Crain's Detroit Business, June 2, 2014 by Crain's Detroit Business

20140602-NEWS--0001-NAT-CCI-CD_--

5/30/2014

3:23 PM

Page 1

This issue in two sections (Section 1) Vol. 30, No. 22

JUNE 2 – 8, 2014

$2 a copy; $59 a year

Page 3 Survey finds biz optimistic about state’s economy

Recall turns up heat for Detroit meatpacker

Method Home Products plans to start making soap in Chicago. But its founders said they wanted to make it in Detroit.

How Michigan lost grip on Method Disconnect, slow response killed plant; officials vow to do better ethod Home Products could have made Detroit — or one of several other Michigan cities — home for a large soap manufacturing plant. It could have built a 200,000-square-foot factory. It could have invested $35 million. It could have created 100 green-manufacturing jobs. Instead, the spoils went to Chicago. A year and a half ago, Detroit didn’t step up to help the San Francisco-based company through the labyrinth of tax credits, abatements, zoning laws, real estate rules, legal wrangling and everything else it takes to turn an abandoned brownfield site into a successful business, said Adam Lowry and Eric Ryan, the Detroit-area natives who founded Method. Mike Finney, president and CEO of the Michigan Economic Development Corp., said his organization also dropped the ball by not providing site information or tax incentive information quickly enough — although the MEDC has since improved its business attraction efforts. See Method, Page 15

See Project Lean, Page 16

BY AMY HAIMERL AND KIRK PINHO CRAIN’S DETROIT BUSINESS

Starts on Page M1

AMERICAN DREAMERS

BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

It wasn’t the first time Mike Duggan asked lean process management experts for help, and, local executives and officials say, it won’t be the last. The mayor’s initiative to seek free expert help to improve 18 Detroit services through lean reengineering is at the halfway mark of an eight-week speed makeover. Duggan asks biz Duggan has to offer no qualms about internships, asking things of Page 16 the business community. At last week’s Detroit Regional Chamber Mackinac Policy Conference, he made an emphatic plea for businesses to take on 5,000 teen interns as part of a summer 2015 project called TeenWork. The Project Lean effort, meanwhile, is in its fourth week. The program puts volunteer executives and consultants to work by teaming them up with more than

Detroit’s immigrants: Driven to succeed

A special report looks at the obstacles and opportunities for immigrants who come to Michigan with dreams as big as a certain tire along I-94.

Halfway into Project Lean, teams look for ‘quick wins’

HIRE A TEEN

Experts: Google needs Detroit to fuel self-driving car biz BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

For the Hammoud family (above), a gas station fueled the success of six children. Read about their stories and those of others who came here as immigrants and now prosper as part of the business community.

NEWSPAPER

Starts on Page M9

Google Inc. is positioning itself to become a player in the automotive industry with advanced autonomous technologies. But with all the expertise in Silicon Valley, it can’t be accomplished without the Motor City. Experts and officials say it’s no surprise Google shipped the project from the West Coast to Southeast Michigan — this region has expertise. “(It) makes a lot of sense given the state’s clear leadership in vehicle manufacturing and engineering,”

said Richard Wallace, director of transportation systems analysis at the Ann Arbor-based Center for Automotive Research. “It also should help motivate Michigan companies to continue innovating and developing great new vehicle technology.” Last week, the Mountain View, Calif.-based tech giant announced it would launch a fleet of 100 selfdriving vehicle prototypes, sans steering wheel and gas and brake pedals, by the end of the summer. Livonia-based Roush Enterprises Inc. will assemble the prototypes with parts from several Southeast Michigan suppliers, anonymous

sources confirmed to Crain’s. It remains unclear whether the prototypes will be retrofitted at Roush’s locations in Allen Park or Livonia. Google and Roush declined to comment on the topic. Troy-based Delphi Automotive plc, which supplies connectivity technology, confirmed it is involved in the process, but would not comment on details. Other autonomous vehicle technology suppliers, such as Auburn Hills-based Continental Automotive Systems LLC and Van Buren TownSee Google, Page 18

Proud sponsor of the 2014 Mackinac Policy Conference

GOOGLE

Livonia-based Roush Enterprises will assemble 100 prototypes of Google’s self-driving vehicle.

www.itctransco.com

20140602-NEWS--0002-NAT-CCI-CD_--

5/30/2014

1:36 PM

Page 1

Page 2

Supreme Court: State can’t stop opening of tribe’s casino in U.P. The U.S. Supreme Court ruled 5-4 last week that Michigan can’t block the opening of the Bay Mills Indian Community’s off-reservation casino in the Upper Peninsula because the state’s legal challenge is barred by tribal sovereign immunity, The Associated Press reported. Michigan argued that the Bay Mills tribe opened the casino in 2010 without permission from the U.S. government and in violation of a state compact. Writing for the majority, Justice Elena Kagan said the federal Indian Gaming Regulatory Act only allows a state to bring lawsuits challenging casinos operating on Indian lands. The Bay Mills casino was opened outside the tribe’s reservation, Kagan said, placing it outside the law’s coverage. The casino has been closed since 2011, when a federal judge issued an injunction. The 6th U.S. Circuit Court of Appeals threw the injunction out.

Report: Water-based industries account for 1 in 5 Mich. jobs Michigan is fourth in the nation in the share of its workforce associated with industries that develop freshwater technology and services or are highly dependent on plentiful and clean water, accord-

June 2, 2014

CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Care for a nice, tall glass of … ‘cow pie’? Gulp This week’s nominee for World’s Toughest Job: The person in charge of marketing a technology for extracting drinkable water from manure. Announcement of the McLanahan Nutrient Separation System came last week from Michigan State University. The system produces water that is said to be clean enough for cattle to drink. (So if you know a Holstein with high standards, cheers!) “If you have 1,000 cows on your operation, they produce about 10 million gallons of manure a year,” Steve Safferman, an associate professor of biosys-

ing to a report released last week. “You just have to look at what’s happening around the country with all the droughts to understand how important it will be in the 21st century to know how to conserve and protect water,” said Jeff Mason, executive director of the University Research Corridor, the consortium of the University of Michigan, Michigan State University and Wayne State University that sponsored the analysis. The report was produced by East Lansingbased Anderson Economic Group and released during the Detroit Regional Chamber’s Mackinac Policy Conference. The report found that 718,704 jobs in the state — 21.3 percent of total employment — are with industries that benefit directly from innovation and research that

tems and agricultural engineering who is working on the project, said in a statement reported by The Associated Press. “Here in Michigan, we have a tendency to take water for granted. But out west, for example, where drought remains an issue, the accessibility of clean water could make the difference between a farm remaining viable or going out of business.” The system now extracts about 50 gallons of water from each 100 gallons of manure. Developers are aiming at raising that to 65 gallons. About 90 percent of manure is water. We’ll take their word for it.

boost water quantity and quality.

MICH-CELLANEOUS 䡲 Ada-based Amway Corp. said the second arrest of its CEO of India operations in the past 13 months is “unjustified and unnecessary.” William Pinckney was taken into custody last week in connection with a consumer complaint alleging unethical circulation of money through the India affiliate, The Economic Times reported. Also last week, Amway extended its research relationship with Yale University to improve Amway products that lighten age spots and resolve other skin tone problems. 䡲 Kalamazoo-based Stryker Corp. said that contrary to a report last week in the Financial Times, the medical device manufacturer

doesn’t plan to make a takeover offer for the London-based orthopedics company Smith & Nephew Plc. 䡲 Wolverine Worldwide Inc. filed an infringement suit against the maker of Vans over the blue rectangle heel tag trademarks used on its sport shoes, MLive.com reported. The Rockford-based footwear maker claims the Vans tag looks too much like Wolverine’s Keds brand. 䡲 Work is scheduled to begin on a $71 million project aimed at speeding up traffic through northwestern Indiana’s congested railroad corridors, which are part of the Chicago-to-Detroit Amtrak route, The Associated Press reported. Officials have estimated the project, along with improvements in Illinois and Michigan, will cut 30 minutes off a Chicago-

WE WERE CURIOUS, COULD A BANK LOOK BEYOND COOKIE CUTTER SOLUTIONS TO HELP YOUR BUSINESS SUCCEED? You don’t run a cookie cutter business. That’s why we dig deeper and ask better questions to get beyond the expected solutions. Set up a visit with a Fifth Third Business Banker. Because if your bank isn’t curious, maybe it should be. 53.com/BusinessAnswers.

Detroit trip. 䡲 Michigan State University received a record 33,172 undergraduate applications, up 5 percent from last year. Out-of-state applications increased 12 percent, the Lansing State Journal reported. 䡲 Sparrow Health System in Lansing has more than doubled the size of its surgical center in a $15 million expansion at Sparrow Hospital, the Lansing State Journal reported. The new center has 10 new operating rooms at the hospital’s main campus 䡲 Chicago-based fairlife, a milk producer, plans to spend $96.3 million to expand its plant in Coopersville west of Grand Rapids and create 100 jobs. Zeeland-based Lakeshore Advantage, a West Michigan economic development organization, said the Michigan Strategic Fund approved a $9.34 million performance-based incentive package for the project, to be realized over 12 years. 䡲 This just in from the “Be Careful of What You Wish For Department”: Saugatuck was voted the No. 1 summer weekend escape destination in the USA Today readers’ choice poll. Find business news from around the state at crainsdetroit .com/crainsmichiganbusiness. Sign up for the Crain’s Michigan Morning e-newsletter at crainsdetroit.com/emailsignup.

The curious bank.®

Fifth Third Bank. Member FDIC.

31675_Fifth Third_Register_10x6.625_QFBR0119.indd 1

4/24/14 5:55 PM

20140602-NEWS--0003-NAT-CCI-CD_--

5/30/2014

3:35 PM

Page 1

CRAIN’S DETROIT BUSINESS

June 2, 2014

Page 3

Survey: Biz upbeat about state Most see worst over, recovery continuing

BIZ OUTLOOK: STATE ON THE UP ... AND UP ... 29% not satisfied

70% satisfied

12% not good

The most important reason for a favorable business outlook: Improved sales: 41 percent Improving economy: 20 percent

76% good

BY CHRIS GAUTZ CAPITOL CORRESPONDENT

Businesspeople in Southeast Michigan continue to remain optimistic about the state’s economy, believing it has already hit bottom, is now in recovery and will continue as such for the rest of the year. A survey commissioned by Crain’s Detroit Business and Honigman Miller Schwartz and Cohn LLP and conducted by Lansing-based EpicMRA found that 70 percent were satisfied with the condition of Michigan’s economy. There were 29 percent signaling they were dissatisfied. The random survey of 300 business owners, operators, officers or managers in Southeast Michigan was conducted April 22-28 to gauge reaction on the economy and other issues. The survey has an error margin of plus or minus 5.7 percentage points. Over the next six months, 76 percent said the outlook for their busi-

Focus: Business Education

Satisfaction with the condition of Michigan’s economy

Outlook for your business over the next six months

The most important reason for a poor business outlook: Poor economy and lack of customers: both 23 percent.

11% say no

81% say yes

Has Michigan’s economy bottomed out and started to improve?

Summer vacation? Not for campus construction, Page M33 Company index

Source: Epic-MRA survey commissioned by Crain’s Detroit Business, Honigman Miller Schwartz and Cohn LLP

nesses is good, with 24 percent indicating “very good.” Just 12 percent said their Crain’s survey business outlook finds businesspeople back was bad. governor’s Rudy Vuckov, immigration owner of Esoteric plan, Page M8 Enterprises LLC, a Royal-Oak-based software development company, was one of those who said his business’ outlook was very good. “Things have improved steadily since 2008,” Vuckov said. “I’m getting more phone calls for job offers.”

SUPPORT FOR SNYDER

Much of the interest in his company’s services has come from the banking, insurance and automotive industries, he said, as well as state government. He said he is receiving calls from larger companies who are now looking to expand and want his help, and this tells him that things are turning around and is why his business outlook is so positive. “Businesses don’t want to invest unless things are going great,” he said. “Unless they are making money, they aren’t spending money.” The vast majority — 81 percent — of those polled felt the state’s econo-

my has already bottomed out and is starting to improve. That was the same percentage when the same question was asked in November. John Cavanagh, co-founder of EPIC-MRA, said he was not surprised by the figure staying the same as there has not been any major economic news or changes in conditions that would shake confidence in the past six months. Just 6 percent said the state economy has not bottomed out and will get worse. The most common reason given See Survey, Page 14

A beef over tainted meat Recall for E. coli puts Wolverine Packing’s processes on the grill BY BILL SHEA CRAIN’S DETROIT BUSINESS

The business fallout from Detroit-based Wolverine Packing Co.’s May 19 recall of 1.8 million pounds of ground beef that may be contaminated with potentially deadly E. coli bacteria won’t be known for some time. Investigations, both internal and by government officials, are underway. So is at least one lawsuit. Wolverine, which had $1 billion in revenue last year, declined to discuss any business practices that may change, or how it may be affected financially, until it completes its own internal investigation. “Since the voluntary recall was launched, the company still is conducting an internal investigation into the recall and assisting the U.S. Department of Agriculture’s Food Safety and Inspection Service as it continues to look into the matter,” said Chuck Sanger, Wolverine’s out-

side spokesman via Hartland, Wis.based food industry public relations firm Charleston Orwig Inc. “Once all investigations are complete, the senior management team can then analyze what was learned and what remedial steps might be taken. Therefore, right now the company is not in a position to make any final judgments regarding the recall’s effect on Wolverine’s policy, business or any changes that might be made moving forward.” The recall is the second in Wolverine’s 77-year history, Sanger said. He didn’t have details about the first, in 2003. The wholesale slaughterhouse, meat packer and distributor based in Detroit’s Eastern Market issued a voluntary recall of 1.8 million pounds of Angus steak burgers and ground beef patties after the federal government said 11 people in four states were sickened between April 22 and May 2. The meat was packed between March 31 and April 18. The recall came after the USDA’s Food Safety and Inspection Service,

