Crain's Detroit Business, March 14, 2016 issue by Crain's Detroit Business

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The Whitney woos young diners with bite-sized treats, PAGE 3

MARCH 14-20, 2016

Flint water lawsuits may top $40M & Newnam Inc. of Houston, Veolia North America Inc . of Indianapolis

By Chad Halcom chalcom@crain.com

Michigan tech moves Internet of Things to fast lane

The pileup of Flint water crisis lawsuits thus far could represent more than $40 million in prospective damages against public officials and the businesses who consulted with or advised them. Engineering and environmental services firms Rowe Professional Services Co. of Flint, Lockwood, Andrews

and several state officials face a combined 19 new lawsuits filed in the past two weeks alleging gross negligence, professional negligence and battery for alleged lead poisoning of about 50 children in Flint over the past two years. That brings the total count of Flint water lawsuits to more than 30

since November. New York-based Levy Konigsberg LLP and Flint law boutique Robinson Carter Crawford PLLC could bring an additional 25 more cases by this week, and represent at least 100 more children in cases not yet filed, said Levy attorney Corey Stern. The three companies prominently named in the lawsuits had varying roles in Flint’s water system.

䡲 Rowe Professional is a civil engineering firm hired as acting city engineer for Flint in 2013. 䡲 Lockwood Andrews is an engineering services and program-management company hired to oversee a refit of the city’s nearly century-old water treatment plant when Flint separated from the Detroit Water and Sewerage Department in April 2014. SEE LAWSUITS, PAGE 25

Foundation Hotel builds its funding base

The Internet of Things is not all about tweeting from your fridge or ordering groceries from your toaster. Michigan companies are working on practical connected devices — and in ways that are driving innovation across the state — from Herman Miller to TechTown.

Renovation of firehouse expected by 2017 auto show By Sherri Welch swelch@crain.com

IoT sensors can help forecast issues in your car or at manufacturing plants. IoT also is at the root of devices that keep patients — and caregivers — safer. Our Internet of Things report in this week’s Crain’s Michigan Business starts on Page 9

CRAIN’S FILE PHOTO

Cleaning and rehabilitation of the brickwork on the historic firehouse exterior is set to begin over the next few weeks as part of efforts to renovate the building into a boutique hotel.

Renovation of the historic firehouse across from Detroit’s Cobo Center into a boutique hotel — a project that’s been in the works for three years — is finally set to move forward. Developers of The Foundation Hotel in downtown Detroit said they have secured needed financing for the $34 million project. The independent, 100-room hotel, which will tell the story of Detroit’s past, present and future, is expected to open early next year, said Mario Tricoci, co-founder and CEO of Chicago-based Aparium Group, which is developing the hotel with Walter Cohen, owner of 21 Century Holdings LLC in Southfield. “We’re going to work really hard to get to an opening by the auto show next year,” he said. “We’ve been getting so many phone calls … (inquiring about) incorporating the hotel into various programs for the auto show.” Tricoci said the developers closed on a loan from U.S. Bank for about 47 percent of the project’s cost, or $16 million, late last month. Rounding out financing are a subordinate loan for about $5.8 million from the Michigan Economic Development Corp.’s Community Revitalization Program, nearly $4.8 million federal historic tax preservation credits and a $7.5 million investment from majority owners Tricoci; Aparium’s other principal, Kevin Robinson; Chicago-based Agman Partners ;

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SEE HOTEL, PAGE 23

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MICHIGAN

BRIEFS Traverse City wine finishes Obama-Trudeau dinner Traverse City winery Chateau Chantal’s 2013 ice wine was on the menu to accompany dessert Thursday night when U.S. President Barack Obama and first lady Michelle Obama hosted Canadian Prime Minister Justin Trudeau and his wife Sophie Grégoire Trudeau for a state dinner at the White House, The Associated Press reported. The dessert was to reflect “the memory of winter and celebrates the coming of spring,” White House staff said in a news release. What was to be served was a maple pecan cake with toasted Texas pecans and caramelized New England maple syrup and butterscotch swirl ice cream. Another way to evoke that memory could’ve been, for many in Michigan, a melting snow cone.

Snyder creates advisory panel on infrastructure Gov. Rick Snyder on Thursday issued an executive order creating a

new advisory commission to study the state’s infrastructure, AP reported. The 21st Century Infrastructure Commission will focus on finding ways to update Michigan’s roads and bridges, water and sewer systems, energy and communications systems, Snyder’s office said. Snyder’s budget proposal includes setting aside $165 million in a new state infrastructure fund; the 27-member commission’s recommendations will help decide how the money is spent. The crisis over Flint’s lead-tainted drinking water has renewed attention to other infrastructure issues. Related stories: 䡲 State lawmakers are sending $30 million to Flint to pay for 65 percent of the water portion of bills. 䡲 Flint is urging a judge to reject a request to halt all water billings. A hearing is planned March 17. 䡲 Michigan’s outside legal fees related to the water crisis could hit $2.7 million, to be paid with public money. 䡲 Snyder on Thursday released another 4,400 pages of his executive office’s emails and documents relat-

ed to the water crisis, his third voluntary release of such records.

Sanders upsets Clinton; Trump cruises in primary Michigan voters on Tuesday validated presidential contenders Donald Trump and Bernie Sanders, with the Vermont senator’s upset of Hillary Clinton a reminder that he is still viable and the billionaire businessman reinforcing his front-runner status. About 2.5 million people, or a third of Michigan’s 7.3 million registered voters, voted — the most ballots cast in a presidential primary in 44 years, AP reported. Sanders’ win assured him at least 65 delegates, and Clinton was guaranteed at least 58. Trump will collect 25 delegates, and Texas Sen. Ted Cruz and Ohio Gov. John Kasich 17 each.

MICH-CELLANEOUS 䡲 Michigan is getting $33.8 million in U.S. Fish and Wildlife Service grants this year to fund fish and wildlife conservation and recreation projects, AP reported. The revenue is generated by excise taxes on sales of sporting firearms, ammunition, archery equipment, fishing equipment and tackle, and electric outboard motors. Recreational boaters also chip in by paying fuel taxes on motorboats and small engines. More than $1.1 billion is being distributed nationwide under the

Wildlife and Sport Fish Restoration Program.

In Michigan, grants awarded previously are funding a statewide angler survey program and improvement of grouse habitat. Another project is helping restore lake trout stocks in Lake Huron, where the decline in chinook salmon has made trout crucial for sport angling. 䡲 Ohio-based A. Schulman Inc. said it will open its first Engineered Composites Innovation and Collaboration Center in Bay City this summer, AP reported. The supplier of high performance plastic compounds and resins did not specify what it will spend on the center or how many people it will employ. 䡲 Swoboda Inc., a manufacturer of electronic components for the automotive industry, headquartered in Germany, plans to invest $15.1 million in an expansion project at its Kentwood facility, MiBiz reported. Swoboda plans to create 37 jobs. It was awarded a $200,000 performance-based grant from the Michigan Strategic Fund. 䡲 Michigan State University has turned to an internationally recognized art curator to be the new director of the Eli and Edythe Broad Art Museum , AP reported. Swiss native Marc-Olivier Wahler is the founding director of the Chalet Society in Paris. MSU says he has focused his career on using contemporary art to build and strengthen communities. He’ll start on July 1, succeeding

INSIDE THIS ISSUE BUSINESS DIARY . . . . . . . . . . . . . . . . 22 CALENDAR . . . . . . . . . . . . . . . . . . . . . . 22 CLASSIFIED ADS . . . . . . . . . . . . . . . . 23 MARY KRAMER . . . . . . . . . . . . . . . . . . . 9 OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6 OTHER VOICES . . . . . . . . . . . . . . . . . . . 6 PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 22 RUMBLINGS . . . . . . . . . . . . . . . . . . . . 26 SECOND STAGE . . . . . . . . . . . . . . . . . . 17 WEEK ON THE WEB . . . . . . . . . . . . . . 26

COMPANY INDEX: SEE PAGE 24

Michael Rush, who died a year ago. 䡲 Weekly newspaper The Bay City Democrat published its last edition on Thursday, ending its run after 126 years. Editor and Publisher Wendy Knochel ran the business in recent years with her mother, who died in January. Knochel said it’s “hard to continue on without her.” Knochel told the Bay City Times that her family has owned the business since 1980. A front-page story in the Thursday edition of the Democrat said the newspaper was started in 1890 by a man named George Washington. Knochel said the newspaper had a weekly print circulation of about 800. 䡲

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Chassix works to right the ship Indiana plant that nearly sank firm getting much-needed lift By Dustin Walsh dwalsh@crain.com

A year after filing for Chapter 11 bankruptcy, Southfield-based Chas six Inc. is inching closer to fixing the plant that almost single-handedly sent it spiraling into insolvency. The supplier’s Bristol, Ind., plant, which manufactures automotive die-cast and machined aluminum and iron control arms and knuckles, is expected to be in the black by the end of this year, President and CEO Doug DelGrosso said. The Chassix board and management team have allocated resources and funds to repairing dated equipment and working to repair relationships to allow the plant to operate at peak capacity.

“We’re still working our way through post-emergence (from bankruptcy),” DelGrosso said. “A lot of work still needs to be done, but we’re restoring our commercial agreements and suppliers that allow us to be financially stable.” DelGrosso, who took over as CEO in December 2015, declined to disclose the company’s projected 2016 revenue, though Chassix said it generated annual revenue of $1.4 billion when it emerged from bankruptcy in July 2015. The company is profitable, even if the Bristol plant is not, he said. Chassix was born leveraged in April 2013, when Tom Gores’ Plat inum Equity formed it by merging DiSEE CHASSIX, PAGE 23

JACOB LEWKOW

Desserts are on display on a table outside The Whitney’s new dessert parlor.The treats will cost $7 to $28 (along with $3 mini-desserts) and could help attract a younger clientele.

The Whitney’s dessert parlor aims at diners’ sweet spot By Vickie Elmer Special to Crain’s Detroit Business

Seeking a fresh face as it faces dozens of upstart competitors, The Whitney will launch a new dessert parlor on its second floor this week, and beside the flaming desserts and torts is an array of $3 mini-treats. Those little “three-bite desserts” play at least three big roles: They may help The Whitney turn more tables more quickly in the main dining room on busy Friday or Saturday evenings. Sweet lovers will fill a space that sits vacant for much of the year. And the treats could entice a new clientele — one who may not

be willing to drop $80 on dinner but who will gladly spend $15 to $20 on dessert and coffee in the 19th century mansion on Woodward Avenue, said general manager Dave Duey. Chocolate silk pie and cherry cheesecake serve as pieces in The Whitney’s effort to stay fresh and relevant amid a deluge of new restaurants opening all around it. The kitchen staff has already “experimented and played” with a four-course summer grilled dinner series, paired with beers, and a dinner where a variety of exotic salts SEE WHITNEY, PAGE 24

MUST READS OF THE WEEK New boss at Cobo

Baking up the next act

Still in the family

Convention center’s management company promotes Claude Molinari to general manager, Page 8

Just Baked founder Pam Turkin cooks up online delivery service that gives would-be home bakers a leg up, Page 4

Lessons from businesses that have survived the test of generations, Page 17

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Just Baked EXPANDING: founder cooks up new dessert biz By Sherri Welch swelch@crain.com

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Just Baked Cupcakes founder Pam Turkin is set to launch a new business this week — this one aimed at helping people “bake like a pro” in their own kitchens. She plans to go live with her online company, Rise Baking, on Tuesday. After selling the assets of Just Baked to Roseville-based Tubby’s Sub Shops Inc. last year, Turkin, 54, said she licked her wounds for months over the demise of her company, which grew rapidly but then closed most of its stores before its sale. It was around that time that a friend asked her for advice on starting a company. And Turkin remembered an idea of her own, spurred by an email from New York-based HelloFresh USA, a company she’d encountered a couple of years earlier at a trade show. HelloFresh, an affiliate of the German company by the same name, is one of several recipe-in-abox companies that have raised millions from investors over the past couple of years. Like Blue Apron and Plated , HelloFresh sends customers a box of ingredients to make a complete meal after they select the recipes online. The premeasured approach to cooking appeals not only to those living in a tiny New York apartment or college dorm with no room to store the ingredients for myriad dishes, but also to millennials and others who want fresh food but crave convenience. Disappointed in how Just Baked turned out, Turkin said she never thought she’d start another business. But the emails from HelloFresh got her thinking about why the company had shown so much interest in a cross-promotion with Just Baked. And an idea began to take shape. The market opportunity for a dessert recipe box, along with nudging from other local entrepreneurs — including Richard Simtob, president of Zoup! Fresh Soup Co. LLC , and Josh Linkner, founder of Pleasant Ridge-based sweepstakes firm ePrize Inc. (now HelloWorld Inc.) and GlobalLink New Media (which sold to the former Rare Medium Inc. in 1999) — spurred her to “rise again,” Turkin said. The biggest obstacle to launching a new business was money, Turkin said. She found DesignCrowd.com and Fiverr.com , online marketplaces for crowdsourcing creative content such as logos and Web and graphic design, thanks to her kids. The sites SEE NEXT PAGE

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FROM PREVIOUS PAGE

enabled her to do all of the design work and branding for Rise Baking for less than $1,000, working with people from all over the world — something she estimates she would have easily spent $25,000 on, had she contracted the work to an advertising agency. Linkner referred her to someone in IT who helped launch the website and is helping market it through search engine optimization. Turkin, who has a background in marketing, having done work for clients and companies including M&M Mars , Caterpillar and Broder Bros. Co . in Plymouth, is marketing Rise Baking through “mommy blogs” and other targeted sites online. The landing page for Rise Baking has only been up a couple of weeks, but already more than 100 people have left their email addresses to be notified when they can place an order, she said. Turkin said she developed bakery quality, “dummy-proof” recipes for things she always wanted to bring to consumers, with an organic and “real food” approach and colorcoded ingredients to make it easier to create the desserts. The recipes don’t include any cupcakes, yet, but you’ll find triedand-true recipes to make a variety of treats from scratch, including chocolate chip cookies, chocolate chunk walnut cookies, peanut butter cookies, a chocolate cake covered in marshmallow butter cream and coconut, shortbread, caramel and oatmeal raspberry bars. At some point, Turkin said, she may also look at other baked goods like bread. “It’s very hard to mess up any of these boxes,” she said. “You have to do the work, but it’s so premeasured and thought out piece by piece.” Rise Baking will offer a choice of three recipes per month and possibly some staples like chocolate chip cookies every month. Customers can order one or more of the recipe boxes, with prices ranging from $29 for a single box to $28 per month for a threemonth subscription or $27 per month for a full-year subscription, which comes with a 13th box for free.

