Crain's Detroit Business, August 10, 2015 issue by Crain's Detroit Business

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CRAIN’S Readers first for 30 Years

Do front office changes at the Detroit Tigers shift the bases of power?

DETROIT BUSINESS

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AUGUST 10-16, 2015

The Fast 50:

Hitting on all cylinders

Storms take toll on tourism Bad weather damages bottom line for lodging, retail, fruit crops By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine

These are the companies that put the “rev” in revenue. This year’s list of Crain’s Fast 50 reflects an economy that’s well into recovery. Nearly all the Fast 50 companies, from auto suppliers to IT firms, said their growth stemmed from a stronger economy.

See Page 11.

Will more grads mean the doctor is in? By Jay Greene jgreene@crain.com

Will increasing the number of medical student graduates in Michigan by more than 535 a year by 2020 erase the state’s projected shortage of 4,500 physicians? The most direct answer is “not likely,” the deans of Michigan’s seven medical schools said in interviews with Crain’s. Easing the shortage was a justification given for opening medical schools at Central Michigan University, Western Michigan Uni-

Grad vs. grad. 75 percent increase in medical school graduates is making it harder to find training positions for students, Page 26 versity and Oakland University-Beaumont over the past four years, as well as expanding enrollment at existing schools at Wayne State University, Michigan State University and the University of Michigan. But increasing physician availability in the state is not simply a matter of supply. Most of

The Homestead resort and wedding venue near Glen Arbor was full of guests on the afternoon of Aug. 2. Then, the sky turned green. At about 4 p.m., a severe thunderstorm rolled off Lake Michigan onto the western shore of Leelanau County. Straight-line winds of up to 100 mph uprooted or felled so many trees along M-22 heading into town that roads became impassable. Glen Arbor was cut off — no power, no phone lines, no easy way in or out. For tourism-focused businesses like The Homestead, which depend on seasonal revenue, one bad storm can mean disaster for the bottom line — especially if it happens during the busiest weeks of the season. How much depends on the size of the business and length of its season. By 10:30 a.m. the day after the storm, The Homestead was nearly empty. Almost all of its guests packed up and left, said Bob Kuras, president of the high-end resort. Its pools, golf courses and restaurants were closed. Electricity wouldn’t be restored for three full days. The resort, which can do six figures in revenue per day during the summer on room rates that can top $700 a night, instead found itself calling guests who had booked trips last week to encourage them to stay home — not the kind of SEE STORM, PAGE 28

the shortages are a matter of distribution — too few physicians practice in rural, innercity and northern Michigan areas. Medical school deans think addressing the issue requires several solutions, including increasing residency opportunities, beefing up loan forgiveness programs, improving the quality of life and cultural opportunities in underserved areas, and recruiting more inner-city and rural medical SEE GRADS, PAGE 26 COURTESY OF U.S. COAST GUARD AIR STATION TRAVERSE CITY

The northern Michigan storm tossed trees over M-109 heading into Glen Arbor.

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MICHIGAN

BRIEFS GM plans $877M retooling of pickup plant in Flint General Motors Co. will spend $877 million on improvements at the Flint factory that builds large pickups including the Chevrolet Silverado, the automaker’s best-selling vehicle in the U.S., Bloomberg reported. The investment includes a new body shop. GM didn’t say whether it will add jobs at the plant. The factory opened in 1947 and is GM’s oldest in North America. The Flint investment is the last under a three-year, $5.4 billion plan GM and the UAW announced for U.S. plants in April. As the two sides work on a new agreement to replace the four-year contract that expires next month, the UAW will push for more investment and job guarantees. GM said that since emerging from bankruptcy in 2009, it has announced $17.8 billion in spending on its U.S. factories, creating 6,250 jobs.

Grand Rapids commissioner is city’s first woman mayor A day after her 40th birthday, Rosalynn Bliss became the first woman mayor of Grand Rapids, MLive.com

reported. Bliss received two-thirds of the vote in the primary and thereby avoided a runoff. Runner-up Robert Dean, a former city commissioner and state lawmaker, received 30 percent of the vote. Bliss succeeds Mayor George Heartwell, whose service will end at 12 years as term limits force him out of office. Heartwell endorsed Bliss. In other news from elections, voters in communities served by the Kalamazoo Metro Transit system approved a tax that would fund more frequent runs and late-night service, plus expanded service from six days a week to seven, the Kalamazoo Gazette reported.

Metro Health deal with Tenn. health system falls apart The proposed joint venture between Grand Rapids-based Metro Health and Tennessee-based Com munity Health Systems Inc. is a dead deal, MiBiz reported. Metro Health made the announcement as the state attorney general’s office was set to issue a report on whether to allow the deal. Metro Health executives declined to discuss or offer any explanation

why the deal fell apart. Community Health Systems barely made reference to the deal’s collapse in a routine release announcing quarterly results. The nonprofit Metro Health and for-profit Community Health Systems, one of the largest owners and operators of hospitals in the U.S., began talking nearly two years ago and signed an agreement in January to create the joint venture. Metro Health opted to pursue a deal after rejecting proposals from other forprofit and nonprofit health systems including the University of Michigan Health System and Livonia-based Trinity Health.

MICH-CELLANEOUS 䡲 Bloomfield Hills-based JBD Acquisition Corp. acquired the Grand Rapids Corporate Center in suburban

Wyoming, MiBiz reported. The acquisition of the industrial site is JBD’s second purchase of West Michigan property in six months. 䡲 Grand Rapids-based Notions Marketing wants to hire 550 workers to meet demand for its craft supplies, The Grand Rapids Press reported. About 400 jobs will be part-time and temporary to meet an increase in orders during the holiday season. President Adrienne Stevens said the company’s growth is due to a crafting boom and the rise of e-commerce. Notions Marketing currently employs more than 800 and has added 250 jobs this year. 䡲 The Kalamazoo/Battle Creek In ternational Airport received a grant

worth about $3.3 million from the U.S. Department of Transportation , The Associated Press reported. Work supported by the grant includes rehabilitation of the airport’s runway, an extension of its taxiway and installation of taxiway lighting. 䡲 The Shiawassee Queen riverboat, a symbol of the now-defunct Chesaning Showboat Festival , was sold for $50 and dismantled, The Saginaw News reported. Chesaning lawyer Kent Greenfelder, who bought the 70-foot boat in June, said it was too dilapidated to renovate. 䡲 Walker-based Meijer Inc. opened stores in Oak Creek and Wauwatosa, Wis., both in metropolitan Milwaukee, MiBiz reported. They are the retailer’s third and fourth openings in the state, with the first two earlier this summer. Meijer plans to open two to three stores a year in the state. 䡲 The C.S. Mott Foundation announced grants totaling about $5 million for the Flint Institute of Arts, Flint Institute of Music and Flint Cul tural Center Corp. , The Associated Press reported. 䡲 The Frederik Meijer Gardens & Sculpture Park in Grand Rapids reported its busiest month for attendance in its 20-year history. The Grand Rapids Press reported that Meijer Gardens had roughly 101,000 visitors in July, after the opening of

INSIDE THIS ISSUE BANKRUPTCIES . . . . . . . . . . . . . . . . . 25 CALENDAR . . . . . . . . . . . . . . . . . . . . . . 25 CAPITOL BRIEFINGS . . . . . . . . . . . .27 CLASSIFIED ADS . . . . . . . . . . . . . . . . 25 DEALS & DETAILS . . . . . . . . . . . . . . . 24 CRAIN’S LISTS . . . . . . . . . . . . . . . . . . .19 MARY KRAMER . . . . . . . . . . . . . . . . . . 21 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8 OTHER VOICES . . . . . . . . . . . . . . . . . . . 8 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 24 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 30 WEEK ON THE WEB . . . . . . . . . . . . . . 30

COMPANY INDEX: SEE PAGE 29 the Japanese Garden on June 13. 䡲 Filmmaker Michael Moore’s former vacation home on Torch Lake near Traverse City is up for sale, The Flint Journal reported. Now for the awful truth: It lists for $5.2 million. 䡲 Brilliant Books in Traverse City is offering refunds to buyers of Harper Lee’s Go Set a Watchman after some customers claimed they had been misled by the marketing, the Detroit Free Press reported. Readers thought it was a new book instead of a work completed before Lee’s more wellknown To Kill a Mockingbird. Apparently, they thought the protagonist in Watchman was Maximus Filched. 䡲

CORRECTION 䡲 A story on Page 11 of the Aug. 3 issue incorrectly said Save-A-Lot Food Stores is based in Illinois. The company is based in Earth City, Mo.

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Auburn Hills: Magnet for office deals

Revamped Tigers look to future

TI Automotive, Nexteer moves bolster city’s busy supplier base By Chad Halcom chalcom@crain.com

Office moves for TI Automotive Ltd. and Nexteer Automotive Corp. are expected to increase

“McLean has seemed to gain some power and influence with the executive moves,” said Bob Williams, CEO of Evanston, Ill.based Burns Entertainment & Sports Marketing Inc., which represents companies that want to hire athletes to endorse products. Officially, McLean’s portfolio includes oversight of ticket, suite and sponsorship sales; park operations; customer service; ticket services; public and community affairs; marketing; broadcasting; communications; promotions; in-game entertainment;

local jobs and commercial property values in Auburn Hills, a city already dense with automotive supplier companies. TI Automotive plans to relocate all employees at its corporate headquarters on Doris Road, plus some employees in a nearby Hills are alive tech center building, TI Automotive Ltd. into a new building Expected to spend $7 now under con- million to lease and struction near Field - customize the new stone Golf Club along Auburn Hills Taylor Road in the headquarters building city by year’s end. and add 97 jobs. TI, which employs about 800 people in Nexteer Automotive Michigan, obtained Corp. Will relocate about a $500,000 perform- 150 people from its ance-based grant to Saginaw County support the move headquarters into TI’s from the Michigan current corporate building Strategic Fund, an by the second quarter arm of the Michigan 2016. Hasn’t said how Economic Develop - much it will spend on the ment Corp. The move new headquarters. is expected to add 97 local jobs. Nexteer, meanwhile, will relocate about 150 people from its Saginaw County headquarters into TI’s current corporate building by second-quarter 2016, the company announced last week at the Center for Automotive Research Management Briefing Seminars in Traverse City. Making the move to Oakland County will be Nexteer’s C-suite, global financial team,

SEE TIGERS, PAGE 28

SEE AUBURN HILLS, PAGE 25

The season doesn’t stop for things such as front office changes. Third baseman Nick Castellanos waits on the play during the Tigers-Kansas City Royals game last week at Comerica Park.

ASSOCIATED PRESS

In the leadoff spot for team’s top biz exec: Negotiating next TV rights deal By Bill Shea bshea@crain.com

he decision by Detroit Tigers owner Mike Ilitch to fire President, CEO and General Manager Dave Dombrowski last week not only caused some surprised reactions in the baseball world, it altered the team’s front-office organizational chart. Getting all the attention was Ilitch’s decision to replace Dombrowski after 14 seasons with longtime Assistant General Manager Al Avila, who becomes full general manager and executive vice president. The roles of team president and CEO are mothballed, at least for now. But in the announcement about Dombrowski and Avila was a sentence noting that Duane McLean, the team’s executive vice president of business operations, would report directly to Ilitch. That gives McLean, who declined to comment last week, an increased profile as

the organization decides how to plot its financial course. With the owner’s ear, he’ll be the top Tigers front-office executive at the table when the team negotiates perhaps its Duane McLean: most important contract: Finance chief now its local television broadreports to owner. cast rights deal. “The TV rights deal is as important as any other issue for the club. Dombrowski’s exit could be as much of a vote of confidence in McLean as anything else,” said Raymond “Skip” Sauer, former president of the North American As sociation of Sports Economists and chair of the economics department at Clemson Uni versity . Others in the sports industry also noted the shift in business-side operations strategy.

Price now at half the price. Trades send player jerseys to budget bin, Page 4

Toast to downtown: House of Pure Vin aims to quench thirst for wine By Kirk Pinho kpinho@crain.com

Although the Detroit Lions home opener next month is likely to conjure images of beer-swigging football fans, Regina Gaines wants you to think about wine instead. Namely, the wine she will sell in House of Pure Vin , a wine store that she and co-owners Terry Mullins and Andrea Dunbar are opening on

the first floor of a Lofts at

Merchants

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Upward and onward on Woodward. Brokers say real estate interest along the Detroit thoroughfare is more than fair, Page 29

building on Woodward Avenue downtown. With a name that pays homage to both Michigan and France, House of Pure Vin will have a soft opening Sept. 27 in 3,100 square feet in the building owned by Livonia-

based Schostak Bros. & Co. between Grand River Avenue and Clifford Street. The space was previously occupied by Studio Couture —

Lawrence Technological University’s storefront exhibit space

featuring work by design students and professional artists. That space

is moving into the new Detroit Cen ter for Design + Technology in Midtown at Woodward and Willis Street. Retail planning expert Robert Gibbs said House of Pure Vin will fill a void and be particularly successful with the growing office-worker community of about 40,000 in the central business district. “There are places that sell wine (downtown), but not anybody that

MUST READS OF THE WEEK Detroit Homecoming 2015

Send us your dream views

Last year’s event was followed up by more than $230 million in new investment. Organizers reveal what’s in store for this year’s invite-only event, Page 7

Planning to be part of the Woodward Dream Cruise? Then send us photos of you and your classic or muscle car — or just your car — by Thursday, Aug. 13, to be considered for our online gallery. Email kbull@crain.com

just focuses on wine,” said Gibbs, the managing principal of Birminghambased Gibbs Planning Group Inc. Just outside of the central business district in Corktown, Motor City Wine, a wine bar and wine shop, has space on Michigan Avenue west of Rosa Parks Boulevard. The shop, previously located on Woodward SEE PURE VIN, PAGE 29

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Midseason trade winds blow away value of player jerseys By Bill Shea bshea@crain.com

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David Price is pitching in Toronto. Yoenis Céspedes is batting in Queens. Their jerseys remain on sale in Detroit. Trades are an exciting part of baseball season, but they also represent a unique midseason business aspect of professional sports that immediately affects merchandise sales — either prompting a rush to get new apparel on the shelves or to quietly exile the merchandise of departed players to the bargain rack. When the Detroit Tigers dealt Price to the Toronto Blue Jays and Céspedes to the New York Mets last month, the Comerica Park concessionaire, Buffalo-based Sportservice, pulled their jerseys from the ballpark’s retail store shelves and reduced the prices. Their jerseys, manufactured by official Major League Baseball uniform provider Majestic Athletic of Easton, Pa., originally retailed for $148 at the stadium, and they were marked down to $74.99 last week. They were carted from Comerica Park’s primary retail store, the sprawling D Shop, to a Level 300 retail location. If they don’t eventually sell at discounted prices, they’ll be destroyed, said Robert Thormeier, general manager for Sportservice at Comerica Park. “Everyone keeps some sort of reserve on their balance sheets for traded players,” he said. “We mark (the jersey) down and try to get our cost out of it.” It’s a decision between the local unit management and the home office on when and how to destroy unsold inventory, he said. Baseball itself does the same: MLB’s official online retail site had Price’s authentic “Cool Base” home jersey discounted to $168.97 from the original $225.99. Authentic jerseys are the same as what players wear on the field but are costly, so teams generally carry just a handful in their brick-and-mortar shops. Replica jerseys, which account for most jersey sales, are not as elaborate and considerably less expensive. Price’s replica online is down to $74.97 from the original $99.99. Authentic jerseys for popular exTigers Max Scherzer and Torii Hunter, who departed Detroit via free agency before the season, remain on the site at $152.97, discounted from $214.99. Specific jersey sales numbers aren’t disclosed by the teams or MLB, but Tigers slugger Miguel Cabrera annually is among the top sellers across all of baseball, the league and players union has said. Majestic has said it moves about 1 million jerseys a year to teams, stores and directly to consumers.

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Before Yoenis Céspedes was traded to the NewYorkMets last month, his jersey retailed for $148 at Comerica Park.After the trade,it was marked down to $74.99. concessionaire have to determine when fan interest in a new or young player is sufficient to justify wholesale purchase of jerseys or other merchandise from MLB-licensed manufacturers. For example, the Tigers and Sportservice are discussing apparel sales for new pitcher Daniel Norris, a 22-year-old lefty who came to Detroit from Toronto as part of the July 30 trade for Price. Norris won his first start for the Tigers, and a media narrative about his offbeat spring training lifestyle of living frugally in an old VW van, surfing and reading Beat Generation novels, has further sparked fan interest. But with the season winding down, Norris will get just a few more starts to justify the expense of selling his T-shirts or jerseys at the ballpark. The risk is that he flames out on the mound and fans lose interest in buying his No. 44 T-shirt or jersey. Still, Norris has the Tigers and Sportservice thinking hard. “Sometimes you just take a chance,” Thormeier said. Jerseys are ordered in minimum batches of 72 or 144 per order, he said, and each batch can have up to 12 of each standard size.

Other sellers It’s not just the concessionaire and teams opting to order new player jerseys. The major retail chains and online providers, such as Dick’s Sporting Goods and Fanatics Inc. (which operates the e-commerce sites for all four U.S. major sports leagues), will place orders with manufacturers. Majestic Athletic and other companies pay hefty fees to license the MLB and team logos for commer-

cial and retail sale, and they sell the merchandise to the concessionaires and stores. They also sell directly to the public online. The licensing deals are done through Major League Baseball Prop erties Inc., and the 30 clubs split the national revenue from such contracts — which accounts for a sizable portion of MLB’s $9 billion in annual revenue. The net sales revenue from jerseys at the team’s brick-and-mortar retail concessions outlets is subject to baseball’s revenue share formula, which distributes 34 percent of each club’s local revenue among the teams. The Tigers and Sportservice also split sales revenue at an undisclosed ratio. Industry sources say the concessionaire typically keeps about 60 percent of the sales. Revenue is shared from online sales of MLB jerseys and other apparel and merchandise through the team sites and the league’s centralized e-commerce site.