These companies have significant mention in this week’s Crain’s Detroit Business: A & M Hospitality Services . . . . . . . . . . . . . . . . . M27 Ansara Restaurant Group . . . . . . . . . . . . . . . . . . M13 Antonio’s Cucina Italiana . . . . . . . . . . . . . . . . . . M29 Arab American and Chaldean Council . . . . . . . . . M17 Arab American News . . . . . . . . . . . . . . . . . . . . . M28 Arab Comm. Center for Economic & Social Services . M21 Augment Ventures Fund . . . . . . . . . . . . . . . . . . . M31 Basha Diagnostics . . . . . . . . . . . . . . . . . . . . . . . M15 Biomed Health Solutions . . . . . . . . . . . . . . . . . . M29 Bright Loritos . . . . . . . . . . . . . . . . . . . . . . . . . . . M3 Choon’s Design . . . . . . . . . . . . . . . . . . . . . . . . . M28 Cummings, McClorey, Davis & Acho . . . . . . . . . . M11 DealerDirect . . . . . . . . . . . . . . . . . . . . . . . . . . . M15 DeNovo Sciences . . . . . . . . . . . . . . . . . . . . . . . . M22 Destination Media . . . . . . . . . . . . . . . . . . . . . . . . 13 Detroit Materials . . . . . . . . . . . . . . . . . . . . . . . . . 10 Detroit Seafood Market . . . . . . . . . . . . . . . . . . . M13 Detroit/Wayne County Port Authority . . . . . . . . . . . . 4 DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . M36 Eastern Michigan University . . . . . . . M33, M34, M35 Flash Jewelers/Manufacturing . . . . . . . . . . . . . . M13 Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M6 Garden Food Distributor . . . . . . . . . . . . . . . . . . . M16 Gateway Community Health . . . . . . . . . . . . . . . . M26 Global CNC Industries . . . . . . . . . . . . . . . . . . . . M31 Global Logistics Strategies . . . . . . . . . . . . . . . . M26 Hacienda Mexican Foods . . . . . . . . . . . . . . . . . . M19 Heinz C. Prechter Bipolar Research Fund . . . . . . M29 Henry Ford College . . . . . . . . . . . . . . . . . . M40, M41 Honigman Miller Schwartz and Cohn . . . . . . . . 3, M8 iRule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M23 La Marsa Mediterranean Cuisine . . . . . . . . . . . . M18 Law Offices of Joumana Kayrouz . . . . . . . . . . . . . M24 Lawrence Technological University . . . . . . M33, M34 Liberty Capital Management . . . . . . . . . . . . . . . M17 Living Essentials . . . . . . . . . . . . . . . . . . . . . . . . M16 Lopez Tires . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M4 Michigan Bottling & Custom Pack . . . . . . . . . . . M16 Michigan Economic Development . . . . . . . . . . . . M24 Midfield Concession Enterprises . . . . . . . . . . . . M21 Mr. Song Millinery . . . . . . . . . . . . . . . . . . . . . . . M30 Motif Diamond Designs/Jewelers . . . . . . . . . . . . M13 NeuMoDx Molecular . . . . . . . . . . . . . . . . . . . . . M22 NextEnergy . . . . . . . . . . . . . . . . . . . . . . . . . . . . M36 Oakland Community College . . . . . . . . . . . M35, M40 Original Equipment Suppliers Association . . . . . . M17 PharMor Pharmacy . . . . . . . . . . . . . . . . . . . . . . M29 PrimeOne Insurance . . . . . . . . . . . . . . . . . . . . . . . . 5 ProNAi Therapeutics . . . . . . . . . . . . . . . . . . . . . M30 Rockbridge Growth Equity . . . . . . . . . . . . . . . . . . . 13 Roman Village . . . . . . . . . . . . . . . . . . . . . . . . . . M29 Roush Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . 1 Schoolcraft College . . . . . . . . . . . . . . . . . M35, M55 SHW Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . M35 Tata Technologies . . . . . . . . . . . . . . . . . . . . . . . . M4 TelNet Worldwide . . . . . . . . . . . . . . . . . . . . . . . . M24 University of Detroit Mercy . . . . . . . . . . . . . . . . . M34 University of Michigan . . . . . . . M33, M35, M36, M56 U.S. Ice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M3 Walbridge Development . . . . . . . . . . . . . . . . . . . M56 Walsh College . . . . . . . . . . . . . . . . . . . . . M34, M35 Washtenaw Community College . . . . . . . . . M38, M39 Wayne State University . . . . . . . . . . . . . . . M33, M34 Welcoming Michigan . . . . . . . . . . . . . . . . . . . . . . M3 Wolverine Packing . . . . . . . . . . . . . . . . . . . . . . . . . 3 World Heritage Foundation-Prechter Family Fund . . M29 Zell & Lurie Institute for Entrepreneurial Studies . . M53

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 8 BUSINESS DIARY . . . . . . . . . . . . . . . . 11 CALENDAR . . . . . . . . . . . . . . . . . . . . 12 CAPITOL BRIEFINGS. . . . . . . . . . . . . . . 8 ISTOCK PHOTO

See Meat, Page 17

CLASSIFIED ADS . . . . . . . . . . . . . . . . 15 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 6 LETTERS . . . . . . . . . . . . . . . . . . . . . . . 6 MARY KRAMER . . . . . . . . . . . . . . . . M51 OPINION . . . . . . . . . . . . . . . . . . . . . . . 6

THIS WEEK @ WWW.CRAINSDETROIT.COM

The morel of the story So, what’s the big deal about a mushroom? Crain’s resident morel authority, Tom Henderson, answers that question in his blog at crainsdetroit.com/blogs. KATHLEEN HENDERSDON

OTHER VOICES . . . . . . . . . . . . . . . . . . 7 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 11 RUMBLINGS . . . . . . . . . . . . . . . . . . . 19 WEEK ON THE WEB . . . . . . . . . . . . . . 19

20140602-NEWS--0004-NAT-CCI-CD_--

5/30/2014

1:39 PM

Page 1

Page 4

CRAIN’S DETROIT BUSINESS

Jamian leaves Port Authority, contract up BY BILL SHEA CRAIN’S DETROIT BUSINESS

Exceptional Leadership.

Delivered. Michigan’s Premier Retained Executive Search Firm Over 100 years of combined experience. LLC

International Executive Search Tel: +1.248.645.1551 • www.huntergroup.com

The Detroit/Wayne County Port Authority will be seeking a new executive director because John Jamian’s three-year contract ended Friday, and he’s not returning. It wasn’t clear whether Jamian chose not to return or whether the authority’s five-member board wanted someone else. A message requesting comment was left with the port’s business staff. Jamian, 59, was hired in June 2011 for a second stint as Jamian the authority’s executive director. He also had the job from 1997 to 2001. “I accomplished everything I needed to accomplish in three years,” Jamian said. When asked whose decision it was for him to leave, Jamian would say only that his deal was for three years and that he has other work he wants to do. Jamian said he intends to work with the nonprofit Detroit Wayne County Port Foundation that aids the port authority in maritime education, preservation, environmental stewardship and other functions. “I’m going to work to make that financially strong,” he said. He didn’t specify whether that would be paid or volunteer. During Jamian’s tenure, the authority completed construction of a $15 million, 21,000-square-foot ship terminal and $7.1 million offshore wharf to serve cruise ships and other deep-draft vessels in the Detroit River bringing tourists (and their money) to the city. Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

June 2, 2014

IS YOUR TEMPORARY LABOR PROVIDER CHARGING YOU A FAIR RATE? Get a free assessment at: www.parrymurphy.com/templabor.html

Crain names CFO

LENDING to growing businesses remains our top priority.

Hennessey Capital is now Hitachi Business Finance

Offering a world of ÁH[LEOH financing RSWLRQV for companies that want to grow. 248.658.1100

ZZZ.+LWDFKL%XVLQHVV)LQDQFH.FRP

Thomas Stevens has been named CFO of Crain Communications Inc. Stevens, 38, joins Crain from ProQuest LLC, Ann Arbor, where he was vice president of finance. Stevens also has held executive-level positions with Borders and Pulte Homes, was an equity analyst for Manning & Napier Advisors, Stevens worked in M&A with Deloitte and began his career as a CPA with Ernst & Young in Detroit. Stevens has a bachelor’s degree in accounting from Michigan State University and an MBA from the UCLA Anderson School of Management. Stevens lives in Northville with his wife and two children.

EXECUTIVE CALENDAR Regional event dates, locations and contacts, all in one place.

crainsdetroit.com/executivecalendar

20140602-NEWS--0005-NAT-CCI-CD_--

June 2, 2014

5/30/2014

1:36 PM

Page 1

CRAIN’S DETROIT BUSINESS

Page 5

Bhargava closing insurance biz; agents, clients surprised, upset BY JAY GREENE CRAIN’S DETROIT BUSINESS

Manoj Bhargava is the first one to admit he wasn’t cut out to be in the insurance industry. “I am not known for my patience,” said the CEO of 5-Hour Energy about his decision to phase out his Farmington Hills-based PrimeOne Insurance Co. While the 4year-old property and casualty insurance comBhargava pany is honoring current policies, PrimeOne sent letters to agents starting May 2 that it will not write new policies. “We have stuff all the time that we start up and we end,” said Bhargava, chairman of PrimeOne and founder and CEO of Living Essentials LLC, which makes and distributes 5Hour Energy. “This project isn’t one that is working, so we are shutting it down. It is a business decision.” But Bhargava’s decision isn’t sitting well with insurance agents, many of whom took a chance with the insurer because of Bhargava’s business reputation. “I am very disappointed. We gave them a significant amount of trust and worked with them to sell a lot of policies, and to pull the plug without any explanation is pretty disheartening,” said George Gjokaj, owner and CEO of Primary Insurance Agency Group LLC in Sterling Heights. Gjokaj, who has sold about 100 PrimeOne policies, said he doesn’t know what to tell his clients. “I am probably going to bring in my clients to discuss it with them. I have been in the business for 20 years and have never seen anything like this before,” said Gjokaj, noting that he and other agents received little advance notice that PrimeOne was going out of business. PrimeOne lost $2.27 million last year on net premiums written of $5.7 million, according to a financial report filed with the Michigan Department of Insurance and Financial Services. During the first three months of 2014, the insurer lost another $1.14 million on net written premiums of $1.3 million, DIFS said. Bhargava said PrimeOne — an insurer that focused on bars, taverns, strip clubs and restaurants — required more capital investments to meet operating costs than he wanted to spend. During the fourth quarter of 2013, Bhargava’s companies contributed $4 million in capital to help offset operating losses, said A.M. Best Co., an Oldwick, N.J.based credit rating agency. “We didn’t want to invest (in PrimeOne any more),” Bhargava said. “We decided we have too many other projects (that promise better returns on investment). If I were to invest $5 million or $10 million for the long haul, it makes no sense. This is a small company that

would keep looking for money.” In March, Bhargava announced a $100 million investment in Oakland Energy and Water Ventures LLC, a private equity company. He launched Stage 2 Innovations LLC, another private equity firm, in 2011. Caleb Buhs, DIFS’ public information officer, said the department has been notified PrimeOne is winding down operations. “We are regulating them as we always have and asked them for a plan of action to understand how they are (conducting the business run-off) and to make sure all their obligations are fulfilled,” he said. In a May 22 statement, A.M. Best said PrimeOne faces challenges as it phases out its business. PrimeOne management must be careful “concerning the current book of business and whether the loss reserves associated with existing claims, and incurred but not reported claims, develop favorably or unfavorably,” A.M. Best said. Bhargava declined to discuss potential employee layoffs or the process he is going through to close PrimeOne. He confirmed that Dan Gibson, the company’s CEO since 2012, left several weeks ago. Doug Young, an insurance attorney with Detroit-based Wilson

Young PLC, said PrimeOne aggressively tried to increase market share by paying agents up to a 20 percent commission to sell its policies. Average commissions range between 12 to 15 percent, he said. “This company was short-lived and aggressive,” said Young, who also represents the Michigan Association of Insurance Agents. “It appeared to … underprice insurance coverage as a way to grow premium volume and gain market share. It also was gaining a reputation for aggressively denying claims,” said Young, who represents a PrimeOne policyholder in a lawsuit that alleges the company has failed to pay a business interruption claim for more than a year. Gjokaj said PrimeOne offered the lowest premiums of any property casualty insurer in the hospitality industry. “I have a client with a PrimeOne policy I am trying to renew with another insurer,” he said. “He owns a restaurant in Detroit and paid a premium of $4,700. The closest price I have found so far is $7,770. This will be a real problem for many of my clients.” Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

BOSTON RED SOX VS DETROIT TIGERS

FRIDAY JUNE 6 • 7:08 PM

SATURDAY JUNE 7 • 7:15 PM

SUNDAY

JUNE 8 • 8:07 PM SUNDAY KIDS DAY On-Field Photo Day Da Joe Nathan Mini Fathead to all kids I4 & under

Our business is family business Every day, we work to provide family-owned businesses proactive solutions that can help ensure their success. Our CPAs & consultants, wealth managers and corporate investigators work collaboratively to provide you more ideas, more service and more experience. Contact me today to learn how.

Sandy Gohlke, CPA, CGMA Principal 248.458.7940 sandy.gohlke@rehmann.com

19 locations in Michigan, Ohio, Florida and Indiana rehmann.com

866.799.9580

20140602-NEWS--0006-NAT-CCI-CD_--

5/30/2014

3:16 PM

Page 1

Page 6

June 2, 2014

CRAIN’S DETROIT BUSINESS

OPINION

Immigrants’ dreams can help Detroit rom Lebanon to an Eastpointe gas station to the careers and businesses of their six children, Mustapha and Soubhye Hammoud embody the modern American dream. As we report on Page M9 in this week’s American Dreamers section, they worked hard to put their kids through school. Education propelled their children — who also worked in the family business — into careers ranging from engineering to banking to medicine and the law. As Abed Hammoud, now an assistant U.S. attorney, told Crain’s: “Our dad thought a master’s degree was the minimum requirement; he set the bar high. He devised the gas station as a way to pay for our college and keep us together.” Gov. Rick Snyder hopes to boost Michigan’s economy by focusing on two types of immigration: EB-2 work visas for people with advanced degrees and EB-5 for people who have the means to invest in an existing business or create a new one. He hopes to focus the latter on projects in Detroit. If Snyder wants a poster-child family for his quest, he can use the Hammouds. Better yet, he can use any number of successful immigrants we profile in our special report this week. If the federal government and Michigan’s congressional delegation want “low cost” ways to support Detroit’s revival, creating a pool of EB-5 visas for Detroit is an easy way to do it.