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CRAIN’S DETROIT BUSINESS

OPINION Michigan can be key to future of transit M

ichigan is working hard to hold onto — and grow — its piece of hot segments related to future transportation such as connected cars, autonomous vehicles and ride-sharing. Last week, we learned that Ford Motor Co. hired Jim Hackett, a former CEO of furniture maker Steelcase Inc., to run Ford Smart Mobility LLC, an entity that is a new subsidiary and enables Hackett to report directly to Ford CEO Mark Fields. Fields has started a big push by Ford to diversify its business model to account for the many other ways people will want to get from point A to point B in the future. While this is the Motor City and lots of folks will always prefer their own set of wheels, the future of transportation in metro Detroit, and globally, also needs to account for other options like shuttle services, car-sharing or even on-demand buses. We also learned last week that General Motors is acquiring San Francisco-based Cruise Automation, a company that sells an aftermarket, roof-mounted autonomous driving kit. The deal is valued at $1 billion, according to tech news source Re/Code. Tying back to the future mobility theme: The self-driving cars could be part of a future solution for ride-sharing fleets. Michigan is a hotbed for important research in this area. There’s UMTRI, the University of Michigan Transportation Research Institute, which is a hub for research on connected cars, sustainable mobility systems and more. And plans are in the works for the former Willow Run Powertrain Plant site to become a $90 million hub for R&D on cars of the future. Flip to our Crain’s Michigan Business focus in this week’s edition, starting on Page 9, and there are more stories surrounding how Michigan innovation will continue to disrupt industries like connected cars: The Holland, Mich.-based innovation arm of Faurecia is collaborating on sensors that track heart and respiration rates to analyze the stress and alertness of people in cars. And Ford is developing wearables that monitor driver stress and fatigue. As leaders from economic development groups such as Ann Arbor Spark and Automation Alley readily remind us, innovations in technology aren’t just a Silicon Valley thing. (And when it comes down to getting cars on the road, the folks in Silicon Valley ultimately tap Michigan’s engineering and experience.) It’s critical that corporate and elected leaders continue to support the growth of the future transportation industry in Michigan. It’s part of the region’s DNA, and it’s also now about a whole lot more than just traditional vehicles. 䡲

DMC remains committed to community ore than a decade ago, Detroit

M Medical Center’s financial sit-

uation reflected that of the city of Detroit. Over six years, the system lost $569 million, received $50 million in public funds to cover operating shortfalls, and the company’s bonds had a negative rating. DMC was struggling, and there was little hope of avoiding bankruptcy. Collaboration and strategic financial investment focused on patients and families have resulted in an organizational turnaround that finds DMC growing and thriving. From the 2004 system reorganization to the purchase by Tenet Healthcare Corp., DMC’s partnerships and innovations have concentrated on providing quality care for one of the nation’s most diverse ethnic and economic populations. We realized there were fears and concerns about what the ownership change would mean for both DMC’s patient care and community role. We believe our track record demonstrates those fears were unfounded, and our system is more focused and committed than ever to being there for the families we serve and to being a catalyst for positive change. One example is our center’s work to continue to enhance our

OTHER VOICES Joseph Mullany Joseph Mullany is CEO of the Detroit Medical Center. essential relationship with Wayne State University (Crain’s Detroit Business Feb. 29 edition, Page 3) and other health care stakeholders like Michigan State University College of Osteopathic Medicine and the Kresge Eye Institute. These affiliations help ensure coordination and the delivery of cutting-edge care that saves lives and promotes good health. For six years straight, DMC has gained market share and maintained financial stability. We are recognized for our safety and quality rankings and are on a path to become one of the country’s top 15 academic health systems. DMC’s $862 million capital investment has supported 15 construction projects. Of the $362 mil-

lion direct construction costs, 47 percent has been awarded to minority-owned, women-owned and Detroit-based businesses. Additionally, 47 percent of those expenditures can be tied to Wayne County businesses. The results are a new heart hospital, redesigned emergency departments at Detroit Receiving Hospital and Sinai-Grace Hospital, a new Children’s Hospital of Michigan facility in Troy and construction of a new critical care tower at Children’s Hospital in Detroit. As a key Midtown economic development anchor, DMC worked with Midtown Detroit Inc. to develop affordable housing options and to connect people to Midtown businesses. Another successful collaboration aimed at this is the new DMC Midtown Marketplace located in Harper/Hutzel hospital opening up to the public right off Brush Mall. The marketplace created 150 new jobs for Detroiters with eight private businesses offering diverse food options. (Crain’s Detroit Business, March 9 online reports.) DMC will continue to invest in medical advancements, serve as a driver of economic development in Southeast Michigan and never stop working to positively impact the communities we touch. 䡲

LETTERS

Coverage of mental health issues appreciated Editor: As a parent of a young woman with developmental disabilities who receives services through Macomb-Oakland Regional Center and JARC in Oakland County, I thank you sincerely for your coverage of Gov. Rick Snyder’s attempt to bid out mental health services to the Medicaid HMOs. (See “State must be open on mental health,” Feb. 29, Page 6; also see a blog and stories by Jay Greene at crainsdetroit.com.) Our daughter is able to thrive and live in a community setting, going to a workshop three days a week (which we call her job), and a friendship club two days a week. Her outlook is positive and her self-

esteem is blooming. Five years ago, she was hospitalized six times in 12 months for her delusional outbursts. We know that she will need these or similar services throughout her lifetime. We also know that the services she receives from trusted care providers are not “integrated care” and cannot be accomplished if the state slashes $200 million from the budget. I am so thankful for your coverage of this complicated issue. I know The Detroit News and Free Press are focused on Flint, but they have said nothing about this critically important issue. Your coverage has sparked a flame across the state that has motivated advocates, families, service providers and law-

makers alike. According to your story this weekend, it looks like Section 298 will be deleted from the budget. What a blessed relief! I don’t know what motivates you — it seems the only people who really care about mental health funding are those who have a personal connection to it, like my husband and myself. But I thank you for your work on this. You are making a difference in the lives of the state’s most vulnerable population. Hopefully, we will be able to come together to strengthen mental health services, not cut from them to fix the state’s other awful problems. Donna Raphael Bloomfield Township

TALK ON THE WEB Re: Rhodes: State must act or Detroit teachers won’t be paid About time the school system had a bully on its side. John

The state of Michigan has had unfettered control of Detroit Public Schools for more than seven years without effectively solving any problems. … We need comprehensive reconstitution of primary edu cation — starting with the only

proven effective measure of improving student achievement ... integration (racial and income) within schools. Unfortunately when we have dinosaurs in office

that made their career destroying inter-district busing, the likelihood of this is rare. 313

Re: Detroit area’s jobless rate falls; state hits lowest since ’01 I’m dismayed over such a deceptive article. There is nothing about the job losses and the kinds of jobs lost and which kind are gained. Yes, the numbers look good, but the real economic conditions just keep getting worse. Creating minimum-wage jobs

and losing middle income jobs doesn’t help our state.

ments, especially considering Democrats were in charge during the recovery; no love. Detroit automakers and workers should start every day with a big “thank you” to Obama for bailing out the industry when it was on its knees. John

Re: Calvin Johnson retires from Detroit Lions CJ has always been a class act. No showboating, always humble before and after the fact. He will be missed. The best is hopefully ahead of him. 1PondDweller

Dumbhillbilly

Amazing the negative com-

SEE NEXT PAGE

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Business growth author wants to help companies scale up ow many of us know talented,

Hhard-working small and mid-

size business owners who just haven’t figured out how to scale up? It’s the billion-dollar question. And who better to speak with about the conundrum than Verne Harnish, the founder of EO (Entrepreneurs Organization), CEO of Gazelles Inc. and business growth author. What irritates Harnish? As much buzz as trendy startups generate, it’s “scale-ups” — or growth companies — that really help drive local economic growth. And those companies don’t always find the support infrastructure they need to really break out and get on a growth path. “Because they aren’t as ‘cute’ as your typical young local tech entrepreneur, they don’t get the attention and support they deserve,” Harnish said via an email chat from Spain. “We want to change this in Detroit and around the world.” Harnish will be in Detroit as a keynote speaker March 22 as the local chapter of EO marks its 20th year with a member recruitment lunch. This year, the organization also is making a concerted push for female entrepreneurs with the goal that at least 10 new members of its 20 open slots are women. (See eodetroit.com for information.) Harnish also has very specific targets in mind when it comes to global scale-ups and has a focus over the next decade to work with 150 cities worldwide to form scale-up ecosystems. These would be add-ons to existing programs that primarily support startups. The end game to those efforts, he says, will be helping entrepreneurs scale up and “to specifically help them home-grow another billiondollar firm; help a dozen exit for $1 billion to $3 billion; and to help another 140 local firms scale from $5 million to $15 million and $15 million to $100 million.”

JENNETTE SMITH Editor The idea and operating principles of EO complement other groups like Young Presidents Organization and Vistage. Members build close relationships with

other members and participate in peer-to-peer groups — safe places to talk through issues and share best practices. What are the big issues CEOs confide with each other on? In Harnish’s view, they are the things you would expect: Finding employees to hire who have the skills they need; building their leadership capabilities; accessing customers in new markets; accessing the right combination of financing; and navigating infrastructure. Companies that can’t sort through these issues face continued

“Revenue is vanity; profit is sanity, so make sure you’re focused on going after the best customers in your niche.” Verne Harnish

margin pressure — especially those companies that have failed to adequately differentiate themselves. Speaking of differentiation, another pearl of wisdom from my chat with Harnish: Try a strategy of “hyper-specialization” or dominating a very narrow sector of a given

market with your product or service mix. For example, auto insurance for classic cars or advertising for a specific type of law firm. “Revenue is vanity; profit is sanity, so make sure you’re focused on going after the best customers in your niche,” he said.

TALK FROM PAGE 6

We wish you well, Calvin. You were a bright spot during some pretty lean times both for the Lions and the city. Announcer

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Cobo Centerâ&#x20AC;&#x2122;s management company SMG has promoted Assistant General Manager Claude Molinari to general manager of the Detroit venue. In the new role, Molinari will oversee all of Coboâ&#x20AC;&#x2122;s operations. Molinari succeeds Thom Connors, a 34-year veteran of SMG, who had served as general manager of Cobo since November 2010, shortly after SMG took on management of the venue. Connors, 65, will continue his corporate role as regional vice president for West Conshohocken, Pa.based SMG, overseeing multiple venues, including Cobo Center. â&#x20AC;&#x153;Claude and I came to Detroit together five years ago when SMG was given the (management) contract,â&#x20AC;? Connors said in an email. â&#x20AC;&#x153;We have worked together very closely since day one at Cobo to change the culture, reorganize the business, improve labor relations, build the brand and increase both service levels and bookings.â&#x20AC;? Molinari, who has been with SMG for 18 years, has served as assistant general manager of Cobo since January 2011. Dur- Cedric Turnbore : ing his tenure in Named director of Detroit, he was operations. promoted to the additional role of regional director of operations for SMG Mideast, overseeing the operations departments of 15 regional facilities. Before coming to Detroit, Molinari was assistant general manager of Pittsburghâ&#x20AC;&#x2122;s David L. Lawrence Convention Center and general manager of SMG Exposition Services , a subsidiary of SMG. In that role, he gained experience at some of the nationâ&#x20AC;&#x2122;s largest convention centers, including the Las Vegas Convention Center and Jacob K. Javits Convention Center in New York. SMG also promoted Cedric Turnbore, a 26-year veteran of the event venue management company, to director of operations for Cobo from senior operations manager, with oversight of production, sustainability and janitorial services.äĄ˛

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MARY KRAMER Publisher mkramer@crain.com

Don’t let lead taint message for state biz Our state’s Pure Michigan campaign has a certain irony these days. Or is it just lead(en)? In most things that matter, the Flint water crisis has drowned out nearly any other messaging about the state. “My sister in Germany knows all about Flint water,” says Birgit Klohs, CEO of the Right Place economic development group in Grand Rapids. “I was in line in a restaurant in Texas — someone asked me where I was from and started asking about Flint.” Michigan needs a counter-messaging campaign. In its rollout of 2016 priorities, Business Leaders for Michigan, the statewide council of CEOs, hinted that it may be creating such a plan. “The state needs stronger approaches to business attraction,” the group says on its website, “as well as a unified economic development strategy.” And a business-attraction campaign to counter “impure Michigan” — the idea that the water isn’t fit to drink. Snyder’s predecessor, Gov. Jennifer Granholm, had two pro-Michigan campaigns with dueling celebrities — Tim Allen’s voiceovers in “Pure Michigan” tourism spots and Jeff Daniels’ on-screen touting of startup and emerging companies in “The Upper Hand” campaign. Snyder wanted Pure Michigan to carry the banner for both tourism and business attraction. One economic developer told me privately he thinks the state should pull the plug on Pure Michigan for now. Klohs thinks the tourism campaign is important but some dollars could be diverted. “Pure Michigan doesn’t work for economic development,” she says. “It’s not a business attraction campaign. We need a Dan Gilbert, a Doug DeVos, a Mary Barra talking directly about why this is a great place to do business.” What a concept: Using recognizable business leaders and company names to pitch the state. The campaign could also tout Michigan’s wins, like the autonomous vehicle test track at the old Willow Run airport near Ypsilanti or Las Vegas-based Switch’s plans to spend $400 million initially to build the SuperNAP data center in suburban Grand Rapids. The 10-year buildout could top $2 billion and create more than 1,000 IT jobs. “We talk about infrastructure — water, sewer, roads, airports,” Klohs said. “We need all of these, but part of the new business infrastructure is data centers, with all of the streaming services and business demands for data. This is a new industry for the state.” Bottom line: The message is Michigan is open for 21st century business. Catch Mary Kramer’s weekly take on business at 6:10 a.m. Mondays on WJR AM 760’s Paul W. Smith show and in her blog at crainsdetroit.com.

