Crain's Detroit Business, Aug. 29, 2016 issue

Schostak looks to take Olga’s back to the future, Page 3 AUGUST 29 - SEPTEMBER 4, 2016

Wayne State ponders doc noncompetes Opponents question legality of pacts for medical faculty

By Jay Greene Jgreene@crain.com

A fight is brewing at Wayne State University Physician Group over a

proposal that would require more than 500 physician faculty members to sign a noncompete agreement.

Wayne State University in Detroit has floated a draft of a noncompete contract that it expects the physicians to sign by Jan. 1 or face possible disciplinary action or termination from the faculty medical group, Crain’s has learned.

Officials for Wayne State, who declined several interview requests, said in a statement to Crain’s that “noncompete agreements are a standard practice” for medical groups. Wayne State acknowledged that UPG never required one before.

“We are considering noncompete agreements for our clinical faculty. We’ve received some feedback

that we are considering, but to date we have not changed any policies,” Wayne State said in a written statement.

The proposal comes as UPG and Wayne State are in negotiations over contracts for services provided to Detroit Medical Center and could crimp efforts by competing medical groups or health systems to hire those doctors if those talks fail to bear fruit. UPG and the Wayne State Medical School are also in the middle of their own cost-cutting and turnaround plan.

Charles Parrish, president of the

75

COOL PLACES

TO WORK

American Association of University Professors-AFT Michigan Local 6075

at Wayne State, said the proposal is “draconian,” possibly violates the Public Employment Relations Act and the union’s collective bargaining agreement and is an unfair labor practice. He said he is consulting

SEE WSU, PAGE 28

New U.S. import tariff galvanizes steelmakers

By Dustin Walsh dwalsh@crain.com

Grand Steel Products Inc. avoided the fate of so many other steel companies in recent years and is now flourishing, thanks to new U.S. import regulations.

The Wixom-based steel service center and distributor is the beneficiary of the lifeline offered to U.S. steelmakers this year by way of an import tariff designed to punish dumping, or selling steel below cost, by foreign steel companies to gain U.S. market share.

For Grand Steel, it was a lifeline.

In the first half of this year, the company has made more profit than in 2015 and 2016 combined,

said Vice President Michael Barnett.

The company has an inventory of 20,000 metric tons of steel and expects to generate revenue near $50 million this year.

The U.S. Department of Commerce imposed duties this year on imports of rolled steel, used to make auto parts, appliances and equipment, from seven countries including China, which received the biggest tariff.

Preliminary duties began early this year and became final on July 21.

“China has been overproducing steel for years, way too much for their own market and even the global market,” said Kevin Dempsey, senior vice president of public policy SEE STEEL, PAGE 26

© Entire contents copyright 2016

by Crain Communications Inc. All rights reserved

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MICHIGAN

BRIEFS Report: Mich. among states that underfunded pensions

A majority of states, including Michigan, did not contribute enough to their employee pension systems in 2014 to reduce unfunded debt, a new nationwide analysis shows.

In a brief released last week, Philadelphia-based The Pew Charitable Trusts said pensions in all 50 states were underfunded by $934 billion in the 2014 fiscal year, the most recent for which data is available. According to Pew, Michigan had funded two-thirds of its nearly $84.6 billion in pension liabilities that year, with $28.1 billion in debt.

The state also fell short of a new benchmark Pew researchers developed to determine how much states should contribute to their employees’ retirement funds to reduce their unfunded obligations. Under Pew’s “net amortization” metric, which aims to determine whether a state’s payment into its retirement systems is adequate after accounting for benefits costs and employees’ contributions, only 15 states paid enough into the system to cover costs and reduce unfunded liabili-

ties, Pew said. Michigan was not among them; the state paid more than $2.4 billion, or 88 percent of a recommended $2.8 billion, in 2014.

Pew’s report is an effort to get an accurate measure on states’ ability to reduce pension debt, especially given new accounting standards that took effect in 2014.

Lindsay VanHulle

W. Michigan transit officials uncertain over funding Political pressures in Washington, D.C., have created uncertainty for transit officials looking to fund a new West Michigan bus rapid transit line, MiBiz reported. Despite having announced the route between downtown Grand Rapids and Grand Valley State University’s Allendale campus more than three years ago, officials with the Interurban Transit Partnership, known as The Rapid, say plans for the proposed Laker Line are in a holding pattern.

Until Congress appropriates the funds, there’s no money in the bank yet, said Nick Monoyios, long-range planner for The Rapid and the project manager for the Laker Line. “It’s (like)

playing a chess game where you’re just moving pieces back and forth,” he said. “Nobody is making a move yet.”

The Rapid expects it could receive the needed funds in the coming month or the money could be split up into different years, depending on how the federal appropriations process plays out, said Monoyios, who recently met with Federal Transit Administration officials.

MICH-CELLANEOUS n Daughters in two Grand Rapids-area family-owned empires are taking on bigger roles in their respective companies, MLive.com reported. Christina Keller will lead a division of Cascade Township-based Cascade Engineering, the company started by her father, Fred Keller; and Kara Gordon Warren, daughter of CEO Jim Gordon, is joining the corporate board in October at Wyoming-based Gordon Food Services.

Warren, now assistant general manager, will become general manager for GFS’ Florida Division next April. As president of Cascade Business Team, Keller will oversee nearly half of Cascade Engineering’s nine businesses. n An international tea franchise based in London has chosen East Lansing as the base of its North American operations, the Lansing State Journal reported. Newby Teas, which has 15 offices in Europe and Asia, has opened its U.S. office inside a Marriott hotel. The luxury brand sells tea and gifts inside highend hotels. In the U.S., they can only

be found in New York City, although the company is hoping to expand. n Gov. Rick Snyder is challenging a court order that bars McLaren Hospital in Flint from contacting state health authorities on any future issue related to the city’s water woes, AP reported. The Aug. 17 order by a Genesee County judge has “tied the hands of state employees” to protect the public, Snyder said. The order tells McLaren to talk only to the county health department on Flint water-related matters. A spokesman for the attorney general’s office said investigators are trying to protect health data related to lead poisoning and deaths from Legionnaires’ disease. n The Michigan Economic Development Corp. awarded new contracts to the advertising and public relations firms that developed the marketing for the state’s Pure Michigan travel campaign. The state awarded a $25.2 million contract to McCann Erickson, which has an office in Birmingham, for the travel campaign.

The contract begins with the start of the new fiscal year on Oct. 1 and runs through Sept. 30, 2017, with four, one-year renewal options. McCann Erickson also won a $7.5 million contract to continue business marketing services for the state. McCann’s sister firm, Weber Shandwick, was awarded a nearly $2.2 million contract to continue PR and social media work for the MEDC. Both companies are part of McCann Worldgroup, a subsidiary of New York City-based Interpublic Group of Cos. Inc.

INSIDE THIS ISSUE

BANKRUPTCIES ...............................29 CALENDAR ........................................24 CLASSIFIED ADS..............................25 DEALS & DETAILS............................24 KEITH CRAIN....................................... 8 OPINION .............................................. 8 OTHER VOICES ................................... 8 PEOPLE ..............................................24 RUMBLINGS ......................................30 WEEK ON THE WEB .........................30

COMPANY INDEX: SEE PAGE 28 n Highland Park-based call center operator Dialog Direct Inc. decided to shutter its Grand Rapids-area operation in Cascade Township and lay off 106 workers by Oct. 17 after losing a key contract, MiBiz reported. The company is working with the Michigan Economic Development Corp. to repay $272,000 of a $550,000 performance-based grant awarded in 2014 when it announced the facility’s creation, the MEDC said. n Fans of Michigan’s Adventure in Muskegon will have a new way to cool off next summer, MLive.com reported. The park’s Half Pint Paradise will feature all-new equipment, including seven new children’s slides. To commemorate its 60th anniversary, the park will open a petting farm. Michigan’s Adventure is owned and operated by Sandusky, Ohio-based Cedar Fair Entertainment Co., which also operates Cedar Point.

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Wesley Berry closing local stores

“Olga’s Kitchen is this iconic local brand that deserves better and more.”

By Sherri Welch swelch@crain.com

Mark Schostak, Team Schostak

New life for Olga’s

Schostak’s plans to boost chain: Update look, change locales, revive classic menu items

By Kirk Pinho kpinho@crain.com

Mark Schostak hopes a renewed focus on bread will help bring the Olga’s Kitchen restaurant chain more of it.

That’s one small part of the strategy to revive the Southeast Michigan brand that earlier emerged from Chapter 11 bankruptcy with a new owner, an affiliate of Livonia-based Team Schostak Family Restaurants.

Among the ways Team Schostak hopes to breathe new life into the struggling chain: Refreshing restaurant interiors, retraining staff, hiring a pair of new executives, resurrecting original menu recipes dating back more than 40 years and moving underperforming restaurants from tired mall locations to new ones at prime corners.

TEAM SCHOSTAK

Among Team Schostak’s plans to revive Olga’s Kitchen is to make the chain’s pita bread, its signature product, even better.

Team Schostak, which has about 100 restaurants spread across four different brands, is the latest to try to turn around the

MUST READ OF THE WEEK

chain — a local favorite that has long struggled with profitability and failed expansion plans and revamps.

Schostak, executive chairman of Team Schostak, said the 25 Olga’s restaurants — 15 of which were acquired in a bankruptcy auction from Olga’s Kitchen Inc. — serve an average 600 pieces of bread per day.

And that bread is one of the menu items that will be a key moving forward, he said.

“Make the (pita) bread even better,” he said.

“That’s our signature product.”

Original recipes for things like orange cream coolers, ham and cheese Olgas, and spinach and cheese pies will be revived from the days when Olga Loizon opened the first restaurant in Birmingham in 1970.

Ann Arbor startup raises funding for animal-specific drug development thenderson@crain.com

Crain’s summit links startups to national brands, Page 6

SEE WESLEY, PAGE 29

Zomedica aims to specialize in pet pharma

By Tom Henderson

Food for thought

SEE SCHOSTAK, PAGE 27

The 70-year-old Wesley Berry Flowers florist chain is shutting down local company-owned stores.

It’s unclear whether FlowerDeliveryExpress.com, the national, online floral business that put Wesley Berry on Inc. magazine’s 2014 list of the 5,000 fastest-growing companies in the country, is still operating.

Attempts to order flowers through FlowerDeliveryExpress. com led to an automated message and voicemail box, and messages left were not returned last week.

The company’s owner, Wesley Berry II, did not respond to requests for comment.

The Commerce Township-based florist was operating four brickand-mortar stores in the region: two in Detroit and one each in Commerce Township and West Bloomfield Township.

As of Friday, only its downtown Detroit store in the Penobscot Building and its West Bloomfield store at Orchard Lake and West Maple roads remained open, fulfilling advance orders that had been placed, said Jerry Baker, manager of the downtown Detroit store.

Its original store, which opened in 1946 on Schoolcraft Avenue near Greenfield Road on Detroit’s west side, and its Commerce Township location on Haggerty Road north of Pontiac Trail had been shuttered.

Baker said he has orders placed at the downtown Detroit store for events taking place the next three weekends. As it winds down, the store also continues to fill small walk-in orders.

Wesley Berry’s corporate leadership informed him it was closing some of its stores last week, without

Zomedica Pharmaceuticals Corp., an Ann Arbor startup that is developing drugs for cats, dogs and horses, announced last week that it has finished raising the first segment of a private offering of $15 million Canadian, or the equivalent of about $11.7 million U.S. The company said it has sold more than 3.3 million shares of common stock at $1.50 Canadian for total proceeds of just over $5 million Canadian, or about $4 million U.S. The company, whose drug development is still in the early stages, is part of a growing array of startups seeking to develop drugs tailored to specific animals, rather than repurposing human drugs.

Company President and CEO Gerald Solensky Jr. told Crain’s Friday that he expects to finish the offering in the next month or so.

“We’re targeting both new and existing investors, and we’ll finish fundraising very quickly,” he said. “This financing strongly positions Zomedica to hit the key milestones that we have communicated to the public markets.”

The company began trading on the Venture Exchange of the Toronto Stock Exchange on May 2 at 30 cents a share, under the symbol ZOM. The shares were trading Friday at $1.44.

The private offering is available to Canadian residents only.

SEE ZOMEDICA, PAGE 25

Gerald Solensky Jr.: Expects to finish the private offering in the next month or so.

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Skidmore puts new look on menu for iconic Halo Burger Bill Shea

bshea@crain.com

Advertising and design ďŹ rm Skidmore Studio, which relocated to De-

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troit’s Madison Building in 2010 after many years in Royal Oak, earlier this year inked the Flint-based Halo Burger chain to an agency-of-record relationship.

Skidmore picked up Halo Burger after an informal competitive review, and the work thus far has involved refreshing the growing chain’s iconic logo and creating a rebranding rollout campaign.

The ad agency, which has 17 fulltime staffers and had $7 million in revenue last year, focuses on millennial branding and is trying to carve out a niche in the food sector.

Agency owner Tim Smith said Skidmore has Tim Smith: Owner u p c o m i n g meetings for and CEO of more potential Skidmore Studio. food clients, including a craft brewery. In the past, the ďŹ rm did major work for Dallas-based restaurant chain Dave & Buster’s.

Skidmore’s other major clients include Visa, Credit Karma, Fathead, Fiat Chrysler Automobiles, Rock Ventures, Universal Orlando Resort and the Community Foundation for Southeast Michigan.

Halo Burger has 16 locations, including restaurants in Novi and Brighton. It added a stand inside The Palace of Auburn Hills earlier this year. The chain traces its roots to the Kewpee burgers sold from a wagon on Flint’s Harrison Street in 1923.

Halo Burger’s pitch is that its burgers are made from fresh ground beef that’s never frozen, and pressed on a hot grill.

The burger chain’s menus and signs and packaging with the new logo are designed and in production, Smith said, and will be introduced over the next 90 days or so.

New print, outdoor and social media are coming sooner, with new photography that was just shot. He expects a digital campaign in 2017.

Below, Smith tells Crain’s reporter Bill Shea about the relationship with

BEFORE

AFTER

SKIDMORE STUDIO Skidmore Studio picked up Halo Burger after an informal competitive review, and has

refreshed the growing chain’s iconic logo and created a rebranding rollout campaign.

Halo Burger and the thinking behind the changes made to the chain’s look.

Q: How did the relationship with Halo Burger develop?

The new owners of Halo Burger’s 16 locations, Chance and Amanda Richie, were seeking a creative partner who understood and embraced their philosophy of “customer ďŹ rst.â€?

From a culture and chemistry perspective, Skidmore and Halo hit it off from the very beginning. We both believed in the potential of Halo Burger and the strength in building an authentic brand.

Q: What did they ask you to do for them?

They had a vision of making Halo Burger Michigan’s premier fastfood brand. They knew their existing customers really loved Halo Burger, but were also very protective of the legacy. Chance and Amanda trusted Skidmore’s process of working from a philosophy of customer ďŹ rst, and we started with a comprehensive brand and logo development.

They appreciated and respected our expertise in the restaurant/food space and allowed us to reinvigorate the logo, while keeping the brand pillars. That work has since grown to include packaging, menus, signage, a food truck, advertising, social media and interactive work. All of these elements are in process of being rebranded and will be rolled out in the near and mid-term.

Tell us about the new logo brand.

First and foremost, Halo Burger is an iconic Michigan brand with a strong regional following. We wanted to build on that history with an identity that harkens back to the

early days while propelling the brand forward. We see Halo Burger as a brand for everyone and wanted to capture that Midwestern blue-collar grit. Ultimately, we wanted to stay true to their roots while gaining some polish and sophistication.

The logotype was designed to feel hand-wrought — like something you may have seen in a pre-digital era. We also knew moving forward that the halo and star would be a key piece of art for the brand, as it always had been. We wanted it to be integral to the logo — connected in a meaningful way that adds a “heavenly� touch.

Q: How does Halo Burger fit in with Skidmore’s business strategy?

It truly is an ideal ďŹ t. Skidmore has a lot of experience in this space — we understand the restaurant and food industry, we know Michigan, and we are at our best when we can really dig into the brand strategy and design. We gain the most satisfaction working with clients who respect our expertise, appreciate our creative talents, have fun, and evaluate based on results. I see us continuing down this path to work with other regional food brands in need of our branding expertise.

Q: How much Halo Burger have you been eating?

We just did a new food shoot, so every time I walk by a designer’s desk and see a burger pop up on someone’s screen, I get a strong Pavlovian response. There isn’t a Halo Burger close to the studio, but when I’m in Halo country, it’s a mandatory stop for a Cheezy Double, side of tots and Boston Cooler.

Bill Shea: (313) 446-1626 Twitter: @bill_shea19

Chemical Bancorp’s acquisition of Talmer to close this week The acquisition of Troy-based Talmer Bancorp Inc. (Nasdaq: TLMR)

by Midland-based Chemical Financial Corp. (Nasdaq: CHFC) is sched-

uled for Wednesday.

According to David Provost, Talmer's president and CEO, Talmer branches are scheduled to be rebranded with Chemical signs the weekend of Nov. 12.

He said that about seven branches, some at each bank, will be closed

but the locations have not been determined.

Because the two banks had so little geographical overlap, the closings are far fewer than have accompanied various bank acquisitions in Michigan over the years.

For example, the recent acquisition of Akron, Ohio-based FirstMerit Corp. by Columbus, Ohio-based Huntington Bancshares Inc. will result in the closing of six Huntington

branches and 32 FirstMerit branches in Michigan.

In July, shareholders of Talmer and Chemical overwhelmingly approved the $1.4 billion acquisition that was announced in January, on the same day the $3.4 billion FirstMerit deal was announced. The Talmer deal will create a bank with about $16 billion in assets and about 250 branches.

Tom Henderson

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Entrepreneurship program to offer training, loans to ex-inmates

By Lindsay VanHulle

Crain’s Detroit Business/Bridge Magazine

The federal agency tasked with helping small-business owners opted last year to “ban the box” on its microloan lending program, a rule change that will open new options for former prisoners previously excluded from such financing.

That decision by the U.S. Small Business Administration in 2015 laid the groundwork for a new pilot project that will roll out in Detroit in coming months. Roughly 50 ex-offenders in the city will be eligible to receive up to $50,000 in microloans through the agency and entrepreneurship training designed to help them start and grow a business.