Aid to city: End water torture This week, the state Senate may act on a critical piece of Detroit’s future: a $195 million contribution toward the “grand bargain” that would help support pension obligations, propelling the Detroit Institute of Arts and its artworks into ownership by a private nonprofit. If the legislation passes, it could inspire a favorable vote by retirees, who have until July 11 to approve concessions proposed as part of the bankruptcy. Enter Oakland County Executive L. Brooks Patterson, who wants to tie specific demands about the future of the city’s water system into the legislation. Patterson insists Orr’s plan for a regional water authority will generate cash for the city’s general fund and, unfairly, to pay for pension obligations unrelated to the water department. Gov. Rick Snyder and U.S. Bankruptcy Judge Steven Rhodes have issued point-by-point rebuttals and white papers. But Patterson says he’s “skeptical.” Facts are facts, and Rhodes is an independent reviewer whose judgment should count for something. Reasonable people may disagree, but if Rhodes’ final decision on this issue is in favor of Orr, then Patterson should acquiesce and support the region’s best chance for financial growth in decades.

LETTERS Don’t trust state on road funds Editor: I agree with Keith Crain’s May 26 column regarding road taxes (“Gas taxes are the fairest tax for roads”). His statement that we need lots of money and that the existing funding system isn’t working, however, is disconcerting. This raises the following questions: 䡲 How much is lots of money? Do we give Lansing a blank check? 䡲 What is the basis for determining the amount? 䡲 Where is the study that establishes best practices for road construction, road maintenance and road repairs; sets benchmarks for the costs the state is incurring for labor costs, road costs and road durability; identifies waste in the current system and sets a game plan for getting rid of it; and establishes a detailed basis for the additional taxes requested? In 2002, when Michigan’s roads were not a serious issue, the state spent $2.1 billion on transportation. In 2013, the state spent $2.9 billion on transportation. That’s an increase of 38.1 percent, or 3 percent per year (compounded). During that same period, the Midwest CPI (as determined by the Bureau of Labor Statistics) increased by 29.5 percent, or 2.4 percent per year. (Michigan’s Gross Domestic Product has been growing at an average annual rate of about 2 percent per year.) My best estimate of the total amount of additional road taxes that the governor would like is $1.4 billion — which adds 48 percent to the state’s cost for “transportation.” That’s a boatload of money for a transportation system that already increases its cost at a rate that is 25 percent higher than the inflation rate (3 percent versus 2.4 percent). The roads are indeed in terrible shape. However, the state has not documented that it has been a good steward of our transportation tax dollars, and it has not documented that its claimed needs are based upon monitored best practices. Now, to alleviate our ever-increasing pain and suffering, the state would like taxpayers to increase road funding by a whopping 48 percent. And this does not consider the large increases in road taxes being aggressively pursued by the

Crain’s Detroit Business welcomes letters to the editor. All letters will be considered for publication, provided they are signed and do not defame individuals or organizations. Letters may be edited for length and clarity. Write: Editor, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207-2997. Email: cgoodaker@crain.com federal and local governments. The bottom line is that the state has not done the due diligence necessary to earn our vote for additional road taxes. John Boyle Principal J.L. Boyle International

Where did money go? Editor: Roads may be the means to financial health for the state of Michigan, but road beautification is not. What deteriorates the roads is weight, yet many years ago vehicle taxes changed from weight to price. In fact, today’s vehicle tax is not based on what the vehicle is worth, or weight, but what one may have paid for the vehicle long ago. Price has nothing to do with the deterioration of the roads. Yet taxes and fees have gone up, up, up. Where has all this money gone?

Vehicles are lighter and thus deteriorate the roads less. Yet there is talk once again about raising taxes to fix the roads. Does beautification of the roadway take precedence over fixing the roads? If one travels along I-696 between I-75 and I-94, it is clear that millions of dollars were spent on beautification of the roadway. In fact, the new, better lighting on I-696 appears to not just have been replaced but moved several feet. Were the moves necessary? Was not an experiment done on I-375 using a European style of construction versus what we use? How is that holding up? Using better methods of construction of our roads in the long run may save us money — in repair of our roads and our vehicles. It may take us 100 years to reconstruct all the roads, but there will be plenty of road construction during those 100 years, including some repairs. It was not too long ago that we were told that a billion dollars was needed to fix the roads. Are all taxes of fuel now going to road construction or somewhere else? Maybe the general budget. This is why I am not in favor of any new taxes or fees on fuel or vehicles. Can our accountant governor find out where all the road money went? Kenneth Rapske Harrison Township

KEITH CRAIN: Detroit needs to have more blight removal I am very excited about the plans for recovery of Detroit homes that will be available to buyers who are moving in and fixing them up to live in them. Mayor Mike Duggan has the right idea, and more power to him. I am also excited about the plans for attacking the problem of blight in the city and its removal. It’s a good thing that we’ve got Dan Gilbert fighting this fight. But it’s time for the citizens of our community to extend the removal of blight even further. I think we’ve got a couple of ex-

amples of industrial blight that we have to figure out how to handle and what all our options might be: the former Packard plant and the Michigan Central Depot. Certainly, the new owner of the old Packard plant deserves some time to come up with a plan and the money to get rid of this horrid example of industrial blight in our city. The plant has become one of the

poster children of Detroit that everyone who visits our city with the idea of doing the latest great story ends up using as the photo example. It almost always seems to run on the front page of some faroff newspaper or a television news segment exemplifying decay in Detroit. The plant has been vacant for half a century and shows it. If there is some value to the plant, it would

seem to have eluded everyone except the new owner, who must have some ideas for this rubble. I only hope that he has a statute of limitations on his plans and that we, Detroit, don’t have to be embarrassed by it for another 50 years. That brings me to the granddaddy of all industrial blight, our infamous abandoned railroad station. That has been empty for more than 25 years and must be the topranked example of city blight — not only in the city but the nation. I am very sorry that the owner doesn’t seem to be affected by all

the negative publicity it has generated for him and the city. Whatever his master plan is for the station, it’s been a secret all these years. We have to figure out how to encourage both of them to do something about their very ugly eyesores that are the worst things about blight and Detroit. And in spite of the great examples of what our mayor and Gilbert are doing, these are two examples that are outside their purview. Let us hope there is something we all can do. It’s embarrassing.

20140602-NEWS--0007-NAT-CCI-CD_--

June 2, 2014

5/30/2014

10:16 AM

Page 1

CRAIN’S DETROIT BUSINESS

Page 7

OTHER VOICES: Brace yourself for the fiscal pothole that any solution would reWASHINGTON — Cars It’s only a lack of courage that stands in the way. quire new tax revenue — are getting more efficient. Automakers cannot build their anathema to Republicans, Congress is not. own roads, and they shouldn’t especially in an election That confluence of fachave to do so. There’s a reason that year — or huge cuts in intors has brought Washingin every developed country, the refrastructure spending at a ton to the brink of another sponsibility has been handed off to time when roads and fiscal crisis, this time over the government to build infrabridges are falling apart. highway funding. structure for the common good. The worse that AmeriAnd it should be deeply Ask most members of Congress ca’s roads and bridges get, frustrating to the auto inthe less attractive driving but companies have been willing to ment’s fiscal pothole is easy to fix. and they will agree: This is a job dustry, which has invested Gabe Nelson becomes to motorists. And gamble on the idea that they will It knows how to build infrastruc- for government. tens of billions of dollars in Too bad the government isn’t docleaner, more efficient vehicles, that’s bad news for the auto indus- sell smaller, lighter vehicles run- ture. It just needs to make the ining its job. only to discover that Congress is too try, which is investing heavily to ning on batteries or hydrogen fuel vestment. That means spending prudently Gabe Nelson is a Washington, paralyzed by partisan squabbles to address big issues such as oil de- cells. They do not know which techinvest in serviceable roads for them pendence, climate change and af- nologies will win. The marketplace to build what the country needs, D.C., reporter for Automotive News, will decide. and collecting revenue, in some a sister publication to Crain’s Defordable mobility. to use. By comparison, the govern- fashion, to pay for it. troit Business. It is expensive and challenging, Here’s the situation: By late July, if revenue and spending remain on their current trajectories, the U.S. Department of Transportation’s Highway Trust Fund will run dangerously low on cash. That means no more federal grants for roads and bridges in need of repair. Predictably, the argument is about taxes and spending. Every one of these man-made crises gets a snappy name: debt ceiling, fiscal cliff, government shutdown. Let’s call this one the fiscal pothole. President Obama clearly sees it as the next crisis. “States might have to put some of their projects on hold,” he warned the nation in his weekly video address on May 18. “In fact, some already are, because they’re worried Congress won’t clear up its own gridlock.” Last year alone, DTE spent $809 million with Michigan-based suppliers, far exceeding our target It comes as no surprise that the highway fund is almost empty. For of $625 million. And as a key partner in the Pure Michigan Business Connect Initiative, we’ve years, spending has outstripped spent more than $1.6 billion with Michigan businesses in the last two years. These dollars don’t the roughly $40 billion that the federal government collects annually just support business, they support jobs in our state and help people and communities thrive. from an 18.4-cents-a-gallon tax on gasoline and a 24.4-cents-a-gallon tax on diesel fuel. Yes, highway projects have gotten more expensive. But the main reason for the gap is on the revenue side: Cars and trucks are much more efficient than they were in 1993, the last time the fuel taxes were raised. Light-duty vehicles used 123.9 billion gallons of fuel in 2011, an 11 percent drop from 2004, according to University of Michigan researcher Michael Sivak. And that was before the Obama administration’s strict new fuel economy standards even began. Current laws offer no solution to the funding problem. For the nation to avoid the fiscal pothole, Congress needs to act. But once again, Congress is proving itself incapable of anything but brinkmanship. This month the Senate Environment and Public Works Committee approved a six-year bill that would maintain spending at current levels, plus inflation, but without any suggestion of where that money would come from. That task was left to the Senate Finance Committee. “Admittedly, compared to the Finance Committee, which has to lead all of us in figuring out how to pay for this six-year bill, we have an easier role,” U.S. Sen. David Vitter of Louisiana, the Public Works committee’s ranking Republican, told reporters. (Needless to say, the Finance Committee hasn’t yet proposed a solution.) But at least the Senate put some sort of plan on the table. The House hasn’t even done that, knowing

The worse that America’s roads and bridges get, the less attractive driving becomes to motorists. And that’s bad news for the auto industry.

“WHAT’S DTE ENERGY DOING FOR MICHIGAN BUSINESS?”

20140602-NEWS--0008-NAT-CCI-CD_--

5/30/2014

11:15 AM

Page 1

Page 8

June 2, 2014

CRAIN’S DETROIT BUSINESS

Wage hike maneuver a chess game to its architect Depending on your pogan ballot proposal, litical persuasion, it was which would have ineither a stroke of genius creased the state’s minior a disingenuous politimum wage for both regucal maneuver to prevent a lar and tipped employees minimum wage increase to $10.10 an hour. from making it to the balThe ballot proposal lot. sought to amend the But the man who figstate’s minimum wage ured out how to do it law and increase the says it has more to do wage. with the principle of the LaBrant’s idea, which Legislature being emtook the form of Senate Chris Gautz powered — to legislate. Bill 934, was to repeal Bob LaBrant, senior counsel for state law so even if the issue did the Lansing-based public policy make it to the ballot, voters would firm Sterling Corp., came up with be trying to amend a law that no the idea to thwart the Raise Michi- longer exists. This would make the

Capitol B r i e fi ng s

In some ways, this is a chess “ game, and you have to anticipate the moves of your opponent. ” Bob LaBrant, Sterling Corp.

whole ballot exercise moot. “In some ways, this is a chess game, and you have to anticipate the moves of your opponent,” he said. The minimum wage bill, sponsored by Senate Majority Leader

Randy Richardville, R-Monroe, was signed into law by Gov. Rick Snyder less than 24 hours before Raise Michigan volunteers submitted their signatures to put the issue on the ballot. Now the courts will likely be the

CHOOSING THE RIGHT HEALTH PLAN CAN LEAD TO HAPPY, HEALTHY AND PRODUCTIVE EMPLOYEES! Elaine Schnueringer, HealthPlus Director of Health and Lifestyle Management

Providing a healthier work culture encourages employees to better manage their health. HealthPlus provides a comprehensive wellness program to help employers do that. “Our Worksite U program offers a custom health management strategy that’s unique to your business and your employees. Worksite U takes a proactive approach to worksite wellness by delivering data reports. These reports show you which factors drive up your costs and how to help your employees get healthier to reduce those costs. Unlike most health programs, we integrate Worksite U into our other programs to continuously provide a better experience for our members.” The Worksite U Wellness Program is part of your HealthPlus beneﬁt package—for happier, healthier and productive employees, call HealthPlus at 1-800-530-9071 or visit HealthPlus.org today.

final arbiters of whether the proposal should be allowed on the ballot. “I think the court is going to say, ‘Guess what? You should have done your petition drive three months earlier,’ ” LaBrant said. But even if it did make the ballot and voters approved it, LaBrant said there is case law in Michigan he thinks will ensure that the law Snyder signed will trump the ballot measure. And that case, Reynolds v. Martin, is also one he was involved in, behind the scenes. In 1994, then-Gov. John Engler signed into law a ban on political bingos. Democrats who opposed that law put together a referendum effort to reverse the law change. But lawmakers, not long after, passed a bill that Engler also signed that changed some provisions relating to Moose Lodges. More importantly, the preemptive bill also largely contained all the same language of the 1994 law banning political bingos. So in passing the new law, it reenacted the ban on political bingos that the referendum was seeking to overturn in the upcoming election. LaBrant said as the bingo bill had worked its way through the Legislature, he saw the potential precedent it could set, because at issue was whether the Legislature can re-enact a law while a referendum was pending, but before the actual vote. He encouraged lawmakers to support the measure — and then waited until it could be tested in court. A unanimous Michigan Court of Appeals ultimately agreed with the trial court that first handled the case and said the law with the replacement language was lawful. And that to rule otherwise would allow a small number of petitioners to limit the power of lawmakers elected by citizens across the state. LaBrant said while the people have the right to try and put an issue on the ballot before voters, it doesn’t mean the Legislature can’t take up that issue at the same time. “There’s a parallel here,” he said. “When you’re an old guy like me and you’ve been through some wars before, situations repeat themselves.”

