Crain's Detroit Business, Aug. 11, 2014 by Crain's Detroit Business

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www.crainsdetroit.com Vol. 30, No. 32

AUGUST 11 – 17, 2014

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Page 3 Craig Fahle signs off; WDET looks for new host

The cost of prepaying a four-year education for Michigan’s public universities now is about a third more than the average family makes in a year. One reason: The declining value of state support.

Fast 50 McKinley Inc. among newcomers to Crain’s list of fast-growing companies, Page 11 CRAIN’S MICHIGAN BUSINESS

2.5

State appropriations in 2013 dollars

Percentage of college budgets paid by tuition and fees

$2.13B

$1.65B

$1.89B 1.5

43.4

2001

2007

2012

2013

1995

NEWSPAPER

2001

2007

2012 2013

Source: President’s Council of State Universities/Michigan

Source: Michigan House Fiscal Agency

Forgotten Harvest has named Kirk Mayes as CEO. Mayes, 38, joins the Oak Park nonprofit from Mayor Mike Duggan’s administration, where he was deputy group executive of the Jobs and Economy Mayes Team. Before that, Mayes was the executive director of the Brightmoor Alliance, coordinating issues of blight removal, job training and housing. Mayes has also held positions at the National Community Development Institute, Communities in Schools Detroit and Village Gardeners, which he founded. He succeeds Susan Goodell, who left to become CEO of the Global Fund for Children in Washington, D.C.

44.6

40 1995

Forgotten Harvest names Kirk Mayes new CEO

70.7

2.0

1.0

This Just In

BY TOM HENDERSON 70.2

$1.25 $1.26

Recreational boat sales throttle up, Page 21

Want to buy Compuware? Better hurry

The METrics of college costs

Tuition up, support down Has college finally broken the bank? BY KIRK PINHO CRAIN’S DETROIT BUSINESS

veryone knows college has become more expensive. But here’s one more jaw-dropping statistic: An MET contract now costs a third more than the average Michigan family makes in a year. And that’s just for one child.

COUNTING THE COSTS Check out the searchable database of tuition costs, state funding at crainsdetroit.com/MET

In 1995, a four-year MET cost $19,908, 54 percent of the median household income of $36,426. By 2012, the last year for which median family house income data is available, it cost $66,496, about

one third more than the $50,015 the average family made that year. The MET, shorthand for Michigan Education Trust, was instituted in 1988 as a way to prepay tuition and mandatory fees for a four-year college degree while children are still young. A contract covers any of Michigan’s 15 public

CRAIN’S DETROIT BUSINESS

Is there a buyer in Compuware Corp.’s immediate future? Analysts are speculating, fueled by comments President and CEO Bob Paul made in the company’s quarterly earnings conference call July 29, that there may be talks to buy the company and take it private. Paul wouldn’t confirm or deny to Crain’s if there are talks to sell the Detroitbased IT services company, or if any talks have grown more serious in recent weeks. But he said that if any deal were to get done, it needs to be soon, preferably Paul before the end of the current quarter on Sept. 30. He said major programs the company is embarking on, including splitting Compuware (Nasdaq: CPWR) into two companies, will make a deal much harder to get done after that date. Compuware hired The Goldman Sachs Group Inc., the New York City-based investment banking firm, to evaluate credible offers after a $2.3 billion takeover offer was launched by New York City-based Elliott Management Corp. in December 2012. (See story, Page 37.) Paul told Crain’s that the compa-

See College, Page 34 See Compuware, Page 37

New DEGC head excited about coming to ‘city with soul’ BY AMY HAIMERL CRAIN’S DETROIT BUSINESS

Rodrick Miller, the new head of the Detroit Economic Growth Corp., will face an entirely different set of challenges than he did in New Orleans. There, as the founding president and CEO of the New Orleans Business Alliance, he was charged with building an economic development operation almost from the

ground up. Here, he is following the highly regarded George Jackson and will be expected to continue that track record. “He’s not Miller coming into a fix-it-up organization. We have an impressive track record of accom-

plishments,” said DEGC Chairman Rod Gillum. It’s a record that Miller, 36, acknowledged when making his media debut at the DEGC on Friday, calling Jackson his “new big brother” and Gillum his “other new big brother.” He told the small group that he came to Detroit because “I gotta be in a city with soul” and he appreciates Detroit’s “rich history,” especially as someone who is a gospel

musician and plays 13 instruments. “We see this as a passing of the baton,” said Gillum. “We think Rod has the background to continue — if not accelerate — the city’s growth.” Mayor Mike Duggan was involved in the selection process, saying he had a “keen interest” in it because his “biggest fear” was See DEGC, Page 33

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CRAIN’S DETROIT BUSINESS

MICHIGAN BRIEFS Monroe Bank & Trust escapes consent order from state Monroe Bank & Trust, a bank with $1.2 billion in assets that operates eight branches in Wayne County, is fully back in the good graces of state and federal regulators. The bank, which was founded in 1858, has been operating under a consent order to improve its practices by the Michigan Department of Insurance and Financial Services and the Federal Deposit Insurance Corp. since July 12, 2010. Consent orders became common during the recession, and many area banks that began operating under them never survived. In fact, in 2008 Monroe Bank & Trust bought the assets of one of the first banks to be shut by state and federal regulators, Northville-based Main Street Bank. This consent order was terminated June 30. — Tom Henderson

Flag creator finds town pride in his ‘piece of fabric’ A young entrepreneur with an interest in vexillology — which, we’re sure, you already know is the study of flags — has led to a new business. Daniel Sterling designed a Glen Arbor flag, with a seal and a well-known local scene, and has watched the 3-by-5 foot images fly off shelves in stores around the Lee-

‘Farm to Glass’ aims to give state ag a swig of beer biz Michigan farmers targeting the state’s expanding craft beer business could benefit if a newly proposed “Farm to Glass” bill gains traction in the state Legislature. House Bill 5275, introduced by Rep. Douglas Geiss, D-Taylor, aims to provide tax incentives for beer, wine, mead and cider makers using state-grown ingredients such as hops and grain in their products. While craft beer production has soared in the state over the past decade, Michigan-based agriculture has been slow to catch up, said Geiss, who hopes to drive demand for state-produced ingredients and grow the agricultural sector. Geiss expects the House Regulatory Reform Committee to vote on the legislation this fall. The Farm to Glass bill provides breweries, wineries and other producers with a tax credit of 8 cents per gallon on the first 500,000 gallons of production and 4 cents per gallon on the next 14.5 million gallanau County town. Sterling, who created the design while studying at the University of Michigan, sold nearly 100 flags at $30 each in his first month of business, The Associated Press reported.

MICH-CELLANEOUS Sparta-based General Formulations plans to add 50 new jobs and embark on a $4.175 million expansion of its large-format printing operations, thanks to a $233,000 performance-based grant from the Michigan Strategic Fund. The grant will help fund the first phase of the

lons. The credit would spare local craft brewers from having to pay thousands of dollars in taxes annually if they meet certain conditions for using Michigan-based ingredients. For example, Grand Rapids-based Brewery Vivant aims to produce around 4,500 barrels of beer this year, said Jason Spaulding, the brewery’s cofounder. At 31 gallons per barrel, that equates to a savings of approximately $11,000 on the company’s state taxes — a significant number. However, some West Michigan brewers are skeptical about the feasibility of the new legislation and question its immediate impacts on both the craft beer and agricultural industries. While the legislation does take a step in the right direction of supporting breweries’ use of local agriculture, it may take 10 years for it to become feasible, said Spaulding. — MiBiz

expansion, which will close off nearby streets and relocate utilities, MLive.com reported. The company employs 250 at its facilities. Byron Township-based FlowRite Controls Ltd. is set to add 64 new jobs over the next three years, thanks in part to a $224,000 grant from the Michigan Strategic Fund, MLive.com reported. The grant is part of a $6 million investment in new research labs and machinery by Flow-Rite, which employs 112. A water ban was lifted that affected 30,000 people in the Monroe area and hundreds of thousands in Ohio after tests at a treatment

plant showed readings for microcystin above the standard for consumption. Byron Township-based SpartanNash named company veteran Larry Pierce executive vice president of merchandising and marketing. Pierce was named interim EVP of the grocer a year ago to lead the merchandising and mar-

keting team through the merger of Spartan Stores and Nash Finch. The U.S. Department of Agriculture awarded Michigan State University $6.9 million to study and develop bee pollination strategies for specialty crop growers, AP reported. The grant is part of the 2014 Farm Bill signed earlier this year by President Barack Obama. Voters in Saginaw County approved a 10-year, 0.2-mill property tax to help pay for operations of the Saginaw Children’s Zoo, AP reported. Nancy Parker, zoo executive director, said the levy “will keep us moving on the same path.” In its first year, the tax is expected to go toward efforts including lowering admission fees and facility updates. Filmmaker Michael Moore says the 10th annual Traverse City Film Festival was the most popular yet, with 131,000 admissions — an increase of 12,000 over last year, AP reported. The six-day festival ended Aug. 3. 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.

CORRECTION ■ Mary Kramer’s column in the Aug. 4 issue used an incorrect name for the foundation hosting a recent community policing workshop. It is the Detroit Public Safety Foundation.

Rocking the Intellectual Property World Warner Norcross & Judd attorneys blaze new trails in intellectual property law. Raymond Scott and Greg DeGrazia represent KISS Catalog, Ltd., providing trademark solutions and litigation that protect the licensing of the rock stars’ images. When the U.S. Patent and Trademark Ofﬁce said that faces of entertainers couldn’t be trademarked, they were persuaded to approve precedent-setting trademarks for the iconic face paint of KISS. Trademarks for the face paint and logo are now registered in more than 40 countries. Finding new ways to protect intellectual property is one way our attorneys go the extra mile for clients.

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Docs to learn at Providence center Gwen MacKenzie returns to Michigan as senior VP for Ascension Health, sets priorities, Page 36

Advanced surgical training to start in fall BY JAY GREENE CRAIN’S DETROIT BUSINESS

A 9,000-square-foot surgical innovation center at Providence Park Hospital in Novi is expected to attract hundreds of physicians from Michigan and elsewhere when it opens in October. Advanced surgical training will be available to physicians, residents and fellows that will include at least 20 specialized dedicated training stations, a 50-seat auditorium and an eating area, said Michael LaRouere, M.D., a neurotologist with the Michigan Ear Institute, a nine-physician specialty practice affiliated with Providence Park and Providence Hospital in Southfield. Neurotologists treat neurological ear disorders.

The advanced surgical learning laboratory is in a two-story medical office building adjacent to the 212-bed Catholic hospital, said Peter Karadjoff, president of Providence Park. The $3 million price tag for the project and renovations of the 22-year-old building is coming from Karadjoff charitable donations from the Art Van Elslander family and other contributors, Karadjoff said. The surgical center will include six labs for working with cadavers and 14 lab stations for temporal bone and skull-based See Providence, Page 36

OU plan: Help autistic find work BY KIRK PINHO CRAIN’S DETROIT BUSINESS

As the father of a 31-year-old autistic son, Pat Kemp’s new role as executive director of a new effort housed at Oakland University to help adults with autism find employment hits close to home. The effort — funded with $130,000 the first year from the Autism Alliance of Michigan, OU and Smiles for Children — hopes to address the need for employment opportunities for the more than 60,000 in Michigan with autism spectrum disorder. Kemp said the unemployment and underemployment rate among adults with autism is 90 percent. By next August, Kemp, a former executive vice presiKemp dent of New York City-based Autism Speaks, an autism awareness advocacy organization, expects 20 to 25 people with autism to be employed at up to five small businesses. Those could eventually include small janitorial and paper shredding companies, for example. See Autism, Page 35

Inside

KENNY CORBIN

Craig Fahle, shown during one of his final days at the Detroit station last week, will be a tough act to follow. “WDET needs to find a new host who loves this city and is able to translate that dedication daily on the air,” said radio analyst Don Tanner.

Post Fahle, WDET goes host shopping BY BILL SHEA CRAIN’S DETROIT BUSINESS

For the first time in seven years, Detroit awoke Monday morning to a voice other than Craig Fahle’s as the regular host of WDET 101.9 FM’s morning talk show. Fahle’s highly praised, eponymously titled show about the city’s issues had emerged as the public radio station’s flagship program, and his surprise decision in July to leave radio to become director of public affairs and senior adviser for the Detroit Land Bank Authority has forced WDET to scramble for a replacement host. The goal is to have a new host hired within three to four

Replacing Craig “ is akin to replacing two people. ” Don Tanner, Tanner Friedman

months, said Michelle Srbinovich, WDET’s general manager. Wayne State University, which holds the station’s broadcast license and provides its free space, will conduct the search, she said. WDET has job criteria and an application form on its website, wdet.org, that can be found by clicking on “The Craig Fahle Show” link under “Shows.”

Based on its job listing language, the station is seeking a Fahle clone: “WDET is looking for someone who has broadcast experience and the balance of knowledge, confidence and humility that will allow them to quickly establish and sustain credibility with listeners. The host will have particular skill and passion for cultivating deep, authentic relationships with people across the community and the ability to navigate a diverse cross section of stories, guests, contributors and listeners.” Finding a host who fits those criteria will aid WDET in its critical fundraising efforts as well. “Replacing Craig is akin to reSee WDET, Page 35

Mr. B’s owner: Manufacturing leads to kitchen, Page 6 Company index These companies have significant mention in this week’s Crain’s Detroit Business: Acro Service . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 19 Alta Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Altair Engineering . . . . . . . . . . . . . . . . . . . . . . . . . 27 American Axle & Manufacturing Holdings . . . . . . . 17 Amerisure Mutual Insurance . . . . . . . . . . . . . . . . . 20 Ascension Health Michigan . . . . . . . . . . . . . . . . . . 36 Autoliv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 BorgWarner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Bridgewater Interiors . . . . . . . . . . . . . . . . . . . . . . 18 Chrysler Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Cold Heading . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Colony Marine . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Compuware . . . . . . . . . . . . . . . . . . . . . . . . 1, 27, 37 Credit Acceptance . . . . . . . . . . . . . . . . . . . . . . . . 17 Danlaw . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Detroit Economic Growth . . . . . . . . . . . . . . . . . . . . 1 Diversified Restaurant Holdings . . . . . . . . . . . . . . 17 Domino’s Pizza . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Dow Chemical . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Fori Automation . . . . . . . . . . . . . . . . . . . . . . . . . . 17 FutureNet Group . . . . . . . . . . . . . . . . . . . . . . . . . . 16 General Motors . . . . . . . . . . . . . . . . . . . . . . . . . . 27 General RV Center . . . . . . . . . . . . . . . . . . . . . . . . 19 Gentherm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Great Expressions Dental Centers . . . . . . . . . . . . . 19 Henniges Automotive . . . . . . . . . . . . . . . . . . . . . . 19 H.W. Kaufman/Burns & Wilcox . . . . . . . . . . . . . . . 14 Ideal Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Ilitch companies . . . . . . . . . . . . . . . . . . . . . . . . . . 16 International Automotive Components . . . . . . . . . . 16 Inteva Products . . . . . . . . . . . . . . . . . . . . . . . . . . 12 James Group International . . . . . . . . . . . . . . . . . . 15 Key Safety Systems . . . . . . . . . . . . . . . . . . . . . . . . 14 LaFontaine Automotive Group . . . . . . . . . . . . . . . . 16 La-Z-Boy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Lear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 27 Lormax Stern Development . . . . . . . . . . . . . . . . . . 30 Malace & Associates . . . . . . . . . . . . . . . . . . . . . . 20 McKinley . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 15 Mr. B’s Pub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 MSX International . . . . . . . . . . . . . . . . . . . . . 19, 27 Neapco Holdings . . . . . . . . . . . . . . . . . . . . . . . . . 17 NetLink Software Group America . . . . . . . . . . . . . . 15 Oakland University . . . . . . . . . . . . . . . . . . . . . . 1, 34 Penske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Pinkerton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Piston Automotive . . . . . . . . . . . . . . . . . . . . . . . . 12 Providence Park Hospital . . . . . . . . . . . . . . . . . . . . 3 PVS Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Quicken Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Rapid Global Business Solutions . . . . . . . . . . . . . . 20 RevSpring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 RGIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Roush Enterprises . . . . . . . . . . . . . . . . . . . . . . . . 15 Sachse Construction & Development . . . . . . . . . . . 16 Secure-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SET Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Southland Center . . . . . . . . . . . . . . . . . . . . . . . . . 30 SRG Global . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Suburban Collection . . . . . . . . . . . . . . . . . . . . . . . 16 Sun Communities . . . . . . . . . . . . . . . . . . . . . . . . . 17 Syntel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Technical Training . . . . . . . . . . . . . . . . . . . . . . . . 19 TI Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 TriMas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 27 TRW Automotive Holdings . . . . . . . . . . . . . . . . . . . 27 Tweedle Group . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 U.S. Farathane . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 U.S. Manufacturing . . . . . . . . . . . . . . . . . . . . . . . 15 Universal Truckload Services . . . . . . . . . . . . . . . . . 14 Wayne State University . . . . . . . . . . . . . . . 34, 35, 36 WDET 101.9 FM . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 WorkForce Software . . . . . . . . . . . . . . . . . . . . . . . 19

Department index BANKRUPTCIES . . . . . . . . . . . . . . . . . . 4 BUSINESS DIARY . . . . . . . . . . . . . . . . 32 CALENDAR . . . . . . . . . . . . . . . . . . . . 31 CLASSIFIED ADS . . . . . . . . . . . . . . . . 33 KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8 MARY KRAMER . . . . . . . . . . . . . . . . . 21

THIS WEEK @ WWW.CRAINSDETROIT.COM

Follow the Lions Follow Bill Shea’s Lions coverage on his blog on crainsdetroit.com and on Twitter at @Bill_shea19

OPINION . . . . . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . 32 RUMBLINGS . . . . . . . . . . . . . . . . . . . 38 WEEK ON THE WEB . . . . . . . . . . . . . . 38

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CRAIN’S DETROIT BUSINESS

Improved residential building market

spurs return of Homearama showcase BY KIRK PINHO CRAIN’S DETROIT BUSINESS

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With the number of new residential building permits having more than doubled since 2010, the Homebuilders Association of Southeastern Michigan is snapping an 11year hiatus for its Homearama showcase of high-end houses. Homearama will run Aug. 29Sept. 14 with tours in six homes in the Pinnacle subdivision, developed by Auburn Hills-based Moceri Cos. on Silverbell Road east of Adams Road in Oakland Township. Tom Lias, president of Farmington Hills-based Gorman’s Home Furnishings & Interior Designs, a presenting sponsor of Homearama, said now is an opportune time to bring back the event. “It was so bad that even builders that might have had family businesses for as long as 40 years got wiped out, which was exceptionally dramatic,” Lias said. “This is the time to show off what everybody is capable of and create more interest in better-quality homes.” According to the Southeast Michigan Council of Governments, 3,407 residential building permits were issued in 2010 in the seven-county SEMCOG region of Wayne, Oakland, Macomb, Livingston, Washtenaw, Monroe and St. Clair counties. However, there was a solid tick upward last year, when 7,586 building permits were issued. Since 2010, a total of 17,754 single-family residential building permits have been issued, according to SEMCOG. Joey Jonna, founder of Birmingham-based Jonna Luxury Homes LLC, agrees the timing is good for Homearama to come back. “You’re seeing new subdivisions again,” he said. “That’s really what drives the market. When you see subdivision (construction) back at it again, that’s a sign of significant growth.” People in Southeast Michigan are generally more confident after the recession that they will be able to keep their jobs, leading to renewed interest in buying new homes, said Don Grimes, senior research specialist at the University of Michigan Institute for Research on Labor, Employment and the Economy. “Another reason is that home prices in the Detroit area are very low compared to Chicago or Boston or other cities, especially compared to the wages that people earn in metro Detroit,” Grimes

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What it is: Home tours in Moceri Cos. Pinnacle subdivision in Oakland Township Where: Silverbell Road east of Adams Road. Free shuttle service (encouraged) from the Oakland Christian Church parking lot at 5100 N. Adams Road. When: Aug. 29-Sept. 14. 11 a.m.-9 p.m. Monday-Saturday; noon-9 p.m. Sundays Tickets: $12 individual, $32 family until Aug. 28. After that, $15 and $40. Charity preview: 6-10 p.m. Aug. 27. Tickets are $75. The preview benefits Habitat for Humanity of Oakland County and The Rainbow Connection. Contact: homearamahba.com for tickets or more information. said. In June, the most recent month for which data was available, Farmington Hills-based Realcomp II Ltd. reported that median sales prices in Wayne, Oakland, Macomb and Livingston counties

increased by 20.2 percent from June 2012. In June, median sale prices were $149,000 compared to $124,000. The homes on display, which are unoccupied and for sale, range from $1.2 million to $4 million, Lias said. The smallest is 6,689 square feet, with four bedrooms and four bathrooms; the largest is 8,817 square feet, with five bedrooms and six bathrooms. Groundbreaking on the $137 million development was in November. Moceri built three of the homes on display; the other three were built by Macomb Township-based MJC Cos., Shelby Township-based Cranbrook Custom Homes LLC and Bloomfield Hills-based Arteva Homes Inc., Lias said. Gorman’s furnished the three Moceri-built homes. The homebuilders association uses the revenue from the event to offset its cost. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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Pinkerton to move global HQ to Ann Arbor Nonprofits can win $100K if they rise to the challenge BY CHRIS GAUTZ

CRAIN’S DETROIT BUSINESS

The historic Pinkerton security firm, which traces its roots to before the Civil War, has chosen to move its global headquarters to Ann Arbor. The company began the move this week from its headquarters in New Jersey and expects to be fully operational before the end of the month with a staff of about 30. Pinkerton President Jack Zahran said he decided to make the move from New Jersey, because he sees great potential in the Michigan area because the level of talent in the region is strong and many of his employees have ties here. Zahran, who has been company president for two years, is a graduate of Lawrence Technological University in Southfield. Pinkerton moved to New Jersey from Westlake Village, Calif., 15 years ago. Zahran said the company is evolving. It has been synonymous with detective and security work for more than a century. Its first logo, featuring an unblinking eye, gave rise to the term “private eye.” The company was founded in 1850. Pinkerton employees provided personal security to President Abraham Lincoln during the Civil War — but not on the night of his assassination.