Called the Aspire Entrepreneurship Initiative, the $2.1 million program is the latest among efforts to help connect convicted felons with employment opportunities. The three-year project is launching in Detroit and three other cities — Chicago, St. Louis and Louisville, Ky. — in conjunction with Battle Creek-based W.K. Kellogg Foundation and Justine Petersen, a St. Louis-based organization that helps low-income people with credit building and other financial needs. If it works, organizers hope to expand it nationally.

By next month, Justine Petersen, which will operate the program, plans to name a Detroit-area service provider that has experience working with ex-offenders to help identify participants, spokesman Galen Gondolfi said. Priority will be given to ex-inmates with children, particularly those from birth to 8 years old, he said.

“This is about life skills as it relates to financial asset-building,” Gondolfi said. “The goal ... is about stabilizing households, raising household income and, to be honest, even impacting neighborhoods and communities at large.”

About 200 people will participate across the four cities, SBA spokeswoman Andrea Roebker said. Training will include classroom instruction, mentoring and financial coaching. Those who complete the training and show they’re able to start a business will qualify for microloans.

The average microloan awarded under the SBA program is worth $13,000.

Roebker said the pilot expands the audience for other agency programs, including business plan counseling.

Organizers have an initial goal of 50 participants in each city, with 30 completing the entrepreneurship training and 25 closing on a microloan, Gondolfi said. Coursework could begin in the spring.

Gondolfi said participants will study the Ice House Entrepreneurship Program, an experience-based course offered through the Kansas City, Mo.-based Ewing Marion Kauffman Foundation and Entrepreneurial Learning Initiative Inc., of Mentor, Ohio.

Two classes of participants are expected to go through the nearly fivemonth course throughout the threeyear grant period, Gondolfi said.

The small-business agency will manage the project and access to capital for the microloan portion of

the program. The Kellogg Foundation will fund much of the effort, including matching dollars for a revolving loan fund, and work with the SBA on a report evaluating the pilot’s results.

Gondolfi said the foundation “strongly recommended” that Detroit be included on the list of inaugural cities.

“Detroit is really at a place where the time is right,” said Jeanne Wardford, a program officer with the Kellogg Foundation’s family and economic security team. “We’ve seen a lot of new development with small businesses in the city, and I think this opens up another aspect of that.”

Kellogg will fund close to $1.5 million of the project cost, with SBA contributing $650,000, Wardford said.

The goal of the revolving microloan fund is to have a pool of money that can exist once the pilot program has ended, she said.

The partnering organizations also will evaluate its results to determine whether the entrepreneurship training supports a real change in household income, Wardford said, adding: “To our knowledge, there have been some smaller studies done, but this is one of the largest, most-comprehensive studies that are going to happen around this population with micro

enterprise.”

Roebker, of SBA, said organizers will study several outcomes — including family economic security, skills development, training satisfaction, participants’ ability to start a business or find a job — and recommend best practices for future training.

The evaluation also could include such benchmarks as household income, credit scores, business growth and job creation, Gondolfi said. Organizers hope the program could lead to more private investment from new participating banks and foundations.

The pilot is not being run in conjunction with the Michigan Department

of Corrections, though spokesman

Chris Gautz said the department has contacted its organizers.

Corrections administrators have created a residential vocational training program at two state prisons near Ionia and Jackson, which offer training and certification in trades such as automotive repair and construction.

And the department is working with three Michigan community colleges on a federal program that will extend Pell Grants to incarcerated students in hopes their education will help them find jobs once they’re released.

Lindsay VanHulle: (517) 657-2204 Twitter: @LindsayVanHulle

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National food brands looking to small companies to grow

By Sherri Welch swelch@crain.com

National food brands say they are looking to small companies to help reinvent themselves as consumer demands increase for fresher, healthier foods produced in sustainable ways.

Speaking during a panel at the inaugural Crain’s Food Summit last week, representatives from Campbell Soup Co., General Mills Inc. and Kellogg Co. said they’ve established venture capital arms to invest in startups and make acquisitions when the right, well-established company comes along.

And they’re looking for other ways to work with innovative food companies, as well.

Large national food brands “don’t want to steal your idea,” said Jeff Dunn, president of the Campbell Fresh division, which acquired Garden Fresh Gourmet in Ferndale for $231 million last year. “In fact, big companies are looking for ideas, for talent, to help them reinvent themselves.”

General Mills shifted its internal

301 Inc. unit last fall from building companies from the ground up into a venture capital arm.

The Minneapolis-based company, which has operated a Yoplait plant in Reed City since the 1970s, is focused on investing to help companies grow, said Kirk Sabiston, senior manager-mergers and acquisitions.

For its part, Camden, N.J.-based Campbell launched a $125 million venture capital fund, Acre Venture Partners, to invest in food startups in February, just shy of a year after its Garden Fresh acquisition.

And Battle Creek-based Kellogg in June established Eighteen94 Capital LLC to make minority investments in companies pursuing next-generation innovation, including startups touting new ingredients, packaging and enabling technology.

In its pursuit of salsa and dip maker Garden Fresh, what Campbell found was that co-owner Jack Aronson was adamant about the finished product and what went into it, Dunn said.

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At the Crain’s Food Summit last week at Eastern Market in Detroit, the “Titans of the Industry” discuss how the big food companies are working with local, smaller businesses. From left: Jeff Dunn, president, Campbell Fresh; Kirk Sabiston, corporate acquisitions, General Mills Inc.; Rick Wion, senior director of consumer engagement, Kellogg Co.; and Daniel Duggan, Crain’s Detroit Business.

“The combination of Jack and (co-founder) Annette (Aronson)’s Winning pitchers: Snack companies, nonprofit story … (and) also the secret sauce of how they made the product …

Two salty snack makers and a Detroit nonprofit that teaches young we’ve actually taken that to some of people about food entrepreneurship won professional business serour bigger brands ... to try to replivices after pitching their companies at the inaugural Crain’s Food Sumcate ... what Jack and Annette did mit last week. here,” Dunn said.

The “startup” winner was Pop Daddy Popcorn Inc. in Highland TownHe predicted the future in the ship, and Great Lakes Potato Chip Co. in Traverse City won the “growth” food industry “is going to be more category. The Detroit Food Academy won the “impact award” for the smaller plants almost like craft beer business that has the largest, measurable, positive impact on food en(plants) that are hardwired to the trepreneurship. community.”

Pop Daddy Popcorn features non-GMO premium red kernels, and 75 Companies should think about percent of the corn is sourced from Michigan farms. It is popped in pure how to configure their business earolive oil, co-owner and co-founder Mark Sarafa said. ly on with an eye toward scaling it, Great Lakes Potato Chip Co. produces kettle, skin-on chips and, more Dunn said. “Food entrepreneurship recently, tortilla chips. is going to continue to grow very fast The Detroit Food Academy works with educators, chefs and business ... but we need better infrastructure, owners to inspire Detroiters ages 13-24 through entrepreneurial experiespecially in that $0 to $5 million ences to learn about the food business. growth stage.”

The winners received pro bono legal help from Varnum LLP and a For its part, Campbell is looking marketing and public relations checkup from Tanner Friedman. to invest in food technologies as well as food companies, Dunn said.

“Betting on what technologies are food companies that want to do some point. ... If you take investgoing to be successful is not for the business with large national brands ment money, there’s going to come to engage with them, panelists said, a day when they’re going to want it faint of heart.”

But it’s similar to car companies including contacting them via so- back,” and companies need to be trying to get ahead of the next best cial media and their venture capital prepared for that. arms. technologies, he said.

Among other relationships, “Big companies are not big com- Kellogg is working with local farmIn addition to taking a stake in panies. They are a ers to identify best practices focompanies, of human cused on sustainability, such as there are other “Big companies ... bunch beings trying to cre- growing wheat with less water, ways to forge ate value for share- Wion said. partnerships, are a bunch of holders,” Dunn said Rick Wion, human beings “We’re able to take our size and said. “Find a way to help local communities grow and senior director engage with us. thrive ...,” he said. “That’s not of consumer trying to create We’ve got Garden front-of-the-box, but it’s someengagement at value for Fresh in Ferndale. thing that is really important to Kellogg.

Go knock on the us.”

In June, Kel- shareholders. door and ... talk logg teamed Find a way to Campbell is working to help with us.” with a New York bring up a new generation of farmIn bringing in ers, Dunn said. chef and former engage with us.” venture capital, restaurant gen- Jeff Dunn, Campbell Fresh “We need the next generation of panelists said, farmers. That’s not necessarily goeral manager to maintaining con- ing to come from historic farmers open the Cereal Café. The chef, Christina Tosi, had trol of your business is extremely because you’ve got a whole generabeen serving milk sweetened with important. tion who’ve lost the farm,” he said, frosted flakes and then strained at And the expertise VC will bring is noting the average age of today’s her restaurant. Kellogg got wind of it even more important on the front farmer in the U.S. is 64. and a partnership was born. end of your business than the capThe Crain’s Food Summit, which Rather than hiring Tosi, the part- ital, Dunn said. included breakout sessions for food nership “lets her be her,” Wion said, He cautioned food companies expert panels and other food forums, adding that her creativity led to the to remember that with venture drew more than 450 attendees.

Sherri Welch: (313) 446-1694 partnership. capitalists, “they’re all coming in Twitter: @sherriwelch There are several ways for local for an exit. ... Patience runs out at

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Horizon Global to acquire 2 rival towing companies

By Chad Halcom chalcom@crain.com

Troy-based Horizon Global Corp. will pay about $189 million in cash, debt and stock to acquire rival towing companies Westfalia-Automotive Holding GmbH and TeIJs Holding BV from a German private equity group.

The deal to buy the Westfalia Group, from a consortium led by DPE Deutsche Private Equity, is perhaps the largest for the towing and trailering equipment maker since Horizon (NYSE: HZN) spun out from TriMas Corp. (NYSE: TRS) of Bloomfield Hills, over a year ago.

Horizon will pay 89 million euros, or slightly more than $100 million at current exchange rates, in cash and issue about 2.7 million new Horizon stock shares to the investors, worth about $41 million. It will also assume about 42 million euros, or about $48 million, of new debt in the transaction, which should close in the fourth quarter pending regulatory approvals and finalization of an investor rights agreement restricting sales of the sellers’ Horizon shares.

Headquartered in Rheda-Wiedenbrück, Germany, Westfalia operates facilities in 11 countries. The company is the inventor of the European ball towbar, holds more than 130 patents and has been manufacturing and selling towing products since 1932.

Horizon’s overseas Asia, Pacific, Europe and Africa president has a previous manufacturing presence in Hartha, Germany, and in the United Kingdom, but no other European countries, according to U.S. Securities and Exchange Commission

documents.

“The addition of Westfalia is very complementary to our business, adding to our regional profile with new customer channels and broadened product offering,” Horizon President and CEO A. Mark Zeffiro said in a statement.

Horizon expects to become an approximately $800 million global manufacturer and distributor in the tower-trailer market after the purchase, suggesting the Westfalia companies clear about $200 million annual revenue in U.S. dollars, based on pre-acquisition figures for Horizon.

Wells Fargo Securities was financial adviser to Horizon Global in the deal, while Ernst & Young LLP provided due diligence services, and Jones Day and Eversheds LLP were Horizon’s legal advisers.

Shares of Horizon traded at $16.86 at midday Thursday, up $1.38 from the previous close.

Chad Halcom: (313) 446-6796 Twitter: @chadhalcom

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OPINION Michigan must deal with pension issue

W

hy are cities going broke?

That’s the question the West Michigan Policy Forum aims to answer on Sept. 26 when David Walker, former U.S. comptroller general and now a strategic adviser at PricewaterhouseCoopers, speaks about a PwC report on five Michigan cities and one northern county.

For a change, Detroit won’t be the poster child for bad fiscal health, though the city knows very well what happens when paying for pension shortfalls and retiree health care restricts the ability to serve current residents. The report will spotlight Ann Arbor, Kalamazoo, Lincoln Park, Port Huron, Saginaw and Grand Traverse County.

The legacy pension costs are understated, the report concludes — and the impact may be crushing. One of the culprits is the practice of using rosy forecasts for return estimates. A 7 percent in today’s market? That’s fantasy land. A return target between 3 percent and 5 percent is more realistic. All parties involved need to change their ways to account for real liabilities. And then, either current budgets are cut or taxes are raised.

Gov. Snyder, a CPA, focused on pension issues when he first took office and has been using surplus cash to invest in the state employees’ plan, to the tune of more than $2.4 billion in 2014. But according to a new Pew Charitable Trusts report, that was still more than $327 million, or more, shy, of what was required to fulfill obligations. (Read more in Lindsay VanHulle’s report on crainsdetroit.com.)

Urgent issues — the Flint water crisis among them — often push issues like pension liabilities aside. But if the governor wants to leave a positive legacy for Michigan, it’s tackling this pension issue with the Legislature in the remainder of his term.

Positive working conditions help all Building and sustaining a quality work environment is no easy feat, especially when company owners and managers are simultaneously working toward financial targets, battling competitive pressures and grappling with industry changes.

But, by creating a workplace that truly becomes a hotbed for creativity and innovation, they can build the team they need to weather the storm — and thrive. Don’t miss our 2016 Cool Places to Work feature that begins on Page 11 of this issue and is also found at crainsdetroit.com/CoolPlaces The project recognizes employers that go the extra mile to make staff feel valued, empowered and invested. We salute the 75 honorees featured; the profiles emphasize big and small things, from a bowl of fruit in the break room to regular access to training. Tellingly, average scores in some of the big areas like role satisfaction were 90 percent or more for the winners.

Creating a top workplace requires going the extra mile — and can become one of the reasons why a company retains talent and bolsters its bottom line.

Lessons learned from Cadillac Joe

I

had not been back to Detroit since my family and I relocated to West Michigan about four years ago. I returned recently for an economic development conference, particularly interested in seeing the city’s transformation first-hand.

Throughout the state, economic developers know our largest city’s health hugely impacts our ability to compete for jobs and investment.

The most memorable lesson I received on the city of Detroit’s strengths, though, came from someone most would think is the least likely to educate an out-oftown visitor.

I ate dinner one night at an upscale downtown Detroit restaurant bar. A (clearly) homeless man walked in and sat on the stool next to me. It was raining; he was soaked and came in for shelter. He was impossible to ignore, yelling across the bar for a shot of whiskey. Eyes averted to ignore him and pretend he didn’t exist. Normally, I would have

OTHER VOICES Jennifer Owens

Owens is president of Lakeshore Advantage, a West Michigan economic development nonprofit based in Zeeland. done the same, but that night I chose to learn his story.

He said everyone calls him Cadillac Joe because of his love for the city of Detroit. He told me Detroit is the best place to be in the world.

“Detroit will be the next top city like San Francisco or Cleveland,” Joe said. “Buy real estate now here if you wanted to make big money.”

Not surprisingly, he loved cars.

His told me his nickname wasn’t just about the best car in the world, but

I’m hoping Fairlane Town Center pays attention to this.

Reader responses to stories and blogs that appeared on Crain’s website.

Comments may be edited for length and clarity.

E M Parmelee

Here’s hoping these spaces won’t go to waste. The location alone no doubt is making some developers drool in anticipation.

Re: Meijer doubles down on the big box

Fewer choices and higher rates.

Thanks to our esteemed representatives in Washington, this is what we are left with.

Meijer has the same problem in the Chicago market — stores too small for the wow factor. Those stores, like the Eight Mile store in Detroit, are small, underwhelming, not well-cared for, and simply not impressive. Build a giant supercenter with hot food, a big clothing section, 24-hour access, a garden center, etc., and it will impress people. As far as Midtown, downtown and Woodward Avenue go, Meijer’s best bet would be to open a larger version of their current gas stations: a convenience store with affordable, Meijer-brand goods that isn’t trying to be a grocery store or a mini-supercenter.

MikeInMI

BrewPubNate

new construction or remodeling and renovation, people with those skills have to be doing well.

But we need jobs. Not hundreds, but thousands. We need new businesses to be created. We need businesses to move back into the city.

And we need businesses to move here from out of state.

And that means we need incentives to attract those businesses.

I have never been a great fan of cities and states competing with each other — each offering bigger incentives — but I am afraid it works.

It doesn't make a lot of sense to give the new hockey arena an incentive since it would be in Detroit re-

gardless.

But it does make some sense to offer a new business that is interested in building a plant where none existed some sort of incentive to entice it to be in Detroit.

New plants usually mean new jobs. That should always be the end game.

With incentives, Detroit doesn't lose revenue from someone who never existed.

Detroit is a very hot place today.

It’s a great destination city and should be a great place to locate your business. But a little nudge can’t hurt, and we need lots of nudges.

Next month, Crain’s Detroit Busi-

putthehammerdown

Re: Priority Health, HAP to withdraw PPO plans I want to know why the politicians don’t have the health plans with high deductibles and copays.

Instead they have the Cadillac plans with no premiums, deductibles or copays. Why is that?

Nandev

also because Detroit was founded

by Antoine Cadillac in 1701. He shared with me a bit about Detroit’s rich history and culture.

The rain stopped, and Joe left to go to another bar “where the drink prices weren’t so high.” I’m still thinking about Cadillac Joe and the pride he feels for his community.

He, like many people I met on my trip, has a great love for Detroit.

Gritty, committed, determined and convincingly sharing why Detroit is the best place in the world.

Keep driving forward, Detroit. I am cheering you on.

LETTERS

TALK ON THE WEB Re: Southfield unveils ambitious plans for Northland Center site

Cadillac Joe: Gritty, committed, determined and convincingly sharing why Detroit is the best place in the world.

Auto industry must keep strengths in new tech age Editor: Interesting story by Dustin Walsh on the potential for increased patent litigation between the auto and tech industries (“Clash of IP Titans?” Aug. 22). Equally, or perhaps more important, is the need for the auto industry to hold onto its core competencies in engineering and design, supply chain management, dealer networks and product innovation, to name a few, amid the new era of collaboration and joint agreements.

While there is room for both the auto industry and the tech industry to thrive in the age of autonomous vehicles and other tech-dependent auto initiatives, it will be important, particularly for Michigan, that the auto industry not cede any of its hard-fought leadership and clout to the upstart tech industry.

Steven Oberholtzer Intellectual property attorney Brinks Gilson & Lione, Ann Arbor

Maybe we need incentives It is very gratifying to see Detroit’s economy rebounding — slowly but surely.

Most of us are aware of new restaurants opening every week.

What was once happening only downtown has now spread out, and we see businesses opening farther and farther from the core.

Neighborhoods are being recaptured and rebuilt all over our city.

