CONVERSATION: New Fifth Third Bank CEO sees opportunity for growth. PAGE 22
EVOLVING IDENTITY
Greektown families work to preserve heritage as district changes. PAGE 3
CRAINSDETROIT.COM I JULY 11, 2022
GREAT LAKES CRUISES
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A big new addition has the business in Michigan booming more than ever before. PLUS: Leading lights on the Upper Peninusla tech scene. Crain’s Michigan Business begins on Page 8
The cruise ship Pearl Mist stops for a port of call in Muskegon, where passengers will tour the city, its culture and history.
Your next cashier may be in the mirror Worker shortage has self-checkout taking over BY JAY DAVIS AND NICK MANES
Love it or hate it, your cashier at the store — any store — is increasingly likely to be yourself. Introduced in 1995 by Kroger Co., self-checkout stations were initially designed to help customers with small baskets speed through checkout and on with their day. Most self-checkout lanes limited customers to 10 items or less. Now an increasing number of retailers, including grocers, fast-food restaurants, home improvement stores and pharmacies, are implementing more self-checkout lanes.
The reasons vary, from customer convenience to social distancing concerns to answering the labor shortage that has worsened over the years of the COVID-19 pandemic.
Where does that leave StockX, OneStream?
Big changes for companies
BY NICK MANES
Self-checkout is increasingly moving beyond the express lane. Kroger in 2021 ran a pilot program in which a Dallas location converted completely to self-checkout. The Cincinnati-based company (NYSE: KR) earlier this year in
The “ice cold” market for initial public offerings in 2022 has all but assuredly slowed the roll to the stock market for many a high-flying unicorn company, and likely some in Southeast Michigan, according to experts. Companies like OneStream Software in Rochester and Detroit-based e-commerce reseller StockX have
See SELF-CHECKOUT on Page 21
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IPO market goes into deep freeze
CVS Pharmacy rolled out self-check kiosks in many of its stores for the first time during the pandemic. | CVS PHARMACY
raised billions from institutional investors before and during the pandemic years and have long been metro Detroit’s top-tier candidates to head for the stock market. But just as the IPO window opens, the IPO window closes, notes Erik Gordon, a business professor at the University of Michigan’s Stephen M. See MARKET on Page 21
REAL ESTATE INSIDER West Village battle over 2 old houses — and what replaces them — intensifies with text messages, Nicole Curtis. PAGE 4
NEED TO KNOW
DEPARTURES
THE WEEK IN REVIEW, WITH AN EYE ON WHAT’S NEXT ` GOVERNOR HOPEFUL PLEADS NOT GUILTY IN JAN. 6 RIOT THE NEWS: Ryan Kelley, a Republican candidate for Michigan governor pleaded not guilty for his actions during the insurrection at the U.S. Capitol on Jan. 6, 2021, when he says he and other supporters of then-President Donald Trump were exercising their free speech rights. Kelley is accused of disruptive conduct, injuring public property and entering restricted space without permission. WHY IT MATTERS: Kelley was a little-known candidate in a field of five Republicans vying for the GOP nomination on Aug. 2 to face Democratic Gov. Gretchen Whitmer in November. He has said he believes the arrest and accompanying publicity helped increase his name recognition and gain supporters.
` MICHIGAN AIRPORTS GET FEDERAL FUNDS THE NEWS: The Biden administration is allocating nearly a billion dollars for improvements at 85 airports including Detroit Metropolitan Airport, Bishop International Airport in Flint and the Gerald R. Ford International Airport in Grand Rapids. At Metro, grants totaling $49.6 million will go toward restroom renovations aimed at enhancing accessibility and energy efficiency, as well as toward
new boarding bridges for the airport in Romulus. In Grand Rapids, $8.7 million will go toward new passenger boarding bridges. Bishop received $3.5 million in grants for roof renovations.
bills would let state liquor regulators issue up to three licenses to a university for sales within the public areas of its football, basketball and hockey stadiums and arenas. Sales could occur starting two hours before a game until two hours after. WHY IT MATTERS: One of the sponsors, Democratic Sen. Curtis Hertel Jr. of East Lansing — home to Michigan State University — said eight of the 14 Big Ten schools already sell alcohol in their stadiums and this is a “matter of fairness.”
WHY IT MATTERS: The grants are the first installment of $5 billion for airport projects that were included in an infrastructure bill that Congress approved and President Joe Biden signed last November.
` BILLS WOULD ALLOW ALCOHOL SALES AT BIG TEN GAMES THE NEWS: Bipartisan legislation would lift a ban on public alcohol sales at Big Ten and other games hosted by Michigan universities. The
` LE LABO CLOSES ON WOODWARD DOWNTOWN
Midtown staple Cass Cafe to close later this month ` Cass Cafe, the beloved restaurant in Midtown Detroit with strong ties to the city’s artistic community, is set to take orders for the last time later this month. The restaurant, located at 4620 Cass Ave. in the area long known as the Cass Corridor, will close for good July 17. Owner Chuck Roy, who opened the restaurant in 1993, said a lot of factors played into his decision to close the eatery. “The cafe has always been a labor of love,” said Roy, 62, who opened the restaurant while he was a student at Wayne State University. “I went into the community right out of high school and never left. Many reasons have brought me to this point. It’s just time.” Roy, who lived in the Cass Corridor for 20 years after opening the cafe, cited new options in the area as a reason for the closure. Roy made staff aware of the move on July 1.
THE NEWS: The Le Labo fragrance maker on the downtown block that also houses the Shinola Hotel recently closed its doors. The precise status of the store is unknown; the Le Labo website lists it as temporarily closed, and a statement from Dan Gilbert’s Bedrock LLC real estate company did not answer whether the closure is permanent or whether Le Labo is moving to another location. WHY IT MATTERS: Le Labo’s departure from its frontage at 1434 Woodward Ave. the block is the third store to vacate this year, following Détroit is the New Black in February at 1430 Woodward Ave. and Madewell at 1426 Woodward Ave. in March as downtown’s retail landscape shifts.
The Cass Cafe in Midtown Detroit has been known for its strong connections to Detroit’s artistic community.| AMELIA BENAVIDES-COLON / CRAIN’S DETROIT’S BUSINESS
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McLaren takes a page from ‘Star Trek’ with new tech Project gets systems talking to each other BY DUSTIN WALSH
Dillon and Crissi Raxter wanted a summer wedding in 2020 but they wound up posing for wedding photos in January 2022 in front of the The Whiskey Factory at Detroit City Distillery as snow flurries fell. | JESS ROBERTSON/GIRL WITH THE TATTOOS
Weddings are back — and metro Detroit vendors are overwhelmed BY AMELIA BENAVIDES-COLÓN
Dillon and Crissi Raxter said “I do,” on their 5,000th day of dating. Snow flurries filled the air as the couple celebrated their marriage after almost 14 years together. This was not the intended aesthetic: They had originally planned a June wedding 16 months prior that had to be rescheduled three times due to the COVID-19 pandemic. But they were lucky to get their wedding squeezed in when they did. Around 2.5 million weddings are estimated to happen this year, which
is the most since 1984, according to the Wedding Report, a trade group that surveyed 2,229 customers and 283 businesses to gather its data. The majority of the weddings will be events that were planned for 2020 or 2021 but had to be rescheduled due to COVID-19 related restrictions. "Our original date was June 6, 2020...and the state formally shut everything down a week before," Crissi Raxter said. It's a common theme for venues: everyone with something planned during the pandemic shutdown is trying to squeeze in their events, re-
sulting in a crunch that has some people getting married on unusual days and times of the week. Scott Rutterbush, managing partner at The Eastern, an industrial event venue located in Detroit's Eastern Market, said one of the biggest obstacles now is the rise of midweek weddings as Friday and Saturday bookings are going fast. “It’s really been crazy,” he said. “I mean people are doing weddings on days that they don’t even traditionally do weddings, like Thursdays." See WEDDINGS on Page 18
A wedding setup inside The Eastern.
The boom-or-bust lake town of Petoskey isn’t known as a technological epicenter. Nestled on Little Traverse Bay, business here is more about the charming downtown and coastal white sand resorts. But a recent influx of cash from federal COVID-19 funds and wealthy Up North donors have made the local hospital one of the most technologically advanced in the state. In 2015, McLaren Health Care embarked on a $158 million renovation project for its McLaren Northern Michigan Hospital, which included $37 million in private donations to expand and upgrade the facility. The project added 182,000-square-feet of space as well as technology modernization to improve patient safety and experience. “With the construction project, we knew our future was now,” said Rich Reamer, regional manager of clinical engineering at Grand Blanc-based McLaren Health Care. “We had people in the area who wanted to give toward a project like this, so we had the opportunity to come together and create the best integrated system we could.” Reamer’s goal was to get all of the hospital’s digital systems to communicate. So his team invited nine tech system vendors to meet and told them to create a way for the systems to work together — or the hospital would find other vendors. “Most systems aren’t able to integrate and we knew that was a problem,” Reamer said. “It took a lot of time, but we weren’t buying a system unless they worked together and we ultimately convinced them to try.” The result is nine different communication systems in the hospital operating in concert to streamline operations and improve health care, Reamer said. See MCLAREN on Page 19
REAL ESTATE
Families seek to preserve heritage amid big changes in Greektown BY KURT NAGL AND MINNAH ARSHAD
When longtime Greektown businessman Tasso Teftsis was approached to buy the former PizzaPapalis building on Monroe Street, he was flooded with memories of growing up in the space that once housed his father’s barbershop. But Teftsis, 62, didn’t buy the 10,000-square-foot historic building for more than $1 million because of what it used to be. He saw it as an opportunity to help shape the future of
one of Detroit’s oldest neighborhoods at a time of significant change. “Everybody has not only money invested, but they have a lot of emotional investment in it because the majority of them are Greek, and they want to keep Greektown the way their parents had it,” said Teftsis, whose family also owns Astoria Pastry Shop, Red Smoke Barbeque and the Monroe Street buildings they occupy. Teftsis is one of a half-dozen other Greek families who own most of the non-casino real estate on and adjacent to Monroe Street, which is anchored by
the recently rebranded Hollywood Casino at Greektown. Its new nameplate towers over the district’s main drag where changes abound. The design stages of a roughly $8 million streetscape project are in the works to make the tight-packed neighborhood more pedestrian-friendly, while fundraising for a $2.7 million plaza at Gratiot Avenue and Randolph Street is underway, said Melanie Markowicz, executive director of Greektown Neighborhood Partnership. See GREEKTOWN on Page ?