The real trade winners On the manufacturing end, player trades mean additional revenue for Majestic. “The truth of the matter is that we love trades because, for us, it’s mainly upside,” said Michael Johnson, vice president of strategy and business development for Greensboro, N.C.-based apparel giant VF Corp. ’s VF Licensed Sports Group, parent of Majestic Athletic. Trades are a routine factor for jersey makers, so it doesn’t hurt the bottom line. Majestic has the business procedures in place to quickly manufacture new jerseys midseason and isn’t left with stacks of old ones. “Due to our U.S.-based manufacturing, we keep very little inventory on hand,” Johnson said. Majestic makes jerseys in bulk when it or its clients anticipate demand, such as when a major player such as Price is dealt to a new team. “We were able to turn Blue Jays Price jerseys into the marketplace within a day of his trade,” Johnson said. Individual retail orders are fulfilled on demand. Majestic also has a “Player Trade Protection Promotion” for consumer buyers. Here’s how it works: If you buy an authentic player jersey via Majestic Athletic.com between July 1 and Aug. 31, and that player is traded in that time, you can get a coupon for a 50 percent discount on the purchase of a new authentic jersey. The coupon, an online code, is redeemable between Sept. 4 and Nov. 30. Teams, concessionaires and stores don’t get that protection. “If a retailer has a lot of product on hand, that is generally their responsibility,” Johnson said. 䡲 Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19

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Downriver group aims to improve communities, create jobs By Sherri Welch swelch@crain.com

Not long before a story appeared in the Crain’s Aug. 12, 1985, issue about the Downriver Community Conference , the group of communities spanning the 20-mile stretch from Detroit’s southern limits to Monroe helped bring a $450 million Mazda Motor Corp. plant to Flat Rock. Twenty years later, the organization assisted with training 1,600 employees for a third shift at the plant when it took on production of Ford Motor Co.’s Mustang, Executive Director Jim Perry said. The new production brought a new wave of suppliers to Downriver communities and more jobs. The conference also successfully advocated in 2003 to get U.S. Steel Corp. to buy Great Lakes Steel operations in Ecorse and River Rouge after parent National Steel Corp. , went bankrupt, Perry said. The deal preserved hundreds of jobs. The headlines haven’t been as big for Southgate-based DCC during the past decade, but the organization is still squarely focused on providing employment and training services to attract and keep jobs in southern Wayne County. It administers employment services and trade adjustment assistance from satellite offices as a MichiganWorks provider. In fiscal 2014 ended Sept. 30, more than $6 million of the $9.7 million the DCC spent on governmentfunded programs went to employment and training programs. It ended the year with nearly $9.1 million in total revenue and a reported operating loss of $573,272 as it waited for nearly $5 million in government grants to come through. DCC covered the gap with cash and investments totaling $985,557 for the year, according to its audited financials. The organization now encompasses 20 Downriver communities with about 500,000 residents, up from 16 communities and 353,000 residents in 1985, following the addition of Romulus, Dearborn, Dearborn Heights and Huron Township. “Our goal has always been to enhance the quality of life for area residents, workers and businesses and to shape public policy at federal, state, regional, county and local levels to assist in providing leadership in areas like employment training, weatherization and economic development,” Perry said. While programs like its administration of the Downriver Council for the Arts and business counseling for the U.S. Small Business Administration are things of the past, DCC has continued a number of other programs. Among them is a program that coordinates emergency response and services across its communities. Through the Downriver Mutual Aid consortium, teams of emergency responders arrived in Romulus after the 1987 plane crash at Detroit Metropolitan Airport and traveled to communities besieged by last summer’s historic flooding. The consortium’s joint approach enables it to fund a SWAT team, un-

LOOKING BACK: On Aug. 12, 1985, Crain’s reported on the activities of the Downriver Community Conference, an organization of communities spanning Detroit’s southern limits to Monroe.The issues might have changed, but the group remains focused on providing employment and job training services in southern Wayne County. More at crainsdetroit.com/30 derwater dive team and arson investigation team, Perry said. “No one community could afford all of that if it was on its own.” By having a coordinated approach and larger service area, the DCC communities are also eligible for federal and state grants they wouldn’t be able to get independently, said Paula Boase, DCC pro-

gram director. In 1995, DCC began administering a brownfield redevelopment program that is providing Environmental Protection Agency funding for cleanup projects in Wayne, Lenawee, Washtenaw and Monroe counties. Since the 1990s when the Detroit River International Wildlife Refuge

project began in Trenton on land

donated by Chrysler Corp., DCC has administered $2.2 million in federal funding to Wayne County for cleanup efforts, Perry said. The Wayne County and U.S. Fish and Wildlife Service project encompasses the last parcels on the Detroit River that are undeveloped, Boase said. Construction of a visitor center

on the site began last year, and work on a fishing pier and floating dock is expected to begin soon, she said. Another redevelopment project the DCC funded was asbestos abatement at Dearborn’s old city hall, a three-building campus that occupies an entire block. Dearborn sold the campus to Minneapolis-based Artspace Pro jects Inc. last year for $1.65 million. It’s now being converted to artist housing and incubator, studio and gallery space. 䡲 Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

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Signature, Cushman to end biz partnership By Kirk Pinho kpinho@crain.com

A marriage between the nation’s third-largest real estate brokerage and one of the largest locally based brokerages is coming to an end. And with the dissolution of the agreement that gives Cushman & Wakefield Inc. boots on the ground in Detroit — and gave Southfieldbased Signature Associates Inc. referral access to Cushman’s national network — Chicago-based Cushman now plans to open a standalone office after a nine-year absence here. The formal disbanding comes after a business relationship that began in May 2006. Signature — founded in 1989 by Steve Gordon, its president — forged the relationship during a wave of real estate mergers. Details have not been disclosed about the location and size of the local Cushman office. At the corporate level, Cushman & Wakefield entered into an agreement to sell the firm and merge with the real estate services company DTZ. The acquisition is expected to close in the fourth quarter. DTZ is backed by private equity firm TPG Capital. Mark Woods, Signature principal and COO, said the company, which has 75 brokers and more than 150 employees, is looking for an alternative national partner. Signature has reached out to potential partners, and some have reached out to Signature, he said. They expect to make a decision in about 30 days. Signature said it sold and leased more than 32.2 million square feet of space and 1,700 acres of land last year — in deals valued at more than $1 billion. In July, it closed deals totaling more than 2.9 million square feet and valued at more than $102 million. Signature has offices in Southfield, Detroit, Lansing, Grand Rapids, Muskegon, Holland, Kalamazoo and Toledo, Ohio. Signature and Cushman both trumpeted the alliance’s success over the years. “For whatever the reasons, it was a really good fit. Not only were we complementary with Cushman & Wakefield, but we alliance firms got pretty close,” said Woods, adding that there were 38 such alliances throughout the country. Shawn Mobley, president of Cushman’s central and southeast regions, said: “Detroit is a great corporate accounts market driven by the automotive companies and suppliers — and the whole chain there. “With our global platform, we should go with an owned-office strategy.” National Real Estate Investor magazine pegs Cushman as the third-largest brokerage in the U.S., with $115 billion in annual deals. 䡲

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New for Homecoming: Pitch contest, funds for city By Kirk Pinho kpinho@crain.com

More than $230 million in direct investment was generated through 30 different initiatives that stemmed from last year’s inaugural Detroit Homecoming event, so organizers are gearing up for Year 2. The second Detroit Homecoming is scheduled for Sept. 30-Oct. 2, organizers announced at a kickoff event Aug. 5. The invitation-only event is designed to bring expats — former Detroiters — back to the city. With focuses on the role of professional sports and the changing narrative about the city, expats this year will have meetings at cultural institutions and a chance to tour the city. Among new agenda items at this year’s event are a business pitch competition; a Crowdrise fundraising effort for metro Detroit charities and causes; and a digital effort to generate solutions for what Mayor Mike Duggan views as the top issues facing the city. The Crowdrise effort is expected to provide funding for Detroit incentives dealing with children, housing, neighborhood rehabilitation and restoring Belle Isle, Mary Kramer, codirector of Detroit Homecoming and publisher of Crain’s Detroit Business, said at last week’s kickoff at the Aloft Hotel at the restored David Whitney Building downtown. “We view this expat community as a significant untapped resource for Detroit,” said Jim Hayes, another Homecoming co-director and retired publisher of Fortune magazine. Expected speakers this year include Gov. Rick Snyder; Duggan; Dan Gilbert, founder and chairman of Quicken Loans Inc . and Rock Ven tures LLC; David Maraniss, author of Once in a Great City: A Detroit Story and Barack Obama: The Story and associate editor of The Washington Post; and Mark Reuss, General Mo tors Co. executive vice president of global product development, purchasing and supply chain. Stephen Ross, CEO of real estate development firm The Related Cos. and owner of the NFL’s Miami Dol phins , will address Homecoming attendees via video. Among the planned 200 attendees are retired NBA player Shane Battier; ABC journalist Bob Woodruff; real estate developer Peter Cummings; Gwendolyn Butler of Chicago-based Capri Investment Group; Christopher Keogh, chairman of Goldman-Sachs Midwest ; retired New York Life CEO and author Fred Sievert; and country musician Josh Gracin. Detroit Homecoming is convened by Crain’s Detroit Business, but local civic and business leaders comprise a host committee to organize the event. The Downtown Detroit Partnership is a nonfiduciary partner. Last year’s event brought back more than 150 high-profile former Detroiters, including Dan Doctoroff, former deputy mayor of New York City; and Ron Fournier, senior political columnist of the National Journal. “This has brought an entirely new energy, attention and focus to

the downtown at a time where we are able to finally pull all the threads together,” said Eric Larson, CEO of the DDP and founder, president and CEO of Bloomfield Hills-based Larson Realty Group. The Detroit Homecoming project received a $100,000 grant from the Miami-based John S. and James L. Knight Foundation earlier this year to build a digital community that can reconnect former Detroiters Other news highlights from the Aug. 5 Detroit Homecoming kickoff: 䡲 Wayne State University M. Roy Wilson said the Hecker-Smiley mansion

property, built between 1889 and 1892, is expected to be renamed after 1960 WSU graduate Thomas Tierney, a medM. RoyWilson: ical research inHecker-Smiley dustry executive. mansion renamed That’s because for WSU alum. he and Tierney have been in talks about a gift to the university of more than $1 million, Wilson said. Brian Escamilla, director of de-

velopment communications for the WSU Division of Development and Alumni Affairs, said an official announcement of the gift and renaming of the property WSU purchased last year at Woodward Avenue and Ferry Street is expected this fall. Tierney, who attended the inaugural Detroit Homecoming, is president of Tustin, Calif.-based VitaTe ch Nutritional Sciences Inc . The Hecker-Smiley property consists of a 21,000-square-foot mansion and a 5,700-square-foot carriage house. 䡲 Nicole Curtis, star of HGTV and DIY’s “Rehab Addict,” said she plans

to focus her future Detroit house restoration efforts for her show on the city’s east side, particularly on once-grand East Grand Boulevard. Curtis restored a house on the boulevard last year, which was featured on her show. Currently, she is working on the 1876 Ransom Gillis mansion in Brush Park. She announced her Detroit focus during last year’s Homecoming. 䡲 More news on Detroit Homecoming, which is not open to the public, is at detroithomecoming.com. 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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CRAIN’S DETROIT BUSINESS

OPINION

OTHER VOICES: REPS. SAM SINGH AND JASON SHEPPARD

Energy efficiency mandate: Is it time for state to pull the plug?

Time to diagnose T med training issues Keep them: Energy efficiency makes biz sense M

he 2008 law that created state-mandated energy efficiency programs expires this year, and legislators and businesses are split on whether to renew them. Rep. Sam Singh, D-East Lansing, argues that

ichigan’s medical education landscape keeps getting more complicated. As Jay Greene reports on Page 1, the state continues to graduate more doctors — with three new medical schools in the past four years. But more graduates alone won’t address Michigan’s shortage of physicians. For a couple of reasons: The shortage is less about numbers than about the fact that doctors prefer not to practice in rural areas and inner cities. Part of this is economics — Medicaid pays less than insurers, and many doctors have considerable education debt. Part of it is lifestyle. Increasing enrollment does not necessarily create more residencies, which are required for licensing. The number of grads is going up across the country, not just in Michigan, making residency slots highly competitive. And there’s not necessarily a homefield advantage in competing for the slots. Hospitals that sponsor residencies, both here and elsewhere, naturally want to recruit the best possible graduates, regardless of where they’re attending school. All of this leads to some questions. In the public policy arena, state Sen. Mike Shirkey is asking for data to show whether Michigan is getting sufficient return on the payments the state makes to help subsidize residencies. One measure of that would be whether the money is being spent on too many doctors who leave the state. On another front, the economics of residencies are murky. Hospitals rely on residents, who are much less costly than practicing physicians, for a significant amount of medical care. Payments from the federal government and state also subsidize the cost. But it isn’t clear there is enough funding to create significantly more residencies. It is also unclear if residency programs break even or make money for hospitals because the costs and revenue aren’t accounted for that way. It all seems a little scattershot with the various parties focused, not surprisingly, on their own problems. All of this begs for a sophisticated analysis. The Citizens Research Council of Michigan has studied doctor shortages. Shirkey is working to figure out whether the state is spending money in the most effective way. There are medical school deans and hospital officials who can speak to the issues and obligations involved in training future doctors. Is there a way all of these groups can come together to determine how all their best interests can come together?

the programs have been beneficial and should be renewed and made more rigorous. Rep. Jason Sheppard, R-Temperance, thinks another approach would produce better results for state residents.

End them: ‘All of the above’ is key to energy future

One Michigan success story that does not receive nearly as much attention as it should is our state’s energy policy. In 2008, the Michigan Legislature passed comprehensive, bipartisan legislation addressing energy distribution, production and use. By any measure, the results of this legislation have been positive for the residents and businesses of this state, particularly in its efforts addressing energy efficiency. Now, as the 2008 legislation reaches its conclusion, the Legislature is engaged in a debate Sam Singh of East on what the next steps should be Lansing is the Democratic floor for energy policy. I have been an advocate for in- leader of the creasing Michigan’s use of energy Michigan House of efficiency, introducing bills both Representatives. He last session and this session represents the 69th (House Bill 4055) to double our en- District. ergy efficiency standards — which would increase savings for customers from 1 percent of a utility’s electric retail sales to 2 percent. Such an increase would put us in line with other Midwest states — such as Illinois, Wisconsin, Iowa and Minnesota — that have already set energy reduction and efficiency rates between 1.5 percent and 2 This is not percent. I am also enabout couraged by the position Gov. Snyder has taken businesses this issue. Not only and residents on did the governor mendoing less; it tion energy efficiency in his State of the State adis about dress earlier this year, he making sure also made reducing enthe energy we ergy waste a focal point of his special message do use is on energy in March. Increasing energy used wisely. efficiency standards makes sense from a business standpoint as well. The easiest way to save money on energy costs is to use less of it. This is not about businesses and residents doing less; it is about making sure the energy we do use is being used wisely and not being wasted. Reports from the Michigan Public Service Commission show that every $1 invested in energy efficiency programs saves consumers $3 to $4 in unused energy costs. Collectively, consumers in this state will save nearly $3.4 billion through energy efficiency updates made since 2009. Energy efficiency and optimization efforts also help reduce our future energy needs. Building new power generation plants is a large financial undertaking for energy companies and is a cost that ultimately gets passed along to consumers. Reducing the need to build new plants is a win-win for the energy companies and consumers alike. These benefits are exactly why business leaders from Whirlpool Corp., Johnson Controls, Schneider

As a member of the House Committee on Energy Policy, I have heard testimony from all of the state’s leading experts and reviewed every available piece of information we have regarding Michigan’s energy future. The choices we have to make now are coming into view. With burdensome environmental mandates being forced on our state by bureaucrats in Washington, D.C., it is clear we must pursue a sweeping reform to the state’s energy policy. Michigan needs to have a poliJason Sheppard, cy focused on the most reliable R-Temperance, is a and cost-effective ways of profirst-term member viding cleaner, more efficient enof the Michigan ergy to residents. That is why I House of was proud to join the chairman Representatives, of the House Energy Committee, representing the state Rep. Aric Nesbitt, to help 56th District. create a reform plan — House Bills 4297-4304 — that would work to achieve these goals. There are currently two competing visions for our energy policy. One would require increased mandates and fees to push consumers away from cheap and reliable electricity. While these plans would probably cut some electric use, the If customers significant rate increases hurt Michigan are expected would families who cannot cut to be on the any further. hook for these Our plan, on the other hand, takes an “all of the efficiency above” approach by upgrades, the using energy waste reduction techniques, replan we newable resources and choose has to cleaner forms of energy while also keeping costs be the most low for Michigan famicost-effective. lies. The path to Michigan’s energy future is paved with innovation and new technology, not increased rates that punish consumers for living in the modern world. Unfortunately, the increased fees and new mandates are already being implemented on a smaller scale. Many people have received new, high-efficiency lightbulbs, provided by their utility, to replace the older, less efficient bulbs. Others may have been offered an in-home efficiency assessment that encouraged them to invest in a new furnace or programmable thermostat, possibly even with the promise of some sort of financial assistance to help defray the costs. These government-mandated plans, funded by ratepayers like you, are supposed to reduce energy waste and provide future savings to customers. However, a recent study by the Energy Policy Institute at the University of Chicago found that for every $2 we invest in these kinds of plans, we only see $1 in efficiency savings. Furthermore, the study found that the

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OTHER VOICES

SINGH FROM PREVIOUS PAGE

Electric, Ingersoll-Rand and United Technologies are calling for the continuation of energy efficiency standards. They understand the link between energy policy and the cost of doing business. Energy efficiency standards provide businesses with certainty that Michigan is committed to reducing energy waste and reining in energy costs. This certainty is necessary for them to make investment decisions and continue to grow their business in our state. Recent Republican proposals that would scale back or eliminate Michigan’s highly successful energy efficiency programs would be a major step backward for businesses and residents. Repealing energy efficiency standards sends the wrong signal to businesses looking to invest and grow in our state by creating uncertainty and undermining the progress we have made to date. By increasing energy efficiency standards, we can help to provide the reliability businesses seek as they plan their future investment and growth. Committing ourselves to meeting these standards sends the message that the state of Michigan seeks to be a partner willing to work with companies to help keep their costs down. It also helps the residents of this state make their energy dollars go further, putting more money in their pockets. Michigan’s energy efficiency programs have been a success. As a state striving to come back stronger than we were before, we need to build on our successes, not tear them down. 䡲

Lear eyes acquisitions to boost electrical unit By Mark Clothier Bloomberg News

TRAVERSE CITY — Lear Corp . is looking for acquisitions of as much as $1 billion for its electrical unit as automakers’ demand for global vehicle platforms drives consolidation among their suppliers. Southfield-based Lear already is the second-largest maker of auto seating and gets about three-quarters of its revenue from that business. But the electrical unit, which supplies control parts and systems, is more profitable, generating 46 percent of operating earn-

ings last year from about a been very actively lookquarter of the company’s ing,” Simoncini said. $17.7 billion in sales. Auto sales in the U.S., led The push is to add caby pickups and SUVs, are pability in software, data surging, helping fuel a spurt encryption and cloud of mergers among auto computing, CEO Matt parts makers — including ZF Friedrichshafen AG’s May Simoncini said in an interview last week at the CAR Matt Simoncini: acquisition of TRW Automotive Holdings Corp. to create Management Briefing Expect more the industry’s second-larSeminars in Traverse City. “nontraditional gest supplier. “You’ll see more and acquisitions.” A resurgent U.S. economore nontraditional acquisitions of software firms that my, widely available credit and low bring intellectual property into the interest rates are keeping the sales firm from outside of automotive, pace near levels not seen in a and that’s an area where we’ve decade or more.

Lear’s search to expand its electrical unit is “driven less by the margins and more because there are more areas to grow there,” Simoncini said. “The industry is exploding in that subsegment, and it requires you to keep up with certain capabilities — in our case, software — as you move from moving electricity to moving data.” Lear’s last two acquisitions were to strengthen its seating unit. In January, Lear bought Eagle Ottawa, a maker of leather for auto interiors, for $850 million. In 2012, it acquired fabric maker Guilford Mills for $257 million. 䡲

THIS AWARD SHOWS YOU’RE OUR

HIGHEST PRIORITY. DTE Energy has just been ranked “Highest in Customer Satisfaction With Business Natural Gas Service in the Midwest” by J.D. Power, but really it’s you who comes out on top. Because to achieve this honor, our entire team has fundamentally improved the way we serve you. We’ve worked hard to provide important energy saving and safety information, restructure the business service center, and offer new online and mobile tools to make doing business easier. We’re proud of the teams that have made this award possible, but most of all, we’re proud of how we serve you.

SHEPPARD FROM PREVIOUS PAGE

average annual rate of return is minus 9.5 percent, showing that their projection models were proved wrong when compared with actual results. These plans sound attractive, but they simply do not work. We can do better with a smarter, more modern approach to energy policy. New techniques and emerging technologies can help this state meet its demand for years to come in a way that will benefit consumers, not punish them. Reducing waste and becoming more energy efficient are important parts of Michigan’s energy future. However, if customers are expected to be on the hook for these efficiency upgrades, the plan we choose has to be the most cost-effective approach to providing energy to Michigan families. Risky investments that could potentially raise rates should not be placed on the backs of consumers. Taking an “all of the above” approach to new energy reforms, as proposed by Rep. Nesbitt and myself, eliminates backward government mandates and fees while lowering costs for ratepayers and providing reliable energy for our homes and businesses. 䡲

DTE Energy received the highest numerical score in the Midwest in the proprietary J.D. Power 2015 Gas Utility Business Customer Satisfaction StudySM. Study based on 9,243 online interviews ranking 20 providers in the Midwest. Proprietary study results are based on experiences and perceptions of businesses surveyed April-July and August-December 2014. Your experiences may vary. Visit jdpower.com.