And it seems to be happening faster all the time. In our core, it’s hard to find a place to live. Lofts, I am told, are rented as fast as they are available. And along with availability, sadly, rents are growing. But that means it will encourage the development of even more apart-

KEITH CRAIN Editor-in-chief

ments. There is even, finally, a lot of new construction. Detroit is improving. Don’t let anyone tell you otherwise.

But we still need the single most important development. We need jobs. I have no doubt that construction jobs are booming. Whether it’s

ness will hold its third “Detroit Homecoming.” An idea spawned by my friend Jim Hayes, retired publisher of Fortune magazine, Crain’s has nurtured and developed this into what has become a blockbuster for economic development. We invite successful folks who have left to return and sample just how great Detroit has become. And that often prompts rekindled engagement and investing.

Jim and Crain’s are the hosts for this invitation-only opportunity for a couple of hundred folks to get reacquainted with the city and the opportunities that are available.

In the end, it’s all about jobs, one at a time or by the thousands.

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Priority Health, HAP to pull PPO plans from state exchange

By Jay Greene jgreene@crain.com

Following announcements by for-profit commercial carriers Humana and UnitedHealthcare, nonprofits Health Alliance Plan and Priority Health are notifying agents they are pulling all PPO plans for 2017 from the Michigan health insurance exchange, Crain’s has learned.

Detroit-based HAP already has announced it is pulling eight Personal Alliance individual preferred provider plans for individuals from the exchange and four PPO plans in the open market next year. HAP will continue to offer HMO individual plans on and off the exchange.

“We believe that these (PPO) plans do not represent the best value for the consumer,” Mary Ann Tournoux, HAP’s senior vice president and chief marketing officer, said in a statement. “At this time of cost conTournoux: PPO sciousness, we plans aren’t the believe our rebest value for the maining plans consumer. are the most cost effective and offer our members and consumers greater value for their hardearned insurance dollar.”

That means Detroit-based Blue Cross Blue Shield of Michigan would be the only one left with PPO plans offered to serve 341,000 people who purchase subsidized insurance on the Obamacare marketplace.

Sources told Crain’s that Blue Cross is concerned as it is projecting more than $70 million in losses in the individual market this year.

“Priority Health remains committed to offering individuals access to affordable health care through the federal exchange,” said Amy Larson Miller, manager of public relations for Priority Health. In fact, she said, it will offer more individual product options on the exchange in 2017 than any other carrier in Michigan.

“Our decision to eliminate our individual market PPO plans is based on consumer market trends showing interest in PPO plans continually declining,” Miller said.

HMOs and PPOs differ in many ways. HMOs tend to be priced lower to consumers, but they offer many restrictions on hospitals, physicians and other providers. PPOs offer greater flexibility in choice of providers, but they are more expensive and can include higher copayments and deductibles. HMOs offer insurers greater ability to maximize profits as there is less fluctuation with service utilization than PPO plans, and HMOs can restrict providers using cost and quality metrics.

Despite the defection of many health insurers from PPOs, most health insurers continue to offer HMO plans on the exchange. Humana announced plans to leave the PPO market in 2017 but will continue to offer HMO products. United said it would leave the exchange entirely

next year.

Even so, most health insurers have filed for large rate increases on the state exchange, averaging 17.5 percent, said the state Department of Insurance and Financial Services. Last year, individual rate increase approvals averaged 6.5 percent while small group plans rose an average of only 1 percent. DIFS is expected to announce its rate filing decision within the next week.

About 1.5 percent, or 10,000 of HAP’s 675,000 members, will be affected, HAP said. Members will be notified before open enrollment begins Nov. 1. A HAP spokesman said

small and large group health plans are not affected.

HAP said it will continue to offer a full suite of plans for 2017, including more than 45 Personal Alliance plans for individuals and families.

Because health insurers are treating patients who are sicker than expected and fewer healthier and younger people have signed up for individual policies on exchanges, profit margins are thinning and in some cases health insurers are posting large losses.

For example, Aetna Inc. announced it will withdraw from 11 of 15 state markets next year because

its losses are expected to exceed $300 million this year. Aetna does not compete in the Michigan marketplace.

Avalere Health, a Washington, D.C.-based health insurance consulting and data reporting firm, said 36 percent of 500 rating regions in the U.S. may have just one health insurer when the 2017 sign-up season starts Nov. 1. Another 19 percent could have just two carriers.

However, Cigna Corp. has announced it will enter several state insurance markets. It recently filed in North Carolina.

Most Obamacare exchanges had

far more competition this year, with about two-thirds of rating areas having three or more health insurers vying for customers’ business.

Competition can help lower prices for consumers and offer more plan choices, Avalere said.

One of the bright spots nationally, Michigan has had 11-14 health insurers competing on the state's health insurance exchange the past three years, offering a variety of PPO and HMO plans. Those numbers may be cut somewhat by the time open enrollment rolls around.

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

Crain’s Detroit Business just named Greenleaf Trust a 2016 Cool Place to Work.

(Not that we noticed…)

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75 cool places to work From leadership training to time-off policies to wellness perks, read what makes these companies stand out among Michigan employers.

ILLUSTRATION BY CHRIS MORRIS FOR CRAIN’S

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Where happy is a strategy 1. V-Suites Farmington Hills @FurnishedApts Diane Batayeh, president Corporate housing and furnished apartment rental agency.

Number of U.S. employees: 28 Male/female employee ratio: 26/74 Male/female executive ratio: 50/50 Average salary: $55,000 3 things that make V-Suites cool: 1. Employees can stay at any of the organization's apartments for free.

2. Every employee is eligible for a 10-30 percent end-of-year bonus that is dependent on their position and yearly performance.

3. A “Spin the Pin” features every employee's name on a large wheel; on random days, the company vice president spins the wheel and the employee chosen gets to immediately go home for the day.

How they communicate: A “go meeting” is held each morning; employees use Lync to chat throughout the day.

2. Clarity Voice Southfield @clarityvoiceUC Gary Goerke, president, owner Cloud communication/VOIP phone services provider.

There’s a basket of fresh organic fruit in the break room and a visioning session with the CEO at 3 o’clock. A masseuse is coming to the office tomorrow, but wait: Your son has a doctor’s appointment, so you’re working at home.

You must be employed by a Cool Place to Work.

Flexibility, wellness and collaboration are some of the key drivers of employee attraction, retention and engagement, according to the 75 companies that were named to the 2016 Cool Places to Work in Michigan list.

This project recognizes employers that go the extra mile to make employees feel appreciated — as judged by the employees themselves.

Crain’s hired Harrisburg, Pa.-based Best Companies Group to gather data on employers and survey employees to produce this ranking. The voluntary program was open to Michigan businesses, nonprofits and government entities that have at least 15 employees at a Michigan location. The process is extensive: First, the employer provides detailed information on its benefits and perks; next, employees answer questions about work environment and company leadership in a confidential, 80-question survey.

This employee part of the assessment — which seeks to determine, among other things, whether employees understand the long-term strategy of the company and whether they feel they are being groomed for future leadership positions — accounts for 75 percent of the final ranking.

Read more about the companies, and sort through them by industry and size, at crainsdetroit.com/CoolPlaces. Also online are videos, submitted by the companies themselves, that showcase their unique takes on workplace culture. Plus, workplace consultant Chuck Underwood gives advice to employers on working with millennials and other generations that are part of today’s workforce.

6. Greenleaf Trust

Company profiles by Kristin Bull, Laura Cassar and Paul Vachon

7. Contract Professionals Inc.

8.

Waterford Township

@Ar

Number of U.S. employees: 34 Male/female employee ratio: 64/36 Male/female executive ratio: 38/62 Average salary: $51,950 exempt; $28,674 nonexempt* 3 things that make Clarity Voice cool: 1. Remote work capability.

2. Flexible scheduling.

3. Massage therapy sessions in the office.

Wellness matters: Employees respond to customers via headsets, many times walking laps around the office and juggling stress balls or standing at their ergonomic workstations.

3. Trion Solutions Inc. Troy

3 things that make Trion Solutions cool: 1. During a monthly companywide coffee chat, breakfast is provided to all staff while management discusses developments and recognizes staff for accomplishments.

2. Paid paternity leave for birth or adoption of a child.

3. Smoothies provided to employees on Fridays in the summer.

Wellness matters: Monthly massages offered to all employees on-site.

4. Grand Circus Detroit @GrandCircusCo

@TrionSolutions

Damien Rocchi, CEO and co-founder

Craig Vanderburg, COO Payroll and human resources services.

Training for developer and other tech careers.

Number of U.S. employees: 67

Number of U.S. employees: 16

Male/female employee ratio: 30/70

Male/female employee ratio: 50/50

Male/female executive ratio: 100/0

Male/female executive ratio: 50/50

Average salary: $55,000 exempt; $38,000 nonexempt

Average salary: $70,000 exempt; $30,000 nonexempt

14%

5. Worldwide Express

Kalamazoo Ronald Kilgore, CEO

Wealth management firm.

Number of U.S. employees: 100 Male/female employee ratio: 42/58 Male/female executive ratio: 73/27 Average salary: $107,735 exempt; $53,274 nonexempt 3 things that make Greenleaf Trust cool: 1. Adult recess during the workday.

2. Regular 4:01 p.m. get-togethers.

3. Day of Caring: A paid day off for the entire company to volunteer.

of companies conduct employee performance reviews more than once a year.

@wwexmidwest

Steve York, CEO and founder

Michael McCarthy, vice president

Veteran-owned global staffing company.

Packaging and shipping company.

Number of U.S. employees: 28

Number of U.S. employees: 36

Male/female employee ratio: 42/58

Male/female employee ratio: 32/68

Male/female executive ratio: 50/50

THROUGHOUT THIS REPORT: BEST

Male/female executive ratio: 40/60

Average salary: $62,000 exempt

COMPANY GROUP’S REPORT FROM

Average salary: $80,000 exempt

3 things that make CPI cool:

SURVEY OF COOL PLACES WINNERS

3 things that make Grand Circus cool: 1. Each month, a staffer nominates a colleague for a monthly award and writes a poem for that person, then reads it aloud to the staff.

2. Personal and professional development opportunities, such as free coding classes.

3. Unlimited vacation, paid time off.

How they communicate: Weekly lunches where one employee cooks a meal for the rest of the crew and the team discusses what they’ve been working on.

3 things that make Worldwide Express cool: 1. Paid time off is awarded to employees each month based on performance.

2. Employee groups work together to earn a company trip, where the destination is chosen by employees.

3. A promote-from-within training program allows employees to move up.

Wellness matters: Gift cards are given for weight loss challenge accomplishments.

ever

33%

@CPIJobsInc

SOURCE FOR DATA POINTS FOUND

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How they communicate: “Perspectives and Solutions” lunches with the company president and human resources director in which a small group of mixed-generation workers talks about concerns.

Southfield

of Crain’s Cool Places to Work say they pay 100 percent of employee medical benefits.

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1. Part of the company’s mission includes finding employment for veterans.

2. Reimbursement for an evening out with a spouse, significant other or friend for all employees.

3. On-site meditation room.

Wellness matters: All employees receive a day off and $100 when they complete their yearly health physical; a pay-to-walk program reimburses employees for each mile walked.

* Notes: For salary data, exempt employees are those who are exempt from overtime provisions of the Fair Labor Standards Act; nonexempt employees are typically paid hourly. Also, some companies ranked here have headquarters outside Michigan; here, we highlight the Michigan office and highest-ranking Michigan executive. Questions about this report? Email Kristin Bull, assistant managing editor, at kbull@crain.com.

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Leaders to follow Experts say growing a leadership team takes dedication, time

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27

By Zack Burgess and Paul Vachon

Special to Crain’s Detroit Business

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What makes a workplace cool? Clockwise, from top: Table tennis at United Shore; workouts at Taubman; collaborating on company vision at ImageOne and take-your-dog-to-work day at V-Suites. See photos of every company and watch videos, too, at crainsdetroit.com/CoolPlaces.

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@ArrowStrat

Grand Rapids, Troy

Jeff Styers, CEO Recruiting and staffing company.

Number of U.S. employees: 61 Male/female employee ratio: 50/50 Male/female executive ratio: 50/50 Average salary: $55,000 exempt 3 things that make Arrow Strategies cool: 1. A comprehensive tuition reimbursement program, which pays up to $1,500 of tuition and subsidizes certification programs.

2. All employees are eligible for a paid day off from work each year to volunteer.

3. Free massages and a game room keep employees loose and relaxed.

Wellness matters: A personal trainer at no cost to the employees for the first six months and unlimited boxing lessons with an on-site instructor.

@TQLogistics Jeffrey Miller, group sales manager Transportation logistics company.

Number of U.S. employees: 3,814 Male/female employee ratio: 82/18 Male/female executive ratio: 92/8 Average salary: $52,234 exempt; $31,074 nonexempt 3 things that make Total Quality Logistics cool: 1. When Detroit employees hit a certain sales milestone, they get a street sign with their name on it as a memento.

2. A TQL Kids Club gives employees’ kids a selection of TQL logo items and their very own name badge.

3. On-site oil changes, grocery delivery and dry-cleaning pickup take errand-running off employees’ after-hours checklists.

How they communicate: The CEO sends a daily companywide email to all employees updating them on company news, employee milestones and upcoming events; sales and revenue numbers are shared weekly with everyone in the company.

10. Marsh and McLennan Agency LLC Troy @MMA_Michigan Thomas McGraw, CEO Employee benefit plan provider.

Number of U.S. employees: 94 Male/female employee ratio: 32/68 Male/female executive ratio: 27/73 Average salary: $125,859 exempt; $44,736 nonexempt 3 things that make Marsh and McLennon cool: 1. A masseuse visits the office weekly.

2. “Sunshine Days” are granted at random throughout the year, giving employees an early exit from the office to enjoy the day.

3. For introducing a new client, an employee receives 15 percent of the first year's revenue.

How they communicate: “Work in Progress” meetings with supervisors to monitor progress on a given project and discuss lessons learned.

Developing the next wave of leaders to move a company forward is something that needs constant effort. If not managed properly, the differences can affect everything — recruiting, team-building, organizational change and maintaining productivity.

There are many ingredients to the winning team. Among them: a leadership group that is diverse by age and other metrics, and a business environment that allows leaders to lead in their own way that is true to their personalities and styles.

“As a former CEO of a business with very rapid growth — a leader doesn’t build a business by themselves. They build the team and the team builds the business,” said Marie Seipenko, business strategy coach at C-Suite Business Strategies and former president and CEO of Preferred Solutions, Farmington Hills.

“In order to grow your team, you’ve got to have the right people. I do think it’s really important to continue to develop and grow your team. However, when you talk about Gen X, millennials and baby boomers, we’re all people.

“And while there are different wants and needs of those generations, I think the common thing is that we all want to learn, and as people become a part of a team, we want to grow as a team and we want to grow as individuals.”

Some eye-opening statistics from the Cool Places to Work winning companies’ research: While all companies that made the list scored an average of 90 percent in overall employee engagement, scores in the areas of training, development and resources were substantially lower.

Only 81 percent of the employees said they “understood what is expected for career advancement.” There is a disconnect, even at well-run firms. Sometimes this can be tied to genera-

tional leadership issues; sometimes it’s something else.

As generations have merged in the workforce, companies — big and small — are grappling with the obstacles that come with cultivating and managing different employee groups with different wants and preferences.

Combine that with rapidly changing industry trends and technology, and it spells a constant round of change management.

The stereotypes run rampant: The boomer who is a good team player and is mystified by Facebook; the millennial who wears flip-flops in the office; the traditionalist (born prior to 1946); the cynical Gen Xer; and the Gen 2020 type — born after 1997 — who appears surgically attached to her smartphone.

How does a manager determine the true nature of the team?

First, research. “One of the things that we did to grow individuals and grow leadership, we did a profile called StrengthsFinder 2.0, which gives you a pretty good idea of what you’re good at,” said Seipenko. “We used that information to help morph jobs and develop leadership tracks that were the right fit for the company. It helped us to understand each other and grow the team that we had into leaders."

In the end, some common conclusions in employee surveys are that most people want more feedback and most people want to add value to the company.

In addition, not every employee wants to be an executive, and there is a place for solid worker-bee roles. They can, instead, be your subject matter experts and specialty skills leaders.

“The simplest approach to developing organizations and leaders with a vast array of differences generationally has to start with clarity,” said executive coach Lynda Jeffries, senior consultant with The Leadership Group LLC, which has Michigan offices in Novi, Grand Rapids and Detroit.

“The organization has to be really clear about where it is going and hopes to achieve. There’s a book that we use a lot by Patrick Lencioni, it’s called The Advantage. In that, he talks about the SEE LEADERS, PAGE 14

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SPECIAL REPORT: COOL PLACES TO WORK

LEADERS FROM PAGE 13

real advantage in an organization is to have clarity. What is it you’re trying to do? What is it that you’re trying to become?

“And if an organization has clarity, then it can align its resources.”

Engagement Yet many staffers, including those working at some of the Crain’s Cool Places to Work winning companies, sometimes feel left out of the plans; only 70 percent agreed with the statement, “there is room for me to advance at this organization.”

To maximize success, an organization must engage closer to 100 percent of its employees.

According to Sandy Fiaschetti, co-founder of Rochester Hills-based Magnet Consulting, this shortcoming results from a manager focusing too narrowly on what the company does and unconsciously viewing leadership training as an afterthought.

“Business people can make the mistake of thinking just because they’re heading up a business they can effectively oversee leadership training. But it’s actually a very different skill set. You can be a great IT technician and be a terrible leader. There’s a necessary shift that needs to happen from being a doer to being a leader.”

Workplace experts agree that a good starting point is to approach

Tips from experts on developing leaders n Experiment with mixed-age teams and interactive mentoring programs that encourage older and younger workers to learn from each other. n Develop incentive plans that reflect where your employees are in their lives i.e. their generational realities. n Conduct regular human resources surveys to get a pulse on your employees’ goals and needs. n Avoid generation-based employee empathy groups — they reinforce stereotypes. n Recognize that different managers have different styles. Avoid trying to compel each manager to manage their projects in the same way. n Form partnerships with employees of different ages and encourage them to share their opinions. n Don’t think that you already know how to motivate employees who are from different generations — ask them what they want out of their professional lives.

Zack Burgess

the issue from the perspective of today’s millennials — the group that will supply tomorrow’s leaders.

“Creating a simulated business environment is a way to discern and nurture talent,” Fiaschetti said.