The company also figures in Detroit’s history. The agency was hired by the automakers in the 1930s to aggressively work against union organizing activities. Today, the focus of Pinkerton Consulting & Investigations Inc., which does business as Pinkerton Corporate Risk Management, is on technology and corporate risk management services, though it still provides physical security services at national and international sporting events and awards ceremonies. “We wanted to reinvent ourselves, much like Michigan has,” Zahran said. “Our market has really shifted.” He said manufacturing is now a large segment of the company’s clientele. So are technology and health care companies. “When clients have a lot of complexity, the threat landscape around that can be pretty expansive,” he said. That threat landscape can include everything from physical security of products and facilities, to cybersecurity, brand protection and emergency response recovery. “We have shifted from being a consulting-based company to one that offers a more holistic approach,” he said. “You don’t just send a bodyguard anymore.” The company will be in 11,000

square feet of space at 101 N. Main St., Suite 300, in Ann Arbor. He said the proximity to the University of Michigan was a big draw. Zahran said of the 30 employees who will work out of the Ann Arbor office initially, about five will be new hires from the state with the rest relocating from other offices. As the company grows, there are plans to expand in phases, he said. Pinkerton has about 1,500 employees worldwide, along with a network of about 10,000 vetted agents who can be called on for contractual work around the globe. During Hurricane Katrina, the company deployed about 3,000 agents; during Hurricane Sandy, it deployed about 500. Pinkerton has 60 locations worldwide, including a two-person office in Troy, which will remain, he said. The Ann Arbor headquarters will include management, human resources, sales, marketing and finance positions. The company made the move without any state or local financial assistance. “We weren’t looking for the best deal,” he said. “We were in a position to evaluate and to do what was best for our company.” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

Detroit-area 501(c)(3) nonprofits have a chance to compete for prizes totaling $100,000 through the RiseDetroit Challenge being funded by Phillip Fisher’s Mission Throttle and the Marjorie S. Fisher Fund. The challenge works like this: Nonprofits register at ApplyRiseDetroit.com and, using the CrowdRise platform, fundraising teams will compete to raise the most money for their cause. The organization that raises the most money by the end of the challenge will receive $50,000; second place will receive $20,000 and third, $10,000. An additional $20,000 will be given to nonprofits throughout the campaign through weekly bonus challenges. Organizations that don’t win prizes keep the money they raise. The challenge starts Sept. 15 and ends Oct. 30. “My mother (Marjorie S. Fisher) always says you start with your heart and then use your mind when giving back to the community,” said Phillip Fisher, founder of Mission Throttle and vice chairman of the Max M. & Marjorie S. Fisher Foundation, in a news release. “My hope is to find and fund innovative tools and programs that help people to do both.”

REGISTRATION OPEN Go to ApplyRiseDetroit.com For more information, email

RiseDetroit@CrowdRise.com

Mission Throttle is an investor-funded social impact fund designed to invest in social entrepreneurs and other social impact efforts. CrowdRise is Fisher a fundraising platform, co-founded by CEO Robert Wolfe, founder of Madison Heights-based Moosejaw Mountaineering. Crain’s Detroit Business is media sponsor of the challenge. “We’re so, so psyched to work with so many amazing organizations in Detroit,” Wolfe said in a news release. “The idea of leveraging the incredible generosity of Mission Throttle and the Fisher Family to raise a crazy amount of money for Detroit area charities is awesome.”

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Mr. B’s new owner tells how manufacturing can lead to kitchen A background in manuit Quality for Kids and goes facturing is guiding John by “Johnny Prep” on the Prepolec as he navigates Bloomfield Hills public the metro Detroit restauaccess TV cooking show rant industry. Soup and Co., talked Prepolec bought Mr. B’s with Crain’s special corPub Inc. in Royal Oak in respondent Anjana the spring from longtime Schroeder about why he owners Michael Nash, made the switch from Marty Tuchman and auto exec to restaurateur Ralph Gustafson. At age — and whether he plans 55, Prepolec knows his to change those Mr. B’s journey is not traditional seasoned fries. for a restaurant owner: He John Prepolec, was raised in a family that How was your passion for Mr. B’s Pub owned a tool-and-die busicooking born — and what ness, was educated as an kept you from that passion engineer, and worked his way into in the first place? the C-suite of an injection molding I would always cook. I did all the company, LDM Technologies Inc., cooking for myself and whomever where he managed plants in the I lived with. I just love it — to unU.S. and Canada. derstand where the food comes Looking back on his career, Pre- from, how to grow the food, how to polec realizes how it all works to- cook the food, how to serve the gether. food. There’s really nothing about “Running a restaurant is a lot of that I’m not interested in. like running a manufacturing After college (Prepolec earned company,” Prepolec said. “You are an engineering degree from the buying your materials; you are University of Michigan), I went to keeping an inventory. You have work for a small computer compastandardized recipes: You make ny. But I had a heart for cooking. them and want them to be the When I was 24 or 25, I went up to same every time.” Ann Arbor and talked to some At Mr. B’s, Prepolec is studying friends who owned Rick’s American the menu and slowly making Café, and they rented the kitchen changes that he projects will result to me for about a year. That is in $3.5 million in revenue over the when I realized how challenging next year. See Next Page Prepolec, who runs the nonprof-

Q&A

ANJANA SCHROEDER

John Prepolec came to Mr. B’s Pub in Royal Oak from a long career that included education as an engineer and the management of manufacturing plants in the U.S., Canada and Mexico.

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working in this industry can be, and I couldn’t make as much money as I was making as an engineer — that was a big thing. How did you break into the automotive business — and why did you leave? I ended up buying my first injection molding company (C Plastics) from LDM Technologies, and between 2007 and 2008, I opened a plant in Guadalajara, Mexico. That was what I needed to do in order to be competitive. My biggest customers were Chrysler and General Motors. One of the biggest problems they had (was) an overabundance of inventory — way too many cars. So they’d shut down their plants in some cases for three months. I realized in order to keep the business going I was going to have to re-up an investment in it. This made me step back, reassess where I was at. Fortunately, I was successful enough that I had some wherewithal. And I decided it was time to do something else — around age 50. I wanted to do something that I was passionate about. I tell my kids this: If you’re going to spend 60 or 70 hours a week doing something, you ought to like it. So strategically, when I started thinking about what I wanted to do, I wanted out of the automotive industry because I thought it was a very poor industry to be in from a market cycle standpoint. And I was a huge fan of food TV. Take us from your love for cooking — and food TV — to your decision to buy a restaurant. You invest a lot of time, and you invest some money. It’s not something that you snap your fingers — it’s taken five years, and I’m still not on Food Network. You have to have a long view — I looked at it as more or less a five-year plan. That was part of going to cooking school. (Prepolec earned a culinarian certificate from Schoolcraft College in April 2014.) Within the profession, there is a certain level of respect for classical training, and I wanted that. I did a lot of benchmarking. I went and looked at all the media/celebrity chefs and looked at the type of assets they owned and the type of public relations firms they were using and their social media. As I was studying these people and looking at their assets — there are cookbooks, TV shows, cookware, food products — the majority of them own restaurants. That is their cash-flowing asset. Why Mr. B’s? My top priority was location. The second thing that was important to me was that I was buying a business that had an established track record of cash flow. I wanted a successful business model. The third priority: I wanted something big enough that, if successful, it made a good return on my investment. Mr. B’s in Royal Oak (which was for sale) checked off my list of priorities. Running a restaurant is a lot of like running a manufacturing company. You are buying your materials; you are keeping an inventory. You have standardized

recipes: You make them, and want them to be the same every time. And you want good quality. What are your plans for Mr. B’s? Will the menu stay the same? Yes, it will stay the same. Well, when I say “the same,” I mean there’s still going to be hamburgers and pizzas. I’m not going to touch the seasoned fries. I told employees to give me their top five menu items and I wouldn’t touch them. Fries was high on the list; the fries, the barbecue sauce and the Slop Burger were the top three. Frankly, everything else was up for grabs. I knew I was going to change my corned beef because I’m a huge fan of Wigleys corned beef (in Eastern

Market). I went to a better grade of Black Angus meat for my burgers. I immediately changed my Mexican food — the salsa, tortillas and the chips — there’s no preservatives in them at all; they’re completely natural. What’s next at Mr. B’s? One thing we’re going to do with this place, which I’m pretty upbeat about, is with B’s Lounge. Originally it was conceptualized to be a martini bar with bottle service, and it never really got completed. I intend to make it a tasting room, where we’re going to bring in guest chefs, do pop-ups, small plates, wine tastings, beer tastings, sausage tastings and cheese tastings … and do tasting events perpetually. I think that’s really

Page 7 exciting. What are your big-picture goals? I really want to get this (Mr. B’s) to the point where it’s very successful and I’m very proud and the team is really reaping the rewards of running a really successful organization. I’m going to continue to pursue media (exposure), as well. At the right point in time, if my broker comes to me with another deal that I think is really good, I might do another restaurant. I can see myself owning more than one restaurant. I don’t know if I’ll do it from scratch. There are some other iconic restaurants that I keep my eyes open on. If one came for sale, I’d probably look at it.

I intend to make “(B’s Lounge) a tasting room where we’re going to bring in guest chefs, do pop-ups, small plates, wine tastings, beer tastings ... and do tasting events perpetually.

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OPINION

City must make water plan work

TALK ON THE WEB From www.crainsdetroit.com Re: Evans trounces Ficano in race for Wayne County executive Robert Ficano said in a statement that the race “just didn’t go our way.” I guess that is about as positive a statement as you can put on the race. Hard to believe he even thought he had a chance givFicano en the scandals and mismanagement that came out these past few years. MikeinMI

ater isn’t free, but Detroiters behind on their bills can have more time — and more assistance — to ensure the taps are flowing again. That’s the gist of the plan announced by Detroit Mayor Mike Duggan last week to turn the water back on for low-income Detroiters delinquent on their bills. It treats people fairly — no more onerous tab for turning water back on — while it skirts the populist call to provide free water as a basic human right. The still-bankrupt city can ill aford making water free across 139 square miles; the system needs paying customers to help finance sorely needed upgrades and improvements. The important thing is to get assistance to those who truly need it, but make sure those who can afford it pay their bills. Detroit has a penchant for stubbing its toe in public relations gaffes. The nagging issue of delinquencies on water accounts could have been handled with more finesse. And certainly, reports of hang-ups and busy signals at the water department’s call-in numbers didn’t help. Now the onus is on the mayor and his hand-picked partners to make sure the system works. But let’s remember: We tend to take water quality coming from the Detroit system for granted. It’s so good you can bottle it. Which is what some folks in Toledo may have been tempted to do earlier this month.

I voted for Wild because he was not part of the “in crowd.” We shall see how Warren Evans goes. Smartest OneHere

Competition benefits nonprofits

Re: $15B upgrade for utilities: EPA rules stoke Consumers, DTE move to wind, gas

Social media platforms create new connections — and for nonprofits in Southeast Michigan, they can help raise thousands of dollars in a new competition created by young entrepreneurs and established philanthropic givers. As we report on Page 5, RiseDetroit Challenge gives nonprofits a chance to compete for cash to match what the nonprofits raise online. The effort is a collaboration of members of the Fisher family and entrepreneur Robert Wolfe, who created the CrowdRise platform that nonprofits can use to raise money. Crain’s Detroit Business is a media partner on the effort and will promote the challenge and participating nonprofits in digital and print features in September and October. Nonprofits can register on the RiseDetroit website now; the challenge starts Sept. 15 and runs through Oct. 30.

Just more of the same recycling of old administrations. There was hope in Bill Wild, who turned a deficit around in Westland, moved to many shared services arrangements, and made changes to salary and pension benefits. He Wild approached matters like the businessman he is and could have made a huge impact on Wayne County. RobertArch

More money we don’t have wasted for nothing. Natural gas may be cheap now, so let’s squander it in the name of global warming? Windmills are inefficient, unreliable and a blight on the landscape. Nuclear is a viable option, but we are far too backward and cowardly to employ it. So we sit around waiting for the wind to blow. What a joke. David Weeks I smell fiasco since it is the EPA. I see more money coming out of my wallet in the future with what little I have left. Sorry. Bad vibes with our government imposing more and more rules and regulations.

Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity.

Re: TV ratings for soccer match at Michigan Stadium highest in nation Soccer will become popular in the USA — just like peeps said with Pele, after the Olympics and the formation of MLS. Never happens, but they say it. Rod Munch Maybe Michigan fans will watch anything that happens at UM Stadium, even a soccer practice, or a “friendly,” as the advertisers called it. TTWSYF

Re: 5 Peet’s Coffee shops to close; fast-casual restaurants may move in

Wind farms may be getting a boost if the state responds as indicated to new EPA rules on carbon emissions.

May be time to move out of the USA. Kaos Rex Will the people of Michigan wake up to the truth about wind energy? Will they go to the wind farms and learn for themselves? It’s easy to listen to what others are saying. Will they look at the transmission cost for their electric? Why not generate their electric closer to home? Oh, yes: “Not in my backyard.” Dumbhillbilly

Re: Detroit mayor announces water bill collection plan It is simple. Pay your bill on time or make arrangements or get help or have your service shut off. The city is responsible for having a reasonable collection policy and properly implementing that policy in a prudent manner. The city is not responsible beyond that. Being poor does not mean being irresponsible. William Plumpe

I sometimes wonder if there are people in the company who actually do research before opening a new location. The Shelby Township location (of Peet’s) competed directly with a Panera Bread with a drivethrough. Panera has good coffee and also has food. It is no wonder that (Peet’s) store did poorly. The Rochester Hills location replaced the very popular Oakland University Caribou. Changes included less seating, fewer electrical plugs, classical music and a closing time of 9 p.m. It is as if they decided that sticking 100 percent to their corporate model was more important than knowing their customers and staying open one hour later. BloggerDave

Re: Voters OK $28M raise for SMART This really should be only the start. We need a merger of SMART and DDOT as part of a growth strategy to provide regular and comprehensive bus service in metro Detroit. People who complain about taxes to support mass transit should cut a check to their cities, counties and state for the taxpayer money spent on roads that drivers otherwise don’t spend on (other than through some gas taxes). The roads were built and are maintained with taxes. Why not require drivers to start paying each time they drive on a road much as bus riders have to pay for each ride that also is subsidized? 260859

KEITH CRAIN: Perhaps the most important job in city Last Friday, the Detroit Economic Growth Corp. announced the new head of the organization. After George Jackson announced he was stepping down, a long, and what would appear to be very thorough, search was conducted. George had done a great job, but my suspicions are that he didn’t fit in with the new mayor’s agenda and a change was required. I’m not sure we want someone who is in the hip pocket of the administration. It’s nice to have an independent organization promoting economic development. The DEGC should work very closely with the

mayor’s office but always have an arm’s length from the administration. Rodrick Miller comes to us from New Orleans, where he was running the New Orleans Business Alliance, which is similar to the DEGC. The alliance’s chairman, Henry Coaxum, speaks very highly of Miller. Our loss, Coaxum says, is your gain. Nice words for the newest citizen of Detroit.

I have strongly believed that our emergency manager, Kevin Orr, would do a fine job in fixing the financial mess that 50 years of inept management caused. When he leaves, we’ll have a nice, clean balance sheet. But the city and its citizens will still be looking for economic improvement. That simply means investment and jobs. The unemployment rate is way too high, particularly among young people.

We have to encourage investment, both in expansion of existing facilities and attraction of new plants. We need to attract plants that need jobs. Buying and selling is great and certainly demonstrates the viability of our community for investment, but the truth is that we need factories and companies that are looking for people to hire — even if they have to train them, that’s OK. Yes, we have to get rid of the blight, turn on the streetlights, make it safe and fix the roads. But we can’t ignore the fact that we have too many people who are un-

employed. If the city wants to lower its costs, then it has to hope to have many more of its residents working, off any sort of subsistence and paying taxes. And, yes, paying their water bills as well. The head of the DEGC is a very important job in our community. All of us have a vested interest in the success of economic development. It will be a long road to major investment, but it looks like they have hired the guy who’s going to do a great job in attracting jobs. We welcome him and wish him great success.

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SRG Global shops fuel-saving air flow tech to North American market In the era of regulation, fuel efficiency is king. Automakers are relying on suppliers to innovate fuel-saving technology — even incrementally. Active grille shutters are among the latest developments in the industry on its quest to meet the CAFE fleet standard of 54.5 mpg by 2025. Warren-based chrome-plating supplier SRG Global Inc. plans to capitalize on the projected $50 million North American market for the shutters. SRG developed its integrated active grille shutters at its Taylor Advanced Development Dustin Walsh Center, which opened in 2010. Active grille shutters open to allow air to flow through the radiator to cool the engine. However, when that air flow isn’t needed, the shutters close to reduce drag, creating a more aerodynamic ride, thus improving fuel economy. SRG is shopping its integrated system, in which the shutters and grille are shipped as one component to automakers, Dave Prater, SRG’s president and CEO, said in an interview with Crain’s at the Management Briefing Seminars in Traverse City last week.

Shifting Gears

NOMINATIONS SOUGHT FOR NONPROFIT CONTEST This year’s Crain’s Best-Managed Nonprofit Contest is focused on good management practices of nonprofits. Applicants are asked to give examples of how they deploy their mission and resources, among other information. Applications are due Aug. 25. Finalists will be interviewed in person by judges the morning of Nov. 11. Applicants for the award must be a 501(c)(3) with headquarters in Wayne, Washtenaw, Oakland, Macomb or Livingston counties. Applications must include an entry form, a copy of the organization’s code of ethics, a copy of the most recent audited financial statement and a copy of the most recent IRS 990 form. Previous first-place winners are not eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations. The winners will be profiled in the Dec. 1 issue, receive a special “best-managed” logo from Crain’s for use in promotional material and will be recognized at the Crain’s Newsmaker of the Year lunch early next year. For an application form, please email YahNica Crawford at ycrawford@crain.com or visit www.crainsdetroit.com/nonprofit contest. For information about the contest itself, email Executive Editor Cindy Goodaker at cgoodaker@crain.com or call (313) 446-0460.

Competitor shutters are a separate part added to the grille during assembly, he said. Ford Motor Co., General Motors Co., Chrysler Group LLC, BMW AG and others have incorporated nonintegrated active grille shutters in recent models. Prater said after years of researching new component options for SRG to pursue, integrated grille shutters made the most sense. “We sought to take our decorative product and create functionality, which led us to take a look at our product and find growth areas,” Prater said. “Today’s mar-

ket is driven more and more by innovation, and we’re ready to take a chunk of the North American market” for grille shutters. SRG tested its integrated acPrater tive grille shutter technology at a wind tunnel facility in North Carolina, which is used by NASCAR race teams and engineers. Component testing occurred at the University of Michigan’s smaller wind tunnels.

Prater said SRG’s integrated system achieves more than 1 percent better fuel economy savings than competitors. SRG’s shutters are integrated much closer to the grille than competitor components, which reduces more drag, he said. In the meantime, SRG has been expanding its chroming plants globally. In April, SRG announced it would expand its Irapuato, Mexico, plant by more than 215,000 square feet. The expansion is expected to be complete in 2015. The supplier is also expanding its plant in Ibi, Spain. SRG, a subsidiary of Auburn

Hills-based Guardian Industries Corp., generated $775 million in revenue in 2013. In late 2012, SRG’s parent, Guardian, sold a minority stake of the glassmaker to KGCI LLC, a subsidiary of Wichita, Kan.-based Koch Industries Inc. The company became the largest individual shareholder of Guardian. The deal reduced the stakes of longtime executives and Davidson family members. Guardian founder Bill Davidson died in 2009. This column originally appeared as a Dustin Walsh blog at crainsdetroit.com.

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Second Stage Fast 50

THE FAST 50 1. Quicken Loans, Detroit 2. Gentherm, Northville 3. Inteva Products, Troy 4. Chrysler Group, Auburn Hills 5. Piston Automotive, Redford 6. U.S. Farathane, Auburn Hills 7. RevSpring, Wixom 8. Universal Truckload Services, Warren 9. Key Safety Systems, Sterling Heights 10. H.W. Kaufman Financial Group/Burns & Wilcox, Farmington Hills 11. McKinley, Ann Arbor 12. Netlink Software Group America, Madison Heights 13. Roush Enterprises, Livonia 14. James Group International, Detroit 15. U.S. Manufacturing, Warren 15. Sachse Construction and Development, Detroit 17. TriMas, Bloomington Hills 18. The Suburban Collection, Troy 19. LaFontaine Automotive Group, Highland 20. Syntel, Troy 21. International Automotive Components, Southfield 22. The Ideal Group, Detroit 23. FutureNet Group, Detroit 24. Ilitch companies, Detroit 25. American Axle & Manufacturing Holdings, Detroit 25. Lear, Southfield 27. Credit Acceptance, Southfield 28. Danlaw, Novi 29. Diversified Restaurant Holdings, Southfield 30. PVS Chemicals, Detroit 31. Fori Automation, Shelby Township 32. Sun Communities, Southfield 33. Neapco Holdings, Belleville 33. Alta Equipment, Wixom 35. Bridgewater Interiors, Detroit 36. SET Enterprises, Warren 37. General RV Center, Wixom 38. Henniges Automotive, Auburn Hills 39. Acro Service, Livonia 40. BorgWarner, Auburn Hills 41. Great Expressions Dental Centers, Bloomfield Hills 41. MSX International, Detroit 43. Technical Training, Rochester Hills 44. WorkForce Software, Livonia 45. Amerisure Mutual Insurance, Farmington Hills 45. Rapid Global Business Solutions, Madison Heights 45. Malace & Associates, Troy 48. Penske, Bloomfield Hills 49. Tweddle Group, Clinton Township 49. Secure-24, Southfield 49. Cold Heading, Warren

Crain’s list of the area’s fastest-growing companies this year includes a number of newcomers, including McKinley Inc., profiled below. Read how it and others made a way.

More than 50 ways to grow

rain’s Fast 50 is based on a ranking of companies in Crain’s database of private and publicly traded companies in two ways: by dollar amount of revenue growth between 2010 and 2013 and by percentage revenue growth during that same period. The two rankings were added together to create the list; the lower the number, the higher the final rank. The results help paint a picture of the local economy for the period: The majority of the top 10 companies benefited from the strong come-

back of the automotive industry since the recession. Staffing firms, in particular, are seeing fast growth and hiring. “Whenever the economy is coming out of a slow period, our industry tends to do well because most of our clients prefer to hire contingent workers rather than do direct hiring because they want to be sure the recovery will sustain itself,” said Ron Shahani, president and CEO of Acro Service Corp., which came in at No. 39 on the list. Read how the others grew, starting below and continuing through Page 20.

McKinley Inc. grows by targeting rising-rent areas BY KIRK PINHO CRAIN’S DETROIT BUSINESS

cKinley Inc. has become a $500 million real estate ownership and management company over the past three years, with revenue jumping 83 percent in that time. That kind of growth put the Ann Arbor-based company on Crain’s Fast 50 list for the first time, at No. 11. To achieve this growth, the company used a relatively simple strategy: Invest where rents are increasing. Of its $4.6 billion ownership and management portfolio, 30 percent of the square footage is in Southeast Michigan, said CEO Albert Berriz. But in the region, much of that is concentrated in Washtenaw County — not in the higher population areas of Wayne, Oakland or Macomb counties. “When you look at the year-overyear returns, the (rent) increases in multifamily, office and retail in Ann Arbor specifically blow

CRAIN’S HONORS FAST 50 Where: MSU Management Center, Troy When: 7:30-10 a.m. Oct. 7 Register: Crainsdetroit.com/events or call (313) 446-0300 for more information

away any numbers for Southfield, Bloomfield Hills, Troy, Warren,” Berriz said. “We probably had 10 percent year-over-year rent growth on the multifamily side in Ann Arbor.” Berriz said McKinley’s apartment ownership portfolio grew by more than 10 percent in the past three years, and the company had a 45 percent acquisition growth as it bought properties once owned by Lehman Bros. McKinley, which has 1,600 employees, has a total of 35,000 multifamily units and 21 million-plus square feet of office and retail space under ownership and management in 34 states. Kirk Pinho: (313) 446-0412, kpinho@ crain.com. Twitter: @kirkpinhoCDB

CARTER SHERLINE

Albert Berriz is CEO of McKinley Inc., which saw revenue jump 83 percent over three years.