Industry still sorting out magnitude of complex network Stories by Leslie D. Green / Special to Crain’s Detroit Business

Defining the Internet of Things is like describing a platypus: a complex, highly adaptable animal. Ask experts and you might hear, “The Internet of Things is a model that uses networks of Internet-enabled devices without human intervention.” Or: “The Internet of Things is manufactured things connected to the Internet.” From desktop telephones to handheld smartphones to heart signatures that unlock smartphones, IoT is not new. But the rapidly evolving uses for smart sensor technology and the abundance of data being generated is making the Internet of Things increasingly part of the worldwide lexicon. It is exemplified in chairs that monitor vital signs. It’s used with sensors that predict when machines, buildings and bridges will require maintenance. And IoT is involved when chips enable companies to remotely track products from assembly to delivery — or

Michigan innovators in IoT Karetech: Transforming patient care, Page 11 AlSentis: Touch tech upgrades — without special gloves, Page 12 Civionics: A way to get ahead of factory floor problems, Page 13 PsiKick: Lowering the energy burn of embedded chips, Page 14

homes that will allow people to age in place. The biggest IoT players are large brands headquartered Google Inc ., elsewhere: Amazon.com Inc ., General Electric, Medtronic Inc., IBM Corp., Cisco Systems Inc., and Microsoft Corp . However, many major Michigan-based companies — Ford Motor Co., Dow Chemical Co., Herman Miller — and statebased start-up firms are vying for a slice of the IoT pie. There are industry-specific guesstimates as to what intelligent devices will bring us. With reports that at least 35 percent

of U.S. manufacturers already are using sensors to collect data and enhance operations, MarketsandMarkets.com predicts the industrial IoT market alone will reach $151 billion by 2020. On the health side, Business Insider reports there will be 646 million connected IoT healthy devices by 2020 and MarketResearch.com expects that health market to reach $164.24 billion in the same period. However, prospects for heightening brand loyalty through customization, data procurement and sharing — as well as increasing productivity

and cost and time savings — has companies sharing ideas, collaborating and cultivating new IoT applications. For example, Zeeland-based Herman Miller, which makes furniture, can help businesses make real estate decisions. Faurecia , an auto supplier with its innovation center in Holland, wants to monitor drivers’ health. Essentially, IoT will create better solutions for enterprises to conduct and do business, said Paul Riser, director of technology-based entrepreneurship at TechTown Detroit. “If they can become more understanding from an analytical and ‘predictalytics’ perspective of operations, of utility, of office space, of the environments we work in, of machinery and automation, of health delivery systems… we can be more proactive in understanding trends in where care and focus should be delivered, then I think we all beSEE IoT, PAGE 10

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Michigan is in a fight for mind share. At least, that’s how Automa tion Alley COO Tom Kelly sees it. State-based companies that invest in the Internet of Things will control the brainpower of their own products — the technology and the data — or that power will go to Silicon Valley or China. For this reason, along with increased brand loyalty, productivity and cost savings, accelerators, venture capitalists and manufacturers are investing business acumen and big dollars in startup companies. These startups are developing the smart technology and devices that integrate into the everyday world in new ways. According to the Ann Arborbased Michigan Venture Capital Asso ciation , IT venture capital investment in Michigan grew nearly 38 percent to $36.73 million in 2014 from $26.6 million in 2012. “A few short years ago, IT wasn’t even a major sector,” said MVCA executive director Maureen Miller Brosnan. “The predominance of funding was going into life science. Now IT is our fastest growing sector of investment. There is a growing need for more sensors included in products so we are better able to determine future possibilities.” She said the speed at which IoT developments can go to market and their low operating costs are among the reasons for increased investment. Start-to-exit time in life science is close to 10 years. IT, on the other hand, has a five- to 10-year start-to-exit time and fewer regulations. Startups coming out of the Uni versity of Michigan ’s Technology Transfer Venture Center have raised $700 million in the past five years, said director Jack Miner. His office launched 66 startups between 2011 and 2015, with 29 percent launching last year. Among them is PsiKick Inc., which

Tech Transfer launched in 2014. The chip company has raised $22 million, $17 million of that late last year, with help from New Enterprise Associates and Osage University Part ners, said CEO Brendan Richardson. And, last April, Seamless Coalition and Accelerator , founded by Grand Rapids-based early stage venture capital fund Start Garden, launched a consortium composed of Steel case Inc ., Amway , Faurecia SA , Meijer Inc ., Spectrum Health and Priority Health to invest in and cultivate startups. Rick DeVos, the entrepreneur behind ArtPrize and grandson of Amway co-founder Richard DeVos, launched Start Garden in 2012 with $15 million. Seamless Coalition Director Mike Morin said the consortium helps startups intelligently map a plan of how they will grow. The program provided $20,000 to seven companies to participate in a 12-week mentoring program that ended in November. Members of the consortium invested more than $2.5 million in the companies, and several participants were able to land development programs that added capital. Among those that received additional funding: Hollandbased touch technology company AlSentis LLC. “Seamless created a huge point of validation for us. We went from not being able to land meetings because no one ever heard of our approach or technology to being able to explain it in depth. Steelcase invested in us in less than 10 weeks,” said CEO Justin Teitt. He said AlSentis is working with Faurecia on “proprietary” vehicle interior projects and with Amway on undisclosed “durable goods with human-to-machine interfaces.” Publicist Brian Burch said AlSentis is also working with Steelcase on a touch-controlled stand-up desk. The selection process is under-

way for the next round of the Seamless Coalition program, which begins in April. This time, the group plans to invest an additional $200,000 in two participating startups that make “solid traction and progress,” Morin said. Similarly, Techstars Mobility’s Driven by Detroit program last year collaborated with eight corporate partners — Verizon, Magna International, Ford Motor Co., Dana Corp., Honda, McDonald’s, Munich RE and Michelin — and invested $120,000 in each of its 10 participating startups, said managing director Ted Serbinski. Those companies together raised $3 million and received four acquisition offers. Six of the 10 companies — including people-to-machine companies Cosmos Labs , Splitting Fares and My Dealer Service Corp . — either moved to Michigan or opened satellite offices here. While last year’s program was broadly IT based, this year’s program will include 12 companies and focus more on IoT. “Investing in IoT is really like the third major wave of the Internet,” he said. “ “Detroit has always been good at building things,” Serbinski added, “and now all these things are being connected.” Last year, Oakland University and Automation Alley invested more than $7 million into the Technology Center, an IoT education center working with Siemens, Tata Technologies, PTC and Autodesk. Automation Alley’s Kelly said the organization plans to invest another $500,000 this year. “The battle is who is going to own the brainpower that puts the smarts into the products,” he said. “We need to be the ones that not only build the product but the ones that have the knowledge of the sensors around the product. “Whoever owns that is going to control how this all plays out.” 䡲

IoT

other resources focus on developing the next better thing, he said. Boston-based Lux Research Inc . has nine separate groups analyzing IoT properties, including digital health and wellness, sensors, autonomous systems, intelligent buildings and wearables. Said senior analyst John Melnick: “There’s much upside to the Internet of Things, but it’s really about finding the specific use cases and opportunities.” For example, he said, the “Internet of Healthy Things” is about companies understanding the patient, customizing treatment and augmenting behavior rather than looking at broad strokes to predict problems. “If you start to understand glucose levels, you can understand not just when someone would need insulin but, more importantly, what they should eat to prevent an upcoming diabetic episode,” Melnick said. The reality is IoT will get bigger, much bigger, but proliferation remains an issue, said Bill Morelli,

senior director of IT and networks at research firm IHS in Austin, Texas. “There are markets that are overhyped; like smart homes,” Morelli said. “How many consumers really want 57 different apps to control the dog door, the refrigerator and the washer? Before consumers need to adopt this, they need standardization. Smartphones appeared before the iPhone, but it took the iPhone to make it mass market. The same needs to happen to smart homes for it to take a foothold.” Plus, concerns surrounding IoT’s privacy and cyber-security are real, as evidenced by last summer’s hacking of a Chrysler Jeep. J. Michael Ellis, president of system design and software company SpinDance Inc. in Holland, said there is no magic template to security and safety issues. “But there is a mindset that somebody is going to try to hack your system, so you better be ready.”䡲 Dustin Walsh contributed to this story.

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come better solution providers,” he said. The IoT puzzle of possibilities has analysts continually revising IoT’s worth. Research firm Gartner predicts there will be 21 billion connected devices in 2020 compared with 5 billion devices today. In June, International Data Corp. said IoT spending will grow from $655.8 billion in 2014 to $1.7 trillion in 2020 with nearly 30 billion connected devices. “We have no idea the true magnitude of the Internet of Things today because we don’t know what’s going to change the habit of businesses,” said Tim Shinbara, vice president for manufacturing technology at The Association For Manu facturing Technology (AMT) in McLean, Va. Used properly, IoT can reduce barriers to information about inventory or machinery when it handles routine, non-valueadd work and lets employees and

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Bed that converts to wheelchair puts nurses, doctors in driver’s seat When his sister injured her back after lifting a patient, a young Bob Karwal thought it was an inevitable part of his sister’s nursing job. Yet many years later, when the mechanical engineer tried finding a suitable wheelchair for his grandfather, he said, “enough is enough.” “We have robots that lift door panels to help workers in the factory, w should have things of this nature to help lift your grandfather, your grandmother, your sister, your brother. We don’t have that ability.” Nurses, nurses’ assistants and orderlies endure more than 35,000 injuries yearly, stemming from moving patients, according to the American Nurses Association . And bedbound patients are prone to pressure (or bed) sores, which can cause life-threatening infections like sepsis and cellulitis. “That was a powerful message for me. I realized we are giving such poor quality of workmanship to products used by those we love and who care for our loved ones. That is what brought me here today.” Karwal, CEO of Karetech Medical Devices Inc . in Farmington Hills, is working with Henry Ford Hospital in Detroit; Cleveland Clinic ; and Leam ington District Memorial Hospital in Windsor, Ontario, to develop a smart, drivable hospital bed that converts into a wheelchair. “I’m not a doctor. I am an engineer. I had a thought because of a need,” said Karwal. The need was preventing injury to caregivers and providing patients with both independence and relief from pressure sores and atrophy. At the time of his grandfather’s illness, Karwal was working on electric vehicles, such as the Tesla Roadster with Swiss manufacturer Huber + Suhner. His knowledge of automotive manufacturing led him to believe that his solution was an electric vehicle. “You can have a Chevy or a Cadillac, but for (engineers) a powertrain is a powertrain. All we needed were the internal features and the design.” Vehicle-to-vehicle connectivity also inspired him. “We certainly know that cars can talk to cars. We have known that for 10 years. I wanted to add the same knowledge and technology into the medical device,” Karwal said. “It’s the same mentality.” Eventually, he came up with the integrated health care platform (IHP), a drivable bed with steering and braking. He filed his patents and founded Karetech in 2009. The company, which is part of the relatively new category the Internet of Healthy Things, has received assistance from accelerators TechTown Detroit, NextEnergy and Henry Ford Innovation Institute . Revenue projections aren’t yet available. “With my product, you don’t push or pull,” Karwal said. “It prevents caregivers from really stressing and straining their bodies.” The bed uses a voice command system and “predictalytics,” the ability to

Karetech Medical Devices Inc. Location: Farmington Hills Founded: 2009

self-diagnose potential problems in real time and alert a support staff via the Internet. Unlike most beds, the IHP could help prevent bed sores and muscle atrophy in part because it doesn’t have a mattress, Karwal believes. Moreover, the bed’s

surface can be heated or cooled. In a statement, Zain Ismail, manager of innovation and partnerships at Leamington, said the bed “can really help us be more efficient, save money and of course protect our workforce.” Though the robotic bed is in the testing phase, Karwal expects it to be used inside and outside of the hospital. “I can imagine in-home care,” he added. “I can imagine assisted living and hospice care. I can even imagine military applications and veterinarian institutions using the bed.” 䡲

A robotic hospital bed that converts to a wheelchair is designed to prevent injuries to nurses and doctors. Karetech Medical Devices Inc. CEO Bob Karwal was

inspired by vehicle-to-vehicle connectivity in making the device.

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Holland firm puts its finger on improving touch tech AlSentis LLC is a semiconductor company, but what it actually does sounds far more interesting when you hear the CEO explain it. “Imagine being able to interface with a touch technology similar to what you would have on an iPhone — except being able to AlSentis do it through LLC not just glass or plastic, but Principals: Justin foams, fabTeitt, Dave Caldwell rics, fiberFounded: 2008 glass or Location: Holland wood. And being able to interface with surfaces that aren’t just flat, but are angular to pliable or thermalformed or textured,” said AlSentis CEO Justin Teitt. Environmental fluctuations can wreak havoc on technology: A driver with cold hands attempting to access an option on a car’s touch display could spend more time tapping his selection than watching the road. And variance issues, such as temperature and layers of paint can interfere with touch technology. However, AlSentis has developed a way to sense touch and ignore that variance. Called HSS Touch Recognition Technology, the AlSentis method uses signatures that detect actual touch rather than set thresholds. Lux Research Inc. reviewed nearly 1,200 developing technology companies last year and after its top 10 gave AlSentis an honorable mention. The Boston-based advisory firm helps clients monetize emerging technologies by rating technology developers according to competitive landscape, barriers to growth, momentum, and other factors. Senior analyst Jon Melnick said AlSentis scored quite highly. “Among other things,” he said, “the company has really compelling technology and a great management team.” So far, AlSentis will say only that it is “revenue positive” without revealing specific projections. Founder Dave Caldwell, who previously worked with U.S. Navy Nuclear Propulsion and Hollandbased Donnelly Corp, has been in the touch tech business for nearly 30 years. His technology has been integrated into vehicles and household machinery. In 1994, the Lapeer native co-founded TouchSensor Tech nologies , sold the company to Gemtron Corp. in 2007 and founded AlSentis the next year. Forbes reported last year that General Motors Co. replaced its standard OnStar button in two Chevy models with HSS technology. Other clients: Steelcase , Amway and Faurecia. 䡲

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Technology senses when something’s about to go wrong Temperature changes, weight loads, equipment that needs TLC — those are among the industrial infrastructure properties that Internet of Things technology can track. University of Michigan engineering professor Jerry Lynch and doctoral student Andy Zimmerman first researched ways they Civionics Inc. could use Principals: Jerome sensors to Lynch, Andrew measure Zimmerman and and analyze Gerald Roston the load, impact and Year founded: 2009 overall Location: Ann Arbor health of rail bridges to predict structural problems. Their company, Civionics Inc., is working with UM and an unnamed railroad on a project; however, because of market limitations, bridges are not the company’s primary focus. Under the direction of CEO Gerry Roston, former president of New Enterprise Forum in Ann Arbor and CEO of InPore Technologies in Lansing, Civionics spent 2015 updating its product line and getting ready for new operations. That rediscovery period is paying off with a new focus as a potential profit center: manufacturing. In January, Gerry Roston: Civionics inCEO is also director stalled sensors in residence of for its first major TechTown Detroit customer, an undisclosed automotive OEM. The wireless sensors, on control cabinets at two of 24 stamping lines, measure temperature, current and other criteria to identify anomalous data and predict when infrastructure failure is imminent. “At a stamping plant at Chrysler , for example, Civionics could detect the possibility of downtime in advance,” said Paul Riser, TechTown director of technology-based entrepreneurship. IDC Manufacturing Insights in a 2015 study reported the most immediate benefit to industrial IoT “is eliminating the need to have personnel acquire and enter data on the plant floor.” Roston, who also is executive director in residence at TechTown, said Civionics can save manufacturers time and money by anticipating the issues. Civionics has also installed a pilot system at a “multinational aerospace corporation in California. Revenue for the company has been averaging about a couple of hundred thousand dollars a year; 2016 projections were about $750,000. But, Roston said, that number could dramatically increase depending on client wins. 䡲

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Company cracked code for battery-less tech It’s not news to say experts believe nearly every “thing” — bicycles, toasters, eyeglasses, clothing, lampposts — will eventually use embedded chips, or sensors, to connect wirelessly to everything else. Electrical meters and wearables already are providing real-time data to smartphones. Cars are beginning to communicate with roadways. Yet, in all of the excitement about the “Internet of Things,” very little is being said about what will actually power the chips that make the things talk. “This is where the grand vision breaks down. This is when you start to think about having to change a battery for everything that’s ‘smart,’” said Brendan Richardson, co-founder and interim CEO of PsiKick Inc. “Your refrigerator and toaster will be plugged in and won’t need battery power. However, those things needing batteries will need to have their batteries changed every cou-

PsiKick Inc. Principals: Brendan Richardson, Benton Calhoun, David Wentzloff Year founded: 2012

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technology. David Wentzloff, professor of electrical engineering and computer science at the University of Michigan, and Benton Calhoun, professor of electrical and computer engineering at the University of Virginia, met and collaborated while pursuing Ph.D.s at Massachusetts Institute of Technology. While they each returned to work at their undergraduate alma maters after graduation, their collaboration continued. More than a decade later, in 2011, they created self-powered chips that detect anomalies or patterns and wirelessly send the data and analyses to the cloud. One such use, Richardson said, is a wearable EKG sensor powered by the wearer’s body heat. Similar human-powered technology is coming out of MIT. According to a report in The Guardian, researcher Sangtae Kim is hoping to commercialize a product placed in the soles of shoes to power sensors and wearable gadgets. As for PsiKick’s technology, Jack Miner, director of the Venture Center in the Office of Technology Transfer at UM, said some of the company’s chips wake up only in certain conditions — temperature changes, low indoor light, voice vibration, certain times of days. The chips get the signal they need and go back to sleep after sending the appropriate data. The Tech Transfer office helped PsiKick secure initial funding and helped connect the principals to various partners. Richardson, a former partner at Silicon Valley-based Vision Capital, has a history of investing in chip startup companies. He said he recognized quickly that Wentzloff and Calhoun created something “pretty unique and potentially disruptive.” In other words, their work could change the manner in which businesses (tech or otherwise) create value. PsiKick’s EKG application is not being marketed for commercial use because the company doesn’t yet have the funds to pursue Food and Drug Administration approval. However, it is working with the Depart ment of Defense on the technology. “Imagine a sensor in a soldier’s helmet that can perform an EEG or a digitized sensor in a uniform that can perform an EKG,” Richardson said. “There are prototypes now that require batteries, and they are bulky. We are designing chips that would lower the weight.” 䡲

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

Where IoT has found a home Here are some other new applications of Internet of Things technology from Michigan companies:

AlSentis as well as a chair that remembers the userâ&#x20AC;&#x2122;s last setting and adjusts itself. In June, Wired reported the furniture manufacturer introduced a heated chair with speakers in the headrest and a sensor that signals if the seat is already occupied. The company also updated its Gesture chair, which can now monitor sitting position, heart rate and stress levels. Plus, video conferencing tech is part of Steelcaseâ&#x20AC;&#x2122;s smart product lineup.