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The Fast 50 1. Meridian Health Plan Inc., Detroit 2. Gentherm Inc., Northville 3. Southfield Jeep Inc. dba Southfield Dodge Chrysler Jeep Ram, Southfield 4. RevSpring Inc., Wixom 5. U.S. Farathane Corp., Auburn Hills 6. United Road Services Inc., Romulus 7. H.W. Kaufman Financial Group Inc./ Burns & Wilcox Ltd., Farmington Hills 8. Piston Automotive LLC, Redford Township

SPECIAL REPORT: SECOND STAGE

THE FAST 50

9. McKinley Inc., Ann Arbor 10. FCA US LLC, Auburn Hills 11. James Group International Inc., Detroit 12. The Suburban Collection, Troy 13. Netlink Software Group of America Inc., Madison Heights 14. Alta Equipment Co., Wixom 15. Acro Service Corp., Livonia 16. Danlaw Inc., Novi 16. General RV Center Inc., Wixom 18. American Axle & Manufacturing Holdings Inc., Detroit 19. Global Automotive Alliance LLC, Detroit 20. LaFontaine Automotive Group, Highland Township 21. FutureNet Group Inc., Detroit 21. DTE Energy Co., Detroit 23. Penske Corp., Bloomfield Hills 24. Ramco-Gershenson Properties Trust, Farmington Hills

As economy takes off, meet the jet-setters

25. Sun Communities Inc., Southfield 26. Key Safety Systems Inc., Sterling Heights

High-growth companies credit simple formula: Biz is booming

26. Sachse Construction and Development Co. LLC, Detroit 26. Diversified Restaurant Holdings Inc., Southfield 29. Ilitch companies, Detroit 30. International Automotive Components, Southfield 31. Michigan CAT, Novi 32. MJC Cos., Macomb Township 33. TriMas Corp., Bloomfield Hills 33. Auburn Pharmaceutical Co., Troy 35. Syntel Inc., Troy 35. Walbridge Aldinger Co., Detroit 37. WorkForce Software LLC, Livonia 38. Jim Riehl’s Friendly Automotive Group Inc., Warren 39. Tweddle Group Inc., Clinton Township 39. Camaco LLC, Farmington Hills 39. Wolverine Truck Sales Inc., Dearborn 42. Amerisure Mutual Insurance Co., Farmington Hills

rain’s Fast 50 is created by ranking companies in Crain’s database of private and publicly traded companies in two ways: by dollar amount of revenue growth between 2011 and 2014 and by percentage revenue growth during that same period. The two rankings are then added together to create the list. The lower the number, the higher the final rank. This year’s Fast 50 list reflects an economy that’s well into recovery. Nearly all companies said their growth stemmed from increased business as a result of a stronger economy. Automotive suppliers are enjoying an industry that is hitting pre-recession production

levels. Auto dealers are enjoying life at the other end of that industry. And construction company Walbridge Aldinger Co. has grown as companies invest in new or existing plants. Trucking and logistics companies are seeing higher volumes, as are professional services and B2B firms. Diversified Restaurant Holdings Inc. opened nine restaurants last year under the Bagger Dave’s Legendary Burger Tavern and Buffalo Wild Wings brands. Others are reaping the benefits of investments in themselves, such as the big IT firm Syntel Inc., which said investments in intellectual property and service offerings led to more business. Another striking feature is the degree to which buyouts are propelling growth among

the companies listed. Of the 50 companies on the list, 13 cited recent acquisitions as reasons for their higher income numbers. The Suburban Collection automotive dealership company, appearing in the No. 12 slot on this year’s list, is reaping the benefits of a rebounding economy as car sales increase. As a result, it felt confident enough last year to buy six dealerships — all in Southeast Michigan. “The revenue increase is really symbolic of the great tailwinds in Southeast Michigan,” said General Manager David Fischer Jr. Read more on Southeast Michigan’s fastestgrowing companies, Pages 12-17 CRAIN’S LIST: The Fast 50, Pages 19-20

42. Lear Corp., Southfield 44. Bridgewater Interiors LLC, Detroit 45. Roush Enterprises Inc., Livonia 46. ITC Holdings Corp., Novi

UP CLOSE: THE STORIES BEHIND TWO OF THE FAST 50

Someone old, something new means revenue

49. Henniges Automotive, Auburn Hills

The confluence of two trends has fueled speedy growth at Jeffrey Farber’s Auburn Pharmaceutical Co.: An aging U.S. population and new, stricter health care requirements to use generic drugs.

50. Secure-24 LLC, Southfield

Page 13

47. Credit Acceptance Corp., Southfield 48. Plante Moran PLLC, Southfield

Insurers’ insurer makes noise on bottom line Alan Jay Kaufman’s H.W. Kaufman Financial Group doesn’t get much attention by being the insurance company that serves other insurances companies, but that hasn’t stopped it from reaching $1.6 billion in revenue, Page 17

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SPECIAL REPORT: THE FAST 50

1. Meridian Health Plan Inc.

Revenue growth: $441.7M

Revenue growth: $279.9M

Revenue growth ranking: 21

Revenue growth ranking: 32

Detroit

Combined rankings: 32

Combined rankings: 42

䡲 What it does: Developer of

䡲 What it does: Automotive

automotive thermal management technologies, such as actively heated and cooled seat systems and cup holders, heated and ventilated seat systems, thermal storage bins and other electronic devices.

dealerships

Revenue 2014/2011: $1.95B/$960.6M Revenue percent change: 102% Percent change ranking: 17 Revenue growth: $984.5M Revenue growth ranking: 12 Combined rankings: 29

䡲 What it does: Operates Medicaid health plans and provides other health services. 䡲 How it grew: Rapid growth stems

from two major trends: health care reform and Medicaid expansion in the states where Meridian does business — Michigan, Illinois and Iowa. More people on the Medicaid rolls has led to more business, said Meridian Health Plan President Jon Cotton.

䡲 How it grew: Established a solid global footprint with its buyout of Germany-based W.E.T. Automotive Systems AG in 2011. Growth for the past two years stems from new program launches and strong sales of the vehicles in which Gentherm’s products are installed.

䡲 How it grew: Has increasingly used marketing, social media and advertising to increase customers. The company’s three stores were recently purchased by Salt Lake City-based dealer Ken Garff, which has aided in stability and profitability, said CFO Deborah Kassak.

2. Gentherm Inc. Northville

Southfield

5. U.S. Farathane Corp. Auburn Hills Revenue 2014/2011: $500M/$235M Revenue percent change: 113% Percent change ranking: 12 Revenue growth: $265M

4. RevSpring Inc. Wixom Revenue 2014/2011: $388M/$142M Revenue percent change: 173%

3. Southfield Jeep Inc. dba Southfield Dodge Chrysler Jeep Ram

Compass Investment Partners Fund LP combined several companies to form RevSpring in 2012. Organic growth, combined with more acquisitions, including three buyouts in the past 18 months, has added further revenue.

Percent change ranking: 5 Revenue growth: $246M Revenue growth ranking: 39 Combined rankings: 44

䡲 What it does: Handles billing and

Revenue 2014/2011: $811.3M/$369.6M

Revenue: 2014/2011: $477.4M/$197.5M

Revenue percent change: 120%

Revenue percent change: 142%

collections mailings for customers for home services, health care and debt collection firms. Also provides accounts receivable and payments services.

Percent change ranking: 11

Percent change ranking: 10

䡲 How it grew: New York-based

Revenue growth ranking: 36

manufactures plastic automotive parts.

䡲 How it grew: Expanded with the

automotive industry’s upswing. It operates 10 facilities, including locations in Sterling Heights, Orion Township, Utica and Westland. It was bought by Los Angeles-based private equity firm Gores Group in December for more than $100 million and plans to grow further through acquisitions.

6. United Road Services Inc. Romulus Revenue percent change: 105% Percent change ranking: 16 Revenue growth: $271.2M Revenue growth ranking: 33 Combined rankings: 49

䡲 What it does: Logistics for vehicle

manufacturers, remarketers, auctions, dealers and Internet vehicle transactions nationally

䡲 How it grew: Recent growth has

come from an expanded customer base and an acquisition in December of the auto transport division of Waggoners Trucking. The company also expanded its national network.

7. H.W. Kaufman Financial Group Inc./ Burns & Wilcox Ltd. Farmington Hills

We invest in PEOPLE. We build LEADERS.

Revenue 2014/2011: $1.6B/$950M Revenue percent change: 71% Percent change ranking: 33 Revenue growth ranking: 17 Combined rankings: 50

䡲 How it grew: Acquisitions have

Platform Criteria Buy & Build Strategies Revenues: Up to $200M EBITDA: $5M or more No Minimums for Add-ons

been key. In 2014, the company acquired Oval International of London. That followed another London acquisition, Chesterfield Group, in 2012. Other acquisitions in 2012-13 have been ISI Insurance Services, Uniontown, Pa.; Global Excess Partners, New York; and Mertens Enterprises, Lockport, Ill.

8. Piston Automotive LLC Redford Township 500 Griswold Street - Suite 2700 | Detroit, Michigan 48226 | 313-962-5800 | www.huroncapital.com

Revenue growth: $364.4M Revenue growth ranking: 27 Combined rankings: 56

䡲 What it does: Supplies cooling

modules, interior systems and powertrain and chassis components to the auto industry.

䡲 How it grew: Received a large contract from Fiat Chrysler Automobiles that led to a new plant in Toledo, Ohio. New work from Ford Motor Co. and General Motors Co. also has pushed growth.

9. McKinley Inc. Ann Arbor Revenue 2014/2011: $520M/$273M Revenue percent change: 90% Percent change ranking: 20 Revenue growth: $247M Revenue growth ranking: 38 Combined rankings: 58

䡲 What it does: Commercial and multifamily residential real estate ownership and management 䡲 How it grew: Increased holdings of apartment buildings and affordable multifamily housing in recent years as part of a strategy to invest where rents are increasing. A major expansion during the past 12 months in Tampa, Fla., has added “hundreds of millions in acquisitions” to the company’s portfolio, said CEO Albert Berriz.

10. FCA US LLC Auburn Hills Revenue 2014/2011: $83B/$55B Revenue percent change: 51% Percent change ranking: 58 Revenue growth: $28B Revenue growth ranking: 1 Combined rankings: 59

䡲 What it does: It is the current iteration of Chrysler, now owned by Netherlands-based Fiat Chrysler Automobiles, which also owns Italy’s Fiat Group Automobiles SpA. 䡲 How it grew: Sales of vehicles under the Jeep, Ram and Chrysler nameplates have been strong, helping to propel the parent company’s global sales up 7 percent last year, a higher jump than by the industry’s top carmakers.

Revenue growth: $675M

䡲 What it does: Provides insurance services to brokers, agents and carriers, including underwriting, inspections, risk management and third-party claims administration

Sector Focus Specialty Manufacturing Consumer Goods & Services Business Services Healthcare

Percent change ranking: 29

Combined rankings: 48

䡲 What it does: Designs and

Revenue 2014/2011: $530.2M/$259M

Huron Capital Partners

Revenue percent change: 77%

Revenue 2014/2011: $838.2M/$473.8M

11. James Group International Inc. Detroit Revenue 2014/2011: $133M/$30M Revenue percent change: 343% Percent change ranking: 2 Revenue growth: $103M Revenue growth ranking: 64 Combined rankings: 66

䡲 What it does: Logistics and supply chain management firm 䡲 How it grew: Is building on expansions into exports, logistics software for automotive companies, consolidating and sequencing of container shipments, and strong growth at its Magnolia Automotive Services LLC SEE NEXT PAGE

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SPECIAL REPORT: THE FAST 50

Troy drug company’s revenue is far from generic The confluence of two trends has fueled speedy growth at Troy-based Auburn Pharmaceutical Co. : an aging U.S. demographic and stricter health care requirements to use generic drugs. But there are other reasons this generic drug distributor has been knocking it out of the park revenue-wise. Internal turmoil at a competitor was one reason, said Jeffrey Farber, Auburn Pharmaceutical president and founder. “And we’ve gotten better at what we do.” The company also points to its Web presence as a factor behind its growth rate of 15 percent to 18 percent a year. Auburn says it was the first in its niche to accept credit card payments. It also started an auction site in January to sell drugs with expiration dates of less than a year at a roughly 50 percent discount. The site is responsible for about 3 percent of its sales so far this year. The company, started in 1993, had $43.7 million in revenue in 2011; in 2014, revenue was $92 million. This year, Farber projects revenue will top $100 million. From its 40,000 square feet of office and warehouse space in Troy, Auburn buys generic drugs from 50 drug manufacturers and has $11 million in drugs on hand at any given time. It repackages the drugs and sells them to independent drugstores, small chain retailers, government agencies and

JACOB LEWKOW

Jeffrey Farber’s formula for managing the growth of Auburn Pharmaceutical Co.: “Hire (the right) people, train them well and provide them with the tools to do the job properly.”

FROM PREVIOUS PAGE

Percent change ranking: 18

subsidiary in Blue Springs, Miss, a joint venture with Toyota Tsusho America Inc. that performs the tire and wheel assembly operation for a Toyota plant.

Revenue growth: $138M Revenue growth ranking: 54 Combined rankings: 72

䡲 What it does: Parts, service, sales

12. The Suburban Collection Troy Revenue 2014/2011: $1.9B/$1.2B Revenue percent change: 57% Percent change ranking: 53

and rental services for the heavy equipment and industrial equipment markets

䡲 How it grew: Entered new markets,

including heavy equipment and contractor rental equipment, and expanded its materials handling business into new territories in northern Indiana and metro Chicago.

Revenue growth: $693.2M Revenue growth ranking: 15 Combined rankiXngs: 68

䡲 What it does: Car dealership 䡲 How it grew: Internal growth, the

recovery of the automotive retail business in metro Detroit and acquisitions. The company bought six dealerships last year, adding to five other purchases it made since 2012.

15. Acro Service Corp. Livonia Revenue 2014/2011: $260.2M/$133M Revenue percent change: 96% Percent change ranking: 19 Revenue growth: $127.2M Revenue growth ranking: 58

hospital pharmacies throughout the country. Drugs are shipped by UPS and FedEx. The company sees an advantage in sticking to the genericdrug market. While many competitors distribute generic and brand drugs, Auburn distributes only generics. The number of generics keeps increasing as big-name drugs become fair game in the generic market. A brand drug becomes generic after its patent expires. The lower costs and expanding market make this a business with plenty more room to grow, the company said. It also has a warehouse in Salt Lake City, which makes distributing to West Coast cities easier. The company hangs on closely to its 100 employees by giving them flexible work schedules, an onsite gym, a personal trainer, frequent parties and profit sharing — even for part-timers in the warehouse. Another crowd pleaser: no copays or deductibles for health care. He said his formula for managing growth “is hire (the right) people, train them well and provide them with the tools to do the job properly.” Meanwhile, Auburn is considering selling bulk ingredients for compounding drugs to small pharmacies. Marti Benedetti

making devices that record vehicle data — to its base in automotive electronics has fueled ongoing growth.

16. General RV Center Inc. Wixom Revenue 2014/2011: $453M/$260M Revenue percent change: 74% Percent change ranking: 32 Revenue growth: $193M Revenue growth ranking: 46 Combined rankings: 78

䡲 What it does: Recreational vehicle dealership 䡲 How it grew: Has expanded its footprint in all of its markets over the past five years. Has added retail locations in suburban Chicago and, last year, near Tampa, Fla. Has expanded its service facilities, sales floors and display lots at most locations, which helped individual outlets grow market share in their markets.

Combined rankings: 77

13. Netlink Software Group of America Inc. Madison Heights Revenue 2014/2011: $180.6M/$71.5M Revenue percent change: 152%

䡲 What it does: Staffing, and IT and

engineering consulting

䡲 How it grew: It expanded its customer base beyond automotive into industries such as aerospace, energy, food and beverage, health care and government.

Percent change ranking: 8 Revenue growth: $109M Revenue growth ranking: 61 Combined rankings: 69

䡲 What it does: IT services and

16. Danlaw Inc.

Percent change ranking: 68

Novi

Revenue growth: $1.1B

Revenue 2014/2011: $90M/$20M Revenue percent change: 350%

䡲 How it grew: Continues to build on relationships in India, where in 2013 it built a 15-acre campus to handle an IT contract with the State Bank of India. The facility houses 4,000 employees.

Percent change ranking: 1

Wixom Revenue 2014/2011: $275M/$137M Revenue percent change: 101%

Detroit Revenue 2014/2011: $3.7B/$2.6B Revenue percent change: 43%

outsourcing

14. Alta Equipment Co.

18. American Axle & Manufacturing Holdings Inc.

Revenue growth: $70M Revenue growth ranking: 77 Combined rankings: 78

䡲 What it does: Developer of electronics, telematics and vehicle network communications systems for the automotive and insurance industries. 䡲 How it grew: Adding telematics for the automotive insurance industry —

Revenue growth ranking: 11 Combined rankings: 79

䡲 What it does: Manufacturer of

driveline systems, chassis systems and forged products for the global automotive industry.

䡲 How it grew: Improved operational performance has helped to compound the benefits of a recovered automotive industry. The company diversified in new regions, adding products to its offerings to pick up customers. SEE NEXT PAGE

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19. Global Automotive Alliance LLC Detroit

Combined rankings: 84

Revenue percent change: 39%

$471.7M/$289.2M

䡲 What it does: Automotive

Percent change ranking: 78

Revenue percent change: 63%

Revenue growth: $3.4B

Percent change ranking: 43

Revenue growth ranking: 7

Revenue growth: $182.5M

Combined rankings: 85

Revenue growth ranking: 47

䡲 What it does: Energy and energy

Combined rankings: 90

dealerships

䡲 How it grew: Acquisitions in addition to the industry uptick.

Revenue 2014/2011: $539M/$329M Revenue percent change: 64% Percent change ranking: 42 Revenue growth: $210M

21. FutureNet Group Inc.

technology

Detroit

䡲 How it grew: DTE’s revenue spike

Revenue 2014/2011: $94M/$33.5M

Revenue growth ranking: 41

Revenue percent change: 181%

Combined rankings: 83

䡲 What it does: Auto manufacturer,

assembler, warehouse sequencer, aerospace warehousing and logistics

䡲 How it grew: Expansions in the

automotive, aerospace and warehousing portions of its business

Percent change ranking: 4

Revenue 2014/2011: $663.3M/$411.4M

23. Penske Corp.

Combined rankings: 85

Bloomfield Hills

䡲 What it does: Construction,

environmental, security and technology services to government agencies

Revenue percent change: 61%

21. DTE Energy Co.

Percent change ranking: 47

Detroit

Revenue growth: $251.9M Revenue growth ranking: 37

䡲 How it grew: A $1.32 billion purchase of Green Courte Partners LLC in 2014 increased portfolio value by about one-third to $5.1 billion.

Revenue 2014/2011: $12.3B/$8.9B

26. Key Safety Systems Inc.

Revenue 2014/2011: $26.4B/$19.3B

Sterling Heights

Revenue percent change: 36%

Revenue 2014/2011: $1.3B/$938M

Percent change ranking: 83

Revenue percent change: 43%

Revenue growth: $7B

Percent change ranking: 67

Revenue growth ranking: 3

Revenue growth: $407M

Combined rankings: 86

Revenue growth ranking: 24

䡲 What it does: Transportation services with subsidiaries operating in retail automotive, truck leasing, transportation logistics, transportation component manufacturing and professional motorsports

Combined rankings: 91

䡲 What it does: Maker of automotive

safety parts such as a seatbelts and airbags

䡲 How it grew: Added customers and

䡲 How it grew: Acquisitions and

increased production related to the industry’s increasing need for safety systems. Is investing to enter new geographic territories and product areas.

same-store growth

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26. Diversified Restaurant Holdings Inc. Southfield

Revenue growth ranking: 81

the acquisition of Smith & Wesson Security Solutions of Tennessee. Has announced it could land $135 million of security and software business in India after signing with the state of Gujarat.

Highland Township

has been powered by increases in the company’s non-utility businesses, namely those for energy trading, gas pipelines and large industrial customers.

Revenue growth: $60.5M

䡲 How it grew: Military contracts and

20. LaFontaine Automotive Group

䡲 What it does:Owns and operates manufactured housing and RVcommunities

Puerto Rico; and Honolulu also have fueled growth. Locally, with downtown Detroit at a 98 percent occupancy rate for rental housing, Sachse’s multifamily division has experienced growth, and the company continues to oversee large projects in the city such as Meridian Health Plan’s headquarters, additions to the Detroit Athletic Club and the new Michigan Humane Society facility.

24. Ramco-Gershenson Properties Trust Farmington Hills Revenue 2014/2011: $218.4M/$117.6M Revenue percent change: 86%

26. Sachse Construction and Development Co. LLC Detroit

Revenue 2014/2011: $128.4M/$60.7M Revenue percent change: 112% Percent change ranking: 13 Revenue growth: $67.7M Revenue growth ranking: 78 Combined rankings: 91

䡲 What it does: Owner, operator and

franchisor of the Bagger Dave’s Legendary Burger Tavern chain and owner of more than 40 Buffalo Wild Wings franchises.

