Crain's Detroit Business, Nov. 10 issue by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 45

NOVEMBER 10 – 16, 2014

$2 a copy; $59 a year

Page 3 Ann Arbor office deep in the heart of Texas VC firm’s plan

Departing state Rep. Frank Foster: “My drive wasn’t to serve in the Legislature until the constitution said I couldn’t, but doing something meaningful while I was there.”

Second Stage

$1.4B focus: Safety, systems, blight

3 firms overhaul IT and reboot bottom lines, Page 11 CRAIN’S MICHIGAN BUSINESS

BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

Grand Rapids gets cracking with plan to fix roads, Page 17

This Just In AL GOLDIS

PR veteran Bailey to join Truscott Rossman in Detroit

NEWSPAPER

Longtime public relations expert John Bailey is coming out of retirement to join Truscott Rossman as its first business strategist. Bailey will be based in the Detroit office of the Lansingbased public relations firm. Bailey’s expertise includes public relations strategy, media relations and Bailey crisis communications, and he often speaks on the topic of ethics in business. Bailey founded an eponymous PR firm in 1996 and grew it to $5 million in revenue before selling it in 2009 to Grand Rapids-based Lambert, Edwards & Associates. Bailey remained a managing director of the firm until 2011. Bailey also is the author of The Power of Ownership: How to Build a Career and a Business and a frequent speaker on the topic of ethics in business. He is a member of the Public Relations Society of Detroit’s Hall of Fame.

City looks to reinvest after bankruptcy

A BATTLE LOST, WAR STILL ON

rank Foster championed the end of discrimination based on sexual orientation and lost his northern Michigan state House seat because of it. He – and some major state employers – are working to make sure that’s not the end of the story | PAGE 34

What’s next in the wake of Detroit’s just-concluded bankruptcy case? A $1.4 billion city reinvestment spending spree heavily weighted in new financial management systems, public safety and blight-busting. With it comes the appointment of a nine-member Financial Review Commission to supervise that spending, a group that includes Mayor Mike Duggan, Detroit City Council President Brenda Jones and seven independent members. U.S. Bankruptcy Judge Steven Rhodes appealed to Gov. Rick Snyder Friday to build a commission that can keep city officials’ influence in check. “It is a plain conflict of interest for the mayor and the Rhodes council president to have a vote. It both skews the commission’s voting and risks undermining the commission’s effectiveness in ensuring the implementation of the plan,” Rhodes stated in his ruling Friday. “This problem requires that the governor appoint members of the commission who are fully willing and able to exercise the independent, skilled and experienced judgment that (the state law) contemplates,” Rhodes said.

DEMS COULDN’T GET OUT VOTE, GOP COULDN’T LAND A SENATE SEAT | PAGE 3 See Bankruptcy, Page 35

Plastech in legal battle over Chinese car contract BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

Julie Brown, the embattled former CEO of Plastech Engineered Products Inc., is back in court six years after her company was liquidated under bankruptcy. Brown’s new venture, Dearbornbased Plastech Holding Corp., is taking action against a company it says interfered with its relationship with a Chinese carmaker. Plastech Holding filed a suit in

U.S. District Court for the Eastern District of Michgan in Detroit on Oct. 21 against Virginia-based WM GreenTech Automotive Corp. The case centers on claims that GreenTech inBrown tentionally interfered with Plastech’s relationship with Anhui Jianghuai Automobile Co.

Ltd., more commonly known as JAC Motors. Plastech alleges GreenTech entered into an agreement this year to distribute JAC Motors’ electric cars, despite a prior exclusive contract agreement between JAC and Plastech. However, GreenTech attorneys argue that Plastech refuses to supply the defendants or court with a copy of the contract in question. JAC Motors, meanwhile, claims the contract does not exist.

Plastech and GreenTech are trading jabs in court documents — all while uncertainty remains on whether the U.S. market is even ready for Chinese-made cars.

Deal or no deal? According to the October complaint, Plastech Holding signed a framework agreement in October 2010 to allow Plastech to distribute See Plastech, Page 37

Yearning for legal peace of mind? AT T O R N E Y S AT L AW

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Sit down for this: Office furniture activity index is highest in 7 years A quarterly index measuring activity in the office furniture industry reached its highest point in more than seven years last month, MLive.com reported. Holland-based Michael A. Dunlap & Associates surveyed industry executives and suppliers, crunched the numbers and came up with a figure that was the best reading since July 2007, before the Great Recession hit the industry and pretty much every other sector. Results show the office furniture industry “continues to move on a very steady and improving trend line,” Michael Dunlap, principal of the firm, said in a statement. “We are confident that the industry is still on course to achieve its best year in more than a decade.”

Stryker to pay more than $1B for recalled hip devices Kalamazoo-based Stryker Corp. agreed to pay more than $1 billion to resolve lawsuits over thousands of hip implants recalled in 2012 after patients complained of pain, swelling and metal debris from the devices. Stryker will pay a base amount of $300,000 per case to patients who had the devices surgically removed, Kim Catullo, one of the company’s lawyers, told a New Jersey judge. The device maker faces more than 4,000 suits consolidated in New Jersey state court and federal court in Minnesota. Stryker withdrew its Rejuvenate and ABG II devices in July 2012 after warning surgeons they could harm tissue around the hip and cause other health problems. The company said that it set aside more Bay County’s Monitor Township. The automotive parts manufacturer expects to create 25 jobs.

Election leftovers: School merger isn’t, recall wasn’t, mayor can’t be

MEDC awards $650K to 2 firms that plan to create 115 jobs The Michigan Economic Development Corp. awarded $650,000 in grants for two projects, The Associated Press reported. LTC Roll & Engineering Co., based in St. Clair County’s Cottrellville Township, will receive a $450,000 performance-based grant through the Michigan Business Development Program. The manufacturer plans to buy a new plant and create 90 jobs. Mando America Corp. was awarded $200,000 to help renovate its plant in

䡲 In last week’s election, voters in the Ann Arbor Public Schools turned down a proposal to merge with the Whitmore Lake Public Schools, while voters in the latter district approved the proposed merger, The Ann Arbor News reported. The measure had to pass in both districts. 䡲 In news involving an election that didn’t happen, Edward Pinkney was found guilty of five felony counts of election fraud for changing dates on petitions used to gather signatures in the planned recall of Benton Harbor Mayor

than $1.4 billion to cover costs of handling cases over the recalled hips, so the settlement fell into the “low end of the range of probable loss.” Unlike other device makers, Stryker settled before facing a trial over claims their hips suffered from design flaws and the company failed to warn patients about the devices’ risks. “It’s odd that they would not try any cases and then settle so early in the litigation process,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia. “Sounds like they might have been afraid of facing even bigger liability if they didn’t settle them now.” — Bloomberg News

James Hightower, The Associated Press reported. In September, the Michigan Court of Appeals ordered the recall be taken off the ballot. 䡲 Voters in Grand Rapids approved a change to the city charter under which nobody can serve as mayor or city commissioner for more than eight years, MLive.com reported. George Heartwell has been mayor for 11 years. Do the math. He can’t run for re-election next fall.

MICH-CELLANEOUS 䡲 Perrigo Co. agreed to buy Belgian

health products provider Omega Pharma NV for $4.5 billion, including debt, in a deal that will expand Perrigo’s presence in Europe, Bloomberg News reported. Perrigo, formerly based in Allegan but now an Irish

company for tax reasons, will rank among the world’s five largest providers of over-the-counter health care remedies, the company said. 䡲 Warren-based Ascension Health Michigan named Kathy Young president and CEO of Kalamazoo-based Borgess Health effective early next year, MiBiz reported, succeeding the retiring Paul Spaude. Borgess Health serves patients across 10 counties in southern Michigan. 䡲 Calgary, Alberta-based Enbridge Inc. said the pipeline company has spent about $1.21 billion to clean up a 2010 oil spill ignto the Kalamazoo River system. TV stations WOOD and WWMT reported that the updated estimate is about $86 million higher than a previous figure released in December. 䡲 The new issue of Global Trade Magazine picked Grand Rapids as

one of “America’s Best Cities for Global Trade,” putting it in its top 10 “Emerging Cities.” 䡲 The West Michigan Horticultural Society, owner of the Frederik Meijer Gardens and Sculpture Park in Grand Rapids, bought the United Auto Workers Region 1-D building last month, The Grand Rapids Press reported. The building is named after former UAW President Owen Bieber, who grew up in nearby Dorr and also was a longtime friend of the late Frederik Meijer. 䡲 Michigan State University alumni Peter and Joan Secchia donated $3 million to support the men’s basketball program and to endow the football team’s defensive coordinator position. Peter Secchia, former chairman and CEO of Grand Rapids-based Universal Forest Products Inc. and former U.S. ambassador to Italy, previously funded MSU’s softball stadium. 䡲 One reactor unit of the D.C. Cook Nuclear Plant near Bridgman was taken offline and the other operated at half power while a storm passed over Lake Michigan, The Grand Rapids Press reported. On Nov. 1, both reactors were shot down because of rough lake conditions. So to recap: There’s a nuclear plant next to a big lake where high winds and waves often occur. 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.

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November 10, 2014

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Texas VC firm opens branch in Ann Arbor Some portfolio companies may move here BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

A Houston-based venture capital firm that has raised more than $100 million for its newest fund is to announce Monday that it has opened an office in Ann Arbor and recruited Adrian Fortino, formerly a vice president at Invest Detroit, to run it.

Blair Garrou, a partner and cofounder of Mercury Fund, said that his firm has big plans for the Michigan office. He said that not only will the new fund invest in local earlystage high-tech companies, but it plans to move here other Midwest companies in which it invests. Garrou said Mercury looked hard at opening an office in Chicago but chose Ann Arbor because “there’s so much development talent in Michigan. We couldn’t match that in Chicago. As we invest in Midwest companies, we’ll want to move some of them to Ann Arbor. And we’ve already got a company in Texas; we are looking at opening

a secondary office in Ann Arbor.” He said there is a depth of engineering, computer science and machinelearning talent in the area, bolstered by graduFortino ates of the University of Michigan. One of Mercury’s main areas of investment is biotech, and there are numerous contract research organizations in Ann Arbor that were founded by former Pfizer Inc. employees after it closed its local op-

erations in 2008. Garrou said Mercury, which was founded in 2005 to provide seed- and early-stage funding to tech companies and now has more than $225 million under management, expects to finish fundraising on its third fund, Mercury Fund Ventures III LP, in the next two or three weeks. “I don’t know what our final close will be, but it will be more than $100 million, and that’s the fund Adrian will be investing out of,” he said. Fortino was managing director of both of Invest Detroit’s funds, the First Step fund, which typically See Invest, Page 33

Inside

Q&A: New EAA leader spells out her priorities, Page 4 Company index These companies have significant mention in this week’s Crain’s Detroit Business:

An elephant and a donkey in need of horse sense

Aisin World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Autoliv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Avanti Law Group . . . . . . . . . . . . . . . . . . . . . . . . . 23 The Big Salad . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Botsford Hospital . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Business Leaders for Michigan . . . . . . . . . . . . . . . 10 Causley Automotive Group . . . . . . . . . . . . . . . . . . . 7 Colliers International . . . . . . . . . . . . . . . . . . . . . . 30 Core Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 County Road Association of Michigan . . . . . . . . . . 19 Crest Automotive Group . . . . . . . . . . . . . . . . . . . . . 7 Cribspot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Danlaw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Detroit Materials . . . . . . . . . . . . . . . . . . . . . . . . . 23

REPUBLICANS: Campaign stumbles DEMOCRATS: Johnson’s high-tech plan to get out the vote fizzles helped sink Land amid GOP wave BY CHRIS GAUTZ

BY CHRIS GAUTZ

CAPITOL CORRESPONDENT

See Republicans, Page 36

Johnson

PIERRETTE DAGG/CDB

Domino’s Pizza . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Dow Chemical . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Education Achievement Authority . . . . . . . . . . . . . . 4 El Vocero Hispano . . . . . . . . . . . . . . . . . . . . . . . . 22 Etkin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 General Motors . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Inteva Products . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Johnson Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Kelly Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

hen it came to Michigan’s open U.S. Senate seat, 2014 seemed to have it all for Republicans. It was a midterm election year, which typically favors the party not in the White House; there was an unpopular Democratic president to run against; and there was a well-financed and organized effort nationally to support Republican candidates to regain control of the Senate. “This was a good shot for us,” Michigan Republican Party Chairman Bobby Schostak said. Land But it ended up being a huge opportunity missed, as former Republican Secretary of State Terri Lynn Land lost in a landslide to U.S. Rep. Gary Peters, D-Bloomfield Township, by 14 percentage points. Her resounding defeat, though, came in the midst of a huge Republican wave in the state and nationally, making the reason for her loss simple to understand, political watchers say. “We had a bad candidate, who then made a series of bad strategic decisions,” said Greg McNeilly, president of the Michigan Freedom Fund, a Republican-oriented nonprofit. So why was Land the candidate? Essentially, she was the only one to raise her hand. Popular and respected Republican U.S. Reps. Dave Camp of Midland and Mike Rogers of Brighton decided to retire from Congress this year and both were considered top prospects for the seat. U.S. Rep. Candice Miller, R-Harrison Township, took herself out of the running early, saying she in-

Detroit Wallpaper . . . . . . . . . . . . . . . . . . . . . . . . . 10

emocrats traditionally do not fare well in midterm elections. But Lon Johnson, the new Michigan Democratic Party chairman, came in planning to change that. For more than a year leading up to last week’s midterm election, Johnson spoke confidently about his plan to turn out at least 200,000 Democratic voters who didn’t vote in 2010 to help propel his candidates to victory. But the plan didn’t work. Republicans won almost across the board in the major statewide offices and the Legislature. Gov. Rick Snyder defeated Democrat Mark Schauer by 4 percentage points, Attorney General Bill Schuette and Secretary of State Ruth Johnson were re-elected with ease, the state Senate increased its super majority by one seat, and the state House picked up four more Republican seats, giving the party a 63-47 majority. The notable exceptions were the drubbing of Republican U.S. Senate candidate Terri Lynn Land by 14 percentage points to U.S. Rep. Gary Peters, and the near sweep of all but one of the university board races by Democrats. But not only did Democrats lose most of the biggest races, turnout overall ended up being less last week than it was in 2010 by about 80,000 votes. “We are not happy

Republicans won almost across the board – with one notable exception

See Democrats, Page 36

Main Street Strategies . . . . . . . . . . . . . . . . . . . . . 36 Metaldyne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Michigan Democratic Party . . . . . . . . . . . . . . . . . . . 3 Michigan Freedom Fund . . . . . . . . . . . . . . . . . . 3, 36 Michigan Manufacturing Technology Center . . . . . 15 Michigan Municipal League . . . . . . . . . . . . . . . . . 18 Michigan Republican Party . . . . . . . . . . . . . . . . 3, 36 Miller Buckfire . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 MSX International . . . . . . . . . . . . . . . . . . . . . . . . 25 NSF International . . . . . . . . . . . . . . . . . . . . . . . . . 25 One Detroit Center . . . . . . . . . . . . . . . . . . . . . . . . 30 Penske Automotive Group . . . . . . . . . . . . . . . . . . . 25 Pinkerton Consulting & Investigations . . . . . . . . . . 25 Plastech Engineered Products . . . . . . . . . . . . . . . . . 1 Plastech Holding . . . . . . . . . . . . . . . . . . . . . . . . . . 1 PRapid Global Business Solutions . . . . . . . . . . 11, 12 Regional Transit Authority of Southeast Michigan . 10 RevSix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Root 4 Creative . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ShindelRock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SkySpecs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Sommers Schwartz . . . . . . . . . . . . . . . . . . . . . . . . 37 TI Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 TRW Automotive Holdings . . . . . . . . . . . . . . . . . . . 25 Truscott Rossman . . . . . . . . . . . . . . . . . . . . . . . 1, 36 Vanguard Public Affairs . . . . . . . . . . . . . . . . . . . . 36 Vera and Joseph Dresner Foundation . . . . . . . . . . . . 6 W3R Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 6 BUSINESS DIARY . . . . . . . . . . . . . . . . 32 CALENDAR . . . . . . . . . . . . . . . . . . . . 31 CLASSIFIED ADS . . . . . . . . . . . . . . . . 33 CRAIN’S LIST . . . . . . . . . . . . . . . . . . 27 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 LETTERS . . . . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . 17 OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 32

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RUMBLINGS . . . . . . . . . . . . . . . . . . . 38 STAGE TWO STRATEGIES . . . . . . . . . . 15 WEEK ON THE WEB . . . . . . . . . . . . . . 38

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Priorities of new EAA leader: Improve learning environment, internal oversight you turn that around? The Education AchieveThere was a drop after ment Authority, the turnthe first year. It has been around district for the stable from last year to stateâ&#x20AC;&#x2122;s lowest-performing this year. In fact, we proschools, officially has a jected 6,100 and, with the new chancellor now that charters, about 7,000. We its board appointed interare at 7,300. We exceeded im Chancellor Veronica our projections. Conforme to the position I wasnâ&#x20AC;&#x2122;t here during vacated by John Covington that time when enrollin June. ment dropped so I canâ&#x20AC;&#x2122;t Conforme, a graduate comment about when the of Syracuse University and precipitous drop hapColumbia University, previVeronica pened. We have stabilized ously held posts with The Conforme, enrollment. When schools College Board and the New Education are improving, when they York City Department of EdAchievement are demonstrating results ucation. She was appointAuthority â&#x20AC;&#x201D; when the families start ed last week. to see that these are great Within the next 30 days, Conforme, 41, said she will schools â&#x20AC;&#x201D; they will come. present a plan for what she will do After some uproar over travel and to improve the nine elementary and middle schools and six high credit card expenses of EAA adminisschools, all in Detroit, in the EAA tration, you revamped those policies as interim chancellor. What other and its administration. She spoke with Crainâ&#x20AC;&#x2122;s reporter oversight or administrative aspects of Kirk Pinho on Thursday. The inter- the EAA need to be addressed? We now have more oversight view has been edited for clarity and length.

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Talk about your priorities for your first weeks and months as the new EAA chancellor. I have had two major goals Iâ&#x20AC;&#x2122;ve been focused on the last four months that will continue to be priorities moving forward. First, enhancing the student experience in our schools by ensuring they have a safe, secure and nurturing learning environment that is focused on improving academic achievement. The second priority has been really doing an internal operations review of the EAA and starting to address some of the issues that weâ&#x20AC;&#x2122;ve found. Some things that Iâ&#x20AC;&#x2122;ve already done include improving financial controls. My goal is to continue to make changes in the operational and organizational infrastructure. Today we announced a conflictof-interest policy and an ethics hotline. We did have a policy in place, but employees were not signing off on confirming that they did not have a conflict of interest, and there was no actual way that people were able to report ethics violations anonymously. What types of challenges lie ahead and how will they be addressed? I think we have a number of them. One is how we focus on improving outcomes for students, and thatâ&#x20AC;&#x2122;s in a variety of ways. I think we have a challenge around recruiting the best talent, retaining that talent, and supporting and helping staff and teachers grow over time. We have to recruit the best people, retain them, incentivize them and support them. I would say that the EAA schools have done a lot of work improving the culture and climate in all the schools. That includes improved safety in all the schools. Falling enrollment in EAA schools has been a concern, dropping from 11,000 from when it started running the schools in 2012 to around 7,200 for the current academic year. How do

and documentation around what should be approved travel and what should not be. That is part of the operational review. Everything is up for review. Everything from instruction â&#x20AC;&#x201D; and how we are doing it â&#x20AC;&#x201D; to how we are doing safety, security â&#x20AC;Ś how we can continue to improve on that, to the policy on conflict of interest, ensuring that we have high integrity and standards for all of our employees. What else is important to add? One of the things Iâ&#x20AC;&#x2122;m still doing is really getting into schools. Iâ&#x20AC;&#x2122;ve held teacher and staff forums in every single one of our schools to hear directly from our teams as to what is working and whatâ&#x20AC;&#x2122;s not. That, coupled with the top-to-bottom review and my meetings with parents and community members â&#x20AC;Ś will be taken into account as we prepare a plan for improving our schools and operations. We have no more time to waste.