Hospital and patient care äĄ˛ Zeeland-based Herman Miller is working with Boston-based EarlySense to include technology in hospital chairs and beds. The embedded technology would monitor a patientâ&#x20AC;&#x2122;s motion, heart and respiratory rates and notify staff of changes, said Joel Van Wyk, director of the furniture manufacturerâ&#x20AC;&#x2122;s health care product category. â&#x20AC;&#x153;They desire to prevent patient falls. Getting out of the bed on their own is a big contributor to that.â&#x20AC;? äĄ˛ Detroit and Pittsburgh-based Impellia â&#x20AC;&#x201D; founded by Dave Morin, Richard Walker and former Detroit Lions and Pittsburgh Steelers player Charlie Batch â&#x20AC;&#x201D; recently licensed IoT application Pivot from the Uni versity of Pittsburgh. Morin said the Pivot technology uses sensors placed on the knee to measure the likelihood of an ACL (anterior cruciate ligament) tear in the joint or classify the degree of the injury. Impellia also has optioned tele-rehabilitation technology Visyter and InterAction to help therapists remotely monitor patients.

Workplace space äĄ˛ To help customers understand how they are using their environments, such as a conference room, Herman Miller has been using sensor technology in some of its office furniture for nearly 10 years. Herman Millerâ&#x20AC;&#x2122;s Joel Van Wyk said that knowledge allows clients, usually large Fortune 1000 companies, to better use spaces or recognize when they need to buy or lease new spaces. äĄ˛ Ferndale-based Tome Inc. has developed a system called Office IQ that knows whether users are sitting or standing when they are at their desks. Co-founder Jake Sigal said unlike wearables, such as Jawbone,

Top: High-tech hospital chair from Herman Miller and Early Sense. Below: Wearable technology from Ford Motor Co. New York manufacturer Humanscale builds Office IQ sensors into its furniture. The information then shows up on usersâ&#x20AC;&#x2122; computer screens. â&#x20AC;&#x153;It just seamlessly fits into that working experience,â&#x20AC;? said Sigal, who added that companies that encourage wellness breaks also encounter decreased productivity. â&#x20AC;&#x153;Obviously if you have 50 emails and you leave your desk and go for a walk, youâ&#x20AC;&#x2122;re going to come back and have 55 emails,â&#x20AC;? he said. â&#x20AC;&#x153;With the combination of sitting and standing at your desk, youâ&#x20AC;&#x2122;re getting a lot more activity without decreasing productivity, and it also helps with a lot of lower back pain.â&#x20AC;? äĄ˛ Grand Rapids-based Steelcase Inc . is developing touch-control stand-up desks with Holland-based

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äĄ˛ Dow Chemical Co. in Midland is exploring opportunities to use cloud-based analytics and sensing in several of its businesses. Realtime data can make all the difference when it comes to adapting to changing conditions in areas such as agriculture. â&#x20AC;&#x153;Uses range from precision agriculture in our AgroSciences business to remote microbial sensing in our microbial control business â&#x20AC;&#x201D; to intelligent packaging in our plastics and specialty packaging business,â&#x20AC;? said Paula Tolliver, chief information officer and corporate vice president, business services. â&#x20AC;&#x153;Sensors could be placed in the field (oil wells, water sample, crop field condition, grain silos, etc.) and report back environmental, chemical, or even images where they can be analyzed, expanding currently available data.â&#x20AC;? Transportation äĄ˛ Dow Chemical Co. tracks more than 20,000 rail cars by passive radio frequency identification and 600 railcars with GPS tags and impact sensors throughout North America to evaluate supply chain performance, said Dowâ&#x20AC;&#x2122;s Paula Tolliver. This allows the company to analyze weather-related data on railroad routes to â&#x20AC;&#x153;proactively manage weather events.â&#x20AC;? äĄ˛ Ford Motor Co. announced in January it is developing wearables that monitor driver stress and fatigue and alerts them as necessary. The Dearborn-based automaker also is investigating ways to integrate its Sync software with Ama zonâ&#x20AC;&#x2122;s Echo and Wink, both Internet devices for the home. Fordâ&#x20AC;&#x2122;s plan isnâ&#x20AC;&#x2122;t just for drivers to start and stop and lock and unlock their vehicles, but to communicate with Echoâ&#x20AC;&#x2122;s assistant â&#x20AC;&#x153;Alexaâ&#x20AC;? regarding calendars, home and vehicle temperatures, garage doors and lights for a totally integrated experience. äĄ˛ Similarly, the Holland-based innovation arm of Faurecia is collaborating with Honolulu-based Hoana Medical Inc. on noncontact biometric sensors that determine heart and respiration rates to analyze the stress and alertness of people in cars. â&#x20AC;&#x153;With that, we can actuate heating and cooling and posture to offer therapeutic regimes to relax the occupant or energize the occupant,â&#x20AC;? said Dana Lowell, Faureciaâ&#x20AC;&#x2122;s global director of technology ventures. äĄ˛

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WORLD WATCH WHERE MICHIGAN DOES BUSINESS

Belfor Holdings Inc. Based: Birmingham Operations: One operations office

in Shanghai and Dongguan Employees: 20 Products/Services: Commercial and industrial fire, smoke and water restoration services; environmental services Top executive: Tommy Kang, Greater China regional director; Richard Chang, China operations manager

Cooper-Standard Automotive Inc. Based: Novi Operations: Headquarters, manu-

facturing and technical facilities in Shanghai; manufacturing facilities in Chongqing, Shenyang and Wuhu; one joint-venture manufacturing facility in Guangzhou; one manufacturing facility and one joint venture manufacturing facility in Huai’an; two manufacturing and technical facilities in Kunshan Employees: 3,743 Products/Services: Anti-vibration systems, fluid transfer systems, fuel and break delivery systems and sealing systems Top executive: Song Min Lee, corporate senior vice president and president for the Asia-Pacific region Clients: BMW, BYD Auto, Changan Auto, Chery Auto, Daimler, Ford, Fuyao, Geely, General Motors, Honda, Inergy Automotive Systems, Jianghai, PSA, SAIC Motor, Tata, Volkswagen

Domino’s Pizza Inc. Based: Ann Arbor Operations: 48 stores in Shanghai

and 52 stores in Beijing Employees:

2,000 Products/Ser vices: Pizza and

other food products developed for regional markets Top executive: Doug DeBoer, president and CEO

Faurecia North America Inc. Based: Auburn Hills Operations: Headquarters for

Faurecia China in Shanghai with 40 plants and four R&D centers over five main automotive regions Employees: 13,000 Products/Services: Seating systems; interiors systems; emission control systems; and exteriors Top executive: Jean-Michel Vallin, president of the China division Clients: First Automobile Work Shop-Volkswagen, SAIC Motors Corp.–Volkswagen, Dongfeng Nissan, Dongfeng Citroen , Changan PSA, Changan Ford, Geely, BYD Auto and Great Wall Motors

CHINA ith a 2015 nominal GDP of $11.38 million, China is the world’s largest economy, surpassing the Beijing United States in 2014, according to the CIA World Factbook. China Chengdu Suzhou Shanghai has experienced many Hangzhou Chongqing economic changes over the past few years, becoming the world’s Guangzhou largest exporter in 2010 and undertaking Hong Kong substantial economic reforms in the fall of 2015. Haikou China’s largest exports are apparel, furniture, electrical and other machinery, data processing equipment, textiles and integrated circuits. Its biggest export partners are the United States (16.9 percent), Hong Kong (15.5 percent), Japan (6.4 percent) and South Korea (4.3 percent). China’s largest imports are oil and mineral fuels; nuclear reactor, boiler and machinery components; electrical and other machinery; metal ores; soy beans; motor vehicles; and optical and medical equipment. Its biggest import partners are South Korea (9.7 percent), Japan (8.3 percent), the United States (8.1 percent) and Taiwan (7.8 percent). 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 April: Australia and New Zealand; May: Germany

Federal-Mogul Corp. Based: Southfield Operations: Manufacturing oper-

ations in Nanchang, Shanghai, Qingdao, Anqing, Changsha, Chongqing, Langfang, Wuhan, Tianjin, Changshu, and a technical center, distribution center and sales offices in Shanghai Employees: 3,700 Products: Engine bearings and materials, pistons, rings, sealing, ignition, cylinder liners, valve seats and guides, friction products, valvetrain products, other Top executives: Felix Cheng, VP and general manager for China and Korea, powertrain; Keith Power, president of Asia Pacific, motorparts

Ford Motor Co. Based: Dearborn Operations: Asia-Pacific head-

quarters, China head office and credit office in Shanghai; a research and engineering center in Nanjing; and nine joint venture manufacturing facilities with Changan Ford and Jiangling Motor Co. across Chongqing, Nanjing, Hangzhou and Nanchang Products/Services: A portfolio of passenger and commercial vehicles, as well as financing services Top executive: John Lawler, chairman and CEO of Ford China

General Motors Co. Based: Detroit Operations: Headquarters in

Shanghai, 11 joint ventures, two wholly owned foreign enterprises and 24 plants across the country Employees: 58,000

Products/Services: Buick, Cadil-

lac, Chevrolet, Baojun, Wuling and Jiefang vehicles and products Top executive: Matt Tsien, executive vice president and president of General Motors China

International Automotive Components Group Based: Southfield Operations: A regional headquar-

ters in Shanghai; one manufacturing facility in Chongqing, Fuzhou, Hangzhou, Tianjin and Shenyang; and two manufacturing facilities in Beijing, Changshu, Shanghai, Wuhan and Yantai Employees: 650 Products/Services: Vehicle interior components and systems, headliner and overhead system, instrument panels, consoles, other Top executive: QiuMing Yang, vice president for China Clients: Changan Ford, Fujian Daimler, Jaguar Land Rover, Beijing Benz Automotive Co., Qoros, SAIC Motor, Shanghai General Motors, BAIC Group, Denza, Mitsubishi, Nissan and Honda

Inteva Products LLC Based: Troy Operations: One manufacturing

facility in Changchun, one manufacturing facility in Chengdu, two manufacturing and technical center joint venture facilities in Shanghai, one manufacturing facility in Wuhan, one operations and technical center in Zhenjiang, and a technical center, one test lab and two operations locations in Waigaoqiao Employees: 2,500 Products/Services: Door modules,

sunroofs and rollers, latches, window regulators and motors Top executive: Richard Zheng, managing director for China Clients: Volkswagen (including FAW-VW and Shanghai VW), SAIC Motor, General Motors (including Shanghai GM and GMDAT), CFMA, Dongfeng Citroen, Chery Auto and Haima

Kelly Services Based: Troy Operations: Recruitment centers

in Beijing, Chengdu, Guangzhou and Suzhou; a recruitment center plus corporate office in Shanghai Employees: 90 Products/Services: Placement, recruitment process outsourcing, managed service provider, payroll process outsourcing, contracting and labor dispatching Top executive: Nathan Li, country GM for Kelly Services China and CFO and CAO for North Asia

Lear Corp. Based: Southfield Operations: Headquarters and

technical center based in Shanghai; 27 manufacturing locations for seating and electrical operations and eight non-consolidated joint ventures located across the country. Employees: 12,500 Products/Services: Automotive seating and electrical components Top executive: Jay Kunkel, president of Asia Pacific operations

MSX International Inc. Based: Detroit Operations: Headquarters in

Shanghai Employees: 100 Products/Services: Provides parts

and accessories, sales programs, dealer standards and process improvements; and training, technical and warranty support Top executive: Stuart Faid, managing director of MSXI China Clients: BMW, Ford, Fujian Benz, In finiti, Jaguar Land Rover, Jiangling Mo tors, John Deere, Mercedes-Benz and Volvo

NSF International Based: Ann Arbor Operations: An office and labora-

tory in Shanghai Employees: 100 Products/Services: Certification and testing of food equipment, drinking water systems, filtration and plumbing components, dietary supplements and consumer products and textiles, other Top executive: Greg Brown, managing director of NSF China and NSF Global Seafood

RGIS LLC Based: Auburn Hills Operations: Offices in Shanghai,

Beijing, Guangzhou, Suzhou, Hangzhou, Chengdu and Hong Kong Employees: 200 Products/Services: Inventory services for retail stores and health care industry as well as commercial and industrial customers. Top executive: Daniel Ni, country manager and China operations manager

TI Automotive Ltd. MPG PHOTO

An MPG plant in Suzhou

MPG (Metaldyne Performance Group Inc.) Based: Southfield Operations: Two manufacturing

facilities in Suzhou Employees: 360 Products/Services: Engineered products for auto engine applications such as powder metal connecting rods, crankshaft dampers, other; products for transmission applications; and cold forged parts for powertrain applications Top executive: Jose Miranda, general manager for Metaldyne Suzhou Clients: Changan Ford, Changan Ford Mazda Engine, Dongfeng Peugeot Citroen, SAIC Motor, Beijing Foton Cummins Engine Co., Chery Auto, Cummins North America and Integral Accumulator

Based: Auburn Hills Operations: Plants in Changchun,

Guangzhou, Haikou, Chongqing, Qinhuangdao, Shanghai, Shenyang, Tianjin and Wuhan Employees: 3,400 Products/Services: Gasoline direct injection lines and rails, turbo charger lines, brake and fuel lines, engine lines, fuel tank assemblies, other Top executive: Brian Kaiser, managing director of fluid carrying systems for Asia-Pacific; Peter Bian, managing director of fuel tank and delivery systems for Asia-Pacific Clients: FAW-Volkswagen, BMW, Brilliance Auto, Kautex, Nissan, Toyota, Audi AG, Shanghai-Volkswagen, Changan Ford, Changan Mazda, LiFan, DFL-Nissan, Geely, Dongfeng Nissan Motor, Daimler China, Great Wall Motors, Beijing Automotive Industry Holdings Co. and Beijing Benz Automotive Co. Ltd. Natalie Broda

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Family business owners face incredible odds. Family Firm Institute Inc., a research group based in Boston, found that about 30 percent of family owned businesses survive to the second generation, and only 12 percent remain viable into the third. The statistics drop further from there, with only 3 percent of family businesses making it to the fourth generation and beyond. Joseph Horak, director of The Family Owned Business Institute at Grand Valley State University in Grand Rapids, believes failure of planning plays a factor in these statistics. “It’s not just your typical procrastination; it’s avoiding some very hard decisions,” Horak said. “You have to have conversations with your family that are hard.” Morrie Stevens Sr., chairman and CEO of fifth-generation family company Stevens Van Lines Inc., uses several tactics to confront decision-making, including regular family meetings. “It creates an environment of looking ahead and continuing to push the envelope,” Stevens Sr. said. “If you don’t have a family meeting, it doesn’t get done.” Inter-generational conflicts and resolving differences are other common issues. “Maybe the next generation isn’t competent to lead, or the current generation has a hard time letting go of control or being more innovative,” he said. Peter James DeWitt, president of fifth-generation family company De Witt Barrels Inc. , said the business doesn’t waste time on family disagreements. “If we make a mistake, we recognize it, learn from it and move ahead, rather then dwell on it and point fingers,” he said. Beyond internal family issues, there’s still the basic challenge of making a business last decade after decade. In this month’s Second Stage, we talk to family companies — each of them more than 100 years old — to find out how they beat the odds. The common theme among them? The ability to diversify and stay ahead of their ever-changing industries.