䡲 How it grew: Same-store sales figures continued to climb last year, following a period in 2012 and 2013 when the numbers sputtered. Opened six Bagger Dave’s and three Buffalo Wild Wings last year, and also bought another three Buffalo Wild Wings. Plans to continue opening locations at a clip of five or six Bagger Dave’s and three or four Buffalo Wild Wings a year.

29. Ilitch companies Detroit

Percent change ranking: 23

Revenue 2014/2011: $135.2M/$64.5M

Revenue 2014/2011: $3.3B/$2.4B

Revenue growth: $100.8M

Revenue percent change: 110%

Revenue percent change: 38%

Revenue growth ranking: 65

Percent change ranking: 15

Percent change ranking: 81

Combined rankings: 88

Revenue growth: $70.7M

Revenue growth: $900M

䡲 What it does: Real estate investment trust

Revenue growth ranking: 76

Revenue growth ranking: 14

Combined rankings: 91

䡲 How it grew: Mostly related to

䡲 What it does: Construction, construction management, designbuild, post construction and property maintenance services.

acquisitions completed in 2013 and 2014, along with a $4.6 million increase at existing centers.

䡲 How it grew: Retail business has

grown to include new clients such as Versace, H&M, Tory Burch, Hugo Boss, Williams Sonoma and Pottery Barn. New mall projects in Salt Lake City; San Juan,

25. Sun Communities Inc. Southfield Revenue 2014/2011:

Combined rankings: 95

䡲 What it does: The companies of

Michael and Marian Ilitch include Little Caesars, Detroit Red Wings, Detroit Tigers, Olympia Entertainment and Olympia Development.

䡲 How it grew: Continued demand for products under the Little Caesars brand, with strong ticket sales for Tigers and Red Wings games.

30. International Automotive Components

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Local sporting goods company with $250,000 in A/R ﬁnancing

Southfield Revenue 2014/2011: $5.9B/$4.4B Revenue percent change: 34% Percent change ranking: 88 Revenue growth: $1.5B Revenue growth ranking: 8 Combined rankings: 96

䡲 What it does: Tier-one supplier of

automotive interior and exterior trim parts

Helping manufacturers, service providers, government contractors and more with business cash ﬂow solutions.

major regions as part of a global expansion plan that led to winning work on major global vehicle programs.

31. Michigan CAT

› A/R Financing › Lines of Credit

(248) 658-1100

䡲 How it grew: Grew in each of its

Novi Revenue 2014/2011: $590M/$383M Revenue percent change: 54%

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SEE NEXT PAGE

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$911.4M/$642.4M

Revenue percent change: 76%

Percent change ranking: 55

Revenue percent change: 42%

Percent change ranking: 30

Revenue growth: $207M

Percent change ranking: 70

Revenue growth: $65M

Revenue growth ranking: 42

Revenue growth: $269M

Revenue growth ranking: 80

Combined rankings: 97

Revenue growth ranking: 34

Combined rankings: 110

Combined rankings: 104

䡲 What it does: Publisher of manuals and service information for the automotive industry

䡲 What it does: Longtime Caterpillar equipment dealer that provides sales of new and used equipment as well as rental and parts and service.

䡲 How it grew: Company did not

comment, but demand for heavy equipment has risen with the economy.

32. MJC Cos.

䡲 What it does: Provides a wide range of outsourced IT services to companies around the world. 䡲 How it grew: Investments in new IP

and service offerings led to increased business from clients. Also benefited from internal restructuring that better aligned operations with clients’ operations, as well an improved global business climate.

Macomb Township Revenue 2014/2011: $65.1M/$24.6M

䡲 How it grew: Growth has come from electronic formats for navigation and mobile systems. The addition of new automotive customers also has boosted revenue.

39. Camaco LLC Farmington Hills Revenue 2014/2011: $450M/$300M

Percent change ranking: 6

35. Walbridge Aldinger Co.

Revenue growth: $40.6M

Detroit

Percent change ranking: 59

Revenue percent change: 165%

Revenue percent change: 50%

Revenue growth ranking: 95

Revenue 2014/2011: $1.6B/$1.1B

Revenue growth: $150M

Combined rankings: 101

Revenue percent change: 37%

Revenue growth ranking: 51

䡲 What it does: Residential, apartments, commercial construction, builder and developer

Percent change ranking: 82

Combined rankings: 110

Revenue growth: $420M

䡲 What it does: Supplier of automotive seat structure assemblies

䡲 How it grew: Acquisitions in 2009

and 2010, followed by construction and development projects in 2011 and 2012, bore fruit beginning in 2014.

33. TriMas Corp. Bloomfield Hills

Revenue growth ranking: 22 Combined rankings: 104

䡲 What it does: Construction including general contracting, designbuild, construction management and virtual design services 䡲 How it grew: A rebound in the

automotive manufacturing sector and supplier base caused the most growth.

Revenue 2014/2011: $1.5B/$1.1B Revenue percent change: 38% Revenue growth: $415.1B Revenue growth ranking: 23

Livonia

Combined rankings: 102

Revenue 2014/2011: $61M/$24M

䡲 What it does: Designs,

Revenue percent change: 154%

manufactures and distributes engineered products for the energy, defense, aerospace, livestock, construction and consumer markets.

Percent change ranking: 7

䡲 How it grew: Internal initiatives and acquisitions as the company seeks to exit less profitable businesses and invest in more highly profitable ones, such as those in packaging and aerospace. TriMas spun off Horizon Global Corp. as a publicly traded company in July. Horizon distributes towing, trailer and cargo management products.

Combined rankings: 105

33. Auburn Pharmaceutical Co. Troy Revenue 2014/2011: $92M/43.7M Revenue percent change: 110% Percent change ranking: 14 Revenue growth: $48.3M Revenue growth ranking: 88 Combined rankings: 102

䡲 What it does: Distributor of generic

pharmaceuticals

䡲 How it grew: Increases in the size of

the sales and IT teams led to a significant increase in the company’s Internet business. The addition of a warehouse in the western U.S. allowed it to boost its presence in that part of the country.

Revenue 2014/2011: $98.2M/$51.8M Revenue percent change: 90% SEE NEXT PAGE

Revenue growth: $37M Revenue growth ranking: 98

䡲 What it does: Develops workforce management software for large employers 䡲 How it grew: Growth has been fueled by increased demand for one of its main products, EmpCenter, an application for managing employee work scheduling in accordance with the regulations of specific countries.

38. Jim Riehl’s Friendly Automotive Group Inc. Warren

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Revenue percent change: 64%

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Percent change ranking: 40

Locations in Midtown Detroit, Livonia, Farmington Hills and Macomb County

Revenue growth: $90.7M

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Revenue growth ranking: 68 Combined rankings: 108

䡲 What it does: Automotive dealerships 䡲 How it grew: Increased use of social

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media and Web advertising and greater participation in nonprofit community events. Stepped-up product quality from Chrysler and General Motors brands also has boosted sales.

35. Syntel Inc.

39. Tweddle Group Inc.

Troy

Clinton Township

Revenue 2014/2011:

39. Wolverine Truck Sales Inc. Dearborn

37. WorkForce Software LLC

Percent change ranking: 79

䡲 How it grew: Growth is directly related to the booming automotive market and the large amount of new business it has been awarded.

Revenue 2014/2011: $150M/$85M

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Revenue growth: $134.9M

Percent change ranking: 21

Revenue growth ranking: 55

Revenue growth: $46.4M

Combined rankings: 119

Revenue growth ranking: 89

䡲 What it does: Provider of

Combined rankings: 110

䡲 What it does: Truck sales, parts and service 䡲 How it grew: Pent-up demand for freightliners left over from the recession.

42. Amerisure Mutual Insurance Co. Farmington Hills Revenue 2014/2011: $701.4M/$495.3M Revenue percent change: 42% Percent change ranking: 71

engineering, testing, product development, manufacturing and prototype services to the transportation, defense, theme park, oil and gas, and aerospace industries

䡲 How it grew: Diversified its customer base beyond automotive. Company has several lines of business, including Roush Fenway Racing ; R o u s h P e r f o r m a n c e , a manufacturer of aftermarket performance vehicles and products; and Roush CleanTech , a maker of fuel systems for trucks. Roush announced in January that it will assemble a test fleet of 100 self-driving cars this year for Google Inc.

Revenue growth: $206.1M Revenue growth ranking: 43 Combined rankings: 114

䡲 What it does: Property and

casualty insurance company targeting midsized commercial companies in manufacturing, construction and health care

䡲 How it grew: Has expanded from 13

states to 23 since 2008. It also enjoyed effects of a bounce-back in the construction industry, as well as increases in premium rates.

42. Lear Corp. Southfield Revenue 2014/2011: $17.7B/$14.2B Revenue percent change: 25% Percent change ranking: 108 Revenue growth: $3.6B Revenue growth ranking: 6 Combined rankings: 114

䡲 What it does: Supplier of

automotive seating and electrical distribution systems

䡲 How it grew: Growth reflects $2.6

billion in new business wins, increased production on key platforms and the acquisition of Guilford Performance Textiles.

44. Bridgewater Interiors LLC Detroit Revenue 2014/2011: $2.3B/$1.7B Revenue percent change: 31% Percent change ranking: 99 Revenue growth: $535.5M Revenue growth ranking: 19 Combined rankings: 118

46. ITC Holdings Corp. Novi Revenue 2014/2011: $1B/$757.4M Revenue percent change: 35% Percent change ranking: 86 Revenue growth: $265.7M Revenue growth ranking: 35 Combined rankings: 121

䡲 What it does: Owner and operator

of electricity transmission lines

䡲 How it grew: Operating revenue increased as a result of $2.5 billion in transmission grid investments.

47. Credit Acceptance Corp. Southfield Revenue 2014/2011: $723.5M/$525.2M Revenue percent change: 38% Percent change ranking: 80 Revenue growth: $198.3M Revenue growth ranking: 45 Combined rankings: 125

䡲 What it does: Financial institution providing consumer credit collection services 䡲 How it grew: Growth has resulted from an increase in the size of the loan portfolio due to increases in loan originations in recent years.

48. Plante Moran PLLC Southfield Revenue 2014/2011: $433.1M/$304.5M Revenue percent change: 42%

䡲 What it does: Automotive seating

Percent change ranking: 69

and interiors maker

Revenue growth: $128.6M

䡲 How it grew: Growth has come from renewed contracts with automotive customers as automakers push production higher.

Revenue growth ranking: 57 Combined rankings: 126

䡲 What it does: Accounting and management consulting firm 䡲 How it grew: A 2012 acquisition of

45. Roush Enterprises Inc. Livonia Revenue 2014/2011: $440M/305.1M Revenue percent change: 44% Percent change ranking: 64

Blackman Kallick in Chicago accounts for about $50 million in net revenue beginning in fiscal 2013. Drivers also include growth in the private equity, wealth management, management consulting practice and tax consulting services. SEE NEXT PAGE

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The insurer behind insurers: Quiet – except on bottom line It’s not easy getting noticed when you’re an insurance company that serves other insurance companies — even if you’re a billion-dollar one. H.W. Kaufman Financial Group Inc. had $1.6 billion in revenue last year and employs 1,600 people globally. But since the company deals only with other companies in the insurance industry, brokers and agents mostly, it doesn’t get much attention, especially in a manufacturing-centric state like Michigan. That hasn’t stopped the company from growing by leaps and bounds. Buoyed by organic growth and propelled by consistent acquisitions, it pushed past the billion-dollar mark for the first time in 2012. Revenue has continued to climb since then. Kaufman does not sell insurance to the public, but its customers do. When these agents and brokers are having a hard time finding coverage for something, they call Kaufman. Environmental, cyber liability, architecture, engineering and hurricanes are examples of the types of coverage Kaufman can source. The company does this by employing people with experience and contacts in a given field of coverage. Buying companies that have such people is a handy way of doing that. Two of Kaufman’s recent acquisitions serve as a demonstration of how the company typically places buyouts into its overall strategy. Kaufman’s purchase of Toronto-based Avec Insurance Managers Inc. in January expanded its reach into Canada and the marine insurance market. The September buyout of London-based Oval International, which Kaufman renamed Lochain Patrick , also deepened Kaufman’s marine insurance business while increasing its presence in the United Kingdom. It followed the 2012 pur-

FROM PREVIOUS PAGE

49. Henniges Automotive Auburn Hills Revenue 2014/2011: $824.8M/$611M Revenue percent change: 35% Percent change ranking: 87 Revenue growth: $213.8M Revenue growth ranking: 40 Combined rankings: 127

䡲 What it does: Supplier of sealing

and anti-vibration systems for the automotive industry

䡲 How it grew: Besides getting a boost from the rebounding automotive industry, gains have come from increases in sales in China as well as new programs with existing customers, such as new work with Ford Motor Co. for the F-150 pickup truck.

50. Secure-24 LLC Southfield Revenue 2014/2011: $73M/$40M Revenue percent change: 83% Percent change ranking: 25 Revenue growth: $33M Revenue growth ranking: 105 Combined rankings: 130

䡲 What it does: IT operations, application hosting and cloud services 䡲 How it grew: A 2012 majority

investment by Charlotte, N.C.-based Pamlico Capital has provided the capital needed to invest in new products. Security and enterprise performance management software systems have pushed the company’s revenue and employee count higher.

LARRY PEPLIN

Alan Jay Kaufman is CEO and chairman of H.W.Kaufman Financial Group Inc., which has 15 subsidiaries.“I can’t remember the last time we sold a subsidiary,” he says.

chase of Chesterfield Group Ltd. in London. Besides providing inroads into insurance niches, the acquisitive approach helps Kaufman find talent at a time when universities aren’t producing many insurance-minded graduates. (Kaufman this year gave Michigan State University ’s business school more than $1 million to endow a full-time professorship on the insurance business.)

Alan Jay Kaufman, the CEO and chairman, likens the approach to law firms that hire attorneys for their skills in specific areas of law. “We want to have the best expertise, and we continue to broaden it,” Kaufman said. There are 15 subsidiaries under the Kaufman umbrella, Burns & Wilcox Ltd. being the flagship among them. In the past three years, Kaufman has bought nine companies. These are not private-equity-style investments. “We’re not a seller. I can’t remember the last time we sold a subsidiary,” Kaufman said. The risk of growing through acquisitions is the possibility of cultural mismatches, he said. Sometimes hindsight lets the business owner know that more due diligence could have headed off trouble. But certainty over whether a company will fit only comes after pulling the trigger. Kaufman said he plans for this by setting aside resources beyond that of the purchase price — an emergency kit in case deep surgery is needed to attach subsidiary to parent. Kaufman said he’s never had to turn away from a company he bought. But he has felt twinges of buyer’s remorse when looking back at a deal and realizing more prep work could have been done, or when the target company doesn’t live up to expectations. Buyers should know they might need to send in teams of people who will spend valuable time and money after the purchase to make things right, Kaufman said. “Be ready to do more than pull the plug and say, ‘Forget about it,’ ” he said. Kaufman will have more opportunities to follow this advice as he plans to continue buying companies at a pace of about one a year. 䡲 Gary Anglebrandt

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CRAIN'S LIST: THE FAST 50 Rank

Company Address Phone; website

Top executive(s)

Ranked by combined revenue growth rankings, 2011-2014

Combined Revenue Revenue revenue Revenue % 3-year growth Revenue growth ($000,000) change % change ($000,000) growth rankings 2014/2011 2014-2011 ranking 2014-2011 ranking Reason for increase

Meridian Health Plan Inc. 777 Woodward Ave., Suite 600, Detroit, 48226 (313) 324-3700, www.mhplan.com

David Cotton president and CEO

$1,945.0 $960.6

102%

$984.5

Rapid growth stems from two major trends: health care reform and Medicaid expansion in the states where Meridian does business Michigan, Illinois and Iowa.

Gentherm Inc.

Daniel Coker president and CEO

811.3 369.6

120

441.7

Established a solid global footprint with its buyout of Germany-based W.E.T. Automotive Systems AG in 2011. Growth for the past two years stems from new program launches and strong sales of vehicles in which Gentherm's products are installed.

Paul Steel president

477.4 197.5

142

279.9

Southfield Dodge Chrysler Jeep Ram 28100 Telegraph Road, Southfield, 48034 (248) 354-2950, southfieldchrysler.com

Timothy Schriner president and CEO

388.0 142.0

173

246.0

RevSpring Inc. 29241 Beck Road, Wixom, 48393 (248) 567-7300, www.revspringinc.com

Andrew Greenlee president and CEO

500.0 235.0

113

265.0

U.S. Farathane Corp. 2700 High Meadow Circle, Auburn Hills, 48326 (248) 754-7000, www.usfarathane.com

United Road Services Inc. 10701 Middlebelt Road, Romulus, 48174 (734) 947-7900, unitedroad.com

Kathleen McCann president and CEO

530.2 259.0

105

271.2

Increased use of marketing, social media and advertising has led to an increase in customers and buyers. All three of the company's stores were recently bought by Salt Lake City-based dealer Ken Garff, who has aided in its stability and profitability. New York-based Compass Investment Partners Fund LP combined several companies to form RevSpring in 2012. Organic growth, combined with more acquisitions, including three buyouts in the past 18 months, has added further revenue growth. Grown with the automotive industry’s upswing. Was bought by Los Angeles-based private equity firm Gores Group in December for more than $100 million and plans to grow further through acquisitions. Growth has come from an expanded customer base and an acquisition in December 2013 of the auto transport division of Waggoners Trucking. It also expanded its national network.

1,625.0 950.0

675.0

Has 15 subsidiaries and makes one acquisition a year on average. Recent acquisitions have deepened the company's presence in Canada and the United Kingdom, and in the marine insurance business.

838.2 473.8

364.4

Received a large contract from Fiat Chrysler Automobiles that led to a new plant in Toledo, Ohio. New work from Ford Motor Co. and General Motors Co. also has pushed growth.

520.0 273.0

247.0

Increased its holdings of owned apartment buildings and affordable multifamily housing in recent years as part of a strategy to invest where rents are increasing. A recent major expansion in Tampa, Fla.

1 2

7 8 9 10 11 12 13

21680 Haggerty Road, Suite 101, Northville, 48167 (248) 504-0500, www.gentherm.com

Alan Jay Kaufman H.W. Kaufman Financial Group Inc./Burns & chairman, president Wilcox Ltd. 30833 Northwestern Highway, Farmington Hills, and CEO 48334; (248) 932-9000, www.kaufmanfinancialgroup.com Vincent Johnson Piston Automotive LLC chairman and CEO 12723 Telegraph Road, Redford Twp., 48239 (313) 541-8674, www.pistongroup.com Albert Berriz, CEO; McKinley Inc. Matthew Mason, 320 N. Main St., Suite 200, Ann Arbor, 48104 senior vice president (734) 769-8520, www.mckinley.com FCA US LLC 1000 Chrysler Drive, Auburn Hills, 48326-2766 (248) 576-5741, www.fcanorthamerica.com

Sergio Marchionne chairman and CEO

83,057.0 54,981.0

28,076.0

Sales of vehicles under the Jeep, Ram and Chrysler nameplates have been strong, helping to propel the parent company's global sales to 7 percent growth last year.

James Group International Inc. 4335 W. Fort St., Detroit, 48209 (313) 841-0070, www.jamesgroupintl.com

John James chairman and CEO

133.0 30.0

343

103.0

The Suburban Collection 1795 Maplelawn Drive, Troy, 48084 (877) 471-7100, www.suburbancollection.com

David Fischer chairman and CEO

1,914.5 1,221.3

693.2

Building on expansions into exports, logistics software for automotive companies, consolidating and sequencing of container shipments, and strong growth at its Magnolia Automotive Services LLC subsidiary in Blue Springs, Miss, a joint venture with Toyota Tsusho America Inc. Internal growth, the recovery of automotive retail business in metro Detroit and acquisitions. It bought six dealerships last year, adding to five purchases since 2012.

Netlink Software Group of America Inc. 999 Tech Row, Madison Heights, 48071 (248) 204-8800, www.netlink.com

Dilip Dubey, executive chairman; Anurag Shrivastava co-founder and CEO; Greg Hacias, N.A. president Steven Greenawalt CEO

180.6 71.5

152

109.0

Continues to build on relationships in India, where in 2013 it built a 15-acre campus to handle an IT contract with the State Bank of India. The facility has 4,000 employees.