New Mac conference chairman 䡲 Mark Davidoff, Michigan managing partner at Deloitte LLP, was announced as the chairman of the 2015 Detroit Regional Chamber Mackinac Policy Conference at the conclusion of this year’s conference. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

BANKRUPTCIES

The following businesses filed for protection in U.S. Bankruptcy Court in Detroit May 23-30. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. HB Somerset LLC, 2800 W. Big Beaver Road, Suite V-338, Troy, voluntary Chapter 7. Assets: $500; liabilities: $721,300. Universal Investments Group LLC, 32420 Michigan Ave., Wayne, voluntary Chapter 11. Assets: $201,564; liabilities: $129,400. — Natalie Broda

20140602-NEWS--0009-NAT-CCI-CD_--

June 2, 2014

5/30/2014

10:20 AM

Page 1

Page 9

THE MILLER LAW FIRM Changing the Odds in our Clients’ Favor

COSTAR GROUP INC.

Triton Capital Partners wants to turn the Marquette Building into loft-style office space once it takes ownership.

Triton plans to upgrade space in Marquette

The Miller Law Firm is Recognized as a Leader in Shareholder Disputes

BY KIRK PINHO CRAIN’S DETROIT BUSINESS

Imagine Dan Gilbert’s 46,000square-foot Madison Building on Broadway Street, but more than three times larger. That’s what Triton Capital Partners Ltd. envisions for the 164,000-squarefoot Marquette Building at West Congress Street and Washington Boulevard, which it plans to turn into more modern loft-style office space for creative and tech companies similar to the Madison Building once its purchase of the building closes, probably by end of summer. The building is being sold by 400 Monroe Associates, which is controlled by the estate of the late Greektown Casino-Hotel developer Ted Gatzaros. Detroit-based Exclusive Realty is representing the estate. The Class B office building, which was built in 1899, is only about 15 percent to 20 percent occupied, but there is demand for the modern office space that Triton plans for the Marquette Building, said A.J. Weiner, executive vice president in the Detroit office of Jones Lang LaSalle, who is representing Triton in the sale. “Everyone is trying to do residential right now, but what we see is a real opportunity to deliver this kind of space to the market,” Weiner said. The renovated space would be available the first quarter of next year, Weiner said. According to data from the Southfield office of Newmark Grubb Knight Frank, average asking rental rates are $19.79 per square foot in Class B buildings downtown. The listing price is $6.5 million, or $39.63 per square foot. Steve Morris, managing principal of Farmington Hills-based Axis Advisors LLC, believes the building is worth closer to $25 or $30 per square foot because it doesn’t have designated parking and needs renovation. “Nevertheless, you have tenants who will continue to look for space downtown and it has enough architectural bones to it and enough oldtime design that, with a meaningful amount of improvements, it should be able to lease,” Morris said. “It’s still a good buy at about $30 per foot.” Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

Automotive supplier counseling

Employment litigation

Shareholder disputes

950 West University Drive, Suite 300 Rochester, Michigan 48307

Q Q

Commercial and business lawsuits Complex business litigation Alternative fee arrangements considered.

248-841-2200

millerlawpc.com

20140602-NEWS--0010-NAT-CCI-CD_--

5/30/2014

10:17 AM

Page 1

Page 10

Focused on standing tall for Michigan business From Mackinac to Detroit, New Buffalo to Lansing, TCF delivers the right combination of financing and treasury management solutions to help businesses navigate in any economic climate. $19,500,000

$17,700,000

$8,000,000

$5,625,000

Senior Housing Facility

Industrial Space

Multifamily Property

Regional Self-Storage Operator

Construction Loan Treasury Management Services West Michigan

Construction Loan Treasury Management Services Lansing, Michigan

Construction Loan Treasury Management Services Southeast Michigan

Term Loan Treasury Management Services Southeast Michigan

To learn how we can help, contact:

Patrick Skiles, Senior Vice President (734) 542-2790 pskiles@tcfbank.com

Andy Helmuth, Vice President (248) 740-1613 ahelmuth@tcfbank.com

June 2, 2014

Wayne State spinoff gets funding boost BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

The Detroit Innovate Fund, a new fund to help launch local hightech startup companies, has invested $250,000 in Detroit Materials Inc., a Wayne State University spinoff that hopes to make cast-steel parts for the military, mining and off-road markets. The company will use that money, and $150,000 awarded this month through a phase-one Small Business Innovative Research grant from the National Science Foundation, to do small-scale prototyping and validation testing at Michigan Tech University. The SBIR grant came with a matching grant of $25,000 from the state’s Emerging Technology Fund. CEO Pedro Guillen said he hopes Detroit Materials can start generating revenue next year by selling gears, wear plates and cutting tools, such as the teeth on large industrial digging tools. Guillen said he is in talks with two local companies to make his company’s products if the testing goes as hoped at Michigan Tech. He is also looking for headquarters space, with MidGuillen town the first choice. Nick Moroz, co-founder of Farmington Hills-based CSquared Innovations Inc., a University of Michigan spinoff that makes nanoscale coatings for lithium-ion battery electrodes and solar cells, is chief technology officer. Guillen said he will soon hire two engineers to work on product development. The company would like to sell to domestic auto suppliers, but it needs to establish a track record in other markets before beginning the long and costly process of becoming certified as an auto supplier. Guillen said he is preparing a response for a request for information, due June 24, from the Tank Automotive Research, Development and Engineering Center in Warren about lightweight materials technology. Detroit Materials is based on patented research by Susil Putatunda, a professor of chemical engineering and materials science in WSU’s College of Engineering, which involves austempering, a heat treatment for steel and iron that results in improved mechanical properties. Putatunda’s work was previously funded by a three-year NSF grant of $303,461 that began in June 2009. The school’s office of technology transfer signed a license to spin off the technology to the company in March following due diligence by Adrian Fortino, a vice president of Invest Detroit, a community development organization affiliated with Business Leaders for Michigan. Detroit Innovate is an early-stage investment fund of Invest Detroit. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

20140602-NEWS--0011-NAT-CCI-CD_--

June 2, 2014

5/30/2014

10:16 AM

Page 1

CRAIN’S DETROIT BUSINESS

BUSINESS DIARY

Page 11

PEOPLE FINANCE

ACQUISITIONS & MERGERS XanEdu Inc., Ann Arbor, a provider of customized course materials for higher education, and SharedBook Inc., New York City, announced the completion of a merger that includes SharedBook’s AcademicPub and noneducational operations, such as Blog2Print. The combined entity plans to operate under the XanEdu brand. Website: www.xanedu.com.

Pierle

Anderson

Plymouth Ventures, an Ann Arborbased venture capital firm, has named Chris Frick its first CFO. He had been health system controller for St. Mary’s of Michigan– Saginaw. Before St. Mary’s, he was a CPA Frick and a commercial banker. Frick, 44, earned a bachelor’s degree in accounting from Michigan State University and an MBA from Saginaw Valley State University.

Ferguson

Kowalski

Healthcare Centre, Taylor, from med-

CONTRACTS Gale Group Inc., Farmington Hills, part of Cengage Learning Inc. and a publisher of research and reference resources, contracted with the Texas

State Library and Archives Commission to provide Gale research databases to all public school libraries in Texas. Website: gale.cengage.com.

Jekyll & Hyde Advertising and Marketing, Redford Township, will work with DenTek Oral Care Inc., Maryville, Tenn., to market its nighttime dental guards. Websites: jekyllhydeagency .com, dentek.com. Detroit-based DTE Energy Co.’s gas storage and pipeline segment secured longterm gathering commitments with Southwestern Energy Co. and Cabot Oil & Gas Corp., both in Houston, that will significantly expand the Bluestone Pipeline. Website: dteenergy.com. Altair Engineering Inc., Troy, announced that Segula Technologies Inc., Nanterre, France, an engineering and consulting firm, adopted Altair’s software to monitor and optimize the use of commercial computer-aided engineering and computer-aided design software licenses. Websites: altair .com, segulatechnologies.com.

EXPANSIONS Lear Corp., Southfield, a supplier of automotive seating and electrical distribution systems, opened a 300,000square-foot facility in Kenitra, Morocco, for the manufacture of wire harnesses for European automakers. Website: lear.com. Art Van Furniture Inc., Warren, is opening an Art Van PureSleep store at 610 N. Lapeer Road, Lake Orion. Telephone: (855) 803-8070. Website: artvan.com.

IN THE SPOTLIGHT

David Pierle to senior vice president, commercial banking relationship manager, PNC Financial Services Group Inc., Ann Arbor, from vice president, commercial banking relationship manager. The following became senior vice presidents at the Troy location: Timothy Anderson, wealth management team director, from vice president, wealth management team director; Jeff Ferguson, treasury management officer, from vice president, treasury management officer; and Scott Kowalski, corporate banking relationship manager, from vice president, corporate banking relationship manager.

HEALTH CARE Terry Baer to administrator, Regency

ical data set coordinator, Heartland of Waterville, Waterville, Ohio.

HOSPITALITY Kanina Brinkey to director of group sales,

Westin Southfield Detroit, Southfield, from midmarket account executive, Marriott International Inc., Detroit.

INSURANCE Brinkey

Mike Amine to market leader for Michigan, MetLife Inc., Southfield, from managing partner, New England Financial, Southfield, a MetLife company.

Immigration Experience

In Your Corner.

NAME CHANGE

Michigan Association of Certified Public Accountants, Troy, changed its acronym from MACPA to MICPA and its website from michcpa.org to micpa.org. The old site address will continue to function, as will emails sent to staff using the @michcpa.org domain. Telephone: (248) 267-3700.

■

Nonimmigrant visa petitions.

■

Family and employment-based permanent residence petitions.

■

In Your Corner.

NEW PRODUCTS Meritor Inc., Troy, is adding optimized axle ratios to its 14X rear-drive axle portfolio. Meritor’s 14X tandem drive axles with a 2.79 ratio will be available for production in June, and a 2.85 ratio will be ready this summer. When used with the Cummins Inc. and Eaton Corp. SmartAdvantage Powertrain, the new axle ratios will improve fuel efficiency for line-haul applications through “downspeeding,” a process that maintains vehicle speed at lower engine rpms. Website: meritor.com. ProQuest LLC, Ann Arbor, announced the availability of its new mobile Web edition of eLibrary, which enables access from smartphones and hand-held devices to more than 2,500 full-text magazines, newspapers, books and transcript titles and a collection exceeding 7 million maps, pictures, Web links and audio/video files. Website: proquest.com.

NEW SERVICES Carbon Media Group LLC, Bingham Farms, a producer of digital content for outdoor enthusiasts, is offering its proprietary digital network, CarbonTV, to television viewers through Roku, a digital media player that allows viewers to stream Internet content to their televisions. Websites: carbonmedia.com, roku.com.

Contact Nina Thekdi at nathekdi@varnumlaw.com

■

Metro Detroit

■

Grand Rapids

■

Kalamazoo ■ Grand Haven

■

Lansing

20140602-NEWS--0012-NAT-CCI-CD_--

5/30/2014

11:12 AM

Page 1

Page 12

CRAIN’S DETROIT BUSINESS

June 2, 2014

CALENDAR WEDNESDAY JUNE 4 ImageSoft Government Summit. 8 a.m.4:30 p.m. ImageSoft Inc. Conference on improving document management processes and efficiency in government, targeting courts, law enforcement, prosecutors and other paper-intensive government agencies. With keynote speaker David Behen, director, Michigan Department of Technology, Management & Budget and chief information officer, state of Michigan; and featured speaker Mark Hackel, Macomb County executive. Lansing Center, Lansing. Free; open only to government employees. Call for pricing on optional 11:30 a.m.-6 p.m. golf outing and 6-9:30 p.m. dinner June 3. Contact: Beverly Lyons, (248) 948-8100, ext. 330; email: blyons@images oftinc.com; imagesoftinc.com/govern ment-summit-2014.

Street Cred Our business attorneys have proven to be signiﬁcant assets to clients in transactions of all sizes. But it’s more than just giving sound legal advice, it’s our pragmatic and down to earth approach that allows us to offer the world-class value and results that build trust. And reputations. Providing Counsel in:

Project Startup Entrepreneur Forum. 5:30-8 p.m. TechTown Detroit. Targeting entrepreneurs, local businesses, business students and community leaders in a pitch competition awarding $20,000 in cash and technology services. TechTown Detroit, Detroit. Free. Contact: Pamela Dover, (248) 233-4537; email: pamela_dover @cable.comcast.com; website: project startuplive.com/location/detroit.

Private Equity Transactions Business Combinations and Joint Ventures Commercial Agreements Transaction Financing Venture Capital Financing

THURSDAY

Down to Earth, Down to Business.

JUNE 5 The Meaning and Long-term Impact of Philanthropy. 11:30 a.m.-1:30 p.m. Info-

www.millerjohnson.com

rum. Fifty-second annual meeting. With keynote speaker Andrew Plepler, global corporate social responsibility and consumer policy executive, Bank of America; Craig Fahle, host, “The Craig Fahle Show,” WDET 101.9 FM;

CRAIN’S HONORS 20 IN THEIR 20S Join Crain’s Detroit Business 5-9 p.m. June 12 at the Garden Theater, Detroit, for 20 in their 20s, honoring 20 metro Detroiters in their 20s whose creativity and entrepreneurial spirit are contributing to a new energy in Southeast Michigan. In addition to the presentation of awards and a strolling dinner, the evening will feature “Three Takes on the City from Past and Present 20s,” moderated by Craig Fahle, host of “The Craig Fahle Show” on WDET 101.9 FM; “Reshaping Local Politics,” presented by Bryan Barnhill, chief talent officer, city of Detroit, 20s class of 2014; “What Happens After the Media Declares Your Restaurant Will Save Detroit,” Phil Cooley, co-owner, Slows Bar BQ, class of 2007; and “How Social Entrepreneurship Helps Detroit,” Veronika Scott, founder and CEO, The Empowerment Plan, class of 2013. Tickets are $35 for 20s alumni, $45 for other guests, and $40 each if purchased in groups of 10 or more. Preregistration closes at 5 p.m. June 9. If space is available, walk-in registration will be $55. For ticket information, call Kacey Anderson at (313) 446-0300, email her at cdbevents@crain.com, or visit crainsdetroit.com/events. Join the conversation with #cdb20s. Romy Gingras Kochan, founder and president, social enterprise development firm Gingras Global LLC; Donna Murray-Brown, president and CEO, Michigan Nonprofit Association; Amy Peterson, co-founder, jewelry-making business Rebel Nell; Vivian Pickard, General Motors president, Foundation, and director, corporate relations, General Motors Co.; and Amanda Van Dusen, principal, Miller, Canfield, Paddock and Stone PLC. Detroit Marriott Renaissance Center, Detroit. $40 Inforum members, $55 nonmembers, $700 table of 10; $25 students. Contact: (877) 633-3500; website: inforummichigan.org.