Barrel company rolls toward its sixth generation of ownership

Behind fifth-generation business owners Peter James DeWitt and Tim DeWitt is a business with a long history of staying on top of industry trends. The brothers own 123-year-old family company DeWitt Barrels Inc. , based in Marne, near Grand Rapids. The business was founded in Chicago by their grandfather, Peter DeWitt. The company has 70 employees and hit $11.5 million in revenue last year. DeWitt Barrels sells and reconditions steel, fiber and plastic drums for reuse. The company’s main customers are in

the oil and chemical industries. “We’re a very close family. We remember that when you walk in the door, it’s business, and when you come home it’s family,” said Peter James DeWitt, president. “It’s a hard thing to learn, but we’ve been very successful at it for a long time.” The company began in 1893 when Peter DeWitt, an immigrant from the Netherlands, settled his family in Chicago — already a major distribution point for the U.S. at the time. He saw opportunity in reselling old wood barrels, which companies would

burn after use. He crafted new ones by removing and recycling wooden staves — the narrow strips of wood that form the sides of barrels. As business grew, Peter hired a crew and began repairing and reconditioning barrels. He moved the company to Grand Rapids in 1937. The company has passed down from father-to-son ever since. “Each generation has done it differently than the generation prior,” Tim DeWitt, secretary and treasurer, said. “We’re

The DeWitt family has owned its barrel company for 123 years. From left : Peter Jason DeWitt; his father, Peter James DeWitt; and Peter James’ brother, Tim DeWitt.

SEE BARRELS, PAGE 18

Photo by Rex Larsen

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BARRELS FROM PAGE 17

about as different of individuals as you can possibly find, but we all have respect for each other and we’re good listeners.” Peter James and Tim’s father, Peter Joseph DeWitt, picked up on a trend in the 1940s when customers began switching to steel drums and retooled his company’s facility to suit. Other barrel companies that continued to use wood barrels eventually died out. “Many (competitors) who couldn’t see forward and adapt and embrace the new types of containers and technologies are gone,” Peter James said. “Those that survived, our family included, were wise enough to see what was coming down the road.” Peter Joseph retired and passed the business ownership to his sons Peter James, Tim and Michael. (Michael is now retired.) The brothers increased the company’s revenue by shifting focus on becoming more involved in the barrel reconditioning process, rather than being just a broker. They also brought intermediate bulk containers into the business. These are reusable industrial containers designed for storing and transporting barrels easier. “We saw this happening almost 20 years ago, and my brother

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Michael pushed us hard to get into it,” Peter James said. Peter James’ son, Peter Jason DeWitt, is vice president of the company. He too has come up with new ways to keep the company on top of industry trends. Recently, he persuaded the company to purchase a robot to operate the intermediate bulk container production line. Peter James said the company was not originally in favor of the idea, as the operation was costly. When Peter Jason presented research that showed what the costs and payback would be, the top executives changed their minds. “He had the task of trying to sell his idea to us, much the same as any company trying to sell themselves to investors to enable them to grow,” Peter James said. “He was right — it enables us to increase our production without sacrificing any quality.” Peter Jason was rewarded for his forward thinking by the company’s decision to pass the next generation of ownership to him. Tim and Peter James said the family does not have a specific timeline or rule of thumb for succession planning, but instead picks a successor depending on work ethic and passion for the business. “This isn’t the kind of business that you can do and survive if you’re an absentee owner,” Peter James said. “You have to be actively in-

volved, and you have to have knowledge of everything you’re doing.” Peter James recommends staying in contact with professional advisers when choosing successors and for determining a company’s worth. “I really believe there are family businesses that only go so far because they just don’t want to go through the problem and the hard task of passing it along,” he said.

Not always full of laughs DeWitt Barrels has had its share of bumps along the way. An arson fire destroyed the Grand Rapids plant in 1974, burning equipment and all paper and plastic barrels inside the building. The company continued to operate while the new facility was being built around them. “We worked outside in the yard, rain or shine, doing what we could to process barrels that were still coming in that needed to be cleaned or loaded on trucks to have to go out,” Peter James said. During the recession of 2001, DeWitt lost a lot of major customers. “We decided we either had to grow the business to continue or we had to get out,” Peter James said. Peter James, Tim and Michael went through financials to cut spending. They searched for customers by going through phone books and finding out who worked in the oil and chemical industry. And they went to companies doorto-door to drum up new business. “I never had a door that wouldn’t open to me,” Tim said. “They knew DeWitt Barrels.” They gained customers and moved to Marne, the current headquarters, to expand. The facility processes 3,000-4,000 drums a day. “Our new plant was designed to do oil drums and chemical drums, and we made those customers our focus,” Tim said. The owners also maintain relationships with state inspectors and industry trade groups to stay current on environmental rules. “(Companies) and business associates that didn’t pay attention to all of the environmental rules got themselves into trouble,” Peter James said.

Barreling ahead The company was awarded a Clean Corporate Citizen award by the state of Michigan in 1999 for its efforts, the first year the award was handed out, and has won the award every year since. DeWitt Barrels was also honored by the U.S. Small Business Administration as the Jeffrey Butland FamilyOwned Business of the Year in 2010. Tim and Peter James don’t immediately plan to leave the business, but are getting ready to pass it on. “It’s hard to see someone have a different slant on something that you’ve done a certain way for a lot of years,” Tim DeWitt said. “But not everything we tried worked, and when it didn’t, we’ve certainly learned, and we’ve shared that experience with Jason.” 䡲

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Van company avoids blowouts by rolling with the changes Morrie Stevens Sr. credits business diversification for his fifth-generation family company’s ability to survive through the generation changes, rolling with the changes that have come to the moving and storage industry over the years. “Our ability to change with the times has definitely kept us in business,” said Stevens, chairman and CEO of Stevens Van Lines Inc. Stevens services households, offices, the government and churches regionally and internationally, including shipping cargo. The Saginaw-based company has about 175 employees and reached $75 million in revenue last year. The company also is connected to the Stevens Center for Family Busi ness at Saginaw Valley State Universi ty . Stevens’ wife, Julie Stevens, helped spearhead the family business center aimed at bringing family businesses together. Frederick H. Stevens Jr., grandfather to Morrie, founded Stevens Van Lines in 1905. Stevens Jr., a lumberman, saw his industry was dying but that there was a consistent need outside it for delivery services. He began by hauling freight and baggage using a single horse and dray, a cart used for delivering heavy loads, to and from Michigan Central Railroad Depot in Saginaw. A few years later, the company began moving people in Saginaw, transporting household goods for homes. That line of business still brings in most of the revenue. The business saw opportunities in other moving markets in the 1950s, when the freeway systems were built. Stevens Van Lines began using straight trucks and semis to move furniture, household goods and, later, large computer systems and medical equipment. As times changed, computerized technology became smaller and de-

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mand decreased. “What we used to put in a semi goes into a UPS box now,” Stevens said. “There were several moving companies that specialized in that, and it put them all out of business.” Another way Stevens increased revenue was through the addition of the company’s international division in 1981. Stevens Van Lines had previously packaged shipments with international companies throughout Ohio and Michigan, but the company chose to go it alone. “We just got to a point that we said, ‘we’re doing this work at both ends, why don’t we just do it on our own and capture more of the revenue,’” Stevens said. International shipping makes up about 20 percent of revenue.

Tools of the trade The moving and storage industry has had its struggles of late. People move less in the wake of the recession, and many telecommute rather than move for work. “This country has had a major change in mobility,” Stevens said. “A lot of local movers have gone out of business.” The industry also has been impacted by a shortage of drivers. Stevens said it’s not a lifestyle millennials gravitate toward. Stevens Van Lines uses a number of tools to stay on top of trends. The family has annual meetings and keeps in touch with consultants. Stevens stays active in the National Moving Association and has served on the board, twice as chairman. The family business

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center at Saginaw Valley State keeps the company in touch with other business owners. The company beefs up retention through a stock ownership plan. Stevens and his family own 70 percent of the company, and employees own the remaining 30 percent. The company maintains relationships with customers it’s had for decades — including the U.S. De partment of Defense . Stevens has been moving military personnel since World War II. “Once you qualify as a carrier to do business, you can basically stay on as long as you continue to meet their requirements and do a good job,” Stevens said. Besides diversification, the company has survived by paying close attention to touchy issues like succession planning. It even has a family “constitution” that spells out requirements for family members who want to be a part of the company. Those who want to work at Stevens must work three years outside of the company. If they have a college degree, they can pursue a management position. “I don’t want to negotiate with each one of my children on all of these issues,” Stevens said. “This way, it’s their document, not mine.” Succession buyouts keep ownership interests from getting messy. “If we didn’t have succession buyouts, I’d have cousins in the company,” Stevens said. Stevens said Stevens Van Lines in the past put family before business. His father paid all family members equally, regardless of their roles. “If your last name was Stevens, you were an executive. It didn’t matter what your skill sets were or your energy level was,” Stevens said. “If you want to preserve longevity, you have to get the culture switched to a business-first business.” 䡲

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1934 Hendrik Meijer

Hank Meijer, co-chairman and co-CEO, grandson; Doug Meijer, co-chairman, grandson

Supercenters and grocery stores.

1959 Jay Van Andel and Rich DeVos 1946 William Russell Kelly

Steve Van Andel, chairman, son of cofounder Jay Van Andel; Doug DeVos, president, son of co-founder Rich DeVos

100

A global direct-selling business and other holdings.

Terence Adderley, chairman, son

Outsourcing and consulting services as well as staffing on a temporary, temporary-to-hire, and direct-hire basis

Jon Cotton, president, Meridian Health Plan of Michigan, son; Sean Cotton, chief administrative officer, son; Michael Cotton, COO, son Christopher Ilitch, president and CEO, Ilitch Holdings Inc., son

Government programs health insurance

100

Food, sports and entertainment industries. Companies include Little Caesars Pizza, Olympia Entertainment, Detroit Red Wings, Detroit Tigers, Blue Line Foodservice Distribution, MotorCity Casino Hotel, Ilitch Holdings Inc., Champion Foods, Olympia Development and Little Caesars Pizza Kit Fundraising Program. Manufacturer of rigid plastic packaging containers and preforms for consumer product companies.

Meijer Inc. 2929 Walker Ave. NW, Grand Rapids 49544 (616) 453-6711; www.meijer.com

-12.0

Amway 9,500.0 7575 Fulton St. E., Ada 49355-0001 10,800.0 (616) 787-1000; www.globalnews.amway.com

Kelly Services Inc. 999 W. Big Beaver Road, Troy 48084 (248) 362-4444; www.kellyservices.com

5,518.2 5,562.7

-0.8

3,370.4 1,945.0

73.3

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

1997 David Cotton

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

3,300.0 3,300.0

0.0

1959 Michael and Marian Ilitch

Plastipak Holdings Inc. 41605 Ann Arbor Road, Plymouth 48170 (734) 455-3600; www.plastipak.com

2,856.7 C 2,405.8

18.7

Moroun family holdings 12225 Stephans Road, Warren 48089 (586) 939-7000; NA

2,311.2 D 2,235.1 D

3.4

Sherwood Food Distributors LLC 12499 Evergreen Road, Detroit 48228 (313) 659-7300; www.sherwoodfoods.com

2,181.3 1,740.8

25.3

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

2,001.5 1,914.5

4.5

H.W. Kaufman Financial Group Inc./Burns & Wilcox Ltd. 30833 Northwestern Highway, Farmington Hills 48334 (248) 932-9000; www.kaufmanfinancialgroup.com

1,830.0 1,625.0

12.6

1969 Herbert W. Kaufman

1,780.3 1,498.0

18.8

Barton Malow Co. 26500 American Drive, Southfield 48034 (248) 436-5512; www.bartonmalow.com

1924 Ben Maibach Jr. E

Serra Automotive Inc. 3118 E. Hill Road, Grand Blanc 48439 (810) 694-1720; www.serrausa.com

1,612.1 1,556.5

3.6

1973 Albert M. Serra

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

1,432.0 1,550.0

-7.6

1916 John Rakolta Jr., chairman and CEO, son John Rakolta F

Wolverine Packing Co. 2535 Rivard, Detroit 48207 (313) 259-7500; www.wolverinepacking.com

1,268.0 1,213.0

4.5

Soave Enterprises LLC 3400 E. Lafayette Blvd., Detroit 48207 (313) 567-7000; www.soave.com

1,216.5 1,970.0

-38.2

1,079.0 733.0

47.2

The Diez Group 8111 Tireman Ave., Dearborn 48126 (313) 491-1200; www.thediezgroup.com

1973 Gerald Diez

Zeigler Auto Group 4201 Stadium Drive, Kalamazoo 49008 (269) 375-4500; www.zeigler.com

955.0 832.0

14.8

1975 Harold Zeigler

Kenwal Steel Corp. 8223 W. Warren Ave., Dearborn 48126 (313) 739-1000; www.kenwal.com

910.0 899.2

1.2

1947 Sol Eisenberg

Bissell Homecare Inc. 2345 Walker Ave., Grand Rapids 49544 (616) 453-4451; www.bissell.com

900.0 NA

1876 M.R. Bissell

Orleans International Inc. 30600 Northwestern Highway, Suite 300, Farmington Hills 48334 (248) 855-5556; www.orleansintl.com

856.0 758.4

12.9

8 9 10

19 20

! $' # )$ !