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Dresner Foundation assets hit $140M; to begin accepting grants Kevin Furlong, who served as accountant for the Dresner family, Dresner’s Highland Cos. and the family’s other apartment and industrial sites development companies Furlong in metro Detroit. Another $10 million or so in assets has yet to transfer from the estate, Furlong said. The foundation’s existing assets rank it among the 20 largest foundations in Michigan, according to

BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

A private foundation funded by the late real estate developer Joseph Dresner is coming into its own. Transfers of cash, real estate interests, cash and stock from Dresner’s estate following his death in 2012 increased the assets of the West Bloomfield-based Vera and Joseph Dresner Foundation Inc. to $78.5 million in 2012 from $1.5 million in 2011. By the end of last year, the foundation’s assets had reached $140.3 million, according to the foundation’s CEO and CFO,

the Council of Michigan Foundations. Serving on the foundation’s board with Furlong are Lori Dresner, Dresner’s daughter in Colorado; Gary Weisman,a principal with General Development Co. in Southfield; and Mark Cohn, a shareholder of Southfield-based Seyburn Kahn PC. Over the past two years, the Dresner Foundation has quietly been making multimillion-dollar grants as it puts in place systems to begin accepting grant requests, Furlong said. In September, it hired a program officer to assist Lori Dresner in the grant review process. Grants made in 2013 and this year have been focused in three ar-

eas that were important to both Joseph, who was 87 when he died, and his wife, Vera Dresner, who died in the late 1990s. Those areas are health research, youth programs and animal welfare. Joseph Dresner’s struggle with the blood disorder myelodysplasia gave him an appreciation for the need to fund health research, Furlong said. He donated a total of $5 million to the Barbara Ann Karmanos Cancer Institute while he was alive. Today, the foundation continues to support the areas the couple was passionate about, Furlong said. Multiyear grants made last year and this year have included:

having options

$5 million to Ann Arbor-based North Star Reach to construct a camp for children with chronic and life-threatening health challenges and their families. $3.25 million to the Jewish Federation of Metropolitan Detroit and United Jewish Foundation to support several programs, including the Jewish Family Service of Metropolitan Detroit’s emergency needs for families program. $2 million to the Michigan Humane Society to help fund the construction of its new Detroit Animal Care Campus. $1.3 million to Jewish Family Service of Colorado for the Safety Net and Lunchbox Express programs. $125,000 in grants to Warrenbased Winning Futures to help fund its mentor programs for high school students. As the remainder of the assets transfer from Dresner’s estate into the foundation, Furlong said he expects the annual grant budget to be $6 million to $7 million. The foundation plans to roll out a grant solicitation process next year. Until then, it is only taking grant requests by invitation. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

Botsford plans $160M expansion Two months after agreeing to combine into eight-hospital Beaumont Health, 330-bed Botsford Hospital announced last week a $160 million expansion plan for its Farmington Hills campus. Botsford CEO Paul LaCasse, D.O., said the osteopathic hospital plans to begin construction next summer after receiving expected certificate-of-need approval in the spring from the Michigan Department of Community Health. LaCasse said construction will include a five-story, 80-bed tower, bringing the total number of private patient rooms to 160 with an additional 24 private beds in the intensive care unit. Most hospitals in Southeast Michigan have been converting semiprivate rooms into private for patient convenience. “This has been overdue for a number of years,” LaCasse said. Botsford’s emergency and trauma center also will be expanded and critical care and observation units added. Surgical services will be updated with nine new operating rooms.

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BANKRUPTCIES The following business filed for Chapter 11 protection in the U.S. Bankruptcy Court in Detroit Oct. 21Nov.7. Under Chapter 11, a company files for reorganization. Detroit Auto Recovery Inc., 14201 Joy Road, Detroit, voluntary Chapter 11. Assets and liabilities not available. Compiled by Anjana Schroeder

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Causley Group buys Macomb auto dealership land, franchise

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Causley Automotive Group LLC has purchased the Macomb Township dealership property and Hyundai franchise that formerly operated as Crest Volvo Hyundai. Causley paid Crest Automotive Group $3.13 million for the real estate and an undisclosed amount for the Hyundai franchise. The deal closed Oct. 31 and took the better part of a year to negotiate, said Joseph Sowerby, partner at Mt. Clemens-based Anton, Sowerby & Associates, who served as broker on the deal. The dealership began operating as Causley Mazda Hyundai on Nov. 1. The 28,000-square-foot dealership, which sits on 4.5 acres fronting Hall Road, is undergoing significant renovations, Sowerby said. The Volvo franchise that Crest previously operated was not part of the deal. It was closed as part of a consolidation program, said Bill Chope, president of Crest Automotive Inc., in an email. Thirty employees continued on with Causley Automotive, he said. Rob Causley, president and CEO of Causley Automotive Group, which operates Jim Causley Buick GMC in Clinton Township, did not return calls last week. Chope said the decision to sell the dealership was made after Sowerby opened a discussion about a deal. “We were excited by Rob Causley’s plan for Hall Road and the energy he would bring to the market for Hyundai and now with Mazda,” he said. The deal will allow Crest “to continue to expand our business, first with our existing remodeled locations and then the opportunity to grow in the future,” Chope said. Crest operates Crest Lincoln in Sterling Heights, Crest Ford in Center Line and Crest Ford Flat Rock. Its owner is Paul Alandt, who is married to Lynn Alandt, a greatgranddaughter of Henry Ford and cousin of Ford Motor Co. Executive Chairman Bill Ford. The automotive dealership group recently completed a $3 million expansion and renovation at Crest Ford in Center Line, Chope said. That followed a $750,000 renovation at Crest Lincoln in 2013. Next year, the group plans to invest $100,000 to add a Lincoln “Black Label” studio at the Sterling Heights dealership, he said. Lincoln plans to begin rolling out top-of-the-line Black Label trim levels for nameplates including the MKZ and MKC compact crossover at year’s end, according to Automotive News, a sister publication of Crain’s Detroit Business. Chope said Crest Automotive also plans to begin a $750,000 expansion and remodeling of Crest Ford Flat Rock in the coming year. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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CRAIN’S DETROIT BUSINESS

OPINION

LETTERS

Patterson should back transit options

Showcase Motown sound in revue

Brooks Patterson has been a tireless cheerleader for his beloved Oakland County. And as Crain’s reported Nov. 3, Oakland continues to be a major economic engine in terms of job growth and investment. Patterson’s latest initiative — Tech248 — will try to do what Medical Main Street has done: Focus on a key sector in the county and try to grow it. Still, we winced when Patterson used the Tech248 launch last week to send a volley Dan Gilbert’s way by asking him to stop trying to recruit Oakland County companies to downtown. Two ironies struck us: 䡲 First, Patterson never seemed to mind when companies exited Detroit over the past 30 years to new headquarters and offices in Oakland. So he shouldn’t gripe about the reverse. The county’s doing fine and does best when the region does well. 䡲 Second, if he really wants to build IT jobs — jobs often held by millennials — he should get on board for plans for strong bus rapid transit. Millennials like to text, not drive. Patterson has a great opportunity to become a champion of expanded transit options for the whole region. His support for a dedicated revenue stream — likely to come to voters in 2016 — would be a big boost.

Learning from risky business The Allen Park/Unity Studios saga came to an end last week with the U.S. Securities and Exchange Commission settling fraud charges against former Mayor Gary Burtka and former city administrator Eric Waidelich. Burtka and Waidelich were accused of misleading prospective investors in a $31 million bond issue for the project. Burtka will pay a $10,000 fine, and Waidelich agreed to be barred from participating in municipal bond offerings. The project hinged on being able to use bond proceeds to buy land that would be turned over to an entity it had created with Detroit native Jimmy Lifton to build a movie studio. But using the proceeds for that purpose proved to be illegal, and the developers then withdrew $20 million commited to the project. Burtka and Waidelich proceeded with the bond sale anyway, failing to tell investors about the change in plans and incurring debt the city couldn’t afford to pay back. Allen Park ended up with an emergency manager. All of this falls into a “what were they thinking?” category that we suspect was based on an inability to let go of the project even after its financial underpinnings disappeared. We hope Allen Park’s hard experience has made other public officials less starry-eyed. There are a lot of ways to foster economic development, but making risky bets shouldn’t be one of them.

Editor: I was reading Mary Kramer’s Oct. 23 column on crainsdetroit.com regarding being able to hear the Motown sound in Detroit (“Detroit needs more opportunities to hear Motown sound year-round”), and I couldn’t agree more. I’ve always felt that either the City Theatre by the Fox or the Century Club by the Gem Theatre

would make an ideal home for a permanent Motown revue show. You could get a small cast of three males and three females to do a medley of songs. The Motown collection is so deep that the show could be refreshed with different songs every few months. By using a smaller theater, you would get visitors and tourists, but also locals, to attend. Of course, I have always felt we

needed a Motown-themed bar in town – a bar whose walls were decorated with Motown memorabilia like a Hard Rock Café, and many video screens that could play nonstop Motown videos. I think of when people visit a Hard Rock Café to look at memorabilia, they’d do the same for Motown. Roman Nestorowicz Warren

Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not defame individuals or organizations. Letters may be edited for length and clarity. Email cgoodaker@crain.com

OTHER VOICES Ideas for new water authority Now that the new Great Count Port Authority. The Lakes Water Authority port authority will grow has been created, replacsignificantly with the exing the dysfunctional and pansion of the Panama antiquated Detroit Water Canal to and Sewerage Departallow for ment, the regional orgasuper connization will be meeting tainer to map its mission, strateships to gy and future action. I proceed suggest that the authority from Asia Joe Neussendorfer to do the following: ports 䡲 Consider creating a broad- along the Eastern based strategy that brings together Seaboard. Conall parties associated with water tainer traffic will technology, water economics, wa- grow from the ter usage and sustainability to Port of New York work on growing Southeast Michi- and Montreal to gan’s overall economy. This initia- the Port of Detroit tive could be modeled after Mil- via the St. Lawrence Seaway. waukee’s Global Water Center, 䡲 Develop a partnership with which was created by business, ed- Michigan’s University Research ucation and government leaders to Corridor composed of Michigan transform their region into a State University, the University of “world water hub.” Our region Michigan and Wayne State University. These universities have could do likewise. 䡲 Consider creating an econom- received nearly $300 million in ic development arm to assist exist- awards for water-related research ing and new customers with its and outreach from 2009 to 2013, acservices. There could be a linking cording to a report from the Anof current and new efforts by coun- derson Economic Group. ty and city economic development 䡲 Consider the use of public-pridepartments, such as Macomb vate partnerships to help with fiCounty and Executive Mark Hack- nancing and sharing the risks and rewards on infrastructure proel’s “blue economy.” 䡲 Consider a development part- jects. Public funds will be limited nership with the Detroit/Wayne to maintain the existing water and

sewerage system, and P3s could help alleviate these future costs to rate payers. Such arrangements would not wrest system control from public owners. 䡲 Consider establishing a program whereby rate payers will have a voice in future rate hikes and water conservation and sustainability programs. Southeast Michigan must look at the big picture when it comes to using its water resources. It was the water that brought historical economic development to the Detroit River and the Great Lakes. Innovative programs to develop our precious water resources will contribute greatly to a turnaround. Let’s transform the moniker “Water Wonderland” to “Water Technology Innovation Land.” Joe Neussendorfer is an affiliate member of the American Society of Civil Engineers, a member of the Engineering Society of Detroit and the Detroit Economic Club. He is president and CEO of U.S. Construction Research.

Southeast Michigan must look at the big picture when it comes to using its water resources.

KEITH CRAIN: Now all we must do is live within our means The journey to the end of bankruptcy has been long and painful. There has been a lot of giving with little or no taking, and now it would appear that we’re at the end of that particular road. But it’s not the end; it’s just the beginning. While the end of the bankruptcy case leaves the city with a clean balance sheet, now the real work begins in trying to make sure everything is in place for the right financial conduct for the decades ahead. Everyone owes the emergency manager a great debt. The city has

been lucky to have Kevyn Orr as well as a federal judge who understood what was happening and, more important, what had happened over the past half century. The real success is that no one is completely happy. All the parties involved with this settlement are unhappy. The conclusions simply were not designed to make anyone completely happy. But the real challenge will be on

today’s political leaders to toe the financial line today and tomorrow. The mayor and the Detroit City Council cannot for a single minute assume that it’s business as usual. It will never be business as usual again. That’s what brought this city to its knees before — and no one wants to see it happen again. Political decisions that don’t reference financial implications simply

can’t happen ever again. Every decision that is made by city employees and politicians will be watched and scrutinized under a microscope for decades in the future. That’s the real world. The city has had a terrible history of political malfeasance and financial improprieties. Everyone connected to this system for the past half century will have to share the blame. Going forward, this city cannot afford to have it happen again. Checks and balances have been put in place to prevent this from happening.

Let’s hope that they all work. Things were pretty easy up to the bankruptcy. Everyone got away with whatever they wanted and let the financial consequences happen sometime in the future. Those days are over. These 16 months under bankruptcy were not pleasant. No one wants to see that happen again. It will be up to the mayor and council to keep this ship on course and make sure it’s heading in the right direction financially. It was a tough journey. Now, the real challenges begin.

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OTHER VOICES: CBA would boost neighborhoods, small biz Detroit’s economic Marathon expansion: a $175 mil- good on deliverables based on ing $4 million annually for local We have all heard the progress and further dis- lion tax abatement in exchange for signed agreements. No less should residents; a full-service grocery tale of two Detroits, the be expected of major developers store where 95 percent of the emenfranchises communi- 15 Detroit jobs. whispered interplay beAlthough a small percentage of who receive massive public subsi- ployees are minorities and 65 perties of color. tween the haves and the Detroit’s leadership business leaders have expressed dies and need to be a good fit for cent live in the Hill district; and a have-nots, the rich versus must move past emotion- their dissent toward a CBA ordi- the communities that host their new $13 million neighborhood poor, black versus white partnership program that supal and opinion-driven nance, a large percentage of De- projects. and corporate versus comIn August 2008, the Pittsburgh ports home maintenance, re-entry rhetoric by adopting a troit-based businesses, especially munity. policy that would include those of African-American descent Penguins, the city of Pittsburgh, programs for former offenders and While Detroit is witnesstargeted hiring, first- operating in Detroit’s neighbor- Allegheny County (Pa.) and scores a variety of additional social sering a paradoxical resursource employment, em- hoods, call for a return of invest- of community groups entered into vices. gence between downtown Ken Harris the Hill District CBA. These are not empty promises. ployer training, forecast- ment. and Midtown (commercial What the community benefits In return for $750 million in pub- These are real outcomes that can corridor), amounting to billions of ing, Detroit-based procurement, ordinance offers is something that lic investment, the One Hill coali- be achieved when there is a legally dollars in investment, the city’s enforcement and monitoring. Such measures are needed to most businesspeople and business- tion negotiated $32.5 million in di- binding CBA. neighborhoods (urban corridor), community benefits, Ken Harris is president and CEO which comprise more than 82.7 avoid the repetition of Detroit’s es crave: a clear framework with rect percent African-Americans and spotty history, from the urban re- established expectations. Develop- including a first-source hiring sys- of the Michigan Black Chamber of 32,490 black-owned businesses, moval of Black Bottom on up to the ers expect subcontractors to make tem for newly created jobs generat- Commerce. have largely been ignored for any economic opportunities, resources and benefits. The absence of diverse participation and inclusion in Detroit’s economic revitalization efforts has become a serious problem in a city that’s majority minority. The lack of a clear economic policy for Detroit’s neighborhoods has led to insurmountable socioeconomic disparities, resulting in increased unemployment and joblessness, small-business and entrepreneurial neglect, community despair and a sense of hopelessness. A community benefits agreement can help achieve equitable and inclusive development that will address Detroit’s “neighborhood problem” and bring together the two Detroits. CBAs are the best-known economic policy for underserved neighborhoods, where large percentages of economically disadvantaged minorities and communities of color reside and own businesses. It allows for large-scale projects and sometimes-controversial new development projects, which normally depend on a range of public subsidies, to work with elected officials and residents to support the inclusion of robust community benefits. Detroit taxpayers have public skin in the game, and the resulting public benefit should be quantifiable. CBAs are a way for the city to also adopt a living-wage ordinance policy, local hiring standards, mixed-income housing requirements, procurement with Detroitbased businesses and other policies that apply to future large-scale projects. CBAs can be used as one solution to job creation and economic growth in Detroit’s neighborhoods. From fully-funded HMO, PPO, and Medicare plans to self-funded plans, HealthPlus has options for any budget. In Detroit, several large-scale And all of our plans come with great beneﬁts like prescription coverage and preventive care. And if HealthPlus is your projects, including the new arena project, the entertainment district, sole health beneﬁts carrier and you have 51+ employees, the HealthPlus Worksite U™ Wellness Program is free! M-1 Rail, a second bridge to Canada, expansion of hospitals and uniHealthPlus is accepted at leading hospitals all over Michigan, so call your agent today at versities, philanthropic entrepreneurial targeting, community or visit HealthPlus.org. reinvestment, and new housing and commercial developments represent hundreds of millions of dollars, if not billions, in investment. A CBA will ensure that there are best practices and policies with measurable outcomes — think ROI — that can have a direct impact on Detroit’s most distressed and unThe Right Plan for a Healthier You derserved neighborhoods. 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CEO Summit focuses on keeping companies competitive BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

The third annual Michigan CEO Summit from the Business Leaders for Michigan will focus on keeping the state’s companies competitive, locally and globally. The Nov. 14 event is designed to create and express ideas and concepts from the business community on how the state can outperform others in job growth and innovation. Peter Diamandis, chairman and CEO of Culver City, Calif.-based X Prize Foundation and noted author, will keynote the event. His presen-

tation is titled “Do You Know Who Your Competition Is?” X Prize is a nonprofit that provides prize money for innovative technological development. Its board Diamandis members include Tesla CEO Elon Musk, Google CEO Larry Page, filmmaker James Cameron and others. Past X Prize challenges have included suborbital flight, genome sequencing, oil spill cleanup and

more. Other notable speakers at this year’s summit include Jeff Fettig, CEO of Whirlpool Corp.; James Hackett, vice chairman of Steelcase Inc. and interim athletic director at the University of Michigan; Blake Kreuger, chairman, president and CEO of Wolverine World Wide Inc.; Florine Mark, president and CEO of WW Group Inc.; and Jonathan Woetzel, director of the McKinsey Global Institute. Crain’s Detroit Business Publisher Mary Kramer is moderating the panel “Growing Innovation Through Collaboration.” Jaeson Brown, partner at Detroitbased digital marketing firm Root

4 Creative LLC, will be on the panel titled “Getting Your Business off the Ground.” Brown, attending his first CEO Summit, said understanding the business trajectory in Michigan is critical to his firm’s success, as well as the networking. For the second year in a row, the CEO Summit will feature the Made in Michigan Lounge, where entrepreneurial companies will display their work. Ferndale-based Detroit Wallpaper Co. will showcase its customizable wallpaper and rug creations. “As a small business, we’re always trying to find new opportuni-

ties for exposure; business leaders from around the region to become aware of our product,” said Josh Young, co-owner of Detroit Wallpaper. “We’re also looking forward to meeting other Michigan-based makers and help bring the framework to help support us and support other companies like us.” The CEO Summit will be held from 8 a.m. to 3 p.m. at the Westin Book Cadillac Detroit. Tickets are $125 for individuals and include breakfast and lunch. For more information, go to www.businessleadersformichigan. com.

Transit summit showcases new RTA chief Ford BY BILL SHEA CRAIN’S DETROIT BUSINESS

An upcoming business-oriented transit summit will introduce Michael Ford, the new CEO of the Regional Transit Authority of Southeast Michigan, to local business, civic and religious leaders. “Build Transit, Build Business” is a free event scheduled for 8:15-11 a.m. Nov. 18 at Ford Field and is a follow-up to “Better Transit, Better Business,” which drew 100 participants to its Detroit Zoo location in June. “We are introducing Michael Ford to a diverse group of regional leaders, some who will offer to arrange meetings with him in the future,” said longtime transit advocate and event co-organizer Marie Donigan, a former state legislator and partner at Royal Oak-based Donigan McLogan Consultants LLC. “In June, the RTA was in a holding pattern; now they can get down to business,” she said. “We want to give Michael Ford a head start, meeting the people he needs to know.” The RTA is expected to seek a regional transit tax in 2016. The summit also will include leaders from local colleges, hospitals and business. “We are convening a panel of higher education presidents and chancellors to discuss the issues they face with regards to transit for their students and faculty and the development of their campuses,” Donigan said. Additionally, Jason Jordan, director of the Washington, D.C.based Center for Transportation Excellence, will speak about trends in transit planning, ballot issues, messaging, champions and transit campaign best practices. The summit is a product of the Metro Coalition of Congregations of the Detroit-based Harriet Tubman Center. Eight churches in Oakland and Macomb counties make up the MCC. Donigan said she expects at least 300 participants. Those interested in attending the summit must RSVP through tubmanorganizing.org.

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REMADE IN AMERICA How an auto electronics company brought its manufacturing back home, Page 15

growing small businesses REPORTER’S NOTEBOOK Tom Henderson covers banking, finance, technology and biotechnology. Call (313) 4460337 or write thenderson @crain.com.

Tom Henderson

Accelerate Michigan picks winners SkySpecs LLC, an Ann Arbor-based maker of drone aircraft to inspect bridges, water pipelines, and other infrastructure, won the grand prize of $500,000 last week at the finals of the fifth annual Accelerate Michigan Innovation event. It was the third year the company has competed at the three-day event. Launched in 2012 by a team of engineering students at the University of Michigan, SkySpecs finished third in the student category that year and was a semifinalist last year before being named one of the 10 finalists this year. Finalists made five-minute presentations to a panel of four judges that decided the big payoff Thursday night. Now all SkySpecs CEO Daniel Ellis and other drone makers need is the long-anticipated approval by the Federal Aviation Administration for commercial drones to take to the air. Ann Arbor-based Cribspot.com, which helps college students find places to live while helping mom-andpop owners manage rental properties, won $100,000 as runner-up. The other Accelerate finalists were Akervall Technologies Inc. of Saline, a maker of mouth guards; Ann Arborbased AMF-Nano Corp., which makes sensors to monitor crop and animal conditions; Ann Arbor-based FreeStride Therapeutics Inc., which makes drugs to alleviate joint paint and arthritis symptoms in animals; Levanto Financial Inc. of Troy, a cloud-based “CFO” for high-income households; Ann Arbor-based Movellus Circuits Inc., which makes electronic device circuits; Ann Arborbased Ornicept Inc., which provides cloud-based data management; SurClean Inc. of Wixom, which provides laser-based removal of surface coatings and dirt; and TurtleCell LLC, an Ann Arbor-based maker of smart-phone cases. Since awards were given out in various sectors, companies were able to win money even though they had not been selected among the finalists. The sector awards went to: Solartonic LLC; Ornicept; Akervall; SurClean; FreeStride; AlertWatch LLC; Inventev; BEET Analytics Technology; and TurtleCell. For information on student winners, see longer story at crainsdetroit.com

Hardware, software ... beware GLENN TRIEST

To grow quickly and stay competitive, Troy-based Rapid Global Business Solutions Inc. had to update its information technology, said Ravi Kumar, vice president of global operations. “Because,” he said, “technology can really take you forward or hold you back.”