UPCOMING EVENTS The Big M Manufacturing Convergence. 7:30 a.m.-10 p.m. June 9, 8:30 a.m.-7:30 p.m. June 10, 8:30 a.m.-6 p.m. June 11, 8:30 a.m.-2 p.m. June 12. Soci-

Winners Always Cho se

A Thoroug hbred

Whether you’re jockeying for position in the marketplace, working to rein in costs or racing to the finish line, you know business success involves a unique, trusted relationship between you and a strong, agile financial partner. As the only Michigan firm to ever be named a “Best of the Best” firm by INSIDE Public Accounting ... not only once ... but 18 times, Doeren Mayhew’s CPAs and business advisors understand what it takes to manage a high-performing business.

Insight. Oversight. Foresight.® 248.244.3000 doeren.com/MichiganBestCPAs

When you’re ready to take your place in the winner’s circle call on us to provide insight into your business, oversight to ensure best practices and foresight for what’s ahead.

ety of Manufacturing Engineers. Focus will be on the entire manufacturing process from design to production, including innovations that can impact the process. Cobo Center, Detroit. Contact: Christine Longroy, (313) 4253137; email: service@sme.org; website: bigmevent.com.

Strictly Business. 11 a.m.-1:30 p.m. June 12. JVS. Annual networking and awards luncheon. With keynote speaker Mark Fields, COO, Ford Motor Co.; Jacques Panis, president, Shinola/Detroit LLC, 2014 JVS Business Leadership award winner; and Max Surnow, co-founder, Cooper Street Cookies, recipient of the 2014 JVS Rising Entrepreneur Award. The Henry, Dearborn. $150. Contact: Judy Strongman, (248) 233-4213; email: jstrongman@jvsdet.org; website: jvsdet.org/ strictlybiz.

Detroit — Engage China Auto Industry. 2:30-9 p.m. June 13. Detroit Chinese Business Association. Seminar and networking with more than 40 executives of Chinese original equipment manufacturers and auto suppliers. With Yang Dong, vice chairman and general secretary, China Association of Automobile Manufacturers. Petruzzello’s Banquet and Conference Center, Troy. $48-$150. Contact: (248) 918-0391; email: info@dcba.com; website: dcba.com.

20140602-NEWS--0013-NAT-CCI-CD_--

June 2, 2014

5/30/2014

11:15 AM

Page 1

CRAIN’S DETROIT BUSINESS

Page 13

Rockbridge to buy owner of Gas Station TV BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Detroit-based Rockbridge Growth Equity LLC has signed a purchase agreement to buy a majority stake in Birmingham-based Destination Media Co., whose Gas Station TV broadcasts at gas pumps at 2,600 stations in 42 states. Revenue and sales price are not being disclosed, but private equity firm Rockbridge’s deals typically are between $100 million and $200 million. This one is expected to close by the end of June, giving Rockbridge 10 portfolio companies. The current management team will remain. Gas Station TV is Destination Media’s only operating entity. Destination Media was founded in Oak Park in 2006. It began with five stations in Texas and now, according to figures compiled by Nielsen Co., reaches 50 million consumers a month with its mix of programming, advertising and gas station promotions. Non-advertising content includes ESPN, CNN, Bloomberg TV and local weather. Destination Media’s CEO, David Leider, said the company plans to grow its footprint dramatically with Rockbridge’s financial support. It hopes to be in all 50 states in a year and plans a substantial international expansion.

“We’ve had inquiries about expanding into Asia, South America and Europe, and the partnership with Rockbridge gives us the opportunity,” said Leider. Rockbridge Partner Kevin Prokop said: “This is what we do: Invest in fast-growing companies with strong management teams and help them continue to build

out their platform. “We’re big fans of this team. They’ve built this business up from nothing.” Rockbridge was founded in 2007 by Prokop, Dan Gilbert and Brian Hermelin. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

ADVISOR SPOTLIGHT GENE LOVASCO President As President of LoVasco Consulting Group, Gene leads and inspires his team to provide innovative and sustainable insurance, employee benefits, and retirement planning products and consulting services to clients. Gene works with clients to design sophisticated life insurance portfolios that enable them to optimize economic results, minimize taxes, and expand flexibility in multigenerational wealth planning. 535 Griswold Street, Suite 1600 • Detroit, MI 48226 • www.lovascogroup.com • 313.394.1700 A Member Firm of M Financial Group. Securities Offered Through M Holdings Securities, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. LoVasco Consulting Group is Independently Owned and Operated.

A DIFFERENT SET

OF VOICES WILL RAISE THE ROOF

LaBrant

AT FORD FIELD. – JOHN HERTEL

GENERAL MANAGER, SMART TRANSPORTATION BOARD VICE CHAIRMAN, DMCVB

Rich with history, heritage and cultural influences, Detroit’s doors are open to all. That’s why faith-based groups including the 2014 International Convention of Jehovah’s Witnesses chose Detroit and Ford Field for conferences in both June and July. That means 90,000 total attendees with a direct spending of almost $57 million in The D. So as they experience our city’s great restaurants, diverse attractions and affordable accommodations, Detroit’s true spirit will shine. Be part of America’s great

comeback city. For more comeback stories, visit meetdetroit.com/comeback-stories.

Winner

20140602-NEWS--0014-NAT-CCI-CD_--

5/30/2014

10:21 AM

Page 1

OF IHGâ&#x20AC;&#x2122;S DEVELOPMENT& DESIGNER AWARD

CROWNE PLAZA DETROIT DOWNTOWN Newly designed meeting rooms with beautiful floor to ceiling

windows offering natural lighting, meeting packages with complimentary wifi and Crowne Meeting Director on site.

www.crowneplaza.com | 313-965-0200 | 2 Washington Blvd., Detroit, MI 48226

Page 14

June 2, 2014

CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

Survey: The upbeat goes on for biz â&#x2013; From Page 3

for those who had a positive outlook was that sales and customers were increasing, as well an overall improving state economy. Those who had a negative outlook most often cited the opposite, a poor economy, and a lack of customers. Harvey Rabinowitz, president of West Bloomfield-based Mediaâ&#x20AC;ŚPeriod, a media planning and buying service, was among those who was only somewhat satisfied with the state economy as it related to his business. He said the economy is not great, but it has been worse. He said heâ&#x20AC;&#x2122;s not sure what it is that is holding things back. â&#x20AC;&#x153;There is a fundamental fear that exists that this is short-term, that the bottom could fall out at any minute,â&#x20AC;? he said. Robert Oâ&#x20AC;&#x2122;Neill, CFO of Shelby Township-based Spec Technologies Inc., a manufacturer of fixtures and equipment for the automotive industry, said for his business, there has definitely been a recovery from the â&#x20AC;&#x2122;08-â&#x20AC;&#x2122;09 recession. He said some of Snyderâ&#x20AC;&#x2122;s changes in tax policy, including the move from the Michigan Business Tax to the corporate income tax, have helped. Oâ&#x20AC;&#x2122;Neill said he would support Snyderâ&#x20AC;&#x2122;s re-election, because four years isnâ&#x20AC;&#x2122;t enough for anyone to get such a big job done. Snyder has done well in his first term, he said, and has not given voters a good reason why he doesnâ&#x20AC;&#x2122;t deserve another term. â&#x20AC;&#x153;I believe Snyder has made some

POLITICS: THE SURVEY SAYS â&#x20AC;Ś Gov. Rick Snyder led a roster of officeholders and candidates with a favorable rating by 70 percent. He was followed by Republican Secretary of State Terri Lynn Land, who is running for the U.S. Senate, at 42 percent; President Barack Obama, 41 percent; Democratic U.S. Rep. Gary Peters, also a U.S. Senate candidate, at 31 percent; and Democratic gubernatorial candidate Mark Schauer, 14 percent. Obama led the pack in unfavorable opinion at 52 percent, with Peters at 35 percent, Snyder and Schauer at 25 percent each, and Land at 20 percent. 32 percent of those polled did not know who Schauer was, followed by Land at 14 percent and Peters at 9 percent. 64 percent believe Obama is doing a poor job as president, with 35 percent approving of his performance. 67 percent approve of Snyderâ&#x20AC;&#x2122;s performance, with 31 percent disapproving. 59 percent said they are leaning toward voting for Snyder for governor this fall, with 25 percent leaning toward Schauer. 45 percent are leaning toward voting for Land as the replacement for retiring U.S. Sen. Carl Levin, with 34 percent learning toward Peters. people upset, but there isnâ&#x20AC;&#x2122;t a good leader that hasnâ&#x20AC;&#x2122;t,â&#x20AC;? he said. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a reason why people at the top donâ&#x20AC;&#x2122;t have a lot of friends. In five years from now, if things are good, people wonâ&#x20AC;&#x2122;t give a darn.â&#x20AC;? According to the survey, the majority held the same view as Oâ&#x20AC;&#x2122;Neill, with 59 percent saying they would vote for Snyder, while 25 percent said they would vote for his opponent this November, former U.S. Rep. Mark Schauer, D-Battle Creek. The poll also showed that 70 percent of respondents had a favorable opinion of Snyder, compared to 14 percent for Schauer. The one-term congressman and former state Senate minority leader also suffered from 32 percent of respondents hav-

ing never heard his name. Everyone polled had heard of Snyder. Cavanagh said the percentage of the business community in this poll that was unfamiliar with Schauerâ&#x20AC;&#x2122;s name tracks closely with polls done of the general public. He said it is surprising that Schauer is not yet on the air with ads to increase name identification. Jody Kuhn, owner of Bingham Farms-based Kuhn & Associates, a small accounting firm, said she would support Snyderâ&#x20AC;&#x2122;s re-election. â&#x20AC;&#x153;I prefer a bean counter, and our governor is one and he balanced the budget,â&#x20AC;? she said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

Look forward to 2015.

/PCPEZ LOPXT XIBU IFBMUI DBSF XJMM MPPL MJLF CVU FWFSZPOF LOPXT UIJOHT XJMM CF EJĂ˛ FSFOU Crainâ&#x20AC;&#x2122;s Detroit Business, JO QBSUOFSTIJQ XJUI UIF (SFBUFS %FUSPJU "SFB )FBMUI $PVODJM QSFTFOUT B TFSJFT PG XFCJOBST GPS FNQMPZFST FNQMPZFFT BOE QSPWJEFST $PNJOH VQ JO +VOF

EMPLOYER FACTS:

EMPLOYER S E I T I L I B I S N O P RES +VOF t /PPO Q N t 4USBUFHJFT GPS DPNNVOJDBUJOH DIBOHFT UP FNQMPZFFT t )PX UP LFFQ VQ XJUI QPMJDZ VQEBUFT t 8IBU HPWFSONFOU DIBOHFT NBZ CF PO UIF IPSJ[PO

D E N R A E L S N O S LES 2013 FROM+VOF t /PPO Q N EMPLOYER FACTS:

t )PX DPNQBOJFT BSF EFBMJOH XJUI UIF DIBOHFT t )BWF UIF QPMJDZ DIBOHFT HPOF UIF XBZ QFPQMF FYQFDUFE t )PX UIF MFTTPOT MFBSOFE GSPN XJMM JNQBDU UIF GVUVSF

FREE WEBINARS - Register at crainsdetroit.com/webinars Sponsored by: In Partnership with: â&#x201E;˘

20140602-NEWS--0015-NAT-CCI-CD_--

5/30/2014

3:17 PM

Page 1

CRAIN’S DETROIT BUSINESS

June 2, 2014

Method: Detroit project slips away ■ From Page 1

Among others in Michigan, the sprawling 2.5 million-square-foot site of American Axle & Manufacturing Holdings Inc.’s Detroit manufacturing complex was a contender for Method’s plant, said Greg Hudas, the agent/broker for Southfield-based Signature Associates Inc., a Cushman & Wakefield alliance member. Hudas evaluated sites throughout the state between November 2012 and February 2013. Method also considered the former Ford Motor Co. Wixom assembly plant and RACER Trust sites in Flint and Grand Rapids, as well as other sites in Lansing and in southern Michigan near Toledo. “The mindset was triple-green, LEED Platinum, and they were going to have a windmill for electricity,” Hudas said.