" !

(

1967 William C. Young, president and CEO, son William P. and Mary Young 1937 T.J. Moroun

Manuel Moroun, son, and Matthew Moroun, grandson, both hold several executive positions.

Ambassador Bridge and various trucking and logistics companies

100

Wholesale food distributor

100

Automobile sales and service

Alan J. Kaufman, chairman, president and CEO, son; Daniel J. Kaufman, corporate vice president, grandson

100

Insurance distribution, underwriting, brokerage, financing, claims administration, inspections, loss control, audits and real estate

Ryan Maibach, president, CEO and chairman, grandson; Doug Maibach, executive vice chairman, son; Ben Maibach III, chief community officer, son Joseph Serra, president, son

General contracting, construction management, design/ build, engineer-procure-construct, integrated project delivery, self-perform services: civil, concrete, rigging.

100

Retail automotive

Construction company offering services in North America and South America

100

Wholesale meat packer and processor; wholesale meat, poultry and seafood distributor

100

Diversified management holding company, specializing in scrap metal recycling, real estate, hydroponic greenhouse, auto retailing, others

Aluminum and steel sales, blanking, CTL, laser welding, slitting and warehousing

100

Automotive retail

100

Steel service center

100

Manufacturer and marketer of floor cleaning products

100

Meat trader

1969 Howard Ishbia, executive vice president, Earl Ishbia and sales and marketing, son; Jason Ishbia, Alex Karp executive vice president, finance and CFO, son; Joel Ishbia, executive vice president, inventory management, son; Gary Karp, executive vice president, corporate affairs and general counsel, son; David Ishbia, sales, son; Scott Ishbia, IT, son 1948 David Fischer, president and CEO, son; Richard David Fischer Jr., vice president, grandson; Fischer Zachary Fischer, director, grandson

1937 Alfred Bonahoom

Jim Bonahoom, president, son; Roger Bonahoom, vice president, son; Jay Bonahoom, vice president grandson

1961 Angelique Soave, vice president, daughter; Anthony Soave Andrea Soave Provenzano, vice president, daughter April Diez, vice chairman, daughter; Gerald Diez Jr., president, son; Sherry Diez, vice president, daughter; Mark Diez, vice president, son Aaron Zeigler, president, son

Kenneth Eisenberg, chairman and CEO, son; Stephen Eisenberg, president, Burns Harbor, grandson

Mark J. Bissell, CEO and chairman, fourth generation great-grandson; Max M. Bissell, global accounts manager, fifth generation; M. Catherine Bissell, director corporate affairs 1937 Earl Tushman, president, grandson; Larry Max Tushman Tushman, vice president and secretary, grandson; Reed Tushman, director of operations, great grandson; Marc Tushman, director of logistics and operations, great-grandson

This list of family-owned businesses is an approximate compilation of the largest such businesses in Michigan. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. For some companies, the founders were later bought out by another family. Actual revenue figures may vary. NA = not available. If you believe your company should be on this list, contact Sonya Hill at shill@crain.com.

B Supermarket News estimate. C Estimated revenue includes acquisition of APPE packaging division of LaSeda de Barcelona Group in July 2015. D Crain's estimate. E Founded in 1924 as C.O. Barton Co. by Carl Osborn Barton. The Maibach family acquired majority control in 1961. F George B. Walbridge and Albert H. Aldinger founded the company in 1916. John Rakolta Sr. bought the company in 1963 with business partner Robert Robillard. LIST RESEARCHED BY SONYA D. HILL

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DEALS & DETAILS CONTRACTS Pipecon Inc., Plumbing Techs of Michigan, Oak Park,

was recently awarded plumbing contracts by Stellar Hospitality Inc., Farmington Hills, for two new hotels: the Staybridge Suites, Ann Arbor, and the Hilton Homewood Suites, Novi. Website: plumbingtechs.com. Aqaba Technologies Inc., Sterling Heights, an Internet marketing agency, has been retained by Vintage House Banquets and Catering, Fraser, to design

a new mobile responsive company website. Also Aqaba has redesigned and launched the new website for MRPR Group PC, Southfield, a certified public accounting and business advisory firm. Websites: aqabatech.com. vintagebanquetsandcatering.com. mrpr.com.

EXPANSIONS

Art Van Furniture Inc., Warren, has opened a store

at 125 E. Army Trail Road, Glendale Heights, Ill. Website: www.artvan.com.

TUESDAY MOVES AccessPoint LLC, a staffing, recruiting, HR out-

sourcing and professional employer organization, has moved its corporate headquarters from 42400 Grand River Ave., Novi, to 28800 Orchard Lake Road, Farmington Hills. Telephone: (866) 513-3861. Website: accesspointhr.com.

NEW SERVICES University of Michigan Health System, Ann Arbor,

has purchased the BrightMatter solution for planning and performance of complex brain surgery, from Synaptive Medical, Toronto, Ontario. The is a highly detailed imaging and robotic positioning system with sensor-driven tools used in the operating room. It should arrive in Ann Arbor in July. Website: synaptivemedical.com. uofmhealth.org.

STARTUPS Make it Memories, a personalized home gallery

style shop owned by Ziad Ammouri, has opened at 112 W. Main, Northville. Telephone: (248) 719-7930. Website: make-it-memories.com.

JARC, an organization serving people with dis-

abilities and their families, has opened the JARC Center for Autism and Rehabilitation Services at JARC’s Lois and Paul Katzman Administrative Building, 30301 Northwestern Highway, Suite 300, Farmington Hills. Telephone: (248) 912-1780. Website: jarccenter.org. Capriotti’s Sandwich Shop Inc., Las Vegas, Nev., has

opened a restaurant at 319 E. Big Beaver, Troy. Telephone: (248) 528-1515. Website: capriottis.com. Kuhnhenn Brewing LLC, Warren, has openedits Clinton Township Taproom at 36000 Groesbeck, Clinton Township. Telephone: (586) 231-0249. Website: kbrewery.com.

Savannahblue, a restaurant featuring contempo-

rary northern soul food, has opened at 1431 Times Square, Detroit. Telephone: (313) 9260783. Website: savannahbluedetroit.com.

Mack Ave., Grosse Pointe Park. Telephone: (313)757-2593. 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.

MANUFACTURING Joe Don Long, Director of Quality Raw Materials, Carhartt, Inc.,

Ryan Ambrozaitis, Chief Development Officer, Boys & Girls Clubs of Southeastern Michigan, Boys & Girls Clubs of Southeastern Michigan is pleased to announce the appointment of Ryan Ambrozaitis, CFRE as Chief Development Officer. In his new role, Ambrozaitis will direct all development activities and will be responsible for strategic fundraising, marketing, communications and donor relationship activities. Ambrozaitis has more than 15 years of professional fundraising experience in metro Detroit and is an Alumnus of Boys & Girls Clubs of Southeastern Michigan's Bloomer Club.

MARCH 15

7Cs Best Practices: Tactical meetings with PCS Insight. 8:30-10 a.m. Automation Alley. Pavan Muzumdar, managing director of PCS Insight

and creator of the organizational management system iCube, will discuss why most meetings are ineffective and what to do about it. Automation Alley, Troy. $20 member; $40 nonmember; $30 walk-in member; $50 walkin nonmember. Contact: (800) 427-5100; email: info@automationalley.com

WEDNESDAY MARCH 16

The Next Generation Economy: How Will it Affect Your Brand? 5-8 p.m. Marketing & Sales Executives of Detroit. Panelists: Jacques Driscoll, owner of Green Dot Stables, Johnny Noodle King and the Huron Room in Corktown/Mexicantown; Nick Gorga, founder of Hatch Detroit; Jon Goldstein, owner of Maple Theatre; James Van Dyke, partner in the Roxbury Group and part owner of the Aloft Hotel in the David Whitney Building. Moderated by Nancy Benovich Gilby, Ehrenberg director of entrepreneurship, University of Michigan. Aloft Hotel, Detroit. $45

members; $60 nonmembers. Website: msedetroit.org

THURSDAY Michele Bezue Confections has opened at 15324

ADVERTISING SECTION

NONPROFITS

CALENDAR

Long's focus is developing and executing fabric, trim, color, and finish quality strategies, as well as fabric testing. In this newly created role, he also will procure strong vendor relationships and ensure all raw materials meet Carhartt's quality and regulatory requirements.

Lamar Hartness, Director of Quality Assurance, Carhartt, Inc., Hartness is responsible for directing and developing quality requirements, processes, systems, procedures, and testing to ensure an efficient, effective and proactive Carhartt quality process.

Crain’s has moved its complete list of appointments and promotions to www.crainsdetroit.com/peopleonthemove.

Guaranteed placement in print and online can be purchased at this website.

MARCH 17

People, Profit, Progress Conference. 8 a.m.-4

p.m. American Society of Employers. ASE’s 13th annual conference and workshops. Suburban Collection Showplace, Novi. ASE members $239; nonmembers $299. Contact: Linda Yesh-McMaster, phone: (248) 223-8002; email: lyesh-mcmaster@aseonline.org Pancakes & Politics. 7:30-9:30 a.m. Michigan

Chronicle. Breakfast with nearly 400 policy and decision makers. Panelists include Tonya Allen, president and CEO, Skillman Foundation; Sen. Bert Johnson, D-Highland Park; John Rakolta Jr., chairman and CEO, Walbridge; and Ivy Bailey, interim presiTonya Allen dent, Detroit Federation of Teachers. Detroit Athletic Club. $100. Phone: (313) 963-5522; website: michronicle.com/events

UPCOMING EVENTS Investigative Journalism in the Age of BuzzFeed. 5:30-8 p.m. March 24. Association for Women

in Communications and Detroit Press Club. A professional development program with a panel of reporters. Program participants include: Tresa Baldas, the federal courts reporter for the Detroit Free Press; Chad Livengood, political reporter for The Detroit News Lansing Bureau; and Chastity Pratt, the urban affairs reporter for Bridge Magazine. Robin Luce Herrmann, general counsel to the Michigan Press Association, will moderate. Automotive Industry Action Group, Southfield. $25 members, $35 nonmembers, $15 students. Contact: (248) 643-6590; email: info@womcomdetroit.org

Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” from the drop-down menu that will appear. Fill out the submission form, then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events.

PEOPLE: SPOTLIGHT Lear Corp. appoints Facebook exec to board Lear Corp. appointed Facebook Inc. executive Mary Lou Jepsen to

its board of directors last week. Jepsen, 51, is Facebook’s executive director of engineering and the head of its virtual reality unit Oculus. Facebook acquired Oculus for $2 billion in 2014. Before Facebook, she served as the head of Google Inc.’s display division and was the CEO and founder of Pixel Qi, which was a spinoff of One Laptop per Child, a nonprofit that developed $100 laptops for children in developing countries. Jepsen also holds about 100 patents in the computer and technology fields.

American Axle names chief technology officer American Axle & Manufacturing Holdings Inc. has promoted Philip Guys to chief

technology officer. Guys, 53, will retain his current role as vice president of American Axle’s drivePhilip Guys line product engineering, but will now also lead the Detroit-based supplier’s strategy and advanced technologies development, the company said in a news release. Guys joined American Axle in 2011. Before that, he served as vice president of global manufacturing and engineering for Li namar Corp. He was also president of McLaren Performance Technologies and chief engineer at Ford Motor Co. He earned a bachelor’s degree from University of Pennsylvania and an MBA from University of Michigan.

Macomb Habitat for Humanity names COO Macomb County Habitat for Hu manity has named Robert Johnson its first COO.

Johnson, 32, had served as vice president of retail operations at Habitat since August, overseeing the operations of Habitat’s two ReStore locations in the county. Sales last year exceeded $1 million, the nonprofit said. As COO, Johnson will oversee most areas of the nonprofit, including its home construction and deconstruction work in addition to retail operations. Prior to this, Johnson worked in the metro Detroit golf industry for 11 years, holding management positions at Rouge Park Golf Course, Chandler Park Golf Course and The Woodlands of Van Buren Golf Course for owner American Golf Corp. Most recently, he served as general manager at Rackham Golf Course.

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HOTEL

“We’ve seen a lot of ideas that represent Detroit’s past, (and) that’s very important, very informative. But I think it’s important now to think about where Detroit is going now in its future. ... We want to be a part of that.”

FROM PAGE 1

and Cohen as a minority owner. McIntosh Poris Associates in Birmingham is architect on the project, and Detroit-based Sachse Construc tion is general contractor. Simeon Deary Design Group in Chicago is doing interior design for the hotel, Tricoci said. The project, which is expected to create about 100 jobs, has taken longer to come together than originally expected, he said. Detroit’s bankruptcy filing slowed the process of getting approvals to purchase the building. The developers had to go through the state to sign off on the sale, following the appointment of the emergency manager. There was also protracted discussion with the National Park Service over the design of the hotel to make sure it maintained historic integrity and qualified to secure the federal historic tax credits, Tricoci said. In addition to the historic firehouse, the hotel will include the former Pontchartrain Wine Cellars building on Larned, a 13,000square-foot, four-story building that shares a wall with the fire station. The developers acquired the building in 2013 for $1.25 million,

Mario Tricoci,co-founder,CEO,Aparium Group

Cohen told Crain’s in 2014. Sachse has completed selected demolition, with some things being salvaged to be reincorporated into the hotel, Tricoci said. There’s also a model room completed, and cleaning and rehabilitation of the brickwork on the firehouse exterior is set to begin over the next few weeks.

Creating a vision As manager of the hotel and restaurant, Aparium is guiding its branding, concept, design and positioning, Tricoci said. “We couldn’t wait to get the financing behind us. We are now getting ready to do the fun stuff.” Much of what guests will see in the hotel will have roots tied to Detroit or the state of Michigan. “To the extent we can find someone locally to incorporate local elements in the project, we are actively seeking them out,” Tricoci said. “We have been cultivating those rela-

CHASSIX FROM PAGE 3

versified Machine Inc. and SMW Auto motive Inc . Gores acquired Diversi-

fied Machine through his equity firm from The Carlyle Group in December 2011. But its Bristol plant, one of 23 plants, was performing so poorly, it sank the entire company. Chassix entered a prepackaged bankruptcy on March 12, 2015, with $556.7 million in total debt and only $34.3 million in assets after missing bond payments, according to a court filing. David Jaffe, principal of Birmingham-based J a f f e C o u n s e l P L C and former general counsel for G u a r d i a n I n d u s t r i e s I n c ., said bad contracts and bad forecasting are the greatest threats to profitability in the industry. “One of the biggest challenges for an automotive supplier is to set pricing for its products, and that’s largely because understanding and predicting costs is extremely difficult over the lifecycle of a platform,” Jaffe said. “Over many parts and many years a small mistake in assessing your costs can lead to very large losses.” Through the pre-organized bankruptcy, Chassix exited with $300 million in new financing, free of debt and without Gores’ firm as owner. It’s now owned by previous bondholders and new funds. Joel Applebaum, partner and coleader of the corporate restructuring and bankruptcy practice at Butzel Long PC in Birmingham, represented one of Chassix’s suppliers before bankruptcy. He said the bankruptcy went smoothly and

David Jaffe: Bad contracts, forecasting threaten profits in auto industry.