Pinsight, a leadership development company based in Denver, Colo, has developed such a training model. Prospective leaders are placed in an office environment which mimics a C suite. Emails and phone calls from actors portraying clients, colleagues and subordinates gauge a subject’s response.

“We have industrial psychologists monitor participants’ responses to determine if they are up to the job, and if so, what specific areas they need to further work on,” said

Martin Lanik, company CEO. The concept is grounded in solid research. Pinsight based it on a program used by the U.S. military during World War II to identify personnel for espionage assignments.

Talent audits Leadership development also can be less elaborate. Positive information can be gained from a “talent audit,” a battery of vocational tests.

“Let’s say a person in purchasing has a natural skill discovered by the audit that might be useful in a project customer service is working on," Fiaschetti said. “A temporary transfer across the company might be beneficial to both the employee and the organization.”

Some of the companies on this year’s Cool Places to Work list have seen the advantages of being proactive with leadership training. Novibased National Food Group uses the help of Vistage International, an organization of executives from noncompeting businesses. Vistage conducts seminar-style coaching and leadership development sessions; the driving mindset is that better-trained leaders make better managers.

Another company making strides is Detroit-based Marketing Associates. In 2014, the company introduced a training program called Transitions to Leadership, which to date has involved 56 of its 356 staffers. The program begins with a behavioral assessment and culminates in two-day courses spaced over a year. For CEO Mark Petroff, the investment has been worthwhile.

And, at Novi-based Interior Environments, one employee expressed to company managers his interest in developing his leadership potential. Over the next eight years, he was brought in as an active partner — deeply immersed in learning the business. There was a purposeful approach to grooming him.

When the firm recently purchased a similar company in Colorado, the decision was made to relocate the employee there as the general manager. “We decided the investment was worth it, and we were right,” said Principal Randy Balconi.

11. Blue Chip Talent Bloomfield Hills @bluechiptalent Nicole Pawczuk, CEO Staffing company specializing in information technology, engineering and healthcare IT. Number of U.S. employees: 23 Male/female employee ratio: 58/42 Male/female executive ratio: 67/33 Average salary: $65,000 exempt; $60,000 nonexempt 3 things that make Blue Chip Talent cool: 1. Early Fridays: if team members hit their numbers they can leave at 3 p.m.

2. Team-building outings include ziplining and bubble soccer.

3. A company trip to Las Vegas.

How they communicate: A service subscription that assesses personality traits teaches employees how to communicate and helps resolve conflicts.

12. Michigan Community VNA Bingham Farms Vicki Welty, CEO Home health care company.

Number of U.S. employees: 71 Male/female employee ratio: 24/76 Male/female executive ratio: 0/100 Average salary: $90,000 exempt; $45,000 nonexempt 3 things that make Michigan Community VNA cool: 1. Paid paternity leave for birth or adoption of a child.

2. Employees are offered productivity and time management workshops.

3. Monetary incentives or extra paid time off when overnight travel is required.

How they communicate: Monthly newsletter delivered via email.

13. Sachse Construction LLC Detroit

@SachseConstruct Todd Sachse, CEO Commercial construction manager and general contractor.

Number of U.S. employees: 146 Male/female employee ratio: 72/28 Male/female executive ratio: 88/12 Average salary: $84,000 exempt; $30,000 nonexempt 3 things that make Sachse Construction cool: 1. Unlimited PTO. 2. After 10 years of service, employees are given a four-week sabbatical.

3. An incentive program lets all team members — from accounting to the project manager — share in profits from a job that’s on time and within budget.

Employee recognition: The “Game Ball Award for Leadership” is given each quarter to the company’s MVP; it comes with a ball signed by company executives, a $500 gift card — and flowers to the employee’s significant other, thanking him or her for the support.

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SPECIAL REPORT: COOL PLACES TO WORK 14. HookLogic Ann Arbor @hooklogic Jonathan Opdyke, CEO Online marketing for retail, hotels.

68%

of companies offer paternity leave to employees.

20. Control-Tec Allen Park @controltec

Number of U.S. employees: 150

Provider of telematics and analytics for the transportation industry.

Male/female employee ratio: 89/11

Number of U.S. employees: 74

Male/female executive ratio: 80/20 Average salary: $106,377 exempt; $50,000 nonexempt 3 things that make HookLogic cool: 1. An annual incentive program for salaried employees, the amount of which is based on attainment of personal and company benchmarks.

2. Company-paid fitness club memberships.

3. Unlimited vacation time.

Employee recognition: A “hero program” recognizes employees who have gone the extra mile to make a project succeed.

15. Warner Norcross & Judd LLP Grand Rapids @WNJLLP

17. RightBrain Networks LLC

Male/female executive ratio: 88/12 Average salary: $93,000 exempt

@RightBrain_Net

3 things that make Control-Tec cool:

Jamie Begin, CEO

1. Flexible work hours.

Software developer/engineer.

2. Workplace celebrations include Pi Day and Bacon Day.

Male/female employee ratio: 82/18 Male/female executive ratio: 100/0 Average salary: $70,000 exempt

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Male/female employee ratio: 85/15

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Number of U.S. employees: 27

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3. A recreation room on-site offers foosball, basketball and cornhole.

Wellness matters: Free membership to gym across the street from work.

LET’S GET S TA R T E D T O D AY !

3 things that make RightBrain cool: 1. Team-building activities include cabin rentals and wine tours in northern Michigan.

EDSIsolutions.com 313.271.2660

2. Unlimited vacation time.

3. There’s an office espresso machine — and a keg.

How they communicate: A weekly all-hands meeting.

Doug Dozeman, managing partner Law firm.

Number of U.S. employees: 378 Male/female employee ratio: 41/59 Male/female executive ratio: 62/38 Average salary: $125,611 exempt: $54,253 nonexempt 3 things that make Warner Norcross cool: 1. A workplace book club: In 2015, employees read Some of My Best Friends Are Black: The Strange History of Integration in America by Tanner Colby.

2. Employees with 30 and 35 years of service get a standing ovation during a ceremony that has become a tradition at the firm.

3. Office fruit is replaced on Wednesdays with vegetables: it’s called Veggie Wednesdays.

Wellness matters: The company has an on-site nutritionist.

16. Shift Digital

18. HRPro/BenePro Royal Oak @hrbenepro Kristopher Powell, CEO Human resource and employee benefit consulting and administration.

Number of U.S. employees: 27 Male/female employee ratio: 12/88 Male/female executive ratio: 20/80 Average salary: $61,500 exempt; $36,800 nonexempt 3 things that make HRPro/BenePro cool: 1. Sponsorship of an employee assistance program that provides short-term counseling for personal concerns.

2. Minimal overtime.

3. Inclusion of employees’ immediate family members in corporate events.

How they communicate: Employees are surveyed annually to determine their level of satisfaction.

Birmingham @ShiftDigital1 Steve St. Andre, CEO Digital marketing and technology firm.

Number of employees: 315 Male/female employee ratio: 53/47 Male/female executive ratio: 81/19 Average salary: $78,500 3 things that make Shift Digital cool: 1. Benefits are 100 percent paid by the company.

2. Every new employee gets a two-week orientation that’s more than just meetings and paperwork; they are actually assigned to a project.

3. Catered lunches at least twice a week.

How they communicate: Employees make heavy use of Skype to communicate with one another; the CEO hosts quarterly meetings with employees.

19. Billhighway

WHO WILL MAKE BUSINESS HAPPEN? SPARTANS WILL.

Troy @billhighway Vince Thomas, CEO KENDRA CORMAN, MBA ‘13

Financial management services.

MANAGING DIRECTOR H2H CONSULTING

Number of U.S. employees: 229 Male/female employee ratio: 54/46 Male/female executive ratio: 100/0 Average salary: Not provided 3 things that make Billhighway cool: 1. Children At Work policy allows employees to bring their child(ren) to work if they do not have a child care option that day.

2. Employees receive extra PTO for each weekend day they travel for work.

3. Each team received a budget to conduct a “workspace makeover” for their team work areas.

How they communicate: Monthly town hall meetings and an anonymous suggestion box. (About 50 percent of suggestions have been acted on or implemented.)

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SPECIAL REPORT: COOL PLACES TO WORK 21. Michigan First Credit Union

1. Pet benefits (including a “Pawrents Group,” pet adoption stipend, pet bereavement time off).

24. Farbman Group @farbmangroup

@MichiganFirstCU

2. Tiki Trolley, a party on wheels that brings the beverages, snacks and music to employees.

Lathrup Village

Michael Poulos, president and CEO

3. Two-week sabbatical at 10-year anniversary.

Community credit union.

Number of U.S. employees: 306 Male/female employee ratio: 70/30 Male/female executive ratio: 43/57 Average salary: $84,554 exempt; $37,106 nonexempt 3 things that make Michigan First Credit Union cool: 1. Monthly breakfasts with the CEO. 2. A concierge runs personal errands for employees.

3. An on-site meditation room.

Employee recognition: An incentive program promotes the reduction of teller errors and increases retention; prizes include a five-day trip for two.

22. DigitasLBi Detroit @Digitas Robert Guay, EVP/managing director Global marketing and technology agency.

Number of U.S. employees: 1,991 Male/female employee ratio: 41/59 Male/female executive ratio: 79/21 Average salary: $85,000 exempt; $78,000 nonexempt 3 things that make DigitasLBi cool:

How they communicate: “Say Anything,” a suggestion box where employees can ask, suggest or say anything to leadership.

23. Ambassador Software

Southfield Andy Gutman, president A commercial real estate company.

Number of U.S. employees: 116 Male/female ratio: 51/49

Average number of paid holidays that companies say are part of their work calendar.

Male/female executive ratio: 80/20

2. Four weeks of PTO in year one, five weeks after five years.

Average salary: $63,084 exempt; $39,378 nonexempt

3. Annual office block party.

3 things that make Farbman Group cool:

Royal Oak

1. Farbman University classes at least once per month to help employees grow.

@Ambassador

2. Flexible hours.

Jeff Epstein, CEO

3. A “fun” committee.

Tech and marketing startup.

9.6

How they communicate: Town hall meetings for updates on the company; open-door policy where employees are free to communicate one-on-one with all levels of the executive leadership team.

26. OHM Advisors Livonia

Wellness matters: Supplement cost of Weight Watchers and on-site Weight Watchers meetings; also, a walking/steps competition.

@OHMadvisors

Average salary: $70,670 exempt

25. Dewpoint Inc.

Number of U.S. employees: 324

3 things that make Ambassador cool:

Lansing

Number of U.S. employees: 42 Male/female employee ratio: 70/30 Male/female executive ratio: 100/0

1. Paternity leave (either paid or unpaid) for the birth or adoption of a child.

2. Monthly theme happy hours and a lounge area with pingpong, gaming consoles and beanbags.

3. Commission is uncapped and ranges from 8-13 percent.

How they communicate: Slack, a real-time messaging system, lets employees communicate in chat rooms.

John Hiltz, president Architecture, engineering and planning firm.

Male/female employee ratio: 70/30 Male/female executive ratio: 90/10

Ken Theis, president/CEO Technology consulting firm.

Number of U.S. employees: 138 Male/female employee ratio: 64/38

Average salary: $83,820 exempt; $50,000 nonexempt 3 things that make OHM Advisors cool:

Male/female executive ratio: 80/20

1. Four-day work weeks in the summer.

Average salary: $112,148 exempt; $45,000 nonexempt

2. Paternity leave for the birth or adoption of a child.

3 things that make Dewpoint cool:

3. Hiking trails on company campus.

1. $150 plus four hours of paid time off to donate to charity of choice.

27. imageOne Oak Park @imageoneway Joel Pearlman, CEO Print services, printing equipment supplier.

Number of U.S. employees: 52 Male/female employee ratio: 70/30 Male/female executive ratio: 75/25 Average salary: $51,157 exempt; $48,754 nonexempt 3 things that make imageOne cool: 1. Language learning club for employees.

2. Cultural and team-building exercises conducted during weekly staff meeting.

3. Weekly podcast invites staff to discuss topics of interest with colleagues.

Employee recognition: Personal video messages from company leadership sent to employees to celebrate accomplishments and anniversaries.

75%

Companies that offer flexible work hours or a compressed work week. For more about workplace flexibility, see crainsdetroit.com/ CoolPlaces/Flexibility

How they communicate: “Spark,” a companywide intranet.

! u o Y k n Tha We want to thank our employees for voting us one of the “Cool Places to Work” and solidifying our place within the community. We are excited to continue to offer outstanding job opportunities throughout the

AllureMedicalSpa.com

| 800-877-2570

community. We are proud of our staff at all 5 of our locations throughout Metro Detroit, creating a medical environment where patients feel loved and know they are being treated by the best.

SEE WHAT IT’S LIKE TO WORK AT ALLURE MEDICAL SPA

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SPECIAL REPORT: COOL PLACES TO WORK 28. Interior Environments Novi

@ieoffices Commercial interior design firm.

Randy Balconi, principal Number of U.S. employees: 39 Male/female employee ratio: 32/68 Male/female executive ratio: 50/50 Average salary: $84,950 exempt 3 things that make Interior Environments cool: 1. Companywide outings.

Average salary: Not provided 3 things that make Kapnick Insurance Group cool: 1. Once a month, company owners take a group of employees out to lunch.

Employee recognition: A Process Improvement Award gives cash to employees who propose an idea that results in greater efficiency.

30. Humantech

Male/female executive ratio: 58/42 Average salary: $75,000 exempt; $45,000 nonexempt 3 things that make EDSI cool: 1. Weekly visits from a meditation bus.

Gerald Acker, senior partner

2. A service offers employees organic grocery delivery at a discounted rate.

Number of U.S. employees: 130

3. Each month an employee gets to interview the company president for an online series called “Pez with the Prez”; they eat Pez candy during the chat.

Wellness matters: Workplace bikes are shared among employees, who are encouraged to bike to meetings and lunch.

@humantech Franz Schneider, CEO

3. Flexible work schedules.

Mark McDaniel, president and CEO

29. Kapnick Insurance Group

Male/female executive ratio: 100/0

Number of U.S. employees: 530

Number of U.S. employees: 45 Male/female employee ratio: 50/50 Average salary: $97,000 exempt; $32,250 nonexempt 3 things that make Humantech cool: 1. Extra compensation when overnight travel is required.

2. In-office chair massages, dry cleaning and shoeshines intended to conserve employees’ free time.

3. Twice-monthly catered lunches.

Wellness matters: Sit-to-stand workstations.

How they communicate: EDSIyou, an online communication tool used for employee training, quality management documentation, interactive forums and blogs.

32. Open Systems Technologies Grand Rapids @ostgr Meredith Bronk, president and CEO Data center and provider of design, software and analytics services.

Number of U.S. employees: 186 Male/female employee ratio: 78/22 Male/female executive ratio: 78/22

Southfield

1. An employee gets a $1,000 bonus when his or her child goes to college.

33. Cinnaire

Male/female executive ratio: 50/50

Male/female employee ratio: 28/72

@goodmanacker

Kevin Schnieders, CEO

2. A “career sculpting” program, where great performers are paired with a career mentor to regularly discuss future career plans.

How they communicate: Plan Grid, mobile construction management software, is used to communicate between site and internal groups.

Number of U.S. employees: 147

3 things that make Open Systems Technologies cool:

Male/female employee ratio: 38/62

Provider of ergonomic solutions for workplaces.

Provider of insurance, risk management, employee benefits and financial strategies.

@EDSI_Solutions

3. Retiring employees receive company donation to their charity of choice.

3. Catered meals provided to employees on deadline days.

Jim Kapnick, CEO

34. Goodman Acker PC

Dearborn

Workforce development, customized training and consulting company.

Ann Arbor

@KapnickKIG

Average salary: $91,044 exempt; $37,011 nonexempt

2. Kapnick Klinko lets employees earn points toward prizes such as Jeans Day, additional PTO and gift cards.

2. All employees, regardless of position, receive bonuses based on aggregate sales dollars.

Adrian

31. EDSI

Lansing

@cinnaire Nonprofit community development finance company.

Number of U.S. employees: 77 Male/female employee ratio: 54/46 Male/female executive ratio: 75/25

Personal injury law firm.

Male/female employee ratio: 29/71 Male/female executive ratio: 75/25 Average salary: $75,000 exempt 3 things that make Goodman Acker cool: 1. Partners cook breakfast for staff throughout the year.

2. One to two times a month, the firm does something to show its appreciation for employees, including massages, smoothie stations and lunches.

3. Reimbursement for Bar Association fees and/or for any local legal groups.

Employee recognition: A paralegal bonus program based on pre-litigation money recovered; a case referral bonus to attorneys.

Average salary: $110,921 exempt; $36,128 nonexempt 3 things that make Cinnaire cool: 1. Unlimited paid time off.

2. Riverfront trail for biking and walking during lunch.

3. Jeans and slippers days, with proceeds supporting veterans.

Wellness matters: Organic fruit is delivered to the office weekly.

43%

of companies have a “no overtime” policy, or say overtime is kept to a minimum.

We Love Our Team Like We Love Our Food.

Our people are the recipe for our success.

Thanks for making us one of the coolest places to work!

Check us out at www.nationalfoodgroup.com | 800.886.6866

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SPECIAL REPORT: COOL PLACES TO WORK 35. Gongos Inc. Auburn Hills

38. Detroit IT

Birmingham

41. MRPR CPAs and Advisors

44. Olsman MacKenzie 47. Credential Check & Wallace PC Corp.

Berkley

Troy

Southfield

@_gongos

@DetroitIT

Camille Nicita, CEO

Eric Grundlehner, founder, chief technology officer

@MRPR_CPAs

@olsmanmackenzie

@credentialcheck

Mark Rottermond, managing principal

Jules Olsman, president

Michael Pachuta, president

IT managed services provider.

Accounting and tax advisory firm.

Personal injury law firm.

Number of U.S. employees: 24

Number of employees: 15

Pre-employment background screening service provider.

Male/female employee ratio: 46/54

Male/female employee ratio: 20/80

Male/female executive ratio: 71/29

Male/female executive ratio: 67/33

Average salary: $90,000 exempt; $60,000 nonexempt

Average salary: $343,545 exempt; $62,690 nonexempt

3 things that make MRPR cool:

3 things that make Olsman MacKenzie & Wallace cool:

Market research and data firm.

Number of U.S. employees: 130 Male/female employee ratio: 27/73 Male/female executive ratio: 37/63 Average salary: $75,950 exempt; $25,642 nonexempt 3 things that make Gongos cool: 1. Guaranteed uninterrupted work time during “No Meeting Tuesday Mornings.”