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Where: Detroit Revenue 2013/2010: $3.6B/$1B Revenue percent change: 255 Percent change ranking: 6 Revenue growth: $2.6B Revenue growth ranking: 8 Combined rankings: 14 What it does: Direct online home loans How it grew: The residential real estate market has rebounded over the past several years, with more homes in metro Detroit selling faster. In 2013, Quicken closed $80 billion in residential mortgages, up from $30 billion in 2011. Emerson CEO Bill Emerson also said technology investments have helped Quicken’s approximately 10,000 employees be more efficient.

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CHRYSLER GROUP LLC

Where: Auburn Hills Revenue 2013/2010: $72.1B/$41.9B Revenue percent change: 72 Percent change ranking: 36 Revenue growth: $30.2B Revenue growth ranking: 1 Combined rankings: 37 What it does: Manufacturer of cars, trucks and SUVs under the Chrysler, Dodge, Ram and Fiat brands. How it grew: U.S. car dealership saw sales jump 8.8 percent in 2013, according to the National Automotive Dealers Association’s annual report, and those strong sales have supported Chrysler’s rise. Leading the growth at Chrysler are the topselling Jeep Grand Cherokee and Ram full-size pickup.

PISTON AUTOMOTIVE LLC Where: Redford Revenue 2013/2010: $684M/$324M Revenue percent change: 111 Percent change ranking: 20 Revenue growth: $360M Revenue growth ranking: 31 Combined rankings: 51 What it does: Supplies cooling modules, interior systems, and powertrain and chassis components to the auto industry. How it grew: The minorityowned Piston Automotive, majoritycontrolled by former Detroit Pistons player Vinnie Johnson, grew sales along with its largest customer, Ford MoJohnson tor Co. A major growing point for the supplier was the launch of cooling modules for the Ford F-150. It has also added capacity to support Ford’s SUV models, including the Escape, Expedition and Explorer.

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GENTHERM INC.

Where: Northville Revenue 2013/2010: $662M/$112M Revenue percent change: 489 Percent change ranking: 1 Revenue growth: $550M Revenue growth ranking: 23 Combined rankings: 24 What it does: Supplies climate control seat components and heating, ventilation and air-conditioning units to the auto industry. How it grew: The former Amerigon Inc., which ranked No. 4 in Crain’s Fast 50 a year ago, continues to reap the benefits of its 2011 acquisition of Germany-based W.E.T. Automotive Systems AG. The acquisition, which led to the name change to Gentherm, provided the company with global manufacturing capacity for the first time. Most recently, the company reports continued strong sales in climate control seats, new program launches and improved sales in Japan as factors in continued growth. It also has opened a new electronics manufacturing plant in China.

U.S. FARATHANE CORP. Where: Auburn Hills Revenue 2013/2010: $402M/$161M Revenue percent change: 150 Percent change ranking: 11 Revenue growth: $241M Revenue growth ranking: 41 Combined rankings: 52 What it does: Designs and manufactures plastic injection-molded components as an automotive supplier. How it grew: Consolidation among injection-molded suppliers to the automotive industry left a larger piece of the pie for U.S. Farathane. In 2010, it opened a new headquarters in Auburn Hills and has expanded operations in Shelby Township and Westland.

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INTEVA PRODUCTS LLC

Where: Troy Revenue 2013/2010: $2.5B/$1.2B Revenue percent change: 108 Percent change ranking: 23 Revenue growth: $1.3B Revenue growth ranking: 11 Combined rankings: 34 What it does: Supplies closure, interior and roof systems as well as motors and electronics for interior systems to the automotive market. How it grew: Inteva continues its sharp rise since being formed out of the bankruptcy President-CEO of the global inLon Offenbacher teriors and closures unit of then-Delphi Corp. Its growth stems from increased sales in emerging markets and entry

REVSPRING INC. Where: Wixom Revenue 2013/2010: $365.7M/$130.6M Revenue percent change: 180 See Page 14

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Percent change ranking: 9 Revenue growth: $235.1M Revenue growth ranking: 44 Combined rankings: 53 What it does: Cloud-based cashflow management and accounts receivable for companies. How it grew: Company growth in recent years — it jumped from No. 20 on last year’s list to No. 7 this year — has been fueled through various acquisitions. In fact, the firm itself was built through acquisition. New York City-based private equity firm Compass Investment Partners LP bought and merged a number of companies together and christened the entire entity RevSpring in 2012. In July, the company purchased Talksoft Corp., a New Jersey-based provider of cloud-based reminder and messaging services.

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UNIVERSAL TRUCKLOAD SERVICES INC. Where: Warren Revenue 2013/2010: $1B/$606M Revenue percent change: 70 Percent change ranking: 39 Revenue growth: $427M Revenue growth ranking: 30 Combined rankings: 69 What it does: Transportation and logistics services Why it grew: The publicly traded company, which is controlled by the Moroun family, saw its revenue top the $1 billion mark in 2013 due to the acquisition of LINC, a Moroun-owned third-party logistics company. The compaMatty Moroun ny says 21 percent of its overall growth from 2010-13 was due to a combination of increased sales and acquisitions other than LINC. In addition, the company acquired Louisville, Ky.-based Westport Axle Corp. late last year.

KEY SAFETY SYSTEMS INC. Where: Sterling Heights Revenue 2013/2010: $1.2B/$715M Revenue percent change: 63 Percent change ranking: 46 Revenue growth: $452M Revenue growth ranking: 29 Combined rankings: 75 What it does: Automotive and non-automotive safety-equipment supplier How it grew: Revenue diversification and geographic expansion into 12 different countries has been a key to company growth in the automotive and non-automotive market, including military and commercial vehicles. That pushed the company from No. 24 on the Fast 50 list last year to No. 9 in 2014.

H.W. KAUFMAN FINANCIAL GROUP INC./BURNS & WILCOX Where: Farmington Hills Revenue 2013/2010: $1.4B/$900M See Next Page

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Revenue percent change: 58 Percent change ranking: 54 Revenue growth: $525M Revenue growth ranking: 25 Combined rankings: 79 What it does: Provides insurance services to brokers, agents and carriers, including underwriting, reinsurance, real estate, premium financing, inspections, risk management and third-party claims administration. How it grew: Acquisitions have been key to the company’s growth. In particular, H.W. Kaufman, the parent company of wholesale broker and underwriting manager Burns & Wilcox, purchased London-based Chesterfield Group Ltd. in 2012. That gave the firm additional access to lucrative international clients. H.W. Kaufman also saw gains generated by internal growth and further diversification.

auto industry and into markets such as oil and gas, theme parks and aerospace. It has also expanded beyond services and into products, such as parts for racing Massab enthusiasts. Two growth drivers for the company are Roush Clean Tech, which provides alternative fuel systems to company fleets, and entertainment clients such as Disney and Universal Studios. That has made up for the slowdown in defense industry contracts.

“Diversity has allowed us to manage a nice growth curve,” said Dean Massab, vice president of sales and marketing.

JAMES GROUP INTERNATIONAL Where: Detroit Revenue 2013/2010: $133M/$30M Revenue percent change: 343 Percent change ranking: 4 Revenue growth: $103M Revenue growth ranking: 81 Combined rankings: 85 What it does: Logistics and supply-chain management firm How it grew: James Group has shifted from traditional logistics services to a higher-tech focus. It’s

working with an IT company to make supply-chain software for its automotive customers. Previously the company offered trucking services, but now it contracts out that work so it can focus on other components of logistics, such as handling exports or breaking down and filling up parts containers for its auto customers.

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U.S. MANUFACTURING CORP. Where: Warren Revenue 2013/2010: $334M/$176M Revenue percent change: 90 Percent change ranking: 28 Revenue growth: $158M Revenue growth ranking: 59

Combined rankings: 87 What it does: Supplies machined components, axle housings and assemblies and axle transmission shafts to commercial truck, trailer and light-duty truck makers. How it grew: USM, which was sold to Chicago-based private equity firm Wynnchurch Capital Ltd. earlier this year, is growing based on a recovering industry as well as international sales of its hollow-shaft axles. The specialized axles are lighter and have become popular as automakers struggle to meet rising fuel economy standards.

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MCKINLEY INC. Where: Ann Arbor Revenue 2013/2010: $500M/$273M Revenue percent change: 83 Percent change ranking: 31 Revenue growth: $227M Revenue growth ranking: 49 Combined rankings: 80 What it does: Commercial and multifamily residential real estate ownership and management How it grew: McKinley is a firsttimer on the Crain’s Fast 50 list. The company increased its apartment ownership portfolio by more than 10 percent in three years and increased its ownership of formerly distressed retail properties and affordable multifamily housing, according to CEO Albert Berriz.

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NETLINK SOFTWARE GROUP AMERICA INC.

Where: Madison Heights Revenue 2013/2010: $134.5M/$28.4M Revenue percent change: 374 Percent change ranking: 3 Revenue growth: $106.1M Revenue growth ranking: 80 Combined rankings: 83 What it does: Provides cloudbased IT solutions and data analytics How it grew: NetLink built a 15acre campus in Bhopal, India, last year to handle a contract for IT services that it won in 2010 from the State Bank of India, the largest bank in India with more than 11,000 branches and six associated banks in India and abroad. The facility is designed to house as many as 4,000 employees.

FirstMerit Mobile Payment Connie’s business keeps her on the move. Which is why she has FirstMerit Mobile Payment—to securely accept credit or debit card payments on her phone, almost everywhere she goes. And with realtime processing and the ability to deliver e-receipts to her customers, Connie’s company will continue moving full speed ahead.

ROUSH ENTERPRISES Where: Livonia Revenue 2013/2010: $402M/$215.3M Revenue percent change: 87 Percent change ranking: 29 Revenue growth: $186.7M Revenue growth ranking: 55 Combined rankings: 84 What it does: Engineering, product development, testing and manufacturing services How it grew: Roush’s trajectory has been steady for the past decade as it diversified beyond the

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SACHSE CONSTRUCTION AND DEVELOPMENT CO. LLC

terminals for companies such as Vuitton North American Inc. and Brooks Brothers Inc. “We don’t chase the projects,” we chase the customer,” CEO Todd Sachse told Crain’s in 2012. That same year, Sachse relocated its headquarters to downtown Detroit, inside the Dan Gilbertowned Arts League of Michigan building on Woodward Avenue.

revenue doesn’t tend to bring added debt service to its balance sheet. TriMas has also grown with customer demand in Asia. The expansion helped push the company higher on this year’s list, from its No. 34 slot in 2013.

purchases since 2012, including Suburban Fiat in Ann Arbor and Suburban Chrysler Jeep Dodge Ram in Garden City.

from 2013 to sometime in 2014.

THE IDEAL GROUP Where: Detroit Revenue 2013/2010: $231M/$116M Revenue percent change: 99 Percent change ranking: 27 Revenue growth: $115M Revenue growth ranking: 75 Combined rankings: 102 What it does: Manufacturing and construction services company that also acts as a steel and surplus equipment vendor to some manufacturers. How it grew: The company is a newcomer to the Crain’s Fast 50 list thanks to the growth of Ideal Contracting, the company’s largest subsidiary. IC has been a materials supplier or a subcontractor on several large construction projects in recent years: the Woodward Avenue pedestrian bridge at St. Joseph Mercy Oakland hospital in Pontiac, a new building at the Marathon Petroleum Co. LP refinery in Detroit, a steel contract for the Multidisciplinary Biomedical Research Building at Wayne State University, and a Southfield office tower renovation. Ideal Shield, a subsidiary that makes handrails, guardrails and plastic sleeves that fit over parking lot posts, grew sales online.

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Where: Detroit Revenue 2013/2010: $138M/$35.3M Revenue percent change: 291 Percent change ranking: 5 Revenue growth: $102.7M Revenue growth ranking: 82 Combined rankings: 87 What it does: Commercial construction How it grew: Sachse, which is best known for building out the Quicken Loans headquarters inside the Compuware Building, survived the recession because more than half of its construction projects were done out of Sachse state. That insulated it from the severe local impact of the national downturn. Part of the strategy is focusing on growing clients, building out retail spaces in malls and airport

TRIMAS CORP.

Where: Bloomfield Hills Revenue 2013/2010: $1.4B/$902.5M Revenue percent change: 55 Percent change ranking: 63 Revenue growth: $492.4M Revenue growth ranking: 27 Combined rankings: 90 What it does: Designs, manufactures and distributes engineered products for the energy, defense, aerospace, livestock, construction and consumer markets. How it grew: TriMas has been adding small to midsize companies through what it calls “bolton” acquisitions. The purchases have been made largely with cash from operations, or from issuing more than 9 million new stock shares in 2012 and 2013, so the new

THE SUBURBAN COLLECTION

Where: Troy Revenue 2013/2010: $1.6B/$1.1B Revenue percent change: 52 Percent change ranking: 67 Revenue growth: $544.5M Revenue growth ranking: 24 Combined rankings: 91 What it does: Michigan’s largest privately held dealership group and the 18th-largest dealer group in the country, with sites in Michigan, Florida, Illinois, Wisconsin and California. How it grew: The Suburban Collection has been on a buying spree, which has pushed its growth far above the national average for dealerships. This year, the group acquired four dealerships: BMW of Ann Arbor and Mercedes-Benz of Ann Arbor; Don Massey Cadillac in Plymouth; and Capitol Cadillac of Lansing. That was in addition to five previous

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LAFONTAINE AUTOMOTIVE GROUP

Where: Highland Revenue 2013/2010: $577.1M/$351.3M Revenue percent change: 64 Percent change ranking: 44 Revenue growth: $225.8M Revenue growth ranking: 50 Combined rankings: 94 What it does: Operates 19 vehicle franchises across nine metro Detroit locations. How it grew: Sales grew 27 percent in 2013, fueled in part by the opening of three new franchises in 2012 — a Volkswagen dealership in Dearborn, a Ford dealership in Lansing and a Buick-GMC dealership in Ann Arbor. The company earlier this year bought Dwyer and Sons Subaru in Commerce Township, which has been renamed LaFontaine Subaru.

SYNTEL INC. Where: Troy Revenue 2013/2010: $824.8M/$532.1M Revenue percent change: 55 Percent change ranking: 62 Revenue growth: $292.6M Revenue growth ranking: 35 Combined rankings: 97 What it does: Provides a wide range of outsourced IT services to companies around the world. How it grew: Syntel’s continued rapid growth is driven by demand for business from its 10 largest clients, who constitute more than three-quarters of its revenue. Biggest among those is American Express, at 25 percent, and State Street Bank, at 16 percent. Applications outsourcing provides about 75 percent of revenue. Other service lines include outsourcing of various business processes; IT consulting outsourcing and various e-business services.

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Where: Southfield Revenue 2013/2010: $5.2B/$3.7B Revenue percent change: 41 Percent change ranking: 90 Revenue growth: $1.5B Revenue growth ranking: 10 Combined rankings: 100 What it does: Manufactures interior parts for automobiles How it grew: IAC’s growth has followed the revival of the U.S. automotive industry, with 53 percent of the company’s revenue generated here. But the company has also focused on global expansion and diversification. It operates in 18 countries and expanded into the South African market last year through a joint venture with Feltex Automotive. “Given this global footprint, and our diverse customer and platform mix, as well as our manufacturing expertise, we feel that we have fortified industry barriers to entry while also mitigating our dependence on any individual customer,” the company wrote in its initial public offering documents last year. The company’s IPO was delayed

FUTURENET GROUP INC. Where: Detroit Revenue 2013/2010: $100M/$33.9M Revenue percent change: 195 Percent change ranking: 7 Revenue growth: $66.1M Revenue growth ranking: 97 Combined rankings: 104 What it does: Construction, environmental, security and technology services to government agencies How it grew: Future has secured several large military contracts over the past three years — including with U.S. Army Mission Contracting, the U.S. Army Corps of Engineers and the Naval Facilities Engineering Command — which has propelled the company’s growth up nearly 200 percent. The contracts cover a variety of services, including front gate anti-terrorism and protection improvements at the U.S. Marine Corps Recruit Depot in Parris Island, S.C. In 2012, the company acquired Franklin, Tenn.-based Smith & Wesson Security Solutions, bringing a regular partner in house. Last year, the company won a $63 million maintenance contract at a military installation.

ILITCH COMPANIES Where: Detroit Revenue 2013/2010: $3.1B/$2.2B Revenue percent change: 41 Percent change ranking: 89 Revenue growth: $900M Revenue growth ranking: 16 Combined rankings: 105 What it does: The companies of Michael and Marian Ilitch, including Ceasars, Detroit Red Wings, Detroit Tigers, Olympia Entertainment and Olympia Development How it grew: Increased demand for Little Ceasars $5 pizza and strong sales of food and beverages at its sports and entertainment venues.

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AMERICAN AXLE & MANUFACTURING HOLDINGS INC. Where: Detroit Revenue 2013/2010: $3.2B/$2.3B Revenue percent change: 40 Percent change ranking: 91 Revenue growth: $924.3M Revenue growth ranking: 15 Combined rankings: 106 What it does: Makes driveline and drivetrain system, axles, driveline modules. Why it grew: Growing demand for light trucks, particularly in North America, combined with successful efforts to diversify its business and client base. Many of those efforts have been directed toward ending the company’s dependence on General Motors Co. as a client. GM constituted 98 percent of American Axle’s business when it was spun off from the automaker in 1994. That’s 67 percent today, and the goal is to reduce that to half of sales. The company has similarly been reducing its dependence on truck and SUV components from nearly 100 percent to 65 percent of North American business and 70 percent of global business.

LEAR CORP. Where: Southfield Revenue 2013/2010: $16.2B/$12B Revenue percent change: 36 Percent change ranking: 100 Revenue growth: $4.3B Revenue growth ranking: 6 Combined rankings: 106 What it does: Supplier of interior systems and electronics to the automotive industry. How it grew: Lear emerged from bankruptcy in 2009 with a clean slate and a rising industry shortly thereafter. Increased sales globally as well as stronger product margins have led its growth.

CREDIT ACCEPTANCE CORP. Where: Southfield Revenue 2013/2010: $682.1M/$442.1M Revenue percent change: 54 Percent change ranking: 64 Revenue growth: $240M Revenue growth ranking: 43 Combined rankings: 107 What it does: Auto finance company and collection agency How it grew: Sales of autos are up across the country as the economy has improved. In fact, dealership revenue hit $730 billion — up 8.8 percent — in 2013, according to the National Automotive Dealers Association. That has provided an expanding market of new buyers for Credit Acceptance, which offers financing to those who might not qualify for other lenders.

DANLAW INC. Where: Novi Revenue 2013/2010: $58M/$10.8M Revenue percent change: 437 Percent change ranking: 2 Revenue growth: $47.2M Revenue growth ranking: 109 Combined rankings: 111 What it does: Automotive electronics engineering for OEMs,

suppliers, auto insurance and fleet companies. How it grew: Also a newcomer to this year’s growth list, Danlaw saw revenue jump after the purchase of software engineering firm MicroMax Inc. The company also reports adding more than 72 employees between 2011 and 2013, while pre-acquisition MicroMax employed about 40 people in Canton. The company reports aggressive sales of an automotive aftermarket data logger tool that insurance companies offer to help drivers obtain premium discounts. Danlaw reached 1 million unit sales of the device earlier this year. It also has been building new business in China and Korea through recent reseller agreements to market Mx-Suite, a software testing product it acquired with the MicroMax purchase. To accommodate its growth, the company relocated from Farmington Hills to Novi last year.

DIVERSIFIED RESTAURANT HOLDINGS (BAGGER DAVE’S) Where: Southfield Revenue 2013/2010: $108.9M/$45.2M Revenue percent change: 141 Percent change ranking: 13 Revenue growth: $63.6M Revenue growth ranking: 99 Combined rankings: 112 What it does: Created and operates Bagger Dave’s Legendary Burgers and Fries, and is the country’s largest franchisee of Buffalo Wild Wings. How it grew: The company owns and operates 40 Buffalo Wild Wings and 20 Bagger Dave’s Legendary Burgers and Fries locations. Geographic expansion is key to the company’s growth plans, and it has opened new BWWs in Indiana, Illinois, Michigan and Florida, with plans to add Bagger Dave’s locations in Michigan and Indiana. “We plan to leverage the momentum we have developed and increase Ansley our restaurants by 20 percent in 2014,” said Michael Ansley, president and CEO of DRH, in the company’s annual report. To facilitate expansion, the company recently increased its line of credit to $20 million and reduced the interest on existing debt by 25 basis points.

NEW YORK YANKEES drochloric acid as a “pre-treatment” chemical for energy exploration companies extracting natural gas and oil. That market grew from $18.4 billion in 2012 to $26 billion last year, according to Wellesley, Mass.-based BCC Research.

FORI AUTOMATION INC. Where: Shelby Township Revenue 2013/2010: $179M/$89M Revenue percent change: 101 Percent change ranking: 26 Revenue growth: $90M Revenue growth ranking: 88 Combined rankings: 114 What it does: Designs and manufactures testing and welding equipment for automakers and other manufacturers as well as load-moving equipment and automated guided vehicles for the manufacturing plant and shop floor. How it grew: A newcomer to this year’s Fast 50 list, Fori expanded rapidly through a mix of automotive resurgence and a diversification push into other markets. The company reports non-automotive customers, mainly aerospace and energy companies, account for about 20 percent of revenue compared with virtually none a decade ago. At the same time, it has built up new tier-one supplier business and accelerated with new OEM equipment orders — particularly for Ford Motor Co. and Chrysler Group LLC.

SUN COMMUNITIES INC. Where: Southfield Revenue 2013/2010: $415.2M/$263.1M Revenue percent change: 58 Percent change ranking: 56 Revenue growth: $152.1M Revenue growth ranking: 60 Combined rankings: 116 What it does: Owns and operates manufactured housing and RV communities How it grew: Sun Communities has more than 68,000 mobile home and RV sites located in 26 states. The company has grown through acquisition, completing the purchase of 50 properties — a total of 21,000 sites — since 2011. These are mostly situated in retirement and vacation areas, such as Florida and California. “We continue to experience an active pipeline of acquisition opportunities,” the company said in its annual report to investors.