Longtime Greektown businessman Tasso Teftsis bought the former PizzaPapalis building on Monroe Street, once the home of his father’s barbershop. | CYDNI ELLEDGE/ CRAIN’S DETROIT BUSINESS
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A rendering of the proposed The Coe II development in Detroit’s West Village neighborhood with 50 apartments and four for-sale townhomes. | CHRISTIAN HURTTIENNE ARCHITECTS
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West Village battle over 2 old houses — and what replaces them — intensifies
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A battle is underway in Detroit’s West Village neighborhood, where some residents — plus Nicole Curtis, the host of The Rehab Addict and Rehab Kirk Addict Rescue on PINHO HGTV — are fighting a Detroit developer and his vision for a new four-story apartment building. Behind the scenes, it’s been ugly — and personal. One resident opposing the development has sent repeated text messages to the developer, Clifford Brown, including one that mocked his weight and the clothes he wears. After what Brown said in one day’s exchange was a text message every 15 minutes for more than eight hours, he threatened to take out a personal protection order against the sender. And the opposition group is not slowing down, recruiting Curtis, the Metro Detroit native who is active in Detroit home restoration, and her considerable social media megaphone — she has more than 300,000 Instagram followers and 1 million on Facebook — into the fold. A couple months after I reported that Brown’s plan involved tearing down a pair of run-down houses on Van Dyke Street near Coe Street (more on those in a little bit), a group of residents in the area led by one Parker Street homeowner became upset about the planned demolitions, and began voicing other issues raised in an online petition. They include, but are not limited to, the following (I’ve included some of the counterarguments): `The building that would replace the two homes is too big. (Counterpoint: Within a couple blocks of the site, apartment buildings include the 11-story Parkstone, eight-story Parkhurst, the six-story 1000 Van Dyke and the five-story Village Park Apartments at 1085 Van Dyke, to name a few. Two blocks away, the new four-story, 92-unit Parker Durand sits at Parker and Kercheval, technically in the Islandview neighborhood immediately across the street from West Village and outside of the local historic district.) `It disrupts the historical character of the neighborhood. (Counterpoint: Residents voiced little concern when the first phase of The Coe was built in
2017, looking very much like a modern city says property values are expectapartment building as The Coe II ed to rise 30 percent on average; resiwould look. There was some pushback dential property in Detroit, once valduring the Parker Durand approval ued at a low of $2.8 billion in 2017, is process, but James Van Dyke, executive now tentatively $4.8 billion. My colvice president of co-developer The league Arielle Kass reported earlier Roxbury Group, said it “melted away” this month that home sale prices in once the building started construction. Detroit saw an 18.1 percent increase In addition, in other areas, such as year-over-year in May median home downtown and Midtown and Cork- sale prices, according to RE/MAX of town, new buildings are not construct- Southeastern Michigan, and a 21.3 ed to look like the older buildings; percent increase, according to Farmthose new buildings do not threaten ington Hills-based Realcomp Ltd. II.) historical character in those areas, just ` Developer engagement that has been “rife with late and misleading as The Coe II would not.) `Parking availability will be negatively information.” (Counterpoint: The impacted. (Counterpoint: The Villages WVA in an October letter offering its Community Development Corp., in a “conditional support” of the project letter, says that the development may to the HDC said that “Woodborn actually help improve parking with the Partners and specifically Clifford reconstruction of an alley in the area. Brown have been excellent partners “This is the single best way for residents in the neighborhood and would go so on that block to be able to access their far as to say they set the standard for backyards, so as to be able to build ei- community involvement amongst ther a carport or garage, which is the developers in the area.”) most enduring method of securing ` Phew. Brown said in a statement : permanent off-street parking for resi“We have spent over two years endents,” the Talk of the Villages email newsletter from April says. “This “WE HAVE SPENT OVER TWO has the potenYEARS ENGAGING THE tial to actually improve the RESIDENTS OF THE WEST availability of VILLAGE AND WORKING ON A parking for residents adjacent PROJECT THAT WILL BRING to the developDENSITY, AFFORDABLE ment.” In addition, even in the HOUSING, RETAIL, JOBS, ETC.” Parker Durand, not every resi- — Clifford Brown, developer dent has a car, and The Coe II is expected to follow a gaging the residents of the West Vilsimilar pattern; Brown’s project in- lage and working on a project that cludes 39 off-street parking spaces plus will bring density, affordable houseight spaces for the townhomes. How- ing, retail, jobs, etc.,” he said. “At each ever, the West Village Association has step, we have communicated progexpressed concern about the impact ress and worked to identify compromises in areas of resident concern in on parking.) `It would be a strain on the infrastruc- which we can make changes and still ture like sewers and drains. (Counter- have a viable project. Most of the point: I’m told that’s likely not the case. people we have encountered have “The Detroit Water and Sewerage De- been supportive and interested in partment has not performed water and seeking solutions that meet each othsewer infrastructure assessments in er’s needs and benefit the entire this neighborhood within the last five community. There are others who years,” said Bryan Peckinpaugh, public have chosen a different path. As eviaffairs director for the DWSD. “The denced by our commitments in Hubcity’s water and sewer systems were bard Richard, Brush Park, Lafayette designed to serve 2 million people and Park and West Village, our focus rewe believe it can support the capacity mains on Detroit, its residents and its necessary for this residential develop- neighborhoods.” So ... what gives? ment.”) ` Negative impact on neighboring property values. (Counterpoint: The See INSIDER on Page 5
INSIDER
From Page 4
A fight is brewing For one answer to that, I turned to Amber Cecil, who lives on Parker Street nearby. She’s been among the most vocal on social media and elsewhere opposing the project, at least in its current form. She stressed that she and most others pushing back against The Coe II are not anti-development. “It is not a campaign or a debate of historic (preservation) vs. housing, or pro-development vs. no development,” said Cecil, who said she bought her home in 2018 and had rented in the neighborhood as far back as 2007. She said she first became aware of the development plans several months ago when she noticed a sign about a community meeting on the project. “It was always an issue of capacity,” she said. “It just looks like you’re trying to shoehorn something in that really should have been half the size, and I still feel that way. So then I started asking my neighbors, ‘Hey, have you heard about this,” and showing them, and they’re like, ‘Oh my god, that’s huge.’” Cecil also had concerns about the community engagement process, which she said was lacking and didn’t give residents around the site enough time to mull the development and its implications, an allegation that has been disputed. “How are you supposed to engage if you have 24 hours’ notice and the other days are past,” Cecil said. She also says that she, too, has been called names (“bully” being one of them) and that some have tried to silence her voice in the process. Over the course of several meetings with various groups, Cecil said people continued to voice their concerns, with little taking place to address them. One of those concerns has been that the home at 1532 Van Dyke has been tied up with Brown in a development agreement with the Detroit Land Bank Authority, and others who have attempted to purchase it have been rebuffed. And Curtis has publicly tussled with the land bank over property on
This house at 1514 Van Dyke is slated to be demolished to clear the way for a new 50-unit apartment building along with four townhouses. | KIRK PINHO/CRAIN’S DETROIT BUSINESS
A 19th Century house on Van Dyke expected to be razed to make way for The Coe II project in the West Village neighborhood. | KIRK PINHO/CRAIN’S DETROIT BUSINESS
book page of Curtis, a Metro Detroit native, scoping out one of the Van Dyke houses planned for demolition. Curtis told me last week that she will “of course” get “involved” in the effort to save the homes, and questioned the HDC’s decision to allow them to be razed in the first place. “Honestly, what the f--- is the sense of having a historic district when you’re going to sign off on demolishing houses in your historic district,” she asked. “This is just a ridiculous thing that’s happening all across our city, where you have historic homes that are protected, because it’s in a historic neighborhood, and we’re allowing these developers to tear them down to build these God-awful nightmares. “I’d rather have empty, mothballed buildings than this thing where we’re coming in and we’re absolutely demolishing our history faster than it’s ever been done before, and it just sucks, to put it lightly.”
market rate or affordable, is a good thing in that it either directly or indirectly helps, bit by bit and unit by unit, address a key concern in Detroit. And in a city that continually struggles to meet the affordable housing needs of its 600,000-plus residents as housing costs continue to rise even though wages in Detroit generally haven’t as Area Medium Income is increasing region wide (and inflation is salt in the wound), increasing the number of available units should be a primary goal. With 54 units of supply — 50 apartments and four for-sale townhouses, including 10 affordable units at 80 percent of the federally designated AMI (yes, “affordable” is a fraught term, as we have written about) — The Coe II would seemingly help address that. In recent days, the city has re-
The other home, located at 1532 Van Dyke and owned by the land bank, “appears to be in a salvageable condition typical of many vacant Detroit houses.” It’s at least 125 years old. Both homes have undergone some historically inappropriate modifications, the HDC says, and have been through a lot in recent years. In particular, a November 2013 fire severely damaged a pair of homes that sat in between 1514 and 1532 Van Dyke. Those homes were at 1526 Van Dyke, where the fire started, and 1518 Van Dyke, where the blaze spread, the HDC says. They were demolished in 2015 without HDC review.
Is more housing better? More supply of housing, whether
ceived good news: In an “affordable housing Christmas Day,” four projects with 183 units for people making no more than 60 percent of AMI were awarded nearly $38 million in low-income housing tax credits from the state on $60.9 million in development, my colleague Arielle Kass reported. Donald Rencher, Detroit’s group executive for housing, planning and development, said during an event last week that “the need for affordable housing is vast.” “There’s no doubt we need to bring on more,” he said. What impact public West Village pressure has on this effort that would bring 10 more units in the neighborhood will play out in the days and weeks ahead. Contact: kpinho@crain.com; (313) 446-0412; @kirkpinhoCDB
What is historic?
Signs pepper front lawns: “Let’s keep West Village historic” or “Save these historic homes.” The HDC says the two homes date back to the 19th Century. And although the organization was lukewarm, at best, about their demolition, it ultimately signed off on it even though they had wanted the houses “HONESTLY, WHAT THE F--- IS moved instead (something THE SENSE OF HAVING A Brown has said would be cost HISTORIC DISTRICT WHEN prohibitive, YOU’RE GOING TO SIGN OFF costing hunof thouON DEMOLISHING HOUSES IN dreds sands of dolYOUR HISTORIC DISTRICT?” lars). “HDC staff, — Nicole Curtis, of HGTV who are also of East Grand Boulevard in an owner- course planning staff, did agree that ship dispute. additional density and housing on So at the suggestion of one of her Van Dyke is desirable and approneighbors, Cecil engaged with Cur- priate for this corridor, and that tis over social media by tagging her transforming the current (mostly) in a post. vacant condition of this block is a After that, the two connected. major opportunity that would merit “I gave her the rundown and she any loss of integrity incurred by immediately was fired up,” Cecil moving these contributing buildsaid. ings,” staff wrote. Which brings us to Curtis, who One of the homes, located at said in an interview that she has in- 1514 Van Dyke, is likely at least vested “a couple million dollars re- from the late 1880s, the HDC says, storing houses in the area,” includ- “associated with the earliest period ing in West Village and in nearby of development in this district.” The Islandview. occupied home “appears to be in Cecil posted a video on her Face- fair to poor condition.”
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COMMENTARY
Here’s how businesses can take bold action on climate BY KATE GASPARRO AND MELISSA ZAKSEK
EDITORIAL
Don’t leave money for businesses on table M illions of dollars in COVID relief aid has been left on the table in Michigan that could be helping businesses recover from the pandemic. It’s time for the state to figure out why — and get those funds flowing. The state so far has awarded $105 million in new grants to 2,600 businesses that were hurt by pandemic-related restrictions, Crain’s David Eggert reported last week. That’s good news for restaurants, hotels, bowling alleys and others that were especially hard hit. But it represents only a quarter of the $409 million the state actually set aside for that purpose. Does that mean the money isn’t needed anymore? Hardly, says Justin Winslow, president and CEO of the Michigan Restaurant & Lodging Association: “I guarantee you there’s still demand and need out there.” The problem could be unnecessarily restrictive eligibility rules that put the funds out of reach of the businesses they were supposed to be helping. While guidelines are important to prevent abuse of any COVID recovery funds, they were so tight in this case it’s not surprising that so much of Michigan’s money is still sitting unclaimed. But we don’t know for sure, because lack of transparency surrounding the program makes it difficult to pinpoint where the breakdown occurred. We don’t yet know how many businesses applied; who got grants so far; or how much each received (the average was about $40,000, according to the state.) State treasury officials say that information is forthcoming in a few months, but that’s of little use to businesses who need help now. The state laid out parameters in December for accessing the discretionary federal recov-
ery funding. It’s available to specific pandemic-“afflicted” businesses: entertainment venues, exercise facilities, food service establishments, recreational facilities, “places of amusement” like bowling alleys and casinos, cosmetologists and barbers, nursery dealers and growers, athletic trainers, body art facilities, and hotels and bed-and-breakfasts. To qualify, businesses had to attest in March that they saw total sales decline by at least 5 percent in 2020 from 2019. “Total sales” includes forgiven federal Paycheck Protection Program loans and federal Restaurant Revitalization Fund receipts, according to the law. Essentially, that meant that receiving federal pandemic aid would count against the grants available through the state. It’s not clear whether that provision disqualified many businesses that applied or discouraged them from applying altogether, given how little is known about the process. The deadline for the grant applications was April 1. Danelle Gittus, a spokesperson for the Michigan Department of Treasury, told Crain’s that information about the program will be included in a report to lawmakers once all payments have been made and reconciliation is complete, expected in about two months. The unallocated money will remain in an account until the governor and legislators agree on how to use it, Gittus said. Why wait? Lawmakers should be seeking answers now. Maybe the eligibility criteria need to be reviewed to ensure the money is as widely available as it was intended. Maybe it’s an issue of awareness and more outreach is needed so businesses know it’s there. Regardless, $304 million is a lot to leave hanging. Michigan’s businesses deserve better.
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 | JULY 11, 2022
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A
s our world pivots toward a greener, more electrified future, this new economy presents tremendous opportunities for economic growth and job creation in Michigan. With our abundant natural resources, Kate Gasparro is talent and ingenuity, not to mention grit, Michigan the director of is poised to be a leader in land development and this new economy. The recently released sustainability at MI Healthy Climate Plan Bedrock. sets out a roadmap for harnessing this capital in our progress toward carbon neutrality. However, the state can’t do it alone. Business, in collaboration with the state, universities and nonprofit partners, must play a significant role in transforming our energy landscape and layMelissa Zaksek is ing the foundation for a greener economy and associate director, research greener communities. From energy efficiency at Erb Institute at the University upgrades to renewable of Michigan Ross energy, a greener econoSchool of my is becoming a prereqBusiness. uisite for business success. And, companies know that. Increasing reports show that positive environmental, social and governance activity increases a business’ financial value, and a growing number of Fortune 500 companies are disclosing their sustainability goals and actions to meet Securities and Exchange Commission requirements and market pressure. Not only are companies positioning themselves to be greener to grow economic value, attract new investments and mitigate climate risk, they are looking to attract and retain talent hungry to work for environmentally conscious companies. Many of Michigan’s businesses are already leading the charge in the global clean energy revolution. Ford and GM have made significant investments in manufacturing EVs that will electrify the transportation sector; real estate leaders Bedrock and Related are using their influence to decarbonize Michigan’s cities and buildings through new renewable energy models and partnerships; Whirlpool has
successfully issued a green bond for ongoing investments in green operations; and Walker-Miller Energy Services continues to be a national leader in energy efficiency and energy waste reduction in disadvantaged communities. These investments, and others, are benefiting all Michiganders with new job creation and economic growth. Joining forces in cross-sector partnerships with the state, utilities and others will amplify the potential economic payoff of these business investments in our clean economy. The state of Michigan has made a commitment toward a greener economy through the Great Lakes Impact Investment Platform, the statewide green bank Michigan Saves and ongoing investments in electric vehicle manufacturing and infrastructure. While this progress is encouraging, there remains a great deal of work. Similar to other states, climate events are increasingly posing risk for businesses and communities throughout Michigan. Just last year, Detroit saw historic flooding that damaged houses and shut down the freeways. Further, emissions from legacy manufacturing and generation facilities are putting Michigan’s natural resources and most disadvantaged communities at risk. These challenges require cross-sector solutions that will support the transition toward a greener and more just economy for all. As an example of this, the Michigan Business Sustainability Roundtable, created and facilitated by the Erb Institute at the University of Michigan, has brought together public, private and academic interests to promote a collaborative and data-driven approach toward carbon neutrality for the state. Through two years of engagement, the stakeholders of the Sustainability Roundtable have identified a set of priority solutions with the most immediate and greatest impact that should be deployed justly and equitably, including: `Energy waste reduction in our built environment. `Electrification of transportation infrastructure and vehicles. `Building decarbonization. `Grid decarbonization, including enabling equitable access to renewable energy and reducing reliance on greenhouse-gas-emitting sources. The transition to a sustainable economy presents tremendous economic development opportunities, and Michigan must be ready and at the forefront as a leader in this new economy. We invite other businesses to join us in supporting ambitious climate action and moving Michigan to the forefront of climate action.
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.