2. Employees receive quarterly visits from a financial planner to review their retirement portfolios.

3. To avoid rush hours or accommodate afternoon obligations, employees can begin their days in the office between 7:30 and 9:30 a.m.

Employee recognition: Company awards an annual Golden HIPPO award to an employee who embodies the company’s core values (humanistic, intelligence, passion and pride).

36. Community Housing Network Inc. Troy

@CHNmi Marc Craig, president Affordable housing developer.

Number of U.S. employees: 84

Number of U.S. employees: 15 Male/female employee ratio: 78/22 Male/female executive ratio: 100/0 Average salary: $47,000 exempt; $24,000 nonexempt 3 things that make Detroit IT cool: 1. Uses Tyler's Bottle Service, which supports autism awareness, to collect bottles and cans for recycling.

2. Optional standing desks.

3. Monetary incentives or extra paid time off when overnight travel is required.

How they communicate: Snapchat is a big part of the company culture; Skype and Zoom meetings also keep employees connected.

39. Smith Group JJR Detroit @SmithGroupJJR Jeffrey Hausman, office director Architect and engineering firm.

Number of employees: 1,033 Male/female employee ratio: 59/41 Male/female executive ratio: 68/32

Male/female employee ratio: 21/79

Average salary: $93,716 exempt; $52,490 nonexempt

Male/female executive ratio: 25/75

3 things that make Smith Group cool:

Average salary: $52,000 exempt; $22,000 nonexempt 3 things that make Community Housing Network cool: 1. Surprise “thank you” lunches for employees.

2. Board games and cards provide a mental break from work for any who wish to partake during lunch. There is a group who routinely plays cards every Friday.

3. Children and pets welcome at the office.

How they communicate: An all-staff update system lets employees know via email about everything from a news story about their company, free lunches or severe weather.

1. Employees participated in a city of Detroit initiative to clean up several city blocks.

2. Every employee has a coffee mug to reduce paper and plastic waste for coffee, tea and other beverages.

3. Bike racks are on site and routes for staff to ride bikes instead of commute by car are offered.

Wellness matters: In-house yoga classes are offered.

70%

of companies offer employees paid time off to volunteer.

37. The Martec Group Inc. 40. Broder & Sachse Southfield Real Estate Services @TheMartecGroup Inc.

1. All employees participate in strategic planning and company visioning sessions.

2. All employees receive payouts for company goals being met each year.

2. A masseuse visits the office once every two weeks.

3. Teams compete for bragging rights during “Minute to Win It” games during tax season.

3. Attorneys are encouraged to take leadership roles in legal organizations, and assistance with workload is provided.

How they communicate: Company executives meet at least monthly with employees.

42. Taubman Bloomfield Hills @TaubmanCenters Robert Taubman, chairman, president, CEO Mall and other retail property owner.

Number of employees: 529 Male/female employee ratio: 46/54 Male/female executive ratio: 80/20

2. High-potential employees are offered challenge assignments and are intentionally exposed to senior leadership.

3. Walking challenges, yoga challenges and healthy-cooking demonstrations.

Employee recognition: An annual bonus program includes all exempt employees and offers from 8 percent to 200 percent of an employee’s salary.

43. Argent Tape and Label Inc.

Plymouth

@argentlabel Lynn Perenic, president and CEO

Richard Broder, CEO

Male/female employee ratio: 38/62

Male/female employee ratio: 71/29

Property management and development.

Male/female executive ratio: 0/100

Male/female executive ratio: 80/20

Number of U.S. employees: 107

Average salary: Not provided

Male/female employee ratio: 58/42

Average salary: $65,000 exempt; $25,000 nonexempt

3 things that make Martec Group cool:

Male/female executive ratio: 37/63

2. After 10 years of service, employees are given a four-week sabbatical.

3. Weekly fresh fruit delivery.

How they communicate: Each quarter, the CEO hosts an informal meeting, Bagels with Broder, to offer information on business developments.

3. Company-sponsored parties and contests include summer picnics, movie premieres, Kid Rock concert tickets, Ugly Sweater days and Halloween costume parties.

How they communicate: Internal employee satisfaction surveys are sent semiannually; employees meet with their managers at least quarterly to discuss their job performance and training, as well as career advancement opportunities.

48. Signature Associates Inc. Southfield

@SignatureCRE

Male/female employee ratio: 60/40

Number of U.S. employees: 46

How they communicate: At Analyst Roundtables, employees meet to discuss what’s going on in the company and air any frustrations or things that they are happy with.

2. On-site free flu shot clinic.

Insurance and financial services consulting firm.

1. A community service initiative focuses on the company’s retail focus and on donating clothes to men and women in pursuit of entering or re-entering the workforce.

Number of U.S. employees: 16

1. “Clarity breaks” encourage team members to take a 10-minute timeout at 3 p.m. each day.

1. 20 percent uncapped 401(k) company match.

Commercial real estate firm.

@brodersachse

3. Fridays are half-days.

45. Cambridge Consulting Group LLC

3 things that make Credential Check Corp. cool:

Daniel Cornwell, CEO

Market research and consulting.

3 things that make Broder & Sachse cool:

of companies match employee contributions to retirement accounts.

Average salary: $79,667 exempt; $31,324 nonexempt

3 things that make Taubman cool:

Birmingham

2. Management identifies highpotential employees and puts them on projects with more responsibility.

82%

Male/female executive ratio: 25/75

Royal Oak

Rick Claar, partner

Average salary: $84,000 exempt; $32,000 nonexempt

Employee recognition: The Champion of Justice award is the highest recognition given to an employee at the firm.

Male/female employee ratio: 17/83

Average salary: $135,000 exempt; $53,000 nonexempt

Manufacturer of labels and 3M products for the automotive, health care, and food and beverage industries.

1. All employees are provided Fitbits.

1. Office closes one hour early on summer Fridays.

Number of U.S. employees: 38

3 things that make Argent Tape and Label cool: 1. Humor in the workplace with daily coosh and soft ball fights or marshmallow shooters.

2. Trips to Hawaii after 20 years of service.

3. A friendly office dog.

Wellness matters: In addition to an exercise room, there is a fitness/weight loss challenge with cash prizes and wellness seminars.

Steve Gordon, president Number of U.S. employees: 139

Number of U.S. employees: 59

Male/female executive ratio: 72/28

Male/female employee ratio: 47/53

Average salary: $89,000 exempt; $46,400 nonexempt

Male/female executive ratio: 100/0 Average salary: $58,000 exempt; $33,904 nonexempt 3 things that make Cambridge Consulting cool: 1. DTO (Discretionary Time Off) lets employees take the amount of time off they need to balance work/life.

2. Half days off before all major holidays.

3. During National Volunteer Week, employees are encouraged to take paid time off to volunteer.

Employee recognition: Years of service checks for all employees after one calendar year; bonuses every five years.

46. Hungry Howie's Pizza Inc. Madison Heights @hungryhowies Steven Jackson, president and CEO National pizza chain.

Number of U.S. employees: 128 Male/female employee ratio: 76/24 Male/female executive ratio: 80/20 Average salary: Not provided 3 things that make working at Hungry Howie’s cool: 1. Company contribution toward employee health club memberships.

2. Incentive program rewarding employee contributions to improving workplace safety.

3. Paid paternity leave for birth or adoption of a child.

Wellness matters: Workout sessions in lunch room offered three times weekly.

3 things that make Signature Associates cool: 1. A four-day work week during the summer is offered.

2. Spontaneous closing of the office happens four to six days a year.

3. The company contributes 5 percent of an employee’s salary to a 401(k) account the first year, and employees aren’t required to match.

Wellness matters: Employer-paid flu shots on site.

49. Argent International Inc. Plymouth

@argent_inc Fred Perenic, president and CEO Custom adhesive and die-cut manufacturer.

Number of U.S. employees: 96 Male/female employee ratio: 64/36 Male/female executive ratio: 85/15 Average salary: $68,000 exempt 3 things that make Argent International cool: 1. If there is a gain over 9 percent, the employees share in that gain quarterly.

2. Employees get extra paid time off or monetary incentives when overnight travel is required.

3. The company offers lactation facilities for breastfeeding moms.

Employee recognition: Monthly awards including High Heel of Excellence Award, He-Man Award and Stanley Duck Award.

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SPECIAL REPORT: COOL PLACES TO WORK 50. United Shore Financial Services LLC

53. Franco Public Relations Group

@UnitedShore

@FrancoPRGroup

Mat Ishbia, president and CEO

Daniel Ponder, CEO

Mortgage and financial services firm.

Public relations and digital communications agency.

Troy

Number of U.S. employees: 1,450 Male/female employee ratio: 54/46 Male/female executive ratio: 61/39 Average salary: $56,473 exempt; $33,321 nonexempt 3 things that make United Shore cool: 1. When employees reach their 10-year anniversary at the company, they receive an additional 10 consecutive PTO days plus $2,500.

2. Every Thursday, employees are able to take home fresh meals from the on-site gourmet cafe.

3. Professional athletes lead 35-minute training sessions that any employee can sign up for.

How they communicate: The “UZone” is a companywide interactive platform that has eliminated the need for email.

61%

of companies offer on-site fitness facilities.* Wellness matters to nearly all companies; read why at crainsdetroit.com/ CoolPlacesWellness

51. Preh Inc. Novi

Nick Lontscharitsch, president Automotive control systems manufacturer.

Number of employees: 55 Male/female employee ratio: 77/23 Male/female executive ratio: 100/0 Average salary: $78,149 exempt 3 things that make Preh cool: 1. Health, vision and dental insurance are 100 percent paid for.

2. Pilates balls are an option for employees to use instead of office chairs; the balls support abdominal and back strength.

3. An annual employee foosball tournament promotes team building.

Wellness matters: Nurses come on site at no cost to employees to administer flu shots, check blood pressure and provide wellness screenings.

Detroit

Number of U.S. employees: 19 Male/female employee ratio: 14/86 Male/female executive ratio: 25/75 Average salary: $80,000 exempt; $33,000 nonexempt 3 things that make Franco cool: 1. Fridays end two hours earlier in the summer.

2. Coffee or ice cream breaks help relieve stress during the day.

3. Field trips.

Wellness matters: Franco FIt Club weight loss competition awards monetary prizes, including double the prize if it’s applied toward a fitness-related expense (gym membership or exercise equipment).

54. Leidos Walled Lake

Male/female employee ratio: 25/75 Male/female executive ratio: 0/100 Average salary: Not provided 3 things that make G-Tech cool: 1. Tuition reimbursement for advanced or post graduate degrees.

2. Paternity leave for either the birth or adoption of a child.

3. Flexible hours.

How they communicate: A“looping PowerPoint” recaps and presents relevant events within the company.

Number of U.S. employees: 133 Male/female employee ratio: 10/90 Average salary: $106,000 exempt; $40,000 nonexempt

3 things that make Sakti3 cool:

3 Things that make Allure cool: 1. Flexible hours and little to no overtime.

2. Each employee is given an account for using products and services free of charge.

3. Immediate family members invited to events, including a weekend at Great Wolf Lodge.

Wellness matters: Mok buys Allure employees a healthy lunch and dinner five days a week; they also have ingredients for unlimited smoothies/green drinks.

Novi

Number of U.S. employees: 90

Average salary: $119,366 exempt; $53,735 nonexempt

Male/female employee ratio: 37/63

3 things that make Leidos cool:

Average salary: $68,105 exempt; $39,107 nonexempt

Ann Arbor

@MagneticIs Jason Shriver, senior vice president Marketing agency.

Number of U.S. employees: 270 Male/female executive ratio: 75/25 Average salary: $75,000 exempt 1. In addition to standing desks being an option, “fit desks” allow employees to work and pedal a standing bike at the same time.

Male/female executive ratio: 56/44

3 things that make National Food Group cool: 1. Summer Fridays are half-days for employees.

2. A company Fun Committee plans pingpong tournaments, popcorn days and other events.

3. An on-site garden lets employees grow fruits and vegetables.

Wellness matters: Employees are reimbursed up to $150 a year for fitness-related expenses.

44%

of Crain’s Cool Places to Work offer domestic partner benefits to employees..*

58. Hubbell Roth & Clark Inc. Bloomfield Hills @HRC-engr

2. Multiple team-building activities, including a kickball team and knitting club.

George Hubbell, president

3. An office herb garden.

Number of U.S. employees: 204

Employee recognition: A “Hack-A-Thon” invites teams of engineers to work on self-defined projects for 48 hours; the winner is decided by a popular vote of employees.

60%

of Crain’s Cool Places to work offer telecommuting as a standard practice.*

Male/female executive ratio: 50/50 Average salary: $112,982 exempt; $32,760 nonexempt

Male/female executive ratio: 100/0

55. Magnetic

Male/female employee ratio: 75/25

Male/female executive ratio: 50/50

Wholesale food distributor and processor.

3 things that make Magnetic cool:

Number of U.S. employees: 38

Number of U.S. employees: 19

Male/female employee ratio: 75/25

Dearborn

Human resources firm offering recruitment and placement services, contract and project staffing, and payroll services.

Battery engineer.

Sean Zecman, president and CEO

How they communicate: A virtual open-door program lets employees email questions directly to the company CEO, who personally responds.

3. An Innovation Room on site, and cash prizes awarded for great ideas.

Offers vein therapy, cosmetic surgery and cosmetic enhancement services.

Number of U.S. employees: 1,440

3. Employees get up to $20 a month for health club memberships or other fitness activities.

@Sakti3

Ann Arbor

Charles Mok, D.O., owner

@nationalfoodgrp

2. A hub on the company intranet allows employees to promote personal volunteer activities and causes.

2. A party and two weeks off during the holidays.

Ann Marie Sastry, president and co-founder

Engineering and design service for energy, manufacturing and transportation industries.

1. Employees need only work 30 hours a week to be considered full time.

59. Sakti3 Inc.

@alluremedical

Todd Williams, VP, division manager

Male/female employee ratio: 59/41

Theresa Ghafari, president and CEO

Shelby Township

57. National Food Group Inc.

@LeidosCivil

52. G-Tech Services Inc. @gtechstaffing

56. Allure Medical Spa

Provider of engineering, architectural and consulting services.

Male/female employee ratio: 77/23 Average salary: Not provided Male/female executive ratio: 90/10 3 things that make working at Hubbell Roth & Clark cool: 1. Annual golf outing.

2. Monthly appreciation events.

3. Annual discretionary bonus.

Wellness matters: Companywide step, walking, riding and biking challenges.

1. Paid maternity/paternity leave, for birth or adoption of child, for eight weeks, with an option of an additional eight weeks using available vacation and sick leave.

2. All full-time employees share in a 6 percent profit-sharing bonus.

3. Weekly all-hands meeting with president

Employee recognition: Employee of the Month, Mentor of the Year and Employee of the Year are all recognized.

14.3 years Average time the companies’ highest-ranking official has been in that position in the company.

61. CBI Ferndale @CBI_IT

How they communicate: Employee feedback is solicited anonymously through Survey Monkey.

Steve Barone, CEO

60. Brightwing

Male/female employee ratio: 82/18

Troy

@gobrightwing Aaron Chernow, CEO

IT risk management adviser.

Number of U.S. employees: 93 Male/female executive ratio: 100/0 Average salary: $98,300 exempt 3 things that make CBI cool:

Number of U.S. employees: 54

1. Afternoon drone flights invite employees to bring in their drones and fly the Ferndale skies.

Male/female employee ratio: 42/58

2. Taco days.

A staffing and recruiting agency.

Male/female executive ratio: 60/40 3 things that make Brightwing cool:

3. Natural lighting is used throughout the office.

1. Always Be Growing Program offers biannual incentives to improve performance.

Wellness matters: Gym shoes are laced up for friendly but competitive afternoon basketball games.

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SPECIAL REPORT: COOL PLACES TO WORK 62. Marketing Associates

Male/female executive ratio: 67/33 Average salary: $87,106 exempt; $59,000 nonexempt

Detroit

3 things that make ESG Automotive cool:

@MA_Detroit

65. Tweddle Group Clinton Township Paul Wilbur, president and CEO Information technology.

Male/female employee ratio: 67/33

Male/female employee ratio: 51/49

2. Matching up to $100 of a cash donation for a registered 501(c)(3) per calendar year.

Male/female executive ratio: N/A

3. Flexible hours.

Marketing and technology services.

Number of U.S. employees: 339

Average salary: $36,000 nonexempt 3 things that make Marketing Associates cool: 1. A Volunteer of the Year Award is given to the employee who excels at outside volunteer work and includes a $1,000 donation to the charity of the recipient’s choice.

Employee recognition: Service awards are given quarterly; merit bonuses are given at managers’ discretion.

64. Compuware Corp.

Detroit

@compuware

2. Employees need only work 30 hours a week to be considered full time.

Chris O’Malley, CEO

3. The company is one of the founding firms in the Live Downtown Initiative, which incentivizes employees to live downtown through loans and stipends.

Number of U.S. employees: 330

Employee recognition: Bravo Zulu is a quarterly bonus program given to high achievers.

63. ESG Automotive Inc. Troy

@ESGAutomotiveUS Steve Polakowski, president Engineering service provider specializing in electrical engineering systems.

Number of U.S. employees: 204 Male/female employee ratio: 83/17

IT software company.

3 things that make Tweddle cool:

3. Employees receive up to $2,500 per year to pursue a degree program.

How they communicate: Monthly all-employee town hall meeting.

67. RPM

1. Employees turn the building into a giant haunted house during Halloween.

Royal Oak

53%

of companies offer tuition reimbursement for employees seeking an advanced degree.

68. Blue Cross Blue Shield of Michigan Detroit @BCBSM Daniel Loepp, president and CEO A health insurance company.

2. Employees choose their own hours.

@RPMFS

3. Continual learning through a mandatory annual curriculum of industry-related and leadershipdevelopment skills.

Barry Spilman and Peter Osten, partners

Number of U.S. employees: 7,988

Transportation logistics for freight and automotive shipments.

Male/female employee ratio: 29/71 Male/female executive ratio: 57/43

Number of U.S. employees: 42

Average salary: $85,635 exempt; $48,258 nonexempt

66. Kemner Iott Benz

2. A fitness center is available even to employees’ spouses.

Employee recognition: A traveling trophy is awarded to the salesperson of the month.