NEAPCO HOLIDNGS LLC Where: Belleville Revenue 2013/2010: $570M/$374.9M Revenue percent change: 52 Percent change ranking: 66 Revenue growth: $195.1M Revenue growth ranking: 53 Combined rankings: 119 What it does: Manufactures drive shafts, differentials, die casts and suspension springs for the automotive and aftermarket industries How it grew: Neapco expanded into Europe in 2010, doubling its business with the acquisition of assets from Tedrive Germany GmbH, a former Visteon Corp. business.

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PVS CHEMICALS INC.

Where: Detroit Revenue 2013/2010: $549.3M/$353M Revenue percent change: 56 Percent change ranking: 61 Revenue growth: $196.3M Revenue growth ranking: 52 Combined rankings: 113 What it does: Manufactures and distributes chemicals and chemical transportation services for the energy, steel, manufacturing, public water and waste-water treatment and other industries. How it grew: Hydraulic fracturing has been a growth market for PVS Chemicals, which sells hy-

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The company opened a sales and engineering office in China in 2011 and plans to begin manufacturing there next year. “We continue to expand our business with Leenders the Detroit 3 and European OEMs to cover all global markets,” said Erik Leenders, vice president of global sales for Neapco. “We are planning major expansions in our production facilities in Mexico and China to accommodate this new business.”

ALTA EQUIPMENT CO. Where: Wixom Revenue 2013/2010: $208M/$115M Revenue percent change: 81 Percent change ranking: 32 Revenue growth: $93M Revenue growth ranking: 87 Combined rankings: 119 What it does: Sales of industrial and construction equipment, such as forklifts and excavators How it grew: Alta Equipment purchased four companies in 2009 and four more in the last five years. In 2012, Alta expanded with a new 70,000-square-foot center in New Hudson. “We are confident in the economic recovery, and we have lots of opportunities” for new company acquisitions, said Executive Vice President Ryan Greenawalt. Alta has 600 full-time employees at its Wixom headquarters.

BRIDGEWATER INTERIORS LLC Where: Detroit Revenue 2013/2010: $2.2B/$1.6B Revenue percent change: 36 Percent change ranking: 99 Revenue growth: $580M Revenue growth ranking: 22 Combined rankings: 121 What it does: Automotive seating, interiors and electronics maker Why it grew: The company, a certified Minority Business Enterprise, has grown along with the automotive industry. It is a joint venture of Epsilon Technologies LLC and Johnson Controls Inc.

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SET ENTERPRISES Where: Warren Revenue 2013/2010: $350M/$221M Revenue percent change: 58 Percent change ranking: 53 Revenue growth: $129M Revenue growth ranking: 69 Combined rankings: 122 What it does: Steel processing, duct manufacturing and construction services How it grew: The fortunes of minority-owned SET have improved along with those of its biggest client — the automotive industry, including Ford Motor Co., Chrysler Group LLC, General Motors Co. and Toyota Motor Corp. and a number of tier-one and tier-two suppliers. In 2010, the company formed two new subsidiaries that allowed the

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Second Stage firm to expand into the heating-andcooling and construction industries. Then in 2012, it opened a new steel processing and service center in Jackson, Ala.

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ing strong demand from health care and government clients, recently signing contracts with the states of Michigan and New Jersey to manage staffing programs.

BORGWARNER INC. Where: Auburn Hills Revenue 2013/2010: $7.4B/$5.7B Revenue percent change: 32 Percent change ranking: 123 Revenue growth: $1.8B Revenue growth ranking: 9 Combined rankings: 132 What it does: Auto supplier How it grew: The powertrain supplier continues its upward trend due to a recovered North American automotive market, plus significant sales growth in Asia Pacific and South America.

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Where: Wixom Revenue 2013/2010: $355M/$226M Revenue percent change: 57 Percent change ranking: 58 Revenue growth: $129M Revenue growth ranking: 68 Combined rankings: 126 What it does: Recreational trailer and vehicle dealership How it grew: Expanded outside of Michigan following the recession, opening stores in Jacksonville, Fla.; Salt Lake City, Utah; Huntley, Ill.; and North Canton, Ohio. It also operates six Michigan sites, including a new dealership in Wixom, and plans to open another location soon in Tampa, Fla.

GREAT EXPRESSIONS DENTAL CENTERS PC Where: Bloomfield Hills Revenue 2013/2010: $262M/$163M Revenue percent change: 61 Percent change ranking: 50 Revenue growth: $99M Revenue growth ranking: 83 Combined rankings: 133 What it does: Owns and manages more than 220 dental practices in nine states, including more than 60 in Michigan. How it grew: The company has grown mostly through acquisitions of and affiliations with dental practices in such states as Florida, Georgia, New York and Ohio.

41 38 41

HENNIGES AUTOMOTIVE

Where: Auburn Hills Revenue 2013/2010: $774M/$540M Revenue percent change: 43 Percent change ranking: 82 Revenue growth: $234M Revenue growth ranking: 45 Combined rankings: 127 What it does: Supplier of engineered sealing and anti-vibration systems for the global auto market How it grew: In 2010, Connecticut-based private equity firm Littlejohn & Co. LLC bought the auto supplier from Chicago-based Wynnchurch Capital. Since then, Henniges has made acquisitions to fuel growth, including a German weatherseal company that pushed the company further into the European market. Henniges is also focused on the Chinese market, including acquiring sole ownership of a joint Chinese venture. â&#x20AC;&#x153;We continue to pursue opportunities that strengthen our global footprint in order to drive results and further our ability to serve key customers locally in China and around the world,â&#x20AC;? said Doug DelGrosso, Henniges president and CEO, in a news release.

ACRO SERVICE CORP. Where: Livonia Revenue 2013/2010: $216M/$130M Revenue percent change: 66 Percent change ranking: 42 Revenue growth: $86M Revenue growth ranking: 89 Combined rankings: 131 What it does: Staffing firm How it grew: This newcomer to the Fast 50 list has been riding the economy out of the recession. â&#x20AC;&#x153;Whenever the economy is coming out of a slow period, our industry tends to do well because most of our clients prefer to hire contingent workers rather than do direct hiring because they want to be sure the recovery will sustain itself,â&#x20AC;? said Ron Shahani, president and CEO of Acro. The company started in 1982 servicing the auto industry. Today, revenue from auto clients is growing, but the company has expanded into other markets. Shahani is see-

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Where: Livonia Revenue 2013/2010: $50.4M/$18.6M Revenue percent change: 171 Percent change ranking: 10 Revenue growth: $31.8M Revenue growth ranking: 129 Combined rankings: 139 What it does: Provides workforce management solutions to the public and private sectors How it grew: This is the first year that WorkForce Software appears on the Crainâ&#x20AC;&#x2122;s Fast 50 list. A number of factors propelled the companyâ&#x20AC;&#x2122;s growth, including investment, new customers and global expansion. The company raised $17 million from investors in 2011, plus another $5 million in 2012. Last year, WorkForce established new offices in the U.K., opened data centers in the Netherlands and Sydney, Australia, and expanded into China. New clients include the states of Delaware and Washington.

Where: Detroit Revenue 2013/2010: $450M/$304M Revenue percent change: 48 Percent change ranking: 72 Revenue growth: $146M Revenue growth ranking: 61 Combined rankings: 133 What it does: The managed service provider oversees contract employees and contracts for customers. It also provides contract staffing and services to automotive dealers. How it grew: Client growth has driven MSXâ&#x20AC;&#x2122;s jump in revenues, with nearly all of the global automotive manufacturers signing on. It also scored new customers in other industries, leading the company to open new offices in Thailand, China, India, Hungary, South Africa and the Czech Republic since 2010.

Where: Rochester Hills Revenue 2013/2010: $118.5M/$63.5M Revenue percent change: 87 Percent change ranking: 30 Revenue growth: $55M Revenue growth ranking: 106 Combined rankings: 136 What it does: Training and staffing of dealership technicians for automotive OEM customers How it grew: Expanding globally has been a top priority for TTi Global. Nearly half of its business comes from overseas â&#x20AC;&#x201D; 45 percent compared to 30 percent just a few

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Earlier this year, New York City-based Insight Venture Partners took a majority stake in the company, which will allow it to accelerate growth in the coming years.

AMERISURE MUTUAL INSURANCE

Where: Farmington Hills Revenue 2013/2010: $639.6M/$450M Revenue percent change: 42 Percent change ranking: 86 Revenue growth: $189.6M Revenue growth ranking: 54 Combined rankings: 140 What it does: A private stock insurance company that serves commercial firms in manufacturing, construction and health care. How it grew: Amerisure, which primarily insures long-term risks, has experienced steady surplus growth the past two years, increasing 9.7 percent in 2013 with projected 6 percent growth this year. Premium revenue also is expected to grow 10 percent this year. It is licensed in 50 states and uses appointed agencies in 23 states.

RAPID GLOBAL BUSINESS SOLUTIONS INC. Where: Madison Heights Revenue 2013/2010: $74.9M/$35.5M Revenue percent change: 111

Percent change ranking: 21 Revenue growth: $39.4M Revenue growth ranking: 119 Combined rankings: 140 What it does: Provides engineering services, proprietary software and engineering staffing for automotive OEMs, tier-one suppliers, aerospace and defense. How it grew: The recent recession forced diversification upon the company, but that has driven growth. Founded 17 years ago as an engineering services and staffing company focusing on the automotive industry, RGBSI has branched out into aerospace, defense, railroads and more. Last August, it announced a major partnership with Dassault Systemes SA, a French software company, to develop 3D modeling and simulation tools.

MALACE & ASSOCIATES INC. Where: Troy Revenue 2013/2010: $44.5M/$15.6M Revenue percent change: 186 Percent change ranking: 8 Revenue growth: $29M Revenue growth ranking: 132 Combined rankings: 140 What it does: Provides management of staffing, human resources and facility services How it grew: Diversified its customer base beyond automotive to the engineering, logistics and man-

ufacturing industries. Last year, it launched the Malace Facility Services division to manage non-core vendor contracts for clients.

PENSKE CORP. Where: Bloomfield Hills Revenue 2013/2010: $23.1B/$18.1B Revenue percent change: 27 Percent change ranking: 137 Revenue growth: $5B Revenue growth ranking: 4 Combined rankings: 141 What it does: Transportation services company that encompasses retail automotive, truck leasing, logistics, component manufacturing and professional motorsports. How it grew: Growth over the past several years has come from two primary sources: acquisition of new vehicle dealerships and improving conditions in the heavyduty trucking market. The company has seen more new and used vehicle sales as well as more leasing activity from the heavy-duty truck parts of its business. Additionally, Penske Corp. recently acquired a commercial vehicle distribution company that operates in Australia and New Zealand.

TWEDDLE GROUP INC. Where: Clinton Township Revenue 2013/2010: $113M/$65M Revenue percent change: 74

Percent change ranking: 34 Revenue growth: $48M Revenue growth ranking: 108 Combined rankings: 142 What it does: Creates and delivers the information owners, OEMs and service techs need to keep up with their vehicles. How it grew: Like all of the auto suppliers, Tweddle Group is seeing its revenues rise with the improving economy. But the company also planted seeds of future growth during tough times, investing in R&D of new products. The company, on the Fast 50 list for the first time, also has diversified geographically as well as into new products and industries.

SECURE-24 LLC Where: Southfield Revenue 2013/2010: $63M/$28M Revenue percent change: 125 Percent change ranking: 17 Revenue growth: $35M Revenue growth ranking: 125 Combined rankings: 142 What it does: Hosting, mobile and cloud computing provider How it grew: The firm had its highest growth year ever in 2013, with annual revenue up 15 percent. That prompted the company to hire 80 new employees and look for another 65 in 2014 — all of which helped Secure-24 make the

Fast 50 list for the first time. The company attributes the growth to an expanding customer base, half of which is located in the U.S. and half globally. In 2012, Charlotte, N.C.-based Pamlico Capital made a majority investment in the company, giving it a capital infusion to fuel growth.

COLD HEADING CO. Where: Warren Revenue 2013/2010: $224M/$141M Revenue percent change: 59 Percent change ranking: 52 Revenue growth: $83M Revenue growth ranking: 90 Combined rankings: 142 What it does: Produces fasteners, nuts and bolts for the automotive, agricultural and heavy construction industries. How it grew: The family-owned firm was founded in 1912 and now includes Cold Heading as well as a manufacturing network that spans Wolverine Carbine and Tool to Ajax Wire. By expanding into all aspects of the manufacturing process, as well as bringing on design and engineering capabilities, the company has seen growth as the recession wanes. It has expanded into the global market, including Japan, and into other industries, such as military, wind power and racing. This is the company’s first year on the Fast 50 list.

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

CRAIN’S MICHIGAN BUSINESS Mary Kramer

‘Encore’ finds new pursuits for older adults

RECREATIONAL BOATING’S IMPACT ON STATE’S ECONOMY

Nearly a year ago, Beverly Burns made her “encore.” A onetime journalist, she had practiced labor and employment law in the Detroit area for more than 30 years. But she was ready for another act. She found it at Encore.org, a national nonprofit that champions the notion that older adults who retire from their “day jobs” have plenty of years ahead to find paid and unpaid “encore” careers that fulfill a passion, contribute to a community or simply add income in traditional “retirement years.” Selected as one of two Encore Innovation Fellows in Michigan, Burns began raising awareness of the encore movement around the state while remaining a principal at the Miller Canfield law firm. The other fellow, Jill Harkema, is launching an encore program in Grand Rapids that will link people like her — retired from a formal day job — to nonprofits that need experienced hands for short-term stints and projects. That fellowship is funded by the Grand Rapids Community Foundation. In July, Burns expanded her scope to work specifically with state government agencies through Gov. Snyder’s Office of Good Government. State department heads are now looking for projects that could be, in Burns’ words, “described and accomplished in six months to one year” by an “encore-age” professional — either in a volunteer capacity or a position paid for by a company supporting an employee’s transition to encore work. The opportunity is big: According to a statement from Snyder’s office, nearly 2 million Michigan residents are 60 or older; by 2030, nearly one in four residents will be 60 and older. And that doesn’t speak to the 50somethings who may be ready for the next chapter. But to make it all work, Burns is hoping to find Michigan companies that would emulate the IT giant Intel, which funds paid fellowships of employees after their formal retirement dates for six months to a year. The Encore.org website has other examples of corporations supporting the encore movement as well as a handbook for adults looking for encore opportunities. With retirement portfolios climbing back to pre-recession levels — or maybe more — some professionals in metro Detroit may be thinking “what’s next?” after formal retirement. The encore concept could be their way to parachute into hugely rewarding encore careers. To learn more, visit the Encore.org website. Companies interested in creating their own encore fellowships for retirees can contact Burns at burns@millercanfield.com.

SPENDING Annual: $3.2 billion

ECONOMIC IMPACT Total annual: $7.43 billion

NUMBER OF BOATS Total*: 771,439 Power boats: 635,168 Personal watercraft: 97,758 Sailboats: 25,957 Other boats: 12,556 Households per boat: 5.0

Owosso-based Crest Marine specializes in manufacturing aluminum-hulled pontoon boats that range from 20 to 27 feet.

BOATING BUSINESSES Total: 1,404 Boat building: 22 Motor/engine manufacturing: 11 Accessory/suppliers manufacturing: 124 Dealers/wholesalers: 247 Boat services: 1,000

COURTESY OF CREST MARINE

Boating biz throttles up Sales billow as recession-battered buyers return BY MATTHEW GRYCZAN CRAIN’S MICHIGAN BUSINESS

ike many of the metro Detroit clients he serves as an accountant, Jeff Vitale feels better about the economy now compared to the days of the Great Recession. So when it was time to enjoy the family cottage on Harsens Island with his wife and two children, Vitale decided to spring for a new aluminum-hulled pontoon boat to ply the waters of Lake St. Clair. His choice was a 25-foot-long 250 SLR model made by Crest Marine LLC in Owosso — “the best boat we could ask for” when it came to layout for storage and power to get around. Multiply the experience of Vitale a thousandfold, and it’s clear why some boat builders in Michigan are getting downright giddy about the resurgence of the industry. Even those boat manufacturers that specialize in custom-crafted vessels with price tags

COURTESY OF JEFF VITALE

Jeff Vitale and his family travel the waters of Lake St. Clair on a Crest boat.

north of $1 million are cautiously optimistic that business will grow, based on the fact that work is steady now. If a boat is a hole in the water into which you throw money, then more Americans now are willing to shovel cash into floating craft of all shapes and sizes, according to the Chicagobased National Marine Manufacturers Association. See Boating, Page 22

JOBS Estimated impact of spending on job creation: 58,863 jobs Total boating jobs: 16,670 Boat building: 1,121 Motor/engine manufacturing: 5,184 Accessory/supplies manufacturing: 2,649 Dealers/wholesalers: 2,097 Boat services: 5,519 LABOR INCOME (estimated) Total labor: $2.4 billion Direct: $987 million Indirect: $606 million Induced: $837million BOATING REVENUE Total manufacturing: $1.75 billion Boat building: $289 million Motor/engine manufacturing: $946 million Accessory/supplies manufacturing: $518 million Dealers/wholesalers: $978 million Boat services: $1.2 billion Total retail and services sales: $2.2 billion * Total boats are registered boats as reported by states to the U.S. Coast Guard Source: National Marine Manufacturers Association’s Center of Knowledge; Recreational Marine Research Center at Michigan State University. Numbers are from 2012.

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Boating: Sales on rise ■ From Page 21

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“It’s likely Americans put boat nomic squall to come back purchases on hold until the econo- stronger through lean manufacmy steadied,” said Sarah Ryser, turing and new products. the association’s director of com“Like a lot of companies, we munications. were pound“With rises in coned pretty sumer confidence hard in 2008 and the housing and 2009,” market have said Joe Curcome rises in ran, managnew-boat ing partner sales.” of Crest As the Marine and sixth-largest an affiliate, boat manuOwosso Comfacturing posites, which state in the makes fiberU.S., Michiglass compogan is benenents for fiting from the Crest. pent-up demand for “We’ve repontoons, fishing covered and Sarah Ryser, National Marine boats, small family developed Manufacturers Association cruisers, sailboats new processand powerboats, as es,” he said. well as nonpowered craft such as “We redesigned every boat that we kayaks and float boats for fishing. built and brought a lot of things inhouse to have a little more control over what we do.” Maurice Schell founded the Nearly two dozen Michigan business in 1957 by making poncompanies are involved in boat toons of steel. But Crest Marine manufacturing — ranging in size now specializes in aluminumfrom Rec Boat Holdings LLC in hulled pontoon boats that cost Cadillac, which employs about 475, $17,000 to $85,000 and range from 20 to Dry Fly Float Boat LLC in nearby to 27 feet. Irons, operated by the husbandSchell died in 1999, and Curran wife team of Dave and Karen McIn- and his partners bought the comtire. pany from family members in 2010. And Michigan residents appar“What attracted us to buying a ently use much of what they make pontoon company was that the — the state ranked third national- product appeals to a lot of demoly with more than 800,000 regis- graphics, and the Crest brand has tered boats, behind No. 1 Florida been a substantial brand over a and No. 2 Minnesota. In one seg- number of years,” Curran said. ment of boating, total sales of “The marine business got hit earlipowerboats, engines, trailers and er by the recession, and it took a accessories crept up 2 percent in long time for our industry to get Michigan to $656 million last year, out of it — parts of our industry compared with the previous year. still haven’t gotten out of it. But Crest Marine is a perfect exam- the pontoon business as a whole ple of an old-line Michigan company that was able to exit the ecoSee Next Page

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COURTESY OF CREST MARINE

Joe Curran, managing partner of Crest Marine and affiliate Owosso Composites, said to rebound from the recession the company redesigned boats and “brought a lot of things in-house to have a little more control.”

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doesn’t drop as far, and it always comes back faster.” Annual sales nationally probably bottomed out at about 30,000 to 35,000 units in North America, and now it’s about 50,000 to 55,000, Curran said. The top 10 manufacturers, which includes Crest Marine, probably represent 85 percent of all pontoons sold in North America. “We brought some old Crest customers back into the fold and are working to get the next generation as well,” Curran said. Another major Michigan boat manufacturer is Rec Boat Holdings, a holding company formed to act as an umbrella for the Four Winns, Glastron, Wellcraft and Scarab lines of powerboats. Platinum Equity LLC, an investment firm founded by Detroit Pistons owner Tom Gores, bought Rec Boat in 2010. In June, Platinum sold the company for undisclosed terms to Bénéteau Group, the largest European manufacturer of motorboats up to 15 meters, or about 49 feet. Like Crest Marine, the powerboat brands of Rec Boat Holdings were hard hit in the recession, but the brands emerged stronger through product redesign. The predecessor company to Rec Boat, Genmar Holdings Inc., filed for bankruptcy in 2009, and Platinum Equity bought selected assets for $70 million, according to news reports. “Platinum was extremely supportive in investing in new product development — we have redesigned our Four Winns and Glastron lines over the last three to four years and have reJulie Johnson, cently startRec Boat Holdings ed with Wellcraft,” said Julie Johnson, Rec Boat Holdings director of marketing. Platinum spent about $9 million on capital improvements in Cadillac during the past four years and streamlined manufacturing. Over that time, employment nearly doubled in Cadillac, and sales approached $150 million last year. “Our brands have maintained steady sales, but it has been a slow, uphill climb,” Johnson said. “Wellcraft is significantly ahead of last year; outboard fishing boats are doing well right now. “We just entered the jet segment (with Scarab), which has been climbing steadily over the past four to five years. The stern-drive segment, although slowly increasing in sales, is still much lower than before the recession period of 2009-2010.” Stern-drive systems, which use an automotive engine as the source of power transmitted to a movable propeller and rudder, took the hardest hit among boat categories in the past decade and showed the slowest recovery in the

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Lest someone think that all boats made in Michigan roll off assembly lines like cars, a handful of companies have kept alive the craft of building wooden-hulled boats, a manufacturing process in which time is measured in months rather than days. “We strive to be the best in our class, and we think that that’s what will ensure our survivability and longevity,” said Steve Van Dam, president of Van Dam Custom Boats, a Boyne City-based company that builds high-end, custom, one-of-a-kind, mahogany-hulled boats that can cost anywhere from $200,000 to more than $1 million. “I think people that are not at that level come and go all the time,” said Van Dam, who has begun a boat-building apprenticeship at the company, which he founded in 1977. “We set a high standard, we are very skilled, and we have a lot of experience. With that in mind, our outlook is very good.” Van Dam serves on the technical advisory board of the Great Lakes Boat Building School in Cedarville, which teaches traditional and contemporary techniques in wooden boat building.