SPORTS BUSINESS
Rocket Mortgage Classic energizes as it vies with LIV tournament BY KURT NAGL
Sponsor revenue for the Rocket Mortgage Classic in Detroit is up 20 percent, and attendance for the PGA tournament could be a record, organizers said, despite some major golfers choosing oil money over mortgage money and defecting to LIV Golf. The field and the grounds at Detroit Golf Club will look different than last year when the July 28-31 tournament gets underway. For one, Bryson DeChambeau, formerly sponsored by Rocket Mortgage and an ex-ambassador of the tournament, won’t be teeing it up in Detroit. Instead, he and some other big commitments from the tournament last year, including Phil Mickelson and Patrick Reed, will likely be at Trump National Golf Club Bedminster for the LIV Golf Invitational. LIV is a new golf tour launched earlier this year and Langwell financed by Saudi Arabia’s sovereign wealth fund. It has managed to poach some of the biggest golfers in the world, despite the Saudi regime’s abysmal human rights record and the PGA’s policy of suspending all players who compete in it. Rocket Mortgage Classic tournament director Jason Langwell said he isn’t worried about the new Saudi-backed event sucking talent or excitement away from the PGA’s Detroit stop. Ticket sales are tracking to match or even exceed a record inaugural year in 2019, he said, and there will be more grandstands and fan activations than ever. “We’ve reimagined the layout of Detroit Golf Club to allow for more what we call pockets of energy for fans and for brands to be able to tap into that recreational passion,” Langwell said. That includes The Turn, a new craft cocktail bar between holes 9 and 10; Area 313 Grove, a shaded area near hole 14 with eight food and entertainment locations; and Area 313 Village, a lounge area with concessions and large video board. The neatest new concept might be the Treehouse, an elevated deck built around a tree behind hole 5. Open to general admission, the deck will offer the most expansive view of front 9 action, with sightlines to the green on hole 5, tee shot on hole 6, approach shot on hole 7, tee shot on hole 8 and even a look at the green on hole 1. “Better experience, more interactive experience, fitting our tune of being more than just a golf tournament,” Langwell said. “Wanting to make it a place for some really good ol’ summer fun in the city of Detroit.” Major new sponsors include Deep Eddy Vodka and Dobel Tequila, while sports wagering continues to be a booming category with new sponsor Soaring Eagle joining FanDuel, Golden Nugget, DraftKings and PointsBet. Langwell said DeChambeau’s commitment to LIV, and Rocket Mortgage’s cutting ties with him as a result, did not impact the tournament’s promotional efforts. “We expected Bryson and Patrick (Reed) to play here” Langwell said. “Bryson came to that decision on his own. He informed all of his sponsors when he made his final decision, and he gave us a call. He’s a great champion, and we’re disappointed that he’s
not here, but we wish him the best.” Langwell said that as some bigname players were announcing their allegiance to LIV, organizers of the Detroit tournament were working to secure commitments from players such as Rickie Fowler, a Rocket Mortgage-sponsored tournament staple who had been rumored to be considering the Saudi league. “From the get-go, his stated intent with us was to be here and play and he continues to be, and we’re excited to have him back,” Langwell said. Commitments include U.S. Open runner-up Will Zalatoris and Cam Davis, who won the Detroit tournament last year.
Ground passes for the tournament are $60 for the first round, $70 for the second round and $80 per day for the final two rounds. Prices increase by $5 on July 18 and another $5 on July 25. Kids 15 and younger receive a free grounds ticket when accompanied by a ticketed adult. Practice days July 2627 are free for Detroit residents. Shared hospitality options include the LendingTree Lounge, starting at $100 per day, and the Michelob Ultra Athletic Club, starting at $250 per day. (These prices include admission to the tournament.) Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl
The Rocket Mortgage Classic will be held July 28-31 at the Detroit Golf Club. | ROCKET MORTGAGE CLASSIC
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JULY 11, 2022 | CRAIN’S DETROIT BUSINESS | 7
TECH IN THE U.P. ` Technology company powers hotels. PAGE 12 ` Orbion propels way to expansion. PAGE 12
CRAIN’S MICHIGAN BUSINESS
` SightLine targets fairer college admissions with data. PAGE 13
GREAT LAKES
CRUISE OFFERINGS GROW AS SHIPS GET BIG
VIKING CRUISE INSET: XXXXX
The 378-passenger Viking Octantis made its Great Lakes debut this spring, with stops in various ports including Niagara Falls, Detroit, Mackinac Island and Milwaukee. Here, the Octantis passes through the Welland Canal in Ontario. Inset: View from the deck of the Pearl Mist; photo by Bryan Esler for Crain’s.
Viking Octantis, largest ship on the lakes, is latest entry in a growing niche attracting vacationers to explore Michigan by water | BY GREG TASKER The morning after the 210-passenger Pearl Mist docked at Heritage Landing in Muskegon, Gene and Robin Hamme disembarked from the cruise ship and hopped a trolley for a 20-minute tour of the former industrial city on Michigan’s west coast. “We took a loop through the city. It was impressive,” said Robin Hamme, a retired manufacturing company supervisor from North Carolina. “I loved the old architecture and was impressed by what’s going on — all 8 | CRAIN’S DETROIT BUSINESS | JULY 11, 2022
these revitalization projects, repurposing buildings and turning them into condos. The city is a real treasure.” The Hammes, who boarded the Pearl Mist in Milwaukee the night before, explored Muskegon on the first full day of an 11-night cruise along the Great Lakes. Beyond Muskegon, their itinerary includes stops at Mackinac Island and Sault Ste. Marie, as well as multiple Canadian ports, before ending in Toronto in early July.
The Hammes are among a growing number of vacationers boarding cruise ships to explore the Great Lakes and the St. Lawrence Seaway. In fact, the Great Lakes cruise industry is poised for a record-breaking year after a two-year hiatus because of the pandemic. The number of passengers is up by more than 25 percent from 2019, according to Cruise the Great Lakes, a regional cruise marketing program with a goal to attract more passengers to the lakes. “We had never experienced the
Great Lakes by water before,” said Gene Hamme, noting the couple has been on cruises in the U.S. and Europe before. “They’ve done a really nice job so far. We’re looking forward to the rest of the trip.” In all, nine ships are sailing the Great lakes this season, booked with passengers from all over the United States and Canada. The reasons for interest in the Great Lakes as a cruise destination are many, officials say. See CRUISE on Page 10
“WE HAD NEVER EXPERIENCED THE GREAT LAKES BY WATER BEFORE.” — Gene Hamme, cruise passenger
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CRUISE
focused,” she said. “They’re very similar to river cruises, only you’re on the Great Lakes. The cruises are From Page 15 smaller and more personalized. Sailing back and forth between two You’re never out of sight of land. We countries is a big selling point. Also also are able to go to places where driving interest is pent-up travel de- big ships can’t go. Our passengers mand, especially for cruise vaca- are very interested in activities on tions, because of the pandemic, and shore.” The cruises are more expensive also a change in mind-set. Many vacationers are seeking “experience” than Caribbean cruises, costing travel and also want to explore des- thousands of dollars per passenger. They generally lure an older demotinations closer to home. “We’ve known for a long time graphic, people in their 60s and there was interest in this region for above, who are often retired and cruising,” said Dave Lorenz, vice well-traveled. They’re seeking more president of Travel Michigan, part of laid-back, enrichment vacations. the Michigan Economic Develop- The ships generally don’t offer ment Corporation, noting the state’s pools, casinos or shopping. Oninvolvement with the Cruise the board activities might include muGreat Lakes organization. “We just sic, lectures, and cocktail hours. The didn’t have a lot of ships operating focus is more about personal enon the lakes and that went into richment. “These are not entertainment pause during COVID. And now we have cruise lines like Viking Cruises cruises like the Caribbean cruises,” entering the Great Lakes. It’s perfect said Jeanne Psychas, manager of the Great Lakes Cruise Company, an timing.” Viking Cruises made its Great Ann Arbor-based booking agent. Lakes debut this spring with a new The company has been working ship, the Viking Octantis, with stops with cruise lines for about two dein various ports, including Niagara cades. “I think for a majority of pasFalls; Point Pelee, Ontario; Detroit; sengers, these cruises are part of Alpena; Mackinac Island and Mil- their bucket list. They’re more interwaukee. The Viking Octantis will ested in enrichment, and, in the cruise through early October, offer- case of the Great Lakes, they want to ing a variety of itineraries along the learn about the history of the lakes and their ports.” Great Lakes. Like the Rocky Mountains or New “Our expedition ships were designed with the Great Lakes in mind. York City, the Great Lakes are iconic, This region has been historically un- but they also are unfamiliar to many derserved by cruise lines,” said Tor- Americans. “Those of us who live near the stein Hagen, Viking chairman, noting the company has been delighted lakes take them for granted,” she by the enthusiastic reception from said. “When you see them for the first local communities. “Our guests are curious explorers. time, it’s, ‘Oh, my goodness.’ People They want to continue traveling with can’t believe you can’t see across us to familiar and iconic destina- the lake to the other side. They have tions, but they also like to travel fur- no idea how breathtaking and beautiful they are, or how much history is ther,” he said. here.” That history appeals to many. It’s Enriching voyages not just the Victorian charm of carThe luxurious Viking Octantis, less Mackinac Island or its late with room for 378 passengers, is 18th-century fort or the impressive larger than most of the cruise ships locks at Sault Ste. Marie. Each port on the Great Lakes. Most ships have has its own story. In Muskegon, travfewer than 200 passengers and typi- elers explore the city’s lumbering cally each calls on five to 10 ports in and maritime past with a visit to one a region. The ports are both large of the city’s many museums. The city cities — Chicago, Cleveland, Mil- also boasts an impressive art musewaukee and Detroit — and small um. “We’re a unique community,” said ones, such as Muskegon and Duluth. Many times, the ships are dock- Cindy Larsen, president of the Musing in ports with easy access to the kegon Lakeshore Chamber of Commerce. “We don’t have mega-musesmall communities. The amenities on Octantis are ums like Detroit but we have similar to other Viking Cruises ves- museums that you can go through in sels. They include indoor and out- a couple of hours and explore whatdoor viewing areas; a panoramic ever interests you. Everything is within proximity to each “OUR EXPEDITION SHIPS WERE DESIGNED other, just a couple of WITH THE GREAT LAKES IN MIND.” blocks from — Torstein Hagen, Viking chairman the docks.” To accomauditorium used for lectures, docu- modate visitors, the city runs hopmentaries and films; a spa with an and-go trolleys that take visitors like indoor heated pool and a wood-sid- the Hammes on a tour of the downed hot tub, open to the outside; and town. Another trolley runs guests to the beaches. Guests of the Pearl Mist various dining options. On ships like the Pearl Mist, all also had the option of a planned exfood and drinks at meals are includ- cursion to nearby Holland. ed, as well as cocktail hours, onboard entertainment, such as lec- Economic impact tures and music, and many shore excursions. Guests enjoy spacious The economic impact is formidastaterooms, outward facing cabins, ble, estimated at $120 million this private balconies, indoor and out- year, said Cruise the Great Lakes. door lounges, said Alexa Paolella, a Beyond dollars, the cruises draw spokeswoman for American Cruise new attention to communities, Lines and Pearl Sea Cruises, which bring foot traffic to their downis running 10 Great Lakes cruises towns, and also create a sense of this season, with seven- or 11-night pride for residents, who frequently options. line up along shorelines to welcome “Our cruises are all destination ships. 10 | CRAIN’S DETROIT BUSINESS | JULY 11, 2022
The sun deck aboard the Pearl Mist. | BRYAN ESLER/CRAIN’S DETROIT BUSINESS
A lou are g
Great Lakes cruising is estimated to make a $120 million economic impact this year. | BRYAN ESLER/CRAIN’S DETROIT BUSINESS The
Pearl Mist cruise ship passengers board a hop-on/hop-off trolley to explore Muskegon | BRYAN ESLER/SPECIAL TO CRAIN’S DETROIT BUSINESS
Visitors explore the Hackley and Hume Historic Site in Muskegon. | BRYAN ESLER/CRAIN’S DETROIT BUSINESS
Pear
BUSIN
CRAIN’S MICHIGAN BUSINESS | UPPER PENINSULA
Tech company powers hotels around the world from Munising Growing team maintains systems at luxurious resorts BY TOM HENDERSON
There’s one hospitality niche in Munising that isn’t a surprise to anyone — providing lodging for tourists who are in town to take Pictured Rocks boat tours or go kayaking along the base of the colorful cliffs towering over Lake Superior. There’s another niche that no one would ever suspect — a growing tech team downtown that designs and maintains all the technology systems at many of the most luxurious resorts around the world, where rooms are never less than $1,000 a night and often are many times that. Deployed Technologies LLC is officially headquartered in Roanoke, Texas, where its CEO and president are based. The company employs 36, three of them in Roanoke, 19 in Munising and others in Dubai, Scotland, Thailand, southern Florida and Las Vegas. The Munising team includes company co-founder and COO Tom Dolaskie and his brother, Joe Dolaskie, who is head of design and leads a team of 14 designers. Tom got his training as an electrical engineer with a focus on fiber optics during a four-year stint in the Air Force. Joe also got his training in the Air Force and was an engineer at the Minot Air Force Base in North Dakota, a manager helping oversee the country’s nuclear stockpile. CEO Darrin Hubbard says the company is currently involved in about 75 hotel and residential projects for the ultrawealthy, either in the design stage or in construction. Two of the most high profile and luxurious projects under construction are The World Islands in Dubai and Four Seasons residences on Lake Austin, Texas. The World Islands are an archipelago of small artificial islands constructed in the shape of a world map in the Persian Gulf. Deployed Tech is working on the island in the shape of Europe. When it is completed, the Four Sea-
The former Fineman Building, which sat empty for 28 years, is now home to Deployed Technologies and Gallery Coffee. | RICK NEBEL, PEOPLES STATE BANK
Darrin Hubbard, Texas CEO enjoying frozen Lake Superior. | TOM DOLASKIE
sons will have 179 residences sitting on 145 acres ranging from $4 million to $30 million each. The residences sit on a forested hillside and will have a funicular railway taking homeowners on a long, sloping ride from their homes to the lake and their yachts. Other current projects include the Virgin Hotels Chicago and the Baccarat Hotel and Residences in Manhattan. Joe Dolaskie’s team creates blueprints and written specs for all telecom and Wi-Fi, HVAC systems, surveillance cameras, points of sale contacts at various shops and restaurants, lift gates and facial-recognition door locks.