Joel Applebaum: Chassix came out of bankruptcy stronger.

Chassix came out the other side stronger. “We were concerned about the continued production and that our contracts were assumed,” Applebaum said. “There was nothing earth-shattering about the bankruptcy, which is good, and that’s a testament to Chassix’s professionalism.” The Bristol plant suffered from excessive volume requirements, which it couldn’t maintain, as the plant worked around the clock to appease its customers, which included General Motors Co., Ford Motor Co. and FCA US LLC, DelGrosso said. “The biggest issue was producing and meeting customer requirements,” he said. “It was able to meet the demands but not in an economically feasible fashion. It was operating at a substantial financial loss.” Ahead of its bankruptcy, those major customers were on the ground in the plant, ensuring product was making it on the trucks, even funding the supplier’s efforts. Those customer representatives are now gone and the supplier is working to allocate resources to fix Bristol, funded from $300 million in financing from PNC Bank and bondholders.

tionships for three years.” Aparium is talking with local distillers, brewers, coffee roasters and farmers to deliver an authentic Detroit experience. It’s also contracted with several local manufacturers, vendors and artists for metalwork, lighting, restoration work, artwork, sculptures and multimedia art forms, he said. But he declined to give further hints on what guests will find, beyond mentioning Aparium in conversation with the College for Creative Studies , among others. The design for The Foundation Hotel won’t be an obvious Detroit firehouse restoration; instead, the hotel will tell Detroit’s past, present and future stories “as a nod to where we believe … Detroit is headed next,” Tricoci said. “We’ve seen a lot of ideas that represent Detroit’s past, (and) that’s very important, very informative. But I think it’s important now to

Chassix redirected some of the work done at Bristol to other plants as it invests capital to repair and upgrade machinery, DelGrosso said. “We’re making sure the plant can operate at a reliable and efficient level; we’ve had to idle some of the equipment to make repairs,” DelGrosso said. “We are selectively restoring the workload and revenue stream to the plant, and we think once we get that done, we’ll have a sound plant operating better than it ever had. Our target is to break even by the fourth quarter; we’d like to do it faster than that, but we’re taking this a step at a time.” Jonathan Foster, chairman of Chassix and founder and managing director of New York-based private equity firm Current Capital LLC, said the hiring of DelGrosso was critical to Chassix’s success. An automotive industry veteran, DelGrosso most recently was president and CEO of Henniges Automo tive Inc., an automotive sealing and anti-vibration company in Auburn Hills. The company was sold to AVIC Automotive Systems , a Chinesebased auto supplier for as much as $1 billion, Bloomberg reported. DelGrosso also worked at TRW Inc. and Lear Corp.

He spent about 23 years at Lear and was a rising star at the company until he departed as president at age 45 in August 2007. “Hiring Doug has been very important,” Foster said. “We’ve put a variety of resources into Chassix because the performance hadn’t been anywhere near satisfactory. The tide has turned.” 䡲 Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

think about where Detroit is going now in its future. ... We want to be a part of that and celebrate local thought leaders.” That said, there are historic elements the developers want to preserve, he said. Among them are the current entryway and elevator lobby, the commissioner’s suite and elements of the “apparatus room,” with its big red doors, where the fire engines once sat. As part of the restaurant, a loft overlooking the apparatus room will have an observation kitchen that can be used for private events and as a rotating room for Detroit’s newest chefs or very prominent chefs who will come back home and share their culinary talents with the local market, Tricoci said. The restaurant planned for the Foundation will be staffed with local, cultivated and trained talent,

23 Tricoci said, noting Aparium is out in the Detroit market looking for culinary talent, starting with the executive chef. “This will be a tremendous opportunity … for a chef (who) really wants to make a name for himself or herself.” Detroit continues to be an eventdriven market for downtown hotels, said Michael Damitio, senior vice president, acquisitions and development for Vos Hospitality , which manages the Aloft Detroit. The Aloft, a boutique brand of Starwood Hotels & Resorts Worldwide Inc ., which opened in the David

Whitney Building in December 2014, did better its first full year than projected, Damitio said. And 2016 is off to an even better start for the 136-room hotel. “The challenge any time you’re opening a niche product is you’re trying to find your market. We certainly believed there was one in Detroit, and we found it,” Damitio said. “The Foundation is its own animal. I’m sure it will find its own market, as well.” Sherri Welch: (313) 446-1694 Twitter: @SherriWelch

JOB FRONT MISCELLANEOUS

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Tooling & New Product Development Engineer for Managed Programs, LLC in Auburn Hills, MI. Duties: dev & implement changes in gravity casting tooling design, fabrication, function, & construction operations to increase efficiency & reduce error rates, inc’l new techniques for modular tool designs & sealing core/cavity tool halves; train eng’g staff re standard mold designs & standardized design processes to reduce design times, inc’l creating & disseminating written design guidelines & procedures re air intake manifold tooling designs & other new product tooling designs; optimize & modify product dev & mfg processes for new business opportunities, inc’l evaluating opportunities to expand usage of new materials for auto underhood parts; dev new techniques of interchangeably w/ consumable tooling elements, & create & optimize new tooling designs w/ computer-aided eng’g (CAE) tools & computational fluid dynamics (CFD) analysis; lead research & dev into new product categories & new business concepts, specifically targeting low-volume production (LVP) applications; optimize new product designs through use of CAE tools, testing methodologies, air flow/noise modeling, & engine modeling. Req’s: Bach Deg in Mech’l Eng’g, or foreign equiv; 2 yrs exp in casting mold design pos’n in or supporting auto parts industry. Exp must inc’l: developing gravity casting tooling designs for low pressure casting processes, inc’l training regarding accelerated or modular tool design practices; developing advances in tooling design which minimize secondary operations inc’l flash trimming, drilling, & reaming operations; applying CAE or CFD tools to the improvement of a plastic casting process; developing methods of utilizing common tooling components & features across multiple tool set design projects; consulting re methods of modifying 3D product designs in order to maximize mfg & tooling feasibility; leading research & development into potential new complex plastic automotive powertrain parts utilized in low-volume production applications. Exp can be acq’d concurrently. Resumes: hr@managed-programs.com Identify Tooling & New Product Dev Eng’r pos’n. EOE

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WHITNEY FROM PAGE 3

show up in each plate, said Patrick Liebler, the restaurant’s executive director. (His father, Bud Liebler, bought The Whitney nine years ago and they run their public relations agency from its top floor.) It also added an Absinthe Room in October, to serve the mysterious green liqueur, and high tea two years ago. More recently, its staff started experimenting with desserts in a smaller room on the third floor and before long realized that the audiences for dessert and its Ghost Bar, a watering hole said to be haunted, may not mix so well. “It’s taken a few years to figure it out,” said Bud Liebler. Now, despite traffic snarls on Woodward from the M1 Rail construction, The Whitney’s

JACOB LEWKOW

Seasonal and house-made desserts worthy of a photo or two on social media are meant to entice a younger crowd to The Whitney’s dessert bar.

INDEX TO COMPANIES These companies have significant mention in this week’s Crain’s Detroit Business: 21st Century Holdings LLC .................................1 AlSentis LLC..................................................10, 12 Aparium Group.....................................................1 Automation Alley .............................................10 Barris Sott Denn & Driker PLLC ......................25 Business Leaders for Michigan.........................9 Butzel Long PC ..................................................23 Chassix Inc...........................................................3 Civionics Inc. ......................................................12 Cobo Center ........................................................8 College for Creative Studies ...........................23 DeWitt Barrels Inc. ............................................17 Dow Chemical Co...........................................9, 15 Faurecia...........................................................9, 15 Ford Motor Co......................................................9 Foundation Hotel ................................................1 Herman Miller.................................................9, 15 Hickey, Cianciolo, Finn & Atkins PC ...............25 Impellia ...............................................................15 Jaffe Counsel PLC .............................................23 Karetech Medical Devices Inc. .........................11

McAlpine PC ......................................................25 McIntosh Poris Associates .............................23 Michigan Venture Capital Association ..........10 Platinum Equity ..................................................3 Plunkett Cooney PC .........................................25 PsiKick Inc.....................................................10, 14 Ray’s Ice Cream.................................................24 Right Place...........................................................9 Rise Baking ..........................................................4 Robinson Carter Crawford PLLC .......................1 Rowe Professional Services Co. ........................1 Sachse Construction .......................................23 Seamless Coalition and Accelerator..............10 SpinDance Inc....................................................10 Steelcase Inc......................................................15 Stevens Van Lines Inc. .................................17, 19 TechTown Detroit ...............................................9 The Whitney ........................................................3 Tome Inc. ............................................................15 Vos Hospitality..................................................23 Warner Norcross & Judd LLP ..........................25

business strategies seem to be working, he and Patrick say, and examples show up as readily as its Tiffany windows. Sunday brunch, which initially served about 20 people, now feeds around 200 people a week, up about 55 percent in the last year. After years of finding ways to make their restaurant feel full and energized, often by closing off sections of it, the Lieblers are spreading out and using more of the 52 rooms. They declined to disclose The Whitney’s revenue but they say sales have grown 52 percent since 2011. That translates to 6.2 percent increase in 2015, Bud Liebler said, despite the construction on Woodward. Revenue grew 5.2 percent in 2014 over the year earlier, and 22.5 percent in 2013. Bud Liebler predicts that desserts, absinthe and other newer features will bring a 25 percent increase over the next two years, calling it “a modest target.” Some of that growth is likely to come from more diners on busy nights. Customers who make one reservation will be encouraged to make a second for dessert upstairs. “It guarantees me when that table’s going to be ready for the next reservation,” Duey said in an interview with Crain’s. They will move upstairs in 90 minutes instead of lingering over coffee and dessert for longer. Guests who want dessert on the main floor may order it there, from a much more limited menu, but to get “the full Whitney experience” they will be encouraged to head upstairs, he said. Whitney’s first-floor dining room seats about 185 people — or 54 percent more than the award-winning

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nearby newcomer Selden Standard offers on weekends. Its dessert parlor will easily accommodate 75 or 80 people. The restaurant hopes to debut it Wednesday or Thursday. Desserts will be displayed on a 9foot antique table in the center of the former ballroom, with mini-desserts that will be piled high and serve as an enticement for guests on their way to the restrooms or third-floor bar. They cost $7 to $28 for the “flaming mixed berries Van Gogh” made with absinthe-soaked sponge cake. The Katherine McGregor Dessert Parlor was named for one of the daughters of David Whitney Jr., to show ties to the home’s history and first family. Though the restaurant doesn’t expect the desserts to be big money-makers on their own, “when we get young people to come to the restaurant to have a lifelong memory, they’ll keep coming for every big event of their life,” Duey said. Dessert could appeal to younger diners, who are driving dessert consumption at restaurants, said Jill Failla, editor of restaurant consulting firm Technomic’s Consumer Insights. While 28 percent of adults 35 and older go to a restaurant specifically for a dessert, 43 percent of consumers ages 18 to 34 visit a specific restaurant because of the sweet endings, she said, citing Technomic’s 2015 research. Seasonal and house-made desserts and items that look fresh and beautiful will work. “People want something that they can take a picture and share online,” Failla said. Seven in 10 chefs say that housemade or artisan ice cream is a hot trend for this year, according to a National Restaurant Association survey. The Whitney is partnering with Ray’s Ice Cream in Royal Oak to create a signature ice cream: White Pine, a rich vanilla with pine nuts. The 52-room mansion was the family residence of David Whitney Jr., who made a fortune in lumber back East and then moved to Detroit where he bought real estate and started lumber operations in the Midwest. The Romanesque Revival home was built between 1890 and 1894 from rose-pink South Dakota jasper stones. Bud Liebler, a former Chrysler media executive, bought the mansion for more than $2 million in 2007. That timing was a big mistake, Liebler said in an interview, because of the global recession. And Detroit saw 11 new restaurants and permanent casinos open in 2008, some of which stole away The Whitney’s staff, he added. Yet The Whitney turned tables and hired away Duey from the Fox & Hounds in Bloomfield Hills in 2012. “Dave came in and told us all the things we were doing wrong,” Bud Liebler said. He brought in pastry chef Eric Bunge in 2014. Bunge bakes wedding cakes and tortes, scones and much more; he arrives at The Whitney most days by 3:30 or 4 a.m. His only challenge: “I’ve never done pies before,” Bunge said. Still he’s looking forward to baking Jack Daniel’s pecan pie and then in early summer, his first seasonal pie: strawberry rhubarb. 䡲

CRAIN’S DETROIT BUSINESS www.crainsdetroit.com Editor-in-Chief Keith E. Crain Group Publisher Mary Kramer, (313) 446-0399 or mkramer@crain.com Editor Jennette Smith, (313) 446-1622 or jhsmith@crain.com Director, Digital Strategy, Audience Development Nancy Hanus, (313) 446-1621 or nhanus@crain.com Managing Editor Michael Lee, (313) 446-1630 or malee@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 News Editor Beth Reeber Valone, (313) 446-5875 or bvalone@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 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, the defense industry and education. (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, 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 Robert Snell, reporter Covers city of Detroit and regional politics. (313) 446-1654 or rsnell@crain.com Lindsay VanHulle, Lansing reporter. (517) 6572204 or lvanhulle@crain.com Dustin Walsh, senior reporter 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

ADVERTISING Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Advertising Director Matthew Langan Senior Account Executive Katie Sullivan Advertising Sales Catherine Grace, Joe Miller, Diane Owen, Sarah Stachowicz, Katie Sullivan Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Events Manager Kacey Anderson Creative Services Director Pierrette Templeton Senior Art Director Sylvia Kolaski Marketing Coordinator Ariel Black Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik, YahNica Crawford Editorial Assistant Nancy Powers Production Manager Wendy Kobylarz Production Supervisor Andrew Spanos

CUSTOMER SERVICE Main Number: Call (877) 824-9374 or customerservice@crainsdetroit.com Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at kbora@crain.com To find a date a story was published (313) 4460406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Executive Vice President/Operations William A. Morrow Executive Vice President/Director of Strategic Operations Chris Crain Executive Vice President/Director of Corporate Operations KC Crain Vice President/Production & Manufacturing Dave Kamis Chief Financial Officer Thomas Stevens Chief Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROITBUSINESS ISSN # 0882-1992 is published weekly,except fora special issue the third weekof November,and no issue the third weekofDecemberby Crain Communications Inc.at 1155 Gratiot Ave.,Detroit MI 48207-2732.Periodicals postage paid at Detroit,MI and additional mailing offices.POSTMASTER: Send address changes to CRAIN’S DETROITBUSINESS,Circulation Department,P.O.Box07925,Detroit,MI 48207-9732. GST# 136760444.Printed in U.S.A. Entire contents copyright 2015 byCrain Communications Inc.All rights reserved.Reproduction oruse ofeditorial content in anymannerwithout permission is strictly prohibited.