With 13 full-time employees, Van Dam Custom Boats builds from scratch two to four vessels a year, and it works to maintain a one-year backlog. Business is up from the lull during the recession. The company used the downtime to reconfigure its shop floor, which includes a machine shop for stainless steel and aluminum fittings. “Some customers have a firm idea what they want when they commission us to build a boat,” Van Dam said. “Some customers have no idea what they want. We sit down to kind of a design spiral with them to work it out.” In that process, Van Dam’s designers ask the customer about needs, preferences and budget, develop options based on the information, and then continually narrow down the final design. From concept to finished boat can take 11 months to two years. Grand-Craft Boats LLC in Holland takes a similar tack when it comes to producing crafted mahoganyhulled boats, but it relies on designs that loosely take their queue from the famous Chris-Craft look of yesteryear, with its wooden forward deck and sleek cockpit. The company is licensed to do replicas of Chris-Craft boats, and See Next Page

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some of the 16 employees shared between Grand-Craft and an affiliated company, Anchorage Marine Service, worked for a time at ChrisCraft, said Jeff Cavanagh, the owner of Grand-Craft and Anchorage Marine. As if to emphasize the point, the company recently delivered a 24foot-long runabout to customers at Squam Lake, N.H. â&#x20AC;&#x201D; where the 1981 movie â&#x20AC;&#x153;On Golden Pondâ&#x20AC;? was filmed. Over the years, celebrities who appreciate the warm look of mahogany-hulled boats â&#x20AC;&#x201D; such as Kid Rock, Robert Redford, Jennifer Lopez and Tim Allen â&#x20AC;&#x201D; have purchased Grand-Craft boats. Cavanagh bought Grand-Craft in 2010 after the company temporarily ceased operation a year before because of financial difficulties. He moved the operation to nearby Anchorage Marine Service on the north shore of Lake Macatawa in Holland. â&#x20AC;&#x153;We always did large and small wooden boat restoration,â&#x20AC;? Cavanagh said. â&#x20AC;&#x153;So when my old friend Dick Sligh, who had been running Grand-Craft for 20 years, said the company could become available, I jumped at it.â&#x20AC;? Jeff Cavanagh, In the goGrand-Craft Boats, go years of Anchorage Marine boat buildService ing in the 1990s, Grand-Craft produced a dozen boats a year, but that has tapered off to an average of about three annually. â&#x20AC;&#x153;We are happy that things are steady, and we expect them to pick up with time,â&#x20AC;? Cavanagh said. Grand-Craft has built boats anywhere from 20 to 42 feet long and carrying price tags of $90,000 to $1.6 million. â&#x20AC;&#x153;The â&#x20AC;&#x2DC;old boatâ&#x20AC;&#x2122; people just get geeked up when they see an all-mahogany wooden boat with the new engine in it and our fly-by-wire technology for shift and throttle,â&#x20AC;? Cavanagh said. â&#x20AC;&#x153;Not only do you get the beauty of the mahogany that people look for, our boats are built using contemporary techniques and materials that result in much lower maintenance.â&#x20AC;?

the company, which annually builds up to 40 boats ranging from 6 to 14 feet in length and costing $695 to $1,495 each. Dry Flyâ&#x20AC;&#x2122;s boats are almost too well-built for their own good â&#x20AC;&#x201D; new business appears to be dampened somewhat by the availability on Internet auction sites of his companyâ&#x20AC;&#x2122;s used craft, built over the past 15 years, McIntire said. Tom Haag, vice president of Colony Marine, with three boat sale centers in Southeast Michigan,

said the stateâ&#x20AC;&#x2122;s boat manufacturers are using tried-and-true techniques to boost business â&#x20AC;&#x201D; providing intimate knowledge of what customers want and setting good prices on their products. â&#x20AC;&#x153;And itâ&#x20AC;&#x2122;s great working with a Michigan company like Crest because they are responsive to both customers and dealers,â&#x20AC;? Haag said. â&#x20AC;&#x153;If there is an issue with something we sold or if someone needs spare parts, we know they will give us great service.â&#x20AC;?

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Trickle-down effect Michigan is also home to more than a dozen entrepreneurs who translated their love of water into cottage industries. Dave McIntire, owner of Dry Fly Float Boat, said that for years he and his wife enjoyed the rivers that run throughout northern Michigan, such as the Big Manistee and Pere Marquette, before they launched their company in 1998. â&#x20AC;&#x153;I designed our inflatable pontoon boat based on my own experience with river fishing,â&#x20AC;? McIntire said. â&#x20AC;&#x153;They are so lightweight that they can be thrown on the top of a vehicle or in the back of a pickup truck.â&#x20AC;? Business has stayed steady for

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CRAIN’S DETROIT BUSINESS

CRAIN’S MICHIGAN BUSINESS

Term limits to be on the agenda of West Michigan Policy Forum ATTEND THE FORUM What: West Michigan Policy Forum When: Sept. 28-29 Where: Amway Grand Plaza Hotel in Grand Rapids Highlights: Speakers include Gov. Rick Snyder, Pulitzer Prize-winning journalist and Fox News contributor Charles Krauthammer, Andra Rush, CEO of Wayne-based Rush Trucking Inc. and a host of business executives from west Michigan businesses including Haworth Inc., Herman Miller Inc. and Wolverine Worldwide Inc.

BY CHRIS GAUTZ CAPITOL CORRESPONDENT

When Michigan did what was once unthinkable and became a right-to-work state last year, some of the credit — or blame — went to the West Michigan Policy Forum. Doug DeVos, president of Amway Corp. and immediate past chairman of the forum’s board, said that when the forum began in 2008, making Michigan a right-to-work state was one of two recommendations made by attendees. The other was the elimination of the Michi-

gan Business Tax. Gov. Rick Snyder made both happen in his first term. “It took a long time to go through and see those two forward,” DeVos said. And as an estimated 600 business leaders again converge on Grand Rapids for this year’s forum, the next long-term issue could be legislative term limits. Issues like transportation, talent and education will be part of the forum again, but DeVos said when organizers have traveled around the state, business leaders

they met with often brought up term limits as something they would like to see lengthened or eliminated. Experience matters in business as well as in politics, he said. DeVos said the sentiment he often heard from business owners was: “As soon as I connect with someone, they are gone.” So during some of the policy sessions at the forum, DeVos said attendees can begin to explore how other states deal with term limits and whether Michigan’s system is the best way to go.

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Two years ago, to coincide with the 20th anniversary of the passage of term limits by voters in 1992, the Michigan Society of Association Executives released a white paper on term limits. The group found that the state has one of the more restrictive term limit laws in the nation. It is one of six states that has lifetime term limits, and the total of 14 years that a lawmaker can serve is one of the lowest in the country. In Michigan, lawmakers can serve three two-year terms in the House and two four-year terms in the Senate. Cheryl Ronk, president of the society, said the research found that term limits have lessened the power of the lawmakers themselves and increased the influence of the legislative staff who have the institutional memory. Senate Majority Leader Randy Richardville, R-Monroe, as he ends his 14th and final year in the Legislature, plans to introduce legislation this fall that addresses term limits. Richardville, who has long supported lengthened term limits, said he is investigating an idea that would allow lawmakers to hold office long if they can collect a specified number of petition signatures from constituents. On WKAR’s “Off the Record,” Richardville said the issue is about local control. He said voters typically like their own elected official but think others in Lansing should be cast out. In order to change the law, it would take a two-thirds vote of support in both the House and Senate, as well as a vote of the people to amend the state constitution. And lawmakers have been leery of the perception that they are looking to extend their own career. Richardville is not interested in serving another term in the Legislature if term limits were changed, his press secretary, Amber McCann, said. “The problem is, even if someone is pure of heart, it makes them look self-serving,” said John Cavanagh, co-founder of Lansingbased Epic-MRA Corp. Richardville said to make the vote more palatable, he wants to pair it with financially penalizing lawmakers who don’t complete the state budget on time, and who don’t show up to work. But even if lawmakers could come up with the votes themselves, it would take an awful lot to convince voters that they were wrong on term limits, Cavanagh said. When his firm has polled voters in the past, the idea of changing term limits received a bare majority of support, at best, but that was when it was combined with moving to a part-time Legislature, he said. “The fascination with the public of term limits continues,” he said. “It’s possible the sentiment has changed. Maybe a new generation of voters has replaced those that voted term limits in. But I wouldn’t bet on it.” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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Malaysia/Thailand

WHERE MICHIGAN DOES BUSINESS Altair Engineering Inc. Based: Troy Malaysia operations: Regional headquarters in Kuala Lumpur Employees: 25 Products: Proprietary software and services. Top executive: Srirangam Srirangarajan, managing director Customers: Proton, Perodua, APM Automotive, OYL Manufacturing, Modenas, Toyota, Honda, Thai Summit Auto Parts, Summit Auto Body, Nissan, Bosch, Lear, Kawasaki Heavy Altair’s Malaysia office is in Industries, Sobida, Kuala Lumpur. Astra, Komatsu Indonesia, Defence Science and Technology, Seagate Technology, Molex Singapore

Autoliv Inc. Based: Auburn Hills Thailand operations: Airbag manufacturing plant in Chonburi Employees: 1,918 Products: Airbags, seat belts, steering wheels Top executive: Colin Naughton, ASEAN president Customers: Ford, General Motors, Hino Motors, Honda, Isuzu, Mitsubishi, Nissan, Tata, Auto Alliance Co.

he economies of Malaysia and Thailand are driven by exports, but each has different economic challenges. The global economic recession had a strong impact on Thailand’s export industry, with most sectors experiencing losses in the double-digits, according to the CIA World Factbook. Some of Thailand’s exports include electronics, textiles, fishery products, rice, rubber and computer and automobile parts. Its largest export partners are China (11.7 percent), Japan (10.2 percent) and the United States (9.9 percent). With a 2013 GDP of $400.9 billion, some of Thailand’s industries include tourism, garments, manufacturing, rubber, plastics, electronic appliances and computer parts. It is the world’s second-largest producer of tungsten and the thirdlargest producer of tin. Malaysia is attempting to reduce its dependence on exports, particularly from electronics, oil, gas, palm oil and rubber. The oil and gas industries supplied 32 percent of government revenue in 2013, according to the CIA World Factbook. With a 2013 GDP of $312.4 billion, major industries include light manufacturing, pharmaceuticals, timber processing, logging, and natural gas production. Its major export partners are Singapore (13.6 percent), China (12.6 percent) and Japan (11.8 percent). materials, water process and solution Malasyian products: Performance plastics, advanced material, performance materials Thailand top executive: Jirasak Singmaneechai, managing director of Dow Chemical Thailand and SCG-Dow Group Malasyian top executive: James Thong, country manager Customers: First Solar Malaysia, Thong Guan Plastics & Paper, Klang Hock Plastic, Jotun Malaysia, Scientex Berhad, Syarikat Carto, Ibiden Electronics Malaysia, Nippon Paint Malaysia

Compuware Corp. Based: Detroit Malaysian operations: Application performance management, sales and field technical support in Kuala Lumpur Employees: 8 Products: IT software and services Top executive: Eng Kiong Koh, regional director of products

Domino’s Pizza Inc. Based: Ann Arbor Thailand operations: 13 stores Malaysian operations: 111 stores Thailand employees: 100 Malaysian employees: 1,200 Thailand top executive: Sanjay Singh, CEO, Evolution Capital PCL Malaysia top executive: Ba U Shan-Ting, COO, Domino’s Pizza Malaysia

LAOS

THAILAND Bangkok Chonburi

CAMBODIA

City

BRUNEI Kuala Lumpur Senai

MALAYSIA INDONESIA

COMING UP 䡲 September: Japan 䡲 October: Canada

VIETNAM

Employees: More than 500 Products: Furniture Top executive: Dhanakorn Kasetrsuwan, managing director Customers: G&G of South Korea, Blims Fine Furniture, PT. Chandra Asri Petrochemical Tbk, Harvey Norman Singapore

District of Rayong. Employees: 354 Products: Pump and module systems, fuel tank systems, fluid carrying systems, brake lines, fuel lines and tank top lines Top executives: Simon Velvin, executive managing director of Asia Pacific; Olivier Van Boxlaer, plant manager; John Zhang, plant manager Clients: Nissan, Mitsubishi, General Motors, Ford, Mazda, Suzuki, Inergy

Lear Corp.

TriMas Corp.

Based: Southfield Thailand operations: Manufacturing in Bangkok, Mueang Nakhon Ratchasima, Rayong, Samut Prakarn and Kabin Buri Malaysia operations: Manufacturing in Behrang Stesen and Klang Buri Thailand employees: 1,850 Malaysia employees: 200 Products: Fully assembled seats, seat components and wire harnesses Top executive: Jay Kunkel, president Asia Pacific operations Clients: Ford, General Motors, Nissan, Daimler, Proton, Volkswagen Passenger Cars

Based: Bloomfield Hills Thailand operations: Facility in Rayong for subsidiary Lamons. Facility in Conburi for subsidiary Cequent APEA (Asia, Pacific, Europe and Africa) Employees: 6,000 Products: Metallic and non-metallic gaskets, bolts, industrial fasteners, specialty products, custom-engineered towbars, hitches, roof rack and cargo management products, towing accessories, tubular side steps Top executive: Dave Wathen, president and CEO, TriMas; Kurt Allen, president, Lamons; Carl Bizon, president, Cequent APEA

MSX International Inc.

TRW Automotive Holdings Corp.

Based: Detroit Operations: Office in Bangkok Employees: 14 Services: Dealer training and coaching, warranty parts return and evaluation center Top executives: Xavier Vandame, general manager Clients: Ford and Chevrolet More information: MSXI Thailand is celebrating its first anniversary.

Based: Livonia Thailand operations: Two manufacturing plants in the Pluak Daeng District and aftermarket office in Bangkok. Malaysian operations: Aftermarket manufacturing/fulfillment in Johor, braking and suspension manufacturing in Senai, manufacturing in Senai and Rawang, engineering office in Senai, aftermarket and brake systems office in Rawang and global information services and data centers in Shah Alam Thailand employees: 845 Malaysian employees: 366 Thailand products: Engine valves, driver airbag modules, steering wheels, leather wrapping Malaysia products: Display units, window lifter and mirror switches, alarm systems, clocks, buzzer and distribution switches, multifunction timers, brakes, suspension and chassis systems, tie rods, ball joints, stabilizer link, tie rods, toe rod ends, suspension ball joints, others Thailand top executive: Tom Draper, lead executive for Thailand Malaysia top executive: Sharif Mohd Azlan, general manager at Rawang More information: 19 percent of global sales are in Asia Pacific. — Compiled by Natalie Broda

General Motors Co.’s facility in Rayong, Thailand

General Motors Co. Based: Detroit Thailand operations: Manufacturing plant, powertrain facility in Rayong Employees: 4,300 Products: A range of vehicles under the Chevrolet nameplate including Sonic, Spin, Cruze, Captiva, Colorado and Trailblazer Top executive: Tim Zimmerman, president, General Motors Southeast Asia

RGIS LLC

Dow Chemical Co. Based: Midland Thailand operations: Head office for Dow Chemical Thailand and SCG-Dow Group in Bangkok, 12 plants in Rayong province Malaysia operations: Head office in Petaling Jaya, subsidiary of Dow Chemical Co., Dow AgroSciences LLC office in Petaling Jaya and Tawau, technical lab at Shah Alam and a technical service center in Penang Thailand employees: 900 Malaysian employees: 74 Thailand products: Performance materials, performance plastics, advanced materials, agricultural science, microbials, functional

Crain’s World Watch Monthly report showcases companies that are leaders in global markets and those that are expanding. 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.

La-Z-Boy has manufacturing operations in Chonburi, Thailand.

Based: Auburn Hills Malaysia operations: Office in Kuala Lumpur Employees: More than 30 Products: Physical inventory, fixed-asset inventories Top executive: Clarence Lim, country manager Clients: F.J. Benjamin Holdings, Nike, Triumph, Ralph Lauren, Burberry, Warnaco Malaysia Sdn Bhd, Estee Lauder, PERNAMA

La-Z-Boy Inc.

TI Automotive Ltd.

Based: Monroe Thailand operations: Manufacturing plant in Chonburi. Sales and marketing company, La-Z-Boy Asia, is headquartered in Bangkok.

Based: Auburn Hills Thailand operations: Office in the Klong Toey District of Bangkok, plant in Panthong District of Chonburi, plant in Pluak Daeng

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CRAIN’S DETROIT BUSINESS

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A $45 billion acquisition proposed by Comcast Corp. could completely reshape the Michigan cable TV market — affecting thousands of local jobs, hundreds of thousands of customers, tens of millions of dollars in local asset investments, and various community programs. The Federal Communications Commission last month started its 180day review clock on the all-stock acquisition deal for Philadelphiabased Comcast (NASDAQ: CMCSA) to buy New York City-based Time Warner Cable Inc. (NYSE: TWC), and Comcast still hopes to close on the deal by year’s end. But to appease federal regulators, a side deal for Comcast to shed 3.9 million customers and come in below a 30 percent market share among U.S. cable households after the acquisition will mean turning over nearly all its Michigan customers to a new, asyet unnamed public company formed by St. Louis-based Charter Communications. A fixture of the northern Michigan cable market, Charter as yet has no presence in Southeast Michigan and will completely replace the local market leader. Comcast, which houses a headquarters for its Heartland region of cable and Internet service division in Plymouth, currently has about 4,400 Michigan employees and had about 1.2 million cable and Internet customers statewide at the end of 2009, the last time such figures were furnished to Crain’s. The cable company also has a Sterling Heights call center that specializes in customer service for residential products, a technical center in Southfield and several smaller offices throughout the region. Some of its other larger markets include San Francisco and the Chicago area, but the Charter and Time Warner deals are expected to give it market dominance in New York and Los Angeles.

Under the cap All told, the post-acquisition Comcast expects to have about 29.1 million cable subscribers and 28 million Internet service customers nationwide. That comes in under a proposed 30 percent ownership cap the FCC has adopted in recent years as a safeguard against “monopsony,” or a buyer bottleneck in distributing media content. But the company no longer publicly discloses any breakouts of accounts by state or region. The U.S. Department of Justice also needs to review the deal, but no timetable is set for that. The deal with Charter calls for all of its Michigan customer base except for Berrien and Cass coun-

ties in southwest Michigan to transfer into “SpinCo,” the working title of a new public company that will be formed, managed and one-third owned by Charter. The remaining two-thirds will be owned by Comcast and Time Warner Cable shareholders. Other Heartland division Comcast customers in central Indiana also will go to SpinCo, as will Comcast service pockets of Minnesota, Tennessee and Alabama; TWC will also transfer most of Ohio and eastern Wisconsin into the new entity in the latest version of the acquisition deal. All told, the new public company will have more than 2.5 million cable customers, and Comcast will sell another 1.4 million accounts directly to Charter for cash. It wasn’t immediately clear what a Comcast exit from Southeast Michigan does to its local

workforce or operations, and sources have told Crain’s the new company may need fewer people in administration, IT services, human resources or other management staff, because some of its Michigan workforce handles service calls from other states. “The SpinCo is a company that would have to be created unto itself, and how it may be created or may manage its own operations would only be speculative for us. Comcast wouldn’t own it,” said Sena Fitzmaurice, vice president of regulatory and government communications for Comcast in Washington, D.C. Comcast has said it expects to save about $1.5 billion a year in operating costs nationwide if the deal goes through, but that savings may come mostly outside of Michigan. See Next Page

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Safe from cuts? Fitzmaurice and Michelle Gilbert, vice president of public relations for the Heartland region, both said a strong “majority” of employees in Michigan and other states are “front-line” employees — cable service technicians, installers, Internet technical support staff and others who work directly with customers. Those kinds of jobs traditionally are safer from the administrative and overhead cuts that often follow mergers and acquisitions. Gilbert declined to give breakouts on how many Michigan employees are front-line versus management or administrative staff. But the Plymouth regional headquarters houses some management positions, and Comcast almost 10 years ago built a $15 million call center in Scio Township that services broadband Internet customers and handles call sharing with other Comcast markets. “One of its pride and joy, state-ofthe-art facilities was the Scio call center when it opened, and they also have a relatively new customer service center in Plymouth along I275,” said Matt Friedman, a TV industry veteran and co-founder of public relations firm Tanner Friedman Friedman in Farmington Hills. Tanner Friedman represented Comcast as a client intermittently before 2010. “So that could be a big question in the deal — does Comcast want to keep any of that? The one thing we know for sure will be part of the spinoff is the households and customer accounts (in Michigan). What happens to their investments?” Friedman said he did not think the Charter spinoff deal would lead to a large downsizing of Michigan executives, because Comcast already has been centralizing its management structure outside Michigan for several years. “But Comcast has had one of the most active community relations programs of any corporate entity in Michigan, they do a lot with volunteering, free services for schools and libraries, and sponsorship of local events,” he said. “Would this new company have the kind of resources to continue doing that? I’ve always been a strong advocate for the programs because I thought they do a lot to build value and combat the image challenges. But we’ll have to see.” Comcast is an event sponsor for the Detroit Regional Chamber’s annual Detroit Policy Conference, and a 2001 commitment to City Year Detroit has grown into a national sponsorship of the at-risk youth organization and a support for City Year teams in 12 cities. Comcast also sponsors the Dearborn Area Chamber of Commerce Business Builder Series and the Midwest Technology Leaders conference, and sends volunteers to local Boys and Girls Clubs and Gleaners Community Food Bank locations as a part of Comcast Cares Day. Local advertising media buyers

also said they expect the Comcast sales force to be safe as well, since the Detroit market is so complex and many clients need to coordinate on local “zone” ad buys for small businesses, political candidates and others who need targeted marketing. Agencies often buy advertising time nationally through NCC Media, a New York City-based advertiser sales and marketing company coowned by Comcast, TWC and Cox Media. But local buys are usually coordinated directly with Comcast, or other local operators like Bright House Networks or WideOpenWest. “As an agency, it shouldn’t affect us much at all — it could be pretty seamless, I think,” said Micci Lasser, broadcast supervisor and negotiator for Duffey Petrosky & Co. in Farming-

ton Hills. “Because a new name is coming into the same basic market, and we’ve all been through that before.” Harvey Rabinowitz, president of West BloomLasser field Township media buyer Media…Period!, also said he expects little to change other than the company name and logo for local Comcast sales executives — and continuity might even be easier for the Charter-managed SpinCo. “Buying cable can be very complex and technical, but buying through a central location and (managing locally) reduces the level of

Page 29 complication,” he said. “It’s not going to be a snap-your-fingers-andnow-it’s-done (transaction), but that does reduce the level of complication.”