Too slow off the mark Hudas said the American Axle site in Detroit would have been “tremendous” for Method, which was founded in 2000 and in 2012 was acquired by European rival Ecover, creating a $200 million company. “But I never had a chance to sit face to face with the Method guys,” Hudas said. “There were no meetings with the American Axle people or the guys who own the Ford Wixom site.” What could have been done differently? For Lowry, interviewed during the Detroit Regional Chamber’s Mackinac Policy Conference last week, choosing Chicago over Detroit came down to vision. Chicago, he said, knew what type of businesses it wants to grow. Every developer sang from the same hymnbook, knew what types of projects could be expedited. Detroit, meanwhile, was haphazard. It was, at least at that time, economic development by happenstance, not by grand vision. Chicago won the business with a better pitch and a team in sync. If the plant had come to Detroit, it would have become just the third LEED (Leadership in Energy and Environmental Design) Platinum-certified building in metro Detroit, joining the 80,000-squarefoot Lafayette Place development at the former Sears Roebuck & Co. department store location in Pontiac and the Kresge Foundation headquarters in Troy with that distinction. Justin Palm, president of Madison Heights-based Lumerica Corp., a manufacturer of LED lights which has worked on several LEED projects, said Method’s decision wasn’t a “major blow” to the green building movement or to the region. Instead, he said, it’s more a reflection of past missteps. “I think it reveals what occurred in the past and, I think, looking forward, the city and state have taken great steps to address situations like this,” he said. “From our experience, we are seeing the city and state and other entities working in unison quite well.” Lowry and Ryan, whose products are in stores ranging from Whole Foods to CVS, said they had visited Chicago, Detroit and other locales, telling the mayor’s office, local brokers and developers they were looking to rehabilitate an ex-

METHOD HOME PRODUCTS

Method Home Products founders Eric Ryan (left) and Adam Lowry said they tried to set up shop in Detroit but found Chicago more responsive.

isting factory or build new on an abandoned site. They knew what they wanted — to bring jobs and investment into a struggling area. “We wanted to go into an urban area and take something that had been abandoned and turn it into a factory for the 21st century,” Lowry said. “Doing that takes an unusual amount of coordination. We needed a lot of help understanding what it would take to remediate a brownfield site.” But when Method’s brokers took them to see properties in Detroit, they didn’t fit the bill. “It was like they were just showing us properties they wanted to get rid of,” Lowry said. Lowry wouldn’t identify exactly whom the Method team spoke with in Michigan — other than to say the MEDC and the Detroit mayor’s office — but the parties never coalesced in time to help them find the right property and push forward. “By contrast, Mayor Rahm Emanuel himself very quickly got involved in the project.” Emanuel appointed one of his deputies, Steve Koch, to be the point person. They got the permits in 20 days. Emanuel and representatives from Gov. Pat Quinn’s administration announced the 150,000-square-foot plant last July. A groundbreaking on the plant was held in March, and construction is expected to be complete early next year.

Needed: Better coordination Method will employ 70 people there, and a commercial greenhouse on the roof will bring at least 30 more jobs. A bottle manufacturing facility is also scheduled for the property, which will include a refurbished 230-foot wind turbine and solar panels that will generate approximately half of the plant’s yearly electrical needs, according to a press release. Dan Labes, senior vice president in the Southfield office of Newmark Grubb Knight Frank, said he’s never heard anyone in his office complain about lack of receptiveness or response from the Detroit Economic Growth Corp. or MEDC. Finney said the MEDC fell short on the Method project but has since become more responsive. “The situation that happened with Method is one that we obviously find less than optimal, but we’ve taken steps, including the Michigan prospectus and the business attraction team, which should keep us well positioned to not miss out on potential opportunities,” he said. The prospectus lists shovelready sites across the state that

“could be available on relatively short notice,” Finney said. The business attraction team is a group of about eight MEDC employees who, when corporate prospects such as Method arise, assign the interested company to one person to see a project through. In addition, the MEDC and 13 other economic development organizations across the state like the DEGC and the Wayne County Economic Development Growth Engine, or EDGE, now meet monthly to discuss development issues. “We spent a lot of our early time focused on existing business; now we are focusing on business attraction,” Finney said. Finney pointed to Mahindra & Mahindra Ltd. as one recent success story in Southeast Michigan. The Indian automaker announced in May an expected $2 million investment in its Mahindra North American Technical Center in Troy, and plans to add 112 engineers. Mahindra also chose Ann Arbor for a $2 million plant to build electric scooters. Last week, the state announced incentives for other manufacturing projects. Walker-based Challenge Mfg. Co. LLC received approval of a $2.5 million performance-based grant toward a 400,000-square-foot manufacturing plant in Pontiac. The $50 million project is expected to create 450 new jobs at the former General Motors Pontiac Assembly. Also last week, the state said Green Box NA Michigan LLC, a subsidiary of De Pere, Wis.-based Environmentally Advanced Reclamation Technology HQ LLC, will receive up to $125 million in tax-exempt bond financing for two facilities. The proposed $200 million projects include a commercial-waste treatment plant in Detroit and a processing plant in Cheboygan. The commercial waste, mostly from the restaurant industry, will be turned into pellets in Detroit, then shipped to Cheboygan, where it will be converted into bath, facial and napkin products, as well as biofuels and fertilizer. The two Green Box projects are expected to create up to 331 jobs.

Left hung out to dry? The Method project loss, though, was shock to the representatives of the DEGC and city of Detroit who were sitting in the audience of a Mackinac Policy Conference panel last week. “This wouldn’t have happened if they’d called us,” said Olga Stella, DEGC vice president of business development. Waymon Gillebeaux, executive vice president of project management for the DEGC, had never heard of the project. Neither had Marcell Todd, who worked in the administration of former Mayor Dave Bing and is now Mayor Mike Duggan’s director of city planning. Duggan also is laying plans to improve the city’s chances when the next big manufacturer comes calling. He has a lean processes team evaluating systems like permitting and licensing. (See story, Page 1.) Still, Finney said, the Method project was a missed opportunity. “Based on what I’ve seen, we could have done better.”

Page 15

REAL ESTATE COMMERCIAL PROPERTIES

OFFICE BUILDING

BE YOUR OWN BOSS!

FOR SALE 12% CAP 7,800 Sq. Ft. Medical Building $258,000 Tepee Realty ~ 734.453.7000 TomEgoebel@Gmail.com

OWN A MICRO BREWERY! 27522 Northwestern Hwy.

Jonathan Brateman Properties, Inc.

MARKET PLACE MISCELLANEOUS SELL US YOUR OLD INVENTORY We buy all kinds of surplus and obsolete inventories, raw materials, machinery, equipment and scrap.

(248) 477-5000 JB@bratemanproperties.com www.bratemanproperties.com

JP Kraft Jr. 734-427-6600 | jpkraft@corepg.com

Call or email today for information on a custom advertising plan!

cdbclassified@crain.com 313.446.6068

MANUFACTURING SERVICES

CKX Supplier Solutions • • • •

Specializing in Chrysler Supplier Issues Production Tooling Veriﬁcation Engineering/Sales/Purchasing Services ED&D/Prototype Tooling

Cathy Kirk

ckxllc.com 586-612-9363 cathykirk@ckxllc.com

JOB FRONT POSITIONS AVAILABLE

CHIEF ADMINISTRATIVE OFFICER Wayne State University Physician Group is currently seeking qualified candidates for a Chief Administrative Officer for the Department of Psychiatry and Behavioral Neurosciences. This position is the Senior Administrator in a large department involved with education, research and clinical activities. The ideal candidate will be a highly motivated and dynamic administrator responsible for fiscal affairs, including budgeting, financial analysis & forecasting, human resource management, contract management and maintaining internal and external relationships. Working closely with the Department Chair and Chief Medical Officer, the CAO will ensure the efficient and effective operation of the clinical practice and will work closely with the WSUPG corporate executive team to accomplish the mission of the Corporation. Position requires a Bachelor’s degree in Business or related field, Master’s degree preferred, and at least three years of physician/medical practice management experience. Strong working experience in Microsoft Office utilizing excel, word, PowerPoint. Must have excellent written and verbal communication skills and the ability to work independently. A competitive salary and benefits package including retirement plan with a corporate contribution, free parking. Qualified applicants please submit resume and salary requirements to: bcoutant@med.wayne.edu Note: Individuals using tobacco or nicotine products will not be hired and must pass a screening test.

E.O.E.

SALES

The Crain’s reader:

26.5% influence the purchase of office/industrial and commercial space. Help them find you by advertising in Crain’s Real Estate section.

313.446.6068 • FAX: 313.446. 034 7 E-Mail: cdbclassif ied@crain.com

VICE PRESIDENT OF SALES Dart Appraisal is seeking a Vice President of Sales to be based in our Troy, Michigan office. This person will be responsible for the direction and management of sales. The VP of sales will drive the development of national sales strategies, and establish sales objectives by forecasting and developing annual sales quotas for regions and territories. At least 7 years sales experience in comparable industries, with 10 years in a senior management or executive position, is required. For a complete job description and to apply, please visit:

www.dartappraisal.com/careers

Call Us For Personalized Service: (313) 446-6068 FAX: (313) 446-0347 E-MAIL: cdbclassified@crain.com INTERNET: www.crainsdetroit.com/section/classifieds

See Crainsdetroit.com/Section/Classifieds for more classified advertisements

20140602-NEWS--0016-NAT-CCI-CD_--

5/30/2014

2:38 PM

Page 1

Page 16

June 2, 2014

CRAIN’S DETROIT BUSINESS

Project Lean: Halfway through effort, teams seek ‘quick wins’ ■ From Page 1

PROJECT LEAN TEAM 䡲 Advanced Manufacturing Group LLC, Royal Oak. Traffic signs project, to

process requests for signs, through the Department of Public Works. 䡲 Dawn Thompson, independent consultant, formerly of Warner Norcross & Judd LLP, Clinton Township. Facilitate obtaining permits for special events and valet services, through Public Works. 䡲 Deloitte LLP, Detroit. To find improvements in snow removal processes, driver assignments or materials, through Public Works. 䡲 Global Productivity Solutions LLC, Clinton Township. Streamline procurement processes, through Purchasing Division of Finance Department. 䡲 Grant Thornton LLP, Southfield. Expedite issuing income tax refunds, through the General Services Department. 䡲 Jama Consulting LLC, Livonia. Speed up securing a certificate of occupancy, through the Buildings, Safety, Engineering and Environmental Department. 䡲 Mary Martin, city of Detroit. Reduce delays and bureaucracy in business licensing, encourage development and create a one-stop-shop for assistance. Also coordinating other reviews at the Fire Department and Municipal Parking Department. 䡲 Metro-West Appraisal Co. LLC, Northville. Review methods of maintaining vacant lots, response to complaints, and coordinating with city developmental agencies, through General Services. 䡲 MPM Consulting, Waterford Township. Increase the rate of on-time starts of city buses, through the Detroit Department of Transportation. 䡲 Osirius Group LLC, Troy; Patriot Systems, Troy. Review the process of following up on complaints about lighting and handling repairs, through the Public Lighting Department. 䡲 Plante Moran PLLC, Southfield. Leading two project teams, one to streamline site-plan review, through Buildings Safety; and another to review and prioritize pothole repair projects and follow up on citizen complaints, through Public Works. Companies on the Plante Moran team: Belfor USA Group Inc., Birmingham; Karoub Associates Inc., Lansing Township; Mercy Education Project, Detroit; Wayne County Airport Authority; DAJ Consulting, Laurel, Md. 䡲 PMC (Production Modeling Corp., Dearborn); University of MichiganDearborn. Select codes for enforcement and streamline processes, and explore revenue opportunities, through Buildings Safety. 䡲 PricewaterhouseCoopers LLP, Detroit. Reduce the average time of hiring and onboarding from 144 days to 45 days, through the Human Resources Department. 䡲 Vedant Ghang, UM graduate school. Refine the process of evaluating and removing diseased trees, through General Services. 䡲 Weblyn Group, Northville. Reduce response time to respond to and track IT issues from city employees. 䡲 Western Michigan University Bronco Force executive education program, Kalamazoo. Two auto parts replacement projects, for General Services and DDOT.

100 city employees across eight city departments. The goal is to shore up specific city functions, ranging from business licensing to distributions of city income tax refunds.

A process begins The 18 teams will prepare reports for city officials on current operations and possible improvements by mid-July. Other tasks on the table for review are city practices in hiring, certificates of occupancy, snow removal, purchasing and IT help-desk service time. The eight-week lean program largely mirrors a lean process Duggan initiated as CEO of Detroit Medical Center. The teams have been completing project charters establishing their own missions and creating project plans, and could propose a few easy fixes soon, said Mary Martin, director of lean process management for Detroit. Martin was formerly the vice president of performance improvement and radiology at DMC. “We anticipate in the next two or three weeks they (the teams) can begin making some smallerscale improvements — the quick wins we can go after, before we then begin laying out a larger plan for the future,” she said. “It (the outcome) is going to depend on the projects and what they find. For example, I’m working on the business licensing (project). We’re not only going to work on ways to reduce response time and shorten the process, but also look at what we require business licensing for and if it’s necessary.” An example of a lean improvement opportunity: Evaluating

whether the city even needs to have its own licensing process for a business already licensed by the state. The volunteer effort was born largely out of requests Duggan made at the Crain’s Newsmaker of the Year luncheon in February, and at a meeting of the chamber earlier this year, for business executives to offer leaders willing to teach and apply lean principles to government agencies. “The mayor was talking about this eight-week sprint in various agencies, and we were thinking initially maybe we would pick out one of the 18 projects. But we were so intrigued by the opportunity — and it was clear to us that the entire process would benefit from an umbrella holistic approach,” said Mark Davidoff, Michigan managing partner for Deloitte LLP. “So we went back to our own drawing board and ended up proposing not only having ownership of a project but heading a project management office.” Deloitte is overseeing the project management office, which sets the schedule and coordinates the 18 eams, and is also lean volunteer on snow removal, one of two projects under the auspices of the Detroit Department of Public Works. A range of other accountants, consultants, efficiency experts and other specialists are volunteering services. (See list, left.)