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“We are using the expertise and abilities of these lawyers and their firms for processing massive quantities of emails and documents. … ” Adler said in a statement. “Their work will be valuable regardless of the types of suits that are or may be filed, because production of the emails and documents, which we are already releasing publicly, would likely be required (in civil suits).” Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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about levels of trihalomethane, a byproduct of water treatment measures. Robert Kamenec, head of the insurance, professional and governmental law department at Plunkett Cooney PC and attorney for Lockwood Andrews, deferred comment to the company. Engineering director Jim Redding at Rowe could not be reached for comment. Stern said his practice at Levy Konigsberg is extensively focused on lead contamination, usually from lead paint, and his jury verdicts on behalf of children have ranged from a high of $8.5 million to as little as $700,000, although settlements are frequently less than that. The damages in the Flint cases could be substantial, he said, since the exposure to lead was recurring and long-term, and as many as half or more of the children in families retaining the law firms are under age 6, when lead exposure effects are considered to be most severe. None of the new batch of cases is filed as a class action or names the state or city, or Gov. Rick Snyder, as specific defendants. Experts have told Crain’s that governmental immunity is a difficult defense to overcome in litigation, and that policymakers often are more protected than individual employees might be. “I do think there’s some professional responsibility within those city and state agencies that employed the people we named, but from a review of 10,000 or so emails, the people we named were some of the most outstanding in the bunch for breaching that responsibility,” Stern said. “It remains to be seen if the state stands by them or cuts them loose, but we are targeting

cross & Judd LLP in a contract worth up to $800,000. Driker is assisting the state attorney general’s office with an ongoing investigation, while Lennon is coordinating legal work related to document disclosures and information requests, for Snyder’s office. That work may overlap with defending against civil litigation, but responding to the various allegations in court will likely fall to the attorney general’s office, said Ari Adler, director of communications for Snyder.

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Veolia is an environmental services company that performed an analysis of Flint’s water system and reported to the city in March 2015 that it was compliant with state and federal safe drinking water standards. Individual public employees in the Michigan Department of Environ mental Quality , Department of Health and Human Services and the Flint Department of Public Works are also defendants in the new cases. Lockwood Andrews last week got nine of the new lawsuits in Genesee County Circuit Court transferred to U.S. District Court in Detroit, but the Levy firm is seeking to have them returned to Judge Archie Hayman in Flint. The company in a statement to Crain’s last week also said its engineering services were limited to specific components of the water plant only, “not the overall water quality,” in its Flint contract. “The systems we provided services on are operating without issue, and it is clear that LAN provided these specific services in a responsible and appropriate manner in accordance with industry standards,” reads a company statement from Pete Wentz, executive director of Chicago-based Apco Worldwide and a Lockwood spokesman. “Decisions concerning the optimization plan for corrosion control were made by the city and the (MDEQ) and not by LAN. LAN continues to assist the City of Flint as it addresses the various water issues confronting the city today.” Corrosion became a problem in Flint after the city separated its water line network from Detroit in April 2014 and began treating water from the Flint River through the Lockwood-refitted water treatment plant. Anti-corrosive measures at DWSD usually kept Flint and other communities with old infrastructure out of danger, but the river water had a higher corrosive content and wasn’t being treated as aggressively at first, until corrosion inside the pipes brought lead into the water flow. State testing of more than 14,800 residential water samples between last September and March 8 found about 7 percent exceeded the corrective action threshold of 15 parts per billion, set by the U.S. Environ mental Protection Agency. Communications Manager Paul Whitmore at Veolia North America, a subsidiary of a French global environmental services company, said the report referenced in the new lawsuits is not meant to analyze lead or copper contamination in residential water. “It was an analysis of the city water treatment process only as it relates to the residual chlorine problem they were experiencing at the time,” he said. “It was pretty clear that we were limited in focus to that analysis.” General Motors Co. , the city’s largest employer, separated its engine plant from city water to another supply from neighboring Flint

public entities that we believe inflicted damages and have the financial wherewithal to pay them.” Steven Hickey, co-managing partner at Troy-based Hickey, Cianciolo, Finn & Atkins PC who has handled some mass injury and classaction litigation for insurers in the past, agreed that lead poisoning damages can be substantial and seven-figure judgments for individuals are not uncommon. But typically, injury from mass exposure to a toxic chemical is difficult to litigate as a class action because injuries vary too much from person to person. Hickey isn’t involved in the Flint lead cases but said if injuries vary enough it’s possible that a mass settlement plan could address claimants by severity or specific medical conditions, much like the $3.2 billion Dow Corning Corp. settlement fund for breast implant claims from the late 1990s in Michigan. He also said businesses are often easier targets than governmental agencies in injury law — but insurers long ago carved out an expansive “pollution exclusion” into standard commercial general liability coverage, that likely includes lead contamination. “They could have secured some of that (pollution) coverage additionally at considerable expense, because the premiums on policies aren’t cheap. But all that’s going to have to be sorted out in court,” he said. Lockwood Andrews and some individual MDEQ and Flint employees are also defendants in a Jan. 25 lawsuit on behalf of eight Flint families by Auburn Hills-based McAlpine PC , and at least 10 other lawsuits also name city and state officials or McLaren Regional Medical Center in allegations tied to lead poisoning or alleged cases of Legionnaire’s disease that may be connected to city water contamination. Snyder last week reported to the State Administrative Board his office had retained Eugene Driker of Barris Sott Denn & Driker PLLC in Detroit in a contract worth up to $400,000, and Brian Lennon of Grand Rapids-based Warner Nor -

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Township in December 2014 after finding that chloride in the new treated Flint water was rusting engine blocks, before much of the recent lead testing. Veolia in a March 2015 report to the city said the water it studied “is considered to meet drinking water requirements,” but recommended several new treatments and filtration method changes to address concerns raised by the Michigan De -

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WEEK work group has been formed to craft a bill to improve the performance of the state’s mental health system as part of the fiscal 2017 budget, Lt. Gov. Brian Calley said Friday. The target deadline for developing a consensus proposal and report is fairly tight — by mid-May to fit in with the state Legislature’s budgeting process, Calley said. Last month, Calley revealed plans to rethink Gov. Rick Snyder’s fiscal 2017 budget proposal to turn over state behavioral funding to Medicaid HMOs after an intense opposition effort by public mental health organizations, counties and advocacy groups.

COMPANY NEWS 䡲 Brighton-based ASTI Environ mental is opening a Detroit office in the Grand Park Centre building downtown. ASTI President Tom Wackerman said he sees the move into 28 W. Adams Ave. as an opportunity for the provider of environmental and engineering services to expand and work more closely with Detroit customers. 䡲 Royal Oak-based ad agency Factory Detroit Inc. is celebrating the launch of a campaign for Teen Cancer America focused on Pete Townshend’s “Let My Love Open the Door.” Agency founder Mark Lantz called the campaign its “biggest single initiative yet.” 䡲 Detroit Pistons owner Tom Gores said he’ll match donations up to $1 million generated by a telethon to help Flint children and families. Detroit’s WDIV-TV on Tuesday hosts “Flint Water Crisis: 4 Our Families” to benefit the Community Foundation of Greater Flint and its Flint Child Health and Development Fund. 䡲 Blue Cross Blue Shield of Michigan laid off 22 IT employees.

That’s a total of 47 layoffs this year as part of the company’s plan to reduce administrative costs by $300 million by 2018. 䡲 Art Van Furniture purchased Hillside Contemporary Furniture and its Bloomfield Hills store and property from founder and owner Bruce Selik for an undisclosed amount. The store will continue to operate under the Hillside name, and Art Van said it will hire all 20 of Hillside’s associates. 䡲 Willys Detroit, a sister store and neighbor to Shinola/Detroit LLC’s Midtown retail location, will close next month and transition to a single-brand Filson store. Seattle-based Filson sells upscale outdoor gear, including clothing, watches and bags. 䡲 Oil and gas exploration company Jordan Development Co. LLC has won state approval to drill on

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Lt. Gov. Calley sets ambitious timeline for mental health

5:45 PM

ON THE WEB MARCH 5-11

Detroit Digits A numbers-focused look at last week’s headlines:

8.2

The profit margin in 2014 for Michigan’s 83 acute-care hospitals. The 41 hospitals in metro Detroit posted net income of $545.6 million with a 5.1 percent total profit margin. Leading the pack was Beaumont Health with an 8.3 percent profit margin.

The number of felony charges filed against Pasquale Longordo and his Troy-based company, Modify Loan Experts LLC, by Michigan Attorney General Bill Schuette. The state alleges Longordo and his company stole money from residents facing mortgage foreclosures or seeking help to manage credit card debt.

$22 million The development cost of the District Lofts project in downtown Milford. Construction is expected to begin in the fall. Planned by Bingham Farms-based DevMar Development LLC, the project is expected to have 100 loft apartments renting for $1,300 to $2,000 per month.

land leased from Word of Faith International Christian Center Inc. in Southfield. City officials said they are prepared to go to court to stop the drilling.

OTHER NEWS 䡲 The Detroit Public Schools’ bonds were put on watch for possible rating cuts by Standard & Poor’s because the district is at risk of running out of money as soon as next month. If the schools are forced to close early for lack of funds, Michigan has the power to withhold aid that’s used to cover payments on bonds and notes sold in 2011 and 2015, Meriweather: S&P said in a Interim Detroit statement Schools Thursday. superintendent 䡲 In other Detroit schools news, Steven Rhodes, the new manager of the district, said teachers will not be paid after April 8 if the state doesn’t approve $50 million in shortterm aid. And Alycia Meriweather, a longtime Detroit educator, has been named interim superintendent for Detroit Schools. 䡲 Oakland County Executive L. Brooks Patterson will co-host a new radio show with political commentator Nancy Skinner called “B.S. on 910” on WFDF AM 910. The two-hour show debuts at noon March 17, and “it’s going to

be wide open and unscripted,” he told Crain’s. 䡲 Construction is expected to begin in the fall on a $22 million loft development in downtown Milford. Planned by Bingham Farms-based DevMar Development LLC, the District Lofts project is expected to have 100 loft apartments renting for $1,300 to $2,000 per month. 䡲 A former strip club in Capitol Park was razed to make way for a new 13-story apartment building with first-floor retail space. The building at 1416 Griswold St. was damaged in a February 2014 fire. Dan Gilbert’s Bedrock Real Estate Services LLC bought the property last year. 䡲 Sources told Crain’s the former PricewaterhouseCoopers LLP building across from the unfinished Wayne County Jail site is among the next to be acquired by Gilbert, the founder and chairman of Detroit-based Quicken Loans Inc. and Rock Ventures LLC. Robin Schwartz, public relations director for Bedrock Real Estate Services LLC, declined to comment. 䡲 Farmington Hills-based Realcomp II Ltd. reported there was a 13.7 percent increase in home sales in Wayne, Oakland, Macomb and Livingston counties in February from February 2015, rising to 3,388 from 2,979. In addition, median sale prices rose 7 percent in the same region during that time period. 䡲 The new Calexico Detroit Inc. restaurant by franchisee Randy Dickow is planned for the former Olga’s Kitchen Inc. space inside the One Campus Martius building in downtown Detroit this summer. Based in New York City, Calexico’s first location outside of New York is expected to employ 70 people full time and seat about 130 guests. 䡲 Calvin Johnson, the Detroit Lions wide receiver known as Megatron, confirmed his longsuspected retirement. Johnson had a league-record 86.1 receiving yards per game and 83 touchdowns against defenses often geared to stop him. 䡲

RUMBLINGS Moves steer Ford, GM toward auto tech future

ord Motor Co. and General Motors Co., on the same day

last week, made moves toward future auto tech through vastly different approaches. GM is buying its way into the carsharing and autonomous market. GM acquired California autonomous driving startup Cruise Automation for a reported $1 billion. Ford, looking to build internally, created a mobility services subsidiary. Ford’s new company, Ford Smart Mobility LLC, will be run by Jim Hackett, the former CEO of furniture maker Steelcase Inc. and former interim athletic director at the University of Michigan. Hackett was also previously a Ford board member. GM acquired Cruise for its “deep software talent and rapid development capability to further accelerate” GM’s development of autonomous vehicles. While Ford created its subsidiary “to develop mobility solutions to address the rapidly changing transportation challenges of an increasingly crowded world,” Chairman Bill Ford Jr. said in a statement. Both companies are following the trend — GM invested $500 million in car-sharing firm Lyft earlier this year, following Ford’s partnership last year with car subleasing firm Getaround. Both companies are pulling from the same playbook in rapidly moving toward a future filled with more car-sharing than car buying. Which bets will pay off, of course, remain to be seen.

Homecoming honored as place-making event The Detroit Homecoming, the 2-yearold initiative to re-engage Detroitarea “expats” with the city of Detroit, was honored Wednesday as one of eight international “place-making” initiatives at the international Place Marketing Forum’s 2016 awards. The Homecoming, produced by Crain’s Detroit Business, was cited

Colleen Robar of Robar PR, production manager of The Detroit Homecoming since its inception, receives the award from Place Marketing Forum officials Christoph Alaux, Gayé Delahousse and Joël Gayet in Aix-en Provence, France.

for “recruiting talented ambassadors” in the rebuilding of the city after it emerged from bankruptcy. Colleen Robar, production manager for the Homecoming, presented a case study on Homecoming at the Place Marketing Forum’s event in Aix-en Provence, France. Judges complimented the Homecoming, which is led by coDirectors Jim Hayes and Mary Kramer, group publisher of Crain’s Detroit Business, on the program’s ability to target an important audience, expats, to generate more than $240 million in pending investments in Detroit in two years. Detroit Homecoming, an invitation-only gathering of expats, was launched in 2014. This year’s “immersion” will be Sept. 14-16 and confirmed speakers include expat Steve Ballmer, former CEO of Microsoft Corp. and now owner of the Los Angeles Clippers NBA team; and Darren Walker, CEO of the Ford Foundation. So far, more than 300 expats have attended Homecoming in 2014 and 2015. Expat investments include the opening of Will Adler’s Will Leather store in Midtown, investments in several downtown projects by real estate funds led by Teresa Sebastian, and a $2 million gift to Wayne State University by alumnus Tom Tierney. Among the other honorees were efforts in Vienna, Austria; Seoul, South Korea; and Barcelona, Spain.

Exhibit features notable Michigan women To mark Women’s History Month this month, the Michigan Women’s Historical Center & Hall of Fame in Lansing is hosting an interactive exhibit featuring the stories of nine Michigan women who did something notable before the age of 20. “Great Girls in Michigan History” includes the stories of violinist Regina Carter; Sarah Emma Edmonds Seelye, a secret Civil War soldier; aviation pioneer Nancy Harkness Love; Dr. Marylou Olivarez Mason, an advocate for Michigan’s Hispanic communities; and “Rosie the Riveter” poster girl Geraldine Hoff Doyle. The 2015 Michigan Women’s Hall of Fame inductee plaques were also installed earlier this month to honor: Wayne State University Law School Dean Jocelyn Benson; former state Rep. Maxine Berman, an outspoken advocate for women; Sue Carter, a journalism professor at Michigan State University and longtime broadcaster; U.S. Rep. Candice Miller; consumer rights advocate Esther Shapiro, the first director of Detroit’s Consumer Affairs Department; and Linda M. Woods, an advocate for Native Americans and their culture and U.S. Air Force veteran who served during Vietnam. 䡲

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