Too early to predict Francois Claude, an external communications analyst at Charter, also said it was too early to tell what management decisions lay ahead about personnel and infrastructure in Michigan, or other states where it expects to grow. Currently the fourthlargest cable operator in the nation, Charter expects to become second in size only to post-acquisition Comcast if both deals go through. Comcast has said in statements to regulators that the merger will not eliminate cable competition because

there are no local markets where both companies compete for the same customers. Gilbert said many details of the spinout company are still in development, and it’s too early to predict what shape it will take in Michigan. Friedman said metro Detroit was once Comcast’s largest local market outside of Philadelphia, back in 2001, but Fitzmaurice said Chicago has been its second-largest market at least since the $29.2 billion purchase of AT&T broadband closed in late 2002. Comcast intends to retain its Chicago-area service markets after the TWC deal closes, in Illinois, northwest Indiana and southwest Michigan. Chad Halcom: (313) 446-6796,

chalcom@crain.com. @chadhalcom

t r u e s t o ry

The CFO’s heart was in the right place, which told her the company’s 401(k) plan was not. In her capacity as CFO for one of the region’s leading manufacturers, the executive bore a weighty responsibility: to continue providing decent jobs, and to ensure that her company’s 401(k) plan was properly managed. It was the latter point that worried her. For years, the plan provider had been a large, regional bank that was biased toward its own proprietary funds. None were top performers in their sector, and the overall fund selection was equal parts old/laggard and new/unproven. Believing her employees deserved better, and mindful of her own legal ﬁduciary responsibility, the CFO asked a local banker for a recommendation. “We use Greenleaf Trust,” came the reply. At the introductory meeting, the retirement plan services team from Greenleaf Trust made a favorable impression. There was clarity and due diligence on how funds are researched, chosen and continuously measured against a stringent performance requirement. There was transparency on fees. There was a simple, step-by-step plan to expedite a seamless and timely transition from the company’s current provider. And there was a proactive, hands-on approach to meeting with employees individually and collectively in order to help them make smarter decisions about their eventual retirement. It was pretty much everything the current provider was failing to provide, and Greenleaf Trust was awarded the business. Employee participation is now higher, contributions have increased, asset values are healthier, and the CFO thanks the day she met us. Not every plan conversion is such an eye-opener. But with Greenleaf Trust’s ﬁduciary excellence, open architecture, best-in-class investment platform, and nearly perfect client satisfaction scores, your employees will clearly see things in a better light—starting with you. Let’s talk: Call Matt Siel at 800.416.4555.

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CRAIN’S DETROIT BUSINESS

$6 million renovation, theater planned for Southland Center BY SHERRI WELCH

The old adage is that if you can extend “ the stay, you can extend the expenditure ... (and) movie theaters are a marvelous tool for that.

”

Kari Zarbo, Lormax Stern Development Co.

CRAIN’S DETROIT BUSINESS

Southland Center owner Rouse Properties Inc. (NYSE: RSE) plans to begin a $6 million-$6.5 million renovation at the Taylor mall this month that is scheduled to be completed by early next year. The upgrades will include a new children’s play area, new lighting, signs, soft seating and tile flooring

from Italy to give the mall a higher-end feel, Rouse COO Benjamin Schall said. Southland’s two center court areas will also be reconfigured into shopping and dining concourses. The renovations and a new 12screen, 50,000-square-foot Cinemark theater expected to open at Southland on the site of a former Mervyn’s store by fall 2015, are meant to position it as the premier

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I N S U R A N C E

D E S I G N

Securities may be offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Investment Advisory Services may be offered through NFPSI or Schechter Investment Advisors, LLC. Schechter Investment Advisors, LLC. and NFPSI are not affiliated. SIA is an SEC registered investment adviser; please consult the Firm’s Form ADV disclosure documents, available on the SEC’s Investment Adviser Public Disclosure website.

regional mall in the southern suburbs, Schall said during the ICSC Michigan Idea Exchange and Alliance Program in Novi last month. “Our ability to drive traffic, to keep people there longer, is what’s going to drive sales,” he said. Theaters like Cinemark, with fully reclining leather chairs and food and drinks delivered to your seats, “have been a big driver of reintroducing customers to our malls,” Schall said. Rouse Properties, a New Yorkbased real estate investment trust, is among the largest mall owners in the U.S. Its largest holdings are in California and Michigan, where it owns four other properties besides Southland Center: Birchwood Mall in Port Huron, Lansing Mall, Westwood Mall in Jackson and Grand Traverse Mall in Traverse City. The upgrades and new theater headed to Southland follow an influx of new retail. Over the past 18 months, Rouse has added more than 120,000 square feet of new tenants, including Forever 21, Pink, Francesca’s, Ulta Beauty and Zumiez. Sales for the mall are in the $300-$400 range per square foot, Schall said, adding that they should be in the $450-$500 range. “I think the old adage is that if you can extend the stay, you can extend the expenditure ... (and) movie theaters are a marvelous tool for that,” said Karl Zarbo, director of operations for Bloomfield Hills-based Zarbo Lormax Stern Development Co., which owns Macomb Mall in Roseville. “What you’re trying to do is get the same person there for more than shopping,” he said. The amenity upgrades tell the public you’re making a change and represent a commitment to the tenants, community and shoppers, said Zarbo, who managed Southland more than a decade ago under prior ownership. The Taylor mall is “really, really good real estate,” he said. Much like the area surrounding Macomb Mall — which has a renovation of its own underway — there is good density of population near Southland Center, and residents there are not house- or car-broke, Zarbo said. Rouse, he said, “does a lot of homework before they spend a nickel.” There is a lot of disposable income and good potential for sales growth at Southland Center, Zarbo said. Rouse said the mall has more than 8 million visitors annually and total sales approaching $200 million. Sherri Welch: (313) 446-1694, swelch@crain.com. Twitter: @sherriwelch

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CALENDAR THURSDAY AUG. 14 AIAG Conflict Minerals Industry Briefing III. 8:30 a.m.-4 p.m. Hear an overview of Conflict Minerals Reporting Year 1 and information on the year ahead. The 8:30-11 a.m. session will be repeated 1-4 p.m. Automotive Industry Action Group, Southfield. $25 AIAG members, $125 nonmembers. Contact: Shannon Osburn, (248) 213-4642; email: sosburn@aiag.org; website: aiag.org.

UPCOMING EVENTS Leadership Oakland Breakfast â&#x20AC;&#x201D; The Road To Reinvention. 7:30-9 a.m. Aug. 26. With Josh Linkner, CEO, Detroit Venture Partners, on his latest book, The Road to Reinvention, MSU Management Education Center, Troy. $36. Contact: Susan Williams, (248) 952-6880 ext. 3; email: swilliams@leadershipoakland.com; website: leadershipoakland.com.

Networking Reception with Mayor Mike Duggan. 5:30-p.m. Aug. 26. Detroit Regional Chamber. After Detroit Mayor Mike Duggan issues brief remarks, network with him and key staff members. Max M. Fisher Music Center, Detroit. $10 chamber members, $590 nonmembers (the cost of a membership). Contact: Marianne Alabastro, (313) 596-0479.; email: malabast@detroitchamber.com; website: detroitregionalchamber.com

Detroit Economic Club 18th Annual Detroit Lions Kickoff Luncheon. 11:30 a.m.-1:30 p.m. Aug. 27. Detroit Economic Club. Join the DEC as it welcomes new Detroit Lions head coach Jim Caldwell. Lions players and coaches are scheduled to attend. Ford Field, Detroit. $45 DEC members, $55 guests of DEC members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econ club.org.

Automation Works. 2-5 p.m. Sept. 6. Uplift Inc. Career exploration parent workshop and employee recruiting event designed to expose high school students and their parents to a fully functioning automated factory and advanced manufacturing jobs that require training beyond high school but no bachelorâ&#x20AC;&#x2122;s degree. Families will generate points toward prizes as they participate in invention/technology/ robotic exhibits. Comau Innovation. Campus, Southfield. Free. Contact: (877) 429-2370; website: upliftinc .org/automationworkz.aspx.

Detroit Economic Club Presents Lowell McAdam. 11:30 a.m.-1:30 p.m. Sept. 8. Detroit Economic Club. Lowell McAdam, chairman and CEO, Verizon Communications, will address the monthly lunch meeting. MotorCity Casino Hotel, Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econ club.org.

Chrysler Day. 11:30 a.m.-1:30 p.m. Sept. 9. The Adcraft Club of Detroit. Luncheon presentation with Ralph Gilles, senior vice president, product design, and CEO, motorsports, Chrysler Group LLC. Gilles will discuss how Chrysler Groupâ&#x20AC;&#x2122;s design team connects with consumers through vehicle creations and his role as Gilles the CEO of motorsports. San Marino Club, Troy. $25 junior and student members, $35 members, $45 nonmembers. Contact:

LEARN WHAT MAKES THESE FIRMS FAST-GROWING Join Crainâ&#x20AC;&#x2122;s Detroit Business and learn whatâ&#x20AC;&#x2122;s behind the success of Crainâ&#x20AC;&#x2122;s Fast 50, the fastest-growing companies in Southeast Michigan, 7:30-10 a.m. Oct. 7 at the MSU Management Education Center, Troy. Hear from the regionâ&#x20AC;&#x2122;s high fliers, and get the stories on what drove their growth. All companies on the list will be invited to the event, and some will be featured as speakers. Watch for profiles from Crainâ&#x20AC;&#x2122;s annual fastest-growing companies list in this issue. The title sponsor is KPMG LLC. Tickets are $40 for students, $45 each for groups of 10 or more and $50 for individuals. Preregistration closes at 5 p.m. Oct. 3. If available, walk-in registration will be $65. For ticket information, call Kacey Anderson at (313) 446-0300, email her at cdbevents@crain.com or visit crainsdetroit.com/events. Join the conversation with #crainsfast50. Melanie Davis, (313) 872-7850; email: mdavis@adcraft.org; website: adcraft.org.

Cracking the Gender Code at Work. 11:30 a.m.-1:30 p.m. Sept. 9. Inforum. With Connie Glaser, corporate consultant to Deloitte, GE, FedEx, McDonaldâ&#x20AC;&#x2122;s and others, and author of GenderTalk Works, More Power to You! and Swim With the Dolphins. Townsend Hotel, Birmingham. $25 students; $40 Inforum members; $55 nonmembers; $700 preferred seating for 10, with recognition in event presentation and signage, access to VIP reception. Contact: (877) 633-3500. Website: inforummichigan.org. 5th Summit on the Future of the Connected Vehicle. 7:30 a.m.-6 p.m. Sept. 11. Connected Vehicle Trade Association, Michigan Department of Transportation. Participants will include automakers; tier-one and tier-two suppliers; hardware, software, services and communications companies; insurers; and state and federal government officials. Cobo Center, Detroit. $300 government representatives, $400 speakers and CVTA members, $500 nonmembers; all prices increase $100 after Aug. 14; $100 extra to attend Intelligent Transport System World Congress Expo and Demos, Sept. 10. Contact: Scott McCormick, (734) 730-8665; email: sjm@connected vehicle.org; website: connectedvehi cle.org.

How the Destruction of the Dollar Threatens the Global Economy and What We Can Do About It. 11:30 a.m.1:30 p.m. (followed by 1:35 p.m. book signing) Sept. 15. Detroit Economic Club. With Steve Forbes, chairman and editor-inchief, Forbes Media, presenting a controversial argument about why a return to a sound dollar and a new gold standard are vital to a healthy global Forbes economy. Forbes and Elizabeth Ames are the co-authors of How the Destruction of the Dollar Threatens the Global Economy and What We Can Do About It. Westin Book Cadillac, Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econclub.org.

CREW Detroit Impact Awards. 11 a.m.1:30 p.m. Sept. 17. Commercial Real Estate Women Detroit. Recognizing three Southeast Michigan commercial real estate developments that significantly impact surrounding communities, focusing on renovation/adaptive reuse, new construction and special impact. Westin Book Cadillac, Detroit. $65 CREW members, $90 nonmembers, $130 members with guest, $800 table for 10. Registration deadline: Sept. 8; table reservation deadline: Sept. 1. Contact: Nicole Franzen, (248) 233-0107; email: nrfranzen@hedev.com; website: crewdetroit.org.

Toast + Tech Talk Session 3: Driving Growth and Delivering Value. 7:30-10 a.m. Sept. 23. Plante Moran LLC, Automation Alley. Third in a four-part series on topics related to the technology industry, focused on helping growing companies develop the framework and tools necessary to continue to compete and find success. With panelists from Detroit Venture Partners, Hitachi Business Finance, Silicon Valley Bank. Plante Moran, Detroit. Free. Contact: Dan Artman, (248) 223-3469; email: Dan.Artman@plantemoran.com; website: plantemoran.com.

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2014 MICHauto Summit. 8 a.m.-4 p.m. Sept. 23. Detroit Regional Chamber. A look at the new era of Michigan innovation and the blueprint for the rest of the global automotive industry. Discussion will focus on the outlook of design, engineering, manufacturing and all things automotive. Cobo Center, Detroit. $125 DRC members, $200 nonmembers. Contact: Marianne Alabastro, (313) 596-0479; email: malabast@detroitchamber.com; website: detroitchamber.com.

Detroit Economic Club Presents Hans Engel. 11:30 a.m.-1:30 p.m. Sept. 24. Detroit Economic Club. With Hans Engel, chairman and CEO, BASF Corp. Engel leads all activities in the North American business region, including BASF Corp. in the U.S., BASF Canada, BASF Mexicana and the Global Catalysts Division, in addition to his responsibilities as a member of the BASF board. Detroit Athletic Club, Detroit. $45 DEC members, $55 guests of members, $75 others. Contact: (313) 963-8547; email: info@econclub.org; website: econclub.org.

Developing Leaders that Bring Dynamic Impact to the Organization. 7:30-9 a.m. Sept. 26. The Business Round Table. With John Lankford, CEO, Premier Executive Forums, master certified business adviser. Birmingham Country Club, Birmingham. $25 in advance, $30 at door. Contact: Christa Moxon, (269) 685-7829; email: christa.moxon@thebusinessrt.org; website: thebusinessrt.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;Eventsâ&#x20AC;? in the red bar near the top of the page. Then, click â&#x20AC;&#x153;Submit Your Eventsâ&#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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CRAIN’S DETROIT BUSINESS

PEOPLE FINANCE

HEALTH CARE Nicole Toth to di-

BUSINESS DIARY ACQUISITIONS & MERGERS

IN THE SPOTLIGHT

Metaldyne Performance Group Inc.,

rector of quality,

Henry Ford West Bloomfield Hospital, West Bloomfield Township, from director, Inpatient Pharmacy. Dennis Rice to president, Health

Management Systems of America, Brady

Boehm

Laurie Brady to director, Ernst & Young LLP, Detroit, from associate director. Also, Erick Marold to partner, from senior manager; Michael Boehm to partner, from senior manager; Vincent Fries to Lenglet principal, from senior manager; Emily Harbaugh to executive director, from senior manager; Joe Lenglet to partner, from senior manager; Bryon Niekamp to director, from senior manager; and Helen Wilcenski to executive director, from senior manager.

Detroit, from executive vice president of operations and finance.

Toth

LAW

FordDirect, Dearborn, has named Raj Singh as its first chief information officer. FordDirect is a joint venture between Ford Motor Co. and its franchise dealers to create a Web presence for dealers and provide digital Singh marketing and advertising services that help dealers sell cars and trucks. Singh, 41, most recently was property department, Honigman Miller Schwartz and Cohn LLP, Ann Arbor, from shareholder, Quinn Law Group PLLC, Novi.

MANUFACTURING Cook

Julie Martin to

Budde

Sean Cook to chairman, tax practice group, Warner Norcross & Judd LLP,

vice president of sales and marketing, Hel-

Southfield. He is a partner at the firm. Anna Budde to partner, intellectual

la Corporate Center USA Inc., Plymouth, from purchasing director. Todd Carroll to director of finance and inforMartin mation technology, Fortech Products Inc., Brighton, from plant controller and senior operations accounting analyst, Amcor Rigid Plastics USA Inc., Manchester.

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gan’s information technology division, Arrow Strategies LLC, Bingham Farms, from operations director, Allegis Group Services Inc., Troy.

executive director of IT at Consumers Energy Co., Jackson, where he led a portfolio of more than 200 applications and 400 global technology resources, including vendor partner resources. He earned a bachelor’s degree in computer science and an MBA from Michigan State University and a master of program management from George Washington University, Washington, D.C. He is also Project Management Professional-certified, SAP Center of Expertise-certified, and a Six Sigma Green Belt. Laura

Hughes

to vice president, communications and community,

Strategic Staffing Solutions, Detroit, from program officer, Skill-

man Foundation, Detroit. Hughes Jody Hall to vice president, automotive market, Steel Market Development Institute, Southfield, from technical integration engineer, Global Body Manufacturing Engineering Center, General Motors Co., Warren.

REAL ESTATE Bob Ruprich to vice president of project management, Plante

Moran Cresa LLC, Southfield, from director of project development, Jones Lang LaSalle at Beaumont Health System, Ruprich Royal Oak. Also, Lisa Pitt to associate project management, from job captain, Wold Architects and Engineers, Royal Oak; Ahmed Beasley to associate of project management, from president, Shiloh Contracting LLC, Detroit; and Beth Pacurari to accounting coordinator, project management group, from controller, UIC Construction Services, Anchorage, Alaska.

Plymouth, an automotive supplier, completed the merger of Grede Holdings LLC, Southfield, HHI Group Holdings LLC, Royal Oak, and Metaldyne LLC, also suppliers, forming a new holding company. Website: metal dyneperformancegroup.com. MSX International Inc., Detroit, acquired the managed service provider division of IQNavigator, Centennial, Colo., a provider of non-employee workforce management. MSX International will combine its existing managed service provider business with IQNavigator’s MSP operations to form Geometric Results Inc., a whollyowned subsidiary of MSX International Inc. Terms of the deal were not disclosed. Websites: iqnavigator.com, geometricresultsinc.com.

CONTRACTS Aqaba Technologies Inc., Sterling Heights, was awarded a contract by Rain2Day Inc., Las Vegas, to build the firm’s responsive Web and mobile design and cloud-based hosting services. Websites: aqabatech.com, rain2day.com. Paradigm Diagnostics Inc., Ann Arbor, a nonprofit molecular information corporation and collaboration between the University of Michigan Health System, Ann Arbor, and International Genomics Consortium, Phoenix, announced it initiated genomic testing for Access PPM, a cancer registry program of Pharmatech, Denver. Websites: paradigmdx.org, pharmatech.com.

EXPANSIONS Shoe Carnival Inc., Evansville, Ind., opened stores at the Westland Shopping Center, 35000 W. Warren Road, Suite

301,

Westland,

and

the

Shelby Town Center, 14115 Hall Road, Shelby Township. Telephone: (734) 525-2360 (Westland), (586) 566-3424 (Shelby Township). Website: shoe carnival.com. Dickey’s Barbecue Restaurants Inc., Dallas, opened a Dickey’s Barbecue Pit at 23123 Woodward Ave., Ferndale. Telephone: (248) 565-3355. Website: dickeys.com. On The Rise Bakery, Detroit, sponsored by the Capuchin Soup Kitchen, opened On the Rise Bakery Café, 8900 Gratiot Ave., Detroit. Telephone: (313) 922-8510. Website: cskdetroit.org/bakery. National Vision Inc., Lawrenceville, Ga., the parent company of Eyeglass World LLC, opened an Eyeglass World store at the Midtown Square Shopping Center, 1337 Coolidge Highway, Troy. Telephone: (248) 712-6773. Website: eyeglassworld.com.

NEW SERVICES Skidmore Studio, Detroit, introduced its “MerryMen” program to support nonprofit organizations and small businesses in Detroit by providing pro bono strategy and design services. Skidmore kicked off its program by producing a free online commercial for Steve’s Detroit Deli, Detroit, and worked with Detroit Public Schools to conduct research, develop a brand strategy and design the new logo and tagline “See it, believe it.” Website: skidmorestudio.com.

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DIARY GUIDELINES Email news releases for Business Diary to cdbdepartments@ crain.com or mail to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 482072997. Use any Business Diary item as a model for your release, and look for the appropriate category. Without complete information, your item will not run. Photos are welcome, but we cannot guarantee they will be used.

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CRAIN’S DETROIT BUSINESS

August 11, 2014

Ruling could give out-of-state firms $1B in tax refunds BY CHRIS GAUTZ AND CHAD HALCOM CRAIN’S DETROIT BUSINESS

Tax refunds may be due to 135 out-of-state companies following a controversial ruling in July by the Michigan Supreme Court that if left in place could total close to $1.1 billion. The vast majority of that money would have to be paid in the upcoming fiscal year that begins Oct. 1, creating a significant hole in the state budget, said Kurt Weiss, spokesman for the Department of Technology, Management and Budget. That is why Gov. Rick Snyder and other top state officials and lawmakers are urging the Michigan Supreme Court to reconsider its decision. “We are certainly hoping they reconsider,” Weiss said. The 4-3 ruling in July in IBM v. Department of Treasury overturned rulings by the state Court of Claims and the Michigan Court of Appeals, which had previously sided with Treasury over IBM in the dispute, meaning IBM was entitled to a $1.25 million refund and not the nearly $6 million it sought. But the high court, in a lead opinion by Justice David Viviano, found the MBT law had not specifically repealed a provision allowing multistate companies under the compact to compute their Michigan taxes a different way. At issue was whether the state Business Tax Act of 2007, which created MBT, could repeal part of the compact law by implication rather than outright. The Legislature amended the law to close the loophole for multistate businesses in 2011, and replaced MBT with a corporate income tax in 2012. But Viviano, on behalf of three court justices, found the original wording of the MBT law still allowed companies to use the compact formula for 2008 through 2010. “We will presume … in most circumstances, that if the Legislature had intended to repeal a statute or statutory provision, it would have done so explicitly,” the lead opinion states. Along with a separate concurring opinion by Justice Brian Zahra, that created the 4-3 decision in IBM’s favor. That essentially means IBM and similar companies that do much of their business out of state — IBM is based in New York City and reported 2013 revenue of about $43 billion for the Americas — could pay less or receive larger refunds on their Michigan taxes for the first three years that MBT was in effect. Aside from IBM, 134 compa-

nies could potentially see refunds, including Google Inc., Netflix Inc, Anheuser-Busch Inc., DirecTV and the Harley-Davidson Motor Co. The Michigan Department of Treasury last week asked for a stay on the July 14 ruling, arguing in part that the multistate tax compact Michigan joined in 1970 doesn’t give companies an “absolute right” to choose the compact’s tax formula over a state tax, like MBT. The court has yet to rule on that request. On Aug 4, Attorney General Bill Schuette and Solicitor General Aaron Lindstrom also asked the court for a stay and to reconsider the case, arguing that “billions of dollars are at stake.” IBM’s attorney, Greg Nowak, head of the state tax practice and a principal at Miller Canfield Paddock and Stone PLC, did not respond to a message seeking comment. House Speaker Jase Bolger, RMarshall, and House Appropriations Chairman Joe Haveman, RHolland, issued statements supporting Snyder’s request for the court to reconsider the case. Bolger said he believed the court made an error, and Haveman said it would not be fair to taxpayers to have to absorb this budget hit. Haveman declined to speculate on what could be done legislatively if the court does not reconsider the Haveman case. “We’ll have to look at their decision when they make it; we just hope they take the time to review the language of the MBT in depth and apply it fairly,” he said. But Tricia Kinley, senior director of tax and regulatory reform for the Michigan Chamber of Commerce, said it would be “unfortunate” if lawmakers decided to pass a new law that applies retroactively to keep the state from having to pay these refunds. However, she said she understands the thinking of the administration given the sizable budget implications. While the Michigan Chamber was not involved in the case, it did have members who are now in line to receive refunds as a result, she said. “The taxpayers won in this case,” she said. “We don’t think it’s a bad ruling. You win some, you lose some.” Chris Gautz: (517) 403-4403, cgautz@crain.com. Twitter: @chrisgautz