Average salary: $70,332 exempt; $30,585 nonexempt

Average salary: $111,692 exempt; $61,058 nonexempt 1. Employees can participate in a co-investment program through Compuware’s private equity firm, Thoma Bravo. Potential ROI: 9 percent.

3. Chair massages are offered.

Male/female executive ratio: 82/18

Male/female executive ratio: 91/9

3 things that make Compuware cool:

2. Employees receive time off when they wrap up existing business or bring in new business.

Number of U.S. employees: 511

How they communicate: Monthly operations check-in: It's for management, but each meeting is recorded and the video is placed on the company intranet site for all employees to view.

Male/female employee ratio: 73/27

1. Profit-sharing bonuses received from customer companies are shared with staff as cash payments.

@TweddleGroup

1. Heavily subsidized health/dental and vision insurance.

Mark Petroff, CEO

3 things that make Kemner Iott Benz cool:

Male/female employee ratio: 76/24 Male/female executive ratio: 100/0 Average salary: $75,500 exempt 3 things that make RPM cool: 1. There are no cubicles or private offices; everyone, from managers on down, work side-by-side in a wideopen space.

Adrian

@kemneriottbenz Daniel Iott, CEO

2. Company offers a commission/ bonus incentive program to all management, sales and operations employees that ranges up to 20 percent of gross margin each month.

Employee-owned independent insurance agency.

Number of U.S. employees: 41 Male/female employee ratio: 32/68

3. Last-day-of-the-month pizza parties.

Male/female executive ratio: 75/25

Employee recognition: Regular spontaneous sales cash awards based upon daily or weekly goals.

Average salary: $75,349 exempt; $30,425 nonexempt

3 things that make Blue Cross cool: 1. Blue Cross powers part of its Detroit campus with renewable, solar energy.

2. The company provides space for health and fitness activities, such as yoga, Zumba and cardio. There’s also a walking track on top of the office parking deck.

3. Employer-sponsored eldercare assistance helps employees with aging family members, such as transportation to medical appointments or meal delivery.

How they communicate: Blogs, a collaborative website and electronic message boards and video kiosks in the office help keep employees connected.

KEEP YOUR AD FRESH WITH CRAIN’S BOOK OF LISTS YEAR-LONG SHELF LIFE ADDS VALUE TO YOUR ADVERTISING EFFORTS Book of Lists is the culmination of Crain’s year-round efforts to gather details on businesses in Southeast Michigan.

Most lists are updated versions of ones we published throughout the year, while others have been developed specifically for this issue.

PRINT EDITION READERS REFER TO IT $// <($5 • Two-thirds of our readers say YES, they refer back to the Book of Lists • Over half of our readers consider Book of Lists a “must read” • 97% of readers refer back to the Book of Lists more than four times a year

Keeps fresh all year!

ONLINE OPPORTUNITIES • Sponsored list downloads •

Website section sponsorship also available

Source: Signet Total Audience Survey – August 2015 & July 2016

Contact Matt Langan for advertising information: (313) 446-6032, advertisingcdb@crainsdetroit.com ISSUE DATE: Dec. 26, 2016 | CLOSE DATE: Oct. 31, 2016

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SPECIAL REPORT: COOL PLACES TO WORK 69. Ryan

3 things that make RedViking cool: 1. In-house training for manufacturing and engineering staff, including for 3-D modeling software training.

Detroit

@RyanTax John Polizzi, principal Global tax firm.

Number of U.S. employees: 1,544 Male/female employee ratio: 40/60 Male/female executive ratio: 75/25 Average salary: $80,535 exempt; $47,302 nonexempt 3 things that make Ryan cool:

1. Employees are measured on results and not face time in the office.

2. A $20 per employee per month allowance for team lunches or dinner parties.

3. Ryan offers a series of instructorled diversity courses to employees.

How they communicate: An engagement pulse check encourages employees to click on a five-point scale of emoticons each week. Each click is followed by an opportunity for the employee to share more.

70. RedViking @RedVkngEng Randy Brodzik, president and CEO Engineering firm.

Number of U.S. employees: 220 Male/female employee ratio: 89/11 Male/female executive ratio: 100/0 Average salary: $75,000 exempt; $39,000 nonexempt

of companies offer bonuses to employees who refer new hires.

2. When a supervisor’s observations signal that an employee should be considered for a more-senior-level role, their supervisor creates an advancement path that might include job shadowing, mentoring from a senior employee and training.

72. SMZ

3. Lunch-hour walking clubs.

Jamie Michelson, president and CEO

Troy

@SMZAdvertising

Employee recognition: President's awards of $500 plus a framed RedViking medallion are given to high achievers twice a year.

Advertising, public relations and marketing firm.

71. The Mannik & Smith Group Inc.

Male/female executive ratio: 30/70

Canton

John Browning III, senior vice president Engineering firm.

Number of U.S. employees: 253

Number of U.S. employees: 38 Male/female employee ratio: 37/63 Average salary: $72,979 exempt; $39, 670 nonexempt 3 things that make SMZ cool: 1. A workplace mascot, Derby the Dog, brings treats and fun throughout the year.

Male/female executive ratio: 87/13

2. A forensics/debate teacher provides a “presentation skills” curriculum for employees.

Average salary: $108,372 exempt

3. Root beer float Fridays.

Male/female employee ratio: 75/25

3 things that make Mannik & Smith cool:

Plymouth

73%

1. Short-term and long-term disability, as well as life insurance policies, no cost to employees.

2. Dress-down Fridays.

3. Employees get time during work to mentor Detroit Public Schools youth.

How they communicate: Annual company meetings and employment satisfaction surveys.

Employee recognition: Employees are recognized for years of service during staff meetings; gifts accompany based on number of years.

50%

of companies offer formal programs for succession planning.

73. Kinexus Benton Harbor @KinexusGroup Todd Gustafson, CEO Nonprofit economic development agency.

Number of U.S. employees: 62 Male/female employee ratio: 42/58 Male/female executive ratio: 50/50 Average salary: $53,327 exempt; $21,840 nonexempt 3 things that make Kinexus cool: 1. A physical training program called Kinexus Strong that focuses on team building and health.

3 things that make Zoup! cool: 1. Lunch is provided to all employees every day.

2. On-site massages.

3. Pets are allowed at work.

How they communicate: Whole wall whiteboard on which all employees are encouraged to record issues for discussion and resolution at staff meetings.

75. Austin Benefits Group Bloomfield Hills @austinbenefits

2. Snow days in inclement weather.

Dean Austin, CEO

3. A cash incentive program is offered for fund development grants — from $500 to $3,000.

Number of U.S. employees: 35

How they communicate: Weekly meetings at which invited employees can pose questions to the leadership team.

74. Zoup! Fresh Soup Co. Southfield @Zoup_Soup Eric Ersher, founder and CEO Restaurant chain.

Number of employees: 34 Male/female employee ratio: 45/55 Male/female executive ratio: 75/25 Average salary: Not provided

Employee benefits firm.

Male/female employee ratio: 23/77 Male/female executive radio: 50/50 Average salary: $50,000 exempt 3 things that make Austin Benefits Group cool: 1. Austin on the Green (miniature golf in the office).

2. Penny Pincher and Mistake of the Month programs provide incentives to employees to save operating expenses and improve processes based on experience.

3. DJ Any Day lets employees unwind when the stress level is high.

How they communicate: Employees use Skype and organize meetings, but for the big announcements they ring an old-fashioned bell.

You’re only as good as your people. Lucky for us, we’ve got great people.

Blue Cross is proud to be named one of “Crain’s Coolest Places to Work” and we thank all of our employees for being the reason we earned this honor.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association.

BCB137872_Coolest_Places_Ad_F3.indd 1

8/23/16 4:15 PM

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CRAIN'S LIST: LARGEST SE MICHIGAN EMPLOYERS

Ranked by full-time employees July 2016 Rank

Company Address Phone; website

Top local executive(s)

Full-time employees in Southeast Michigan July 2016

Full-time employees in Southeast Worldwide Worldwide Michigan employees employees July 2015 July 2016 July 2015 Type of business

1

Ford Motor Co. 1 American Road, Dearborn 48126 (313) 322-3000; www.ford.com

Mark Fields president and CEO

47,000

44,598

NA

2

General Motors Co. 300 Renaissance Center, Detroit 48265 (313) 556-5000; www.gm.com

Mary Barra CEO and chairman

36,472 B

32,353

213,957

214,628 Automobile manufacturer

3

FCA US LLC 1000 Chrysler Drive, Auburn Hills 48326-2766 (248) 576-5741; www.fcanorthamerica.com

Sergio Marchionne chairman and CEO, FCA US LLC

32,508

32,356

81,865

80,944

Automobile manufacturer

4

University of Michigan Ann Arbor 48109 (734) 764-1817; www.umich.edu

Mark Schlissel president

31,655

30,852

46,420

45,397

Public university and health system

5

Beaumont Health 2000 Town Center, Suite 1200, Southfield 48075 (248) 213-3333; www.beaumonthealth.org

John Fox president and CEO

25,721

24,774

NA

25,446

Health care system

6

U.S. government 477 Michigan Ave., Detroit 48226 (313) 226-4910; www.usa.gov

NA

18,862

18,701

7

Henry Ford Health System C 1 Ford Place, Detroit 48202 (800) 436-7936; www.henryford.com

Nancy Schlichting CEO

16,919

17,332

NA

17,700

Health care system

8

Trinity Health Michigan 20555 Victor Parkway, Livonia 48152 (734) 343-1000; www.trinity-health.org

Richard Gilfillan president and CEO

15,214

14,231

98,842

94,780

Health care system

9

Rock Ventures 1050 Woodward Ave., Detroit 48226 (800) 251-9080

Dan Gilbert chairman and founder

14,237

13,445

26,114

25,854

Rock Ventures LLC is an umbrella entity managing a portfolio of companies, investments and real estate, including its flagship company Quicken Loans

10

Ascension Michigan 28000 Dequindre Road, Warren 48092 www.ascension.org/michigan

Gwen MacKenzie senior VP, Ascension Health, Michigan

11,271

11,303

11,556

11,597

Health care system

11

Detroit Medical Center 3990 John R, Detroit 48201 (313) 578-2442; www.dmc.org

Joseph Mullany CEO

10,553

10,558

10,553

10,563

Health care system for adult and pediatric care

12

U.S. Postal Service 1401 W. Fort St., Detroit 48233-9998 (313) 226-8678; www.usps.com

Lee Thompson district manager, customer service and sales

9,685

9,856

493,381

NA

Postal service

Richard Snyder governor

9,283

9,394

NA

NA

State government

13

State of Michigan 3042 W. Grand Blvd., Cadillac Place, Suite 4-400, Detroit 48202 (313) 456-4400; www.michigan.gov

Mike Duggan mayor

8,918

8,956

NA

NA

City government

14

City of Detroit 2 Woodward Ave., Coleman A. Young Municipal Center, Detroit 48226 (313) 224-3700; www.detroitmi.gov

Blue Cross Blue Shield of Michigan/ Blue Care Network

Daniel Loepp president and CEO

7,110

6,918

8,119

7,906

Health care insurer

McLaren Health Care Corp.

G3235 Beecher Road, Flint 48532 (810) 342-1100; www.mclaren.org

Philip Incarnati president and CEO

6,690 D

4,961

21,688

NA

Health care system

Detroit Public Schools Community District 3011 W. Grand Blvd., Fisher Building, Detroit 48202 (313) 873-3111; www.detroitk12.org

Steven Rhodes transition manager Alycia Meriweather interim superintendent Gerard Anderson chairman and CEO

6,300

5,862

NA

5,862

Public school system

6,138

6,555

9,854

10,603

Energy and energy-technology company

15 16 17

NA

Automobile manufacturer

1,958,811 1,952,307 Federal government

600 E. Lafayette Blvd., Detroit 48226 (313) 225-9000; www.bcbsm.com

18

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

19

Wayne State University 42 W. Warren, Detroit 48202 (313) 577-2424; www.wayne.edu

M. Roy Wilson president

5,806

5,589

NA

5,589

Public university

20

Comerica Bank 411 W. Lafayette, Detroit 48226 (248) 371-5000; www.comerica.com

Michael Ritchie Michigan market president

4,834

4,797

8,768

8,898

Financial services provider

21

Faurecia North America 2800 High Meadow Circle, Auburn Hills 48326 (248) 724-5100; na.faurecia.com

Mark Stidham president, Faurecia North America

4,610

4,485

103,000

99,500

Tier-one automotive supplier

22

Magna International of America Inc. 750 Tower Drive, Troy 48098 (248) 631-1100; www.magna.com

Jim Tobin CMO and president, Magna Asia

3,881

4,630

147,000

133,000 Automotive parts supplier

23

Oakland County 1200 N. Telegraph Road, Pontiac 48328 (248) 858-1000; www.oakgov.com

L. Brooks Patterson county executive

3,432

3,340

3,432

24

Lear Corp.

21557 Telegraph Road, Southfield 48033 (248) 447-1500; www.lear.com

Matthew Simoncini president and CEO

3,078

3,209

140,000

25

Wayne County 500 Griswold Ave., Detroit 48226 (313) 224-5901; www.waynecounty.com

Warren Evans county executive

2,734

2,852

2,734

3,340

County government

132,963 Global supplier of automotive seating and electrical distribution systems

2,852

County government

This list of Southeast Michigan employers encompasses companies with locations in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Number of full-time employees may include fulltime equivalents. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual figures may vary. NA = not available.

B GM's increase was primarily in the areas of engineering and product development.

C On March 14, Detroit-based Henry Ford Health System and Jackson-based Allegiance Health agreed to merge. On April 5, Allegiance Health became Henry Ford Allegiance Health.

D The increase was a result of combining its patient accounting operations into Macomb County and opening administrative offices in Oakland County for the McLaren Health Plan and McLaren Physician Partners.

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23

CRAIN'S LIST: LARGEST MINORITY-OWNED BUSINESSES

Ranked by 2015 revenue Company Address Rank Phone; Web site

Majority owner

Revenue Revenue ($000,000) ($000,000) Percent 2015 2014 change

Local employees Jan. 2016/ 2015

Minority group of ownership Type of business

1

Bridgewater Interiors LLC 4617 W. Fort St., Detroit 48209 (313) 842-3300; www.bridgewater-interiors.com

Ron Hall Jr. president and CEO

$2,092.2

$2,281.5

-8%

940 972

AfricanAmerican

Automotive seating/interiors

2

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

Gerald Diez chairman and CEO

1,079.0

733.0

47

418 409

Hispanic

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

3

Detroit Manufacturing Systems LLC 12701 Southfield Road, Building A, Detroit 48223 (313) 243-0700; dmsna.com

Andra Rush chairman and CEO

1,022.5

694.8

47

886 721

Native American

Automotive component manufacturing, module assembly and sequencing services

4

Piston Automotive LLC 12723 Telegraph Road, Redford Twp. 48239 (313) 541-8674; www.pistongroup.com

Vinnie Johnson chairman

930.8

838.2

11

299 302

AfricanAmerican

Automotive supplier

Arvind Pradhan president and CEO

462.0

450.0

3

46 38

Asian

5

Camaco LLC 37000 12 Mile Road, Suite 105, Farmington Hills 48331 (248) 442-6800; www.camacollc.com

6

Global Automotive Alliance LLC 2801 Clark St., Detroit 48210 (313) 849-3222

William Pickard chairman

415.4

539.0

-23

222 446

AfricanAmerican

Automotive manufacturer, assembler, warehouse sequencer, aerospace warehousing and logistics

7

Prestige Automotive 20200 E. Nine Mile Road, St. Clair Shores 48080 (586) 773-2369; www.prestigeautomotive.com

Gregory Jackson chairman, president and CEO

379.4 B

400.1

-5

228 250

AfricanAmerican

Automobile dealerships, insurance and real estate

8

NYX Inc. 36111 Schoolcraft Road, Livonia 48150 (734) 462-2385; www.nyxinc.com

Chain Sandhu CEO

359.0

340.0

6

1,850 1,800

Asian

Plastic injection molding

9

Acro Service Corp.

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

Ron Shahani president and CEO

318.3

260.2

22

2,056 1,714

Asian

Staff-augmentation, outsourcing and IT and engineering consulting

Tony Elder president

287.1

303.3

-5

196 196

Hispanic

Automobile dealerships

Frank Venegas Jr. chairman and CEO

276.3

239.8

15

403 508

Hispanic

Vision Information Technologies Inc. 3031 W. Grand Blvd., Suite 600, Detroit 48202 (877) 768-7222; www.visionit.com

David Segura CEO

251.0

219.0

15

NA NA

Hispanic

General contracting, specialized miscellaneous steel manufacturing and distribution of protective barrier products, pure global supply chain management, centralized storage and on-demand distribution of parts for machinery and selling excess stock materials Systems integrator and talent management

Royal Oak Ford/Briarwood Ford

Eddie Hall Jr. president

197.1

157.7

25

217 176

AfricanAmerican

Sonal Gadhia Dubey CEO

191.2

NA

NA

NA NA

Bill Perkins president

157.8

146.9

7

148 136

AfricanAmerican

Automobile dealerships

Andra Rush founder and chairman

140.4

137.7

2

298 350

Native American

Motor carrier

John James chairman

137.0

133.0

3

113 135

AfricanAmerican

Logistics and supply chain management

Avis Ford Inc.

Walter Douglas Sr. chairman and CEO

123.8

125.7

-2

115 106

AfricanAmerican

Automobile dealership

Global Parts & Maintenance

Paul Ureste CEO and managing member

120.0

110.0

9

24 21

Hispanic

OEM replacement parts, commodity supply management and procurement services

105.0

82.0

28

200 NA

Asian

Provides IT services to various industries including health care, manufacturing, insurance, engineering, financial services, banking, consumer retail, telecommunications and aerospace

100.0

NA

NA

98 NA

AfricanAmerican

99.0

95.0

4

367 330

Asian

Information technology outsourcing, software application development, big data analytics, mobility and software integration services

85.0

94.0

-10

200 180

Asian

Provides infrastructure solutions primarily to governmental agencies and large corporation in technology, perimeter security and construction areas

83.0

60.0

38

1,100 1,458

AfricanAmerican

Nursing homes, assisted Living

77.6

74.1

5

63 65

AfricanAmerican

Automobile dealership

Elder Automotive Group

John R Road, Troy 48083 10 777 (248) 585-4000; www.elderautogroup.com

11 12

The Ideal Group Inc. 2525 Clark St., Detroit 48209 (313) 849-0000; www.weareideal.com

Woodward Ave., Royal Oak 48067 13 27550 (248) 548-4100; www.royaloakford.com Global Supply Solutions

C

Tech Row, Madison Heights 48071 14 999 (248) 204-8885 Bill Perkins Automotive Group

Gratiot Ave., Eastpointe 48021 15 21800 (586) 775-8300; www.merollischevy.com Rush Trucking Corp.