275.0 137.0

101

138.0

Entered new markets, including heavy equipment and contractor rental equipment, and expanded materials handling business into northern Indiana and metro Chicago.

Alta Equipment Co. 28775 Beck Road, Wixom, 48393 (248) 449-6700, www.altaequipment.com

Acro Service Corp. 39209 W. Six Mile Road, Suite 250, Livonia, 48152; (734) 591-1100, www.acrocorp.com

Ron Shahani president and CEO

260.2 133.0

127.2

Automotive industry rebound and continued to expand its customer base in industries such as, aerospace, energy, food and beverage, medical, consumables and the government sector.

Danlaw Inc. 41131 Vincenti Court, Novi, 48375 (248) 476-5571, www.danlawinc.com

Raju Dandu chairman and CEO

90.0 20.0

350

70.0

Added telematics for the automotive insurance, making devices that record vehicle data, to its base in automotive electronics.

General RV Center Inc. 25000 Assembly Drive, Wixom, 48393 (248) 349-0900, www.generalrv.com

Robert Baidas CEO; Loren Baidas president and chairman

453.0 260.0

193.0

American Axle & Manufacturing Holdings Inc.

David Dauch chairman, president and CEO

3,696.0 2,585.0

1,111.0

Has expanded its footprint in all of its markets over the past five years. Has added retail locations in suburban Chicago, and last year near Tampa, Fla. Expanded its service facilities, sales floors and display lots at most locations, which helped outlets grow market share. Improved operational performance allowed the company to compound the benefits of a recovered automotive industry. Diversified in new regions, adding products to pick up customers.

William Pickard chairman and CEO; Sylvester Hester vice chairman Michael LaFontaine owner and president Maureen LaFontaine owner and vice president Perry Mehta president and CEO

539.0 329.0

210.0

Expansions in the automotive, aerospace, and warehousing portions of its business.

663.3 411.4

251.9

Acquisitions in addition to the industry uptick.

94.0 33.5

181

60.5

Military contracts and acquisition of Smith & Wesson Security Solutions of Tennessee. Has announced it could land $135 million of government security and software business in India.

16 18 19 20

One Dauch Drive, Detroit, 48211 (313) 758-2000, www.aam.com Global Automotive Alliance LLC 2627 Clark St., Detroit, 48210 (313) 297-6676 LaFontaine Automotive Group 4000 W. Highland Road, Highland Township, 48357; (248) 887-4747, www.thefamilydeal.com

FutureNet Group Inc. 12801 Auburn St., Detroit, 48223 (313) 544-7117, www.futurenetgroup.com

DTE Energy Co. 1 Energy Plaza, Detroit, 48226 (800) 235-8000, www.dteenergy.com

Gerard Anderson chairman and CEO

12,301.0 8,858.0

3,443.0

DTE’s revenue spike has been powered by increases in the company’s non-utility businesses, namely those for energy trading, gas pipelines and large industrial customers.

Roger Penske chairman

26,350.0 19,330.0

7,020.0

Acquisitions and same-store growth

Penske Corp. 2555 Telegraph Road, Bloomfield Hills, 48302-0954 (248) 648-2000, www.penske.com

Dennis Gershenson president and CEO

218.4 117.6

100.8

Ramco-Gershenson Properties Trust 31500 Northwestern Highway, Suite 300, Farmington Hills, 48334 (248) 350-9900, www.rgpt.com

Mostly related to acquisitions completed in 2014 and 2013, along with a $4.6 million increase at existing centers.

Gary Shiffman president and CEO

471.7 289.2

182.5

Sun Communities Inc. 27777 Franklin Road, Suite 200, Southfield, 48034; (248) 208-2500, www.suncommunities.com

The $1.32 billion purchase of Green Courte Partners LLC in 2014 increased portfolio value by about one-third to $5.1 billion.

CONTINUED ON PAGE 20

This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Fastest growing is a measurement of revenue growth and does not denote whether a company is profitable. It is not a complete listing but the most comprehensive available.

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CONTINUED FROM PAGE 19 Company Address Rank Phone; website

Top executive(s)

Ranked by combined revenue growth rankings, 2011-2014

Combined Revenue Revenue revenue Revenue % 3-year growth Revenue growth ($000,000) change % change ($000,000) growth rankings 2014/2011 2014-2011 ranking 2014-2011 ranking Reason for increase

Key Safety Systems Inc. 7000 19 Mile Road, Sterling Heights, 48314 (586) 726-3800, www.keysafetyinc.com

Jason Luo president and CEO

$1,345.0 $938.0

43%

$407.0

Added customers and increased production related to the industry's increasing need for safety systems. Is investing to enter new geographic territories and product areas.

Todd Sachse, CEO and founder Steve Berlage, president and COO

135.2 64.5

110

70.7

Sachse Construction and Development Co., LLC 1528 Woodward Ave., Suite 600, Detroit, 48226 (313) 481-8200, www.sachse.net

Michael Ansley chairman, president and CEO

128.4 60.7

112

67.7

Diversified Restaurant Holdings Inc. 27680 Franklin Road, Southfield, 48034 (248) 223-9160, www.diversifiedrestaurantholdings.com

Ilitch companies 2211 Woodward Ave., Detroit, 48201 (313) 471-6600, www.ilitchcompanies.com

Christopher Ilitch president and CEO

3,300.0 2,400.0

900.0

Retail business has grown to include new clients such as Versace, H&M and Pottery Barn. New mall projects in Salt Lake City, Puerto Rico and Honolulu. Locally, with downtown Detroit at 98 percent occupancy rate for rental housing, Sachse's multifamily division has grown, and the company continues to oversee large projects in the city such as Meridian Health Plan's headquarters. Same-store sales figures continued to climb last year, after a period in 2012 and 2013 when numbers sputtered. Opened six Bagger Dave's and three Buffalo Wild Wings last year, and also bought another three Buffalo Wild Wings. Plans to continue opening locations at a clip of five or six Bagger Dave's and three or four Buffalo Wild Wings a year. Continued demand for products under the Little Caesars brand, with strong ticket sales for Tigers and Red Wings games.

International Automotive Components

Robert Miller president and CEO

5,900.0 4,400.0

1,500.0

Grew in each of its major regions as part of a global expansion plan that led to winning work on major global vehicle programs.

Michigan CAT 24800 Novi Road, Novi, 48375 (248) 349-4800, www.michigancat.com

Bill Hodges executive vice president

590.0 383.0

207.0

Company did not comment, but demand for heavy equipment has risen with the economy.

Michael Chirco president, managing member, CEO

101

65.1 24.6

165

40.6

MJC Cos. 46600 Romeo Plank Road, Suite 5, Macomb Township, 48044 (586) 263-1203, www.mjccompanies.com

Acquisitions in 2009 and 2010, followed by construction and development projects in 2011 and 2012, bore fruit beginning in 2014.

David Wathen president and CEO

102

1,499.1 1,084.0

415.1

TriMas Corp. 39400 Woodward Ave., Suite 130, Bloomfield Hills, 48304 (248) 631-5450, www.trimascorp.com

Internal initiatives and acquisitions as the company seeks to exit lessprofitable businesses and invest in more highly profitable ones, such as those in packaging and aerospace. TriMas spun off Horizon Global Corp. as a publicly traded company in July.

Auburn Pharmaceutical Co. 2354 Bellingham, Troy, 48083 (248) 526-3700, auburngenerics.com

Jeffrey Farber chairman, president and CEO

102

92.0 43.7

110

48.3

Increases in the size of the sales and IT teams led to a significant increase in internet business. The addition of a warehouse has boosted its presence in western U.S.

911.4 642.4

269.0

Walbridge Aldinger Co. 777 Woodward Ave., Suite 300, Detroit, 48226 (313) 963-8000, www.walbridge.com

Bharat Desai chairman Nitin Rakesh CEO and president John Rakolta Jr. chairman and CEO

104

Syntel Inc. 525 E. Big Beaver Road, Suite 300, Troy, 48083 (248) 619-2800, www.syntelinc.com

104

1,550.0 1,130.0

420.0

Investments in new IP and service offerings led to increased business from clients.Also benefited from internal restructuring that better aligned operations with clients' operations and improved global business climate. A rebound in the automotive manufacturing sector and supplier base caused the most growth.

WorkForce Software LLC 38705 Seven Mile Road, Livonia, 48152 (877) 493-6723, www.workforcesoftware.com

Kevin Choksi CEO

105

61.0 24.0

154

37.0

Increased demand for one of its main products, EmpCenter, an application for managing employee scheduling in accordance with regulations of specific countries

Jim Riehl's Friendly Automotive Group Inc. 32899 Van Dyke Ave., Warren, 48093 (586) 979-8700, www.jimriehl.com

James Riehl Jr. president and CEO

108

231.7 141.0

90.7

Increased use of social media and Web advertising and greater participation in nonprofit community events. Stepped-up product quality from Chrysler and GM brands also has boosted sales.

Tweddle Group Inc. 24700 Maplehurst, Clinton Twp., 48036 (586) 307-3700, www.tweddle.com

Paul Wilbur CEO and president

110

150.0 85.0

65.0

Growth has come from electronic formats for navigation and mobile systems. The addition of new automotive customers also has boosted revenue.

Arvind Pradhan Camaco LLC 37000 12 Mile Road, Suite 105, Farmington Hills, president and CEO 48331 (248) 442-6800, www.camacollc.com Lynn Terry Wolverine Truck Sales Inc. president 3550 Wyoming Ave., Dearborn, 48120 (313) 849-0800, www.wolverinetruckgroup.com Gregory Crabb Amerisure Mutual Insurance Co. president and CEO 26777 Halsted Road, Farmington Hills, 48331 (248) 615-9000, www.amerisure.com Matthew Simoncini Lear Corp. president and CEO 21557 Telegraph Road, Southfield, 48033 (248) 447-1500, www.lear.com Ronald Hall Sr. Bridgewater Interiors LLC president and CEO 4617 W. Fort St., Detroit, 48209 (313) 842-3300, www.bridgewater-interiors.com Evan Lyall Roush Enterprises B CEO 12447 Levan, Livonia, 48150 (734) 779-7006, www.roush.com

110

450.0 300.0

150.0

Growth is directly related to the booming automotive market and the large amount of new business it has been awarded.

110

98.2 51.8

46.4

Pent-up demand for freightliners left over from the recession.

114

701.4 495.3

206.1

Has expanded from 13 states to 23 since 2008. Also enjoyed effects of a bounce in the construction industry as well as increases in premium rates.

114

17,727.3 14,156.5

108

3,570.8

Growth reflects $2.6 billion in new business wins, increased production on key platforms and the acquisition of Guilford Performance Textiles.

118

2,281.5 1,746.0

535.5

Growth has come from renewed contracts with automotive customers as automakers push production higher.

119

440.0 305.1

134.9

Diversified its customer base beyond automotive. It has several lines of business, including Roush Fenway Racing; Roush Performance, a manufacturer of aftermarket performance vehicles and products; and Roush CleanTech, a maker of fuel systems for trucks. Roush announced that it will assemble a test fleet of 100 self-driving cars this year for Google Inc. Operating revenue increased as a result of $2.5 billion in transmission grid investments.

39 39 42 42 44 45

28333 Telegraph Road, Southfield, 48034 (248) 455-7000, www.iacgroup.com

ITC Holdings Corp. 27175 Energy Way, Novi, 48377 (248) 946-3000, www.itctransco.com

Joseph Welch chairman, president and CEO

121

1,023.0 757.4

265.7

Credit Acceptance Corp. 25505 W. 12 Mile Road, Southfield, 48034 (248) 353-2700, www.creditacceptance.com

Brett Roberts CEO

125

723.5 525.2

198.3

Growth has resulted from an increase in the size of the loan portfolio due to increases in loan originations in recent years

126

433.1 304.5

128.6

Gordon Krater Plante Moran PLLC 27400 Northwestern Highway, Southfield, 48037 managing partner (248) 352-2500, www.plantemoran.com

Henniges Automotive 2750 High Meadow Circle, Auburn Hills, 48326 (248) 340-4100, www.hennigesautomotive.com

Douglas DelGrosso CEO

127

824.8 611.0

213.8

A 2012 acquisition of Blackman Kallick in Chicago accounts for about $50 million in net revenue beginning in fiscal 2013. Drivers also include growth in the private equity, wealth management, management consulting practice and tax consulting services. Increased sales with the automotive industry rebound. Also now wholly owns what was a joint venture in China, which further boosted revenue along with growing sales.

Mike Jennings CEO

130

73.0 40.0

33.0

105

Secure-24 LLC 26955 Northwestern Hwy., Southfield, 48033 (800) 332-0076, secure-24.com

A 2012 majority investment by Charlotte, N.C.-based Pamlico Capital has provided the capital needed to invest in new products. Security and enterprise performance management software systems has pushed the companyâ&#x20AC;&#x2122;s revenue and employee count higher.

B Figures do not include revenue of Roush Fenway, Concord, N.C. LIST RESEARCHED BY SONYA D. HILL

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SPECIAL REPORT: MICHIGAN MARY KRAMER Publisher mkramer@crain.com

Bus picks up strange bedfellows Chad Livengood’s report in The Detroit News last week is giving new life to the adage “Politics makes strange bedfellows.” His scoop: Interviews and audiotapes that indicate state Rep. Todd Courser, R-Lapeer and a Tea Party favorite, tried to persuade a staffer to anonymously distribute a fictional email alleging that Courser had been discovered having sex with a male prostitute. The intent: Make the email appear that it came from a political enemy. The reason: To conceal Courser’s alleged extramarital relationship with another Tea Party favorite, Rep. Cindy Gamrat. This is delicious, of course, for folks who don’t like Courser’s and Gamrat’s flavor of politics. Earlier, Gamrat was thrown out of her own party’s caucus for leaking internal party discussions. Maybe this is what having the “right people on the bus” means. A couple of weeks ago, Rep. Al Pscholka, R-Stevensville, invoked that philosophy by urging attendees of a Michigan Association of Health Plans conference to support their PAC and ensure Al Pscholka: Need the “right people right people on “bus” are on the bus,” — aka Legislature. meaning the Legislature. The bus analogy was popularized by author Jim Collins in his book Good to Great. Pscholka never mentioned names. But he was one of the Republicans who led the charge to eject Gamrat. Maybe it’s no surprise that in May, Pscholka was named “most effective” state representative in a survey of political insiders conducted on behalf of the Michigan Information Research Service. Clearly, Pscholka has taken a page from Collins. He also credits having served in local government first as a trustee for a township and a water-sewer authority. He won election to the House on his reputation for helping resolve the “water wars” between St. Joseph and Lincoln Township — akin to Detroit’s own city-suburb spats. The solution: A water services joint operating board with three representatives from both. The key, Pscholka said, was you needed four votes to get anything passed, so you needed collaboration. Pscholka ran for House Speaker and lost. But chairing appropriations seems like the right seat — at least for now. 䡲

BUSINESS

PHOTOS BY JON BROUWER

Sustainability“is hard to add up in a standard,balance sheet-type approach,” says Gabe Wing,Herman MillerInc.’s directorofsafetyand sustainability. But numbers showit matters.

Herman Miller quantifies savings, educates suppliers to build social impact philosophy By Rod Kackley Special to Crain’s Detroit Business

or the past decade and a half, one of the largest office furniture manufacturers in West Michigan, Herman Miller Inc., has been practicing sustainability, often defined as part of a business philosophy known as the Triple Bottom Line: Earn a profit, protect the environment and improve your community and world through social issue awareness. Herman Miller began moving down the sustainability path more than half a century ago. Since then, the Zeeland-based office furniture manufacturer has found that quantifying the impact of implementing sustainable business practices can be tough. “I think it is hard to add up in a standard, balance sheet-type approach,” said Gabe Wing, Herman Miller’s director of safety and sustainability. But, he said, the company’s 2014 statistics show Herman Miller is on the right track. Recycling revenue last year was close to $2.5 million. Herman Miller also was able to save $800,000 by reducing tipping fees and landfill costs, Wing said. Harder to measure is the impact of sustainability programs on customers, he said. Wing said customers care about greener products but mostly aren’t willing to pay more. “So you have to find ways to incorporate this in your product design up front and not necessarily sacrifice product performance,” he said.

Suppliers of chair spines and other parts must meet Herman Miller’s sustainability standards. But at the same time, Wing said, customers do care. Almost every commercial customer asks some question about the company’s environmental impact before signing a contract. Wing said nearly a quarter of Herman Miller’s customers go even further, putting environmental impact concerns in the top three of their selection criteria. “If you do the math based on our numbers last year, that’s about $500 million worth of business won or lost depending on how well we do in this area,” he said. “It matters.”

‘A good steward’ While Herman Miller’s commitment to sustainability has increased over the past 15 years, the company had been working toward this point for decades. Dirk Jan (D.J.) De Pree, the founder and longtime leader of Herman Miller Inc., tasked the company in 1953 with the directive of “being a good steward

of the environment.” But, Wing said, the company didn’t formalize its strategy until 2004. Perfect Vision, the name given to that strategy, was a set of environmental goals that included a zero-operational footprint — redesigning manufacturing to eliminate the impact related to waste, water and energy — and 100 percent renewable energy. A decade later, Wing said, Herman Miller has largely met those goals by reducing its operational footprint by 91 percent and getting 100 percent of its electricity from renewable sources. That meant it needed to set a new goal. Wing and his staff met with Brian Walker, CEO of Herman Miller, and created the Earthright program, which falls under the umbrella of Herman Miller’s Better World, the idea that the company has a role in making life better on our planet. Among Earthright’s goals are zero waste, and 50 percent reduction in water use and energy intensity. “We have been working in those areas for a long time,” Wing said. “But just in the past decade, we have really worked at pulling them together underneath the Earthright umbrella and packaging it all together in a way the public expects to see.” Wing said they also decided to broaden the scope of the sustainability strategy outside the walls of their headquarters southwest of Grand Rapids. “We could be perfect inside of Herman Miller SEE SUSTAINABLE, PAGE 22

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SUSTAINABLE FROM PAGE 21

but still not move the needle,” he said. It was time to bring sustainability to Herman Miller’s suppliers, which account for 80 percent of the company’s sustainability impact.

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Supplier relations Wing said bringing suppliers into the program has been, and still is, a pull, not a push. The company started three years ago by targeting suppliers by commodity — knowing that working with aluminum is very energy intensive, for instance — and by which of them were most likely to jump on board. “We showed them we were saving about $700,000 in energy efficiency and asked them if they would be willing to sit down and work with us on this,” Wing said. “We were not telling them what they had to work on. But we asked them to spend some time and learn to look at their operations through the lens of sustainability.” Sixteen suppliers agreed to join the program, and Wing’s team went into their plants to help them implement sustainable business practices. Wing said the company uses the lens of Life Cycle Assessment, which allows manufacturers to quantify all of the inputs and outputs associated with making a product. “If you are making a chair, we are going to determine how much steel goes into that chair, how much aluminum, how much of each type of plastic, and do we paint it?” Wing said. He said the assessment also examines how much iron ore has to come out of the ground to make a pound of steel, how much energy it takes to turn that pound of steel into a shape of a chair, and then to wash it, paint it, ship it around the supply chain, ship it to a customer and even what happens to that chair at the end of the product’s life cycle. Will it be thrown into a landfill or recycled? Wing said 80 percent of suppliers are on board, and Herman Miller is still working to get to 100 percent.

