asset health, which is not being sufficiently addressed today and is further exacerbated by aging fleets and increasing complexity of portfolios,” Vikas Agrawal, managing director for the more than $1 trillion Goldman Sachs Asset Management. “SkySpecs has a leading market position providing high ROI preventative maintenance and software solutions to the world’s largest renewable asset owners, along with extensive data and know-how. We’re excited to invest in SkySpecs’ vision to accelerate the expansion of capabilities that will increase the performance and longevity of renewable resources, reduce operating costs, and simplify asset ownership.” The reach of SkySpecs and its software has been growing in recent years. At present, the company’s software is used to monitor about 45 percent of wind turbine blades in North America. The company manages approximately 118 gigawatts of renewable energy assets in more than 30 countries, according to a news release. For context, 1 gigawatt powers approximately 364 utility-scale wind turbines, according to the U.S. Department of Energy. The need for the inspection and maintenance of renewable energy

House of Pure Vin in downtown Detroit will open a 20-seat patio Memorial Day weekend. | HOUSE OF PURE VIN

OFFERINGS

From Page 3

In the coming months, House of Pure Vin will debut a food menu being curated by Detroit chef DaVante Burnley, a private chef and co-owner of Exchange Detroit Catering. Bottle service, featuring rare cognacs and scotches, will also be added. Gaines closed House of Pure Vin from the outset of the pandemic until mid-April 2020, when she began offering curbside pickup. From March-August 2020 it operated just 12 hours a week, increasing to 27 a week by Christmas of that year and 35 hours a week by last summer. The current schedule, with the business

open 51 hours a week Tuesday-Sunday, didn’t go into effect until March. The business went from 17 employees in 2019 to a handful during parts of the last two years. It now has 15 employees. Even though many potential customers have not been downtown for the better part of the last two years, Gaines has worked to keep them engaged. She has used social media to offer various events that featured DJs and chefs giving instruction on food and wine pairings. “We were all about safety. We had to think about what we wanted to be responsible for,” Gaines said. “Detroit was hit hard. I’d go on (social media) and see posts about customers dying. I had to decide if the money was worth it.

“The funny thing was, at the time we were trying to make this an experiential place that people could enjoy on site, only to have to go back to what we originally opened for.” Gaines is excited about her business’ future, which also includes a twice-monthly brunch from noon-4 p.m. on Sundays. “This has always been the plan,” she said. “What we’ve been trying to do is position House of Pure Vin as a good pregame spot. It’s the perfect pre- and postgame spot. We’re trying to make guests feel like they’re on vacation. We’re bringing a different experience, but in our voice.” Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981

WINE.COM

From Page 3

18 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

Crafting a solution Founded nearly a decade ago, SkySpecs has sought to diversify away from largely being a drone company and instead focused on offering a “solution” to a growing industry, according to venture capital executives who have followed the company’s growth. “It’s a lesson to other entrepreneurs about listening to the market and ultimately creating a solution rather than just a product,” said Chris Rizik, the CEO and fund manager of Renaissance Venture Capital based in Ann Arbor. SkySpecs’ $80 million capital raise stands as among the largest funding rounds raised by a Michigan technology company, and particularly one that’s not in the fast burn rate life sciences space. Startup sources noted that the trajectory of SkySpecs appears reminiscent of Llamasoft, an Ann Arbor-founded AI software company that found a $1.5 billion exit in late 2020 via a sale to a Silicon software giant. Ellis acknowledged that an exit of some sort will be a likely outcome for SkySpecs, given the need for a return on capital. But at this point, the key focus is on offering the company’s solution to the renewable energy sector. “Our focus, first and foremost, is how do we solve hard problems in renewable energy,” the CEO said. “And we’re confident that will lead us to the right opportunities to provide our investors and our supporters with the right return on capital. It doesn’t really change the priority or the urgency of that from the last round of funding to this one. It might change the magnitude of what we need to aim for, and the level of growth that we have over the coming years.” Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