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DEGC: Coming to a ‘city with soul’ ■ From Page 1

having a director of the DEGC who saw his or her mission as just traditional economic development — bringing in new business — rather than driving the growth for the whole city. “There was no question that he stood out,” Duggan said. “I felt like he was someone from my administration.” Miller intends to focus the DEGC on bringing new companies and focusing on growing local businesses. He sees entrepreneurs as a vital part of Detroit’s evolution. “It’s more realistic to grow companies that can have a hundred employees than uproot companies from somewhere else,” he said. That is in line with what the DEGC sees as its playbook. “What’s important for us is we have to look at large opportunities and small opportunities,” Gillum said in an interview. “It’s not just what gets the attention of the media because of the splash and the size. It’s focusing on neighborhood development and smaller programs and at the same time projects like the Ilitch development or Meijer or a Whole Foods. It’s a blend of activities.” The DEGC made it clear it was looking for someone with development chops when it advertised for the position after Jackson announced his impending resignation in January after 10 years. Calling for a “charismatic” and “collaborative-minded” candidate, the DEGC posting also asked for strong negotiating skills and the ability to develop tax and job base broadening strategies and be able to have strong local, state and federal outreach. In addition to his time at the New Orleans Business Alliance, Miller did stints in Baton Rouge, La., and Phoenix as an economic development officer. Henry Coaxum, chair of the business alliance, told Crain’s that Detroit is fortunate to get Miller. “You guys have an outstanding young man,” said Coaxum, president of Coaxum Enterprises Inc., a New Orleans-based McDonald’s franchisee. “You will be very proud of him. We wish Detroit well. Our loss is your gain.” Miller comes to the DEGC, which has a 45-person staff and a budget of about $4 million, through a nationwide search that turned up a significant number of national candidates. “This is a job a lot of people had a keen interest in,” Gillum said. What made Miller the final choice, however, was his body of work and background, Gillum said. “He’s very accomplished,” Gillum said. “He has 12 years with public-private partnerships and leading economic development agencies. In Phoenix, he did international business development. In NoLa, he was the founding president of the publicprivate partnership like the DEGC here.” Miller was hired to build the New Orleans Business Alliance

from scratch because there was little infrastructure within the city to handle economic development efforts, from enticing new businesses to entrepreneurial support. He put together a team and an organization that then prioritized enticing national retailers to the city. In particular, Miller brought the first Costco to the city — and state of Louisiana — as well as two Wal-Mart stores. Miller sees national retail as an important component for Detroit, too. “People need amenities,” he said. “In New Orleans, we had a lot of boutiques, and boutiques are great and we’ll build more, but I don’t want to spend $20 on a pair of underwear. And retail drives sales

tax.” To do that required collaboration and cutting through red tape, and Coaxum said Miller has the qualities to do that: charisma, leadership, integrity and the ability to articulate. “He has all of those things.” Miller officially takes the baton from Jackson on Sept. 15. He’ll be moving himself and his 8-year-old son to the city. He is working with a real estate agent and considering neighborhoods. Jackson, who held the CEO post for 12 years, announced in January that he would be stepping down to start his own consulting firm. Jackson initially planned to leave the nonprofit at the end of March, but he has stayed to help with the transition period and with shepherding the new Detroit Red Wings arena through the political process. At the time of his resignation, he said the revitalization of the Detroit riverfront was his proudest accomplishment, particularly eliminating large cement silos that once stood there. “I remember people talking about getting rid of the silos when I was 10 years old,” he said. “And several mayors were involved in that. It was gratifying to be the guy to negotiate those deals.” Amy Haimerl: (313) 446-0416, ahaimerl@crain.com. Twitter: @haimerlad

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College: Rising tuition and fees surpass MET contract’s value ■ From Page 1

universities. The cost of an MET stands as a stark proxy for what years of flat and declining state aid and rising university budgets have done to make a college education less accessible. “We have to plan for a world where it’s going to be $200,000 to go to a four-year college,” said Jeff Williams, CEO of Public Sector Consultants Inc., a nonpartisan LansWilliams ing-based think tank, and the father of a 10-yearold son. “At what point do my wife and I say, ‘Kiddo, here’s a Europass and $50,000’? ‘You’ll learn as much there as you would in college.’ ”

More from tuition, fees In the last two decades, the combined general fund budgets of the 15 universities have increasingly relied upon tuition and fee revenue, rising from 43.5 percent in fiscal year 1994 to nearly 71 percent in fiscal 2013. For students, that’s a swing of 27.5 percentage points to the wrong. That trend doesn’t show signs of changing. For example, while Oakland University’s state appropriation has increased 33 percent in the last 20 years to $48.3 million from $36.3 million in fiscal 1994, its funding is effectively back to where it was a decade ago. It could be worse, though: Wayne State University now receives 2.2 percent less in state funding than it did 20 years ago, going from $194.7 million in fiscal 1994 to $190.5 million in fiscal 2015. All told, it has been death by 1,000 cuts as the state has wrangled with its own budget woes and curbed higher education spending, and experts don’t think lawmakers will stop the bleeding. The problem materialized slowly at first, resulting in tuition and fee revenue percentages of the general fund budgets creeping up onetenth of a percentage point one year, one percentage point in another, reflecting the funding strain being passed along for students to shoulder. Then between fiscal 2002 and fiscal 2003, it was a 3.2 percentage point increase. Then between fiscal 2005 and 2006, it was 2.6 points. Between fiscal 2007 and 2008, it was 2.1. Another two here, 1.6 there. Then between fiscal 2011 and 2012, it was 4.2 percentage points, the largest increase in 20 years. And so on. It wasn’t always this way. In fiscal 1977, for example, tuition and fee revenue accounted for just 30 percent of university general fund budgets, according to data provided by the Presidents Council, State Universities of Michigan in Lansing. “The cost of providing a college degree hasn’t changed much in the last decade, but state support has dropped dramatically,” said Mike Boulus, executive director of the

MET COSTS CONTINUE CLIMB ABOVE MEDIAN INCOME $80,000

The cost of a four-year MET contract remained around $20,000 a year until 2002, when it began its steady rise, surpassing the median family income in 2009. $66,496

$70,000

$60,000 $49,788 $46,089

$50,000

$46,652

$45,022

$50,015

$39,925

$45,994

$40,000

$42,256 $36,426

$30,000 $28,640

$20,512 $20,000

Median income 4-year MET costs

$19,808

1995 1996

1997 1998 1999 2000 2001 2002

2003

2004 2005 2006 2007 2008 2009 2010 2011

2012

Sources For MET, Michigan Department of Treasury; for median income, U.S. Census Bureau

A quarter century later, MET still a tough sell The Michigan Education Trust was announced by Gov. James Blanchard in his 1986 State of the State Address with the idea of encouraging parents to lock in current tuition rates — however high — before they climb even higher. Considered at the time a revolutionary way of making college affordable, the MET started in 1988 by selling about 40,000 contracts for a total of $265 million, according to Robin Lott, executive director of the MET. That’s an average of about $6,625 each. Even though statewide university enrollment has increased by 24 percent to about 267,000 students from about 216,000 in the last 20 years, the number of MET contracts purchased has remained comparatively stagnant, fluctuating between 1,400 in 1995 to a peak of 4,500 in 2003. Why? “My board asks me that every year, and I can’t answer that definitively,” Lott said. But at least part of the problem has been convincing people that the MET is a good way to save money on college education, she said, especially in an era when other 529 plans are widely available. “It’s a tough thing to explain to some parents, but it’s tougher still to get them to act,” she said. “It’s still valuable to lock in that contract. We don’t know how high tuition is going up.”

How the MET works The MET — which only requires that beneficiaries be Michigan residents — offers three different plans: Full benefits, which covers tuition (up to 120 credit hours) and fees at any of Michigan’s 15 public universities or 28 community colleges. Limited benefits, which covers up to 120 credit hours of tuition and mandatory fees at public universities or community college whose tuition is not

greater than 105 percent of the weighted average tuition of all Michigan public universities, which means less than full coverage for public schools that cost more than that. Community college plan, which covers up to two years of in-district tuition and mandatory fees at any public community college. The MET — which does not cover room, board or book costs and can be paid over four, seven, 10 or 15 years — has sold 101,000 contracts to date. When the MET started, the prices varied depending on how old the beneficiary was.

How the MET is invested When the program began, it locked in an investment vehicle with a hefty rate of return of 9.75 percent, consistent with the high interest rates of the time, affording the MET board the luxury of offering packages at lower prices. But fast-forward a little more than a quarter century. Interest rates have fallen to near-zero and tuition rates are rising faster. Lott said the current rate-ofreturn assumption is 6 percent. In September, the MET board approved assumptions of 7.1 percent tuition increases through 2017 and then 4.5 percent tuition increases after that, according to an actuarial analysis by Southfield-based Gabriel Roeder Smith & Co. Lott said the increases are directly tied to spiking tuition rates at Michigan’s 15 public universities, the trust’s need to be solvent and the majority of the 9,155 students with MET contracts attending the state’s three costliest universities: Michigan Technological University (193), the University of Michigan (1,941) and Michigan State University (2,634). — Kirk Pinho

At some point, we are not “ going to have a public (higher) education system anymore. ” Sandy Baum, George Washington University

Presidents Council. And, although that’s not totally true — college budgets have increased in aggregate by $2 billion since fiscal 2004, while state support has declined by roughly $135 million — the onus to make up the difference has fallen on students.

All told, it has taken less than four decades to slowly but fundamentally blow up the model by which universities are funded. “At some point, we are not going to have a public (higher) education system anymore,” said Sandy Baum, a research professor of edu-

cation policy in the George Washington University Graduate School of Education & Human Development in Washington, D.C. “How much more can they cut?” she asked.

Nearing ‘that 50-50 mark’ Michigan isn’t the only state pushing the funding burden on to students. In fiscal 1988 in Pennsylvania, for example, 61.5 percent of the state’s university general fund budgets came from state appropriations, according to data from the Boulder, Colo.-based State Higher

Education Executive Officers. By fiscal 2013, it was down to just 30.7 percent, about the same as Michigan. Nationally, about 52 percent of public university funding comes from state appropriations; about 48 percent comes from tuition and fees, said Daniel Hurley, associate vice president for government relations and state policy for the American Association of State Colleges and Universities in Washington, D.C. “It will be interesting to see where we are at as a nation in three to five years because we are coming very close to that 50-50 mark,” said Hurley, a Northville Township native. “If we cross that, it sends the message that in this country, public higher education is a privately financed consumer good. That’s a symbolic threshold in our country.”

A degree out of reach? Higher education experts like Williams and others believe that students will, in time, be priced out of the market for a college degree. “We’ve had a major change in how we fund higher education, and I can’t remember any namecalling or demagoguery,” he said. “Where was the big battle?” In the last decade, the big battle in Lansing was over the health of the state’s overall budget, not just higher education appropriations. Some members of the Legislature slept on cots overnight in the Capitol Building during the tenure of Gov. Jennifer Granholm, the Democrat who often sparred with Michael Bishop, then the Republican Senate majority leader, because of 11th-hour budget impasses. More recently, in Gov. Rick Snyder’s administration, lawmakers in the Republican-controlled Legislature slashed $213 million in university spending in fiscal 2012 in budget-balancing efforts, to the chagrin of higher education officials. See Next Page

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The Legislature has been gradually restoring university funding to the fiscal 2012 level of $1.42 billion; this upcoming fiscal year, it’s $1.4 billion.

Universities respond University administration officials say that in response to increasing tuition rates, they’ve upped their student aid such as scholarship funding and solicited more from alumnae donors. “Well over 85 percent of our students receive some form of financial aid,” said John Lehman, associate vice president for enrollment services at Michigan Technological University. John Beaghan, vice president for finance and administration and treasurer of the board for Oakland University, said the average OU student received nearly $4,000 in financial aid. Tuition at OU has increased from $2,938 to $11,108, a spike of 278 percent. Beaghan said the average student receives almost $4,000 in financial aid in the form of scholarships, Pell grants and endowed scholarships. Universities also formed partnerships with community colleges in which students take classes for two years and then do two years at the university, which also generates revenue and helps reduce tuition costs. Still, since 2000-01, the average student loan debt in Michigan has increased 90.3 percent, from $15,156 to $28,840, according to the Washington, D.C.-based Project on Student Debt, a division of The Institute for College Access & Success. Fifty-five percent of Michigan students graduated with debt in 2000-01; in 2011-12, the last year for which data was available, that figure was 62 percent.

A matter of tuition In recent years, lawmakers have put in place financial incentives for universities to limit resident undergraduate tuition increases, although they weren’t nearly enough to dissuade one university from bypassing them to hike tuition. Last year, Wayne State disregarded the incentive to hold tuition to a 3.75 percent increase and hiked it 8.9 percent instead. The state incentive would have given Wayne State $534,700; the tuition hike generated $7.3 million, according to Mike Brinich, associate director of communications. If the university limited its tuition increase to 3.75 percent, it would have generated only $4.9 million, he said. In order to receive their share of the $37.3 million in increased higher education funding the state approved this budget cycle, universities have to meet four requirements, including the 3.2 percent cap on resident undergraduate student tuition increases. But performance incentives or not, as long as the demand for higher education exists, universities “can and will” increase tuition rates, Williams said. “It’s supply and demand with mascots.” Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

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WDET: Filling Craig Fahle’s shoes a large task ■ From Page 3

placing two people — not just because of his immense talents, but because his show was replayed at night to an also-steady listener base. Dedicated listeners drive donations and fundraising,” said Don Tanner, a partner in Farmington Hills-based Tanner Friedman Strategic Communications and radio industry insider who Tanner wrote radio and music industry text No Static At All. “WDET needs to find a new host who loves this city and is able to translate that dedication daily on the air.” Filling Fahle’s shoes won’t be easy. “Craig Fahle steadily built a tremendous following on the station with his outstanding mix of intelligence and steady interview demeanor,” Tanner said. “Known for his unparalleled show prep, he always asked the right questions and the tough questions and got answers.” Fahle’s show ranked 27th in the Detroit market in its morning time slot, averaging about 7,000 listeners among adults age 18plus, according to Nielsen Audio data, and another 4,500 for his

nighttime re-broadcast. “The ratings are not high but not uncommon for a public station,” Tanner said. “But his listeners’ time spent listening is very good by industry standards. It gets down to his dedicated audience: They value him and the station and donate.” Data shows people spent about 45 minutes listening during the day, and about a half hour in the evening. The transition period gives the station some time to reflect on its programming lineup, but the priority is to find a new morning personality around whom to wrap the station’s brand. “More local programming is what we’d like to do in the next few years, but we want to make sure we have one solid local show first,” said Srbinovich, a Crain’s “20 in their 20s” honoree last year who had been co-manager at the station overseeing WDET’s business functions while Fahle was in charge of editorial direction. The new talk show host won’t have that managerial role. Instead, WDET is separately seeking a program director who will have day-to-day oversight of the station’s editorial content and its broadcasts, Srbinovich said. She will remain full general manager. “The Craig Fahle Show,” which ended Friday, aired 9 a.m.-noon Mondays through Thursdays and

Autism: OU has a plan ■ From Page 3

The Royal Oak-based Judson Center Inc. will hire the employees at minimum wage using some of the startup money and then contract them out to the businesses. Judson will also train and provide support like job coaches and transportation for the employees. The businesses will be managed by either a current OU student or recent graduate, Kemp said. He said the job description has been approved and that he, an OU business professor and an employee of OU Inc., the university’s business accelerator that is providing space for the businesses, will interview and make final decisions on which students or graduates to hire. “They will be reporting to me,” said Kemp, who is also a former General Motors Co. executive. “I’m going to challenge them to drum up the business.” OU professors will conduct research on the program, eventually publishing their findings and sharing them with other people and organizations in Michigan that would like to set up something similar. “Nobody else has done something like this,” Kemp said, adding that the jobs will be seen as stepping stones to future employment at other companies. Angela Martin, community support specialist for the Wayne State University Developmental Disabilities Institute, said the new effort is good for the autistic

community. “The thing is not just to find an employer who is ready and willing to collaborate on that (job) opportunity and then saying that this is a Martin launching pad or a career for the person,” she said. The training and day-to-day management for the employees, as well as promoting and marketing the companies, will be key to success, said Lisa Katz, executive director of the Workforce Intelligence Agency in Detroit. That said, however, the laundry business fills a niche that, if done properly, can be successful, according to Katz. “If I were looking at the business model, I would think, ‘Wow, there’s an opportunity right there,’” she said. David Tindall, director of development for the OU School of Education and Human Services, said the businesses will be jointly owned by the university, Judson Center and the Autism Alliance. “Taking this bold move is critical to giving these individuals a real purpose and a better quality of life,” Colleen Allen, president and CEO of the Autism Alliance, said in a statement. Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB

9-11 a.m. on Fridays. It repeated in the weekday evenings. Fahle interviewed community and political leaders, celebrities and took calls. Topics ranged from the serious to the humorous — capped off by his often irreverent “Friday Follies” segment each week. In its place, WDET has resurrected an hourlong local issues show, called “Detroit Today,” that airs at 9 a.m. Mondays-Thursdays. Hosts will rotate and include current Fahle producer Laura Weber-Davis and Michigan Chronicle editor Bankole Thompson. On Fridays, the station will air the audio podcast of Michigan Public Television’s “MiWeek” and “American Black Journal” at 9 a.m. and again at 7 p.m. “MiWeek” is an issues show hosted by WTVS Channel 56’s Christy McDonald along with the Detroit Free Press’ Stephen Henderson and The Detroit News’ Nolan Finley. Henderson, a Pulitzer Prize winner this year, is also host of “American Black Journal.” WDET has expanded Travis Wright’s weekly arts and culture program, “Culture City,” to an hour at 1 p.m. on Fridays as part of the “Late Lunch” programming. It re-airs at 8 p.m. Fridays. From 10 a.m. to noon all week will be a syndicated National Public Radio call-in program out of

Boston called “On Point,” a new addition to WDET’s lineup. It will re-air weeknights for an hour at 8 p.m. The “Detroit Today” name may sound familiar to listeners: Fahle hosted a show under that name when he returned to WDET in 2007 after a stint at a station in Charlotte, N.C. That show grew into “The Craig Fahle Show.” Prior to leaving for Charlotte, Fahle was WDET’s local host of “Morning Edition” for nine years. Srbinovich said WDET will be testing a feature similar to “Curiosity City,” a program from Chicago public radio station WBEZ 91.5 FM in which the station investigates and answers questions as voted upon by listeners and digital/online users. WDET’s other content includes local music shows, and syndicated public radio programming staples such as “This American Life,” “Morning Edition,” “Fresh Air” and “All Things Considered.” WDET has a $3.4 million budget and 42 full-time staffers. Fahle was paid $100,000 at WDET (and is getting a similar salary at the land bank). The replacement host’s salary hasn’t been determined. Bill Shea: (313) 446-1626, bshea@crain.com. Twitter: @bill_shea19

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MacKenzie returns to Michigan with ideas – and mandate for change After 10 years as CEO of Crain’s senior reporter Sarasota Memorial Hospital Jay Greene for an interin Florida, Gwen MacKenzie view. has returned to Michigan as senior vice president Why come back to and Michigan market Michigan after 10 years as leader for Ascension Health CEO of Sarasota Memorial Michigan. Hospital? MacKenzie, a former onAscension Health is a cology nurse, spent 25 well-known leader in years at Detroit Medical Cenmission-based care and ter as COO and president of health care innovation, several hospitals, before which I think is an inleaving in 2005 for Sarasoteresting and exceptionta, where she was responsi- Gwen MacKenzie, al combination. Michible for upgrades in the or- Ascension Health gan is at the forefront of ganization’s bond ratings clinical integration and and a $250 million campus im- population health management. provement project completed in Health systems here are leading the fall of 2013. the way for the future of how we At Novi-based Ascension Health will deliver health care. Michigan, MacKenzie is responsiI have known Pat Maryland (forble for the administrative direc- mer CEO of St. John Providence tion, strategic positioning and op- Health System and Michigan Marerations of the system’s 12 ket Leader for Ascension Health) hospitals and five regions. She re- for many years. Pat would keep placed Patricia Maryland, who be- me updated on what was happencame COO of Ascension Health, the ing in Michigan, and I was inSt. Louis-based parent company. spired by the innovation she Ascension Health Michigan’s shared. When Pat was promoted five regional systems are five-hos- (to COO of Ascension Health in St. pital St. John Providence Health Sys- Louis), we talked about various optem in Warren; Genesys Health Sys- portunities to work together. tem in Grand Blanc; Borgess Health in Kalamazoo; St. Mary’s of MichiWhat were your challenges at Saragan in Saginaw; and St. Joseph sota Memorial with a large elderly Health System in Tawas City. population, many snowbirds and being MacKenzie has a bachelor’s de- surrounded by for-profit hospitals? gree and master’s degree in health Every situation is a unique care administration from the Uni- learning opportunity. Working versity of Michigan. Her master’s de- with a large elderly population gree in nursing is from the Universi- taught me a lot about serving paty of California, Los Angeles. tients that may not have a support She recently sat down with infrastructure near them and help-

Q&A

ing them focus on positive aging, prevention and chronic disease management. Being surrounded by for-profits sharpens your competitive instincts to be nimble and flexible with a focus on cost-effective care. How has being an oncology nurse helped you as a hospital CEO? Being a caregiver is something that makes a lasting impact on how you make decisions as a health system administrator. The patient is at the center of everything you do. When I was working as an oncology nurse practitioner early in my career at DMC, Sister Joyce DeShano, one of the future architects of Ascension Health, was a chaplain. Sister Joyce made a huge impact on me about the purpose of health care and the importance of following your mission. I count myself among one of the many people who were inspired by Sister Joyce’s wisdom and grace. What are your top three priorities at Ascension Health Michigan? Describe each one and how you intend to address them? 䡲 Grow Together Health Network, the physician-led clinically integrated network established by the Michigan-based health systems of Ascension Health and CHE Trinity Health (Livonia). It is estimated that 75 percent of Michiganders will be within 20 minutes of a Together Health provider. The network was spurred by changes in health care delivery to a new ap-

proach that focuses not solely on episodic care but rather a coordinated continuum of value-based services that keep populations healthy. 䡲 Leverage the benefits of Ascension Health’s size and scale to create cost-effective initiatives to be deployed at the local level. 䡲 Continue to innovate in the health care space here in Michigan and identify opportunities that can serve as a springboard for national initiatives for Ascension Health. For example, we have exported SmartHealth, our employee health benefits plan with a focus on wellness that has garnered savings for the health system, to other Ascension markets. We also have taken Neuro On Call Telemedicine Network, which uses technology to offer acute stroke care and advanced stroke management for new patients and transfers from any hospital, nationally. What are some of the next steps to build Together Health? We have seated a board of managers and appointed Scott Eathorne, M.D., as interim CEO. We must solidify provider participation agreements to provide care to new populations, accelerate best clinical practices within the network, and build the requisite senior management team and infrastructure. Two years ago, Reverence Home Health & Hospice was formed in Michigan to combine all home health and hospice services in Ascension’s

Providence: Center to offer advanced training ■ From Page 3

surgery demonstrations, Karadjoff said. The first course is planned for Oct. 7 on temporal bone surgery. Donald Weaver, M.D., chairman of surgery at the Wayne State University School of Medicine, said physicians and residents have an increasing need for learning laboratories with cutting-edge digital simulation technology to rehearse procedures. “It can be used to remediate a surgeon because of outcomes not as favorable or maybe because there is something new they haven’t been trained in — to bring him up to speed,” Weaver said. Weaver said most large health systems in Southeast Michigan, including Henry Ford Health System and Beaumont Health System, have surgery simulators to practice their skills and test devices and technologies. “Most surgeons travel outside of their own environment to get this type of training,” said Weaver, noting that Florida is a popular destination for robotic surgery training. “They put you up for a couple days and immerse you in a learning environment.” Over the past 27 years, ear, nose and throat specialists at Providence Hospital have been offering advanced medical courses for specialists, said LaRouere. “Our temporal bone lab has become bigger and bigger over

time,” LaRouere said. “We have a few doctors coming from Hong Kong and Italy, but mainly the U.S., to learn how to do this sophisticated type of ear surgery. We also will have neuroloMichael LaRouere, M.D., Michigan Ear Institute gy and spine proceworking with Eden Prairie, dures.” The idea for a larger surgical Minn.-based Platinum Group to education lab was born four years market the lab for specialized ago after Providence Park Hospi- seminars. Platinum works with tal opened in 2008, LaRouere said. similar labs in Las Vegas, AtThe Providence hospitals are af- lanta, Dallas and Phoenix. “They work with vendors in the filiated with Warren-based St. John Providence Health System and industry and rent out labs for a its parent, St. Louis-based Ascen- week or weekend course to show doctors how to use the latest spine sion Health. technology,” “Our lab is bigger and better instrumentation equipped than almost all others,” LaRouere said. Vendors could include KalamaLaRouere said. “This is a main reason why industry is wanting to zoo-based Stryker Corp., Medtronic partner to use this lab. We would Inc. and Hologic Inc., he said. “We don’t see this as a huge profbe about the only lab in the Midwest capable of holding these it center,” LaRouere said. “Our goal really is to have a sustainable teaching courses.” Besides attracting doctors from system going forward, not lose the Midwest and Michigan, money on the lab, but advance medLaRouere said, Providence will be ical education and technology.”

lab is bigger and better “ Our equipped than almost all others. ... It will benefit local doctors because they will be able to attend courses locally where they won’t have to travel to Las Vegas or Phoenix.