Hubbard said revenue for Deployed Tech on its projects can range from about $300,000 for consulting, design work, blueprints and written specs to up to $5 million if the company is general contractor for all things technological, putting some things out to bid and doing some things with DT employees. How Deployed Tech came to be operationally based in Munising is quite a tale. Tom Dolaskie and Hubbard cofounded Deployed Tech in 2007 and their first contract was the Montage Hotel on Rodeo Drive in Beverly Hills. Previously, Hubbard had been director of technology at the Marriott Inter-
national and Ritz Carlton hotels. In 2008, Dolaskie, a 1997 graduate of Munising High School, returned to the city when his mother, Ann, was diagnosed with lung cancer. Eight months later, she died, and his father became ill soon after with mesothelioma. Dolaskie had been living in California and when he arrived back in Munising, it was on hard times and the last place he expected to grow their tech business or start a family. He certainly didn’t expect to be there 14 years later. “There was nothing here. There was only despair here,” he said, referring to a city whose downtown had long been filled with empty buildings and
Orbion’s space technology propels way to expansion BY TOM HENDERSON
Is there any better example of 20th century commerce making way for that of the 21st century than this? Orbion Space Technologies of Houghton, which has received $30 million in venture funding to make plasma-thruster propulsion systems for the new generation of small satellites, has signed a lease for a 10,000-square-foot former Sears retail outlet in the city and will begin manufacturing and testing there this fall when an extensive renovation is finished. Brad King, Orbion’s co-founder and CEO, said the new facility will allow the company to become more vertically integrated and less reliant on contract manufacturing partners to build flight hardware, which will also help reduce long supply-chain lead times that predated COVID-related supply issues. 12 | CRAIN’S DETROIT BUSINESS | JULY 11, 2022
Orbion, which licenses technology from Michigan Technological University, was founded in August 2016 as King puts it, “by two guys with a napkin sketch.” The other guy is Jason Sommerville, who is chief technology officer. Before founding Orbion, they had been executives at Aerophysics Inc., another company in Houghton that researched and designed spacecraft propulsion systems. Their napkin plan was to commercialize something called the Hall-effect, discovered by E.H. Hall in 1879, which refers to the force created by an electric current flowing through a conductor in a magnetic field. The plan used the Hall-effect to make propulsion systems for small satellites, a market analogous, says King, to what happened when mainframe computers gave way to PCs. Orbion first made headlines in 2017 when it won the $500,000 grand
prize at the eighth annual Accelerate Michigan Innovation Competition in Detroit and went on to raise a seed round of $1.36 million. Orbion raised an A round of funding of $9.2 million in August 2019 and finished raising a B round of $20 million in June 2021. Institutional investors have included Detroit-based Invest Michigan, Detroit-based Invest Detroit, Grand Rapids-based Wakestream Ventures, Ann Arbor Spark, Boomerang Catapult LLC of Traverse City, Beringea LLC of Farmington Hills, Boston-based Material Impact and San Mateo, Calif.-based Inventus Capital Partners. Other firms worldwide that have received funding recently for propulsion systems for small satellites include Accion Systems in Boston; Bengaluru, India-based Bellatrix Aerospace; and French startups ExoTrail and ThrustMe.
When asked if Orbion can ramp up production and testing in the former Sears building out of cash flow or will need to raise a Series C round, King said: “No comment.” Orbion currently employs 46, with plans to add five more after the Sears building comes on line and King says the company will ramp up hiring in 2023. Last summer, Orbion announced it had won a Phase 2 Air Force Small Business Innovation grant of $750,000 to develop and demonstrate a high-thrust propulsion system called El Matador to help small satellites quickly dodge other satellites or space debris. The company said the B round would be used to ramp up production to hundreds of propulsion units a year to meet demand from commercial satellite companies and from the U.S. government. Orbion had won a contract to supply four of its
for-lease and for-sale signs. “Having a family here was the farthest thing from my mind. There were 170 houses on the market. The building we’re in now had been vacant for 28 years.” But family illness kept him there and he fell in love, again, with the Upper Peninsula. His father was Tom III. He is Tom IV. He has a son born in Munising who is Tom V. The cost of living was cheap but, more important, the local telephone company, the Hiawatha Telephone Co. of Munising, was laying fiber with the kind of high-speed downloads, up to 150 megabits per second, that tech workers working remotely needed to connect to projects around the world.
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CRAIN’S MICHIGAN BUSINESS | UPPER PENINSULA
Houghton-based SightLine makes fairer college admissions its goal Company uses market analysis, predictive analytics BY TOM HENDERSON
Tom Dolaskie, COO of Deployed Technologies, inside the Gallery Coffee shop. | TOM HENDERSON/CRAIN’S DETROIT BUSINESS
Dolaskie and Hubbard didn’t stop at growing their hotel design business. In 2014, they created Deployed Assets LLC, a commercial real estate development firm. The timing was perfect. The next year, Good Morning America’s Ginger Zee broadcast live from Munising, with spectacular shots of the Pictured Rocks, jumpstarting a tourist wave that has persisted and was intensified during COVID, bringing in thousands of visitors a summer who need a place to sleep, coffee in the morning and spots to eat. Over the years, the two have been 50-50 owners of a growing collection of area businesses, including bringing back to life long-empty but architec-
turally sound downtown buildings. “It was very strategic on our part,” said Hubbard. “We saw a lot of people we were working with make a lot of money in real estate and restaurants.” Their first acquisition and renovation was the Hillside party store and gas station in 2015. It now boasts the best craft beer and connoisseur scotch collection in the UP. Their most important acquisition, which came soon after, was of the Fineman Building downtown, a large building that had been home to the area’s biggest department store and which had sat vacant for nearly three decades. See HOTELS on Page 14
CEO Brad King of Orbion Space Technology in Houghton. | ORBION SPACE TECHNOLOGY
Ashley Kern, a data scientist, thought there had to be a better way for colleges and universities to decide which students to accept and how much in aid and scholarships to offer them. It has long been a hitand-miss process based more on gut feelings than science. And she wanted to turn that around. So in 2018, she founded Houghton-based SightLine Inc. to offer schools market analysis and predictive analytics through the use of artificial intelligence. The end goal is to make the process fairer and more understandable. “We empower higher education institutions to better understand the data they already have without complicated software installations and training,” she said. SightLine uses what it calls machine learning to give schools insight into what kind of aid a school should offer a particular student and how the school’s financial metrics compare with those at nearby colleges — and to help parents understand what they can expect to pay for tuition based on their kids’ grades and extracurricular activities instead of the sticker price posted on a schools’ website. Early investors and end-users say that she and the company are on the right track. In February 2021, SightLine finished raising a pre-seed fund with an investment of $100,000 from the Michigan Rise Pre-Seed Fund III, a subsidiary of the MSU Foundation in East Lansing. Previously, it raised $125,000 from Invest Detroit. Two angel investors contributed a total of $50,000 to the round. “We are preparing to start a multimillion dollar Series A this year,” said COO Erin Thompson. “We would love to close by the end of the year.” She declined to disclose revenue but said as of the end of June it had Aurora propulsion systems to Blue Canyon Technologies for the Defense Advanced Research Projects Agency’s Blackjack satellites. The propulsion systems are used to raise the orbit altitude, avoid inspace collisions and bring the spacecraft down at the end of life. “Right now we are offering one propulsion system that is sized for satellites in the 80 kilogram to 250 kilogram range. These are satellites about the size of a kitchen dishwasher. We call this product Aurora,” said King. “We will soon be offering a slightly larger, higher-power system that is ideal for satellites in the 250 kilogram to 450 kilogram range.” On June 24, it was announced that Orbion will supply a propulsion system for the U.S. Space Force’s prototype weather satellite, under a contract with San Diego-based General Atomics Electromagnetic Systems. The General Atomics’ satellite, which will weigh about 400 kilograms, will rely on Orbion’s Aurora Hall-effect plasma thruster system for orbit raising and orbit mainte-
Ashley Kern is CEO of SightLine.
Erin Thompson is COO of SightLine. |
| SIGHTLINE
SIGHTLINE
already doubled last year’s revenue. The company employs five. “We were impressed with Ashley Kern and Erin Thompson,” said Jeff Wesley, Michigan Rise’s executive director. “We liked the mission to help small and medium-sized higher education institutions understand their internal data to more efficiently and economically manage their budgets and support students with predictive analytics. We saw this space and their traction to date at the time of our investment as a perfect fit for Michigan Rise. We were happy to invest and support this early startup,” he said. “We originally invested in Ashley’s vision of helping colleges and universities to optimize financial aid decisions and identify most atrisk students through their AI platform. The team deeply understands the significant financial challenges many schools are struggling with,” said Patti Glaza, Invest Detroit’s executive vice president. “Ashley and Erin are extremely complementary in terms of skills, bringing together a
nice balance of technical and business skills.” Kern got her bachelor’s degree in statistics from Michigan Technological University in 2015, then her master’s degree in data science from Tech in 2017. Before founding SightLine, she had been a researcher at Tech, working on predictive modeling of remote sensing to assess the risk of landslides after wildfires in the western U.S. She also worked as a consultant for Cliff Natural Resources in Marquette, helping develop models to predict crude iron ore production and usage for mine and processing plant operations. Michelle Rhodes is associate vice president for financial aid at Grand Valley State University in Grand Rapids. She has been a customer of SightLine’s since March 2021. She and her staff of 25 oversee scholarships and financial aid at the university and help manage on-campus employment opportunities for students.
nance. The Aurora system also will propel the satellite out of orbit at the conclusion of its mission. “Orbion’s timing seems to be excellent. When they started out five years ago there wasn’t a large demand for their product, but the founders predicted that the demand would show up in four or five years, and that they needed to start now to be ready for it. Their predictions so far have been spot on,” said Patrick Visser, chief commercial officer at the Michigan Tech Enterprise Corp.’s SmartZone technology accelerator in Houghton, where Orbion is based. “Orbion’s business plan is to be the Henry Ford of satellite engines. Like Ford, they didn’t invent a new technology, but instead they have found a way to improve an existing technology, adapt it for a new class of customers, and mass produce the engines on an assembly line to feed a fast growing customer base,” he said. When asked what he liked about Orbion, Casey Cowell, the principal at
See SIGHTLINE on Page 14
Boomerang Catapult, responded with a series of bullet points in an email: ` “The main thing is Brad King.” ` “He is authentic.” ` “He is an expert.” ` “He is super bright and creative.” ` “He is a winner.” Invest Detroit has invested more than $1 million in Orbion and was part of both the A and B rounds. “Brad is a global thought and research leader in this space. We like that he has built the company steadily, adding the right people and investing in the appropriate infrastructure as tech has matured,” said Patti Glaza, an executive vice president at Invest Detroit. “Their business model is crushing it,” said Charlie Moret, the president and CEO of Invest Michigan, which has invested more than $1.5 million. “People in Silicon Valley or the East Coast are always asking me, ‘Why did you found a rocket company in the Upper Peninsula of Michigan? I tell them, ‘Michigan is as close to outer space as anywhere else,” joked King. JULY 11, 2022 | CRAIN’S DETROIT BUSINESS | 13
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GRIT: STORIES OF GREATNESS FROM THE STREETS TO THE SUITES SPECIAL GUEST
Starting July 18, we’re throwing it back to our first-ever episode of Grit with Dr. Kwane Watson. Plus, host Margaret Trimer will be sharing key updates on his platform, Kare Mobile, exclusively on Apple Podcasts and Spotify.
Dr. Kwane Watson, Founder and CEO of Kare Mobile
HOST
Margaret Trimer, Vice President of Strategic Partnerships at Delta Dental
Rick Nebel is CEO of the Peoples State Bank in Munising, which is kitty corner from the Fineman Building. “I’ve been doing this a long time, and for 28 years, the No. 1 topic for the Downtown Development Authority was what to do with the Fineman Building,” he said. “Years ago, there were no cars parked around here. Now, the lots are filled.” The building was built in 1906 by Solomon Marks and known for years as the Marks Building. It was then sold to Bob Denman, who operated the department store, and he later sold it to Bob Fineman. The ground floor of the building now houses Gallery Coffee Co., an 8,000-square-foot coffee shop and entertainment venue, regularly featuring comedians and musicians on a large stage, and the second floor is home to Deployed Tech staffers, with a renovation in progress that will double the tech company’s space from 8,000 to 16,000 square feet. Nebel’s bank financed that first acquisition and remodeling. The next year, Nebel sold a former nursing home to them that the bank had foreclosed on. It had originally been the home of a lumber baron but had long been a nursing home and had been in a state of neglect for many years. “I was getting ready to tear it down and Tom said, ‘No, it’s got great bones.’” The building is now home to the Roam Inn, Munising’s version of luxury hospitality, as well as Tracey’s, a fine-dining restaurant that was named by BuzzFeed, based on Yelp reviews, as the best new restaurant in Michigan in 2017. The inn has nine large suites and nine single rooms, with summer rates from $249-$499 a night. They opened the Gallery Coffee Co. and Eh! Burger in 2018; a downtown breakfast place named Earl E. Byrds and a food truck named Tacopotamus
SIGHTLINE
From Page 13
Two years ago, she began looking for an outside contractor to help her team evaluate and improve their processes. Were scholarships and financial aid being awarded fairly? Could the internal processes involved be improved to make sure students weren’t falling through the cracks or getting an unfair share? She began reaching out to colleagues at other state universities, and contacts at Michigan Tech and Northern Michigan University told her about SightLine. “They were exactly what we were looking for. We loved that they were a Michigan business, and we loved that they were a female-owned small business,” said Rhodes. “There are big national companies that do this sort of thing, but we didn’t want a canned response.” As SightLine got involved, COVID was disrupting traditional ways of determining whether to accept an applicant and if and how much aid to give him or her — ACT and SAT tests were suddenly no longer widely available, for example. Rhodes said that meant the school needed better tools for managing its acceptance and aid processes. SightLine’s artificial intelligence algorithms bridged the gap. “We’ve got really good results,” she
The Roam Inn. | RICK NEBEL
in 2021; and Alley Cat’s, a fast-casual restaurant, on June 28 this year. They also founded the nonprofit Roam Community Foundation in 2018. Tom’s wife, Ana-Marija Dolaskie, oversees the restaurant and hotel teams. His sister-in-law, Erin Dolaskie, is general manager of the Roam Inn. With an expanding workforce, both at Deployed Technologies and the various businesses — during the peak summer months, they employ about 170 and about half that off peak — housing has become an issue in a city where 15 years ago there seemed to be an infinite amount. Tom Dolaskie said Deployed Assets recently bought six houses and rents previously purchased apartments to an executive chef at Tracey’s, the manager of the Hillside party store and two employees here on work visas. “Tom has been great for Munising,” said Nebel. “From a community bank stand point, he has been a great entrepreneur, what community banks want and need to have in our community. Non-seasonal employees are so important. They need mortgages. They all have kids who go to school. They all have to eat.” Cori-Ann Cearley, who went to high school with Tom, is president and a director of the Munising Visitors Bureau and owner of the Pictured Rocks Inn and Suites in Munising.