Setting a standard

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Tom Reardon, executive director of the Business & Institutional Furni ture Manufacturers Association , a Grand Rapids-based trade and voluntary standard-setting association, said the industry’s evolution in sustainability led to the creation of the E3 Sustainability manufacturing standard in 2010. The standard is designed to provide an open platform for measurements, definitions and performance criteria for addressing environmental and social considerations throughout the supply chain. “They had been working on environmental and sustainability initiatives for a long time. Having them come together to help draft this industry standard was a sign the industry needed to harmonize on how we define these terms and how we measure our products relative to sustainability metrics,” Reardon said. Norman Christopher, director of Grand Valley State University’s Office

JON BROUWER

Herman Miller’s sustainabilityplans include recycling most unused items,from wire and cardboard to defective chairshells. of Sustainability and the author of Sustainability Demystified, said the E3 standard also shows that from a manufacturing point of view, sustainability is becoming a fact of life. However, Bill Stough, CEO of the Sustainable Research Group, a sustainability consulting firm in Grand Rapids, said not everyone is on board with the Triple Bottom Line concept. Stough, who was one of the founding members of the West Michigan Sustainable Business Forum

in 1994, said 20 years ago the case for the concept of sustainable business was still hazy. And for some companies, it still is. “There are still a lot of organizations that see it (sustainable business) as fuzzy logic and tree-hugging propaganda,” Stough said. “Then there are others that realize it is the future of the marketplace.” But Dan Schoonmaker, director of the Sustainable Business Forum — an association of businesses that share best practices and sustainable business techniques and includes Herman Miller, Haworth and Steel case — believes the model of a sustainable business is becoming more mainstream. “It is not as novel as it had been,” he said. “When this organization launched, it was the first time we were having a conversation about it. Now, two decades later, those initial conversations have been canonized and it is considered to be foundational knowledge.” Schoonmaker said sustainability was originally conceived as a high breed of corporate responsibility and philanthropy. “But today we are hearing the sustainability conversation at the rank-and-file level, not just the CEO level,” he said. Reardon said the concept and practice of sustainability has evolved relatively smoothly in the office furniture industry. So what’s next? “When we started drafting the E3 standard in 2006-2008, a lot of the conversation was around climate change, greenhouse gases and environmental impact,” he said. “The spotlight has shifted now toward human health.” Reardon expects the evolution to continue. “Ten years ago, it was all about global warming,” he said. “Ten years from now, who knows what it will be? The spotlight might shine brighter on social responsibility.” 䡲

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WORLD WATCH WHERE MICHIGAN DOES BUSINESS Amway Corp.

PHILIPPINES

Based: Ada Operations: Headquarters in Makati

City, a training center in Baguio City and six distribution centers throughout the Luzon, Visayas and Mindanao islands Employees: NA Products/Services: Nutrition, beauty and home consumer goods such as Nutrilite brand vitamins and dietary supplements, Artistry brand premium skincare and technology, including eSpring, a home water treatment system Top executive: Leni Olmedo, country manager More information: Amway is a member of the Direct Selling Association of the Philippines and the Chamber of Cosmetics Industry of the Philip pines .

ith a 2014 GDP of $284.9 billion, the Philippines has LUZON the 30th-largest economy in the world. The country has been in a surplus since 2003, according to the Manila CIA World Factbook, and economic growth averaged 6 percent per year Makati during 2011-2014. However, unemployment still sits at 7 percent, and underemployment is near 20 percent of the population. The Philippines’ major exports are VISAYAS semiconductors, garments, copper Lapu-Lapu products, transport equipment, coconut oil, petroleum products and fruit. Its major export partners are Japan (22.5 percent), the United States (14 percent), China (12.1 perMINDANAO cent) and Hong Kong (9 percent). Its major imports are mineral fuels, iron and steel, textile fabrics, grains, electronic products, machinery and transport equipment, chemicals and plastic. Its major import partners are China (15 percent), the United States (8.7 percent), Japan (8.1 percent) and South Korea (7.8 percent).

Crain’s World Watch 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 Gary Piatek, senior editor, at gpiatek@crain.com.

Coming up September: Brazil October:: The Netherlands 2011 in Pasig City.

General Motors Co.

Ford Motor Co.

Based: Detroit Operations: The Covenant Car Company Inc., a General Motors Co. distribu-

AUTOLIV INC.

AutoLiv Inc. has one manufacturing facility in Lapu-Lapu City.

Based: Detroit Operations: Headquarters in

Autoliv Inc. Based: Auburn Hills Operations: One manufacturing fa-

cility in Lapu-Lapu City Employees: 1,130 Products/Services: Leather and foam steering wheels and leather wrapping Top executive: Yasushi Hasegawa, general manager of Autoliv Cebu Safety Manufacturing clients: Honda, Mazda, Mitsubishi, Nissan, Suzuki and Toyota

Muntinlupa City and six dealer principals who operate about 40 dealership outlets throughout the country Employees: 70 Products/Services: Marketing and sales of Ford vehicles, such as the Fiesta, Focus, EcoSport, Escape, Mustang and after-sales services at Ford dealerships Top executive: Kay Hart, managing director, Ford Philippines

tor, has headquarters in Makati City and a global business services office in Bonifacio Global City with 25 dealerships across the country. Employees: 100 Products/Services: Chevrolet motor vehicles such as the Captiva SUV, Chevy Cruze, Malibu Sedan, Sonic subcompact car and the Spark mini-car Top executive: Tad Wakamatsu, general director, GM Southeast Asia Operations

Domino’s Pizza Inc. Based: Ann Arbor Operations: Headquarters in Pasig

City and 17 other stores across the country Employees: 250 Products/Services: Traditional Domino’s products, plus pulled pork pizza, spaghetti and apple crumble dessert pizza Top executive: Ricardo Abaya, franchise owner Clients: Retail pizza customers More information: Domino’s first store in the Philippines opened in

ZIEBART INTERNATIONAL

Thomas Wolfe, CEO of Ziebart International, awards a plaque to the company’s

master franchisee in Makati City for 40 years of service.

More information: The Philippines is GM’s second-largest market in Southeast Asia.

Lear Corp. Based: Southfield Operations: Manufacturing, admin-

istrative, technical and warehouse facilities in Lapu-Lapu City Employees: 3,700 Products/Services: Wire harnesses, junction boxes as well as research and development efforts Top executive: Jay Kunkel, president of Asia Pacific operations Clients: Ford Motor, General Motors and Nissan

VisionIT Based: Detroit Operations: An information technol-

ogy resource center of excellence in Manila. VisionIT’s centers of excellence sustain quality in IT infrastructures management, enterprise applications, mobility solutions and other initiatives. Employees: 55

Products/Services: Application development, Web and mobile development and IT infrastructure support Top executive: Jose Capistrano, managing director

Ziebart International Based: Troy Operations: A master franchisee in

Makati City, two other companyowned stores in Quezon City and Pasig City, and four sub-franchisee stores in Manila, Batangas, Cavite and Cebu Employees: 114 Products/Services: Appearance and protection services, including professional detailing, paint protection coatings, underbody sound barrier, sprayed-on bed liners, automotive glass repair, architectural film, window tint, paint protection film, truck accessories, electronics and scratch repair services Top executive: Thomas Wolfe, president and CEO of Ziebart International Natalie Broda

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24 CONSULTING Jeff Henel to managing director and partner, Sagin LLC, Grosse

Pointe, from client partner, NTT DATA Americas Inc., Chicago. Trevor Woollatt to project manager, environmental services group, G2 Consulting Group LLC, Ann

Arbor,from brownfield/real estate due diligence team leader, Superior Environmental Corp., Wixom. Susan Semack to senior vice president, health care division, Morpace Inc., Farmington Hills, from vice president.

EDUCATION Jon MargerumLeys to dean,

Margerum-Leys

school of education and human services, Oakland University, Rochester Hills, from dean, school of education, California

People on the Move announcements are limited to management positions. Email cdbdepartments@crain.com. Include personâ&#x20AC;&#x2122;s name, new title, company, city in which the person will work, former title, former company (if not promoted from within) and former city in which the person worked. Photos are welcome, but we cannot guarantee they will be used.

PEOPLE

SPOTLIGHT DAVID BROOKS, president, St. Joseph Mercy Ann Arbor, St. Joseph Mercy Livingston

ON THE MOVE Polytechnic State University at San Luis Obispo, Calif.

FOOD Emily Marrah to director of catering, Cutting Edge Cuisine LLC, Bloomfield

Township, from director of catering, CafĂŠ Boulud, Palm Beach, Fla. Kathryn Correll to manager, quality improvement strategy, MedNetOne Health Solutions, Oakland Township, and Andrew Kurecka to manager, out-

David Brooks has been named president of two St. Joseph Mercy Health System hospitals: St.

LAW

Joseph Mercy Ann Arbor and St. Joseph Mercy Livingston.

James Dworman to president, Dean & Fulkerson PC, Troy, from vice president. Also, Curtis Mistele and Robert Figa to partners/sharehold-

ers, from partners, Campbell Oâ&#x20AC;&#x2122;Brien & Mistele PC, Troy.

Brooks, 54, succeeds Rob Casalou, who was promotBrooks ed last fall to regional president and CEO of St. Joseph Mercy Health System. Brooks previously was president of St. John Hospital and Medical Center in Detroit and senior vice president of the systemâ&#x20AC;&#x2122;s east region. Before that, he was CEO of Providence Health and Serviceâ&#x20AC;&#x2122;s northwest Washington service area. Brooks earned a masterâ&#x20AC;&#x2122;s degree in hospital administration from the University of Michigan and a bachelorâ&#x20AC;&#x2122;s with honors from Wayne State University. He is on the board of directors for the Chandler Park Conservancy as well as the Wayne State masters of public health external advisory committee. He is a fellow with the American College of Healthcare Executives.

Kellie Becker to leader, international tax practice, Plante Moran PLLC, Southfield. She is a partner at the firm.

comes research, both from quality improvement specialist.

HEALTH CARE Marya Drygalski to clinical director, CARE of Southeastern Michigan,

Fraser, from MEAP coordinator/clinician, Renewal Christian Counseling Center Inc., Clinton Township. Drygalski Bryan Roach to vice president, PMO/LEAN operations, Detroit Medical Center, Detroit. He continues as senior director of operations finance.

Richey

Mackenzie

SERVICES Shannon Richey to general manager, Detroit laboratory operations, Asterand Bioscience Inc., Detroit, from senior director, custom procurement business segment. Also, Jean Mackenzie to manager, custom procurement, from custom procurement operations manager. äĄ˛

DEALS & DETAILS CONTRACTS Paradigm Diagnostics Inc., Ann

Arbor, which specializes in providing cancer testing, has entered into an agreement with Stratose Inc., Atlanta, a provider of solutions for managing health care costs, for coverage of PCDx, a diagnostic test to provide physicians and patents with a more targeted, personalized approach to cancer treatment by identifying the underlying genomic and proteomic alterations of a patients tumorâ&#x20AC;&#x2122;s DNA, RNA and protein. Websites: paradigmdx.org, stratose.com. Parts Galore LLC, Detroit, a selfservice auto parts company and affiliate of Soave Enterprises LLC, has selected Trent Creative, Rochester, as its agency of record. Websites: trentcreative.com, partsgalore.com. WRCJ 90.9 FM, Detroit, a classical and jazz radio station, has renewed its business agreement with Detroit Public Schools, which allows Detroit Public Television, Wixom, to manage the station for the school district until 2021. Websites: dptv.org, wrcjfm.org.

EXPANSIONS AT&T authorized retailer loca-

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tions, owned and operated by Spring Mobile, have opened at Studio One Plaza, 4501 Woodward Ave., Detroit, and Shoppes at Detroit, 1347 W. Eight Mile Road, Detroit. A remodeled location, owned and operated by Pagetec Wireless, has opened at 111 Monroe St., Detroit. Website: att.com/find-a-store. Playground Detroit, an online magazine, curated marketplace, event production and digital media company, has opened its first headquarters at 1535 Sixth St., Suite 5D, Detroit. The companyâ&#x20AC;&#x2122;s re-launch includes an optimized website with e-commerce platform developed by Canfield Creative Studio, Detroit. Website: playgrounddetroit.com. Big Lots Inc., Columbus, Ohio, opened a store at Gratiot Crossing shopping center, 50700 Gratiot Ave. N., Chesterfield Township. Website: biglots.com. The Robot Garage Inc., Birmingham, a hands-on learning environment for children, has opened a third location, at 15201 Kercheval Ave., Grosse Pointe Park. Telephone: (313) 924-3310. Website: therobotgarage.com. äĄ˛

Deals & Details guidelines. Email cdbdepartments@crain.com. Use any Deals & Details 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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CALENDAR THURSDAY AUG. 13

Inside the CEO Mind. 8 a.m. Aug. 13. Detroit Regional Chamber. Tim Smith, CEO of Skidmore Studio, shares his story and perspective on leadership. Skidmore Studio, Detroit. $30 chamber members, $55 nonmembers. Preregistration required. Contact: Marianne Alabastro, (313) 596-0479; e-mail: malabast@detroitchamber.com.

UPCOMING EVENTS Best Strategies in Supplier Diversity Luncheon. Noon-2 p.m. Aug. 19. Di-

versity Information Resources. Speaker: Eric Holder Jr., former U.S. attorney general. $124. Detroit Marriott Renaissance Center. Contact: Betsy Gabler, (612) 781-6819; email: info@diversityinfo resources.com. August Economic Development Forum. 8-9:30 a.m. Aug. 19. Troy

Chamber of Commerce. Speaker Lisa Katz, executive director, Workforce Intelligence Network, talks about the collaborative effort of seven Michigan Works agencies and eight community colleges. Rehman, Troy. $15; free for Troy Chamber members. Contact: Jaimi Brook (248) 641-0031; email: jaimi@troychamber.com Latino Business Summit. 7:30 a.m.4 p.m. Aug. 21. Julian Samora Research Institute at Michigan State University. Review the state of Lati-

no businesses in Michigan, identify challenges, promote awareness. Kellogg Center, East Lansing. Free. Telephone: (517) 432-1317; email: jsamorai@msu.edu.

Global Business Outlook in Aerospace and Defense. 8 a.m.-noon Aug. 25. Au-

tomation Alley. Discussion on the state of the commercial aerospace and defense industries . Speakers: Noel Nevshehir, director, international business, Automation Alley; Anne Jafery, managing partner, Channels Business Solutions; Sean Carlson, vice president, Michigan Economic Development Corp.; Gavin Brown, executive director, Michigan Aerospace Manufacturing Association. Automation Alley headquarters, Troy. $20 members, $40 nonmembers, free foundation members, $30 walkin members, $50 walk-in nonmembers.Pre-registration closes Aug. 21. Contact: (800) 427-5100; email: info@automationalley.com 2015 North American International Cyber Summit. Oct. 26. Engineering

Society of Detroit. Hosted by Gov. Rick Snyder. Brings together experts to address cybersecurity issues impacting business, education, information technology, economic development, law enforcement and personal use. Cobo Center. $79; $59 for students or members of Information Systems Security Association and other groups (See list online.) Contact: Leslie Smith, (248) 353-0735, ext. 152; e-mail: cybersummit@esd.org. Calendar guidelines. Visit crainsdetroit.com and click â&#x20AC;&#x153;Eventsâ&#x20AC;? near the top of the home page. Then, click â&#x20AC;&#x153;Submit Your Eventsâ&#x20AC;? from the drop-down menu that will appear. Fill out the submission form, then click â&#x20AC;&#x153;Submit eventâ&#x20AC;? at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

MARKET PLACE BUSINESS OPPORTUNITIES

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human resources, information technology and sales staff, the company has said. Crainâ&#x20AC;&#x2122;s first reported Nexteerâ&#x20AC;&#x2122;s plans to relocate to Oakland County in February. Combined, the multimillion-dollar investments from the two suppliers further bolster Auburn Hills as a hub for international supplier corporate offices and R&D operations.

Reinvestment TI Automotive is expected to invest $7 million to lease and customize the new 143,000-square-foot headquarters building, now under construction by Farmington Hillsbased Cunningham-Limp Development Co. It leases about 54,000 square feet in the current headquarters building from owner Samir Chrysler Michigan LLC, according to city records. Nexteer hasnâ&#x20AC;&#x2122;t said how much it will invest at Doris Road, but the company is working with an architect and project manager on any necessary improvements at the site, said its director of corporate affairs, Luis Canales. The former Delphi Corp. steering division went public in 2013 on the Hong Kong Stock Exchange, and reported nearly $3 billion revenue last year. â&#x20AC;&#x153;(Moving to) Auburn Hills provides us with a platform for longterm success and demonstrates our commitment to the state of Michigan and its talented auto industry workforce,â&#x20AC;? Nexteer President and COO Laurent Bresson said. â&#x20AC;&#x153;This standalone location will position us closer to our business partners, industry experts and will continue enhancing the Nexteer brand.â&#x20AC;? Nexteer makes electronic steering systems and driveline components. TI Automotive makes brake and fuel lines, fuel tanks, pumps and fuel delivery components.

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Jason Capitani, executive vice president at commercial real estate broker L. Mason Capitani CORFAC In ternational in Troy, said the Nexteer move was a sensible one given the companyâ&#x20AC;&#x2122;s plan to raise visibility among auto suppliers. â&#x20AC;&#x153;Auburn Hills is very supplierdense. (It) is loaded with large national and international (companies, and) in many cases, this is where their North American headquarters are located,â&#x20AC;? he said. The city houses the headquarters or North American operations of 40 corporations from 32 countries â&#x20AC;&#x201D; including two Fortune 500 companies, BorgWarner Inc. and the American subsidiary of Autoliv Inc. TI Automotive told state officials the move was a space concern; its Auburn Hills buildings were full, and some jobs might otherwise have needed to relocate into other company offices in Tennessee, Indiana, Alabama and Florida. The city has applied for funding from the Michigan Department of Transportation to resurface a section of Taylor Road as part of the TI project, MEDC said. TI Automotive reports 2014 revenue of $3.3 billion and more than 23,000 employees at 125 locations in 29 countries, including a legal headquarters in Oxford, England. Other Michigan locations include Caro, Marysville and New Haven. Nexteer is also on a growth mode; AVIC Automotive Systems Holding Co. Ltd ., a subsidiary of China-based Aviation Industry Corp ., has been a

controlling shareholder of Nexteer since General Motors Co. in 2010 sold off the division, which it had taken over from Delphi in 2009. Nexteer reports a workforce of more than 12,000, more than 50 OEM customers and more than $400 million invested in Michigan since 2010. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a big part, and I believe the best example, of Chinese investment in the North American auto industry,â&#x20AC;?

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Saginaw presence The headquarters personnel move is not expected to affect local tax incentives that Nexteer had obtained separately in Saginaw County through MEDC as of 2013. The company qualifies for a jobs retention credit for up to 2,725 employees in Saginaw Countyâ&#x20AC;&#x2122;s Buena Vista Township through 2017, and for 2,400 employees through 2020. The employees it moves to Auburn Hills could not be claimed for tax credits, but the company is still credit-eligible so long as Buena Vista exceeds a minimum 1,000 employees, said MEDC communication specialist Kathy Fagan. Nexteer reports about 5,000 employees, or almost its entire Michigan headcount, in Buena Vista Township. The last round of incentives approved in 2013 call for 325 new jobs to be added there by the end of 2015. CBRE Group Inc. represented both Samir Chrysler Michigan and Nexteer in the Auburn Hills lease deal. The Southfield office of Newmark Grubb Knight Frank represented TI Automotive in its lease from Cunningham-Limp. äĄ˛ Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

BANKRUPTCIES The following business filed for protection in U.S. Bankruptcy Court in Detroit July 31-Aug. 6 . Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. äĄ˛ Salad Shop LLC, 28345 Beck Road, Wixom, voluntary Chapter 7. Assets and liabilities not available. Natalie Broda

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Clerkship competition tightens with med school grad increase By Jay Greene jgreene@crain.com

The 75 percent increase in medical school graduates in Michigan the past eight years is causing some problems in finding clinical clerkship training positions for students. Clerkships are training experiences for students during their third and fourth years of medical school and are required under medical school accreditation rules. Schools pay a wide range of monthly fees and sometimes make other payments or donations to hospitals, outpatient centers, nursing homes and other post-acute care settings to create the slots. Prices have been driven up in recent years in part because of general supply and demand and also by Caribbean medical schools, which have been willing to pay more to obtain the slots for their students. In some cases, prices for the student clerkships have spiked to as much as $2,000 per student per month, said George Kikano, M.D., dean of Central Michigan University School of Medicine in Mt. Pleasant. “Caribbean schools are for-profit

and their accreditation requirements are different,” said Kikano, noting they have deeper pockets for clerkships than Michigan schools. William Strampel, D.O., dean of Michigan State University College of Osteopathic Medicine in East Lans-

ing, said Caribbean schools are increasing costs for all medical schools in the state and cited payments of $500-$1,000 a month from Ross University School of Medicine in Dominica and American University of the Caribbean in Haiti. A spokesman for American University declined to give specifics about what the school pays, but said it has had a 10-year relationship with St. John Providence. “We have covered the expenses required to build their medical education infrastructure,” said Chris Railey, the school’s senior director of communications. “We also made a gift to support development of a simulation center and support their research program.” Ross University has a clerkship arrangement with St. Joseph Mercy Oakland in Pontiac. Officials at St.