DEALS&DETAILS ` CONTRACTS GETTY IMAGES

“They have shipped way more wine than the law allows them to ship, even if they had been eligible to, which they weren’t,” said Spencer Nevins, president of the Michigan Beer & Wine Wholesalers Association. “They have been misleading the Liquor Control Commission since at least 2015, claiming they produce wine and produce wines they shipped — and they just blatantly don’t.” The Michigan Beer & Wine Wholesalers Association had filed a complaint with the MLCC over Wine. com’s direct sales. Wine.com recently agreed to settle the liquor commission’s violation charges with the attorney general’s office by acknowledging it was illegally shipping wine to Michigan customers for years, agreeing to not renew its direct shipper license and paying a $10,000 fee, according to the MLCC. “What’s going on is time has finally caught up to them,” Nevins said. A spokesperson for Wine.com did not return messages last week from Crain’s seeking comment. But in an April 27 email to a Michigan customer, Wine.com portrayed its ceasing of sales in Michigan as the result of a “regulatory change.” The email, which was obtained by Crain’s, does not mention the Michigan Liquor Control Commission’s multiple charges against the company for violating state alcohol sales laws.

infrastructure is already strong, and only forecast to grow in the coming years. A report published last month by consulting firm McKinsey states that renewable energy sources are expected to account for 50 percent of the global power mix by 2030, and 85 percent by 2050.

“Unfortunately, due to a recent regulatory change, we will be unable to accept new wine orders to Michigan addresses after Friday, April 29th. We are evaluating available alternatives to resume wine shipping in the state soon,” the email to a Wine.com StewardShip member said. Wine.com’s StewardShip members get free shipping, members-only discounts and other perks for a $59 annual fee, according to the e-commerce company’s website. The email offered to let StewardShip members in Michigan cancel their subscriptions or “continue to enjoy free shipping on non-wine items to Michigan and wine to other states, as well as other benefits like access to premium events.” “Please note that any orders placed on or prior to April 29th for

shipment to Michigan will be honored and delivered normally,” the April 27 email said. “... We are very sorry for this inconvenience and are organizing a formal complaint to state officials to reverse this legislation.” A 2021 law, Public Act 16 of 2021, changed the definition of a direct shipper license to include wineries that purchase wine from another winemaker that is “further manufactured or bottled and registered with the commission.” In its statement, the Michigan Liquor Control Commission said its initial notice of violation to Wine. com was issued “17 months prior to the effective date of the 2021 legislative changes.” Contact: clivengood@crain.com; (313) 446-1654; @ChadLivengood

`Gravity Software LLC, Detroit, a business accounting software provider, has a partnership with JRMR Consulting & Services LLC, Frisco, Texas, provider of accounting and advisory services, philanthropic management, and real estate services. to provide consulting and implementation services. Websites: gogravity.com, jrmrconsulting.com `Roncelli Inc. Sterling Heights, a construction management firm, was awarded the Detroit Wayne Integrated Health Network Milwaukee Crisis Center project in Detroit. The renovation will include the first floor being converted into a crisis stabilization unit and the second floor converted into a crisis residential unit. Website: roncelli-inc.com

`MERGERS & ACQUISITIONS ` Penske Automotive Group Inc., Bloomfield Hills, a transportation services company, acquired BMWMini of Escondido and a collision center in Escondido, Calif., that it

expects will add about $115 million in annual revenue. Website: penskeautomotive.com `Munetrix, Auburn Hills, a software company, acquired Dynamo Metrics Inc., Ann Arbor, provider of planning and analytics software for government and public sector customers. Websites: munetrix.com, dynamometrics.com `RHP Properties, Farmington Hills, owner and operator of manufactured home communities, acquired Bayshore Windmill Village, a manufactured home community with 398 home sites in Sarasota, Florida. This expands the company’s manufactured home portfolio to 37 communities in the state and brings the company’s total of manufactured home communities to 312 nationwide. Website: rhp.com `365 Retail Markets LLC, Troy, provider of self-service commerce technology to the foodservice industry, acquired Australia-based Sentry, a vending management software company. Website: 365retailmarkets.com

REAL ESTATE

New renderings show Hudson tower office, dining, retail plan Project has been delayed amid challenges and redesigns BY KIRK PINHO