Repeatable lessons John Boulahanis, owner and president of Livonia-based Jama Consulting LLC, said he took on Duggan’s challenge because he knew his efficiency training could help. He is volunteering on the certificate of occupancy project team with Detroit’s Buildings, Safety, Engineering and Environmental Department. Jama is a business consulting and executive coaching firm that Boulahanis founded in 2007. “About 90 percent of what you do in lean consulting involves looking at … the culture and getting people to those ‘a-ha’ moments of clarity that help them feel they have control,” he said. “But it (Detroit city services) is not just someone else’s problem. It’s everyone’s problem, but everyone also has an opportunity to create value and have a significant impact for the city.” Marc Voorhees Jr., president of Waterford Township-based MPM Consulting and a former risk analyst for Ford Motor Credit Co., said his great-grandfather owned a construction business in Detroit until the 1970s. That was inspiration to lend his Six Sigma process improvement training to the city. His project, reviewing Detroit Department of Transportation bus departure times, will dovetail with his past research experience studying New York City subways as a New York University graduate student. “The people in Detroit have been so wonderful and open to change, and people are passionate about what they do,” he said. Besides transportation and buildings and public works, the executives are also handling projects in Detroit’s finance and human resources departments, general services, purchasing, IT services and

Duggan’s latest request: Teen internships Detroit Mayor Mike Duggan is following Project Lean with a second request for an eightweek time commitment from the business community, this time in the form of internships under the newly created TeenWork Detroit program. “The unemployment rate is 50 percent for Detroit teens,” Duggan told the audience at the Detroit Regional Chamber’s Mackinac Policy Conference last week. “These kids don’t have jobs, and they don’t know people their age who have jobs.” The Detroit City Council has allocated $3 million from previous block grant awards to fund the program, and the city will pay up to half of each teen’s summer employment. The Skillman Foundation and the W.K. Kellogg Foundation will assist with funding and have co-organized TeenWork Detroit with the city, along with Detroit Employment Solutions Corp. The DESC plans to assist in connecting students to jobs, along with City Connect Detroit. Still needed are donations from businesses in the form of internships that do not require matching funds. The goal is to hire 5,000 youths for eight weeks next summer at about $2,000 a teen, for a total of $10 million. Detroit-based Franco Public Relations Group and PracticeSpace, an incubator and residency program, have already expressed interest in participating. — Chad Halcom, Amy Haimerl the Public Lighting Department. One project, the review of business licensing in the city, will be handled internally by Martin. All city services under review are internal except one: a parts replacement program to equip city vehicles other than fire ambulance and DDOT buses that’s now under contract with the Atlanta-based National Automotive Parts Association. Martin said the lean process review will not include outsourcing any of the other 17 functions. “We believe that if we can give the employees the right tools, then we can do the task better than anyone else can,” she said. “We’ve had people without the proper tools for so long.” Davidoff said the city expects the eight-week program to be the first of many consecutive reviews, with other executives likely to step up to new roles in later sessions. “The beauty of the management approach is peeling apart the process, figuring out the key components and putting it back together, and once you commit to the culture of this approach, there’s always a use for it,” he said. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

20140602-NEWS--0017-NAT-CCI-CD_--

5/30/2014

2:39 PM

Page 1

June 2, 2014

www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or mkramer@crain.com ASSOCIATE PUBLISHER Marla Wise, (313) 4466032 or mwise@crain.com EXECUTIVE EDITOR Cindy Goodaker, (313) 4460460 or cgoodaker@crain.com MANAGING EDITOR Jennette Smith, (313) 4461622 or jhsmith@crain.com MANAGER, DIGITAL STRATEGY Nancy Hanus, (313) 446-1621 or nhanus@crain.com MANAGING EDITOR/CUSTOM AND SPECIAL PROJECTS Daniel Duggan, (313) 446-0414 or dduggan@crain.com SENIOR EDITOR/DESIGN Bob Allen, (313) 4460344 or ballen@crain.com SENIOR EDITOR Gary Piatek, (313) 446-0357 or gpiatek@crain.com WEB EDITOR Kristin Bull, (313) 446-1608 or kbull@crain.com WEST MICHIGAN EDITOR Matt Gryczan, (616) 9168158 or mgryczan@crain.com RESEARCH AND DATA EDITOR Sonya Hill, (313) 446-0402 or shill@crain.com WEB PRODUCER Norman Witte III, (313) 4466059, nwitte@crain.com EDITORIAL SUPPORT (313) 446-0419; YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 4461687 TIP LINE (313) 446-6766

REPORTERS Jay Greene, senior reporter: Covers health care, insurance, energy utilities and the environment. (313) 446-0325 or jgreene@crain.com Amy Haimerl, entrepreneurship editor: Covers entrepreneurship and city of Detroit. (313) 4460416 or ahaimerl@crain.com Chad Halcom: Covers litigation and the defense industry. (313) 446-6796 or chalcom@crain.com Tom Henderson: Covers banking, finance, technology and biotechnology. (313) 446-0337 or thenderson@crain.com Kirk Pinho: Covers real estate, higher education, Oakland and Macomb counties. (313) 446-0412 or kpinho@crain.com Bill Shea, enterprise editor: Covers media, advertising and marketing, the business of sports, and transportation. (313) 446-1626 or bshea@crain.com Dustin Walsh: Covers the business of law, auto suppliers, manufacturing and steel. (313) 4466042 or dwalsh@crain.com Sherri Welch, senior reporter: Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com LANSING BUREAU Chris Gautz: Covers business issues at the Capitol and utilities. (517) 403-4403 or cgautz@crain.com

ADVERTISING SALES INQUIRIES (313) 446-6052; FAX (313) 393-0997 SALES MANAGER Tammy Rokowski SENIOR ACCOUNT EXECUTIVE: Matthew J. Langan ADVERTISING SALES Christine Galasso, Jeff Lasser, Sarah Stachowicz CLASSIFIED SALES Angela Schutte, manager, (313)-446-6051 DIGITAL MARKETING MANAGER Jennifer Chinn AUDIENCE DEVELOPMENT DIRECTOR Eric Cedo EVENTS MANAGER Kacey Anderson SENIOR PRODUCER FOR DIGITAL/ONLINE PRODUCTS Pierrette Dagg SENIOR ART DIRECTOR Sylvia Kolaski SALES SUPPORT Suzanne Janik, YahNica Crawford PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Andrew Spanos

CUSTOMER SERVICE MAIN NUMBER: Call (877) 824-9374 or write customerservice@crainsdetroit.com SUBSCRIPTIONS $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. SINGLE COPIES: (877) 824-9374 REPRINTS: (212) 210-0750; or Alicia Samuel at asamuel@crain.com TO FIND A DATE A STORY WAS PUBLISHED: (313) 446-0406 or e-mail infocenter@crain.com CRAIN’S DETROIT BUSINESS IS PUBLISHED BY CRAIN COMMUNICATIONS INC. CHAIRMAN Keith E. Crain PRESIDENT Rance Crain TREASURER Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) EDITORIAL & BUSINESS OFFICES: 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of August, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2014 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

CRAIN’S DETROIT BUSINESS

Page 17

Meat: Recall turns up heat on Wolverine Packing ■ From Page 3

along with the Centers for Disease Control and Prevention, identified patients sickened by E. coli O157:H7. This type of E. coli can cause serious infection with symptoms including severe cramps, nausea and diarrhea. Identified were five Michigan cases, four in Ohio, and one each in Massachusetts and Missouri. Those affected range in age from 19 to 46. The meat was sold for restaurant use, but the federal government hasn’t disclosed the restaurants. It has identified the wholesalers and retailers that took delivery from Wolverine, including Grand Rapids-based Gordon Food Service Marketplace and the M Sixty Six General Store in Orleans west of Grand Rapids. The meat was bought by retailers in Michigan, Ohio, Virginia, Tennessee, Illinois, Minnesota, Georgia, North Carolina, Florida, Indiana, Kentucky, Pennsylvania, North Dakota and Wisconsin. No deaths have been tied to the meat. The bacteria involved is referred to as Shiga toxin-producing E. coli, or STEC. The bacteria can cause severe disease, including bloody diarrhea and hemolytic uremic syndrome, a type of kidney failure, according to the Centers for Disease Control and Prevention. A woman filed a lawsuit in Kalamazoo last week seeking $25,000 from Wolverine claiming she was sickened by its meat and hospitalized for six days. She ate at an unnamed Farmington restaurant. A co-counsel on the case is Seattle law firm Marler Clark LLP, which specializes nationally in high-profile food poisoning outbreaks, and says it has won more than $500 million for clients over the past 20 years.

TRACKING RECALLS There have been periodic outbreaks over the last several years of meat thought to be contaminated, according to the U.S. Department of Agriculture. Below are Class 1 recalls (the most dangerous of three levels of seriousness) and how many recalls were tied specifically to E. coli bacteria. Tonnage is combined for beef, pork, poultry and mixed. 2013 75 total recalls, 13 million tons 52 Class 1 recalls, 12.6 million tons 9 E. coli recalls, 10.7 million tons 2012 82 total recalls, 3.4 million tons 46 Class 1 recalls, 1 million tons 5 E. coli recalls, 63,467 pounds 2011 103 total recalls, 39.7 million tons 62 Class 1 recalls, 38.5 million tons 13 E. coli recalls, 1 million tons 2010 70 total recalls, 34.1 million tons 43 Class 1 recalls, 33 million tons 12 E. coli recalls, 2.3 million tons 2009 69 total recalls, 9.4 million tons 44 Class 1 recalls, 5.4 million tons 16 E. coli recalls, 1.3 million tons 2008 54 total recalls, 154 million tons 42 Class 1 recalls, 9.8 million tons 17 E. coli recalls, 7.1 million tons

Founder Bill Marler, who said he has sued every major U.S. meat manufacturer, outlined what he expects Wolverine’s strategy to be. “Wolverine is a grinding operation that likely sourced trim and other meat to use in producing hamburgers,” he wrote in an email. “They will likely try and point the finger upstream to one of the sources of the meat. However, they likely used multiple sources of meat to make the hamburger in question, so it will be difficult, if not impossible, to sort that out. (Food Safety and Inspection Services) will not fine them or likely do anything. Civil litigation is the only recourse for the consumer.” Bad press and lawsuits trigger worry by suppliers, who may turn elsewhere. “Trying to sell back to that industry that is purchasing can be an uphill battle,” said Ben Chapman, an assistant professor and food safety extension specialist at North Carolina State University. He blogs about food safety at BarfBlog.com. “The loss of that 1.8 million pounds is one thing. It’s difficult to put a monetary value on (goodwill); it’s more than just the product.” Companies that have closed in the wake of a major recall couldn’t survive the combination of lawsuits and loss of trust, Chapman said. In Wolverine’s case, he expects customers to have questions no matter what investigations show. “If everything is up to what’s expected, the buyers may say, ‘What are you to doing to address what went wrong?’ ” he said. “It’s not a random act. Something happened. Either the system they have failed or the system they have wasn’t good enough.” The amount of meat in question is small compared to national beef totals. Nearly 26 billion pounds of beef were produced in 2012; about half of that was ground beef. If beef production has remained on that pace, Wolverine’s recall would represent just 0.0069 percent of the beef supply. The Wolverine recall pales in comparison to the largest recalls. The largest U.S. ground beef recall was 25 million pounds from Rogers, Ark.-based Hudson Foods Co. in 2007. Rival Arkansas-based food processing giant Tyson Foods Inc. eventually spent $632 million to acquire Hudson, which had lost its largest client, Burger King, because of the recall. Congress passed stricter meat quality controls after the situation. Elizabeth, N.J.-based Topps Meat Co. recalled nearly 22 million pounds of ground beef in 2007 after 38 people were sickened with E. coli O157:H7. The company closed within two months of the USDA’s investigation, and was liquidated. Kroger stores in 2008 recalled an undetermined amount of E. coli O157:H7-tainted ground beef that had sickened 21 people in Michigan and 20 in Ohio. That meat had been sold in Kroger supermarkets and supplied to other retailers. Omaha-based Nebraska Beef Ltd. recalled nearly 7 million pounds of meat in 2008 after being linked to nearly 80 confirmed E. coli illnesses. Nebraska Beef, which slaughters cattle for processing, later sued one of its cattle suppliers, Loveland, Colo.-based Meyer Natural Foods LLC, over the situation. The case was settled in 2011.

The last USDA meat recall in Michigan came in 2013, when about 1,000 pounds of salmonella-contaminated ground beef was recalled by Sterling Heights-based Jouni Meats Inc. and Troy-based Gab Halal Foods after it was sold directly to consumers and to an undisclosed restaurant in Macomb County. Wolverine says it sells 4,000 products across 250 brands, and

processes 8 million burger patties weekly. Besides beef, it deals in chicken, pork, lamb, veal, turkey, seafood, wild game, duck, geese and organ meats/variety meats. It opened as a lamb and veal processor in 1937, and began producing beef products in the 1960s. Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

20140602-NEWS--0018-NAT-CCI-CD_--

5/30/2014

2:40 PM

Page 1

Page 18

June 2, 2014

CRAIN’S DETROIT BUSINESS

Google: State sees move as validation of effort put into industry ■ From Page 1

ship-based Visteon Corp., declined to verify whether they are involved in the project. While suppliers are eager to work with Google, the Detroit 3 see the software firm as a competitive threat. “Anybody can do anything with enough time and money,” Mark Reuss, General Motors Co. product development chief, told reporters last week. “If they set their mind to

it, I have no doubt” that they could become “a very serious competitive threat,” he said. But for the state of Michigan, and metro Detroit, Google’s decision validates the effort put into the industry, said Nigel Francis, senior vice president of the automotive office for the Michigan Economic Development Corp. “What you’ve got in California is

really smart people developing software for consumer products; in Michigan, we’re developing software for critical systems on the vehicle,” Francis told Crain’s prior to Google’s announcement last week. “For as masterfully as California can put together a smartphone, Michigan puts together a much more complex, more regulated product called the automobile.”

Francis said the state should see more and more work coming from California as software integration into vehicles continues. “As California and other places get more and more interested in integrating into the car, they’ll have to come where integration happens, and that’s Michigan,” Francis said. “We have to keep on our poker face, and these companies

With all the confusion surrounding healthcare, who knew providing it could be so simple? EXCHANGE SOLUTIONS™

INTRODUCING CAMBRIDGE EXCHANGE SOLUTIONS.

CAMBRIDGE CONSULTING GROUP

There’ss a ne There’ new solu utio ion to pro p ovid ding g gro rou up ben enefi efit co over vera age,, an and it’ss very very si s mple, rea really lly. You gi Yo g ve e you yourr empl mp oy oyeess a se et amo amoun unt of m money ney to sp spend end on be benefi nefits ts – it’s it s li like a ben nefitss allo a lowan w ce – and and th hey use se tha thatt mone oney to o sho shop fo forr the the combination of cov cove erage thatt meet ee s th their indi dividual ual ne eeds ds.. Empl Employ oyeess are em empow powe ered d by by more plan plan cho choic ices. And you’r u’re e ab able to ge get cruc ucia ial co contr n ol ove over cost ostss. Cambridge dge br b ing ngss bene nefits fits,, tec t chnol nology og and d deci d isio sion supp up or ort tools in n a sim simple ple, convenien e t and a d eas easy y to impl mpleme men nt pac packag kage. Add it up,, and the a advantages are cl clea ear.