E. Michigan Ave., Wayne 48184 16 35160 (800) 526-7874; www.rushtrucking.com

17

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

Telegraph Road, Southfield 48034 18 29200 (248) 355-7500; www.avisford.com Executive Drive, Westland 48185 19 6112 (734) 326-7600

20 21 22 23 24 25

Durga Prasad Gadde HCL Global Systems Inc. 24543 Indoplex Circle, Suite 220, Farmington Hills president and CEO 48335 (248) 473-0720; www.hclglobal.com Leon Richardson ChemicoMays LLC president and CEO 25200 Telegraph, Suite 120, Southfield 48033 (248) 723-3263; www.chemicomays.com Anup Popat Systems Technology Group chairman and CEO 3001 W. Big Beaver Road, Suite 500, Troy 48084 (248) 643-9010; www.stgit.com Perry Mehta FutureNet Group Inc. president and CEO 12801 Auburn St., Detroit 48223 (313) 544-7117; www.futurenetgroup.com Advantage Management Group Inc-Advantage Reginald Hartsfield and Kelsey SchwartzLiving Centers Hastings 25800 Northwestern Hwy #720, Southfield 48075 owners (248) 569-8400; AdvantageLiving.net Pamela Rodgers Rodgers Chevrolet Inc. president 23755 Allen Road, Woodhaven 48183 (734) 676-9600; www.rodgerschevrolet.com

Full-service supplier of complete structures, concept through detailed design, including but not limited to validation, testing, prototype developments, state of the art manufacturing and complete vertical integration

Automobile dealerships

Asian, African- Supply chain fulfillment, financing and partnerships American

Chemical management and supply

This list of minority-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, the companies provided the information. NA = not available.

B From Automotive News.

C Formerly a part of Netlink Software Group of America Inc. LIST RESEARCHED BY SONYA D. HILL

24

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6

DEALS & DETAILS CONTRACTS

JetHeat LLC, Livonia, announced an agreement with Alta Equipment Co.,

Livonia, an industrial and heavy equipment dealer, to supply 11 of the company’s micro-turbine heaters. The deal is worth nearly $1 million and may expand to additional units within the next year. Websites: jetheat.com, altaequipment.com.

Moncur, Southfield, a branding and

digital marketing agency, has simultaneously launched five new websites for Children at Heart Ministries, Round Rock, Texas.

Websites: thinkmoncur.com, cahm.org.

Service.com, Farmington Hills, a service that helps homeowners find, hire and pay service professionals to repair, maintain or renovate their homes, has reached an agreement to act as home repair and maintenance concierge for all Re/Maxx Classic home sellers and buyers. Websites: service.com, remax.com.

Fourmidable Group Inc., Bingham

Farms, has been appointed as new management agent for Cambridge Square Apartments, a 104-unit community in Southfield.

Website: fourmidable.com.

CALENDAR

NEW PRODUCTS

NA Publishing Inc., Ann Arbor,

announced it is bringing Creem magazine to the rock digital collection of its music magazine archive. Website: napubco.com.

UPCOMING EVENTS

Connecting Cultures to Business Luncheon. 11:30 a.m.-1:30 p.m.

Sept. 8. Livonia Chamber of

Gayo Kopi, Detroit, said it is now

selling Wild Kopi Luwak, coffee sourced from free-roaming wild Asian palm civets. Website: gayokopi.com.

NEW SERVICES

Domino’s Pizza Inc., Ann Arbor,

announced it has added salads to its delivery menu. There are three varieties: classic garden, chicken Caesar and chicken apple pecan.

Website: dominos.com.

Maxion Wheels, Novi, a division of Iochpe-Maxion S.A., São Paulo,

Brazil, announced a five-year standard warranty with its MaxCoat extra multi-layer finish on the company’s hub-piloted single and wide-base tubeless disc steel wheels sold in North America.

Website: maxionwheels.com.

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.

Commerce. Representatives from metro Detroit businesses will provide information about Asian, German, Chaldean and Hispanic cultures and new ideas to better prepare for productive interactions with business people from different cultures. Moderator: Roop Raj, WJBK-TV2. VisTaTech Center, Schoolcraft College, Livonia. $30 members; $40 guests.

Contact: Laura Tahmouch, phone: (734) 427-2122; email: tahmouch@livonia.org.

The Big Four: Brogan, Lovio-George, Muirhead, Rossman-McKinney. 11:30 a.m.-1:30 p.m. Sept. 14. Inforum. PR

and marketing gurus who are successful business owners in their own right: Marcie Brogan of Brogan & Partners, Christina Lovio-George of Lovio George Communications and Design, Georgella Muirhead of Van Dyke Horn Public Relations (formerly

Berg Muirhead and Associates) and Kelly Rossman-McKinney of Truscott Rossman. The Townsend Hotel, Birmingham. $45 Inforum members; $65 nonmembers; $25 students; $700 table sponsor (table of 10-preferred seating; company logo recognition in event presentation and event signage).

Website: inforummichigan.org.

Entrepreneurs Forum: Where Preparation Meets Opportunity.

Noon-4 p.m. Sept. 16. Southfield

Area Chamber of Commerce.

Keynote speakers include DeAndre Carter, author of Demand Greatness, and Ken Johnson, inventor of Phase 10 card game and board game. Franklin Athletic Club, Southfield. $15 members; $20 nonmembers. Contact: Tanya Markos-Vanno, phone: (248) 557-6661; email: tanya@ southfieldchamber.com.

New Roles for Philanthropy in Metro Detroit: A Perspective From the Kresge Foundation. 8-9:30 a.m. Sept.

21. Troy Chamber of Commerce.

Speaker: George Jacobsen, program

officer, Kresge Foundation.

Rehmann, Troy. Free for Troy Chamber members; $10 for nonmembers. An additional $5 will be charged to those registering the day of the event.

Contact: Jaimi Brook, phone: (248) 641-8151; email: theteam@troychamber.com.

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.

ADVERTISEMENT SECTION

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Mary Jo LeFevre, CEBS

Vice President, Client Executive Hylant Hylant has promoted Mary Jo LeFevre to Vice President, Client Executive.

With over 20 years of experience, Mary Jo will continue to lead growth and retention efforts for Hylant’s southeast Michigan benefits operation. She graduated magna cum laude from Albion College with a bachelor’s degree in economics and political science. In 2001, Mary Jo attained the Certified Employee Benefits Specialist (CEBS) designation and serves on the Michigan Wellness Council.

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Vice President, Client Executive

Hylant, one of the nation’s largest privately owned insurance brokerage firms, has promoted Joseph Curtis to Vice President, Client Executive. With over 15 years of experience, Joseph will continue to help grow and guide Hylant’s southeast Michigan benefits operation. Based out of Hylant’s Troy office, Joseph is a graduate of the University of Dayton with a bachelor’s degree in finance.

PEOPLE: SPOTLIGHT

St. John Providence Foundations taps Smith Scott Smith, chief development officer of St. John Providence Foundations for nearly eight years, has been promoted to president, effective Sept. 11.

He succeeds Scott Smith Susan Burns, who returned to Wayne State University in February to again lead the Wayne State University Foundation and serve as vice president for development and alumni affairs.

Prior to going to Detroitbased St. John Providence, Smith, 52, had a number of fundraising roles with Help USA-Mentoring USA, Michigan State University and the Lake Superior State University Foundation. He also worked in

the Michigan House of Representatives speakers office as a senior computer analyst for 11 years.

Faygo promotes Chittaro to president Alan Chittaro, who started his career at Faygo Beverages Inc. as a part-time driver while he was in his teens, has been named president of the Detroitbased company.

Chittaro Alan Chittaro had been executive vice president at Faygo since 1978, according to his LinkedIn profile. Faygo has been part of Fort Lauderdale, Fla.-based National Beverage Corp. since 1987.

Weimerskirch to lead cybersecurity for Lear Southfield-based auto supplier Lear Corp. appointed Andre Weimerskirch as vice president of cybersecurity for E-Systems, its newly renamed electrical business segment.

Weimerskirch most recently was an associate research scientist at the University of Michigan Transportation Research Institute. He

co-founded IT security company Escrypt Inc., which was sold to the Bosch Group in 2012. He will be responsible for driving Lear’s global cybersecurity technology strategy and implementation.

August 29, 2016

ZOMEDICA FROM PAGE 3

Before going public on the exchange, Zomedica raised $7 million from investors. The company didnâ&#x20AC;&#x2122;t raise additional funds as part of its going public, but going public allowed investors to buy and sell their shares.

Solensky said he hopes eventually to have the company listed on an American exchange, possibly the NYSE MKT LLC exchange, the former Amex exchange now operating as the New York Stock Exchange's smallcap exchange.

The company said use of proceeds from the private placement include expanding the pipeline of drugs in development at its lab on Varsity Drive on the south side of Ann Arbor, possible acquisitions and expanding its intellectual property.

In additions to drugs, Zomedica plans to develop drug-delivery systems and medical and diagnostic devices.

It has been a busy few months for the company, which was founded in May 2015 and employs 10. The â&#x20AC;&#x153;Zoâ&#x20AC;? in Zomedica comes from the word â&#x20AC;&#x153;zoetic,â&#x20AC;? which means of or pertaining to life, and is the root of the words â&#x20AC;&#x153;zooâ&#x20AC;? and â&#x20AC;&#x153;zoology.â&#x20AC;?

On May 10, Zomedica announced that it had filed its first investigational new animal drug application with the U.S. Food and Drug Administrationâ&#x20AC;&#x2122;s Center for Veterinary Medicine for a product with the working name of ZM-012, an antibiotic for pets that will take at least several years to get to market.

On May 17, Zomedica announced a research collaboration agreement that includes an option for an exclusive worldwide animal health license with Tucson, Ariz.based CTX Technology Inc. for a method of improving skin penetration for drug delivery to animals.

And on July 12, the company announced the filing of an application for a provisional U.S. patent for a drug called ZM-006, which targets metabolic disorders in pets.

William MacArthur, Zomedicaâ&#x20AC;&#x2122;s chief medical officer and head of R&D, headed the team that devel-

oped the first two drug candidates. metabolic difference in animals and He has Bachelor of Science degrees the human drugs make a bad transin zoology, biochemistry and chem- lation to animals.â&#x20AC;? istry from the University of MassaCarey said that while drug develchusetts-Amherst; a Master of Sci- opment is never a quick or easy proence degree in cellular and cess, the growing market for owners molecular biology from the Universi- willing to pay for treatment of their ty of Michigan; and a Doctorate of petsâ&#x20AC;&#x2122; diseases will continue to drive Veterinary Medicine from Michigan the growing pet pharma industry.

State University. â&#x20AC;&#x153;On the clinical side, there is a Solensky said the company plans need to focus on animal-specific to develop other drugs in-house as pharmacology,â&#x20AC;? he said. â&#x20AC;&#x153;Dogs and well as buy or license drugs from cats have unique needs. Instead of other manufacturers. borrowing a drug from people that MacArthur was ahead of his time may have some efficacy but isnâ&#x20AC;&#x2122;t when he founded an Ann Arbor ideal, there needs to be a focus on company called the particular GeneWorks Inc. in needs of aniâ&#x20AC;&#x153;Instead of 1996. He strugmals.â&#x20AC;? gled for a decade borrowing a drug Solensky said to make a busi- from people ... that Zomedica ness out of his will be able to discovery of a there needs to be bring drugs to method for ex- a focus on the market with a pressing large need for far less quantities of hu- needs of animals.â&#x20AC;? capital than man protein into Stephan Carey, MSU needed by makthe egg whites of ers of human genetically modified hens. drugs. While the FDA requires drugs After GeneWorks went out of be tested on animals to show efficabusiness, he began and still runs cy and safety, the process is much what is now a six-doctor small-ani- simpler, requiring far fewer trial submal practice, Affordable Pet Services jects and less time. of Ann Arbor.

Solensky said he could get a drug Startup companies focusing on to market in as little as three years, drug development for pets have be- compared to the eight or nine years come something of a trend. For ex- often needed for new human drugs. ample, Kansas City, Kan.-based â&#x20AC;&#x153;We want to create a pipeline of Aratana Therapeutics was founded in products to meet petsâ&#x20AC;&#x2122; unmet 2010, VetDC was spun off from Colora- needs,â&#x20AC;? he said. do State University in 2010, Kindred BioPrior to founding Zomedica, Sosciences was founded in California in lensky was president and CEO of 2012 and CanFel Therapeutics Inc. was Dynamic Fuel Systems Inc., a publicly founded in California in 2013. traded company in Toronto. From The reason for the need for more 2005 to 2007, he was senior vice pet-drug development, said president of Indymac Bank in PasaStephan Carey, an assistant profes- dena, Calif., and from 2000 to 2005, sor of small animal clinical sciences he was a regional vice president of in the College of Veterinary Medi- Troy-based Flagstar Bank.

Solensky said founding Zomedicine at Michigan State University, is that the bulk of pet drugs now on ca is a result of his childhood dream the market are not animal-specific, to be a veterinarian. He thought but instead are close cousins of hu- briefly of going to vet school after man drugs marketed for pets to leaving Dynamic Fuel Systems but help recoup the enormous cost of decided on a pet pharma startup after being introduced to MacArthur. human drug development.

Stephanie Morley, another vet, is â&#x20AC;&#x153;Historically, a lot of the animal pharmaceuticals we use are heavily Zomedicaâ&#x20AC;&#x2122;s COO. Previously, she borrowed from human science,â&#x20AC;? he was an associate director of busisaid. â&#x20AC;&#x153;Some antibiotics work won- ness development with the Univerderfully for people, but there is a sity of Michiganâ&#x20AC;&#x2122;s medical school.

7 firms file Chapter 7 petition against Frank Kerr Co.

By Marti Benedetti mbenedetti@crain.com

Seven pharmaceutical companies have filed a Chapter 7 involuntary bankruptcy petition against Novi-based Frank W. Kerr Co., once one of the country's largest independent pharmaceutical wholesalers.

The creditors who petitioned in U.S. Bankruptcy Court Eastern District of Michigan for a total of nearly $6 million are Allergan plc, Amneal Pharmaceuticals LLC, Ascend Laboratories LLC, Boehringer Ingelheim USA Corp., Par Pharmaceutical Inc., Rising Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc. Involuntary bankruptcies are less common than voluntary bankruptcies. In this case, the petitioner-creditor companies, to-

25

C R A I N â&#x20AC;&#x2122; S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6 CRAINâ&#x20AC;&#x2122;S DETROIT BUSINESS

gether through their attorneys, brought the request for a judge to force the company into bankruptcy liquidation.

Frank W. Kerr, founded 103 years ago, closed its doors in June after it lost its largest customer to a large national pharmacy wholesaler.

Scott Wolfson of Wolfson Bolton PLLC in Troy and Kenneth Rosen, chairman of bankruptcy and creditors' rights department at New Yorkbased Lowenstein Sandler LLP, are attorneys for the creditors.

Secured creditors are J.P. Morgan Chase and Comerica Bank. Secured debt is $64 million; unsecured debt totals $39 million.

Frank W. Kerr Co. suffered the fallout of retail pharmacy consolidation over the past decade due to changing market conditions, pres-

sure on profit margins and the rapid expansion of publicly traded pharmacy operations with national reach.

NoviXus Pharmacy Services, a mail-order pharmacy started by Kerr, told Crain's in June it would remain in business independent of its former owner Kerr and continue to operate in the former Kerr headquarters building in Novi. At the time, it had 75 employees.

The company did not respond Wednesday to calls from Crain's.

Years ago, Kerr fell on hard times but was saved. It was purchased out of bankruptcy by former Detroit Pistons owner and billionaire William Davidson in 1951. He helped return the company to profitability and capture the business of Kmart Corp. and Meijer Inc.

Page 25

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C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6

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and general counsel for the American Iron and Steel Institute, a Washington, D.C.-based trade association. “They (China) run steel mills to maintain employment and are subsidized by their government.”

The rise of imported steel from China stems from a “perfect storm,” Barnett said.

“In 2014 and 2015, we all thought we were so smart,” Barnett said. “We brought in as much import (steel) as we could because coal was cheap and domestic prices were so high.”

Steel prices in the U.S. began to rise steadily between 2012 and 2014, thanks to a surging domestic auto industry and other manufacturing sectors. The spot price for hot-rolled steel in the U.S. rose from $661.67 per metric ton in the second quarter of 2013 to $745 per metric ton in the second quarter of 2014.

Meanwhile, China’s steel production spiked from roughly 200 million metric tons in 2000 to more than 900 million metric tons, or more than 50 percent of the global supply, by late 2014, according to the World Steel Association.

Coupled with oil prices that fell from more than $100 a barrel in early 2014 to under $50 a barrel by the end of that year, importing steel became even cheaper.

“It was the perfect storm,” Barnett said. “Foreign steel saw (U.S.) domestic prices go up and up, and demand was still so high they knew they could come in and sell steel for $200 a ton less than anyone else. Of course, everyone jumped to get it.”

By the fourth quarter of last year,

n o i t n e Att nners!

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U.S. steel prices plummeted to $435 per metric ton, down 35 percent from two years earlier.

The fallout was immense. Steelmakers around the globe reported huge losses in 2015, including a $1.5 billion loss at U.S. Steel Corp., which has operations in Detroit and a research center in Troy, and an almost $8 billion loss at ArcelorMittal SA, the world’s biggest steelmaker, with an office in Southfield.

Both companies laid off U.S. workers and advocated for the protective import tariffs. Nether company responded to requests for comment.

West Chester, Ohio-based AK Steel Corp., which acquired the Dearborn operations of OAO Severstal in 2014 for $700 million, was also suffering, Barnett said.

AK Steel stopped selling spot metal to Grand Steel last year because every transaction would generate a loss, Barnett said.

“The price was at a point where they were losing money for every pound of steel produced,” he said.

“They were on life support.”

Novi-based Lee Steel Corp. didn’t survive. The steelmaker, unable to weather the price cliff after investing heavily in expansion, filed Chapter 11 bankruptcy in April 2015. Lee Steel had closed its Detroit plant on Varney Street and moved into a $26 million plant in Romulus in 2013 and also opened a plant in Wyoming, near Grand Rapids, in 2000 to serve West Michigan’s office furniture and appliance manufacturers, as well as auto plants.