3 firms said ‘bye’ to old tech, overhauled IT and rebooted their bottom lines BY GARY ANGLEBRANDT SPECIAL TO CRAIN’S DETROIT BUSINESS

nce upon a time, it seemed as if every business was touting the latest in information technology it used to be more efficient and gain a competitive edge. Nowadays, businesses are more likely to groan when faced with investment decisions for their back-office management systems and IT infrastructure. Bothering with these things seems more akin to changing the carpet than anything having to do with improving operations. This is especially so for small and midsize businesses, said Stephen Emsley, technology director at Webrunners Inc., a Southfield IT staffing and consulting company better known as W3R Consulting. “A lot of companies see IT on their balance sheets and just see it as a big minus sign. It’s very hard to prove to

IT INVESTMENTS: 3 THAT DARED Rapid Global Business Solutions Inc.: The engineering services company reconfigured its IT and replaced all hardware — then doubled revenue from 2010 to last year, added 25 employees in the past year and moved to larger headquarters this year. Page 12 The Big Salad LLC: Having replaced the inventory and time management systems at the heart of his restaurant chain’s business, owner John Bornoty said, “However long you think it’s going to take, triple it, then double it.” Page 13 ShindelRock: The Novi accounting firm ditched its ’90s-era billing software a few years ago and spent six months building a new one. The result: A customer management system that peers deeper into the firm’s operations, spots trouble areas and improves the overall business. Page 14

the CFO that these systems we put in place increased performance by this much or saved costs by this much,” Emsley said. “IT directors are always asking for money.” But sooner or later, improvements are needed, and waiting a long time to do it increases the chances that problems will

arise. Little issues gather over time and present themselves during overhauls and upgrades. “It’s exceptionally common to run into an environment that has been allowed to decay to a point to where simple Emsley upgrades become an impossibility,” Emsley said. Anything from staff time to legacysoftware surprises can become part of what Emsley called “scope creep,” as the project swallows up more and more resources because of lack of front-end planning. Even off-the-shelf software systems that appear ready to go usually aren’t. This month, Crain’s talks with three companies that recently overhauled their business management technology — the software and hardware that make their operations run — to see how they did it and what snags they hit. If one thing can be learned from their stories, it’s that businesses should not underestimate the time it will take to upgrade back-office systems. While the financial costs aren’t always daunting, the cost in time it takes to get the systems up and running is easy to misjudge at the outset.

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IT changes present a challenge – even for engineering firm Rapid Global Business Solutions Inc. in Troy doubled its revenue in three years. With that growth came a need to scale up the company’s back-office technology to match the new size of the enterprise. The engineering staffing and services company, which does business under the name RGBSI, brought in $35.5 million in 2010. Last year, its revenue came in at $74.9 million. RGBSI has about 85 internal employees (excluding workers the company places for its staffing services). Twenty-five of those employees were added in the past year. After “just surviving” the 200709 period, the company embarked on an aggressive growth plan to hit $100 million, a goal it expects to reach next year, said Ravi Kumar, vice president of global operations. Growth has been driven by a hard push to diversify the customer base, offer new products and services and, more recently, an agreement with Dassault Systemes to act as a reseller of the French design and product software maker’s systems to students. The push led to new customers in the aerospace, defense and railroad industries and a tripling of the total number of customers, now numbering several hundred, Kumar said. To better grapple with the increased volume of work, RGBSI wanted new and nimbler systems to support a bigger and more mobile workforce. The first of two major shifts was last year’s installation of a “virtual desktop infrastructure,” systems whose benefits include reduced power and hardware costs, but also support greater mobility by storing employees’ work on a central server instead of their individual hard drives. This allows them to bring up their desktops anywhere. The project meant an IT overhaul of more than $100,000, but it was deemed worth the expense because of the speed with which new customers and employees could be taken on under the new system. Where it used to take at least a day or two to get new employees up and running at their workstations, it now takes just a few minutes. Besides the planning and financing, the other big challenge was getting employees to change their workstation habits to suit the new virtual desktop environment. “Typically, people are averse to change,” Kumar said. “We communicated that this is what we’re thinking about doing, this is the advantage it will have.” Once employees saw how well the new system worked, they had nothing but good things to say, he said. The company had trouble getting the system to correctly re-

Newer business owners should take this as a word of warning: If a technology overhaul was challenging for an engineering firm, it’s not likely to be easier for anyone else. trieve and send files from central storage to the individual employees who needed them. Switches needed to be programmed and permission issues dealt with before things were properly functioning. Newer business owners should take this as a word of warning: If a technology overhaul was challenging for an engineering firm, it’s not likely to be easier for anyone else. “It’s not straightforward,” Kumar said. This year, the company went through another overhaul, this time of its IT infrastructure. Business growth prompted RGBSI to move from its old headquarters in Madison Heights to a larger space in Troy. The company figured it might as well replace all its computers, Internet, IT and telephone hardware while it was at it. About 95 percent of the equipment powering these systems was replaced. “We essentially started a new company,” Kumar said. The revamp included beefing up network security in a way that prevents different departments in the company — HR and accounting, for example — from being able to access each other’s files. The separation makes it harder for files to be accessed by outsiders, as well as mishandled by insiders. The company’s customers, a group that includes government agencies and companies like Boeing, demanded this. “Some customers put in their terms that if you don’t meet these guidelines we can’t issue POs. Some actually do audits,” Kumar said. The total bill for this hardware overhaul came to $180,000, he said. The two big technology upgrades weren’t done just to get the latest toys. RGBSI plans to reach its $100 million revenue goal in 2015. “That’s where we saw that to grow fast and be competitive, we have to upgrade our back-end infrastructure and technology, because technology can really take you forward or hold you back,” Kumar said. — Gary Anglebrandt

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Big Salad owner finds tech overhaul a lot to digest One of the gravest oversights business heads can make when embarking on a technological overhaul is that of time. That is, not the time it takes to get and install the system, but to make it work after those steps are taken. “When it comes to technology, it never goes as planned — never,” said John Bornoty, founder and CEO of The Big Salad LLC, a Grosse Pointe Farms-based chain of six fast salad restaurants and 90 employees. Bornoty knows of what he speaks: Before getting into the restaurant business, he owned a technology business whose services included back-office infrastructure support. In high school, he had a side job repairing Commodore 64s. “People underestimate the time it takes to put in data,” Bornoty said. “Just getting the data in the system can take a year.” This is nowhere truer than in the restaurant business, with its tight profit margins and inventories of perishable goods. In Bornoty’s company, which had 2013 revenue of $2.2 million, it might be tempting to raise the price of a menu item by a penny. But when given more precise data, managers might see that lowering the price by a penny is the way to go, because that would boost sales volume.

“People underestimate the time it takes to put in data,” said John Bornoty, founder of The Big Salad LLC. “Just getting the data in the system can take a year.”

COURTESY OF THE BIG SALAD LLC

Or they might see that an extra employee at a certain hour of the day will yield thousands of dollars in revenue over a year, Bornoty said. “Everything in our world, and in any business, you have product costs, labor costs and sales. Everything boils down to that,” he said. “We have to find ways to get extra pennies, or see why certain tasks are taking too long. Over the years, we’ve had to come up with ways with a click of a button to see what’s going on; otherwise, we’d have to raise our price without knowing what’s going on.” Two years ago, the business began an overhaul of its systems supporting inventory, ordering and time management for hourly work-

ers. This would be the company’s third-generation system. The first was based on Microsoft’s Excel spreadsheet program; the second was custom-made by the company. Managing the custom-built system became too expensive, so The Big Salad bought one off the shelf and integrated it with its point-ofsale system. The challenge lay in entering all the information needed to make it do things like track average chickpea usage per customer, calculate how many ounces of lettuce come out of a case and show how many customers were served at specific times of day so managers can staff appropriately. Going into this process without a specific plan as to what information

is needed and how it needs to be manipulated is where businesses get themselves into trouble in a hurry. That can lead to months of wasted labor and the system spitting out a hodgepodge of useless data, Bornoty said, so dedicated resources are needed. “Someone’s going to have to take ownership of it because they’re going to be on the phone for six months with the developer,” he said. The project cost Big Salad $100,000 over two years, most of it in labor. And that was with a plan. “However long you think it’s going to take, triple it, then double it. Then it’ll be there,” he said. Coming from the tech world, Bornoty wasn’t surprised at this. But he was surprised at the lack of tech support he received from the software maker. This has become a trend over the years, he said, making it difficult for businesses. Similarly, he gets frustrated at seeing great software missing one vital component that ruins the rest of the program. One gap in his new system was the ability to account for inventory turn rates, a pretty important piece of information when it comes to items like raw chicken. When he asked the developers why the software didn’t include a

feature for turn rates, they asked him what a turn rate is, an answer he did not receive well. “How can you have an inventory system that doesn’t give a turn rate? ... It does everything else!” he said. In one instance, he met a guy peddling a consumer rewards card system that looked great and did everything Bornoty thought it should to suit his business, except one critical thing: It only worked for credit card purchases. So customers paying with cash — roughly half of the total — wouldn’t collect reward points for their purchases. “A lot of software out there is written by developers and not users,” he said. “I’m still surprised at how dumb tech companies can be, for how smart and innovative they can be.” The Big Salad is using a spreadsheet to work around the inventory turn rate problem while twisting the developer’s arm to add that feature. Bornoty said if he had to do it again, he would exercise his IT background a little more by asking deeper questions about how the software was developed. For those without such a background, he recommends hiring a consultant who can ask those questions. — Gary Anglebrandt

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Software upgrade improves numbers for accounting firm Accounting firms don’t always get speedy access to the latest technological toys that other industries do. “The accounting industry is a bunch of Luddites when it comes to technology,” said Steve Wisinski, partner at Novi-based accounting firm Shindel, Rock & As-

sociates PC, which does business as ShindelRock. “Our technology lags the rest of the world. We’re just starting to have apps on our phones.” When 2011 rolled around, ShindelRock had been using the same business management software it had when Wisinski joined the firm

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in 2001, making it quite possibly a 1990s-era system. More important, it just wasn’t good at doing what the firm needed. The central role of an accounting firm’s business software is billing and tracking of billable hours. ShindelRock’s system spit out two types of billing reports, and reconciling the two was problematic. “The different reports weren’t tied to each other,” Wisinski said. “We’d print things, and new information would show up that didn’t show up before.” Part of the problem was that staff members had to track their client hours in a Microsoft Excel spreadsheet, then someone else entered that into the billing software, a process prone to user error. “We’d been trying to get better information about the internal workings of the company. Our business is based on billing of time; the prior software we had wasn’t able to give us reliable information on that,” Wisinski said. While many businesses drag their heels on investments in backoffice technology because of the cost and hassle, accounting firms are slow because they have little choice. “Sometimes we don’t implement when we could because the software’s not there. We have to wait a couple years before they straighten it out. I’m not going to implement technology for technology’s

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sake,” said Wisinski, who also manages the firm’s IT. So when the right software came along, it was an easy decision for ShindelRock to go get it. Wisinski Business management software is meant to mirror real-life processes, a point that’s easy to overlook when planning an upgrade. That means closely considering exactly how a company does its day-to-day business and then making changes to suit the software, and vice versa. ShindelRock spent a month on this step, building the infrastructure of the new program to match how client tax forms come in and what process those forms would experience until project completion. “We changed our billing procedure from that,” Wisinski said. After that step came testing, the hiring of a consultant to train the staff, and a few months of fine-tuning. The whole project, including the initial time to find the system, took six months. Once done, the new system produced clear billing reports — the original goal — and also showed more specific information on work being done for clients, allowing

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managers to better analyze operations. ShindelRock also in the past year made a push to go paperless. This was done to make operations more efficient, and also because more customers expect it — they want to share tax documents electronically. ShindelRock now scans all paper documents that come in, which requires more labor on the front end, especially when the system was new, but speeds things up later. It also set up an online portal for sharing documents with clients. “New clients have been pretty steadily asking for something like that,” Wisinski said. This move to paperless only took a few months because training was minimal and the company already had the software to do it. ShindelRock, which has 20 employees and had 2013 revenue of $4 million, spent about $11,000 on the business software and another $40,000 when training and staff time were factored in. The software for the paperless system cost $500 and another $20,000 in time and training. The new client management system isn’t perfect. The database has plenty of information, but takes coaxing to make it spit out needed information. When called upon to provide anything beyond the “canned list of reports” it offers, it balks, and then the developer’s technical support people have to be called to make the reports happen. “Sometimes they do, sometimes they don’t. If not enough customers are squawking about it, they won’t do it,” Wisinski said. Another frustration is finding people adept at handling the technology. Technically skilled people who happen to be accountants are hard to come by. “I’m looking for people that have that technical bent. It’s hard to find people who have the skill set we’re looking for but also have that viewpoint,” Wisinski said. But the work has paid off in the form of being able to see how much time was spent for, and what services were provided to, a particular client. Managers can compare that to work done for similar clients and spot differences. If work for one client took too long, they can see why. In most cases, the issue has to do with the quality of the information provided by the client. But this is not the worst problem to have. ShindelRock can then go to the client and show how making some small changes to its tax information can cut in half the time ShindelRock spends on a client, saving the client 50 percent on its tax preparation bills. It also knows how much time a 1040 will cost a particular type of client by looking at past examples from similar clients. This helps when making sales pitches. The overhaul wasn’t about just fixing the old software furniture lying about the office. It was about making the whole business more efficient, Wisinski said. “We became more profitable as result of it,” he said. — Gary Anglebrandt

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Danlaw builds automation to return manufacturing to this nation BY GARY ANGLEBRANDT SPECIAL TO CRAIN’S DETROIT BUSINESS

Danlaw Inc. isn’t a stranger to new challenges. The company was formed in 1984 as a tester and developer of automotive electronics systems. Automotive manufacturers would send their systems to Danlaw for third-party testing and validation. This worked fine until the most recent economic downturn, which motivated Danlaw to diversify its offerings and client base. The answer A look at to the problem problem-solving was obvious by growing because the companies company already had another industry knocking on its door: In 2007, automotive insurers began asking that it build a telematics device — one of those plugins insurers offer to track driver habits and vehicle information, ostensibly to save drivers money. But having always been a service provider and not a manufacturer, this solution presented a new set of challenges. Besides having to develop a product and find a contract manufacturer in China to make it, Danlaw had to meet the tough standards required to operate on cellular networks. That alone took more than a year and risked a delay of another year if Danlaw’s product failed to meet the standards. Problem: After wading through these issues, Danlaw began its first production run, of 2,000 units, in 2009. But logistics and intellectual property protection weighed on the minds of Danlaw’s managers as it did business with its Chinese contract manufacturer. Product quality was good, but it was hard to work through any manufacturing and engineering issues with a company on the other side of the world. Danlaw wanted to bring the manufacturing back home, but its first-generation device was laborintensive to build, having more than 90 points to solder manually. Solution: To make the economics of U.S. manufacturing work, Danlaw would have to re-engineer its process. “Our challenge to the (in-house engineering) team was, build it as close to automated as possible and we’ll bring it back to the U.S.,” said Danlaw President and COO Tom Rzeznik. The team answered the call; the U.S.-made device had zero solder points. Rzeznik The challenge was issued in early 2012. In July, Danlaw began producing its devices through Livonia contract manufacturer Odyssey Electronics Inc., followed by additional production in December at Saline Lectronics Inc. in Saline. Both companies invested in

STAGE 2 STRATEGIES

DANLAW INC. Location: Novi Description: Automotive electronics testing service provider; maker of automotive telematics devices for the insurance industry President and COO: Tom Rzeznik Chairman and CEO: Raju Dandu Founded: 1984 Employees: 150 Revenue: $58 million in 2013 new tooling to make the miniature parts that compose the telematics device, Rzeznik said. The automated process saves time and money, shifting the manufacturing advantage stateside. “Add in the logistics and cost to ship parts, and dealing with customs and deeds, and it’s a lot more beneficial for us to do it here,” Rzeznik said. Now, local manufacturers are gaining new business from Danlaw’s growth. Danlaw’s revenue has risen from $10.8 million in 2010, before any significant telematics money began to flow, to $58 million last year. About half of revenue comes from the telematics business, which turns out more than 1 million units a year. Risks and considerations: The company’s biggest concern was that of talent. “A lot of the talent

base for doing electronics manufacturing has left us over the course of a decade. Being able to confidently get the process tunedin was quite a risk and took a lot longer than it would have in China, to be honest,” Rzeznik said. The switch to U.S. manufacturing took a few extra months because the manufacturers had to buy and set up new equipment to make high-density miniature electronics — not the sort of manufacturing Michigan is known for — and then find people to run it. Expert opinion: A shortage of skilled labor is affecting small manufacturers across the board, including ones that try to bring manufacturing back home, said Mike Coast, president of the Michigan Manufacturing TechCoast nology Center in Plymouth. Preparing the road ahead by working with local high schools and community colleges to build a talent pipeline is one way to address that problem. Manufacturers are realizing it’s worth the effort, given the reduced

hassles over time zones, communication differences, shipping and IP worries, Coast said. Labor costs in China aren’t as cheap as many think, and the gap is closing. The MMTC did a study five years ago that showed prices of finished Chinese-made products were only 17 percent to 18 percent lower

than American-made ones — a close enough gap to cover with productivity, technology and efficiency gains. “That’s within striking distance, and that was five years ago,” Coast said. “Their (China’s) labor rates are going up, and our productivity rates are going up.”

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PUBLISHER’S NOTEBOOK Contact Mary Kramer at mkramer @crain.com.

CRAIN’S MICHIGAN BUSINESS Mary Kramer

Imagine results of a U.S., state lawmaker retreat Now that the elections are over, what’s Michigan’s agenda? Is there a “Michigan agenda”? And no, I’m not talking about University of Michigan football. Virtually every person elected last week has an agenda — for Lansing or Washington, D.C. Imagine the power of finding issues that Democrats and Republicans could agree on — and work together to address. Heck, even President Barack Obama and soon-to-be Senate Majority Leader Mitch McConnell seemed to be moving toward a “bourbon summit” to find common ground. With Republicans holding both chambers of Congress, it’s not enough to be the “opposition party.” Long before she ran to succeed her husband in the U.S. House of Representatives in the 12th District, Debbie Dingell was talking up ways to work across the aisle. It seems incredible, but no one I’ve talked to can challenge her claim that the congressional delegation has never gotten together with top Dingell state lawmakers. Not even during the auto crisis. Imagine if they did, meeting first for an informal but structured retreat. After a successful initial meeting, they could convene, say, quarterly or every other month — in Michigan and in Washington. They could do immersion tours in various parts of Michigan to better understand issues. They could hold briefings on key issues from stakeholders, including business, labor and the nonprofit sector — including foundations, which are leading the way on many fronts in this state. They could, in a safe environment, brainstorm “what if?” ideas. Agenda items could emerge and coalitions could be built. What results could occur? Maybe better roads. Or urban strategies to help Michigan cities or ways to support and sell Michigan farm products. Ways to harness — and protect — the power and beauty of the Great Lakes. So who could help convene such a simple but powerful idea? Dave Camp of Midland gets my vote. Camp, the outgoing chair of the House Ways and Means Committee, chose not to run again. But he could be a powerful convener. So would Candice Miller, a congressional veteran and Republican from Harrison Township. Or Carl Levin, who is leaving the Senate after six terms. My guess is Gov. Rick Snyder would buy in. And of course, Debbie Dingell and other Democrats should be tapped. She has key relationships honed through her years as a Democratic leader, lobbyist and wife of a powerful congressional leader. Bottom line: Gridlock is not an attractive option, either in Lansing or Washington. Michigan could try a new tack.

One city has had its fill of bad roads. Now it has a tax – and a plan – to do something about it BY ROD KACKLEY SPECIAL TO CRAIN’S MICHIGAN BUSINESS

report released by the Grand Rapids 21st Century Infrastructure Task Force recommended spending $4 million more a year to maintain the city’s roads, pushing the roads budget to $12 million. The task force recommended increasing general fund support, maximizing state and federal grants, and also called on the Michigan Legislature to chip in more funding, possibly through a higher gas tax. That report was released a dozen years ago. The 2002 plan fell apart when the state’s economy began to crumble. Followed by the state’s roads. Twelve years after that report came out, with Grand Rapids’ roads now in even worse shape, the city’s voters approved the 15-year continuation of an increase of the city income tax to 1.5 percent from 1.3 percent for residents and 0.75 percent from 0.65 percent for nonresidents that had been scheduled to end in July of next year. The tax, renewed by voters in May, should raise close to $9 million annually through 2030 for repairs to the city’s vital streets. The original increase was part of the city’s “transformation plan” approved by a margin of only 204 votes in 2010. The five-year increase helped balance the budget and gave the city time to negotiate union concessions. The tax also allowed Grand Rapids to retain 10 community police officers and pay for a 15-member fire rescue squad. With the new money, city officials also have a new asset management plan for deciding which roads get fixed first. And plenty of them need fixing. Deputy City Manager Eric DeLong said that of the 588 miles of city roads in Grand Rapids, 371 miles are in poor condition. The goal is to get 70 percent of them into fair to good condition in 15 years. Andy Johnston, vice president of government and corporate affairs for the Grand Rapids Area Chamber of Commerce, said the chamber supported the May ballot proposal because taking care of city streets “is a core function of government.” “The city went through a really robust Johnston process,” Johnston said. “They implemented asset management. They also dedicated general fund support to fund roads in addition to the income tax.”