“This used to be a ghost town. Tom saw an opportunity and jumped on it. The Roam Inn is absolutely beautiful. It’s upscale and there’s a clientele for that,” Cearley said. She said Tom and his partner, Darrin, have been crucial in greatly expanding what had been a very limited choice of dining options. “Earl E. Birds was a sorely needed breakfast place, and the Coffee Gallery is a real draw. It gave visitors something to do at night. It filled a niche in the area. Tom has been transformational.” Gustaf Burman is chief information officer and executive vice president of hotel engineering for Montage International, a Ft. Lauderdale, Fla.-based owner of ultraluxurious hotels, including hotels in Cabo San Lucas, Mexico, and Maui, Hawaii. Accommodations in Cabo in July range from $1,328 per night for a room with a king-size bed to $21,250 a night for a five-bedroom stand-alone house. He said he has known Hubbard and Peter Chambers, Deployed Tech’s president, since the late 1990s. “Their organization is an extension of our IT department,” said Burman. “They have a wide range of technology capabilities and thought leadership. They are so skilled.”
said. “They used a holistic process, and we improved our needs-based aid and are able to use Grand Valley’s money as best as we can.” SightLine claims schools average a return of 15 times on what they spend with the company. Given her role helping students with on-campus employment, Rhodes found it interesting that a study by SightLine found a direct link between on-campus employment and better long-term retention of those students by schools. Working students go on academic probation less often and are significantly less likely to drop out. Would she recommend SightLine to other institutions? “Oh, absolutely. They gave us a lot more for our cost than other companies were willing to provide. They’ve been very responsive, and we’re absolutely going to continue our partnership.” While COVID brought a brief halt to SightLine onboarding new clients, a tool the company created as a result was a boon: a low-cost marketplace analysis tool that compared a school’s metrics with its competitors — what percentage of applicants get accepted and average tuition, for example. “Schools were in crisis mode. That became our lead entry point a majority of the time,” Thompson said. One tool SightLine offers allows schools to give applicants a better idea
of what they will actually pay for tuition. Thompson said schools typically list a price on their website that often is higher than what the student will end up paying, once discounts and aid are factored in. The higher listed price often scares an applicant away, she said, but now, SightLine’s predictive analytics can give potential students a better idea of what the real price will be. “The listed price is often very inflated,” she said. “Institution X might list $60,000 a year, which scares parents away; they don’t realize they might be able to get a discounted rate of 50 or 60 percent. It’s not a transparent process.” Jennifer Kingsley Green is associate vice president for enrollment management and student success at of Longwood University in Farmville, Va., a school with about 4,800 undergraduate and graduate students. She began working with SightLine in February. “The SightLine team is really an extension of our Longwood team, helping drive important conversations based on data analytics,” she said. “The analytics they have performed, insights gleaned, and recommendations are thought-provoking and challenge us to think bigger. They are true partners that are responsive to our needs, knowledge and goals to help us make decisions for the long-term wins.”
Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
Contact: thenderson@crain.com (231) 499-2817; @TomHenderson2
SPONSORED CONTENT
CARING FOR KIDS Supporting Michigan children and their families ABOUT THIS REPORT: On this monthly radio program, The Children’s Foundation President and CEO Larry Burns talks to the community, government and business leaders about issues related to children’s health and wellness. This hour-long show typically airs at 7 p.m. the fourth Tuesday of each month on WJR 760AM. Here’s a summary of the show that aired June 28; listen to the entire episode, and archived episodes, at yourchildrensfoundation.org/caring-for-kids
Paul Davis
Rod Alberts
Andy Appleby
Partner at Podium Risk Management
Executive Director of the Detroit Area
Owner and Chief Executive Officer of the
and Board Member at First Tee -- Greater
Auto Dealers Association and North
United Shore Professional Baseball League
Detroit
American International Auto Show
LARRY BURNS: Tell us what your business activities are now.
LARRY BURNS: Give us an update about the upcoming North American International Auto Show.
PAUL DAVIS: My role as partner is
providing a vision for our firm, our advisors, and the brand strategic relationships. We work with active or retired athletes, C-suite executives and business owners around insurance planning. What we’re trying to create is a group of great individuals that have built an amazing brand over their sports career. What we do is maybe one of the most important things that people need right now, from financial literacy to planning, to being educated on the resources out there. Our industry needs to approach the American public in the right way; I’m not sure we’ve done that over the last five or six decades.
Burns: What are you doing at First Tee? Davis: We’re trying to use golf as a vehicle to teach kids life skills. Right now, it’s more important than ever with children having to deal with Covid and being out of school. It’s the one thing that can’t ever be lost on a generation: a firm handshake and looking someone in the eyes. We’re bringing kids from all backgrounds — no one will be left out. We offer great coaches, mentors and one-on-one attention. Burns: One thing golf teaches you is resilience. Davis: First Tee teaches discipline, resilience, integrity and
honesty. We’re giving kids access to a new path; you just never know where it will lead, but we’re excited to see where they’ll take it.
Burns: We have eight different golf courses where we’re holding in-person programs throughout the region and that’s growing. We have increased our coaches, who are all volunteers. They don’t need to be good golfers, they just need to be interested in helping youngsters learn the game, as well as these life skills. How can people get involved? Davis: Donations and engagement in that capacity are always
needed, but the coaches are the lifeblood. It’s an individual that could change the kid’s future. You can find out more on our website, www.firstteegreaterdetroit.org.
Burns: Our Second Annual Ben Hogan Invitational of Michigan is on August 22 at the Country Club of Detroit. There are still sponsorships available. That information is also on your website, as well as ours. Davis: It was a great first event last year and I think this will
be one of the premier golf events in metro Detroit over the next few years. I’m excited to play this year!
LARRY BURNS: Tell us about your journey and what you’re doing today.
ROD ALBERTS: I’ve been doing this show for 30 years, so I’ve seen the evolution and growth of the show. Everything has to change, not just incrementally, but dramatically these days, especially post-Covid. After three years, this show is not going to be the show you remember exactly. It will not have mammoth displays; it’s going to include more activities. Of course, September is a whole different gig. Activities will be outdoors and indoors, so you have a chance to enjoy the community downtown.
ANDY APPLEBY: I went to Springfield College in Massachusetts for my master’s degree in sports management and worked for 12 years for the Detroit Pistons starting in 1986. We won championships along the way. I’ve been on my own now for 24 years. The first thing I did was put together a group of investors to buy a minor league baseball team in Fort Wayne, Indiana. I just fell in love with minor league baseball. We were nationally the team of the year in both 2003 and 2004. We also started a synthetic turf business that the parent company for Astroturf eventually bought out. Just before that, we bought a premier league soccer team in England.
Burns: What can we expect for the Charity Preview?
Burns: Did you have a soccer background?
Alberts: We were going to make it more casual, but what I’m
Appleby: No, but when you’re in sports management it’s all pretty
finding now is people want the black tie to come back. We need that special event and that moment of celebration for Detroit…not just on Charity Preview night. We’re there to make sure the economy is really going. We’re going to start selling tickets in July and it’s going to be a beautiful event. I can’t tell you all the things we’re going to be doing; we’re going to reveal them in the next month or two. But imagine us using the sky, the river and all elements because mobility takes on other facets beyond cars. Don’t be surprised by what you see in the water and in the air — get ready!
Burns: The Children’s Foundation is very supportive of EyesDrive, led by former IndyCar driver Robbie Buhl. What role will they play with the auto show? Alberts: EyesDrive teaches kids about the dangers of distracted driving. The campaign gives parents a way to help educate their teens with safe driving tips and messaging, including talking points that parents need in talking to their teens about safe driving. They’re creating something that’s not just in Southeast Michigan — it’s going to eventually be nationwide. We’re pivoting the Association of Detroit Auto Dealers to do more educational programming with the Auto Show. That also includes teaching people about electric cars and their safety, and a program called Courageous Persuaders. For this program, high school students create 30-second commercials about the dangers of drinking or texting when driving. Burns: Anything else we should know about the Auto Show? Alberts: This Auto Show is going to be built on partnerships. It’s going to be built on community. We want to be a piece of that puzzle for the future of Detroit.
much the same. It didn’t faze me that I didn’t know much about it. I was fortunate enough to be club chairman of Derby County, a club that is one of the original 12 teams of English soccer. We won everything there was to win twice. The responsibility is enormous because for 140 years it’s been the only game in town and these people live and die by the wins and losses.
We wound up selling that team in 2015, and then in 2016 driving into work I just said, “I know that I can build this park. I know I can create this great league. I know that we can have a tremendous community asset. But if I don’t do it now, when am I ever going to do it?” We were able to make an agreement with the City of Utica to build a ballpark. Because I didn’t want to play in anybody else’s league, I created the United Shore Professional Baseball League. Finally, I’ve started a worldwide sports agency. We have offices all over the world and represent about 100 different athletes. Burns: Let’s talk about your partnership with The Children’s Foundation. Appleby: We have a tremendous fan base so I thought we would
be perfect partners with The Children’s Foundation. We also have a different side of metro Detroit, Macomb County, with over a million people. Utica, where the ballpark sits, is the second largest school district in the state. From both sides, we want to continually give back to the community. We’re able to highlight a few of the charities, like First Tee and the Jamie Daniels Foundation, to raise awareness, and ultimately, to raise funds.
Burns: It was a natural fit because we’re interested in expanding our brand in Macomb County and in family-related activities. You mentioned a couple of our affiliates, the Jamie Daniels Foundation and First Tee Greater Detroit, both of which will be highlighted at games to let people know about their work. We hope it helps recruit kids and coaches for First Tee. Appleby: I can’t think of a better partnership than this one.
CRAIN'S LIST | OEM PARTS SUPPLIERS Ranked by 2021 automotive original-equipment parts sales COMPANY ADDRESS PHONE; WEBSITE
TOP LOCAL EXECUTIVE(S)
OEM SALES ($000,000) 2021
OEM SALES ($000,000) 2020
PERCENT CHANGE
PRODUCTS
1
LEAR CORP.
Raymond Scott Jr. president, CEO & director
$19,263.0 1
$17,046.0 1
13.0%
Seating and electrical
2
MAGNA INTERNATIONAL OF AMERICA INC.
Swamy Kotagiri CEO
$16,652.0 1
$15,736.0 1
5.8%
Complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mirrors & lighting, mechatronics and roof systems. Magna also has electronic and software capabilities across many of these areas.
3
TENNECO INC. 2
Brian Kesseler CEO
$15,044.0
$12,654.0
18.9%
Exhaust, pistons and piston rings, bearings, spark plugs, valves and valvetrain, seals and gaskets, ride control, suspension, brakes, elastomers, NVH performance and protective sleeves and wraps.
4
ADIENT
Douglas Del Grosso president, CEO & director
$14,300.0
$12,670.0 1
12.9%
Automotive seating
5
BORGWARNER INC.
Frederic Lissalde president, CEO & director
$13,985.0 1
$9,971.0 3
40.3%
Turbochargers, electric motors, control units, valve-timing systems, ignitions, emissions systems, thermal systems, transmission clutches & controls, torque management systems & rotating electric machines
6
ZF NORTH AMERICA
Martin Fischer president & member board of management
$10,200.0
$8,684.0 1
17.5%
Electronics & ADAS, car chassis technology, electrified powertrain, active safety, passive safety & commercial vehicle systems
7
DENSO INTERNATIONAL AMERICA INC.
Seiji Maeda CEO, North America
$9,396.0 4
$8,678.0 4
8.3%
Powertrain and electrification systems, electronics systems, thermal systems and information and safety systems
8
DANA INC.
James Kamsickas chairman & CEO Timothy Kraus, CFO
$8,945.0
$7,106.0
25.9%
Drive systems (axles, driveshafts, transmissions), electrodynamic (motor, inverters, software), gaskets, thermal-management products, motion systems, and digital solutions (analytics)
9
ROBERT BOSCH LLC
Mike Mansuetti president of Bosch in North America
$7,794.6 e
$7,569.0
3.0%
Injection technology and powertrain peripherals for internal-combustion engines, solutions for powertrain electrification, vehicle safety systems, driver-assistance and automated functions, technology for infotainment, vehicle-to-vehicle and vehicle-to-infrastructure communication, repairshop concepts and technology and services for the automotive aftermarket
FORVIA NORTH AMERICA (FORMERLY FAURECIA NORTH AMERICA) 5
Nik Endrud executive vice president North America
$6,210.0
$4,396.2 1
41.3%
Seating, interiors, Clarion electronics, clean mobility, lighting, lifecycle management
11
PANASONIC AUTOMOTIVE SYSTEMS CO. OF AMERICA 26455 American Drive, Southfield 48034 248-447-7000; panasonic.com
Scott Kirchner president Tom Gebhardt CEO
$6,170.0 1
$4,925.0 1
25.3%
Automotive multimedia products and components
12
CONTINENTAL AUTOMOTIVE SYSTEMS U.S. INC.
Robert Lee 6 CEO
$6,049.0 7
$7,421.0 1
-18.5%
Tires, stability-management systems, electronic chassis systems and brake systems
13
AISIN WORLD CORP. OF AMERICA
Scott Turpin president & CEO
$5,423.1
$5,141.5
5.5%
Body, brake and chassis systems; electronics; drivetrain and engine components
14
AMERICAN AXLE & MANUFACTURING HOLDINGS INC.
David Dauch chairman & CEO
$5,156.6
$4,711.0 1
9.5%
Driveline systems, chassis components and forged products, axles
15
JOYSON SAFETY SYSTEMS
Tao Liu president & CEO
$5,004.4
$4,655.8
7.5%
Airbags, seat belts, steering wheels, electronics
16
HYUNDAI MOBIS (FORMERLY MOBIS NORTH AMERICA)
Chung Kook Park CEO
$4,591.0 1
$3,979.0 1
15.4%
Chassis, cockpit and front-end modules; ABS, ESC, MDPS, ASV parts, LED lamps, sensors, electronic control systems, airbags, hybrid powertrains, parts and power control units
17
APTIV PLC
Kevin Clark president, CEO & director
$4,338.4 e
$4,020.0 4
7.9%
Electronics, transportation components and integrated systems
18
YAZAKI NORTH AMERICA INC.