Dan Gilbert’s Bedrock LLC real estate company has released the first new renderings of the under-construction Hudson’s site development in more than 3 1/2 years. The project broke ground in December 2017 and has been delayed several times amid construction challenges and redesigns that have resulted an additional two years being required to complete the 2.3acre development on the property that once housed the J.L. Hudson’s department store. A press release said the skyscraper component of the development on the southern edge of the site at Woodward and Grand River avenues is now at 200 feet. It is ultimately expected to rise to 685 feet, making it the second-tallest building in the city and state, behind the 727-foot Detroit Marriott at the Renaissance Center. Southfield-based Barton Malow Co. is the general contractor, while New York City-based Shop Architects is the design architect, along with Houston-based Kendall/Heaton Associates, and Detroit-based Hamilton Anderson Associates is landscape design architect and interior design architect on the Edition Hotel component. Detroit-based Pophouse is designing common areas in the office space. The owner’s representative for Bedrock is New York City-based Turner Corp., which was brought in after Jacobs Engineering Group was removed from the project. The project includes two key components: The skyscraper, with 100 to 120 units of residential space and hotel space, and on the northern portion of the site, what’s referred to as the “block” building, with hundreds of thousands of square feet of office, meeting, retail and restaurant space. The tower component at the southern edge of the property has fluctuated in height, initially proposed to be 734 feet, making it the tallest building in the state, then rising to 800 feet, then to as high as 912 feet before softening those numbers and settling on approximately 680 feet. The most recent expected height is 685 feet, 4 inches. The release says it is expected to reach that height next year, with the overall development completing in 2024. A so-called “topping out tree” was put on the tower component last month recently to mark structural steel for the block component commemorating the last/highest piece of structural steel being hoisted in that component. The project is one of four Gilbert has underway totaling about $2.14 billion. Combined, they received a total of $618.1 million in “transformational brownfield” tax incentives from the state. The other projects are the long-delayed $830 million Monroe

An exterior rendering of the Hudson’s site tower. | SHOP ARCHITECTS

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A rendering of the Hudson’s site tower, which is expected to reach 685 feet in height.

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Blocks project immediately east of the One Campus Martius Building, the $311 million redevelopment of the Book Tower and Book Building on Washington Boulevard set to finish this year, and the $95 million addition to the One Campus Martius building where Gilbert has his Rocket Companies Inc. (NYSE: RKT) headquartered. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB

THE PROJECT IS ONE OF FOUR GILBERT HAS UNDERWAY TOTALING ABOUT $2.14 BILLION. COMBINED, THEY RECEIVED A TOTAL OF $618.1 MILLION IN “TRANSFORMATIONAL BROWNFIELD” TAX INCENTIVES FROM THE STATE. MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 19

IVF

From Page 1

Experts say the end of Roe could create legal gray areas that might make things complicated for people trying to conceive children using IVF. “It’s very concerning as somebody who provides health care to women; specifically as it pertains to issues around pregnancy and patients having control of their reproductive decisions to grow their families or limit the size of their families,” said Erica Marsh, division chief of reproductive endocrinology and fertility at Michigan Medicine in Ann Arbor. “From a perspective of how we care for patients and how we support them, this absolutely has implications for embryo storage and implications for embryos’ disposal.” IVF involves boosting a woman’s egg production via medicines to create “superovulation” to produce the most eggs possible per cycle. Those eggs are then fertilized in a lab and grown before one to three of the embryos are transplanted into the woman’s uterus in hopes of producing a healthy child in nine or so months. In that process, some of those fertilized eggs are less viable for a variety of reasons and destroyed. Other times, the implanted embryos result in an ectopic pregnancy — a fertilized embryo latching to the inside of the fallopian tube instead of the uterus — where doctors often have to remove the pregnancy because it’s dangerous to the mother

MORTGAGE

From Page 1

and up from about 3 percent at the beginning of the year, according to data from Freddie Mac, the government-backed mortgage entity. Both Rocket (NYSE: RKT) and UWM (NYSE: UWMC) forecast in their earnings reports last week that mortgage loan originations and gain on sale margins, a key measure of profitability, will likely suffer further declines in the second quarter, having already dropped in the first quarter of the year. Home Point (NASDAQ: HMPT) gave no formal guidance in its report. The mortgage lending business, as well as the broader residential real estate segment, is nothing if not cyclical. And industry veterans note they’ve been here before. “We’re kind of in the third inning of this process,” Rocket Companies Vice Chairman and CEO Jay Farner said of the current cycle, noting that the company’s mortgage lending business, now named Rocket Mortgage, has been in the business for more than three decades. “And it’s one that we’ve lived through before, certainly back in 2008, 2009, 2010, and we saw little glimpses of this in 2014 and 2019,” Farner told analysts last week. “You’ve got to have a long-term view while you’re taking short-term actions to ensure that the company is set up for success.”