See Roads, Page 18 ISTOCK PHOTO

Grand Rapids cracks down

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Roads: Money, and a plan ■ From Page 17

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Road conditions are judged by the Grand Valley Metropolitan Council, a regional planning agency, using a van outfitted with laser technology. The van drives every street and looks at every crack and pothole. The data flow into a Pavement Surface and Evaluation Rating — or PASER — system that provides a numerical designation for each street segment, with zero being on the poor end and 10 very good. Although battered by one of the worst winters on record, the road conditions were the result not of one year but of at least 12 years of delayed repairs and maintenance, DeLong said. Steve Warren, managing director of the Kent County Road Commission, doesn’t agree with the common wisdom that the 2013-14 winter beat up the roads more than normal. “Regardless of the severity of winter, every winter is characterized by not only cold weather but a lot of fluctuations,” he said. “It is the freeze-thaw cycle that gives us a roller-coaster ride in Michigan. “So if roads are bad going into the winter, they are going to be bad coming out of it.” Warren said that during the fall of 2013, up to 35 percent of county roads carrying the heaviest volume of traffic were in poor condition. Grandville, to the southwest of Grand Rapids, is another municipal survivor of the winter of 2013-14. But that city maintains that none of its roads are in poor condition. “Roads are like a car. You can’t neglect it for five years and expect it to last,” said Ron Carr, the public works director for the city of Grandville. Carr said Grandville had the same problem as Grand Rapids but “to a much smaller extent,” thanks to a dedicated road millage of 1.5 mills that helps pay for road maintenance. John LaMacchia II, a state affairs legislative associate at the Michigan Municipal League, said that by the his organization’s count, 40 cities and 60 villages in the state have some source of dedicated funding. He said most of those 100 municipalities are doing it with a property tax millage. However, he said, most communities are also forced to raid their general fund budgets to pay for road and other infrastructure repairs.

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The road to a tax Grand Rapids officials knew they had a major problem with the city’s roads going into the 2013-14 winter. The city had been able to put more money into the roads from its general fund for close to 10 years, DeLong said. But that ended in fiscal 2012. “By then our financial situation had deteriorated so severely that we needed to reprogram those monies for operations,” he said. “We could no longer invest in capital” improvements. A group known as the Sustainable Streets Task Force was appointed and developed the recommendations that resulted in May’s income tax ballot proposal. City officials considered asking residents for a property tax in-

John LaMacchia II of the Michigan Municipal League said 40 cities and 60 villages in the state have some source of dedicated funding. crease or an income tax increase and decided the income tax would be best “because you would have city residents and noncity residents paying for it,” DeLong said. The tax is expected to bring in about $9 million a year for the city’s vital streets. That will be on top of the $3.4 million the city was already spending out of its major and local street fund and the $3 million in grants from the federal government. That’s an improvement but still not enough for what needs to be done, DeLong said. “We are counting on $6 million more from the state,” he said. “We are going to be a lot better off than we would have been even if the state never comes up with that money.” DeLong also said funding can’t be a one-time parachute drop of manna from Lansing. The funding must be “a consistent, long-term, everyyear, systematic investment.” Although the income tax revenue has not started coming in and the $6 million in state funding may never materialize, city officials decided they could wait no longer. And so work has begun on city streets. Some funding is from the $3 million in Metropolitan Planning Organization money from the federal government that flows through Lansing. Some is from money for special projects. But most is borrowing in anticipation of the income tax revenue. DeLong said they had no alternative. If everything ran on its natural course, the city would not start receiving the revenue from the income tax increase, which takes effect June 30, until August or September 2015. “Which would have meant we would have missed one construction season, and we would have suffered through another horrible winter,” DeLong said. The Grand Rapids City Commission authorized up to $50 million in bonding. The city has borrowed, to date, $17 million for the first construction season.

The worst shall not be first Now, Grand Rapids officials not only have new money to fix the city’s roads, but they also they have a new strategy. They no longer fix the worst first, the way roadwork was done when state funding was never an issue. See Next Page

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CRAIN’S MICHIGAN BUSINESS From Previous Page

They decided to look at different scenarios, using the PASER data, and determine what it would cost to bring poor streets to fair condition and fair streets to good condition. DeLong said they also looked at what the right “balance point” would be for the condition of Grand Rapids’ roads. It might seem obvious that streets and roads should be brought up to 100 percent. Not so, DeLong said. “If you’re building a nuclear plant, you do need to hit 100 percent,” he said. “But with streets, there is a DeLong balance. We found that once we got beyond 70 percent of the roads being good or fair, we essentially were overinvesting. We were stretching too far, trying to achieve too much.” The investments are all focused on making sure that what is good and fair stays good and fair and doesn’t drop to poor. “Doing rehab, which is the rotomilling (grinding down the road surface) and resurfacing, we get four miles for every $1 million” spent on roadwork, DeLong said. Reconstruction costs $1 million for every mile of road. With a process known as “cape seal” — which provides a thinner, waterproof treatment — the city get 36 miles for every $1 million spent, he said. Rick DeVries, Grand Rapids’ assistant city engineer, said that under asset management, rather than fixing the worst first, the city concentrates on making sure roads stay good. “Basically, the poor roads are as bad as they are going to get,” he said. “They are not going to get a whole lot worse.” DeVries said major streets eligible for federal funding are being targeted first. To pay for that work, the city expects to receive a steady stream of $6.5 million of federal funding annually for 15 years from Metropolitan Planning Organization fundings, replacing the $3 million grant received this year. Major streets that are not eligible for federal funding are in the second category. DeVries said officials decided to invest heavily in the first two categories for the first two years — about $11 million — to improve 70 percent of those streets to good or fair condition, then do preventive maintenance for the rest of the 15-year period. Next, they start working on local streets. DeVries said each of the private contractors has been given a list of streets and told: “These are the streets you have to go after. You have to do half of the streets this fall and the other half next spring.” City crews are doing “wedging” or triage paving on really bad roads where reconstruction is not going to happen for a while. They put some asphalt down and hope it holds together until they can get there to really fix it after they finish improving roads that can be saved. DeLong said city officials hope to add more streets to the list after they re-evaluate the situation over the winter. DeVries, the city engineer, said

that as of Oct. 22, they had worked on about 35 miles of the 588 miles of city streets. They have not started on reconstruction of the poor roads yet, concentrating instead on moving fair roads into the good category. “We are much better prepared to get through this next winter,” DeLong said, “and we will continue to make steady progress next year.” The next phase is to “make sure we never go back, continuing to innovate and grow and manage these resources very well.” Meantime, newly re-elected Gov. Rick Snyder has not given up his quest to win legislative approval for $1.2 billion in funding to repair Michigan’s roads. Dave Murray, deputy press secretary for the Snyder administration, said the governor wants that package approved by the end of the year. However, that amount is far short of what the Michigan Municipal League and County Road Association of Michigan think is needed to fix all of the roads in the state. “Eighty-two percent of the roads that are eligible for federal funding are in fair or poor condition,” said Denise Donohue, the director of the county road association. “Fi-

nal numbers from all 83 counties in Michigan are not in yet, but the feeling is they will show most of the other roads in the state are in much worse shape.” LaMacchia of the municipal league agrees with Johnston of the Grand Rapids chamber that the issue needs to be addressed in the Legislature’s lame-duck session. He wants any measure on Snyder’s desk by Christmas. “If it doesn’t happen by then, we are going to usher in a whole new session and a bunch of new legislators,” LaMacchia said. “Then the whole debate and the whole education process would have to begin again.” DeLong said Grand Rapids officials have testified before state Senate committees, met with legislators and talked with the Snyder administration about the need for a stable stream of state funding for road repair and construction. Said the chamber’s Johnston: “The longer we wait to address the issue, the more expensive it becomes to fix. And a partial solution is only going to slow the decline. It is not going to maintain the roads at the proper level, long term.”

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Leading Michigan Business Lawyers

Business Builders Alan Ackerman Phillip G. Adkison Kelly A. Allen N. Peter Antone Justin D. Casagrande Sharon M. Woods Timothy J. Currier Harvey B. Wallace, II Courtland W. Anderson Thomas P. Branigan Michael S. Brenton Lawrence G. Almeda William R. Boudreaux Kelly Kathleen Burris James K. Cleland Steven L. Oberholtzer Eric J. Sosenko Cheryl A. Bush Patrick G. Seyferth Claudia Rast Ronald P. Strote Thomas P. Brady David M. Hayes J. Thomas MacFarlane Daniel H. Minkus Michael P. Nowlan Daniel J. Scully, Jr Theresa C. Joswick Susan J. Sadler Janet E. Lanyon Ronald A. Deneweth Timothy P. Dugan Richard M. Bolton Terence M. Donnelly Steven G. Howell Timothy H. Howlett Jason P. Klingensmith Monica J. Labe John H. Norris Edward H. Pappas James A. Plemmons Michael T. Raymond Robert W. Stocker, II Bruce C. Thelen Rhonda D. Welburn J. Bryan Williams Eric M. Dobrusin Douglas R. Mullkoff Richard J. Aaron James S. Brady Eric Thomas Carver Kiffi Y. Ford Kyle R. Hauberg Brian J. Page Carl Rashid, Jr Wayne D. Roberts Mark J. Burzych George W. Ash John F. Birmingham, Jr Thomas B. Spillane, Jr Cathy R. Bowerman Julie I. Fershtman Frank T. Mamat J. Christian Hauser Michael S. Ashton Michael E. Cavanaugh Graham K. Crabtree Jennifer Utter Heston Peter D. Houk Elizabeth H. Latchana David E.S. Marvin Thaddeus E. Morgan Thomas L. Sparks John A. Anderson Andrew T. Baran Basil M. Briggs Gregory J. Gamalski Bruce W. Haffey William H. Heritage, III William L. Hooth William H. Horton Daniel J. Kelly George D. Mercer Timothy J. Mullins Albert T Nelson, Jr Ryan L. Perry Leroy H. Wulfmeier, III

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Leading Michigan Business Lawyers

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Lisabeth H. Coakley Michael E. Hilton Paul A. Keller David L. Suter Michael F. Schmidt Lawrence D. McLaughlin Angela L. Jackson Dean W. Amburn Daniel H. Bliss Henry J. Brennan, III Mark A. Davis Joseph J. DeVito Lisa Sommers Gretchko Michael V. Kell Rodger A. Kershner Henry P. Lee Patrick M. McCarthy Richard M. Miettinen Gary A. Peters Mark W. Peyser Jeffrey A. Sadowski John P. Jacobs Peter M. Alter Aaron H. Sherbin James L. Feinberg Kenneth J. Seavoy Michael D. Carroll Eric I. Lark Richardo I. Kilpatrick Joseph E. Quandt Leila Freijy Randall S. Levine Kenneth W. Beall Jack C. Davis Karl L. Gotting Jeffrey L. Green Paula K. Manis Michael G. Oliva Michael H. Rhodes Jeffrey S. Theuer Mark R. Hauser Michael P. Manley Thomas W. Cranmer Robert L. DeJong Amy M. Johnston Jeffrey L. LaBine Robert D. Brower, Jr Patricia M. Nemeth Kenneth F. Neuman Thomas A. Cattel Charles W. Browning Mary Massaron Scott H. Sirich Michael D. Fishman Michael B. Stewart Randy J. Kolar Robert S. Harrison Michael E. Baum Steven J. Cernak Gregory L. Curtner Joanne B. Faycurry Frederick R. Juckniess Samuel J. McKim, III Robert J. Wierenga Lee T. Silver Douglas W. Van Essen Paul J. Stablein Lynn M. Brimer Thomas J. Strobl William A. Tanoury Robert S. Iwrey Richard L. Braun, II E. Powell Miller Marc L. Newman Ronald G. DeWaard Richard A. Hooker Randall W. Kraker Dorothy H. Basmaji Gregory V. Murray Robert M. Vercruysse Loren M. Andrulis Douglas A. Dozeman Norbert F. Kugele Mary Jo Larson Stephen C. Waterbury Larry C. Willey William J. Giovan Richard D. Rattner

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Copyright/Trademark; Intellectual Property; Patent Intellectual Property Copyright/Trademark; Intellectual Property; Patent Patent Civil Appellate; Insurance/Ins Cov/Reinsurance; PI Defense: General; Products Liab Def Construction; Land Use/Zoning/Condemn; Real Estate: Comm; RE: Finance Comm Lit; Employment: Mgmt Copyright/Trademark; Intellectual Property; Patent Intellectual Property; Patent M & A; Securities & Venture Finance Franchise & Dealership M & A; Publicly Held Corp; Real Estate: Comm Bankruptcy/Workout: Commercial; Creditor Rights/Commercial Collect Comm Lit; ADR: Comm Lit; Products Liab Def Energy; Public Utilities: Gas/Water/Electric Tax: Business Comm Lit Close/Private Held; M & A; Publicly Held Corp Environmental Insurance/Ins Coverage/Reinsurance; Toxic Torts Defense Copyright/Trademark; Intellectual Property; Patent Civil Appellate Comm Lit; ADR: Comm Lit Tax: Business Crim Defense: White Collar Close/Private Held Comm Lit; Construction Corporate Finance; M & A; Publicly Held Corp Banking; Bankruptcy/Workout: Commercial Environmental; Public Utilities: Gas/Water/Electric; ADR: Commercial RE/Enviro/Construction Immigration: Employment Crim Defense: White Collar Banking; Real Estate: Comm; Real Estate: Finance; RE: Tax Close/Private Held; International Business & Trade; Publicly Held Corp Gov't/Muni/Lobbying/Admin; Real Estate: Comm; Real Estate: Finance; RE: Tax Environmental Real Estate: Commercial Energy; Public Utilities: Gas/Water/Electric Gov't/Muni/Lobbying/Admin Energy; Public Utilities: Gas/Water/Electric Construction M & A; Publicly Held Corp; Real Estate: Comm; RE: Finance; RE: Tax Crim Defense: White Collar Comm Lit; Crim Defense: White Collar; Intellectual Property Class Action/Mass Tort Defense; Comm Lit Class Action/Mass Tort Defense; Comm Lit; Products Liab Def M&A Close/Private Held Employment: Mgmt; ADR: Employment; Labor: Mgmt Comm Lit; ADR: Comm Lit Employment: Mgmt; Labor: Mgmt Insurance/Ins Coverage/Reinsurance Civil Appellate Construction Copyright/Trademark; Intellectual Property; Patent Copyright/Trademark; Intellectual Property; Patent Tax: Business Comm Lit; Crim Defense: White Collar Bankruptcy/Workout: Commercial; Creditor Rights/Commercial Collect Antitrust Antitrust; Arts/Entertainment/Sports; Comm Lit; Copyright/Trademark Tax: Business Antitrust Tax: Business Antitrust; Class Action/Mass Tort Defense Comm Lit; ADR: Comm Lit Comm Lit; Gov't/Muni/Lobbying/Admin Criminal Appellate Bankruptcy/Workout: Commercial; Creditor Rights/Commercial Collect; Tax: Business Banking Medical Malpractice Defense Health Comm Lit; ADR: Comm Lit Comm Lit Comm Lit Comm Lit; Crim Defense: White Collar Employment: Mgmt; ADR: Employment; Labor: Mgmt Gov't/Muni/Lobbying/Admin; Land Use/Zoning/Condemn; Public Finance; Real Estate: Comm; RE: Finance Immigration: Employment Employment: Mgmt; Labor: Mgmt Employment: Mgmt; Labor: Mgmt Close/Private Held; Corporate Finance; Mineral/Natural Resource; Securities/Venture Finance Comm Lit; Intellectual Property; Patent; Trade Secrets/Unfair Comp Data Privacy; Employee Benefits; Health Employee Benefits Corporate Finance; M & A; Publicly Held Corp; Securities/Venture Finance Crim Defense: White Collar ADR: Comm Lit; ADR: Commercial RE/Enviro/Construction Real Estate: Commercial

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Leading Michigan Business Lawyers

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CRAIN’S DETROIT BUSINESS

CRAIN’S MICHIGAN BUSINESS

Growth potential As West Michigan’s Hispanic population rises, so do opportunities BY TED ROELOFS SPECIAL TO CRAIN’S MICHIGAN BUSINESS

A couple of decades ago, Andres Abreu played a hunch: Convinced that West Michigan’s Hispanic community was poised for growth, the Dominican Republic native launched a newspaper called El Vocero Hispano from the living room of his Grand Rapids home. “I knew the community was growing,” Abreu said. “I saw there is a market for a good newspaper.” In the 20 years since, the Hispanic population in Grand Rapids more than tripled, from less than 10,000 in 1990 to Abreu more than 29,000 in 2010. In neighboring Wyoming and Kentwood, it more than doubled from 2000 to 2010. The number of Hispanics in Kent County quadrupled in 20 years, to nearly

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60,000 in 2010. It is a remarkable jump for a population first drawn to the region decades ago by seasonal agricultural work in apple orchards and blueberry and cucumber fields. El Vocero — which started in 1993 with just Abreu, his wife and an early-version Apple computer — now has a staff of 14. What began as a 16-page tabloid and circulation of 3,000 is now up to 48 pages and circulation of 15,000, with each issue of the weekly Spanish language free-distribution publication brimming with 80-120 ads. The bottom line of other Hispanic ventures is looking up as well. Hispanic grocery stores have sprouted on the west side of Grand Rapids and south of downtown, meeting a need that big-box stores such as Meijer can’t or won’t fill. Hispanic-owned restaurants such as Lindo Mexico in Wyoming serve a growing customer base. Statewide, Hispanics are a rising share of the population, climbing 30 percent from 2000 to 2010 to more than 430,000 — about 5 percent of the state population. Michigan’s Hispanic population is projected to more than double to more than 900,000 by 2040. In 2007, according to the U.S. Census Bureau, the state’s 10,770 Hispanic-owned businesses generated sales and receipts of $3.9 billion and employed nearly 20,000. A 2008 study of the Hispanic community in seven counties in Southeast Michigan calculated that Hispanics contribute $14.5 billion to the regional economy. That same year, the statewide GDP totaled about $345 billion. But for all that, advocates such as Carlos Sanchez of the Ferris State University Latino Business and Economic Development Center in Grand Rapids see considerable untapped potential. “The potential Sanchez for the non-Latino business owner is tremendous,” Sanchez said. “What other ethnic group is projected to grow at that level? “For the Latino business owner, the potential is quite big as well.” Businesses not owned by Hispanics miss opportunities to reach Hispanic consumers, Sanchez said, often because they fail to bridge language and cultural differences between that ethnic group and the majority culture. Hispanic-owned businesses might be held back because they have trouble gaining credit to start

A RISING TIDE Michigan’s Hispanic population is projected to more than double by 2040. 2010: 436,358 2020: 577,078 2030: 734,875 2040: 907,172 Source: Weldon Cooper Center for Public Service, University of Virginia

WHERE HISPANICS LIVE Top 10 Michigan counties by Hispanic population in 2010: 1. Wayne: 95,260 2. Kent: 58,437 3. Oakland: 41,920 4. Ottawa: 22,761 5. Ingham: 20,526 6. Macomb: 19,095 7. Saginaw: 15,573 8. Washtenaw: 13,860 9. Genesee: 12,983 10. Kalamazoo: 9,959 Source: U.S. Census Bureau

HIGHER EDUCATION The number of Hispanics earning four-year and advanced degrees is rising fast. Four-year degrees: 2000: 75,059 2010: 140,316 Master’s degrees: 2000: 19,384 2010: 43,535 Doctorates, other advanced degrees: 2000: 5,039 2010: 8,085 Source: U.S. Census Bureau

or grow their business, he said. But Sanchez also thinks Hispanic entrepreneurs could be selling themselves short. “There are so many important areas that Latino business owners have not moved into, like sales and marketing,” he said. “There is no insurance agency (in West Michigan) that is Latino. I don’t think there is an accounting firm that is Latino.” Rick Baker, president and CEO of the Grand Rapids Area Chamber of Commerce, expects the Hispanic community to have ever-increasing impact in West Michigan in the years ahead. “Our community is going to look different 10 and 20 years down the road from what it looks like right now,” Baker said. “The demographic projections show that almost all the growth in West Michigan will be from persons of color, and a big chunk of that is in the Hispanic community.” Baker said the chamber — with several Hispanic members — is working to ensure Hispanic and other minority businesses are full participants in the region’s economic growth. “That is a huge priority to us,” he said. Heading into the Nov. 4 election, Sanchez said, no Hispanic officials held elected public office in Kent See Next Page

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County. That could have been due to a variety of reasons â&#x20AC;&#x201D; from the lack of a single, organizing issue, to the low voter turnout of Hispanics. Two Hispanics elected Tuesday to the Grand Rapids Public Schools Board of Education ended that shutout. Itâ&#x20AC;&#x2122;s also true that Hispanics do not readily fit the stereotype of a monolithic group but, rather, comprise a community with roots in nearly two dozen countries, from Mexico to the Caribbean to Central and South America. That might explain not only why it can be hard to organize this group politically but also why a one-track marketing approach might not always work. While Michigan high school graduation rates have improved for Hispanics, they lag the overall state average. According to state figures, Hispanic graduation rates increased 7 percentage points over five years, to 67 percent in 2013. That was 10 percentage points below the overall state average. And according to the Pew Research Center, 24 percent of Hispanics in Michigan ages 18-64 were in poverty in 2011, compared with 13 percent for non-Hispanic whites.

overcame long odds herself to break into the legal field. The native of the Dominican Republic grew up in a home with sporadic electricity and remembers bathing in water her mother heated on the stove. By 2010, Salas was working in family law at Warner, Norcross & Judd LLP in Grand Rapids. She was pleased enough with her work for the large firm, but she sensed an opening others had not, co-founding Avanti Law Group with two other lawyers. The firm spans everything

from business representation to criminal defense, immigration law and estate planning and trademark work. Its five lawyers and four paralegals speak both Spanish and English. â&#x20AC;&#x153;One of the things I noticed was that the (legal) community had existing lawyers that were bilingual,â&#x20AC;? she said. â&#x20AC;&#x153;But they were just focused on immigration, criminal and family law. There are a lot of other legal needs that the commu-

enough money for an Apple Macintosh II computer and a layout program called Aldus PageMaker. Depending on the need or time, he was ad salesman, editor, reporter and design specialist. Now heâ&#x20AC;&#x2122;s got a problem common to many business ventures as rivals see the same opportunity he did 20 years ago. In addition to his own, three other Hispanic newspapers now circulate in West Michigan. â&#x20AC;&#x153;There is just more competition,â&#x20AC;? he said.