Ryosuke Yazaki, president and CEO of Yazaki North and Central America; Munenori Yamada, chairman, Yazaki North and Central America and Yazaki Europe Ltd.
$3,992.0
$5,041.0 3
-20.8%
Connection systems, electrical distribution systems, electronic components, instrumentation
19
TI FLUID SYSTEMS PLC
Hans Dieltjens president, CEO & executive director
$3,496.0 4
$3,211.0 4
8.9%
Fuel systems; fluid carrying products; hydroformed products
20
NEXTEER AUTOMOTIVE
Robin Milavec president, CTO, CSO & executive board director
$3,358.7
$3,032.2
10.8%
Automotive systems
21
MAHLE INDUSTRIES INC.
Scott Ferriman president
$3,275.0 1
$2,744.0 1
19.4%
Engine components, filter systems, vehicle air conditioning and engine cooling
22
FLEX LTD.
Mike Thoeny president, Flex Automotive
$2,900.0
$2,500.0 1
16.0%
Scalable autonomous/ADAS compute, autonomous sensors, power electronics, domain/zone controllers, gateways, infotainment, lighting, overhead consoles, cabin monitoring, smart actuators
23
VISTEON CORP.
Sachin Lawande president, CEO & director
$2,773.0 1
$2,548.0 1
8.8%
Climate controls, electronics, interiors
24
PISTON GROUP 8 3000 Town Center, Suite 3250, Southfield 48075 (313) 541-8674; pistongroup.com
Vinnie Johnson founder & chairman
$2,723.0
$2,852.0 1
-4.5%
Module assembly, HVAC units, trim covers, visors, battery pack assembly
25
COOPER-STANDARD HOLDINGS INC.
Jeffrey Edwards chairman & CEO
$2,330.0 7
$2,375.0 7
-1.9%
Sealing, fuel and brake delivery and fluid transfer systems
10
21557 Telegraph Road, Southfield 48033 248-447-1500; lear.com 750 Tower Drive, Troy 48098 248-631-1100; magna.com
27300 West 11 Mile, Southfield 48034 248-354-7700; tenneco.com
49200 Halyard Drive, Plymouth 48170 734-254-5000; adient.com 3850 Hamlin Road, Auburn Hills 48326 248-754-9200; borgwarner.com 15811 Centennial Drive, Northville 48168 734-855-2600; zf.com 24777 Denso Drive, Southfield 48033 248-350-7500; denso.com/us-ca/en 27870 Cabot Drive, Novi 48377 419-887-3000; dana.com 38000 Hills Tech Drive, Farmington Hills 48331 248-876-1000; boschusa.com
2800 High Meadow Circle, Auburn Hills 48326 248-724-5100; forvia.com
1 Continental Drive, Auburn Hills 48326 248-393-5300; continental-corporation.com/en-us 15300 Centennial Drive, Northville 48168 734-453-5551; aisinworld.com One Dauch Drive, Detroit 48211 313-758-2000; aam.com
2025 Harmon Road, Auburn Hills 48326 586-726-3800; joysonsafety.com 23255 Commerce Drive, Farmington Hills 48335 248-426-5577; mobis.co.kr 5725 Innovation Drive, Troy 48098 248-813-2000; aptiv.com 6801 Haggerty Road, Canton Township 48187 734-983-1000; yazaki-na.com
2020 Taylor Road, Auburn Hills 48326 248-296-8000; tifluidsystems.com 1272 Doris Road, Auburn Hills 48326 248-340-8200; nexteer.com 23030 Mahle Drive, Farmington Hills 48335 248-305-8200; us.mahle.com 27755 Stansbury Blvd., Suite #300, Farmington Hills 48334 248-263-8732; flex.com One Village Center Drive, Van Buren 48111 800-847-8366; visteon.com
40300 Traditions Drive, Northville 48168 248-596-5900; cooperstandard.com
Researched by Sonya D. Hill: shill@crain.com | This list of automotive suppliers is an approximate compilation. For companies based in Detroit and divisions of U.S.-based companies in Detroit, figure is for worldwide OEM sales. For divisions of foreign-owned companies, figure is for North American OEM sales. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. NA = not available. NOTES: e. Crain's estimate. 1. Automotive News. 2. Agreed to be acquired by affiliates of Apollo Global Management Inc. on Feb. 23. 3. Automotive News fiscal year estimate. 4. Automotive News estimate. 5. After Faurecia's acquisition of a controlling stake in Hella, the combined company is now known as Forvia, Faurecia's acquisition of Hella was completed in February. 6. Effective Jan. 1, Robert (Bob) Lee succeeded Samir Salman as CEO. 7. Automotive News fiscal estimate. 8. Holding company for Piston Automotive, Irvin Automotive and Detroit Thermal Systems.
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16 | CRAIN’S DETROIT BUSINESS | JULY 11, 2022
CRAIN'S LIST | MICHIGAN MANUFACTURERS Ranked by 2021 revenue COMPANY ADDRESS PHONE; WEBSITE
TOP EXECUTIVE(S)
REVENUE ($000,000) 2021/2020
EMPLOYEES JAN. 2022 MICHIGAN/ WORLDWIDE
MICHIGAN PLANT LOCATIONS
TYPE OF ORGANIZATION
1
FORD MOTOR CO.
James Farley Jr. president, CEO & director
$136,341.0
47,750 183,000
Dearborn, Flat Rock, Wayne, Woodhaven, Romeo, Sterling Heights, Livonia, Ypsilanti
Automobile manufacturer
2
GENERAL MOTORS CO.
Mary Barra chairman & CEO
$127,004.0
49,733 157,000
Bay City, Brownstown Township, Detroit/Hamtramck, Flint (3), Grand Rapids, Lansing (2), Milford, Lake Orion, Pontiac, Romulus, Saginaw, Swartz Creek, Warren, Ypsilanti, Wixom
Automobile manufacturer
STELLANTIS (FORMERLY FCA US LLC) 1
Mark Stewart COO, North America
$78,969.0 2
42,444 NA
Detroit (3), Sterling Heights (2), Trenton (2), Warren (2), Dundee
Automobile manufacturer
4
DOW INC.
James Fitterling chairman & CEO
$54,968.0
5,200 35,700
Dow Michigan operations, Bay City, Auburn (Dow Central Campus), Auburn Operations, Freeland
Materials science
5
WHIRLPOOL CORP.
Marc Bitzer chairman & CEO
$21,985.0
4,000 69,000
None
Home appliance company
6
LEAR CORP.
Raymond Scott Jr. president, CEO & director
$19,263.1
3,834 160,100
Rochester Hills, Detroit, Traverse City, Roscommon, Farwell, Flint, Taylor, Southfield (HQ), Highland Park, Sparta
Automotive supplier
7
STRYKER CORP.
Kevin Lobo chairman, CEO & president
$17,108.0
4,100 46,000
Kalamazoo, Portage
Medical technology company
8
MAGNA INTERNATIONAL OF AMERICA INC.
Swamy Kotagiri CEO
$16,652.0 4
10,050 5 NA
Holland, Brownstown Twp., Sterling Heights, Plymouth Twp., Grand Haven, Battle Creek, Warren, New Hudson, Novi, Highland Park, Troy, Shelby Twp., Newaygo, Alto Twp., Kentwood, Auburn Hills, Grand Blanc Twp., Delta Twp., Delhi Twp., St. Clair, and Boyne City
Mobility technology
9
APTIV PLC
Kevin Clark president, CEO & director
$15,618.0
NA 155,000
None
Automotive supplier
10
TENNECO INC. 6
Brian Kesseler CEO
$15,044.0
0 71,000
Lansing, Litchfield, Marshall, Grass Lake, Monroe, Greenville
Designer, manufacturer and marketer of clean air, powertrain, ride performance and aftermarket products
11
BORGWARNER INC.
Frederic Lissalde president, CEO & director
$14,838.0
1,387 49,300
Cadillac, Livonia, Marshall
Manufacturing company of components and systems solutions for electric vehicles
12
ADIENT
Douglas Del Grosso president, CEO & director
$14,300.0
3,773 75,000
Detroit, Warren, Lansing, Battle Creek, Lakewood, Charlotte and Madison Heights
Automotive seating supplier
13
KELLOGG CO. 7 One Kellogg Square, Battle Creek 49016 269-961-2000; kelloggcompany.com
Steven Cahillane chairman, CEO & president
$14,181.0
NA NA
Battle Creek, Grand Rapids, Wyoming
Food processor
14
ROBERT BOSCH LLC
Mike Mansuetti president of Bosch in North America
$12,666.5 e
NA 402,600 8
St. Joseph, Kentwood
Technology and services supplier for mobility solutions, industrial technology, consumer goods and energy and building technology
15
CONTINENTAL AUTOMOTIVE SYSTEMS U.S. INC.
Robert Lee 9 CEO
$9,658.5 10
NA NA
Auburn Hills, Brimley, Dearborn, Rochester Hills, Troy
Automotive supplier
16
DENSO INTERNATIONAL AMERICA INC.
Seiji Maeda CEO, North America
$9,500.0
NA 167,000
Battle Creek
Global mobility supplier
17
DANA INC.
James Kamsickas chairman & CEO Timothy Kraus, CFO
$8,945.0
1,697 40,000
Auburn Hills, Warren, Novi, Plymouth
Design and manufacture of propulsion and energy-management solutions for all mobility markets
18
AMWAY
Milind Pant CEO
$8,900.0
NA NA
Ada
Direct selling business
19
UFP INDUSTRIES INC.
Matthew Missad CEO & director
$8,636.1
586 15,000
White Pigeon, Lansing, Spring Lake, Walker, Grand Rapids, Howell
Manufacturing
20
MASCO CORP.
Keith Allman CEO, president & director
$8,375.0
NA 20,000
Ann Arbor, Adrian, Novi, Brownstown, Lapeer
Manufactures products for the home improvement and new home construction markets
21
FORVIA NORTH AMERICA (FORMERLY FAURECIA Nik Endrud executive vice president North NORTH AMERICA) 12
$6,210.0
Fraser, Lansing, Saline, Sterling Heights
Automotive supplier
2800 High Meadow Circle, Auburn Hills 48326 248-724-5100; forvia.com
America
3,949 150,000
22
AISIN WORLD CORP. OF AMERICA
Scott Turpin president & CEO
$5,423.1
286 120,000
No plants but seven Michigan facilities
Automotive components and systems supplier
23
AMERICAN AXLE & MANUFACTURING HOLDINGS INC.
David Dauch chairman & CEO
$5,156.6
NA 18,000
Three Rivers, Auburn Hills, Fraser, Oxford, Royal Oak, Troy, Litchfield, Warren, Kingsford, Sterling Heights, Coldwater
Automotive supplier
24
JOYSON SAFETY SYSTEMS
Tao Liu president & CEO
$5,004.4
NA NA
Auburn Hills, Armada, Pontiac
Air bags, inflators, seat belts, steering wheels, active safety and electronics
25
PERRIGO CO. PLC
Murray Kessler CEO, president & director
$4,138.7
NA NA
Allegan, Holland
Consumer goods
3
1 American Road, Dearborn 48126 313-322-3000; ford.com 300 Renaissance Center, Detroit 48265 313-667-1500; gm.com
1000 Chrysler Drive, Auburn Hills 48326-2766 248-576-5741; stellantis.com 2211 H.H. Dow Way, Midland 48674 989 636 1000; dow.com 2000 North M-63, Benton Harbor 49022 269-923-5000; whirlpoolcorp.com 21557 Telegraph Road, Southfield 48033 248-447-1500; lear.com 2825 Airview Blvd., Kalamazoo 49002 269-385-2600; stryker.com 750 Tower Drive, Troy 48098 248-631-1100; magna.com
5725 Innovation Drive, Troy 48098 248-813-2000; aptiv.com 27300 West 11 Mile, Southfield 48034 248-354-7700; tenneco.com
3850 Hamlin Road, Auburn Hills 48326 248-754-9200; borgwarner.com 49200 Halyard Drive, Plymouth 48170 734-254-5000; adient.com
38000 Hills Tech Drive, Farmington Hills 48331 248-876-1000; boschusa.com 1 Continental Drive, Auburn Hills 48326 248-393-5300; continental-corporation.com/en-us 24777 Denso Drive, Southfield 48033 248-350-7500; denso.com/us-ca/en 27870 Cabot Drive, Novi 48377 419-887-3000; dana.com 7575 Fulton St. E., Ada 49355 616-787-1000; amwayglobal.com 2801 East Beltline Ave., NE, Grand Rapids 49525 616-364-6161; ufpi.com 17450 College Parkway, Livonia 48152 313-274-7400; masco.com
15300 Centennial Drive, Northville 48168 734-453-5551; aisinworld.com
One Dauch Drive, Detroit 48211 313-758-2000; aam.com
2025 Harmon Road, Auburn Hills 48326 586-726-3800; joysonsafety.com 515 Eastern Ave., Allegan 49010 269-673-8451; perrigo.com
$127,144.0
$122,485.0
$74,471.9 3
$38,542.0
$19,456.0
$17,045.5
$14,351.0
$15,736.0 4
$13,066.0
$14,283.0
$10,165.0
$12,670.0
$13,770.0
$12,300.0
$11,560.8 11
$8,678.0
$7,106.0
$8,500.0
$5,154.0
$7,188.0
$4,396.2 4
$5,141.5
$4,710.8
$4,655.8
$4,088.2
Researched by Sonya D. Hill: shill@crain.com | This list of manufacturing companies is an approximate compilation of manufacturers with headquarters or substantial operations in Michigan. It is not a complete listing but the most
comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. Actual revenue figures may vary. NA = not available. NOTES: e. Crain's estimate. 1. Fiat Chrysler merger with PSA Group was completed on Jan. 16. 2. The 2021 North American revenue is based on Dec. 31, 2021, euro to dollars rate of 1.1371. 3. The 2020 North American revenue is based on Dec. 31, 2020, euro to dollars rate of 1.2216. 4. Automotive News. 5. Q4 2021. 6. Agreed to be acquired by affiliates of Apollo Global Management Inc. on Feb. 23. 7. Announced on June 21 that it would spin off its North American cereal business and its business focused on plant-based foods into separate publicly traded companies. The cereal and plant-based businesses would remain headquartered in Battle Creek, the company said. 8. As of Dec. 31, 2021. 9. Effective Jan. 1, Robert (Bob) Lee succeeded Samir Salman as CEO. 10. The 2021 revenue figures represent NAFTA sales of Continental AG, based on a Dec. 31, 2021, euro to dollars rate of 1.1371 . 11. The 2020 revenue figures represent NAFTA sales of Continental AG, based on a Dec. 31, 2020, euro to dollars rate of 1.2216. 12. After Faurecia's acquisition of a controlling stake in Hella, the combined company is now known as Forvia, Faurecia's acquisition of Hella was completed in February.