Taking action To Farner’s point, Rocket and Home Point have taken steps to reduce their headcount, having ramped up for the previous two years. That’s a step that Mat Ishbia, chairman and CEO of UWM, has strongly rebuffed, going as far as scolding Wall Street analysts who 20 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

and impossible to grow to term. More rarely, but not all that uncommon, is that the inserted embryos take and create multiple pregnancies — too many. Doctors then perform what’s called selective reduction, carefully destroying some of those pregnancies to ensure the mother can carry the most viable one to term as well as protect the health of the mother. My wife asked me last week that if the abortion laws change, would any of these scenarios be illegal? I set out to find an answer, but unfortunately, there’s not a lot of concrete answers, according to experts. Richard Friedman, a constitutional law expert and professor of law at University of Michigan Law School, studied Michigan’s 1931 law and believes it’s very unlikely most of these IVF procedures would find themselves on the wrong side of the law. “Obviously, IVF wasn’t around when this law was written” in 1931, Friedman told Crain’s. The first IVF baby was born in 1978. “But the fundamental question is whether you’d find a prosecutor to prosecute a couple looking to have babies. And then find a jury that would convict. I just don’t see that happening.” But he’s also not clear whether destroying viable frozen embryos — one of the three choices for my wife and me, a decision we have not yet finally made — could fall under the 1931 statute. Friedman said it’s not “a closed case.” Christopher Lund, professor of law at Wayne State University, sides with

Experts say the end of Roe could create legal gray areas that might make things complicated for people trying to conceive children using IVF. | GETTY IMAGES

Friedman that the 1931 law isn’t necessarily applicable to IVF procedures. But, he said, the law is vague in defining what is considered a miscarriage or abortion. Section 14 of the law forbids “administering to any pregnant women any medicine, drug, [or] substance ... to procure [a] miscarriage.” Section 15 forbids the providing or selling “any pills, powder, drugs or combination of drugs, designed expressly for the use of females for the purpose of procuring an abortion.” That’s it. That’s vague. Could ending the potential life an embryo has, even if it’s considered unviable, be a planned miscarriage or abortion? Sean Tipton, chief advocacy, policy and development officer for

Washington, D.C.-based American Society for Reproductive Medicine, isn’t convinced the politicization of reproductive rights won’t impact IVF. “We are not comfortable with allowing access to fertility only at the whim of an ambitious prosecutor,” Tipton said. “It’s not at all hard for me to envision an attorney seeking to build a political reputation by going after these IVF docs. It is, of course, the ultimate irony that these people that beat their chests about pro-life are busy making it as difficult as possible for people to have children.” Michigan Medicine’s Center for Reproductive Medicine performs approximately 800 IVF cycles annually, Marsh said. Hundreds to thousands of embryos are frozen at its clinic in

A downward slide UWM Holdings Corp.

The typical monthly payment for a $300,000 home with a 20 percent down payment on a 30-year loan is more than $200 more expensive now than the first week of March due to interest rate increases.

Home Point Capital Inc.

$25 20

Contact: dwalsh@crain.com; (313) 446-6042; @dustinpwalsh

How rising rates impact borrowers

The price per share for Michigan’s three public mortgage companies has declined since last year. Rocket Companies

Ann Arbor. Marsh wondered if something were to happen to those frozen embryos, accidentally, would that be a crime? At an Ohio fertility clinic in 2018, more than 4,000 eggs and embryos were destroyed when a freezer failed. While unlikely, these are the questions reproductive specialists and their patients are asking. Tipton is calling on state legislators to codify protections for IVF to eschew political threats to the industry and families. “Unfortunately, there are people that are perfectly happy to throw fertility patients under the bus to stop abortion,” Tipton said. “At some point, even the most ardent forcedbirth legislation is going to have to grapple with scientific reality, we would hope, and carve out rules for this. I don’t think there is a big danger in IVF becoming illegal, but doing it right could very well become illegal if we do not act.” While there are more than 625,000 abortions performed annually in the U.S. — a figure that has been steadily declining for more than four decades — there are more than 500,000 births from IVF annually and growing on top of the already estimated 8 million babies born through the process. My wife and I are near the end of our IVF journey. But the thousands of couples who enter IVF clinics across the country each day will still be looking for a definitive answer.