248.743.4300 ccgexchangesolutions.com

will come here sooner than you think.” Julie Fream, president and CEO of the Troy-based Original Equipment Suppliers Association, said Google pairing with Detroit suppliers provides validation for both parties. “The technology demands are different … and this is a great recognition that they need technical expertise to get their products into vehicles,” she said. “There’s also some marketing going on here, because if this is done in the traditional automo- Fream tive space, there is some recognition and credibility that goes along with that.” Google has been developing selfdriving vehicle technology since 2009, using a fleet of test vehicles equipped with sensors, lasers, radar and computers that process mapping and drive software to allow their vehicles to be driven autonomously. Google says its original test fleet has racked up some 700,000 miles of autonomous driving. The Roush-assembled Google prototypes are small, pod-shaped cars that appear to be the size of a Smart ForTwo with two seats and two doors. It remains unclear where Google will source the vehicles. The cars will be powered by an electric motor and have a top speed limited to 25 mph. In an announcement posted to the company’s blog last Tuesday, Google said it will begin testing the prototypes this summer. Early versions will include manual vehicle controls and will be tested by company “safety drivers,” Google said. A small pilot program in California may follow “in the next couple of years” if steady progress is made on the project, Chris Urmson, director of Google’s self-driving car project, wrote in the blog post. The prototypes, which have safety items such as additional foam at the bumper and a plasticlike windshield, are part of the company’s research laboratory called Google X, which is led by Google co-founder Sergey Brin. “We took a look from the ground up as to what it would be like if we had self-driving cars in the world,” Brin said. “We’ve worked with partners in the Detroit area, Germany and California,” he said without giving specifics. The prototypes let users ask for a destination address and then drive them to it, Brin said. Over the next two decades, selfdriving cars are going to gain a bigger share of the market. Such vehicles will reach 11.8 million in 2035, according to Egil Juliussen, an analyst at IHS Automotive. And by 2050, he expects almost all cars to be selfdriving. They are estimated to fetch premiums that will start at $7,000 to $10,000 in 2025, Juliussen said. Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh Automotive News reporter Ryan Beene contributed to this report.

20140602-NEWS--0019-NAT-CCI-CD_--

5/30/2014

3:17 PM

Page 1

CRAIN’S DETROIT BUSINESS

June 2, 2014

RUMBLINGS

Page 19

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF MAY 24-30

$5M gift to aid women’s health at Oakwood akwood Healthcare Inc. has received a $5 million gift to support women’s health services programs and equipment. That brings donor Karen Colina Wilson Smithbauer’s total contribution to the hospital to $7.2 million, one of the largest donations from a single donor in more than Smithbauer 60 years, according to a news release. Dearborn-based Oakwood Healthcare plans to use the funds to double the size of the Karen Colina Wilson Smithbauer Breast Care Center at Oakwood Southshore in Trenton, according to the news release. The donation will fund a new pavilion named for Smithbauer at the Southshore location and a new women’s health center at Oakwood HospitalDearborn. Funds will also be used for equipment and technology, and community outreach. Smithbauer, chairwoman of Oakwood’s women’s advisory committee, is a breast cancer survivor.

Walsh College credo: ‘Honor thy spouse’ It will be a husband-andwife affair at Walsh College’s 103rd commencement ceremony on June 16 at Zion Christian Church in Troy. The keynote speaker, who will also receive an honorary doctor of laws degree, will be Jeffrey Bergeron, husband of Walsh President Stephanie Bergeron. Jeffrey Bergeron, chairman of the board of United Way of Southeastern Michigan, reJ. Bergeron tired last year as managing partner in the Detroit office of Ernst & Young LLP. After joining E&Y in 2002, he S. Bergeron

grew the Detroit office from 225 employees to 500. Also receiving an honorary doctor of laws degree will be Aubrey Lee, a legend in Detroit banking. Lee is credited with, in 1966, being the first AfricanAmerican to reach the managerial ranks at the National Bank of Detroit, where he later reLee tired as a senior vice president.

Motown Queen of Soul now a Harvard Doctor of Arts Also picking up an honorary degree last week was Aretha Franklin (who has many), this one a doctor of arts from Harvard University. Seven others also received the honorary degree, including former President George H.W. Bush and former New York Mayor Michael Bloomberg. Franklin also picked up an honorary degree from New York University on May 21. She holds other honorary degrees from universities that include Princeton, Yale, the University of Michigan and Wayne State.

Health equity council to address LGBT issues As Gov. Rick Snyder and top business leaders in Michigan expressed support for expanding state civil rights law to include lesbian, gay, bisexual and transgender people, a new health equity council was formed last week in Southeast Michigan. The Ferndale-based Sexual Orientation and Gender Identity Health Equity Council of Southeast Michigan includes representatives of Beaumont Health System, CHE Trinity Health, Henry Ford Health System, St. John Providence Health System and the Oakland County health division. The health systems joined with lesbian, gay, bisexual and transgender community organizations with pledges to help identify and address health disparities in those population groups that often lead to poorer health care and med-

ical outcomes. The health council, coordinated by Affirmations, a LGBT community group, plans to meet six times this year to develop a plan to close the health care gap for LGBT people. In a statement last week, Gov. Snyder expressed support for lawmakers to amend the Elliott-Larsen Civil Rights Act to include protections based on sexual orientation and gender identity before year-end.

CMU sets grand opening Central Michigan University plans a grand opening this month for the 4,000 square feet of space at One Kennedy Square that it moved into earlier this year. The Detroit office, at 777 Woodward Ave., will house CMU staff devoted to admission and outreach services. Pre-college workshops, summer classes, and dual and bridge enrollment programs will be offered there, said Steve Smith, CMU’s director of public relations. Locally, CMU also has space in Warren, Troy, Livonia, Dearborn, Auburn Hills and Southfield. It joins a roster of public universities, including Eastern Michigan, Grand Valley, the University of Michigan and Michigan State, with a presence in Detroit. Wayne State University’s main campus is in the city.

Pro teams across leagues may get a ‘Ballmer boost’ If Detroit native and former Microsoft Corp. CEO Steve Ballmer does, in fact, pay $2 billion for the Los Angeles Clippers of the National Basketball Association, professional sports teams across North America could be worth more when they come on the market. The first franchise to test the “rising tide lifts all ships” theory could be the National Football League’s Buffalo Bills. Grosse Pointe Shores businessman Ralph Wilson paid $25,000 to launch the Bills in 1960; he died in March at age 95. “The Clippers sale impacts the profile for clubs such as the Lakers, Knicks, Nets and Bulls, but will also raise sale value for smallto-mid-market clubs, just not at such an exponential rate,” said Maury Brown, president of the Portland, Ore.-based Business of Sports Network. The Clippers sale price would be $1.675 billion more than the $325 million Tom Gores paid for the Detroit Pistons in 2011. Ballmer, 58, CEO at Microsoft from 2000 until this year, is said by Forbes to be worth an estimated $20 billion.

Automobile editor out; operations to leave Ann Arbor ean Jennings resigned as editor of Automobile magazine as part of a reorganization by publisher Source Interlink, Automotive News reported. The key components of Automobile’s editorial operations will move from Ann Arbor to Los Angeles, and about 75 employees in Michigan and Florida will lose their positions, the company said. Some employees will remain in a Royal Oak office. Mike Floyd, an editor at Source Interlink’s Motor Trend who formerly worked for AutoWeek and the Detroit Free Press, replaced Jennings. Bonita Springs, Fla.-based Source Interlink is restructuring its automotive titles as TEN: The Enthusiast Network.

City sets launch of entrepreneurs program 䡲 The city of Detroit plans to launch a new program for entrepreneurs. Mayor Mike Duggan said Friday the Detroit City Council recently allocated $3 million from federal block grants to launch the program. To lead the effort, the city hired Jill Ford — no relation to the Ford family — under Tom Lewand, the group executive for jobs and economic growth. Ford has spent the past decade working with entrepreneurs, from funding startups to angel investing in Silicon Valley. Lewand said the new program could improve on what exists to support entrepreneurs, and add services to fill gaps. More details are expected in the coming month.

COMPANY NEWS 䡲 The owner of Supino Pizzeria is starting renovations on a full-service restaurant next door to his Eastern Market shop. He said he hopes the La Rondinella will be open by summer’s end in the former Taste of Ethiopia space. 䡲 Dan Gilbert bought two buildings and a 4,000square-foot vacant lot for a new development in Detroit’s Capitol Park last month. Sale prices were not disclosed. The 42,000-squarefoot building at 119 State St. was listed for $3 million, and the 10,000-square-foot Church Building at 45 W. Grand River was listed for

$1.5 million, according to Washington, D.C.-based real estate information service CoStar Group Inc. 䡲 The Detroit Lions signed a multi-year advertising deal with the University of Toledo, becoming the third Detroit sports team, after the Detroit Tigers and Detroit Red Wings, to establish a marketing relationship with the school. 䡲 The Detroit Red Wings ranked fifth in the hockey fan support index released by New York City-based market research firm Brand Keys Inc., based on a survey of 150 fans of each of the 30 National Hockey League teams.

OTHER NEWS 䡲 After completing its

first block-by-block survey of the city, the Detroit Blight Elimination Task Force announced it would cost an estimated $850 million over five years to remove all residential and commercial blight in the neighborhoods. 䡲 ArtServe Michigan, a state advocacy organization for arts and cultural groups, called on arts supporters to contact senators to oppose a bill, passed by the House, that would prevent the Detroit Institute of Arts from seeking another millage to support its operations after the current millage expires. 䡲 The Obama administration named Southeast Michigan one of 12 regions to receive special attention under a new federal program designed to attract manufacturers and create jobs, AP reported. The Advance Michigan initiative will be led by Wayne County Edge, Detroit-based Workforce Intelligence Network and the Ann Arbor-based Center for Automotive Research. 䡲 Detroit Emergency Manager Kevyn Orr, who lives full time in Washington, D.C., and whose 18-month term ends in September, said he is interested in purchasing a home in Orr one of Detroit’s historic neighborhoods, AP reported. 䡲 The U.S. Department of Health & Human Services announced $15 million in combined funding to the Altarum Institute, Ann Arbor, and the University of Michigan’s Michigan Surgical and Health Optimization Program, AP reported. 䡲 Automotive and technology are converging to help make Detroit a tech hub, with cars becoming “technology on wheels,” said Quicken Loans founder

Dan Gilbert, one of the speakers at a technology event hosted by Detroit-based MSX International and AutoWeek, a sister publication of Crain’s Detroit Business. 䡲 Organizers of Tuesday’s “RoboCop Day” in Detroit say an announcement will be made about the statue of the movie hero expected to be installed in the city later this year, AP reported. The celebration marks the DVD release of the recent remake of the 1987 science fiction film set in Detroit. 䡲 A reported 107,000 visitors attended the Movement electronic dance music festival at Hart Plaza. The event was produced by Ferndale-based Paxahau Promotions Group LLC. 䡲 Operations returned to normal at Detroit Metropolitan Airport after a more than two-hour lockdown prompted by a passenger who entered a secure area without a security check. The U.S. Transportation Security Administration said the passenger arrived at the airport from Little Rock, Ark., and may have missed a connection to Los Angeles. 䡲 A team from Melvindale High School won first place in the Engineering Society of Detroit’s Engineering SMART Michigan Competition at Lawrence Technological University. Runner-up teams from Melvindale and Hamtramck high schools also won four-year scholarships to Lawrence Tech. 䡲 Rochester sports entrepreneur and former Detroit Pistons executive Andy Appleby and his co-owners of English professional soccer team Derby County are planning for next season after a last-minute defeat that kept the team from promotion to the 20-team Premier League and a $200 million windfall. 䡲 Gov. Rick Snyder signed legislation to raise Michigan’s minimum wage over the next four years to $9.25 an hour from the current $7.40. The organization Raise Michigan reacted by filing a petition calling for a state ballot initiative to increase the minimum wage to $10.10 an hour by 2017. 䡲 A group of charities, permanent poker room operators and gaming suppliers filed a motion with the Michigan Court of Claims seeking to block charity poker rules that took effect in May, claiming they are outside the Michigan Gaming Control Board’s scope of authority. 䡲 Michigan International Speedway generates $414 million in economic activity annually, according to a new report from the University of Michigan. About 60 percent of the more than 385,000 people who visit the Brooklyn facility each year come from outside the state, the report said.

DBpageAD_DBpageAD.qxd 5/23/2014 4:43 PM Page 1

YOUR BUSINESS DEMANDS RESULTS. Get the coverage, speed and reliability you need to succeed with America’s Largest 4G LTE Network.

Limited-Time Offer

Get $100 off ANY smartphone $199.99 and up. New 2-yr. activation required. Offer valid through 6/15.

9999

Samsung Galaxy S®5

$249.99 2-yr. price – $100 instant savings – $50 mail-in rebate debit card. New 2-yr. activation required.

Limited-Time Offer

FREE

Verizon Ellipsis™ 7 $49.99 2-yr. price – $49.99 instant discount. New 2-yr. activation required. Offer valid through 6/15.

GET

RANKED #1 IN OVERALL NETWORK PERFORMANCE*

The MORE Everything Plan for Small Business

RootMetrics® 2nd Half 2013 Independent National Study

• Share up to 100 GB of data with up to 50 devices

The most comprehensive national mobile network performance study ever undertaken.

• Enjoy Unlimited Talk & Text, 25 GB cloud storage and more network strength

RootMetrics® RootScore® Award Winner

FOR THE BEST RESULTS FOR YOUR BUSINESS USE VERIZON CALL: 1.800.VZW.4BIZ

CLICK: verizonwireless.com/business

VISIT: verizonwireless.com/storelocator

* Rankings based on RootMetrics US National RootScore Report: covering July-December 2013 for network performance test results of 4 mobile networks as an average across all available network types. The RootMetrics award is not an endorsement of Verizon. Your results may vary. Visit www.rootmetrics.com for details. Activation/upgrade fee/line: Up to $35. IMPORTANT CONSUMER INFORMATION: Subject to Customer Agreement, Calling Plan, rebate form & credit approval. Up to $350 early termination fee & add’l charges apply to device capabilities. Offers & coverage, varying by service, not available everywhere; see vzw.com. Restocking fee may apply. Rebate debit card takes up to 6 weeks & expires in 12 months. Samsung and Galaxy S are both registered trademarks of Samsung Electronics America, Inc. Ellipsis™ is a Verizon Wireless trademark. 4G LTE is available in more than 500 markets in the U.S. © 2014 Verizon Wireless. H5822