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AARON LOISELLE Vice President of Employee Benefits Aaron has 15 years of experience in the employee health and benefits field. With a strong actuarial and financial background, Aaron is able to communicate well with CEOs/CFOs, while addressing the very real and constant benefits issues that face HR managers. Born and raised in the Detroit area, Aaron believes that reviving the city can be achieved by

Mike Semanco President and COO

attracting and retaining the best talent, and a significant part of that starts with providing a well thought out and cost effective benefits program.

Growing by degrees In Detroit, Pedro Guillen, a native of Spain, sees education as the best way to combat those numbers. Guillen is CEO of a tech startup called Detroit Materials Inc. that hopes to produce highGuillen strength, low-alloy steel parts for the military and off-road markets. Guillen is pleased to see a growing number of fellow Hispanic professionals, along with a growing number of Hispanics four-year degrees and more. (See table, Page 22.) It has been a different story at the University of Michigan since voter approval in 2006 of a measure banning affirmative action for college admissions. Hispanic enrollment fell from 5.3 percent in 2006 to 3.9 percent in 2012. The U.S. Supreme Court upheld that ban in April. Among Guillenâ&#x20AC;&#x2122;s classmates at UM was a native of Mexico, Alejandro Quiroz. He grew up helping his father with an ice cream shop in that nationâ&#x20AC;&#x2122;s central highlands. Today, Quiroz is vice president of global advanced manufacturing Quiroz for Benton Harbor-based Whirlpool Corp. â&#x20AC;&#x153;Not many Latinos really break the glass ceiling,â&#x20AC;? Quiroz said. â&#x20AC;&#x153;It is our responsibility as those who are already in senior leadership that we support this network of Hispanic professionals. The better we perform, the more companies will keep hiring people like me.â&#x20AC;? In Grand Rapids, Raquel Salas

nity has. â&#x20AC;&#x153;There are 11,000 Hispanic businesses in the state. They need more than just family, immigration and criminal matters.â&#x20AC;? Within six months, Avanti Law had outgrown its office and moved to a new location to accommodate its growing client base. Looking back at the past two decades, El Hispano Vocero owner Abreu sat at a table at his small headquarters and recalled his shoestring origins. He had just

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CRAIN’S DETROIT BUSINESS

November 10, 2014

CRAIN’S MICHIGAN BUSINESS

‘We bought a bus’ Facing labor shortage, Zeeland company starts shuttle service to truck in talent BY KERRI JANSEN CRAIN NEWS SERVICE

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Like much of the manufacturing industry, Zeeland-based Primera Plastics Inc. has had trouble finding qualified workers to fill gaps in its staff. “West Michigan is growing so fast, the talent is not keeping up with it,” said President and CEO Noel Cuellar. The injection molder, producing primarily automotive and furniture parts, had turned to internal training to build the skill level among its staff of about 130 but still had trouble filling both skilled and entry-level positions. “We have positions open right now, but we’re using temp agencies to fill those because we can’t find permanent employees,” said Steve Berkenpas, Primera’s CFO. Cuellar, who has involved his company in community outreach in the past, thought of a solution that had his staff momentarily confounded. “We bought a bus,” he said. The “bus” is a part of the company’s new program, Primera Pathways, which targets local, unemployed high school graduates who lack reliable transportation. Primera plans to hire three to five per shift for full-time, entry-level positions and will offer the new employees transportation to and from work for one year in the company’s recently purchased 15-passenger shuttle. “We will pick you up, we will bring you to work, and we will train you,” Cuellar said. The company-funded program, which launched last month, is intended to benefit the community while filling Primera’s own needs for workers. “I was asking the question, what happens to those kids when they’re done (with high school)? Because not all of them are going to go to college,” Cuellar said. “So there has to be trade school, there has to be a certification program; what is there out there for these kids? I wasn’t getting quite the answers I was looking for.” The new employees will receive on-the-job training as well as guidance in personal development and career skills; PNC Bank has agreed to provide training in financial intelligence. “What we want to try to accomplish is to bring these young individuals into the workforce before their skills that they’ve received in high school become diminished,” Cuellar said. “We want to get them engaged as much as possible so that they can look at a brighter future. Not just for the manufacturers and Primera, but we’re also focusing on the individual.” Another West Michigan injection molder, Cascade Engineering

COURTESY OF PRIMERA PLASTICS INC.

Primera Plastics bought a bus to help potential new workers get to needed jobs.

We will pick you “up, we will bring you to work, and we will train you.

”

Noel Cuellar, Primera Plastics CEO

Inc. in Grand Rapids, has experimented with unconventional recruiting programs. In the mid1990s, Cascade created a van pool to transport recruits — unemployed and homeless individuals on welfare — to and from work. In that case, the company found the transportation privileges were sometimes abused, and the program ended. In an effort to promote accountability and mitigate obstacles for its program, Primera will require interested individuals to bring a

guardian to sign up for the program. Each potential hire must complete an application, and local nonprofit organizations will provide pre-screening. If Pathways hires are successful at the company, the intent is for them to stay on as permanent employees after the one-year period is up, said Bambi Hollingsworth, director of operations. “Depending on whether they want the quality (department), operations, engineering — we have career paths for all of them, for all of our operators,” Hollingsworth said. Primera also is working with customers Gentex Corp. and Herman Miller Inc. to use the program for their own hires. “It’s about giving those kids an option and opening their eyes to the skilled trades,” Cuellar said. “Somebody still has to grease the wheel, and there’s a shortage of people that do that, and you can make darn good money at it.” From Plastics News

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CRAIN’S DETROIT BUSINESS

November 10, 2014

Brazil

Page 25

Venezuela

WHERE MICHIGAN DOES BUSINESS Aisin World Corp. Based: Northville Brazil operations: Barueri, São Paulo Employees: 160 Products, services: Door frames, door hinges/door checks and door latches Top executive: Hideki Kawamura, president of Aisin DO Brasil Clients: Toyota DO Brasil

Autoliv employs 1,200 at its Brazilian plant.

Autoliv Inc. Based: Auburn Hills Brazil operations: One production facility and technical center in Taubaté, São Paulo Employees: 1,200 Products: Airbags, steering wheels, seatbelts, height adjusters, buckles, textiles, Top executive: Tim Ambrey, president of Autoliv South America Clients: General Motors, Ford Motor Co., Fiat Chrysler, PSA Peugeot Citroën, Renault SA, Volkswagen AG, Toyota Motor Corp., Daimler AG

Domino’s Pizza Inc. Based: Ann Arbor Brazil operations: 103 stores in the country Employees: 1,500 Products, services: Pizza, pasta, chicken, bread sides, beverages Top executive: Edwin Junior, market director for Grupo Trigo

Dow Chemical Co. Based: Midland Brazil operations: Five offices and research and development offices and 15 manufacturing sites in the São Paulo, Guarujá, Bahia, Jundiaí and Rio de Janeiro regions Brazil employees: 3,000 Brazil products: Soy solutions, Herculex, WideStrike, chlor-alkali envelope and epoxy products Brazil top executive: Pedro Suarez, president for Latin America Brazil clients: Unilever plc, Whirlpool Corp., Danika

razil is the world’s eighth-largest economy and has a diversified mix of agricultural, mining, manufacturing and other industries. Venezuela is skewed more heavily toward raw materials and petroleum products; oil revenue makes up 96 percent of export earnings, and 12 percent of GDP. Brazil reported a nominal GDP for 2013 of $2.19 trillion. Textiles, chemicals, iron ore, cement, lumber, tin, steel, aircraft and motor vehicles and parts are a few of the largest products created in the country. Brazil’s major export partners are China, the U.S. and Argentina. Venezuela’s 2013 GDP was $367.5 billion. Its largest export partners are the U.S., China and India. Its major exports include petroleum and petroleum products, minerals, chemicals and agricultural products.

Venezuela operations: One sales office in Caracas Venezuela employees: Eight Venezuela products: Insecticides, herbicides, oil, gas, paints and plastics industries Venezuela top executive: Daniella Souza, geographic leader Andean region of Latin America Venezuela clients: Las Plumas, Agropica, Semillas Flor de Aragua, Bariven, Plásticos de Empaque, Gamma Química, Intequim

General Motors Co. Based: Detroit Brazil operations: Three vehicle assembly plants, in São Caetano do Sul, São José dos Campos and Gravataí. Also, a powertrain plant in Joinville, a components plant in Mogi das Cruzes, a logistics center and warehouse in Sorocaba and Guarulhos, and a technical center in São Caetano do Sul Brazil employees: 21,000 Brazil services, products: Vehicle design and construction, producing engines, cylinder heads and stamping parts Brazil top executive: Santiago Chamorro, president Venezuela operations: One assembly plant in Valencia and one in Mariara, a spare parts and service center in Los Guayos, Carabobo Venezuela employees: 3,100 Venezuela products: Chevrolet products such as the Spark, Aveo 3 and 4-door Cruze, Silverado LS 4x2, Silverado LT 4x4 as well as bus chassis Venezuela top executive: Carlos Alberto Martorelli, president

Inteva Products Valencia

Based: Troy Brazil operations: One manufacturing plant and one technical center in Cordeirópolis, São Paulo Employees: 75 Products: Window regulators and latches Top executive: Marcus Peixoto, production manager Clients: Renault SA, Volkswagen AG

Caracas

VENEZUELA

BRAZIL

Each World Watch features a different country. If you know of a Michigan company that exports, manufactures abroad or has facilities abroad, email Jennette Smith, managing editor, at jhsmith@crain.com.

COMING UP December: China/Taiwan

Metaldyne LCC Based: Plymouth Brazil operations: A manufacturing facility in Indaiatuba, São Paulo Employees: 72 Products: Powder metal automotive components including main bearing caps, cam rings, rotors, plates, cam caps and piston cooling nozzles Top executive: Gilvan Nunes-Bezerra, plant manager Clients: Ford Motor Co., Fiat Chrysler, Schaeffler Group, ZF Friedrichshafen AG, DHB, Nexteer Automotive, Bosch GmbH, MWM International

MSX International Inc. Based: Detroit Brazil operations: Headquarters in São Paulo, seven branch offices throughout the country Employees: 2,000 Services: Technical staffing services to OEMs and tier-one and tier-two suppliers; and business and process, technical, warranty and training services to vehicle manufacturers and dealer networks Top executives: Ilkka Palin, human capital solutions managing director, MSXI Brazil Clients: Fiat Chrysler, Ford Motor Co., General Motors Co., Hyundai Motor Co., Jaguar Land Rover, LG Brasil, MAN SE Corp., Mercedes-Benz, Nissan Motor Co., Peugeot Citroën, Volkswagen AG

NSF International Based: Ann Arbor Brazil operations: Laboratory and office in Porto Alegre Employees: 72 Services: Auditing, testing, certification, training and consulting services to consumer products, food, agriculture, health science, plastics, bottled water, retail, hotel and water industries Top executive: Ellen Pritsch, NSF Bioensaios general manager

Pinkerton Consulting & Investigations Inc. Based: Ann Arbor Brazil operations: Regional hub office in São Paulo and branch office in Rio de Janeiro Employees: 47 Services: Risk management and consulting, including investigations, employment screening, protective services, security management, crisis and emergency response, intelligence and information services, cybersecurity and intellectual property protection Top executives: Jack Zahran, president; John Lawrence, vice president, South America More information: Pinkerton was founded in 1850, making it one of the oldest corporations still in existence.

TI Automotive Ltd. Based: Auburn Hills Brazil operations: Manufacturing facilities and fluid-carrying systems plants in Gravataí, Juatuba, São José dos Campos and São José dos Pinhais; a manufacturing facility for pump and module systems in Eugênio de Melo; a laboratory and test center in Caçapava Brazil employees: 1,240 Brazil products: Pump and modules, level sensors, brake and fuel lines, power steering products, HVAC, HVAC parts and coated tubes Brazil top executive: Luiz Lourenco, acting plant manager; Andre Bonatto Nunes, plant manager; Nelson Ferreira, plant manager; Marcio Pinto Albino, plant manager Brazil clients: Volkswagen AG, Fiat Chrysler, Ford Motor Co., Mercedes-Benz, Renault SA, PSA Peugeot Citroën, Nissan Motor Co., General Motors Co., Android, Iveco Latin America Ltda., Dytech Dynamic Fluid Technologies, General Motors Co., Hyundai, JTEKT North America Inc. Venezuela operations: A manufacturing and fluid carrying systems plant in Valencia Venezuela employees: 50 Venezuela products: Brake and fuel bundles, tube fuel compressed natural gas bundles, tube fuel canister and tube brakes Venezuela top executive: Julian Pabon, plant manager Venezuela clients: Ford Motor Co., General Motors Co., Fiat Chrysler, Toyota Motor Corp.

TRW’s Brazilian presence includes a plant in Lavras.

Kelly Services Inc.

Based: Troy Brazil operations: Headquarters in São Paulo and 10 staffing offices around the country Resende Employees: 200 Rio de Services: Direct hire in the engiOsasco Janeiro neering and IT industries, outsourcSão Paulo ing, consulting, trade marketing and temporary placement. Top executives: Sergio Gomez, vice president for Latin America; Daniel Pagano, general country manager

Clients: Ford Motor Co., LG Brasil, HewlettPackard Brasil, Natura, Sony Corp., Bridgestone Corp., Harley Davidson Inc.

TRW Automotive Holdings Corp. Penske Automotive employs 2,000 in Brazil.

Penske Automotive Group Based: Bloomfield Hills Brazil operations: South American headquarters in São Paulo, 26 locations countrywide Employees: 2,000 Services: Distribution center management, transportation management, industrial logistics management and lead logistics Top executive: Paulo Sarti, managing director

Based: Livonia Brazil operations: Manufacturing facilities in Lavras, Minas Gerais; Engenheiro Coelho, Diadema and Limeira, São Paulo. Limeria also has one aftermarket office. Employees: 3,200 Products: Braking systems, steering and suspension, body control systems, occupant safety systems and safety electronics Top executive: Moises Bucci, president of TRW South America — Natalie Broda

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November 10, 2014

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

CRAIN'S LIST: LARGEST MICHIGAN LAW FIRMS Ranked by number of attorneys in Michigan Rank

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25.

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CRAIN’S DETROIT BUSINESS

After slow climb, Fieger ex-partner finds footing with own law firm BY CHAD HALCOM CRAIN’S DETROIT BUSINESS

It’s been a long and turbulent three years since Ven Johnson and a sole paralegal found themselves sharing his home office in Birmingham after their abrupt departure from their former law firm. But branching out from trial attorney to entrepreneur is paying off for the owner of Johnson Law PLC, a Detroit personal injury and medical malpractice law firm with more than 30 employees, two offices and $24 million worth of verdicts and settlements this year. This week, Brian Molde, former-

ly of McKeen & Associates PC, starts as an associate at the firm’s second office in Grand Rapids, bringing the firm’s number of attorneys to 14. That includes Johnson Jeffrey Danzig, the former intake department director at Southfield-based Fieger Law PC who succeeded Johnson as a partner at Fieger Law following Johnson’s 2011 departure — then followed Johnson to the new firm

earlier this year. In early 2015, the firm plans an expansion into the floor above its offices, Johnson said, to occupy the former Savoyard Club atop Detroit’s historic Buhl Building. A 2012 lawsuit against Fieger Law President Geoffrey Fieger alleging unpaid wages and commissions was settled in September. But first came the challenge of spending almost seven figures to build and promote an all-new law firm, and building a caseload, with any revenue from contingency fees or judgments from new cases likely to be months away. The career change came after a disagreement

with Fieger culminated in Johnson learning he couldn’t return to the office, he said, because the locks had been changed and his computer was shut down. “I had a few cases, but I didn’t know it was going to be my last day, so I didn’t exactly develop an exit strategy,” he said. Johnson Law specializes in medical malpractice, automotive and other vehicular negligence, product liability, police and governmental misconduct, and other plaintiff personal injury litigation. Revenue grew from about $300,000 on $2 million worth of awards in 2011, to $1.6 million in

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2012 on about $9 million in cases, to $4.5 million in 2013 on $18 million and $6 million on cases resolved this year. “I didn’t pay myself anything out of the business for the first two years,” Johnson said. “Instead, I had liquidated the majority of my available funds and used that period for investing in myself, which is what the books and other material on startups and entrepreneurship all tell you to do. “It was petrifying, because of how long it takes the money to come in from your work, and with the ebb and flow of cases, there’s no guarantee of what’s going to happen.” Johnson estimates he has spent well over $500,000 since 2012 on marketing to raise the firm’s profile, including the “Ven Fights” billboards that include pictures with boxing champion Thomas Hearns, and some TV spots. That’s over and above his office lease in the Buhl and payroll for a growing staff. The marketing is through Harper Woods-based J.L. Barlow & Associates Inc. Fieger did not return phone calls seeking comment about Johnson or the settlement. Scott Goodwin, president of the Michigan Association for Justice and a managing partner at personal injury firm Goodwin & Scieszka PC in Birmingham, said Johnson’s results are what will make the difference for him. Johnson’s business growth “was not because it’s any kind of growth time within the personal injury practice field right now. Ven has a reputation for being aggressive, and other attorneys are referring to him.” Johnson came away from Fieger “with a lot of experience in a very well-known firm and had the wherewithal at the time to build a new one. And fortunately for him, results matter. ... Good cases find their way to good lawyers.” Johnson said the media campaign now generates about half the cases, but early on most came from referrals from other attorneys. “With referrals, of course, you also pay a referral fee, but I also got some level of case referrals from judges who knew my work. And at times, I’ve even had cases referred by attorneys who had been my opposition counsel.” Johnson said he started drawing a salary in late 2013, shortly before adding the Grand Rapids office in January by hiring attorney Victoria Marks. Other hires, like Danzig and medical malpractice veteran Jody Aaron, cultivate a mentorship and professional development structure by pairing experienced attorneys with newer ones, he said. Notable wins this year include an $8 million jury verdict in June against Beaumont Health in Wayne County Circuit Court for the family of a 24-year-old patient who died after a gall bladder procedure in 2009; a $2.44 million verdict in May against Motorists Mutual Insurance Co. and Home-Owners Insurance Co. in Macomb County Circuit Court involving insurance coverage to an accident victim; and a $2.75 million accident verdict in Oakland Circuit Court last month. Chad Halcom: (313) 446-6796, chalcom@crain.com. Twitter: @chadhalcom

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Out-of-state buyer likely for One Detroit Center, local analysts say BY KIRK PINHO CRAIN’S DETROIT BUSINESS

When and if downtown’s thirdlargest office building sells, it will likely be to a large out-of-state buyer. The brokerage firm for iStar Financial Inc., the majority owner of One Detroit Center, began Monday marketing the building and an attached parking garage to potential buyers. But that wasn’t before an offer was made to the Detroit Police and Fire Retirement System — which owns 10 percent of the building, a 2,070-space parking garage and the

At that price point (more than “$1M), there are very few real (local) buyers – the big funds, the REITS.