$16.68

$1,500 15 10

$1,596 $1,376

1,200 $7.93

$7.38

900 600

5 0

$5.81 May 12, 2021

$3.70

300

$3.25

May 12, 2022

SOURCES: NEW YORK STOCK EXCHANGE, NASDAQ

even suggest it, as well as publicly criticizing Rocket for doing so. There’s no secret sauce to UWM’s ability to continue forward without cuts to its 8,000-strong workforce, Ishbia said. “The question you’re asking is how can we do it and others don’t,” Ishbia said to analysts last week. “It’s because of technology. Technology and efficiencies. We’re gonna be extremely profitable, like I said last quarter, as long as we continue to run our business the way we run it, (focused on) the purchase market.” Farner, the Rocket CEO, said the company’s focus going forward will be on playing both offense and defense in a different mortgage market than many of its 26,000 employees have been accustomed to. One area of focus, Farner said, is a “shift” in how Rocket approaches its marketing expenses, saying the company had built up the capacity to reach a large audience when the mortgage market was at its peak. Now that it has contracted, much of

Current (5.3%)

First week of March (3.8%)

SOURCE: BANKRATE AND FREDDIE MAC

that capacity remains in place. “So on that offensive side, you shift the marketing, leverage the data and ensure we’re reaching the right client with the right offer,” Farner said on the Rocket earnings call. “You get the operations, marketing and team members adjusted to the new market and then go out there and hit the rock every single day. And in the end, you win.” Home Point, the smallest of the three local companies, has also taken to making cuts, having made layoffs and outsourced employees over the last year, as Crain’s has reported. “We’re very proactive in scoping and scaling the operation to what we believe the opportunity set is,” Home Point President and CEO Willie Newman said on a Thursday earnings call. “And so we look at it that we’re ahead of the general market, where you’ve had a significant demand shock out there, and most companies have responded what I would say more incrementally, we responded more aggressively, even starting last year.”

To help get to a profitable position, Home Point executives said that in the first quarter the company sold mortgage servicing rights — essentially the administrative work associated with servicing a mortgage once it’s been sold — netting $434.5 million. In spite of the rapid rise in interest rates, the housing market in metro Detroit and elsewhere has yet to cool. UWM CEO Ishbia, speaking earlier last week on CNBC, said he forecasts a cool-down in housing prices sometime in the back half of the year.

What analysts say Wall Street analysts appear to see a mixed bag for the companies going forward. With the exception of Rocket’s stock, each had seen modest gains last week. However, all three of their share prices have fallen drastically over the last year. “Times are tough for mortgage lenders where borrowers face (a) steep rise in mortgage rates that suppresses refinancings, while housing

shortage curtails originations,” Ken Leon, global director of equity research at CFRA Research, wrote of the state of the industry last week. Analysts at Jefferies Group LLC wrote “better than feared” and “the nicest house on a (hopefully temporarily) bad block” to describe the first-quarter earnings of UWM and Rocket, respectively. But of Rocket specifically, Leon with CFRA Research cited “an unfavorable macro outlook” for the Detroit company, urging shareholders to sell their stock. While the company’s executives have touted expansions into other areas of the homebuying process, as well as other areas of consumer finance, Leon dismissed those moves. “We like RKT’s expansion in title insurance, appraisals, and closing services but remains small relative to its position as #1 U.S. mortgage lender,” the analyst wrote. Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes

RUSSIA

port our employees, customers and patients wherever we reside. Our technologies save and improve lives and we will continue to operate there provided we can safely do so. We also continue to monitor the evolving supply chain environment in the region and the global impact sanctions may have on the flow of goods.” Ann Arbor-based Domino’s Pizza Inc., which has dozens of locations in more than 40 cities in Russia, has stayed in the country even after other brands including Detroit-based Little Caesars have left. The company has said it cannot legally suspend its operations in Russia but will direct all royalties from its stores there to humanitarian efforts in Ukraine. Several other companies with Michigan ties, such as Southfield-based Lear Corp. and Canadian auto supply giant Magna International Inc., have suspended operations indefinitely in Russia but have not necessarily closed up shop for good. Powertrain parts maker Tenneco Inc., which is based in Illinois but maintains a large Michigan presence, is continuing operations in the country, according to a list of major companies and their stance on Russia, compiled by Yale School of Management. Companies that claim they are staying put for altruistic reasons make a compelling argument, Sytch said. But they must convince investors, consumers and employees that it’s a stronger argument than those who left to weaken the Putin regime. “These arguments have some validity, but the question is what do you compare it to?” Sytch said. “If you compare it to the continuing atrocious war in Ukraine … and if you juxtapose it with the fact that economic pressure on Putin’s regime can potentially speed up the end of this atrocious war, I don’t find those arguments convincing.”

From Page 1

The justification for remaining grows weaker as the nearly 3-monthold war continues and the death toll rises, said Maxim Sytch, management and organizations professor at the University of Michigan. “The era where companies didn’t have to take a stance on sociopolitical issues is largely over,” said Sytch, who was born in Kyiv, the capital of Ukraine, and grew up in the former Soviet Union. “We’re entering a world where both employees, investors and larger communities are asking companies to take a stance on these issues, and companies that don’t often find themselves in a losing position both from a symbolic aspect, but also substantive.” One of the main reasons companies are resisting pressure to leave Russia is the threat of their assets being seized and nationalized by the Russian government, as Putin has threatened to do. Sytch said that selling assets in Russia would be difficult and almost surely come with a loss. Besides the potential negative impact of public opinion, companies in Russia also must also deal with supply chain disruptions even more severe than in the rest of the world. Whirlpool’s Europe, Middle East and Africa segment is expected to lose $300 million in revenue due to the war, according to a recent earnings report. CEO Marc Bitzer said the company is just “keeping the lights on” at its plant in Russia. “We are not imSytch porting goods from our European sites into Russia, but we maintain a very low level of production, basically keeping the lights on in our Russia factory,” Bitzer said on a call with investors late last month. “Is that sustainable over time? It’s probably not. But right now, we keep it running to a certain volume, of course, fully compliant with all sanctions and everything else.” It is unclear how many employees Whirlpool has in Russia. The company declined an interview request. Kellogg is continuing production of “staple foods” in Russia, where it has about 1,600 employees and operates three plants, making “Russian-branded, essential staple foods, including cereal and biscuits,” according to the company. It has discontinued investment and exports to the country. “The situation in Ukraine only accelerated cost inflation and exacerbated the global economies’ bottlenecks and shortages,” Kellogg CEO Steve Cahillane said on a recent call with investors.

Whirlpool Corp. operates a plant in Lipetsk, Russia. CEO Marc Bitzer said the Benton Harbor-based company is just “keeping the lights on” there. | WHIRLPOOL CORP.

“It also prompted us to suspend all shipments and investments into Russia and to identify new sources for certain ingredients … which will have a direct impact on our sales and profit.” Kellogg did not respond to requests for comment. Midland-based Dow Inc., which operates an office in Moscow and two manufacturing plants in Russia, has said it “significantly reduced” operations in Russia, but has not specified what that means. Chairman and CEO Jim Fitterling only briefly addressed the issue late last month in a call with investors. “From a business perspective, our presence in Ukraine and Russia represents approximately 1 percent of annual sales and a much smaller percentage on the bottom line,” he said. “We fully support and are complying with sanctions implemented against Russia, and have significantly reduced our operations and stopped all investments in the country, and are only supplying limited essential goods.” Dow did not return a request for comment. Other major Michigan-based manufacturers in Russia are Kalamazoo-based Stryker Corp. and Auburn Hills-based Guardian Industries, whose parent company Koch Industries said in March that shuttering plants in Russia “would only put our employees there at greater risk and do more harm than good.” Guardian Industries did not respond to requests for comment. Stryker, a medical device manufacturer, said it will continue operating in Russia as long as it is safe to do so. “We have a small presence and no manufacturing operations in Russia,” a spokesperson said in an email to Crain’s. “Our responsibility is to sup-

Midland-based Dow operates a plant in Izolan, Russia, that makes a variety of products for industries including construction, automotive, shipbuilding and refrigeration.

Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl

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Doing business in Russia A variety of Michigan-based companies continue to do business in Russia during its assault on Ukraine.

ESTONIA

Magna has plants in Kolpino and Shushary

RUSSIA

Alex Keros Director, EV Infrastructure, Global Product Development General Motors

Kwafo Adarkwa Director of Public Affairs ITC Michigan

Ben Burns Director, Business Development DTE Energy

Trevor Pawl Chief Mobility Officer Michigan Office of Future Mobility and Electrification

Dow has an office in Moscow and plants in Ramenskoye and Vladimir Oblast

LATVIA Stryker has an office in Moscow LITHUANIA

Lear has plants in Kaluga and Nizhny Novgorod Oblast BELARUS Whirlpool has a plant in Lipetsk

POLAND UKRAINE

Kellogg has an office in Moscow and plants in Pskov, Vyazma and Voronezh

Guardian Industries has a plant in Krasny Sulin SOURCE: CRAIN’S RESEARCH

CRAIN’S DETROIT BUSINESS GRAPHIC ITC_5_23.indd 1

MAY 16, 2022 | CRAIN’S DETROIT BUSINESS | 21 5/9/22 3:42 PM

THE CONVERSATION

Mario Morrow Sr. on changes in the public relations world Mario Morrow Sr., president of Mario Morrow & Associates, has overseen his Southfield-based public relations company adjust over the years, especially the last two of the COVID-19 pandemic. Morrow sees the PR field changing in major ways — from how new companies can make their mark to who pitches the products. The 62-year-old native Detroiter also has a plan for when he calls it a career. This Q&A has been edited lightly. | BY JAY DAVIS ` Your firm is moving into a new office space? We’re moving from one floor to another. It’s a bigger space. The new space is about 500 square feet bigger. (The previous office was 1,468 square. feet and the new one is 2,099.) We’re expanding. We’ve hired new staff. We anticipate more growth. We were kind of on top of each other in the old space. We’ve got a larger conference room, kitchenette, two extra offices, a reception area. Over the last year, we’ve hired three new employees. That puts us at seven. It’s a mix of full and part time. ` It’s been a difficult couple of years for a lot of businesses. How has the pandemic affected your company? Due to the pandemic, we’ve had growth. The reason for that is we’ve certainly been active. We’ve gotten contracts with the state of Michigan, Wayne County to produce work on COVID awareness, encouraging people to get the vaccine. When all of it started, we could put out things talking about masking, social distancing, contact tracing. Then the vaccine came out, so there was that. Then boosters. It kept us busy. The deal with the state is statewide, but focused primarily on urban communities. We’ve done door-to-door activities encouraging people to do all of the things I’ve mentioned. We’ve worked with community health departments, nonprofits, faith-based people. I think we’ve communicated properly with people and messaging. We’ve worked closely with other communications firms. It’s been great for us. Our mission is to help make a better, safer community. It’s been nonstop. Even before (COVID), we worked with the state on the census — educating people on how important the census is. Then, guess what happened? COVID hit. Based on what we did with the census, we were able to use our community partners and the same formula for our COVID work. It’s a relatively new area of communication and marketing: going door to door, direct marketing, using surrogates and influencers to communicate with the

public. It’s a rewarding partnership. As you well know, people tend to trust people they see every day. It’s different when a pastor talks about COVID during church. In the past, working on campaigns or for corporate events, we used TV, radio, social media. Now people tend to want to rely on a more personal touch.