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JULY 11, 2022 | CRAIN’S DETROIT BUSINESS | 17
WEDDINGS
From Page 3
Rutterbush said he lost close to 80 percent of his profits in 2020, with about 75 weddings postponed or canceled. Most couples that didn’t want to wait for their big day agreed to switch to an outdoor wedding or canceled altogether, he said. The Eastern built a wedding tent on its patio as other local venues followed suit. But to accommodate COVID-19 social distancing guidelines in place at the time, outdoor weddings couldn’t have parties larger than 100 patrons. That put some couples who wanted a larger wedding in a difficult spot. Michael Schoenith, owner of the Roostertail event venue along the Detroit River, said turning down couples during the pandemic was hard. “It was one of the most difficult times we, as a management team, have ever experienced,” he said. Schoenith said he rescheduled over 75 weddings, the majority of which opted for an outdoor venue option. The Roostertail ended up spending over $50,000 on a 6,000-square-foot outdoor wedding tent, fully decorated to please every bride and groom. “We decorated the tent with lighting and floral rings in the ceilings, customs bars, things like that,” Schoenith said. Additionally, couples and their wedding parties were invited inside Roostertail to recreate some of the iconic photo instances. “We wanted to give them the experience of still getting the visuals of their first dance or cake cutting and all the theatrics that we do that go along with those key moments for everyone,” he said.
The Roostertail in Detroit took measures to keep business rolling during the pandemic, rescheduling over 75 weddings. | LAUREN ABDEL-RAZZAQ / CRAIN’S DETROIT BUSINESS
Troubles remain With a recession on the horizon and supply chain troubles, some venue owners are worried this post-pandemic wedding boom will not last. The last time there was a major wedding boom was in 1984, the result of baby boomers reaching marrying age mixed with a growing economy, according to a report in The New York Times. In 2021, the U.S. economy grew 5.7 percent, the largest gain since
PEOPLE ON THE MOVE
1984. Despite the economic growth, 47 million Americans quit their jobs last year, according to the U.S. Chamber of Commerce, causing a nationwide labor shortage. Now the economy appears to be headed for trouble as inflation is rising, the stock market is in a slump, the cost of fuel and food is increasing to near record highs and consumer confidence is falling. U.S. consumer confidence dropped in June to the lowest point in 16 months as inflation dampened Americans’ economic views,
according to a Bloomberg report. And higher costs means people are less likely to engage in discretionary spending. Those stressors are already being felt in the wedding industry. Schoenith said he’s been forced to send employees to pick up deliveries from distributors, including linen, produce and alcohol, due to a lack of drivers. “One of our directors of sales here…one night we looked at each other and we said, 'we haven’t worked this hard since we were
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18,'” he said. “And we’re both 50.” Kaila Adam, director of special events at The Flower Alley in Novi, said in addition to lacking skilled florists it has been difficult to find staff to set up and tear down for events. Adam also said the price of doing weddings has gone up 50 percent since 2019, mostly due to a shortage of product. “There is currently unrest in Ecuador where a majority of our roses, baby's breath, hydrangeas and more are imported from,” she said. Protests have been breaking out across Ecuador over the last few weeks as indigenous groups block roads and freeways causing trade to halt, according to The Washington Post. Protesters are demanding an end to gasoline subsidies among other economic issues. According to the International Association of Horticultural Producers, Ecuador produces $2 million per day of flowers. “It has become so extreme the past few weeks that we have seen roses rise at the wholesale level over 50 percent in price, and now we are at the point that roses are not even shipping,” she said. Adam was able to pre-order her product for the next month and a half, but has no guarantee it will ship in time. Overall, it means venues and their customers need to be more flexible in their expectations. The Raxters, who ended up having their dream reception at The Whiskey Factory at Detroit City Distillery, said they were thankful for the flexibility upheld by their venue and other vendors and, ultimately, were thrilled with the wedding they did have. “We had to reschedule multiple times and they all honored their original pricing from 2020,” Crissi Raxter said. "We waited that long so that we could have the big wedding that we’d always wanted. At that point, what’s a few extra years?” Contact: amelia.benavides-colon@ crain.com; (313) 290-2269; @benavides_colon
MCLAREN
From Page 3
The systems, including a virtual nursing platform, smart beds, digital whiteboards, bedside patient tablet and others, communicate through the hospital’s Vocera Smartbadge. The badge is a “Star Trek-esque” communication device that allows staff to call one another without having to actually know who is working that day. A call to the nursing shift supervisor will go to the current nursing shift supervisor, for instance. But the tool also communicates with patients and smart beds. If a patient falls out of bed, the bed will notify the nearest staff member to the room via the Vocera. If the patient needs more pain medication, the bed will communicate to find the closest doctor or nurse able to administer the drugs, removing a nursing assistant or a staffer than can’t administer drugs from taking the call first and slowing down operations. “Vocera alerts us very quickly,” said Miranda Lahaney, a registered nurse at McLaren Oakland in Pontiac, where they are rolling out the device, but do not have all the systems integrated yet. “It cuts down on pain management and fall issues and allows us to get a hold of labs and specialists quickly. It’s made our lives easier.”
Immediate impact The health system completed the technology integration in Petoskey in November and the results were almost immediate, Reamer said. In initial reports, the integrated system captured 1 million safety concerns in the hospital, most of which were not catastrophic but nonetheless important. The issues included improper bed adjustment, side rails being down, or fall hazards, Reamer said. When the new system launched, hospital operations were 60 percent safety noncompliant at any given moment, but within two weeks noncompliance dropped to 20 percent, Reamer said. “We completely changed the safety environment of the hospital,” Reamer said. “Some issues were corrected in three seconds. The longest it took to fix a compliance issue was 17 minutes. The system allows us to operate more efficiently and more safely, which is what we set out to accomplish.” Beyond safety, health systems around the nation are seeking out ways to parlay technology investments into backstops against its shrinking workforce. There is a 17 percent job vacancy rate at Michigan hospitals, leading to about 1,300 fewer patient beds available for the sick across the state compared to last year, according to the Michigan Health and Hospital Association. In response, Detroit-based Henry Ford Health is going to launch a job called “virtual sitting” in the fall at two of its hospitals. Often in the hospital, patients suffering from dementia or another mental episode will require a nurse or medical assistant to watch the patient for their own safety. That chews up an expensive resource that could be assisting other patients as well as reducing the number of available caregivers, said Eric Wallis, chief nursing officer for HFH. “If I am a nurse close to retirement, maybe working a 12-hour shift isn’t attractive anymore,” Wallis said. “But if we can use cameras, we can em-
Diane Wenninger, chief nursing officer at McLaren Oakland Hospital, demonstrates the Vocera, a “Star Trek” like device that can put all the controls and communications at the hospital on one device. | QUINN BANKS / CRAIN’S DETROIT BUSINESS
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ploy staff from anywhere who can visualize and watch those patients and speak to them via a speaker and interact with a team that’s on site if they do something that isn’t safe. That will help reduce the bedside stress on our nurses.” John Jones, managing director of advisory firm Willis Towers Watson’s employee experience unit for North America, said managing patient loads with appropriate work schedules is the industry’s greatest focus — and technology is the ultimate leveler. “Being able to use technology to make it easier on a nurse to cover a larger patient load and, in some cases, improve care even with staffing shortages is paramount,” Jones said. “Necessity is the mother of invention, so health care is looking at
things very differently right now.” But technology implementation at the scale the 202-bed McLaren Northern did isn’t easy or cheap, even for other McLaren hospitals — though the system is in the process of $1 billion in upgrades. “Not everyone is at the same opportunity point,” Reamer said. “Most don’t have the funding to do everything all at once like we did. Most hospitals are going to add technologies piecemeal. But we believe these technologies improve care and patient experience, so I don’t see McLaren slowing down and I expect other systems to ramp up efforts as well. “This is the future of care.”
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GREEKTOWN
From Page 3
Athina Papas, executive officer of the Atheneum Suite Hotel and Conference Center in Greektown, said her family has invested around $2 million to upgrade the hotel lobby and build out a new restaurant space. | CYDNI ELLEDGE/CRAIN’S DETROIT BUSINESS
Greektown’s changing landscape Greektown business owners are looking to breathe new energy into the Detroit district while preserving its heritage, including attracting independent businesses, updating current properties and adding a streetscape and plaza. EET STR B COM MA Astoria Pastry Shop
Monroe Steak House Former PizzaPapalis restaurant New Parthenon
BRU
EET
STR
MO
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TOIN
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SOURCE: CRAIN’S DETROIT BUSINESS RESEARCH
BEA
EET STR
Atheneum hotel
T AN
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aza
Greektown streetscape
PH
DOL
RAN
n pl
tow
TRE
reek
Hollywood Casino
SAIN
OE NR
SH S
ed G pos
20 | CRAIN’S DETROIT BUSINESS | JULY 11, 2022
The Greektown commercial and entertainment district of Detroit has its roots in the early 1900s, when many of the German residents began to move out and Greek residents moved in and established businesses. | CYDNI ELLEDGE/CRAIN’S DETROIT BUSINESS
Pro
“We’re seeing this as a really great opportunity to rethink one of the oldest streets in the city of Detroit and certainly one that has so much history and heritage,” said Markowicz, a 2021 Crain's 40 Under 40 honoree. “We think it’s really important for the vibrancy of the district.” Central to the plan, business owners say, is breathing energy into the neighborhood while preserving its heritage, a mission that’s become more complex with the loss of business due to the COVID-19 pandemic, permanent store closures and recent violence in the district that has hurt its reputation. Driving the plan are second- and third-generation Greek business owners, casino operators and other stakeholders with sometimes differing visions for the district’s future. “We would prefer to have some kind of Greek use, but whatever tenants we have would be something that’s more family friendly, not nightclubby,” Teftsis said of the former PizzaPapalis space. “I don’t think it’s really good for the area. I think we should go back to being a restaurant district rather than a nightclub district, which I think we’re heading towards that. So that’s another reason why we wanted to buy it.” The neighborhood indeed has taken on more nightlife. Clubs such as Exodus, Mix Nightclub, Bouzouki and other areas in the district have recently experienced fights and shootings. Last year a brawl broke out in front of the casino. Marvin Beatty, vice president of community relations for Hollywood Casino at Greektown and treasurer of the Greektown Neighborhood Partnership, said the casino and neighborhood is safe, and he is working closely with business owners to develop ways to convince people of that. “There have been some incidents that have created the negative vibe that there are safety issues,” Beatty said. “Ongoing efforts continue to make sure the street is safe, and people can feel comfortable with their families and feel as though they are in the right place.” Greektown also has lost some of its restaurant flavor. In addition to PizzaPapalis, other recent closures include Monroe Street Steakhouse and New Parthenon. Five Guys also has not reopened since the pandemic, but big chain restaurants in the neighborhood can be a tough sell, for customers and landlords, Teftsis said. “For Greektown, you’d rather see independent operators, or a very highend chain, because you don’t want something you’re going to find on M-59,” he said. “You want destination places.” Around the corner at Atheneum Suite Hotel and Conference Center, the Papas family has invested around $2 million to upgrade its lobby and build out a new restaurant space, said Athina Papas, 41, executive officer of the hotel. Details on the restaurant and opening will be announced soon, she said. Papas, Teftsis, Beatty and the other families and business owners in the district meet four times a month to talk about the streetscape, filling vacant storefronts and overall vision. They often talk on a daily basis while passing each other on the street, Teftsis said. There can be opposing views about the block’s development, especially among older generations, but the general goal is to balance heritage with fresh ideas, Papas added. “If the end goal is to succeed and thrive and continue to do so for decades, then how we get there might be a little messy, but we are all coming to the
CRAIN’S DETROIT BUSINESS
same conclusions,” she said. “We’re still kind of the cultural historic district that we've always been, but we’ll continue to evolve and change to be able to fit into the rest of downtown as it changes.” The casino has strong ties to the Greek families and small business community, Beatty said. The casino pumped $100,000 into the streetscape design and has maintained its program allowing patrons to use casino comps at businesses in the neighborhood, which have helped them through lean financial times. “That’s our community,” Beatty said. “We recognize that we bring value to each other and that the friendships that we’ve had have endured over 20 plus years and will continue to do so.” The past couple of years have been
hard on business because of the pandemic, Teftsis said, but he’s started to notice a turnaround despite the continued dearth of office worker traffic. Business at Red Smoke and Astoria is back to 80 percent to 90 percent of where it was before the pandemic, he said. Papas said business at the Atheneum Hotel has climbed back to about 65 percent of what it was before the pandemic, as business travel and social gatherings slowly return. The investment in the hotel is a show of confidence in the neighborhood, she said. The Papas family also owns Pegasus Taverna and the former New Parthenon space, where a new tenant is expected within the next year. Papas said she is flexible about who she wants to occupy the space, and it doesn’t have to be a Greek user. “New Parthenon is a really iconic space. It’s been on the block for a long time, so finding the right operator is important,” Papas said. Teftsis bought the PizzaPapalis building for $1.1 million about a month ago from Ted Andras, according to a Crain’s estimate based on property records. Teftsis said Andras thought of him first because he wanted a good steward of the property. Teftsis said he plans to do some renovation work on the building but will not change the façade or character of the building. Because of its size, he might split it in half for two tenants. Right now, his nephew Andrew Judnik sells clothing and accessories out of the space for his startup business Nine Clothing Co. His son George operates and owns a share of Red Smoke down the street. The interest from the next generation gives Teftsis hope for the district’s future and reason to keep investing. “They’re totally committed,” Teftsis said. “That neighborhood is really important to them. They’re committed just like their parents were. I think we have a good future. We really want to keep the heritage.” Contact: knagl@crain.com; (313) 446-0337; @kurt_nagl
MARKET
From Page 1