”

Paul Choukourian, Colliers International

land on which they sit — for more than $100 million, said Greg Camia, senior vice president of New York City-based iStar. The retirement system declined the offer last month, leaving iStar

and its broker, Eastdil Secured LLC, searching for other buyers. Those are likely to come in the form of large out-of-state buyers, local real estate experts said. “Really at that price point, there

are very few real (local) buyers — the big funds, the REITs (real estate investment trusts),” said Paul Choukourian, executive managing director in the Southfield office of Colliers International Inc. Still, that bodes well for downtown because it shows that Detroit buildings are now seen outside of Michigan as sound investment opportunities, Choukourian said. “The good news is that Detroit is now off many people’s blacklists. For years, Detroit properties would not even get considered by many of the largest national purchasers. With the good news that is being generated and perceived

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Sally Like, Owner Marcile’s Fashions & Bridal

value in Detroit compared to other major markets, Detroit is actually seeing a large influx of out-of-town buyers poking around.” Among those that have entered the market recently is DDI Group, a Shanghai-based investor group that purchased the David Stott Building and the former Detroit Free Press headquarters at auction a year ago for more than $13 million combined. Others buying downtown include Emre Uralli, the Florida real estate investor who sold those two buildings to DDI, and a New York entity called 600 Randolph SN LLC, which bought the Old Wayne County Building and a surface parking lot for $13.4 million in August. “For the size that (One Detroit Center) is, I think it might be similar to the (Southfield) Town Center deal, where someone came in, gets it at a good price point and then sells it a few years down the line,” said Josh Suardini, vice presiSuardini dent of Southfield-based Etkin LLC. Matt Farrell, executive principal and partner of Birminghambased Core Partners Associates LLC, said the building’s quality, its tenant roster and the parking deck make it a solid investment. “It’s one of the highest quality buildings in Southeast Michigan,” Farrell said. The buyer would receive all revenue from the building and parking deck and pay iStar and the retirement system annual rent on a long-term ground lease on the land on which One Detroit Center and the parking deck sit, Camia said. “The leasehold structure provides the opportunity for an investor to benefit from the dynamic changes occurring in Detroit and to continue upon the recent leasing success at One Detroit Center while still allowing iStar to retain a significant investment in the city,” the company said in a statement to Crain’s Thursday. There is 13.45 million square feet of office space downtown, of which 23.2 percent, or 3.12 million square feet, was vacant in the third quarter, according to the Southfield office of Newmark Grubb Knight Frank. The asking rent for Class A space downtown was an average of $23.02 per square foot per year. That’s slightly higher than the $22.60 per square foot per year average cost to lease at One Detroit Center, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. One Detroit Center is at 500 Woodward Ave. between Congress and Larned streets. At 957,000 square feet, One Detroit Center is third in size only to the Compuware Corp. headquarters at One Campus Martius (1.1 million square feet) and the Penobscot Building at 645 Griswold St. (996,000 square feet). Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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CALENDAR WEDNESDAY NOV. 12 2014 Small Business Conference and Expo. 8 a.m.-4 p.m. Walsh College and South East Michigan Entrepreneurs Association. Learn the tools to successfully own and operate a business in Michigan. Walsh College, Novi. $39 in advance or $59 at the door. Contact: ZaLonya Allen, (248) 491-3146; email: administrator@semea.info; website: semea.info. Top Mistakes Business Owners Make. 7 p.m. Plymouth District Library. Panel offers advice on assets, insurance and more. Topics and panelists include â&#x20AC;&#x153;Are your business assets protected?â&#x20AC;? by Richard Nash, CPA; and â&#x20AC;&#x153;Are your personal goals in line with your business goals?â&#x20AC;? by Paula Swain, financial consultant. Plymouth District Library, Plymouth. Free. Contact: Marjorie Sadler, (734) 453-0750, ext. 205; email: msadler@plymouthlibrary.org; website: plymouthlibrary.org.

THURSDAY NOV. 13 APACC Womenâ&#x20AC;&#x2122;s Leadership Conference. 1:30-6:30 p.m. Nov. 13. Asian Pacific American Chamber of Commerce. Keynote speaker is Betty Chu, M.D., chief medical officer, Henry Ford West Bloomfield Hospital. The Inn at St. Johnâ&#x20AC;&#x2122;s, Plymouth Township. $35 members/ strategic partners, $45 non Chu members, $10 students; day-of-event registrations accepted. Contact: Sarah Lalone, (248) 430-5855; email: sarah@apacc.net; website: apacc.net.

FRIDAY NOV. 14 Inside the CEO Mind. 8-10 a.m. Detroit Regional Chamber. Tony Michaels, president and CEO of The Parade Co., is the guest speaker. Includes a behind-thescenes tour of the facility. The Parade Co., Detroit. $20 for members, $50 for nonmembers, and include continental breakfast. Preregistration is encouraged, but walk-ins are welcome. Contact: Maggie Oldenburg, (313) 5960482; email: moldenburg@detroit chamber.com; website: detroitcham ber.com/events.

UPCOMING EVENTS Fourth Annual Tux & Chucks. 9 p.m.-2 a.m. Nov. 15. Cool Smart Inc. Detroit Jazz Festival, Detroit Young Professionals, Kids Kicking Cancer and the Networkingout Foundation are being honored. The Garden Theater, Detroit. $100. Contact: (313) 673-5175 or (248) 302-7009; info@tuxandchucks.org. Buy tickets at tuxandchucks.org. 2014 North American International Cyber Summit. 8:30 a.m.4:30 p.m. Nov. 17. Engineering Society of Detroit. Keynote speakers include Gov. Rick Detroit Snyder, Mayor Mike Duggan and David Behen, director and CIO, Michigan Department of Technology, Management Snyder and Budget. $99, or $79 for students or members of ISSA, InfraGard, West Michigan Cyber Security Consortium, ISAC, Mi-ISAC, Mi-GMIS, WC4. Contact: Leslie Smith, (248) 353-0735, ext. 152; email: lsmith@esd.org; website: esd.org. Detroit Economic Club Presents. 11:30

BUZZFEED FOUNDER, CEO IN ADCRAFT EVENT Join Jonah Peretti, founder and CEO of BuzzFeed, for a special Adcraft Club of Detroit luncheon presentation Nov. 12 from 11:30 a.m.-1:30 p.m. at The Reserve, Birmingham. Peretti will discuss BuzzFeedâ&#x20AC;&#x2122;s early days as an R&D lab and where it is headed. Tickets are $35 for members, $45 for nonmembers, $25 junior and student members. For more information, call (313) 872-7850, email adcraft@adcraft.org or visit adcraft.org. a.m.-1:30 p.m. Nov. 17. With Daniel Loepp, president and CEO, Blue Cross Blue Shield of Michigan. Westin Book Cadillac Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econ club.org. Build Transit, Build Business Summit. 8:1511 a.m. Nov. 18. Metro Coalition of Congregations. Event brings community, business and civic leaders together with Regional Transit Authority officials to discuss transit planning. The Hall of Legends, Ford Field, Detroit. Free, but attendees must RSVP. Contact: Marie Donigan, (248) 505-2195; email: mariedonigan@yahoo.com; website: mccmichigan.org. Michiganâ&#x20AC;&#x2122;s Got Talent Series: Creating a Winning Corporate Culture. 11:30 a.m.-1 p.m. Nov. 18. Automation Alley. Joe Neary, CEO of Carite, talks about how companies can attract and retain talent. Automation Alley, Troy. $20 members ($30 at the door), $40 nonmembers ($50 at the door). Preregistration ends Nov. 14. Contact: (800) 427-5100; email: info@ automationalley.com; website: auto mationalley.com. Detroit Community Development Awards. 6-11 p.m. Nov. 18. Detroit Local Initiatives Support Corp. and Community Advocates of Detroit. Dinner and awards program celebrates champions of community development. Cobo Center, Detroit. $75. Register by Nov. 17. Contact: (313) 596-8222, ext. 10; email: detroitcdawards@lisc.org. Website: lisc.org/detroit. Breakfast of Champions. 7:30-9 a.m. Nov. 19. Leadership Oakland. Executive coach and author John Baldoni speaks on â&#x20AC;&#x153;Moxie: The Secret to Bold and Gutsy Leadership.â&#x20AC;? MSU Management Education Center, Troy. $25 members, $36 nonmembers. Register at leadershipoakland.com. Contact: info@leadershipoakland.com; website: leadershipoakland.com. Oakland Chamber Network Mixer. 5:30-7:30 p.m. Nov. 19. Oakland Chamber Network. Professionals gather to network among county chamber members. Downtown 51 Grille, Pontiac. Members, $10 in advance, $15 at the door; nonmembers, $25. Contact: Rebecca Wiles, (248) 853-7862; rwiles@auburn hillschamber.com; website: auburn hillschamber.com. 2014 Women Entrepreneurs Conference. 8:30 a.m.-1 p.m. Nov. 20. Michigan Association for Female Entrepreneurs. The conference brings together top female entrepreneurs, business experts and media professionals who will discuss components of a successful business. Michigan First Credit Union, Lathrup Village. $35. Contact: Tonya McNeal-Weary, (866) 490-6233; email: info@mafedetroit.org; website: mafedetroit.org. Networking Reception With L. Brooks Patterson, 5:30-7:30 p.m. Nov. 20. Detroit Regional Chamber. Join more than 300 members for networking and to hear the Oakland County executive. Meadow Brook Hall, Rochester Hills. $10 members ($25 on site), $590 nonmembers; preregistration required. Contact: Maggie Oldenburg, (313) 596-0482; email: moldenburg@ detroitchamber.com; website: detroit chamber.com. Habitat for Humanity of Oakland Countyâ&#x20AC;&#x2122;s Signature Event. 6-9 p.m. Nov. 20. Habitat for Humanity Oakland County. Gathering focuses on homeowner success stories. Special guests include Thornet-

Peretti

ta Davis and Alexander Zonjic and Friends. WWJ 950â&#x20AC;&#x2122;s Marie Osborne emcees. The Townsend Hotel, Birmingham. $175 patron, $250 benefactor. Contact: (248) 338-1843, ext. 226; email: joy cer@habitatoakland.org; website: habitatoakland.org. MSED 21st Annual Awards Gala. 6-10:30 p.m. Nov. 20. Marketing & Sales Executives of Detroit. Among MSED honorees are Joseph Anderson Jr., chairman and CEO, TAG Holdings LLC; John Rakolta Jr., chairman and CEO, Walbridge Aldinger; and Toby Barlow, CCO, Team Detroit. Detroit Athletic Club, Detroit. $150 members, $195 nonmembers. Contact: (248) 643-6590. Register at msedetroit.org; website: msedetroit.org. Eighth Annual Michigan Chronicle Legacy in Motion Gala. 6-10 p.m. Nov. 22. Real Times Media and Michigan Chronicle. Earvin â&#x20AC;&#x153;Magicâ&#x20AC;? Johnson will receive the 2014 Legacy in Motion Lifetime Achievement Award. Grand Riverview Ballroom, Cobo Conference Center, Detroit. Tickets are $150, or $250 for VIP level. Contact: (313) 963-5522; website: michchronicleonline.com The D Show 2014. 6-10 p.m. Dec. 3. Adcraft. Detroitâ&#x20AC;&#x2122;s creative, media, entertainment and production communities celebrate top talent. Masonic Temple, Detroit. $130 regular, $65 student members. Register at adcraft.org. Website: thedshow.org. 21st Century Workspace, Workplace, Workforce: Microsoft, Steelcase, Right Management. 11:30 a.m.-1:30 p.m. Dec. 8. Inforum. Speakers include John Fikany, Microsoft vice president, who will discuss living in a mobile and cloudcentric world; Laura Feinauer, project leader for Fikany brand communications at Steelcase, who will talk about the importance of place for employee well-being and engagement; and Michael Haid, executive vice president, talent management and global strategic workforce consultant at Right Management, whoâ&#x20AC;&#x2122;ll discuss how to align talent and business strategies. Detroit Marriott Renaissance Center. $40 members, $60 non-guests; $25 students. Contact: (877) 633-3500. Register at inforummichigan.org.

CALENDAR GUIDELINES If you want to ensure listing online and be considered for print publication in Crainâ&#x20AC;&#x2122;s Detroit Business, please use the online calendar listings section of www.crainsdetroit.com. Hereâ&#x20AC;&#x2122;s how to submit your events: From the Crainâ&#x20AC;&#x2122;s home page, click â&#x20AC;&#x153;Detroit Eventsâ&#x20AC;? in the red bar near the top of the page. Then, click â&#x20AC;&#x153;Submit Your Entriesâ&#x20AC;? from the drop-down menu that will appear and youâ&#x20AC;&#x2122;ll be taken to our online submission form. Fill out the form as instructed, and then click the â&#x20AC;&#x153;Submit eventâ&#x20AC;? button at the bottom of the page. Thatâ&#x20AC;&#x2122;s all there is to it. More Calendar items can be found on the Web at www.crainsdetroit.com.

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PEOPLE EDUCATION Nicole Wells Stallworth to assistant vice president for government and community relations, Oakland University, at the MacombOU Incubator, Sterling Heights, from director of community engagement, government affairs and enrichment Stallworth programs, The Children’s Center, Detroit.

FINANCE Mark Sutton to senior associate, Plante Moran PLLC, Auburn Hills, from associate. Also to senior associate from associate: At the Auburn Hills branch, Jennifer Chambers; at the Clinton Township branch, Dana Coomes and Robert Shefferly III. Maya Wagh to partner, audit, Grant Thornton LLP, Southfield, from senior manager. Also, Steve Skiba to managing director, tax, from director.

GOVERNMENT Jarod Koopman to special agent in charge of criminal investigation Detroit field office of the Internal Revenue Service, from assistant special agent in charge, Chicago field office, IRS. Marquitta Massey to director, quality improvement and provider management network, Oakland County Community Mental Health Authority, Auburn Hills, from manager, quality improvement and provider management network.

BUSINESS DIARY CONTRACTS

tion Project, Detroit.

IN THE SPOTLIGHT

REAL ESTATE

ViMax Media has named Jeffrey Scheiber as president and CEO. He will assume the post Jan. 1. Scheiber has been with ViMax for nearly two decades, including as vice president and creative director of Scheiber ViMax Media, working on marketing campaigns for national companies such as Kroger and Sysco Foodservice. Scheiber, 41, replaces Michael McGraw, who will remain chairman of ViMax Media. Scheiber earned a bachelor of fine arts degree from the College for Creative Studies in Detroit.

James Bowling Jr. to vice president of corporate services, Compass Commercial LLC, Troy, from manager corporate facilities, planning, design and construction, Kelly Services Inc., Troy.

RETAIL

Morang

Melissa Morang to marketing and sponsorship director, Great Lakes Crossing Outlets, Auburn Hills, from marketing and sponsorship director, The Mall at Partridge Creek, Clinton Township.

SERVICES Jeff Forrester to director of purchasing,

MARKETING Laura Oliveto to vice president of client relations, the Millerschin Group Inc., Auburn Hills, from vice president of new business development, Basso Design Group, Troy. Erin Hall to account manager, Franco Public Relations Group, Detroit, from account supervisor, Gibbs & Soell Inc., Chicago. Also Elizabeth Robbins-Sabourin to account manager, from account supervisor, FleishmanHillard, Detroit.

NONPROFITS Madeline Bialecki to executive director, The Lake House, St. Clair Shores, from development director, Mercy Educa-

FordDirect, Dearborn, from senior buyer, General Motors Co., Warren. Judy Perry to director of community service and business development, 101 Best and Brightest Companies to Work For, Warren, from executive consultant, Search Plus International, Bloomfield Hills. Perry

TECHNOLOGY Fredrick Molnar to venture biotech director, Michigan Life Sciences and Innovation Center, Plymouth, from vice president, North American sales, marketing and service operations, Sony Biotechnology Inc., Ann Arbor.

changed its name to Spalding DeDecker. Website: sda-eng.com.

Rohatynski-Harlow Public Relations LLC, Brighton, has been retained to provide public relations and media relations services to the North American International Auto Show in Detroit. The company, which has been associated with NAIAS and the Detroit Auto Dealers Association, Troy, since 1999, has been PR agency of record for NAIAS since 2012. Website: roharpr.com. Palace Sports & Entertainment LLC, Auburn Hills, announced a multiyear contract with Avita Artesian Water, Roscommon, for Avita to serve as the “official water” of the Detroit Pistons and be featured in all areas of the Palace of Auburn Hills, the official Pistons website and the Pistons mobile app. Website: pistons.com.

NEW PRODUCTS Duo Security Inc., Ann Arbor, a provider of secure, cloud-based authentication services for companies, announced its API Edition for cloud and mobile software providers to protect user account access by adding two-factor authentication. Duo also introduced its Mobile Software Development Kit for iOS and Android, which lets mobile app providers embed authentication capabilities. Website: duosecurity.com. Sika Corp., Madison Heights, announced two new auto glass replacement adhesive products: SikaTack MACH 30, a cold-applied product with a 30-minute safe drive away time and SikaTack MACH 60, an improved one-hour cold-applied product. The company also introduced Sika Primer-207, a one-step primerfor surface treatment of pinchwelds, encapsulated parts and glass. Sika also announced more sustainable product packaging modifications. Website: sikausa.com.

EXPANSIONS The Big Salad LLC, Grosse Pointe Woods, has opened Nourish by The Big Salad restaurant at AL!VE health care park, 800 W. Lawrence Ave., Charlotte. Website: thebigsalad.net. Gateway-Detroit East, an affiliate of Gateway Community Health, Detroit, has opened its integrated person-centered health care home facility at 3646 Mt. Elliott, Detroit. Website: gchi.org. SRI Biosciences, a division of SRI International Inc., Menlo Park, Calif., has opened an early-phase clinical trial facility at the Michigan Life Science Innovation Center, 46701 Commerce Center Drive, Suite D, Plymouth. Telephone: (734) 527-4200. Website: sri.com.

NEW SERVICES Atlas Oil Co., Taylor, a national fuel supply, logistics and services company, announced the launch of its new comprehensive recruiting website, atlasoilcareers.com.

STARTUPS Cornwall Bakery has opened at 15215 Kercheval Ave., Grosse Pointe Park. Telephone: (313) 264-1938. Website: facebook.com and search for Cornwall Bakery.

NAME CHANGES Spalding DeDecker Associates Inc., Rochester Hills, a consulting engineering and surveying firm, has

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Invest: Investing out of state attractsVC firm from out of state â&#x2013; From Page 3

invests $50,000 in seed money for startups, and the newer Detroit Innovate fund, which invests larger amounts in early-stage tech companies. The First Step fund was launched in 2010 with a $5 million grant from the New Economy Initiative for Southeast Michigan. The Detroit Innovate fund was launched last year with $5 million from the NEI, has a commitment of $2.5 million from the Michigan Economic Development Corp. and hopes investments from other foundations will allow it to raise at least $15 million. Fortino will continue as a member of the investment committee for the First Step fund. He has been a serial entrepreneur himself, cofounding three companies â&#x20AC;&#x201D; Shepherd Intelligent Systems, a now-defunct UM spinoff that provided fleet-management software; Ann Arbor-based FlockTag Inc., which manages customer reward programs; and San Francisco-based Sidecar Technologies Inc., a rideshare company. Fortino has equity stakes in both FlockTag and Sidecar, which made headlines in September when it announced a funding

round of $15 million, which included an investment by Virgin Airlines founder Richard Branson. The company previously had raised $20 million in VC funding. Garrou said he got to know Fortino while vetting area startups. Mercury and the First Step fund provided seed funding to Ann Arbor-based Covaron Advanced Materials Inc., founded in 2012 to commercialize a process for making high-performance ceramics at low temperatures. Covaron won $25,000 at the 2012 Accelerate Michigan Innovation contest and last year won $100,000 as the eventâ&#x20AC;&#x2122;s runner-up. Mercury has sold its stake in the company and currently has two area portfolio companies â&#x20AC;&#x201D; DeepField Inc., an Ann Arbor-based provider of cloudbased data analytics, and Swift Biosciences Inc., an Ann Arbor-based provider of biological products for gene researchers. â&#x20AC;&#x153;After working with Adrian, we had identified him as a potential partner. We saw how he operated, and it made sense to reach out to him when we decided to add a sixth partner,â&#x20AC;? said Garrou. Fortino wonâ&#x20AC;&#x2122;t just manage Ann

Patti Glaza, who replaced Fortino as managing director of Invest Detroitâ&#x20AC;&#x2122;s two funds, said the move here by Mercury is proof that a strategy to invest in out-ofstate VC firms is paying off. Arbor operations. He said he will help build up Mercuryâ&#x20AC;&#x2122;s national practice in industrial technologies and physical sciences. An engineer, he previously was manager of powertrain development with Van Buren Townshipbased Ricardo Inc., a tier-one auto supplier. â&#x20AC;&#x153;I had a wonderful time at Invest Detroit. I loved the group, but the opportunity to joining a mid-continent firm closing on a round of more than $100 million was inviting. Theyâ&#x20AC;&#x2122;re some of the best VCs Iâ&#x20AC;&#x2122;ve come across,â&#x20AC;? said Fortino. â&#x20AC;&#x153;We invested $3 million in Mercuryâ&#x20AC;&#x2122;s second fund in 2010, and we invested $5 million in the third fund

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Patti Glaza, who replaced Fortino as managing director of Invest Detroitâ&#x20AC;&#x2122;s two funds, said the move here by Mercury is proof that a strategy both by the state and by Rizik to invest in out-of-state VC firms is paying off. The stateâ&#x20AC;&#x2122;s Michigan Venture Fund II, which is managed by Chicago-based Grosvenor Capital Management LP, has committed more than $10 million to Mercuryâ&#x20AC;&#x2122;s third fund. â&#x20AC;&#x153;The model was to get out-ofstate companies to invest here, and if they did well theyâ&#x20AC;&#x2122;d want to open an office here, and itâ&#x20AC;&#x2122;s worked,â&#x20AC;? she said. â&#x20AC;&#x153;If the state funds and the Renaissance funds werenâ&#x20AC;&#x2122;t here, we wouldnâ&#x20AC;&#x2122;t have this growing venture capital talent.â&#x20AC;? While Mercury was under no legal commitment to invest in Michigan after receiving the first chunk of $3 million from Rizik, Garrou said the firm ended up committing more than 20 percent of its $70 million second fund to investments here, and he expects that percentage to rise for the third fund. Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2

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uddled inside Stafford’s Perry Hotel overlooking Little Traverse Bay in downtown Petoskey, state Rep. Frank Foster was working the phones during the final moments of the Aug. 5 primary campaign. As the polls closed and early returns came in, Foster, surrounded by family, his girlfriend and campaign staffers, was optimistic. While voter turnout was low, it exceeded their target goals against a challenger who had never run for office before. And, while just 28, Foster had never lost an election. But by 9:30 p.m., Foster, a two-term Republican incumbent and chairman of the House Commerce Committee, was making a concession call to Lee Chatfield, a teacher at a private Christian school. Chatfield won by fewer than 1,000 votes. And Foster knows why: He championed an effort to amend the state’s Elliott-Larsen Civil Rights Act to include sexual orientation and gender identity as protected from employment discrimination.