”

Weaver said many large medical device companies have their own learning labs for physicians and usually provide transportation for physicians. “Convenience would be one of the advantages” to offer it locally, Weaver said. “The notion to use a dry lab to enhance surgical skills is expected now, and all training programs continue to expand and increase in importance as simulation programs become better.” Other benefits could include helping Providence Park attract top doctors and medical residents from around the country, Karadjoff said. “It will benefit local doctors because they will be able to attend courses locally where they won’t have to travel to Las Vegas or Phoenix to get medical updates,” LaRouere said. “It might sound cheesy, but physicians who teach these courses make you a better doctor,” he said. “It forces you to be on the cutting edge on medical developments that are happening.” Karadjoff said first-year projections could draw 200 to 300 doctors for training courses with up to 1,000 physicians, residents and fellows in a few years. Jay Greene: (313) 446-0325, jgreene@crain.com. Twitter: @jaybgreene

five regions. What are the benefits for Ascension, patients and practitioners? Since Reverence’s launch, we have expanded services, including bringing home health and hospice services to the St. Mary’s market (Saginaw) and expanding infusion services to the St. Mary’s market. We have plans to include the Borgess market area later this fiscal year. We have shared clinical best practices across the state in wound management, and this fall will begin to offer inpatient hospice services at Borgess using best practices from St. John Providence. Reverence has increased (full-time equivalent employees) by more than 10 percent. How goes the corporate reorganization within St. John Providence’s five regions? We have taken a number of steps to create Michigan market functional leads in finance, legal, marketing, human resources and mission services. We created a satellite clinic at Genesys for St. John Providence’s transplant program and expanded wound care and hyperbaric service from Genesys to all other Michigan ministries. In a statewide contract with Blue Cross Blue Shield of Michigan, we generated $60 million in additional net patient service revenue. We have a common contract with supply and knowledge vendors and improved our statewide revenuecycle services.

Toyota tech staff move to bolster supplier relations Toyota’s plan to move supplier development and purchasing staffs to its technical center in Ann Arbor will improve supplier relations, a top executive said last week. Automotive News reported that Simon Nagata, CEO of Toyota Engineering and Manufacturing, North America, said the automaker: 䡲 Must do a better job earning suppliers’ trust so they will share with Toyota their latest innovations. 䡲 Issues too many design changes late in the procurement process. 䡲 Needs to demonstrate a more open-minded attitude toward new ideas presented by suppliers. “When we combine resources in Michigan, I hope we can do this,” Nagata said at the 2014 Management Briefing Seminars in Traverse City. The move to Ann Arbor is part of Toyota’s reorganization that includes the upcoming shift of the North American headquarters from Torrance, Calif., to Plano, Texas. “Innovation requires good business relations based on trust,” he said. “We must use fair business practices. If an OEM is open-minded and has the trust of suppliers, it will benefit by getting the best new ideas from supplier partners.”

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Paul pleased he made peace with Elliott, Singer When Bob Paul, Comment or its founder, Paul puware Corp.’s CEO and Singer, who was one of president, reads stories those insisting on playabout Argentina’s recent ing hardball with a team default on bond payof overmatched Argenments, about it getting cut tinians, including Presioff from the world’s credit dent Cristina Fernandez markets and its economy de Kirchner. in tatters — the ArgentiOne of Singer’s compana Stock Market plunged nies, Cayman Islands7 percent July 31 after the based NML Capital Ltd., country went into default had reportedly bought — he no doubt smiles and some $350 million in Arthanks goodness he had gentine debt, buying it at made peace with Elliott a fraction of its face valManagement Corp., the ue and then holding out New York City-based Tom Henderson for full value. hedge fund that launched Argentina did bond rea takeover bid for the Detroit- structurings in 2005 and 2010 that based computer services company paid most creditors 33 cents on the in December 2012. dollar. NML and another firm, AuPaul and Compuware made that relius Capital, which held 7 percent peace to the chagrin of company of the bonds in question, refused founder Peter Karmanos Jr. Some and put their lawyers to work, business units were sold; costs with the U.S. Supreme Court recentwere taken out of some of the com- ly siding with lower courts against pany’s other underperforming Argentina. units, which included layoffs; and If Argentina pays the full Elliott got strong representation amount of $1.5 billion to NML and on the board of directors. Aurelius, it must then make the Karmanos is a legendary bull- other bond holders whole, its $29 dog, strong-willed, eager to get in billion of central bank reserves bethe face of those he thinks need ing not enough to cover the tab. some face time, never one to back Hence the July 30 default. down. De Kirchner certainly has not But Karmanos never had to con- been surprised by Singer’s tactics. front the likes of Elliott Manage- Not by now.

Big Bucks

In January 2013, de Kirchner rented a British plane to take her on a trip to Cuba, the United Arab Emirates, Indonesia and Vietnam. Why would she rent a plane from England for $880,000 when Argentina already owned a flock of presidential aircraft, including a Boeing 757 that was dubbed the Tango 1, a Fokkler F-28 called Tango 2, a Fokker F-28 called Tango 3, a Learjet 60 called Tango 10, and three Sikorsky helicopters? And from a country with which she was then in a messy verbal brawl over ownership of the Falkland Islands? Because she was scared to death of Elliott and Singer. That previous October, NML Capital won a court order in Ghana, of all places, to seize an Argentine Navy vessel, the ARA Libertad, which had berthed in a Ghanian port. NML demanded a bond of $20 million to release the ship, Argentina refused, and in December, the International Tribunal for the Law and the Sea ruled that a United Nations convention gives warships immunity from civil claims while docked in foreign ports. Fearful of having one of her planes grounded for months at a foreign airport if NML struck, again, de Kirchner decided to be-

come a renter. Seizing a ship? Well, that had a certain resonance. In 2009, Elliott Management was so aggressive in a deal involving the government bailout of General Motors Co. and Delphi Corp. that it and its hedge-fund partners were described as “Barbary pirates” by Steven Rattner, the so-called car czar, in his 2010 book about the bailout, Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry. Other examples of Elliott hardball? In 2002 and 2003, British court rulings awarded Elliott $100 million for a debt by Congo-Brazzaville that it had bought, reportedly for $2.3 million. Later, Elliott recouped $39 million of the $100 million by intercepting proceeds of an oil sale by the Congo to a Swiss company. Bob Paul is still wrestling with how to boost Compuware’s share price. But he only has normal market forces to worry about. He doesn’t have to worry about Elliott Management or Paul Singer. If he owns a boat, he can pull into any port he wants. This column originally appeared as a Tom Henderson blog at crainsdetroit.com.

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

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

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Compuware: If there’s to be an offer, act quickly ■ From Page 1

ny and Goldman Sachs know what they think Compuware is worth today. As Compuware goes through its planned changes, the company’s valuation will change, and changing valuations will make a deal to sell the company harder. “The point I was trying to make in the conference call to shareholders … is that we are still open to negotiations. If there is an interest in the company, it’s an interest that will have to be solidified in the near term,” he said. Paul denied he was sending a message to potential buyers who had been kicking Compuware’s tires that they needed to get serious and speed things up. “What I said wasn’t intended for any prospective buyers. It was intended for our current investors. I didn’t want anyone to be surprised,” he said. “We continue to optimize all elements of our balance sheet, and let people who are invested in our company make any speculation they want about what that means,” he said. The Elliott bid was eventually dropped after some of Compuware’s business units were sold; costs were taken out of the company’s other underperforming units, which included layoffs; and Elliott got strong representation on the board of directors. But since then, rumors have swirled intermittently about private equity and hedge fund interest in Compuware, including from San Francisco-based Vista Equity Partners LLC, Chicago-based Thoma Bravo LLC, Boston-based Bain Capital Partners LLC and San Franciscobased Golden Gate Capital Corp.

A key phrase What launched the latest round of analyst and investor speculation was a single phrase in Compuware’s 15-page presentation to investors and analysts on the earnings conference call. That phrase, in a list of initiatives to create shareholder value, was: “Remain committed to reviewing and evaluating credible offers to create additional value for shareholders.” In his live presentation, Paul repeated the point that Compuware “had a commitment to evaluate credible offers that would create value for shareholders.” J. Derrick Wood, an analyst with San Francisco-based Susquehanna International Group LLP, wrote in his report of July 30 that while Compuware’s revenue and net income for the quarter that ended June 30 “were not too bad, considering … what is more intriguing to us is the potential for a buyer to re-emerge.” Compuware “indicated that once it begins another round of value-enhanced initiatives, in the October-December time frame, it would become much more difficult to execute a sale. As such, we think if there is a buyer interested, there is now a finite window left to act.” The references also piqued the interest of analyst Kirk Materne of New York City-based Evercore Institutional Equities, who asked in the Q&A session that finished the conference call whether there were active offers. Paul was noncommittal. “We have stated that we’re committed to review any credible offers, and obviously that has not changed,” he said.

Covisint spinoff, company split coming up Compuware Corp. President and CEO Bob Paul had declined to say whether the company is engaged in buyout talks, but he said that if there is a potential deal, it needs to be done, or well along to getting done, by Sept. 30, the end of the company’s second quarter. Here’s why: By the end of the quarter, Paul plans to spin out the 80 percent of the stock Compuware currently owns in Covisint Corp., the business unit it took public last September, to current Compuware shareholders. By the end of the year, he wants to be well on the way to splitting Compuware into two companies, with an internal deadline to complete the process by March 31 next year. The new, as-yet-unnamed company would run the mainframe support business that has been the core of Compuware since it was founded in 1973, with Compuware focusing on its fast-growing applications performance management business, which helps large companies monitor the performance of its various software applications in real time. He wants to do a significant buyback of stock sometime in the company’s third quarter, which ends Dec. 31. “That’s a lot of moving parts in the third and fourth quarters. If there is any interest by someone taking the company private, there are just too many moving parts to get it done then,” Paul told Crain’s. — Tom Henderson

Potential options In his report the next day, Materne wrote: “Additional exposure around credible offers would seem to indicate that there might be other potential value-creating options. … Any outside interest in CPWR’s assets would obviously be a positive, in our view, especially in terms of drawing investor attention back to the stock.” When he wrote his report, Compuware was trading at $9.21 a share, about what it was trading at Friday morning. Materne rated the stock a buy and gave a target price of $11.50. Wood left his rating at neutral but estimated its stock price in a year at $11. Crain’s asked Paul if optimizing

the balance sheet referred to a sale of the Compuware headquarters, which Elliott and other institutional investors have recommended; he declined to comment. Still, some investors and analysts have assumed the building is for sale, with Dan Gilbert’s Rock Ventures seen as a likely buyer. Rock Ventures has declined to comment to Crain’s about it. In any event, interested parties are left to parse the tea leaves. As Paul told Crain’s: “I’m not saying there is or isn’t any active interest. I’m just saying if there is, it will be very difficult to get done later.” Tom Henderson: (313) 446-0337, thenderson@crain.com. Twitter: @tomhenderson2.

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CRAIN’S DETROIT BUSINESS

RUMBLINGS Exhausted owners to halt AA news site ave Askins and Mary Morgan want to do other stuff — and take a breather. That’s why they’re ramping down the news website they created six years ago, the erudite AnnArborChronicle.com. It will halt regular publication of new material on Sept. 2 — the anniversary of both its launch and of Askins and Morgan’s Askins marriage. Askins wrote on Aug. 7 that he and his wife, a former Ann Arbor News business editor, have dedicated “virtually every waking moment to the enterprise” over the past six years. “I’d like to stop before I am dead, because there’s more I’d like to do in life than add to the Chronicle’s archive,” he wrote. AnnArborChronicle.com will remain live, with its archives freely accessible at least until the end of 2014, possibly longer, Askins said. “There may be a special project or two that we will wrap up and eventually insert into the archives,” he wrote.

Granholm visits Michigan for business, politics Former Gov. Jennifer Granholm was back in town last week, both to attend a Talmer Bank board of directors meeting and cheer on

former staffer Rudy Hobbs in his quest for a Congressional seat. Hobbs, a state representative from Southfield, was hoping to be the Democratic nominee to succeed Gary Peters in the 14th Congressional District. Granholm’s support, though, wasn’t enough — Southfield Mayor Brenda Lawrence won the primary.

Michael Symon adds to area burger-joint footprint Iron Chef Michael Symon will expand the suburban Detroit presence of his casual B Spot Burgers bar and restaurant with the opening of a location at Partridge Creek Mall in Clinton Township. It will be the third B Spot in Michigan; the first, at the Village of Rochester Hills, opened in May. Another is planned for 310 Main St. in Royal Oak, in the former Small Plates space. The Royal Oak location is to open in the fall and Partridge Creek will open “soon thereafter,” according to Southfield-based Colliers International, the leasing agency working with Cleveland-based B Spot. Symon calls B Spot a casual version of his Roast restaurant at the Westin Book Cadillac Detroit. The menu is heavy on burgers, bologna, brats and craft beer — hence, the “B” in the “Spot.” There’s no word yet on a downtown Detroit location, which general manager Frank Ritz told Crain’s earlier this year was a possibility.

WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF AUG. 2-8

Macomb Hall of Fame inductees announced Five community leaders and businesses will be inducted into the Macomb Hall of Fame on Sept. 25. They are: The Penna family, owner of Penna’s of Sterling and Villa Sterling in Sterling Heights. The family opened its first restaurant in 1968. Westview Orchards & Adventure Farm, which celebrated its 200-year anniversary in 2013. Sisters Abby Jacobson and Katrina Roy run the 188acre Washington Township farm. Roy O’Brien Ford family: The St. Clair Shores business began in 1946 when Roy O’Brien opened his first Ford dealership. Mark O’Brien is now at the helm. Alphonse Santino, M.D.: Founded the Michigan Institute for Urology in 1991 and still serves as its president and CEO. He’s also cofounder of Henry Ford Macomb’s Ambassador Club. Denis LeDuc, judge, 42nd District Court: LeDuc, who began practicing law in the county in 1973, has also been a Mt. Clemens city councilman and a county commissioner. He’s also a Macomb history expert. Details about the awards banquet are at macombcountychamber.com.

BITS & PIECES Crain’s Senior Reporter Jay Greene has won the 2014 Faces of Michigan Health Care Media Award from the Michigan Primary Care Association for his Greene strong reporting about the state’s health centers, issues facing the medically underserved and the need for health care access.

BEST FROM THE BLOGS READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS

Food entrepreneurs dominate

“

The 10 semifinalists in this year’s Hatch Detroit competition have been revealed, and it’s going to be a food fight!

”

Amy Haimeri’s blog on small business can be found at www.crainsdetroit.com/section/blogAmyHaimerl

Is Gilbert buying elusive title?

“

Dan Gilbert’s national profile could elevate exponentially if his Cleveland Cavaliers win an NBA championship — an increasingly likely possibility.

”

Bill Shea’s “Shea’s Stadium” blog on the business of sports is at www.crainsdetroit.com/sheasstadium

Housing chief resigns after billing for costly food, travel cott Woosley, executive director of the Michigan State Housing Development Authority, is stepping down after billing the state for expensive meals and travel, The Associated Press reported Friday. The Detroit Free Press reported Thursday that Woosley sought reimbursements for staying in hotels that cost $400 to $500 a night and traveling in a stretch limousine. The spending was uncovered by the Michigan Democratic Party in a records request.

ON THE MOVE The Michigan Economic Development Corp. hired Steve Arwood, director of the Michigan Department of Licensing and Regulatory Affairs, as COO. He replaces Steven Hilfinger, who resigned in Arwood June to return to the Detroit law firm Foley & Lardner LLP. Mike Zimmer, LARA’s chief deputy, was named its acting director.

COMPANY NEWS American Axle & Manufacturing Holdings Inc. announced plans to build a new technical center at its Detroit headquarters to develop prototype components and test manufacturing lines. The center is expected to employ 75 to 100 people. Troy-based Talmer Bancorp Inc. announced it agreed to acquire First of Huron Corp. of Bad Axe and its wholly owned subsidiary, Signature Bank, in a deal valued at about $13.4 million. Detroit Free Press owner Gannett Co. announced that it will split its broadcast and publishing business, and will take full ownership of Cars.com for $1.8 billion, buying the 73 percent interest it didn’t already own in Classified Ventures LLC, the auto sales website’s owner. Five of the seven Peet’s Coffee & Tea Inc. shops that opened less than a year ago in former Caribou Coffee outlets were to

close their doors for good Friday. Locations in Novi, Rochester Hills, Royal Oak, Commerce Township and Shelby Township were to be closed by the Californiabased company; shops in Ann Arbor and Grosse Pointe remain open. Toyota Motor Corp. pledged $1 million toward the Detroit Institute of Arts’ goal of $100 million to prevent the sale of art in Detroit’s bankruptcy and help city pensioners. Auburn Hills-based marketing firm George P. Johnson said it has launched a sports marketing practice led by two executives to be based in San Francisco. Federal officials reached a deal with Olympia Entertainment to improve access for people with disabilities at Joe Louis Arena in Detroit, AP reported. The U.S. attorney’s office said the settlement also includes full compliance with the Americans with Disabilities Act at a planned 18,000-seat hockey arena, expected to open in 2017, and entertainment complex near downtown.

ELECTION NEWS The business commu-

nity scored a big win last week when Michigan voters approved Proposal 1, ensuring the elimination of the industrial personal property tax. Scandal-plagued Wayne County Executive Robert Ficano was beaten handily by former Sheriff Warren Evans in the Democratic primary, with Ficano trailing in fifth place. Evans will face Republican primary winner John Dalton in November’s general election. Businessman David Trott easily defeated incumbent Kerry Bentivolio in the 11th U.S. House District Republican primary, and former state Senate Majority Leader Mike Bishop won over state Rep. Tom McMillin in the 8th District Republican primary. Southfield Mayor Brenda Lawrence won a close race in the 14th District Democratic primary, and U.S. Rep. John Conyers moved a step closer to his 26th term in Congress by winning the 13th District Democratic primary. A $28 million tax increase for SMART bus services in Wayne, Oakland and Macomb counties easily received voter approval in the primary election. The Suburban Mobility Authority on Regional Transportation asked voters for a four-year, 0.41 mill tax increase from the 0.59 mills it currently levies to 1 mill. The state said 17.5 percent of Michigan’s votingage population cast a ballot

in the August primary. The secretary of state’s office said about 1.3 million people voted. That’s lower than the 22 percent turnout in 2010 when there were contested gubernatorial primaries in both parties, but up from 16.9 percent turnout in 2006 — another year of no contested governor’s race.

OTHER NEWS The Detroit Lions

donned green practice jerseys, each made from 21 recycled plastic bottles, as part of a new recycling initiative that will include increasing the number of recycling bins at Ford Field to 500 this season. Detroit Mayor Mike Duggan said the city will provide financial help for water customers in an effort to reduce mass service shutoffs that brought protests and widespread criticism. Shutoffs have been halted until Aug. 25. The Wayne County Airport Authority is set to offer $107 million of debt to improve airfields, roadways and terminals at Detroit Metropolitan Wayne County Airport, Bloomberg reported. A former General Motors Co. facility in Ypsilanti Township was sold by the Revitalizing Auto Communities Environmental Response (RACER) Trust to aircraft maintenance firm International Turbine Industries, which is expected to use the property to expand its jet engine repair and parts sales business, AP reported. Detroit Institute of Bagels’ smoked salmon and cream cheese bagel, the “Lew Silver,” is a home run, according to author and TV personality Lucinda Scala Quinn, executive food editor for Martha Stewart Living and author of the Mad Hungry blog, who visited the Corktown restaurant recently and called it a “must stop” on MarthaStewart.com. The Detroit market drew the nation’s strongest TV ratings for the Aug. 2 exhibition tournament soccer match at Michigan Stadium between Manchester United and Real Madrid. The Michigan Department of Agriculture and Rural Development issued a public health alert after listeria was found in a sample of chicken Caesar salad sold at a Novi Sam’s Club store.

OBITUARIES William Walsh, a prominent real estate appraiser and founder of Royal Oakbased Walsh & Associates, died July 31. He was 85. Billy Bowles, a retired longtime reporter for the Detroit Free Press, died Aug. 6. He was 83.

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