Joseph confirmed they train Ross University and other medical school students. Officials for Ross University were unavailable for comment. Robert Folberg, M.D., dean of Oakland University-

also gain clinical field training. Jack Sobel, M.D., dean of the medical school at Wayne State University, is concerned clerkship opportunities at hospitals may be shrinking because of increasing medWilliam Beaumont School of ical school enrollment and Medicine in Rochester Hills, Jack Sobel: Fears recent hospital mergers. said confidential agree- that opportunities Of Wayne’s 580 student ments with Beaumont Health may be shrinking. clerkships, one-third go to Henry Ford Health System , prevent him from disclosing how much the medical school one-third go to Detroit Medical Center and the rest go to Oakwood Health pays for its student clerkships. “We are concerned about it, and it care, St. John Hospital and Medical Cenis driving up the price in Michigan,” ter and the John D. Dingell VA Medical Folberg said. “It is not just in Michi- Center in Detroit. “We have students at Oakwood gan. Deans in New York are apoplectic about it. They are capping enroll- and can’t be certain we will continue to have students there,” said ment because of the costs.” Besides increasing numbers of Sobel, noting that Oakwood has medical students and clerkship prices, merged into the new eight-hospital medical schools are competing for Beaumont Health. But Folberg said Beaumont has training positions with allied practitioners that include nurse practition- made it clear to him that it will not interfere with any medical school ers, physician assistants and dentists. Another challenge for schools is affiliation, including the one at new accreditation rules that require Wayne State. Last month, Michigan State Univerfirst and second year students to

sity College of Human Medicine struck a five-year deal with Providence Hospital in Southfield to establish MSU’s seventh community campus, the first in Southeast Michigan. Over the next several years, Providence will host a total of 60 of MSU’s third and fourth year students. MSU’s medical school has a 200 student enrollment, up from 156 in 2007, said Aron Sousa, M.D., senior associate dean for academics at MSU. The move to Detroit was also partially the result of MSU losing hospital clerkships in Saginaw and Kalamazoo to other medical schools, said several sources. MSU also places students at hospitals in Flint, Lansing, Grand Rapids, Traverse City, Marquette and Midland. Robert Flora, M.D., director of medical education at Providence Hospital, said the Southfield Catholic hospital trains 34 medical students, including 24 medical students from American University and 10 students from Michigan State University College of Osteopathic Medicine. 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

GRADS FROM PAGE 1

students and those willing to become primary care doctors in shortage areas. Robert Folberg, M.D., dean of Oakland

University-William Beaumont School of Medicine

in Rochester Hills, said selling Michigan is also part of the plan. OU wants to “teach students that Michigan is a great place to live. Robert Folberg: … This is a great OU wants to sell place to practice students on state. even if they don’t take residency here,” he said. “We know there are several students not from Michigan who intend to stay here and practice.” That’s important, Folberg said, because many medical school graduates do their residencies elsewhere. In May, OU-Beaumont graduated its first class of 47 students with only 16 staying in Michigan for residency. “We know (from a graduation questionnaire) that 67 percent in that class want to practice in Michigan,” Folberg said. “They may be leaving to get training because of personal issues like a spouse involved or because that is where they matched (selected by teaching hospital for residency training), but they want to come back to practice.”

Slots in jeopardy? That’s one reason the state’s medical school deans believe the 60 teaching hospitals in Michigan should substantially increase the number of first-year residency slots, which now stand at about 1,522. That’s up 35 percent over the past eight years, but further increases may be difficult because of a

Medicare funding cap on residents and rising training and operating costs that have narrowed profit margins, say teaching hospital executives. There are 6,268 total allopathic and osteopathic residents in Michigan, with another 801 fellows. Some of the existing residency slots may be in jeopardy as Gov. Rick Snyder and other legislative leaders have discussed cutting state graduate medical education payments to teaching hospitals. The cuts could

total $163 million annually, which accounts for about 15 percent of all state and federal GME funding. And the problem of a rising number of medical school graduates and limited residency opportunities is a not just a problem here. Ernest Yoder, M.D., associate dean for graduate medical education with Western Michigan University Homer S t r y k e r M . D . S c h o o l o f M e d i c i n e in

Kalamazoo, said over the next several years the total number of U.S. med-

ical school graduates will In 2012, Michigan State University College of Osteo equal the number of firstpathic Medicine and the De year residency slots, creattroit Wayne County Health ing a larger problem for Authority received $21 milMichigan. lion in funding to start a “There is no question community and hospitalwhen you add more medbased residency program ical students into the equafor 85 primary care specialtion without adding firstties in Detroit, said dean year residency positions, Ernest Yoder: William Strampel, D.O. you change the formulation Hospitals helping Earlier this year, Stramand add to the competition med schools. pel and Chris Allen, CEO of for positions that exist,” he the health authority, received addisaid. Another solution to help gradu- tional funding to extend the proates, said Yoder, is for medical gram under the Affordable Care Act. “This is a cheap and effective way schools to start new residency programs in partnerships with com- to train more physicians,” Strampel munity hospitals. That is happening said. “We’d like to do more of these things.” now, he said. “There are a number of hospitals Fierce competition in Michigan that have never done James Woolliscroft, M.D., dean of GME and could sponsor residencies in partnerships with us,” said Yoder, the University of Michigan Medical noting that the medical school is School in Ann Arbor, said competiundergoing feasibility studies with SEE NEXT PAGE several unspecified hospitals.

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Government job changes didn’t take vacation

FROM PREVIOUS PAGE

tion for residency slots in Michigan historically has been difficult for state graduates in specialties like internal medicine because they are competing with graduates of overseas medical schools who are at the very top of their class. For example, in 2015, approximately 57 percent of 1,289 first-year allopathic resident positions in James Michigan were Woolliscroft: filled by U.S. Residency slots are medical graducompetitive. ates, 24 percent by international medical graduates and 19 percent by U.S. citizens who attend medical school in other countries, according to the Accreditation Council for Graduate Medical Education. Strampel said osteopathic residency slots are ample right now for Michigan State. “I have 1.4 slots for every graduate I have now. That number will get smaller as I get more competition,” he said. At Central Michigan University School of Medicine in Mt. Pleasant, Dean George Kikano, M.D., said its first class of 64 students will graduate in 2017. By 2020, the school will graduate up to 104 per year. Kikano is concerned that there aren’t enough residency slots for Central Michigan’s graduates, some 85 percent of whom are native Michiganders and 15 percent are underrepresented minorities. Central’s mission is to George Kikano: train MichiganWorried about spots born students forCMU grads. from rural and urban areas, he said. “When the founding class starts applying for residency, we want to give them venues and incentives to stay in Michigan and ultimately retain them in practices for rural and urban areas,” Kikano said. “After graduation, my job is to keep them in Michigan from residency to practice,” he said. Kristofer Thomas Nicholoff, CEO of the Michigan Osteopathic Associa tion, said teaching hospitals need to increase residency slots to ensure more Michigan graduates stay in the state. “Competition for these slots is already intense, and it’s going to get fiercer,” Nicholoff said. “The number of residency positions is among the most important issues in modern health care, particularly in terms of developing new primary care physicians.” Woolliscroft said in addition to the 33 percent of students who stay in Michigan for a residency program, more than 50 percent of UM’s graduating medical students end up practicing in Michigan. “We are a big importer of physicians, regardless of where they completed residency,” he said. “They want the lifestyle Michigan offers.”

Complex problems But Woolliscroft said the best way to retain physicians in Michigan is to improve the economy of financially depressed rural and urban areas. “Very talented graduates are high achievers. They have high expectations for their careers. They will not gravitate where opportunities do not exist,” he said, noting there is no physician shortage in Grand Rapids, Traverse City, Ann Arbor and Oakland County. While the deans expressed concern with efforts by Sen. Mike Shirkey, chairman of the Senate health policy committee, to analyze how teaching hospitals use funding for graduate medical education, they supported the review process. Shirkey wants to determine, in part, whether the $57 million the state expends in general funds helps alleviate the state’s expected

physician shortage. “I am in favor of accountability and transparency, but what outcome do you want?” Woolliscroft said. “... Too frequently we look for simple answers to complex problems. ... Increasing physician supply is more than looking at return on (state) investment.” Yoder said cutting GME funding for teaching hospitals will only create more problems for medical schools seeking to place graduates and teaching hospitals seeking to care for people. “These GME dollars are translated into taking care of patients,” he said. “A lot of the underinsured are served by doctors paid by GME. Hospitals operate on a thin margin. It doesn’t take much to go from black to red.” 䡲 Jay Greene: (313) 446-0325 Twitter: @jaybgreene

$1 Billion

LANSING — Capitol Briefings is back from a two-week hiatus. While I was out of the office, my inbox filled with government-related comings and goings. Here’s the rundown: 䡲 Gregory Johnson, deputy director and COO for the Michigan Depart ment of Transportation, was named state highway administrator in Maryland. Johnson joined MDOT in 1989 as a staff engineer. His new post begins Sept. 16. 䡲 The Michigan Economic Devel opment Corp. made it official: Dave Lorenz has been promoted to vice president of Travel Michigan , the state’s tourism arm. He’d served as acting vice president since June. Lorenz replaces David West, who resigned this summer. His duties will include leading the state’s branding and marketing campaigns, including Pure Michigan. Prior to his interim role, Lorenz worked as Travel Michigan’s industry relations and international marketing manager. 䡲 Kevin Sullivan, vice president of Alliance Beverage Distributing , Grand Rapids, has been elected chairman of the Michigan Beer & Wine Wholesalers Association. 䡲 Rob Lagergren has been named Michigan state director of

LINDSAY VANHULLE Capitol Briefings lvanhulle@crain.com TWITTER: @LindsayVanHulle

the Republican National Committee in conjunction with the Michigan Republican Party. He will lead the state’s field operation for the 2016 election. He previously was deputy political director for the state party in 2014 and has worked for the Ohio Republican Party.

Snyder to speak Gov. Rick Snyder will speak at the 31st Biennial Mackinac Republican Leadership Conference in September on Mackinac Island. Snyder will join a roster that includes 2016 GOP presidential candidates Ohio Gov. John Kasich, Wisconsin Gov. Scott Walker, U.S. Sen. Ted Cruz, former Florida Gov. Jeb Bush and former HewlettPackard Co. CEO Carly Fiorina. 䡲

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TIGERS FROM PAGE 3

and fantasy camps. In other words, he’s in charge of everything that isn’t players. He’s the executive in charge of making money while Avila spends it on the team (which, if he does his job, brings in fans and TV viewers Al Avila: Spends who generate on team to bring in more revenue). fans, revenue. While fans and pundits debate what they think Ilitch will do next with players and payroll — some even speculate that the team could eventually be sold as the family works on its $535 million hockey arena for the Detroit Red Wings and surrounding development district — the Tigers’ next TV deal is the big contract on deck.

The TV money Currently, Southfield-based Fox Sports Detroit airs Tigers games locally under a 10-year, $500 million deal that expires in 2018. The network has aired Tigers games since 1998, when it first won the broadcast rights from the nowdefunct Pro-Am Sports System , owned at the time by the Washing ton Post Co. ’s Post-Newsweek Sta tions Inc.

As a matter of policy, neither FSD nor the team will comment about their financial relationship. The Tigers have topped Major League Baseball, or been in the top three, in local TV ratings for the past several years, mirroring the club’s era of onfield success that began in 2006. The local TV contract is critical because it helps fuel the majormarket player payroll spending by the middle-market Tigers. This season, the team’s Opening Day payroll was $173 million, and Ilitch has spent $1.5 billion on players since 2006. Forbes.com estimates that Detroit had $254 million in total revenue last season, but lost nearly $21 million in net income — numbers the team will not discuss — but notes that the figures are not based on any information provided by the Tigers. No matter the exact financials, it’s clear the Tigers spend a lot of money as part of the Ilitch’s family’s $3.3 billion business empire, anchored on the Little Caesars pizza chain. “The stakes have gotten a lot bigger, and the need for revenue has readily grown,” said Mike Dietz, president and director of Dietz Sports & Entertainment in Farmington Hills and a former Ilitch Holdings Inc. sales and marketing

vice president.

Deal terms While MLB’s revenue-sharing arrangement spreads among the 30 teams the money generated by the enormous national TV and merchandise licensing deals, the level of individual team profitability is deeply influenced by money

Sports and Media at the generated in the local University of Texas. market. Cooperation between The revenue-sharing McLean and Avila will be formula is complex, but key, Cramer said, because generally each team must Dombrowski’s job was to share 34 percent of its loensure both sides of the cally generated money business worked in harwith the rest of baseball. MLB’s total revenue last Michael Cramer: mony. Having bizexec “very “The issues with this year was $9 billion. So, the bigger a team’s much a good thing.” system are that the business side and baseball local broadcast rights deal, the more money it can keep side could be out of sync, and that is important,” Cramer said. “Getfor itself. The trend? Baseball teams are ting baseball to support the busireaping bigger and bigger broadcast ness goals — from appearances, to getting players to sign autographs, deals. For example, the St. Louis Cardi - to marketing the team, to looking nals, the team at the top of baseball out for the bottom line generally, in local TV ratings, last month ex- to use of the field for promotions, tended its relationship with Fox etc. — are important consideraSports Midwest from 2018-32 in ex- tions. change for $1 billion and a 30 per“There are teams that simply cent stake in the broadcaster. have baseball operations in a coThe Texas Rangers this season coon, and that is not a good thing.” began a $3 billion deal with Fox But Cramer said having McLean Sports Southwest that includes a reporting directly to Ilitch is a good 10-percent equity stake. idea. It will be McLean’s job to ensure “The business guy talking to the the Tigers get such a deal. owner directly is a good thing,” he The team’s winning ways in re- said. “It should not just be the guy cent years have helped. If it contin- spending money talking to the ues to spend on players and win, owner. It’s absolutely important to McLean will have a valuable chip have the guy generating and countat the bargaining table. ing the money speaking as well.” But wins and losses aren’t everyA baseball business guy thing. Detroit’s on-field performMcLean was hired as the Tigers’ ance, like that of all teams, will be cyclical, but the appeal for networks senior vice president of business is the long-term loyalty of Tigers operations in November 2003 after fans and the need for popular con- five years running the Seattle Sea hawks ’ marketing, broadcasting, tent. “There’s always going to be a sponsorship sales, ticket sales, luxconstant appeal for that content,” ury suite sales, advertising, and said Lee Berke, president and CEO client services. He was a Sports of Scarsdale, N.Y.-based sports Business Journal 40 Under 40 honmedia consulting firm LHB Sports, oree in 2001 for his work in Seattle. Entertainment & Media Inc. McLean also worked in 1997 in Fox Sports Detroit has publicly ticket sales and services for the Denoted that it has been able to boost troit Lions. His other pro sports jobs its advertising revenue the past have included work with the NBA’s several years by double digits be- Houston Rockets and Detroit Pistons, and minor league hockey’s cause of the Tigers’ success. The Tigers and FSD could opt to Chicago Wolves. A Rochester Hills native, Mcextend their deal prior to 2018, or the team could choose to entertain Lean has degrees from the Universioffers from competitors, which ty of Wisconsin-Parkside and Univercould drive up the final rights fee, sity of Oklahoma. His bio in the current team Berke said. Whether they could get $1 bil- media guide notes that the Tigers lion over a decade would depend have seen “consistent growth in on the nature of the market in revenue-producing areas” during 2018, and the best distribution his time with the club. He’s credited with oversight of plans that maximize viewership improvements and renovations at and revenue. The Tigers could also pursue an Comerica Park, and the launch of equity stake in Fox Sports Detroit the Detroit Tigers Foundation. “Under his leadership, the or another provider, he said, as Tigers have established all-time part of negotiating a deal. McLean will be the Tigers exec- highs in sponsorship, suite, season utive to figure it all out (with help ticket and group sales,” the media from a roster of vice presidents, di- guide says about McLean. Sports entrepreneur and former rectors, managers, assistants, conPistons executive Andy Appleby, sultants and others). now chairman and CEO of General Eyes on Detroit Sports and Entertainment LLC in Baseball insiders are watching Rochester and co-owner of an Engthe front-office situation in Detroit lish soccer team, praises McLean. closely. One former team president “I’ve known him for close to 30 said the setup the Tigers have now years, and he is a very accomwith McLean and Avila has poten- plished and extremely competent tial positives and negatives. sports executive,” Appleby said. “Having an executive that runs “He’s also gotten a figurative Ph.D. the business side is very much a in sports management from the good thing in my opinion,” said various places and sports he’s been Michael Cramer, former Texas involved with.” 䡲 Rangers team president and now Bill Shea: (313) 446-1626 Twitter: @Bill_Shea19 director of the Texas Program in

STORM FROM PAGE 1

calls a hotel operator wants to make. Losing that business is “a very, very large number for us,” Kuras said. “I don’t know that anyone believed we could have had that severe a storm in this area, or that it could do the damage it did in such a short period of time.”

Business interruption Filling hotel rooms and restaurants in the summer is particularly important in the greater Traverse City region, where some census estimates peg service jobs alone as more than a fifth of the local economy. Traverse City Tourism , the local convention and visitors’ bureau, commissioned a 2013 study that says the tourism industry accounts for nearly a third of the region’s jobs. If business owners buy insurance policies that include coverage for business interruption, such as that wrought by a severe storm, they might be able to recoup some of the financial losses. Those include losses such as structural damage, lost revenue and spoiled food. The Homestead does have such a policy, and Kuras said the final impact of storm-related losses will depend on the outcome of his claim. Those owners that don’t or can’t afford to purchase that kind of coverage might face a double whammy of lower revenue from fewer visitors and higher costs elsewhere, particularly to run generators or replace damaged goods. Smaller hotels often don’t buy the coverage because they bet the odds are low of needing it and thus want to avoid paying higher premiums, said Steve Yencich, president and CEO of the Okemos-based Michigan Lodging and Tourism Association. “It’s a question of cost versus risk,” Yencich said. “People tend to budget and want to pay the lowest premium possible. And, of course, when the claim ensues, you want the most coverage possible. It’s been a long-standing enigma for the insurance industry.” The main financial factor, he said, is cash flow: “How quickly am I able to return to operations and start putting heads in beds?” Hotels weren’t the only businesses disrupted by the storm. Restaurants, wineries and business tied to big attractions like Sleeping Bear Dunes National Lakeshore , mostly closed since the storm, were also impacted. In Glen Arbor, Art’s Tavern was one of the few restaurants in town to operate daily since the storm, but its owner is spending $400 a day to run a generator. “I’ll tell you in December what the impact was,” said Tim Barr, Art’s Tavern owner. Barr said the bulk of his daily customer base is made up of locals who have no power at home — rather than tourists. With the generator buzzing away to keep the restaurant functioning, he’s cutting into his profit margins until the power comes back on. Nearby, the Glen Arbor head-

quarters of the Cherry Republic retail chain on M-22 lost a quarter of its typical sales last week, but made up for it slightly with higher business at its store in downtown Traverse City.

Fruit losses Then there are the agriculture businesses. Horticulture experts say some apple and grape growers might not be able to harvest their whole crop due to wind and hail damage. Wineries on Grand Traverse County’s Old Mission Peninsula, which took a direct hit, also were closed for several days. Apple growers in the worst of the storm band might lose a lot of their crop to rot, said Nikki Rothwell, a Michigan State University Extension

specialist and coordinator of the Northwest Michigan Horticultural Re search Center based in Leelanau

County. That’s because of severity of the storm, bringing hail damage and apple puncturing, plus seasonlong wet weather has been a challenge. Some apples might be salvageable for juice, she said, although growers won’t earn as much in juice as they would by selling fresh apples at markets. Grape growers are coming off two hard winters, and the French hybrid grapes grown here don’t like cold temperatures, Rothwell said. Last year’s wine grape crop already was smaller as a result, and this year’s is shaping up to be the same. At one vineyard near her office, she said, between 20 percent and 40 percent of the already-minimal crop suffered hail damage. Experts have not yet estimated the dollar value of the lost fruit, nor do they know whether any growers will experience a total crop loss. If there’s a bright spot, it’s found in a bowl of Michigan cherries; the cherry crop harvest isn’t impacted by the recent wild weather. Nearly all of the region’s sweet cherries and 66 million pounds of tart cherries — of an estimated total 83 million pounds — are already off the trees.