“This was the defining factor,” Foster said. Now, as a lame-duck lawmaker, Foster knows the bill could be dead. His primary loss may have chilled any support among Republican colleagues, although business advocates — including the Detroit Regional Chamber, the head of AT&T’s Michigan division and office furniture makers in West Michigan — still want to push for lame-duck adoption. This is a story of how a primary battle in a district in northern Michigan derailed legislation that major employers across the state had championed.

Passion for politics Growing up, Foster was not all that interested in politics. He was much more interested in hockey, being part of two state champion travel league teams. But politics — of the Democratic variety — was in the family’s blood. Great uncle Al Foster chaired the Emmet County Democratic Party in the 1970s. For years, county fundraisers were held at the Foster family farm, which still has picnic tables autographed by U.S. Sen. Debbie Stabenow and former Gov. James Blanchard. As a freshman at Grand Valley State University, Foster landed a seat on the student general assembly. Soon after, he was writing letters to university administrators, requesting a meeting with the president to talk about higher education funding. That got him a meeting with Matthew McLogan, vice president for university relations at GVSU, and eventually President Thomas Haas. McLogan said GVSU then and now receives the lowest appropriation per student of the 15 public universities from the state, but is one of the highest-performing institutions in terms of graduation and retention rates and administrative efficiency. That dichotomy bothered Foster and his colleagues in student government. So GVSU administrators brought Foster with them on several trips to Washington, D.C., and Lansing to advocate for increased higher education funding. Foster even testified before the House Appropriations Higher Education subcommittee. He served as student body president as a junior and was re-elected to serve his senior year. “His fellow students saw someone very bright in him, and they were right,” McLogan said. As Foster took over as president, the issue of affirmative action was the hot topic on college campuses across the state due to the pending vote on Proposal 2, a state constitutional amendment to ban racial, gender and ethnic preferences in state government and

universities. Foster organized marches with the black student union on campus against Prop 2, which eventually passed and became law. Around the same time, the university was considering adding sexual orientation to its equal-opportunity statement, something Foster pushed the administration to do. “Coming from a really small rural town in Michigan, that had never occurred to me that that was an issue,” Foster said. “When I got there, I felt it was a real injustice.” So how did he become a Republican? Foster said his conversion began by watching the policies of Democratic Gov. Jennifer Granholm cripple the state budget and cut funding to higher education. And he also came across a pamphlet from Business Leaders for Michigan that led him to explore more of the group’s ideas. “It was a Republican strategy to get the state moving again,” he said. He graduated with a major in fi-

nance from Grand Valley in 2009. At the time, he had made the final cut for the Teach for America program, but he decided instead to run for the state House. When he moved back to Petoskey, and when he wasn’t campaigning, he worked at his family’s construction company, Frank Foster Builders LLC, as the business manager. He won the 2010 GOP primary in convincing fashion and would soon be on his way to Lansing.

Getting involved Confident of his own chances in the general election in 2010, Foster started donating some of his campaign funds to be used to help other Republicans across the state. And when Republicans took back control of the House, he urged House Speaker Jase Bolger, R-Marshall, to make him the chairman of a committee — any committee. “I lobbied him for it,” he said. Bolger assigned him to lead Natur-

al Resources, Tourism and Outdoor Recreation. Foster was one of just two freshman lawmakers to become committee chairs, a feat rare even in the Bolger term-limits era. Bolger said he felt confident in making Foster, who was only 24, a chairman because he saw in him a level of maturity, courage and a willingness to tackle problems. “Those were all evident when we first talked to him,” Bolger said. And Foster soon earned a reputation for working well with House members on the other side of the aisle. Not long into his second term, Democratic Rep. Jeff Irwin of Ann Arbor asked him to cosponsor a bill to amend the Elliott-Larsen Civil Rights Act. “Frank is a good guy,” Irwin said. “I thought he would care that there

HE TOOK ON A CAUSE, BECAME A CASUALTY BY CHRIS GAUTZ | CAPITOL CORRESPONDENT Next up for Foster: Owning a long-term care facility in Flushing for people with traumatic brain and spinal cord injuries. And maybe run for office again.

AL GOLDIS

are people who are discriminated against and have no recourse.” Democrats introduce such a bill every legislative session, and he said he asked Foster beIrwin cause he thought there would be a better chance of passage if a Republican got on board, since the GOP controls the House and Senate. Until Irwin approached him, Foster said, he had no idea that the state didn’t already include such a protection for sexual orientation. As the two talked, they decided that Foster should introduce the bill himself, not just co-sponsor it. But for that to work, Foster knew it would take time, and a plan.

Testing the waters Foster reached out to Jim Murray, president of AT&T Michigan and a former chief of staff to House Speaker Rick Johnson, to help him put together a strategy for getting such a bill passed. Murray, who is gay, is respected around town for his legislative savvy, and that is why Foster said he sought his advice. He said he learned much later about MurMurray ray’s sexual orientation. They tested the waters with Republican leadership and the Snyder administration, and conducted polling on the issue. Murray knew the timing had to be just right to get such a bill passed, but by the spring of 2013, word got out of Foster’s interest in the bill, and he did several media interviews. That helped draw attention to the issue statewide, Murray said, but he also worried it was putting a big target on Foster’s back. So Foster stayed quiet publicly as he worked with Murray on bill language and quietly gathered support in the business community. Meanwhile, discussions were taking place in the Petoskey area about who would run for Foster’s seat after he finished his third term in 2016. Chatfield and Ken Bradstreet, a former Republican lawmaker from a neighboring district, approached Foster to pitch Chatfield as his successor. Bradstreet works at the Northern Michigan Christian Academy with Chatfield, and is part of a daily Christian radio show with ChatSee Next Page

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November 10, 2014 From Previous Page

field’s father, Rusty, who runs the school. Foster brought Chatfield to the Capitol in October 2013 for a day as his guest on the House floor so he could see what life was like as a lawmaker. But toward the end of 2013, Republican National Committeeman Dave Agema, with whom Foster had served in the state House, was making national headlines for a series of disparaging remarks against gays and other groups. Foster publicly called for Agema to resign, as did dozens of other state and national Republican leaders. Not long after, Foster said, Agema and Bradstreet encouraged Chatfield to take on Foster in the 2014 primary and not wait two years to run. “I think that all changed when those two got into the mix,” Foster said. Agema said he encouraged Chatfield to run, because he felt the newcomer more closely represented the Republican National Committee platform, which believes in traditional marriage. “Foster’s voting record was not particularly conservative. I think that’s what primaries are for,” Agema said. “If you have people straying off the reservation, then someone can run against them.” Crain’s attempted to contact Chatfield and Bradstreet, who did not return messages seeking comment for this story. Foster said late last year Chatfield demanded that he be given a copy of Foster’s proposed bill on extending protections in the state civil rights law. Foster said Chatfield also demanded that Foster publicly declare his opposition to extending protections to gays by Dec. 21. Foster declined. On Jan. 15, Chatfield formed a campaign committee to enter the race. Agema was among the first to donate. The primary challenge did not deter Foster’s support for his bill. “He never stopped on this issue, even though we took a lot of grief, even if it meant he might lose his job,” Murray said.

Building momentum On May 1, Murray unveiled the Michigan Competitive Workforce Coalition, formed to advocate for adding sexual orientation and gender identity to the state’s civil rights act. Murray would co-chair the committee, along with Kary Moss, executive director of the American Civil Liberties Union of Michigan, and Brian Walker, CEO of Herman Miller, the Zeelandbased office furniture maker. At the Detroit Regional Chamber’s Mackinac Policy Conference a few weeks later, the chamber and several other businesses joined the coalition, including Chrysler Group LLC, Clark Hill PLC, Kellogg Co., Pfizer and Slows Bar BQ. Also at the conference, Gov. Rick Snyder went as far as he ever had on the issue, saying he hoped the Legislature would take up such a bill before the end of the year. Momentum seemed to be on their side, but work on the bill

We need to decide whether we are going “ to stay out of people’s lives or not, and be consistent. I’m still a Republican and will vote Republican.

”

Rep. Frank Foster

was still not finished and lawmakers instead focused on trying to find a transportation funding solution before leaving for summer break and heading home to campaign for the primary election. And Foster had to focus on his race back home against Chatfield. Foster knew he was facing a challenge. Private polling he had seen in 2013 showed protection from discrimination based on sexual orientation was not a popular issue in his Republican-leaning district, which stretches from Petoskey to Cheboygan, with part of the Upper Peninsula and Beaver and Mackinac islands. But the same polling showed that the issue resonated statewide and, Foster believed, more importantly, that it was the right thing to do. “My drive wasn’t to serve in the Legislature until the Constitution said I couldn’t, but doing something meaningful while I was there,” he said. The nervousness that set in among GOP circles in Lansing that Foster was in trouble was clear; the Detroit Regional Chamber took the unusual step of getting involved in a race so far away from metro Detroit. The chamber’s political action committee, Powering the Economy, paid for mailers and robocalls to support Foster. The ads reminded Democrats and independents they could cross over and vote for Foster in the GOP primary and encouraged them to “take a stand against the Tea Party.” Brad Williams, vice president of government relations for the chamber, said it was the first time the chamber’s PAC had paid for independent expenditures like that, but felt it was important to try to protect Foster, who had been supportive of many of the chamber’s initiatives. “It was breaking new ground for us,” said Williams, who added that the chamber had supported Republicans and Democrats and appreciated Foster’s willingness to support the civil rights issue. “Real leaders do the right thing even if they know it’s not going to be politically popular,” Williams said. “We really wanted to see him come back for a third term.”

Page 35

Bankruptcy:City reinvests ■ From Page 1

Duggan said by serving on the commission, he will make “darn sure” that the panel works toward unanimous resolutions to decisions.

Dividing the shares

If Foster had won, there could have been an opportunity to move the legislation after the primary, but with Chatfield’s victory, that idea died. And there was real concern that an attempt to change the law at all had ended once the final votes were tallied. “Right after Frank lost, there was this pause everywhere,” Murray said. “That delayed us. We just ran out of time.” Now, hopes for passage of the bill rest in the hands of Republican leaders and whether they want to push the issue during the lame-duck session, which begins in earnest this week. While it cost Foster his seat, he remains undeterred. “After he lost, the first thing he told me was, ‘I want to do this more than ever,’ ” Murray said.

What’s next For Foster, there’s life after Lansing. In July, he and a middle school friend purchased Rehabitat Systems of Michigan Inc., a long-term care facility in Flushing for people with traumatic brain and spinal cord injuries. While working in Flushing, Foster said, he will still live in Petoskey, and doesn’t rule out running again for office someday. But for that to happen, the Republican Party needs to change its stance on some social issues, he said. “We need to decide whether we are going to stay out of people’s lives or not, and be consistent,” he said. “I’m still a Republican and will vote Republican.” Chatfield easily won election to the seat on Tuesday. Whether Foster voted for Chatfield is something he is keeping to himself. Looking back, Foster said he wouldn’t change anything about what he did. It would have been disingenuous to avoid a primary challenge by waiting until after April’s filing deadline to disclose his opinion. “My voters should have the right to judge me based on what I believe,” he said. “It would have been politically advantageous for me not to talk about it, but it’s an issue that deserves a discussion.” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

Foster’s voting record was not “ particularly conservative. I think that’s what primaries are for. If you have people straying off the reservation, then someone can run against them.

”

Dave Agema, Republican National Committee

The police, fire, general services and finance departments together account for about $730 million of restructuring expenses in a largely front-loaded package of improvements for city programs by fiscal 2023, according to project lists and restructuring experts in the bankruptcy reorganization. “We’ve been implementing this plan of adjustment all along. More than 200 additional police officers are on the street as a result of the plan. There will be an additional 100 firefighters,” said Duggan. Residential blight removal is the largest earmark on the city’s list of restructuring projects, with $440.3 million in planned spending, including $115 million in the fiscal year that already began July 1. After that comes a $252.2 million investment in the Detroit Police Department, including $49.4 million this year (much of that in vehicles, hand-held radios, IT, precinct facilities and new civilian jobs); then $180.1 million to the General Services Department, including $18.8 million this year (much of that in capital expenditures and facility upgrades). Next up after that: $158.3 million for the Detroit Fire Department, including $28.6 million this year (much of it fleet improvement and hires to offset attrition); then $142.1 million to the Detroit Finance Department, including $37.4 million this year (new software and hardware, reorganization costs and implementing a new enterprise resource planning system). None of the 20 other city departments and agencies in its project list receives more than $46 million in elevated spending over the period — though several will see at least one investment that is offset by projected operational savings. More than a dozen receive a net investment of less than $7 million. The bankruptcy exit plan approved Friday also calls for more than $90 million to create new city jobs, new software to better track city planning efforts, and restructured payment plans for creditors.

Money to exit Helping to pay much of the upfront cost will be exit financing from lender Barclays plc, which has approved up to $325 million for Detroit to exit bankruptcy, although the city only plans to borrow about $275 million. Kenneth Buckfire, co-president of Miller Buckfire & Co., said the city must submit a final account of how much it will borrow from Barclays, and for what purposes, before its formal exit from bankruptcy on Nov. 21. Detroit previously thought it might have to borrow up between $45 million and $50 million more from Barclays. But a $25 million windfall from the trading value of copper will help the city avoid that borrowing. The money is projected to come from a proposal to sell some of the more than 10 million pounds of copper in Detroit’s lighting grid that is

being replaced with an aluminum compound. That, plus some cash on hand, should make more borrowing unnecessary, Buckfire said. Buckfire added that the Barclays financing positions Detroit to repay several classes of bankruptcy creditors as well as fund improvements. “The difference (after creditor settlements) is in what we will keep of it for the frontloading of service improvements,” he said. Rhodes in court favored financing to pay for city reinvestment over a tax increase. He cited witness testimony on the matter during his remarks Friday. “(A) property tax increase would produce little additional income ... (and) raising taxes would add to population decline,” he said. Of the borrowed money, about $85 million will effectively pay off creditors UBS AG and Bank of America’s Merrill Lynch unit. The city has been putting about $4 million a month toward that debt, but will retire the balance after the exit plan is final. Another $55 million will pay off the city’s limited-tax general obligation bondholders on their $163 million claim, and $20 million will go to fund retiree health care costs. That leaves about $115 million to go toward other expenses like the planned service improvements, restructuring experts said. Barclays expects to buy bonds sold through the Michigan Finance Authority, including up to $200 million of tax-exempt debt, that will be secured by city income tax revenue.

Jobs, pensions Finance expects to add more than $90 million for new positions in grant administration, risk management, income tax, purchasing, accounting and finance administration, including $8.2 million this year and $10.2 million next year. Another $20 million will go to software upgrades and data backup services, and the department expects to save $66 million due to vendor consolidation, improved software, insourcing, and better worker’s compensation claims management. Another funding source will be general fund dollars freed up by a near-elimination in what Detroit expects to contribute annually to its General Retirement System and Police and Fire Retirement System pensions over the 10 years. The $816 million “grand bargain” by the state of Michigan, foundations and philanthropists to prevent the sale of valuable cityowned art at the Detroit Institute of Arts, will shore up pensions and avert steep benefit cuts. The GRS pension plan also will get a contribution through about $300 million in bonds raised by a newly created regional Great Lakes Water Authority, to lease and manage assets of the Detroit Water and Sewerage Department. That leaves the city paying nothing to the police and fire retirement system and only about $100 million over the 10 years to the general retirement system, compared with its traditional required contribution that often topped $100 million a year to the plans, said Charles Moore, COO and shareholder of Conway MacKenzie Inc. in Birmingham.

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Republicans: Land only one who said ‘I’m ready’ – but wasn’t ■ From Page 3

tended to run for re-election to her House seat. Camp said he wanted to focus on serving out the remainder of his term, in which he has been focused on passing a tax reform package, and Rogers announced he would be moving into the talk radio world, taking a job with Cumulus Media. John Truscott, president of Lansing-based nonpartisan political consulting firm Truscott Rossman LLC, said another reason that they and some others may have passed on the seat is that Washington has not been a fun place to be in recent years, given the gridlock in Congress. “You can’t blame someone who has been there to want to come home to where reality is,” Truscott said. T.J. Bucholz, president of Lansing-based Vanguard Public Affairs, said it appeared as though Land was simply the only candidate left standing once the others declined to run. “I don’t think she was ever the party’s first choice,” he said. Schostak said Land stepped forward early to say she was interested in being a candidate, but was respectful of Camp and Rogers while they considered a run for the seat. “When the other fellows decided not to proceed, she was the one there saying ‘I’m ready,’ ” he said.

‘It’s not enough’ But she wasn’t.

Poor decisions included the nearinvisible nature of Land’s campaign. The campaign rarely, if ever, announced where it would be ahead of time. Land only did a handful of appearances with statewide media and declined to debate Peters. The few times she did talk with reporters, her lack of a grasp on national issues was apparent, analysts say. McNeilly said he and other prominent Republicans tried to talk with Land’s campaign early on about her mistakes, but was assured by her staff that the problems were being addressed. But they were not, he said, most notably after her appearance at the Detroit Regional Chamber’s Mackinac Policy Conference in May. Attendees said Land looked stiff and read from prepared remarks, never venturing far from her script. Land met with political reporters for the first time in the campaign after that appearance, but lasted just about two minutes before walking away. Bucholz said Land’s inability to articulate a vision hurt her. “The U.S. Senate is a high-stakes race where policy matters,” he said. “It’s not enough to regurgitate talking points.” When she lost on Tuesday, she followed a pattern similar to Mackinac. Before the polls closed, she briefly addressed the crowd at the GOP victory party at the Renaissance Center, thanking her family and staff, and then left. Once the

out and meet voters and “ You have tobegoable to explain your positions on the issues. That’s a basic skill that (Land) was lacking.

”

Joe DiSano, Main Street Strategies

polls closed and it was clear she had lost, she did not give a concession speech or even issue a statement afterward. “Terri just didn’t do anything,” Truscott said. “You can’t expect to go up on air and expect to buy an election.” As of Oct. 15, Land had spent $10 million on her campaign and Peters $8.7 million. Outside groups and the candidates themselves had spent $32.3 million on television ads as of Oct. 3, according to the Michigan Campaign Finance Network. The majority, $18.2 million, was spent by Land and outside groups supporting her. Bucholz said a loss of that magnitude can be attributed to one thing — hubris. “You cannot take the Michigan electorate for granted,” he said. Bucholz said the attitude of Land’s campaign came off as though she didn’t feel it was necessary to engage with middle-of-the-

road voters. “You can’t run a Rose Garden campaign if you’re not in the Rose Garden,” said Joe DiSano, partner with Main Street Strategies, a Lansing-based Democratic political consulting firm. “You have to go out and meet voters and be able to explain your positions on the issues. That’s a basic skill that she was lacking.”

Giving credit But DiSano said it is a copout to blame Land’s loss on being a bad candidate. “It takes a lot away from Gary Peters to say she was a bad candidate,” DiSano said. “(Peters) went out and met voters.” Truscott also credited Peters with running a disciplined campaign as a reason why he won, and not just the poor showing by Land. However, Bucholz and others say the result on Election Day could

have been different if Republicans had gone with a different candidate. “The outcome of that race was decided when the matchup was decided,” McNeilly said. But McNeilly said it was clear another Republican could have won that seat. “There was no reason given the makeup of the election that it was predestined to be that way,” he said. “We’d be looking at a different U.S. senator in Michigan if we had fielded a different candidate.” Schostak, though, said it would have been tough for any Republican Senate candidate because the Republicans haven’t elected a U.S. senator in Michigan in 20 years. Michigan’s last Republican senator was Spencer Abraham, who served a single term beginning in 1995 before being defeated by current U.S. Sen. Debbie Stabenow in 2000. The last Republican before that was Robert Griffin, who served from 1966 through 1978 before retiring and being succeeded by Carl Levin. Schostak said Land worked hard and improved as a candidate as the campaign went on, and he blamed Land’s loss on the negative ads run against her. “She ran into a buzz saw with Gary Peters with all the negatives, and it was nonstop,” he said. Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

Democrats: Leader ‘promised the moon and he didn’t deliver’ ■ From Page 3

with the turnout,” Johnson said. “But the party delivered on what we were tasked to do.” And that was to identify potential voters, call them, knock on their doors and deliver the party’s message, and he said that was all done in record numbers. More than 1.5 million doors were knocked by volunteers, more than 2.3 million calls were made and more than 1 million absentee ballot applications were mailed, he said. “But the results weren’t what we wanted,” he said. Dennis Darnoi, director of analytics at RevSix, a data management company based in Pontiac, said the Democratic effort to recast the playing field in midterm elections in Michigan was just not successful. “This whole notion that Democrats were going to increase turnout and participation was proven to be factually inaccurate,” Darnoi said.

No absentee advantage One way Democrats planned to increase turnout was to encourage the use of absentee ballots. In 2010, 793,914 absentee ballots were requested and 757,627 were returned. This year, 866,289 were requested, a small increase over 2010, but only 767,851 were returned, Darnoi said. Using modeling software, Darnoi said 60 percent of the ballots not returned this year were by Democratic voters.

About 28 percent of the ballots not returned were from Wayne County, and more than half of those were Detroit residents, he said. Greg McNeilly, president of the Michigan Freedom Fund, said for Democrats to win they have to actually bring new voters to the polls, not just get people who went to the polls in 2010 to vote absentee in 2014. But Johnson said based on the data they have so far from the Department of State, there were more than 100,000 Democrats who did not vote in 2010 that requested absentee ballots. He said final figures won’t be available from the state for another month to see exactly who voted and who didn’t. But Darnoi said if the Democrats’ plan had worked like they said it was going to, Schauer would have been elected governor, because Snyder received fewer votes in all 83 counties than he had in 2010. Johnson’s plan relied heavily on technology, with the use of an internal party website developed in part by Dandelion Detroit LLC. The site allowed volunteers to connect with the close to 1 million Democrats the party identified as not voting in 2010.