Ross School of Business with a focus on financial markets. The window for companies going public in the present market is essentially locked and sealed, said Gordon. “Some companies — including maybe OneStream — are kicking themselves for not going public earlier,” Gordon said. “They could have accelerated the process, going public during the boom and … gone public at a very nice price. Now, if they even can go public, it’s got to be at a lower price. And they probably can’t go public.” The reason companies are essentially shut off from going public at present is simple: the gulf between what a company thinks its worth and what the market would value it at would make it a money-losing endeavor, Gordon said. The IPO market in the second quarter of this year saw its worst quarter since the Great Recession, according to Renaissance Capital, which tracks IPOs. Twenty-one companies raised just over $2 billion, according to a report from the firm. “Heading into the (second) quarter, companies took a wait and see approach to going public,” Matt Kennedy, vice president of data and content at Renaissance Capital, said in a video accompanying the report. “While they waited, they saw the IPO window slam shut even further, as
SELF-CHECKOUT
From Page 1
some Ohio stores began offering larger, belted self-checkout lanes for orders that a store clerk bags. Part of the reason Kroger introduced self-checkout in the ’90s mirrored today’s picture: to combat a hiring shortage. Twenty-seven years later, Kroger officials insist that’s not the reason behind the expanded self-checkout use. Kroger spokesperson Rachel Hurst told Crain’s that implementing more self-checkout lanes has not had an effect on staffing. Kroger, which had revenue of $137.9 billion in fiscal year 2022, overall has 420,000 employees, down 9 percent from 2021. Kroger in Michigan operates 120 retail locations with more than 17,500 employees. “Kroger is always looking for new ways to reinvent the checkout experience for its customers,” Hurst said in an email. “In addition to self-checkout options, stores will continue to have traditional checkout lanes with cashiers and courtesy clerks to assist customers with their checkout.” Installation of self-checkout stations at retailers increased by 25 percent in 2020 — when the pandemic was at its peak — with the North American self-checkout system market valued at $1.6 billion for 2022, according to a Grand View Research study. Globally, the market is projected to grow by more than 13 percent annually through 2030. The technology took a big step beyond grocery stores when CVS rolled out the technology in 2020 in the early days of the pandemic. The pharmacy chain, with 8,200 stores in the U.S. and 288 in Michigan, was also the first retailer to offer payments through PayPal and Venmo. CVS said the services add to the customer’s shopping experience. “To provide a full-service checkout experience for our customers in
rising inflation, interest rate hikes and market volatility caused a sell-off in growth stocks to intensify.” All told, the stock performance of U.S. companies that have done IPOs this year is down more than 43 percent year-to-date so far, according to an index from Renaissance. That compares with a decline of 19 percent for the overall S&P 500. Take it a step further and the IPO market in the U.S. is “on a pace for the least amount of money raised in the year for any year since 1990, even lower than the 2008 and 2009 years that saw very little IPO activity,” according to Jay Ritter, a finance professor and IPO expert at the University of Florida’s Warrington College of Business. Calling the market “ice cold,” Ritter told Crain’s only 12 companies so far this year have raised over $100 million in their IPO. It’s a dramatic slowdown. Last year was a record year for new listings, bringing over 1,000 of them. More than half of those SPACs, or blank check, non-operating companies, according to data from Nasdaq. Companies raised about $285 billion in IPOs last year. Other financial segments, including venture capital, have also gone cold as capital retreats during the increasingly uncertain economic climate. Any specific plans that StockX or OneStream — each headquartered in Southeast Michigan — may have made or canceled due to the IPO
StockX has attained a multibillion-dollar valuation with its e-commerce marketplace that offers authentication. | NIC ANTAYA FOR CRAIN’S DETROIT BUSINESS
market downturn are unclear. Representatives for StockX did not respond to an inquiry from Crain’s, and OneStream executives, through a spokesperson, declined to comment. Executives at the Rochester-based OneStream, have made no secret of their ambitions for an exit to the public markets. In an interview with Crain’s last April, just after the company announced a closed fundraising round of $200 million at a valuation of $6 billion, CFO Bill Koefoed said that investors D1 Capital, Tiger Global
Management and Investment Group of Santa Barbara were brought in to do just that. “These three investors really position us well for being a public company,” Koefoed said at the time. “They’re going to help us get smarter to be a public company, they’re going to obviously help walk us through that process. And then they’ll be long-term holders.” For its part, StockX, with backing from Detroit billionaire Dan Gilbert, is currently embroiled in litigation brought by sneaker and clothing giant Nike Inc. alleging that the De-
troit-based reseller of shoes and various luxury goods is selling counterfeit footwear and infringing on Nike’s trademarks. StockX, at the end of June, also announced it was laying off upwards of 100 employees, citing that “macroeconomic challenges currently impacting our global economy continue to affect consumer behavior, and hit businesses of all shapes and sizes.” Experts like UM professor Gordon say they’re skeptical that the market for companies like StockX and OneStream to cash out via a public offering will return this year. Gordon said he could see some investors willing to loosen up later on this year for a few very select companies that have shown substantial revenue growth. “Overall, the IPO market is going to be very quiet for at least six months,” Gordon said. Lise Buyer, co-founder of IPO adviser Class V Group, offered a similar analysis to Axios in a report that ran Thursday morning, telling Business Editor Dan Primack that many deals formulated late last year have just moved to the back burner. “Those seeds are still germinating underground,” Buyer reportedly said. “Maybe someone brave or desperate will try before Q4 but I suspect, based on no hard data, it will be 2023 before there are plants to harvest.” Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes
many locations our colleagues are now accessibly positioned in front of the traditional register to greet customers, answer questions, and complete transactions for them using the assisted checkout,” CVS said in an email to Crain’s. “Customers may choose to complete their transaction using only the assisted checkout or have a colleague assist them at the assisted checkout or traditional register.” Officials with Meijer, Target and Home Depot, which also have added or increased the use of self-checkout stations, did not return requests for comment.
opinion of self-checkout, but their views are generally positive, according to a report last year by PYMNTS, a payments industry trade publication. The report surveyed 2,665 adults and found that some 80 percent of instore shoppers like the idea of nontraditional checkout options, and 66 percent reported that those kinds of checkout options are the ones they most want to try. The majority of surveyed shoppers — more than 60 percent — pointed to greater speed in self-checkout lanes and avoiding waiting in line.
Pandemic effect?
Retailers tend to bring in self-checkout stations on a store-bystore basis, Redman said, and monitor traffic. If there are long lines at traditional checkout lanes, more self-checkout options are brought in. No matter which way retailers go, issues will always persist. “If there are long lines at self-checkout, you add more lanes and/or more personnel,” Redman said. “The customer demand for self-checkout has increased. It’s mostly about convenience, but COVID has played a role, too. This really comes down to what customers are demanding. If they demand more in-person interaction, there’ll be less self-checkout. We’ll just have to see where this goes.” Some die-hards, of course, still loathe scanning and bagging their own items. Meijer customer Nicholas Bodary is one of them. He said he never uses self-checkouts. “(Self-checkout) takes the place of physical jobs real people could use,” Bodary said. “It’s brutal during busy times.”
The pandemic seems to be when everything ramped up. Retailers globally increased investment in self-checkout technology by 25 percent in 2020. Supermarket News Senior Editor Russ Redman told Crain’s that the option of checking out with space between yourself and other customers was attractive. Aside from the pandemic, Redman also sees the increase in online shopping options as a cause for the increase in self-checkout stations, and technology-aided shopping options at stores including Kroger and Amazon Go. Self-checkout, in theory, makes the shopping experience go faster, Redman said. Retailers are hoping the increase in self-checkout stations keeps customers coming in, as opposed to shopping online or using services like Instacart.
Only at the top So far, the changes have taken place only at large chain retailers. Jim Dudlicek, spokesman for the Washington, D.C.-based National Grocers Association, said the group’s 1,500 members have not yet made wholesale changes like larger retail-
What customers want
A customer uses a self checkout kiosk at Harmons Grocery store in Salt Lake City, Utah, U.S., on Thursday, Oct. 21, 2021. | GEORGE FREY/BLOOMBERG
ers. It represents retail and wholesale grocers comprising the independent sector of the food distribution industry. Nationally, there are more than 21,000 privately held or family-owned grocery stores in the United States, generating more than $250 billion in sales and providing more than a million jobs, according to Dudlicek. “Our members regularly observe conditions and changes in the market areas they serve and may make adjustments to their operations they deem appropriate to best serve their customers,” Dudlicek said in an email to Crain’s.
Booming business Atlanta-based NCR Corp. (NYSE: NCR) is among the largest hardware, software and services companies for self-checkout and other payment
technologies. In its first quarter earnings call in April, the company reported that sales from its self-checkout business had increased 8 percent year-overyear, while recurring revenue in the segment increased 3 percent compared to the first quarter of 2021. The company reported total revenue for the quarter of $1.86 billion, a 21 percent boost from the same period last year. “Order activity in this business is very strong, backlog is high, and lead times are extending,” Tim Oliver, NCR’s executive vice president and CFO, told analysts in April. Executives also added that their products and business offerings are being adopted beyond grocery retail and into more restaurants, gas stations and big box chains like Home Depot and Bed, Bath and Beyond. Most every shopper has a strong
Contact: jason.davis@crain.com (313) 446-1612; @JayDavis_1981 Contact: nmanes@crain.com; (313) 446-1626; @nickrmanes JULY 11, 2022 | CRAIN’S DETROIT BUSINESS | 21
THE CONVERSATION
Incoming Fifth Third Bank CEO sees opportunity for growth in Michigan Tim Spence, who transitioned to CEO/president of Cincinnati-based Fifth Third Bank last week, takes the reins during a time of substantial uncertainty. Consumers and business leaders are increasingly feeling uneasy about macroeconomic conditions. Spence, a seven-year veteran of the bank who has a background working in management consulting and tech startups, said he understands those concerns. He said Fifth Third has massive opportunity for growth in Detroit and around the state. | BY NICK MANES ` So how would you characterize the bank you’re taking over? If you look at the transformation the bank has undergone in the last seven years, under (the leadership of retiring CEO Greg Carmichael) it’s pretty profound ... From a returns perspective, the bank went from bottom quartile to top quartile in terms of profitability. In terms of client experience, the bank went from below average to top two or three on most major customer service quality measures. From the standpoint of technology, where I think we were viewed being pretty (much a) commodity, and (now) have product offerings that are techdriven and are viewed as being pretty unparalleled, or very differentiated. So when folks have asked what do I hope to accomplish in my new role, I want to finish what we started here. Because what we started is pretty great. ` What would that finish look like to you? From my point of view, we have earned the right — in terms of the way that the company operates and in terms of the quality of its products and customer service — to be one of the two or three most significant banks in all the major markets where we compete. From a long-term perspective, we want to run the business in a way that maintains the defensive positioning, so that we can perform well, even when the macro environment is more challenging for banks. We want to run the bank in a way that enables it to take market share on an organic basis. ` What does that strategy look like in Southeast Michigan and the rest of the state, where Fifth Third stands as the sixth-largest bank? I think sometimes the banks on the coasts think of this as being a smaller market, but (Southeast Michigan) is one of the three largest markets in Fifth Third’s entire 11-state footprint. It’s a massive market, and it’s a market where we are ranked fifth or sixth among the largest banks. Track that back to my perspective on where we think we can
larly as you work with Fifth Third’s commercial clients? The core of the business is always going to be our ability to provide capital and safeguard capital in the deposits and lending business. The big trends, when you look at what we hear from business clients now, is that they are looking for solutions from us that are more strategic, that are driven to help them solve the more significant issues that they face.
compete. That makes it one of our largest growth opportunities in our core Midwest franchise. So we are very excited about Detroit, and about Southeast Michigan more broadly, because it’s got such a strong foundation and a large population base. And, especially at the moment, a very strong economy. ` And how about around the rest of the state? Michigan more broadly — and also the Upper Midwest as a whole — I really believe is on the cusp of a decade of growth. And I say that because there’s not a single region in our country that is better positioned to benefit from what we believe will happen in terms of the resurgence in domestic supply chain and domestic manufacturing. We have an immense amount of skilled labor. We have a disproportionate share of the large research institutions, when you think about the research and engineering degrees in computer science that’s coming out of it. We have huge logistical advantages in terms of the rail and the air hubs and the interstate connectivity and the water. We just believe there’s going to be great growth (in the region). And for Fifth Third, that’s an excellent thing. There’s not a single large regional bank (with) a deeper set of experience with manufacturing companies. Manufacturing, as a share of total commercial lending, is larger for Fifth Third than anybody else.
Tim Spence is president and incoming CEO of Fifth Third Bank
` How have you seen the business change in recent years, particu-
When I go out and talk to CEOs and ask ‘what are your biggest challenges right now,’ it’s labor and supply chains. And for privately owned businesses, the third thing that we hear about regularly is this question of succession planning and transition. ` What does that mean for the bank? So what the bank has tried to do is invest in technology and advisory capabilities that allow us to bring solutions to those clients. So if you looked at our payments business five years ago, nearly 100 percent of our business would have been core transaction processing. Today, over 35 percent of our revenue in our payments business comes from what we call managed services. Which are basically software-enabled solutions that allow people to literally automate the accounts payable reconciliation and payment routing process. So those are essentially technology products that are wrapped around the bank payment rails, where the benefit to the customer is a reduction in the number of people they have to have in the accounts payable department, and the ability to reduce input costs by optimizing how they pay and when they pay using AI as a technology. And then on the transition side, the bank has made a series of acquisitions over the past few years of M&A advisory firms, whose specialty is providing advice to people who are considering selling their businesses. And more recently built a business transition advisory expertise inside our wealth management group. That helps those private business owners think through how those business sales need to be structured to support tax efficiency and multigenerational wealth planning and otherwise.
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