Mario Morrow Sr. is president of public relations firm Mario Morrow & Associates

` Is implementing that more personal touch one of the ways PR firms have evolved? I mentioned creating direct relationships. Typically you go with the mainstream media, which is able to get a message out to the most people. You have to build a relationship with the community and people who can communicate a message better than you can. Then there’s social media. ... The way people consume information has changed, and how someone discusses their thoughts can change a person’s view. ... With that in mind, we’ve come to rely on digital platforms. We have Google alerts set for all of our clients. If something pops up, we deal with it right away. Social listening is critical to business and success. It allows brands to communicate directly with customers. ... One thing you have to stress more is trying to be (politically correct) while pitching ideas, or telling a story, or communicating with the consumer. There are so many subgroups of people. The whole dynamic of social media, and issue-oriented discussions started with millennials, which is an untapped demographic. They have growth potential and buying power, and an influence on certain issues. That’s why you’re seeing more ads with interracial couples and younger people pitching ads. The days of the pitchman, pitchwoman, pro athlete or TV selling things isn’t dead, but it doesn’t happen as much. Now you see regular families in ads.

connected to communication. During my time as a teacher, I worked my way up to superintendent. When I was on the lower end of the educational profession, I had the summers off and I needed something to do. I ventured off, started working on campaigns and I enjoyed it. That led to my becoming a political analyst. Different media would call and ask for my opinion on political campaigns and individuals. Now all of a sudden I’m an educator and a political analyst. ... I started my first company in 1986. I eventually found I could do my own thing, built up a client base, got some experience and had the support of my family. I think if you put your faith in your work, God, nothing can stop you. ` What do you do with your down time? Do you have any? I golf. My wife and I travel. We haven’t done that much since the pandemic started. I like to watch old movies. My mom is 97 and got me hooked. I think I drive my family crazy watching (Turner Classic Movies). It calms me down. Sometimes I have to turn my phone off for a couple of hours. ` You golf? Are you decent? What’s your handicap? I’m no scratch golfer. I go out for fun. I’ll be honest with you, I feel good if I can break 50 on nine holes. ` Do you have a succession plan in place for when you decide to take up golf full time? We’re pretty much a family firm. My wife, Shauna, joined the firm last March. She was a corporate event planner. A lot of our clients want corporate event planning. My son, Mario Morrow Jr., joined us as soon as he graduated from DePaul. He’s a brilliant young man. He’s 26, helped us with the millennials. My nephew, Ryan Bridges, joined the firm about five months ago. He’s got a great deal of experience. He just left a stint with Wayne County. My hope is that my son and nephew, when the time comes, that we’ve properly prepared them to take over and move things forward.

` You’ve worn a lot of hats: educator, political analyst, entrepreneur. You’ve had an interesting career. Everything connects. Education is

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RUMBLINGS

Nike escalates feud with StockX with claim of counterfeit shoes NIKE INC. ESCALATED its legal battle with sneaker marketplace StockX, saying it purchased four pairs of counterfeit shoes on the platform despite the Detroit-based company’s promises that it is marketing only authentic footwear. The world’s largest athletic-wear maker asked a federal judge to let it add claims of counterfeiting and false advertising to the current trademark-infringement lawsuit against StockX. “Those four pairs of counterfeit shoes were all purchased within a short two-month period on StockX’s platform, all had affixed to them 22 | CRAIN’S DETROIT BUSINESS | MAY 16, 2022

Nike sued StockX in February in federal court in Manhattan, accusing the marketplace of “blatantly freeriding” on Nike’s trademarks and goodwill. | PATRICK T. FALLON/BLOOMBERG

StockX’s ‘Verified Authentic’ hangtag, and all came with a paper re-

ceipt from StockX in the shoe box stating that the condition of the shoes is ‘100% Authentic,’” Nike said in a court filing last Tuesday. Nike sued StockX in February in federal court in Manhattan, accusing the marketplace of “blatantly freeriding” on Nike’s trademarks and goodwill with a service called Vault NFTs. StockX argued that its NFTs aren’t digital sneakers but simply listings for physical sneakers that are stored in its vault and can be traded by users. StockX said in a statement Wednesday that it takes customer protection “extremely seriously”

and has invested millions of dollars to “fight the proliferation of counterfeit products that virtually every global marketplace faces today.” StockX added, “Nike’s latest filing is not only baseless but also is curious given that their own brand protection team has communicated confidence in our authentication program, and that hundreds of Nike employees — including current senior executives — use StockX to buy and sell products.” StockX said in April 2021 that it was valued at $3.8 billion after a secondary tender offering and is said to be planning to go public.

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