Actions vs. rhetoric There are rumblings in Democratic circles that Johnson may be in danger of losing his job because of the poor showing, but he said he plans to run again in February at

is going to take it “ I think Lon Johnson on the chin for the overexaggerated claims. To say it was a disappointing night for Democrats is a massive understatement.

”

T.J. Bucholz, Vanguard Public Affairs

the state party convention. It was at that convention in 2013 where Johnson successfully ousted Mark Brewer in a contentious fight for his job leading the party. Brewer had been the longest serving Democratic state party chairman in the country, at the helm in Michigan for 18 years. “Johnson came in after years of Brewer and promised the moon and he didn’t deliver,” said T.J. Bucholz, a Democrat, who is president of Lansing-based Vanguard Public Affairs, a full-service public relations company. “I think Lon Johnson is going to take it on the chin for the overexaggerated claims. To say it was a disappointing night for Democrats is a massive understatement.” Bucholz said there was a disconnect somewhere between what Johnson was saying about the party’s ground game and what the reality was. “I think Lon Johnson sold a bill

of goods to Democrats,” he said. Johnson’s confident talk leading up to the election worried Republicans, said John Truscott, president of Lansing-based nonpartisan political consulting firm Truscott Rossman LLC, because there was no way of knowing if he was right until Election Day. But McNeilly said both parties need to revisit their plans to bring voters to the polls because turnout was down overall compared to 2010. The difference was that Democrats spent the past year boasting about their system and how it was going to lead them to victory, while the Republicans not show such braggadocio. “It shows action speaks louder than rhetoric,” Truscott said.

GOP planned ahead Republican Party Chairman Bobby Schostak said his party began its political plan for Election

Day before Thanksgiving 2012. Republicans were also encouraging people to vote absentee and worked hard to identify voters and turn them out as well. “We were pretty confident we were going to match everything he did, if not exceed it. We were letting him say it the way he wanted to present it,” Schostak said of Johnson. “We knew what was really going on, and we needed to get our voters out and not get overly confident.” Rep. Brandon Dillon, D-Grand Rapids, campaign chairman for the House Democratic caucus, said the mechanics of Johnson’s plan were good, but they were not able to overcome the Republican wave that swept the state and the nation on Election Day. He said without the work Johnson and his team did, the results would likely have been much worse. He also saw hope in the fact Democrats won all but one of the university board races, which tells him Michigan, deep down, is still a blue state. Dillon said he has confidence in Johnson. “If people don’t have confidence in Lon, they are going to have to look at every state party chair in the country because turnout was down in almost every single state,” Dillon said. “He put together a really strong plan and implemented it, but it did not show the results we were expecting.” Chris Gautz: 517-403-4403, cgautz@crain.com. Twitter: @chrisgautz

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November 10, 2014

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New Wayne County Exec Evans names transition team BY KIRK PINHO CRAIN’S DETROIT BUSINESS

After easily being elected Wayne County executive last week, Warren Evans announced his administration’s transition team. Evans named the following, who will be unpaid volunteers: 䡲 Joseph Nardone, director of development for the Wayne County Airport Authority, will lead the team, known as Transition: Wayne. 䡲 Lisa Canada will co-chair the team and lead a committee studying efficiencies in the departments

of public services and homeland security and the Wayne County Economic Development Growth Engine. She is legislative director for the Michigan Regional Council of Carpenters and Millwrights. 䡲 Robert Daddow, deputy Oakland County executive, will lead a committee studying Wayne County’s budget deficit. 䡲 Mark Davidoff, managing partner of the Michigan practice of Deloitte LLP, will co-chair the team and head up a committee studying financial responsibility and reinventing government. The commit-

tee will look at issues in the departments of management and budget, personnel and human resources, and technology. 䡲 Former Wayne County Circuit Court Judge Richard Kaufman will head a committee studying the half-finished county jail project on Gratiot Avenue. 䡲 Former Wayne County commissioner Bernard Parker will cochair the team and lead a committee studying health and welfare. This committee will look at the county departments of health and human services, children and fam-

ily services, and senior and veteran services. 䡲 Mark Zausmer, managing shareholder of Farmington Hillsbased Zausmer, Kaufman, August & Caldwell PC, will head a committee studying legal affairs. Evans, the 65-year-old former county sheriff and Detroit police chief, will replace Robert Ficano and serve a four-year term beginning in January. At transitionwayne.org, job applicants will be able to submit résumés for appointment- and director-level positions.

Plastech: Ex-CEO in court over Chinese car contract ■ From Page 1

passenger electric vehicles made by JAC to U.S. dealers. Plastech Holding alleges GreenTech and JAC began a partnership in April 2013 to bring Chinese cars to the U.S., side-stepping Plastech’s exclusive agreement — which is valid through October 2015 with a clause for automatic renewal. Plastech Holding seeks a yet-tobe determined amount for damages but said it potentially lost $4 million, said Andrew Kochanowski, senior partner at Southfield-based Sommers Schwartz PC and Plastech’s representation in the case. Kochanowski said Plastech Holding spent millions hiring engineering firms and introducing U.S. dealers to JAC Motors. Now, Kochanowski said, the company is left in the lurch without any JAC cars to distribute. According to the October claim, GreenTech knowingly violated Plastech’s agreement with JAC on several fronts. GreenTech hired Marianne McInerney as executive vice president of sales and marketing in March 2012, according to the complaint. McInerney had been Plastech’s COO. “McInerney assisted in raising a significant amount of funds and interest from U.S. automobile dealers and dealer groups for the JAC passenger vehicles to be distributed by (Plastech),” the complaint states. The complaint alleges McInerney knew the terms of Plastech’s deal and would have informed GreenTech. Plastech also alleges it also met with GreenTech CEO Charles Wang about Plastech serving as the middleman — distributing JAC cars to GreenTech. “They knew perfectly well that we had an agreement and interfered with it,” Kochanowski said. GreenTech said it would abide by an agreement, if one existed. A motion filed on Oct. 31 by GreenTech said JAC Motors confirmed no such deal was reached. GreenTech attorneys asked Plastech to provide the contract with JAC Motors in response to an Aug. 7 cease-and-desist letter from Plastech’s attorneys. Larry Murphy, partner at Honigman Miller Schwartz and Cohn LLP and GreenTech’s representation, said Plastech has yet to enter the agreement in court or produce it for his review. “We asked for the contract and what we got was a lawsuit,” Murphy said. “We really want a copy of this

contract, so we can review its merits.” Kochanowski said the contract contains a confidentiality clause that has prevented Plastech from giving the contract to GreenTech. He said the agreement will be entered in court soon. Plastech is also anticipating arbitration with JAC Motors in Hong Kong over the issue, he said. The legal battle is in anticipation of a push to sell China-made cars in the U.S. To date, Chinese-made cars have not been imported to the U.S. The issue surrounding such an endeavor is that cars manufactured in China do not meet U.S. regulatory safety standards. “I certainly believe that Chinamade cars in the U.S. will occur eventually, that’s very likely,” said Fred Hubacker, managing director of Birmingham-based advisory firm Conway Mackenzie Inc. “However, the timeframe for that to happen is later, not sooner, in my view. A host of quality, branding and distribution issues must be solved before we are likely to see any significant amount of Chinese-built automobiles in this country.”

‘Layers of intrigue’ The suit also makes claims that GreenTech is a “shell company” and that it’s desperate to get JAC cars to fulfill obligations. The allegations center on GreenTech’s troubled history — which Kochanowski said supports Plastech’s claim that GreenTech does business in ways that are misleading and raise ethical questions. GreenTech Automotive was started in 2009 by Democratic Party fundraiser Terry McAuliffe, now the governor of Virginia, with a plan to build 1 million vehicles a year. Now it more modestly proposes to turn McAuliffe out a few thousand low-speed “neighborhood” vehicles a year. GreenTech opened its long-delayed assembly plant in Tunica, Miss., south of Memphis, Tenn., on Oct. 22, the day after Plastech filed its suit. In 2009, the venture estimated the Mississippi plant would cost $1 billion and employ 2,500 workers to start. The company originally envi-

sioned producing several models, with a large portion of them being exported to world markets. Launching production in the next two months would cap off a complicated birth for the startup. Since 2009, GreenTech has been dogged by delays and political flak. Complicating its story was McAuliffe’s and Wang’s plan to finance the venture through the controversial EB-5 U.S. immigration program. EB-5, as created by Congress in 1990, grants immigration visas to foreigners who invest at least $500,000 in a job-creating enterprise in regions targeted by the federal government for job growth. GreenTech made its original fundraising appeals to wealthy individuals in China with the promise of a U.S. visa in return. The venture also became something of a political target when McAuliffe, who led campaign fundraising for Jimmy Carter, Bill Clinton and Hillary Clinton, ran successfully for governor of Virginia in 2013. The U.S. Securities and Exchange Commission investigated the venture at the same time. McAuliffe has stated in media reports that he ended his ties with the auto venture in late 2012. Plastech alleges GreenTech misled economic incentive agencies about its ability to make cars, stating it is simply importing Chinese cars and adding a battery pack. “GreenTech has spent a lot of time to convince the state and federal investigators that it was going to create manufacturing jobs in Mississippi,” Kochanowski said. “They are not going to be manufactured in the U.S. They are not buying kits; they are buying completely assembled cars.” Murphy said these issues are outside the scope of Plastech’s complaint and are “salacious” in nature and filed a motion to strike the allegations from the suit. He called Plastech’s complaint “gamesmanship” by the firm to build a negative public perception of GreenTech. “Rather than pleading a simple complaint based on straightforward contract interference allegations, (Plastech) instead chose to fill its complaint with a multitude of false, impertinent, immaterial and scandalous allegations about the GreenTech companies that do not relate to (Plastech’s) counts or its claims for relief,” the motion said. Dan Sharkey, partner at Birmingham-based Brooks Wilkins Sharkey & Turco PLLC, said Plastech’s claim is a common one

among automotive companies. “Generally speaking, tortious interference claims are very common in commercial litigation, but I’ve never seen the layers of intrigue alleged in this complaint, it reads like a novel,” Sharkey said.

Plastech’s roots GreenTech isn’t alone in its rough go toward profitability. Brown’s former company, Plastech Engineered Products, suffered a worse fate. Plastech Engineered Products, the largest minority-owned supplier in the U.S. at the time, filed for Chapter 11 bankruptcy protection on Feb. 1, 2008, after its largest customer, Chrysler LLC, began to cancel its contracts with the supplier. Chrysler cited Plastech’s production quality as its reason for pulling the contract. In 2007, Chrysler issued 449 “quality tickets” to Plastech for “non-conforming material” for its injection molded components. Chrysler considered this a material breach of its purchase agreement, Crain’s reported in 2008. Plastech had 35 plants and more than 7,700 employees when it filed. At the time, Plastech owed creditors as much as $560 million. A dispute with Chrysler over the supplier’s tooling ensued and by June, Plastech sought to liquidate its assets. It sold its exteriors business to units of Goldman Sachs Group Inc. and Magna International Inc. for $24.7 million and its interiors business to Johnson Controls Inc. and Goldman Sachs for $199.5 million. Plastech also sold its stamping business to J.D. Norman Ohio Holdings Inc. for $4.5 million. Brown’s compensation, and that of family members she hired, also became a hot-button issue during the proceedings. Brown earned $3.23 million in the 12 months before the bankruptcy filing. Brown’s husband, three brothers, two sisters-in-law, sister, cousin and nephew were also on Plastech’s payroll, for a total of $6.4 million for the 2007 fiscal year, Crain’s reported. Plastech blamed Chrysler’s pulling of the contract for its demise, according to court filings. Since then, Brown and Plastech have remained largely out of the public eye until the new Plastech legal case cropped up. Dustin Walsh: (313) 446-6042, dwalsh@crain.com. Twitter: @dustinpwalsh Automotive News reporter Lindsay Chappell contributed to this report.

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Zombie comic inspires new Detroit soda line A zombie-themed comic book has inspired the latest made-in-metro-Detroit beverage. Dearborn Heights-based Caprice Brands LLC will launch its DeadWorld soda line at a Friday party at Best Western Plus Sterling Inn in Sterling Heights. DeadWorld soda is based on the zombie comic book DeadWorld, published by Detroit-based Caliber Comics LLC. The soda line features 12 flavors, including Goon Bit-

November 10, 2014

CRAIN’S DETROIT BUSINESS

RUMBLINGS Former gov. gets to keep portrait post ichigan Gov. Wilbur Brucker was granted another four-year term by voters from across the state last week. The oil-on-canvas version of him, that is. The re-election of Gov. Rick Snyder means Brucker’s official portrait will hang on the third floor of the Capitol rotunda for another four years. When a governor leaves office, his or her portrait is hung in the Capitol rotunda, but there is only enough space for the portraits of the 14 most recent governors. If Snyder would have lost, the Brucker painting would have been moved elsewhere in the Capitol. Brucker, who fought against Pancho Villa and was a doughboy in World War I, was unavailable for comment. He died in 1968.

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WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF NOV. 1-7

Trailer Company from 2-5 p.m. Nov. 15 at the Detroit Historical Society, 5401 Woodward Ave. The 129-page book, including 90 pages of photos, is published by the Mariposa, Calif.-based Fruehauf Trailer Historical Society, retails for $29.95 softcover and $39.95 hardcover. August Fruehauf was asked in 1914 to covert a wagon into a trailer to haul a boat behind a Model-T, and four years later launched his company. It stayed in the family for decades and grew to become one of the largest companies in the nation, but financial troubles led to bankruptcy and a 1997 sale of the U.S.-based assets to Ohio-based Wabash National Corp. Fruehauf’s overseas operations still operate under the Fruehauf name.

CHRIS GAUTZ/CMB

The portrait of Michigan Gov. Wilbur Brucker will remain in the Capitol rotunda for four more years.

Office chair maker’s survey: Office chairs fail

ters cherry cola, Graveyard Delight ginger ale and black cherry-flavored Royal Rotter. The bottle labels are illustrated mostly by local artists. Caprice principal Gary Reed is also the publisher of Caliber Comics. Soda will be sold in four- and 12packs; the 12-pack will include a mini-comic.Detroitbased Intrastate Distributors Inc. is the distributor.

The Spanish Inquisition had the Judas Chair. Roman Emperor Constantine the Great had the Iron Chair. The modern workplace has the infamous office chair. A recent survey found that 31 percent of smallbusiness owners experience lower back pain due to their office chairs, and 88 percent say office chairs affect employee productivity. The survey — funded by, ahem, office chair retailer Staples Inc. and Grand Rapids office chair maker Steelcase Inc. — says a quality office chair should be adjustable and the backrest should be in contact with the sitter’s back at all times. “As this survey reveals, many small-business employees are sitting in pain, especially as they work with new technologies which cause new postures,” said Allan Smith, vice president of global marketing for Steelcase, in a statement.

Centenary of semi-trailer’s Detroit birth gets book The granddaughter of the German immigrant blacksmith and carriage builder who invented the semi-trailer in Detroit 100 years ago has published a history of August Fruehauf’s iconic Fruehauf Trailer Co. Ruth Ann Fruehauf will sign copies of Singing Wheels: August Fruehauf & The History of the Fruehauf

HEALTH CARE LEADERS SUMMIT

AARON ECKELS

Crain’s Detroit Business hosted its sixth Health Care Leadership Summit last Thursday, drawing more than 450 attendees to the Silver Garden Events Center in Southfield. Among speakers at the half-day event was a panel discussion of trends in health care, featuring (from left) Nancy Schlichting, president and CEO, Henry Ford Health System; Joseph Mullany, CEO, Detroit Medical Center; Gene Michalski, president and CEO, Beaumont Health; and Rob Casalou, president and CEO, St. Joseph Mercy Hospitals-Ann Arbor, Saline, Livingston. The panel was moderated by Marianne Udow-Phillips, director of the Center for Healthcare Research and Transformation in Ann Arbor. Also speaking at the event, on a panel addressing the Affordable Care Act: Carl Camden, president and CEO, Kelly Services Inc.; Scott Eathorne, M.D., interim president and CEO, Together Health Network; and Rick Murdock, executive director, Michigan Association of Health Plans.

Compuware proxy statement details $23.5M in golden parachutes ompuware Corp.’s top executives have golden parachutes in place worth a total of $23.5 million should they lose their jobs following the Detroit company’s expected acquisition by San Francisco-based Thoma Bravo LLC, according to a proxy statement filed with the U.S. Securities and Exchange Commission. CEO Bob Paul would receive $6.7 million in a combination of cash and equity, and CFO Joseph Angileri would get $4.5 million if they are terminated either without cause or what is termed good cause, such as a mandatory transfer to another city. Others are: John Van Siclen, head of the company’s applications performance management unit that helps customers monitor the performance of their software applications, would get almost $6 million. Christopher O’Malley, president of mainframe operations, $2.7 million. General Counsel Dan Follis Jr., $2.3 million. Kris Manery, the senior vice president of the mainframe business unit who retired Oct. 31, a little more than $1 million. Former CFO Laura Fournier, an equity payment of $284,656. She would not receive additional cash or other payments because she is no longer with the company.

ON THE MOVE Michigan’s first auto

czar is resigning to work for an automotive company in the state. Nigel Francis, senior automotive adviser for the state and senior vice president at the Michigan Economic DevelopFrancis ment Corp., will be replaced Nov. 14 by the current vice president of the office, Kevin Kerrigan. Francis, named to the state post in September 2013, did not reveal what position he would be taking. Josh Linkner stepped down as CEO and managing partner of Detroit Venture Partners. Linkner, 44, said he wants to focus on a career as a speaker and au-

thor. Brian Hermelin, who cofounded DVP with Linkner and Quicken Loans Inc. Chairman Dan Gilbert, is now acting CEO and acting managing partner. The Oakland Community College Foundation named Carol Furlong as executive director. Furlong, 57, was chief development officer and executive director of operations for CARE House of Oakland County. She succeeds Kathryn Rusak, now director of development at Mercy High School in Farmington Hills.

COMPANY NEWS Kelly Services Inc. is moving forward with a restructuring plan to close or consolidate 50 U.S. branch offices and eliminate 100 jobs, including 55 at its Troy headquarters. Cuts will include several senior leadership positions set to be vacated in December. Target Corp. plans to close three Michigan stores — Northland Center in Southfield and stores in Monroe and Bay City — as part of a wider plan by the Minneapolis-based retailer to shutter 11 stores across the country by Feb. 1. Ann Arbor-based NonProfit Enterprise at Work leapfrogged two other contenders on crowdfunding website Crowdrise to take the $50,000 grand prize for raising the most money in the RiseDetroit Challenge. The nonprofit garnered $94,850 in commitments. Under the new Detroit Service Corps program, J.P. Morgan Chase & Co. will send teams of employees to Detroit to help some nonprofits address the city’s economic challenges as part of the $100 million commitment by the bank. The five-year program will support projects at Eastern Market, Focus: Hope, Michigan Community Resources and Vanguard Community Development Corp. The Adoba Hotel Dearborn/Detroit will continue to operate by that name, under a deal between the outgoing and incoming management companies for the Dearborn hotel. Victory Capital Holdings Inc. of Cleveland closed on its acquisition of Birmingham-based Munder Capital Management Inc. and its wholly owned subsidiary, Integrity Asset Management LLC of Rocky River, Ohio. Munder will keep its name and continue operating from its current office.

OTHER NEWS Detroit developer Herbert Strather withdrew his bid to purchase more than

6,000 properties for about $3.18 million in last month’s Wayne County tax foreclosure auction. But Strather said plans are still in the works to buy the properties and demolish blighted homes on about 2,000 of them. Organizers of Detroit’s M-1 Rail will begin talks with the parent company of Czech rail car manufacturer Inekon Trams to design and build six streetcars for use on the Woodward Avenue loop when it begins service in 2016. The streetcars are expected to cost a combined $30 million. The Detroit Lions are headed back to London. The National Football League’s newly announced three-game 2015 International Series schedule includes a Lions matchup with the Kansas City Chiefs Nov. 1 at Wembley Stadium. The Detroit RiverFront Conservancy is seeking proposals for an experienced operator for its RiverWalk Café. With the right operator, the seasonal café may be operated year-round, conservancy director Marc Pasco said. The Detroit Garment Guild, which operates out of the Rochester Hills home of founder Karen Buscemi, is looking for a place to call home. Buscemi said the nonprofit is working with city and state officials to find a space in Southwest Detroit for a multipurpose facility. A citizens group’s lawsuit against Rochester Hills and Traverse City-based oil exploration company Jordan Development Co. LLC was dismissed by an Oakland County circuit judge, who ruled that lease deals Jordan signed with the city for oil and gas exploration rights under two cityowned parks and a cemetery do not violate the city’s charter. Twelve colorful lifesized cows, which raised $30,000 at the American Cancer Society’s Cattle Baron’s Ball as part of the national public art project CowParade, will be on display in Detroit at the Renaissance Center this month. A federal appeals court upheld anti-gay marriage laws in four states including Michigan, breaking ranks with other courts that have considered the issue and setting up the prospect of U.S. Supreme Court review.

OBITUARIES David Posavetz, retired

chief photographer for the Macomb Daily, died Nov. 5 of a heart attack. He was 67.

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