Varied impacts From 2012 to 2014, 39 percent of leisure vacations to the northwestern Lower Peninsula started during June, July and August, according to Travel Michigan , which cited data from McLean, Va.-based tourism research firm D.K. Shifflet & Associates Ltd.

The state has used the firm’s data, based on national traveler surveys, since 1992 and analyzes it by region and county. In last year’s study, Grand Traverse County ranked third among Michigan’s 83 counties for leisure travel, with estimated spending of $924.5 million, data show. Leelanau ranked 33rd, with $99.8 million. “Certainly, those summer months are very important to the bottom line of hotels and tourismrelated businesses in those areas,” said Michelle Grinnell, a Travel Michigan spokeswoman. Many businesses that are truly seasonal, such as recreation rentals, might be hit the hardest since they SEE NEXT PAGE

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have fewer days to make their money for the year, said Sarah Nicholls, an associate professor of tourism at Michigan State University and a co-author of the state’s annual tourism forecast. “For larger/year-round companies, the impact of any one event is relatively less,” she said via email. This, Nicholls said, illustrates the importance of diversification, both in the types of services or products businesses sell and in how many seasons they operate. “That, of course, is hardest for the smallest entities and for companies that are just getting started,” she said. “Hopefully, we have a long,

warm and dry autumn that can at least help these kinds of businesses recoup some of their loss.” Katy Wiesen and her husband, Matt, are in that camp. They own three stores in Glen Arbor — M22 Glen Arbor , which sells clothing; Crystal River Outfitters , which rents kayaks and stand-up paddleboards; and The Cyclery , a full-service bike shop that also rents bicycles. Their storm-related losses are mounting: They include the physical — trees fell on a storage garage, on a shuttle vehicle used to take kayakers to the river and on employees’ cars — but most are financial. The stores — typically open from 9 a.m. until 8 p.m. seven days a

PURE VIN

ber of Commerce Inc.

“It’s much needed to the development that’s going on,” he said. “You haven’t really seen any news articles promoting new ventures opening up downtown that are African-American-owned.”

MARIA ESQUINCA

About half of the wine Regina Gaines plans to sell at her new wine shop, Pure Vin, will be Michigan-made. A trademark of Laughter in the Sun LLC, House of Pure Vin by the end of 2016 will stock up to 8,000 bottles of wine from up to 800 different brands, Gaines said. The initial stock is expected to have 4,000 bottles from about 400 brands. Up to 50 percent will be from Michigan, with another 40 percent from elsewhere and 10 percent of the stock being champagne. “Most people don’t know that we are the fourth-largest (state) in grape production and the fifth largest in wine production,” Gaines said. According to the Michigan Grape & Wine Industry Council, the state’s wine industry pumps $300 million annually into the state’s economy. There are 117 commercial wineries in Michigan producing more than 1.4 million gallons of wine each year, according to the council. About 2,650 of the state’s 15,000 acres of vineyards are for wine grapes. The House of Pure Vin owners participated in TechTown’s eight-week Retail Boot Camp in the fall and

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: Amerisure Mutual Insurance ..........................116 23 Amway................................................................2 23 Autoliv ................................................................2 29 Bedrock Real Estate Services ........................2 Business Institutional Furniture Manu.Assoc. 22 Central Michigan University ........................11, 26 28 Cherry Republic ................................................2 Detroit Homecoming..........................................77 3, 4 Detroit Tigers ..................................................3 Detroit Wayne County Health Authority .... 26 Domino’s Pizza ................................................ 23 Downriver Community Conference ................ 5 Ford Motor ........................................................ 23 23 General Motors ................................................2 Gibbs Planning Group........................................ 3 Henniges Automotive ......................................117 21 Herman Miller ....................................................2 The Homestead .................................................. 1 3, 29 House of Pure Vin ........................................3

door. On a single day last week, he estimated nearly 500 would. That impact is softened, in part, because Cherry Republic’s Traverse City store was outperforming normal sales goals by 10-20 percent and because it does business in multiple cities year-round, especially at Christmas. “This three days or four days of missed business is microscopic,” he said. “But I could see for some of those stores, where it’s the only store and there’s … really six big weeks to make it — and losing one of your big weeks — that’s a much bigger difference.” 䡲 Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

Biz bloom changes Woodward landscape

FROM PAGE 3

Avenue downtown above the Grand Trunk Pub , moved from downtown about two years ago. And just north of downtown, in Eastern Market, is Cost Plus Eastern Market Wine. Said Gibbs: “With all the gift-giving that goes on in the downtown offices, there is probably a demand. But it’s important that (Pure Vin) positions itself as a wine shop, that they know what they are selling and are able to make reasonable selection recommendations.” The answer to that market need: Pure Vin Master Sommelier Claudia Tyagi, who earned her Court of Master Sommeliers certification in 1997. Revenue is hinged on the expected steady uptick in downtown investment and population growth. Revenue is expected to be $700,000 in the first year with as much as $2 million by the end of third, due in large part to the expected completion of the M-1 Rail project in 2017 and steady interest in living in the downtown core, Gaines said. She said the average customer is expected to spend $25 to $30 per visit and that the bottles will range from $15 to $200 each. House of Pure Vin is expected to become one of the “very small percentage” of businesses in the cengowned, said Ken Harris, president and CEO of the Michigan Black Cham-

week in the summer — were closed for more than three days during the peak of its season. “These are numbers that we will not be able to make up,” Katy Wiesen said, declining to offer sales figures. “We wait all year for this. You know, it’s not like our business is spread out 365 days a year. We have 90 days — not even that — we have 60 days to make our money for the year. Bob Sutherland, president of Cherry Republic, said the Glen Arbor store was trailing a typical August sales week by about 25 percent, although he wouldn’t cite exact sales figures. On a typical day, he said, 2,000 customers can come through the

9, 16, 23 Lear ..........................................................9 Michigan Black Chamber of Commerce ...... 29 27 Michigan Lodging and Tourism Association ....2 27 Michigan Osteopathic Association................2 Michigan State University .................... 1, 26, 28 Nexteer Automotive.......................................... 3 Oakland University........................................11, 26 Providence Hospital........................................ 26 Signature Associates ........................................ 6 Sustainable Research Group ........................ 22 29 TechTown ..........................................................2 3 TI Automotive ....................................................3 University of Michigan..................................11, 26 23 Vision IT..............................................................2 Wayne State University............................11, 7, 26 22 West Michigan Sustainable Business Forum ..2 Western Michigan University ............................11 Ziebart International ...................................... 23

The retail landscape is changing along Woodward Avenue downtown with a mix of new small businesses and some pending deals with big-name destination stores. With shops like the House of Pure Vin wine store at 1433 Woodward opening next month and the first Midwest store for menswear designer and Detroit native John Varvatos opening earlier this year in the Wright-Kay Building , Woodward is getting new life. Media reports last week about two other major retailers looking at Detroit only served to fuel the buzz about the Woodward corridor. But if Nike and Restoration Hardware are indeed coming to town, the landlord most likely tied to those deals, Dan Gilbert’s Bedrock Real Estate Services LLC, is remaining mum. Robin Schwartz, director of public relations for Bedrock, declined to “comment on rumor and speculation.” Crain’s first reported in December that Restoration Hardware, the Corte Madera, Calif.-based luxury home-furnishings retailer, was planning a Detroit outlet store. More recently, sources said

emerged with its first two months of free rent after being selected for the prize by members of the community development, microlending and banking communities. “They demonstrated that they were willing to locate in Detroit and they really had a strong business proposition that was a great mix for the downtown market,” said Regina Ann Campbell, managing director of place-based entrepreneurship for TechTown. The sommelier, Tyagi, has been a consultant for such high-end Detroit area restaurants as the Rat tlesnake Club, Joe Muer Seafood in the Renaissance Center and The Whitney. Tyagi is one of only 147 master sommeliers in North America, and one of just 23 women with such a distinction. Tyagi will not only help the owners pick the best wines to sell at House of Pure Vin, but also train the expected staff of four to eight em-

Restoration Hardware was planning to occupy the Gilbert-owned building at 1217 Woodward. But build-out of the 36,000-squarefoot Bedrock-owned building has effectively been halted, according to a source. No word on what it all means; Restoration Hardware didn’t respond in time for deadline on this report. The company lists a “Detroit outlet” as one of its stores on its jobs postings page. Meanwhile, rumors have been rampant in real estate circles for months that Bedrock is negotiating a deal with Nike, with representatives of the sneaker and athletic wear company scouting downtown at least three times in the last year, according to sources. Then, MLive.com reported last week that Patrick McInnis, CEO of Detroit-based wall graphics maker Fathead LLC, which Gilbert owns, told a crowd of business leaders in mid-Michigan as part of remarks about Detroit that Nike is indeed opening a store here. Nike public relations representatives didn’t respond last week to inquiries from Crain’s. Kirk Pinho

ployees on an ongoing basis and maintain good relationships with Michigan’s vineyards. House of Pure Vin’s roughly $450,000 cost to open includes funding from the Detroit Develop ment Fund , Invest Detroit and TechTown. The store interior was designed by Detroit-based design studio M1/DTW LLC. The building at 1433 Woodward, for which Dan Gilbert’s Bedrock Real Estate Services LLC has the master lease, is the former home to the Frank & Seder Co. department store. For Gaines, House of Pure Vin is a chance to show others that Detroit and Michigan do things other than manufacturing — and at a high level. “We are more than just the automobile industry,” she said. “Few people understand that but us.” 䡲 Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher and Editor Mary Kramer, (313) 446-0399 or mkramer@crain.com Associate Publisher Marla Wise, (313) 446-6032 or mwise@crain.com Executive Editor Cindy Goodaker, (313) 446-0460 or cgoodaker@crain.com Managing Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Director, Digital Strategy Nancy Hanus, (313) 4461621 or nhanus@crain.com Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or dduggan@crain.com Assistant Managing Editor Kristin Bull, (313) 446-1608 or kbull@crain.com Senior Editor/Design Bob Allen, (313) 446-0344 or ballen@crain.com Senior Editor Gary Piatek, (313) 446-0357 or gpiatek@crain.com Research and Data Editor Sonya Hill,(313) 446-0402 orshill@crain.com Web Producer Norman Witte III, (313) 446-6059 or nwitte@crain.com Editorial Support (313) 446-0419; YahNica Crawford, (313) 446-0329 Newsroom (313) 446-0329, FAX (313) 446-1687 , 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 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 Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh Covers the business of law, auto suppliers, manufacturing and steel. (313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, retail and hospitality. (313) 446-1694 or swelch@crain.com

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WEEK Detroit gets $8.9M from HUD to prep for future floods

etroit is getting $8.9 million in federal funding to help the city better prepare for future floods and other natural disasters, The Associated Press reported. The money, announced Friday by the U.S. Department of Housing and Urban Development, also will help with planning and implementation of projects in the Brightmoor, Mount Elliott and McDougall-Hunt neighborhoods. It follows storms that brought severe flooding in August 2014.

ON THE MOVE Keith Owens, former editor of The Michigan Chronicle, was named senior editor of the Detroit-based newspaper. He replaces Bankole Thompson, who resigned July 8. Owens, most recently a freeKeith Owens lance writer, is a former Detroit Free Press and Detroit Metro Times staffer. Don Carpenter, host of the morning-drive “The Dr. Don Morning Show” on Detroit’s WYCD 99.5 FM, said he will transition to a part-time role on the station. Susan Martin, former president of Eastern Michigan University, was named interim president at San Jose State University. Martin left EMU earlier this year.

COMPANY NEWS The Detroit Water Ice Factory, an Italian ice company, is moving into the former Ben & Jerry’s scoop shop location in the Compuware Building. The new business, hatched by Detroit Free Press columnist Mitch Albom, will donate all proceeds to organizations that Albom’s S.A.Y. Detroit charity supports. Ann Arbor-based Tecumseh Products Co., a manufacturer of compressors for the refrigeration and air conditioning industries, agreed to be acquired by an affiliate of Memphis, Tenn.-based Mueller Industries Inc. and Connecticut private equity company Atlas Holdings LLC in a deal valued at $123 million. Detroit-based N.H. Learning Solutions Corp. acquired the assets of Boston area-based CompuWorks Systems Inc., a provider of information technology training. Terms were not disclosed. Kroger picked up Scotty O’Hotty hot sauces to sell in 500 stores in Michigan and 10 other states. The sauces are made by Dearborn-based Owens Family

ON THE WEB AUG. 3-7

Detroit Digits

to expand its restaurant lineup to Toledo, Ohio, and Vernon Hills, Ill.

A numbers-focused look at the week’s headlines:

Major League Baseball Advanced Media LP signed a six-year deal to run the National Hockey League’s

digital operations, among which are websites for teams (including the Detroit Red Wings), NHL.com and the NHL Network.

Options for names for the three United Shore Professional Baseball League’s teams that will play next year at the $12 million Jimmy John’s Field now under construction in Utica. Fans can vote through Aug. 14 for their favorite at uspbl.com.

12,000 The number of volunteers (from more than 250 business partners) involved in a $5 million remodeling of Detroit’s Osborn High School and the 300 blocks surrounding it last week. The project is led by Life Remodeled, a Detroit nonprofit.

$215 million

The amount of the new fund being raised by Ann Arbor-based Arboretum Ventures LLC, according to the U.S. Securities and Exchange Commission. It would be the largest venture capital fund ever raised in Michigan.

Foods LLC and distributed by Warren-based Lipari Foods LLC.

Birmingham-based digital marketing company Sanctus LLC, dba Shift Digital, plans to spend nearly $2.3 million to build additional space after landing new contracts. It plans to hire 93 employees to join its workforce of 120. Sterling Heights-based General Dynamics could be shopping for bids within months to help it refit up to 81 Stryker armored vehicles in Europe, U.S. Army officials told contractors in Novi. Charter Capital Partners, a Grand Rapids-based investment banking firm, opened a new office in Detroit at 1420 Broadway St. The members of Eastpointebased Eastside Family Federal Credit Union voted to merge into Farmington Hills-based Community Choice Credit Union. The entity will operate under the Community Choice charter and name. The Barbara Ann Karmanos Cancer Institute, working with Wayne State University School of Medicine, will be one of 2,400 clini-

cal sites across the nation that will use DNA sequencing in the National Cancer Institutes Molecular Analysis for Therapy Choice Trial that

begins in September. Karmanos is one of 30 centers in the trial. More than 200 researchers and 3,000 patients will participate. In its first expansion outside Detroit, Slows Bar BQ opened at the Grand Rapids Downtown Market. Meanwhile, Southfield-based Sweet Lorraine’s Fabulous Mac n’ Cheez signed franchise agreements

OTHER NEWS The M-1 Rail streetcar line won’t begin carrying passengers on Detroit’s Woodward Avenue until spring 2017 instead of the original goal of late 2016. A spokesman said new federal safety regulations prompted the revised timeline. Wayne County will enter into a consent agreement with Michigan in an effort to fix a $52 million structural deficit, AP reported. County commissioners voted to allow state Treasury officials to act in the fiscal restructuring. Peter Cummings, part of the development group that closed on the recent $12.2 million purchase of Detroit’s Fisher Building and Albert Kahn Building, plans to buy a surface parking lot in the New Center area for a mixed-use development to include multifamily residential units, said a real estate source. After two years of renovations, the University of Michigan’s $55 million Taubman Health Sciences Library reopened as an alldigital learning space. Eastern Michigan University received a gift of nearly $3.3 million from longtime supporters William and Delores Brehm to support special education and music therapy programs, AP reported. Detroit’s Lafayette Park was named a national historic landmark by the National Park Service, AP reported Filming in Michigan is expected to start this fall for Paramount Pictures’ “Looking for Alaska,” the Michigan Film Office said. The filmmakers are expected to hire more than 200 cast and crew members and 1,700 extras, AP reported. The Southeast Michigan Purchasing Managers Index fell in July to 57.5 from a 66.1 level in June, with a number above 50 suggesting economic growth.

RUMBLINGS Detroit might get waxed by Madame Tussauds Madame Tussauds, the inexplicably enduring enterprise based on showing wax versions of famous people, could be headed to metro Detroit. A real estate broker for Madame Tussauds’ London-based parent, Merlin Entertainments plc, told attendees at a retail conference last month that a Detroit-area location is a possibility. The company checked out local tourist attractions such as The Henry Ford and its Greenfield Village when it first began looking at the Detroit market. Merlin, which prefers to cluster its locations, opened the popular Sea Life Michigan aquarium at Great Lakes Crossing Outlets earlier this year and is set to open a Legoland Discovery Center at the Auburn Hills mall in March. No word yet on a wax figure of RoboCop.

New thrones coming for Palace throngs Most of the gray metal and mauve fabric seats at the Palace of Auburn Hills have been there since the venue opened in 1988. That’s about to change. The Palace is replacing its 20,000-plus seats with black plastic chairs that have imitation leather padding, in a $6 million project expected to be completed by summer 2017. The seat supplier is Irwin Seating Co. of Grand Rapids. The first phase is almost finished. That includes the Palace’s 6,000 telescopic seats that can be retracted for events that require more standing room. The Palace has plans to eventually include near-field communications technology in the chairs to allow fans to do things such as order concessions using their phones. Most of the old seats will

be recycled. Lacking legs, they make for a hard sell to fans. But fans of stadium culture can take heart: A Palace exec says some of the posh floor seats (which sport legs) probably will be made available to the public.

Get your grub on by using app for restaurants A Detroit app developer will hold a series of dinner events this week to promote its app for finding restaurants that serve food made from locally-sourced ingredients. Grubbable Inc. plans to hold launch parties at the following restaurants: Jolly Pumpkin (Monday), Cornerstone Barrel House (Tuesday), Our/Detroit (Wednesday) and Atwater in the Park (Thursday). Each event is scheduled to run from 7 p.m. until 10 p.m. Users of the app will get a complimentary beer or mixed drink.The company says the app service now includes 60 restaurants.

Detroit students log into forestry experience The Greening of Detroit took more than 120 Detroit high school students, who also are employed by the nonprofit to maintain trees in the city, up north to get some forestry experience beyond the big city. Students traveled to the Grayling area to learn about sustainable forest management. They visited Hartwick Pines State Park, saw an active timber harvest, and visited a lumber mill. (See photo below.) The Michigan Department of Natural Resources, Michigan Sustainable Forestry Initiative and Michigan Association of Timbermen helped organize the Aug. 3-4 event.

OBITUARIES James Dragun, founder of Farmington Hills-based environmental consulting company Dragun Corp., died July 28. He was 65. Mel Farr, a star Detroit Lions running back who built, and lost, an auto dealership empire with the Mel Farr Automotive Group, died Aug. 3. He was 70. Irene Walt, a public-art advocate who led efforts to put art in Detroit Receiving Hospital and the People Mover stations, died Aug. 3. She was 91.

COURTESY OF MICHIGAN SUSTAINABLE FORESTRY INITIATIVE

More than 120 Detroit high school students journeyed up north to view a state park, a timber harvest and other attractions in the Grayling area.

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Devon, Kristina AND Rachel ARE REFLECTING A NEW DETROIT. ENERGIZERS. INNOVATORS. DETROIT DOERS.

#REFLECTINGDETROIT

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THE 2015 SPRINTER

TToo m maximize axxim i iz izee yo your ur eeffi fficciency, ffi cie ienc ncy, y you y, youu need nee e d to minimize your vehicle’s downtime, including stops at the gas pump. With the superior fuel efficiency of its 2-stage turbocharged diesel engine, service intervals extended to 20,000 miles1 and legendary durability, the 2015 Sprinter will help keep your business ahead of the rest. Plus, new standard Crosswind Assist2 helps stabilize your Sprinter in strong, gusting crosswinds. The 2015 Sprinter—your hardest worker. www.freightlinersprinterusa.com

1 Driver is responsible for monitoring ﬂuid levels and tire pressure between service visits. See Maintenance Booklet for details. 2 Crosswind Assist engages automatically when sensing dangerous wind gusts at highway speeds exceeding 50 mph. Performance is limited by wind severity and available traction, which snow, ice and other conditions can affect. Feature not available on 3500 models. ©2015 Daimler Vans USA LLC. All rights reserved.

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