The timing of those investments derailed the company’s financials, Laura Marcero, managing director of Troy-based turnaround firm Huron Consulting Group who served as chief restructuring officer for Lee Steel, told Crain’s last year.

“Those investments and the recent decline of the steel industry and prices caused the company to experience significant financial distress,” Marcero told Crain’s. “I wouldn’t be surprised if more steel companies potentially file Chapter 11.”

Most survived, thanks to the new tariffs, Dempsey said. Steel imports are now down to 25 percent of the market from 31 percent last year.

Despite closures and shuttered steel mills over the past decade, overcapacity remains an issue.

During the fourth quarter last year, capacity utilization was at 60 per-

cent. It’s since bumped up to more than 70 percent.

“We’d like to see that number continue to come down until the domestic industry recovers,” Dempsey said.

The Organization for Economic Cooperation and Development estimates there is 700 million metric tons of excess steel capacity globally. China represents more than half of that total with 425 million metric tons of the overcapacity, the group said.

With the tariffs in place, U.S. Steel forecasts income of roughly $50 million in 2016, despite losing $386 million in the first half of the year.

The Pittsburgh-based steelmaker filed a complaint in April with the International Trade Commission, arguing that Chinese steelmakers conspired to fix prices as well as trade secret theft.

Jason Kaplan, principal steel analyst for IHS Inc. in London, said the tariffs are performing as they were designed, but warns that long-term propping-up of the steel industry poses a threat.

“It’s good for steel producers, but it’s going to impact the end consumer, and protectionist tactics ultimately cause problems,” he said.

Kaplan pointed to Brazil, which implemented “punitive” import duties on several industries, including steel. Brazil’s economy, rife with overspending and corporate subsidy programs, is contracting at a rapid pace with its GDP falling to $1.8 trillion in 2015 from $2.4 trillion in 2014.

Brazil and China, however, threatened in June to file lawsuits with the World Trade Organization over the new U.S. tariffs.

Barnett scoffs at the threat.

“I’m all for free trade, but what China was doing is absurd,” Barnett said. “We have maybe 15 domestic steel mills. They have a couple hundred, a few good mills, but most are just government-owned s---houses.

That’s not good business.”

Grand Steel, however, is still importing steel with shipments from Vietnam and Italy.

“I was in this business for 10 years and never imported a pound of steel,” Barnett said. “But this is a once-in-a-generation event. We carry a lot of inventory, and we rely on these price swings. We’re always looking for the upside.”

Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh

27

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SCHOSTAK FROM PAGE 3

She sold the restaurant in 1976 to company executive Michael Jordan and a partner.

“Olga’s Kitchen is this iconic local brand that really deserves better and more,” Schostak said of his restaurant company’s first wholly owned brand. “It deserves to be a great brand here in the Detroit area.”

Site changes But the most noticeable, and likely pivotal, part of the transformation will be in real estate, as Schostak and his team relocate stores in declining mall locales, including Twelve Oaks Mall in Novi.

A new Monroe store at Telegraph and Mall roads opened earlier this month, replacing one in Frenchtown Mall, and new locations are planned in Ann Arbor, along Washtenaw Road heading into the University of Michigan campus, opening at the end of October, and Shelby Township, on 23 Mile and Hayes roads, opening in February.

“We are going to continue to look at other market voids to fill in and have Olga’s Kitchen be more represented,” Schostak said, adding that after closing its downtown Detroit location in the former Compuware Corp. headquarters last year, at some point in the future a new downtown or Midtown location is planned.

In all, in the next four to five years, Schostak said, Olga’s should have 33 to 35 locations, with 10 to 12 of those being new in a $5 million overall campaign.

Stores have an average footprint of 3,500 to 4,000 square feet.

“Our focus is that the oldest brands deserve better and more, and we will revitalize the real estate footprint, which includes legacy locations, relocation of some neighborhood and mall stores, and revitalizing restaurant operations,” Schostak said.

Team Schostak is primarly looking at out-lot buildings as part of grocery-anchor strip centers but is considering individual stand-alone locations as well.

In 2014, Farmington Hills-based turnaround company Kenneth J. Dalto & Associates Inc. was brought in to reorganize it, and CEO Jonathan Fox left that same year after replacing CEO Matthew Carpenter in 2013.

Six years ago, the company began rolling out a strategy to open 105 new locations, most of which were fast-casual concepts. Olga's Market Fresh Grill at Great Lakes Crossing in Auburn Hills opened in 2010 and company executives touted at the time that it was performing better than other restaurants in sales and traffic. But the plan never fully materialized as its cash was evaporating.

The bankruptcy followed a lengthy legal battle with Robert Solomon, the chain’s former owner, who along with others allegedly siphoned cash from the restaurants for their own benefit for years. Court records said that as a result of that, some restaurants faced eviction and working capital was drained.

Team Schostak had owned 11 Olga’s restaurants jointly with Olga’s Kitchen Inc. in a joint venture at the time Olga’s Kitchen Inc. filed for bankruptcy; the 11 jointly owned restaurants had not been affected by the filing.

The buyout of Olga’s Kitchen’s ownership stake in those 11 restaurants and 15 other properties was completed in December.

Team Schostak's brand portfolio also includes Applebee’s, Del Taco and MOD Pizza. It has approximately

COURTESY OF TEAM SCHOSTAK

An Olga salad (above) and cinnamon snackers are among the popular items on the Olga’s Kitchen menu.

100 restaurants in its portfolio.

In all, between Team Schostak staff and restaurant staff, the company has 4,884 employees, 874 of whom are Olga’s employees.

Two new executives have been hired: Dan Sledzinski as Olga’s director of purchasing, who previously held the same title with Chicago-based Levy Restaurants and was sous chef and director of purchasing for the Detroit Athletic Club; and Marty Cook as Olga’s director of operations, who previously was regional director of operations for Starbucks Corp.’s Michigan/Midwest region.

Finding a focus But it will take more than a little TLC inside the restaurants, a couple new high-level hires and tinkering with the menu to bring Olga’s Kitchen back to its heyday, said Darren Tristano, president of Chicago-based Technomic Inc., a food in-

dustry research firm.

Tristano, who is familiar with the Olga’s story and is an expert in fast-casual dining, said the restaurant needs to narrow its menu focus and define its target customer.

Too often and for too long, Olga’s Kitchen tried to do too many things with its menu, more along the lines of a Coney Island than a go-to place with a must-have dish, Tristano said.

“When you look at a brand, a legacy brand like this, they have been serving one marketplace for a while, serving a specific customer who has aged,” he said. “And they have to be more innovative and think more like Gen Z or millennials. They are looking for the ingredients, where were they raised.”

Schostak said he is targeting younger consumers by sourcing more food products locally, including with Dearborn Sausage Co. for hot dogs, Detroit-based Wolverine Packing Co. for beef, Canton-based Frosty Products for low-fat yogurt and Detroit-based C. F. Burger Creamery Co. for coffee creams.

“They have strong opportunities to retain their base of business,” Tristano said. “The growth factor will be the hard part. It’s a market that’s changing and is going to have a lot of new players, so they have to be really good at operating every day and offering something unique.”

Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

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A bumpy road It’s been a long road for Olga’s.

SOK Venture LLC, a Team Schostak

affiliate, purchased the iconic company out of bankruptcy with a $10.95 million bid along with a $305,596.33 payment to creditor Sysco Corp., the food-service vendor.

Team Schostak beat out Troybased Cosmo Hospitality LLC, a 50-50 joint venture between Gary Sakwa, co-founder of Farmington Hillsbased Grand/Sakwa Properties LLC, and Stefan Wanczyk, CEO of Troybased manufacturing company Utica International Inc., Hour Media LLC and Lauderdale Development Group.

In June 2015, Olga’s filed for bankruptcy, listing $1 million to $10 million in assets and more than $11.8 million in liabilities. Its creditors also included Citizens Bank ($2.4 million owed) and Detroit-based law firm Dickinson Wright PLLC ($103,843).

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28

WSU FROM PAGE 1

with the union’s lawyer to determine next steps.

When he received a copy of the proposed covenant, Parrish sent a letter of protest on July 27 to Wayne State officials.

“The union demands that you cease and desist from causing or attempting to cause school of medicine faculty to sign a covenant not to compete or any other document that alters their terms and conditions of employment,” said Parrish, adding: “Failure to sign could mean termination from UPG, which would adversely impact their appointment or tenure as clinical faculty in the university.”

Under Wayne State’s proposed agreement, penalties for violating the noncompete agreement could include faculty members paying UPG their previous two years of compensation immediately preceding termination and all expenses, according to the document obtained by Crain’s.

If they sign the covenant, Wayne State physicians employed by UPG

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6

“Cases in Michigan where noncompetes are imposed in midemployment without added consideration are more difficult to enforce.”

Robert Cleary,

Dean and Fulkerson Law Firm

also would not be allowed to quit the medical group and then within one year provide “specialty or related administrative services” to William Beaumont Hospital, Henry Ford Health System, McLaren Health Care Corp., Ascension Health or several hospitals affiliated with DMC. Beaumont, Henry Ford, McLaren, Ascension and DMC, which is a contracted academic partner with Wayne State, are labeled “competing hospital systems” in the proposed noncompete covenant.

Most medical groups and faculty

practice plans have certain specialty physicians sign noncompete contracts, several health care labor attorneys told Crain’s. Beaumont declined to comment because its noncompete contracts are confidential.

David Spahlinger, executive director of the University of Michigan Faculty Practice Group, said the medical group added a noncompete in the 1990s for only new employees that restricts doctors from practicing within about 25 miles for one year after leaving. He said there are no monetary damages.

“We would have to go to court to get an injunction to enforce. We had two cases where we sent letters out but we never went to court,” said Spahlinger, adding that the noncompetes were necessary to protect investments in newly hired doctors and programs.

At Henry Ford, a spokesman told Crain’s that noncompete covenants are common for subspecialties like neurosurgery, cancer surgery and cardiovascular, but not required for many other specialties like radiology, anesthesia and emergency medicine.

Wayne State officials said the medical school never had a noncompete contract for UPG doctors.

“Newly hired physicians sign noncompetes with us,” the university said.

Motive for Wayne State?

It is unclear what Wayne State’s motives might be for drafting a noncompete covenant for its faculty.

Over the past year, Wayne State has been trying to improve its contracts and operations as part of a multiyear turnaround plan to erase last year’s $32 million deficit. Officials have said they expect the deficit to be cut in half by Oct. 1 through various cost-cutting and revenue-enhancing programs.

Last month, 37 medical school faculty members were targeted for termination because they have been deemed unproductive or underproductive by the medical school administration. Some have agreed to retire, and others are subject to further hearings. The faculty union has objected to the process.

As part of the financial turnaround, Wayne State also is negotiating what it hopes will be favorable long-term teaching, clinical services and administrative contracts with DMC, the hospital system owned by Dallas-based Tenet Healthcare Corp.

DMC is Wayne State’s teaching hospital partner. The contract has expired, and both organizations are working with a series of short-term contract extensions.

But Parrish said Wayne State is in a difficult negotiating position with DMC and wants the noncompete contract to impose leverage on DMC and the faculty physicians.

“They are afraid if the DMC deal falls through, they will have an unfavorable (future) relationship with the DMC,” Parrish said. “The faculty could resign and move to one of the named health care systems. They want to prevent that.”

Roger Wiseman, DMC’s senior

vice president for population health, said he had no reaction and declined to comment on Wayne State’s noncompete covenant.

“We are still in negotiations with Wayne State regarding medical administration and clinical agreements,” he said. “We hope we are close to an end of those negotiations.”

Wiseman had no comment on whether Wayne State is using the noncompete as leverage with DMC as part of the contract negotiations.

He said DMC is focused on making sure patients get the care they deserve.

“We are focused on two things.

Are we getting what services we need and what is a fair market value paid for those services,” he said.

Robert Cleary, a labor lawyer with the Troy-based Dean and Fulkerson Law Firm, said noncompete contracts are allowed in Michigan, but only if they are reasonable in time, duration, scope and connected to the employer’s business.

Cleary said one of the important aspects of the issue hinges on whether Wayne’s faculty can be represented by the union in a UPG matter.

“If (the union) represents them, the university’s unilateral imposition of a noncompete without bargaining with the union is grounds for an unfair labor practice charge,” he said.

But Cleary said it appears after reviewing the noncompete for Crain’s that Wayne State’s noncompete may be unenforceable because of its punitive remedy clause.

“Noncompetes are not uncommon, but they are created at the outset of a relationship,” Cleary said.

“Rarely and not common is they name the hospitals, and separately name DMC and all its locations, with penalties that are clearly unreasonable. One hundred percent of pay for the prior 24 months. No judge is going to enforce this.”

Cleary also said noncompete covenants are easier to enforce when created with new employees because it is part of the arms-length agreement and is consideration in exchange for compensation.

“Noncompetes with current employees without added consideration are far more difficult. ... Cases in Michigan where noncompetes are imposed in mid-employment without added consideration are more difficult to enforce,” he said.

Cleary said judges don’t often enforce blanket noncompetes, especially in the medical profession, because of the potential of shortages of physicians in underserved areas.

“If a judge thinks the main reason is to stifle competition, the judge won’t enforce it,” Cleary said.

In a Aug. 3 email to Parrish, Louis Lessem, Wayne State’s general counsel, said the union has no standing in the matter because UPG is a separate corporation. Except for one exception, Lessem said, UPG employees are not represented by the union. A 2012 settlement between the university and union only allows the union to represent UPG doctors when they are subject to disciplinary proceedings, he said.

Parrish responded by casting doubt that UPG is truly an independent entity because of university oversight, contributions UPG makes to university coffers and that the benefits plan of UPG is funded by the university.

“Participation in the practice plan was voluntary and not a term of employment for faculty,” Parrish said. “The covenant makes clear that appointment in UPG is linked to terms of employment as a faculty member at SOM.” Lessem said Wayne has not required any physician to sign the noncompete and that it could be modified based on further discussions.

But if UPG is considered a private and independent entity from Wayne State, Parrish said it is possible the union might request that a bargaining unit be formed for UPG employees from the National Labor Relations Board.

If UPG is part of the university and a public entity, as Parrish maintains, another option is to request that the union represent UPG doctors through the Michigan Employment Relations Commission, which oversees and resolves labor disputes involving public and private sector employees by appointing mediators. A five-year agreement with Wayne not to seek MERC representation expires in September, he said.

“If UPG is an independent organization, why is the general counsel of the university handling it?” said Parrish. “The medical school dean (Jack Sobel) is chair of UPG.” As an IRS 501(c)(3) tax-exempt entity, Wayne State University Physician Group is a nonprofit, academic medical group affiliated with the Wayne State University School of Medicine. Many UPG physicians serve as faculty at the school, conduct clinical research and teach medicine to medical students and hospital residents.

Jay Greene: (313) 446-0325 Twitter: @jaybgreene

INDEX TO COMPANIES

These companies have significant mention in this week’s Crain’s Detroit Business: Blue Cross Blue Shield of Michigan .................... 9

Priority Health ....................................................... 9

Chemical Financial ............................................... 4

Skidmore Studio ................................................... 4

Garden Fresh Gourmet ........................................ 6

Talmer Bancorp ..................................................... 4

Grand Steel Products ........................................... 1

Team Schostak Family Restaurants ...................3

Halo Burger ............................................................ 4

Wayne State University......................................... 1

Health Alliance Plan ............................................. 9

Wayne State University Physician Group .......... 1

Horizon Global ........................................................7

Wesley Berry Florist ..............................................3

Kellogg Co. ............................................................. 6

W.K. Kellogg Foundation ......................................5

Michigan Department of Corrections ................5

Zomedica Pharmaceuticals ................................3

Olga’s Kitchen ........................................................3

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C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6

WESLEY FROM PAGE 3 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 Digital Editor Carlos Portocarrero 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 or shill@crain.com Newsroom (313) 446-0329, FAX (313) 446-1687, TIP LINE (313) 446-6766

REPORTERS Marti Benedetti (313) 446-0416 Jay Greene, senior reporter Covers health care, insurance, energy, utilities and the environment.

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(313) 446-6042 or dwalsh@crain.com Sherri Welch, senior reporter Covers nonprofits, services, food, 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 Manager Katie Sullivan Advertising Sales Gerry Golinske, Catherine Grace, Joe Miller, Diane Owen, Sarah Stachowicz Classified Sales Manager Angela Schutte, (313) 446-6051 Classified Sales Lynn Calcaterra, (313) 446-6086 Meetings/Events Director Kim Winkler Events Manager Kacey Anderson Senior Art Director Sylvia Kolaski Marketing Manager Marilyn Barnes Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik 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) 446-0406 or e-mail infocenter@crain.com Crain’s Detroit Business is published by Crain Communications Inc. Chairman Keith E. Crain President Rance Crain Treasurer Mary Kay Crain Senior 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 Information Officer Anthony DiPonio G.D. Crain Jr. Founder (1885-1973) Mrs. G.D. Crain Jr. Chairman (1911-1996) Editorial & Business Offices 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the third week of November, and no issue the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2016 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner without permission is strictly prohibited.

giving any reason for the closure, he said.

“It was a surprise; I didn’t see it coming.”

The company took all of its equipment from the Penobscot Building shop, including computers and a fax machine, last week, Baker said, and it disconnected the phone line for the store.

Signs on the Detroit store’s windows let customers know the shop is operating on a cash-only basis now.

The lone Wesley Berry franchised store left, in Canton Township, was still operating last week. Its owner declined any comment.

Under the Wesley Berry Flowers name, the combined brick-andmortar and online businesses ranked No. 1,755 on Inc.’s 2014 list of the 5,000 fastest-growing companies in the U.S., with $40.2 million in reported revenue for 2013, up from $11.9 million in 2010.

Wesley Berry Florist Inc. sold its first franchise about 30 years ago. It went on to establish 30 franchises across five states before selling most of them in the 1990s and launching an e-commerce business in 1994.

As of June 2015, Wesley Berry Flowers’ Michigan operations and online business employed 100 people in Michigan and 50 at a call center in the Philippines, owner and CEO Wesley Berry II told Crain’s at the time.

At that point, he said the companies were dealing with 5,000 to 6,000 customers each day, either placing orders or receiving flowers through the company from online orders.

Several hundred of those orders came from other countries, Berry said, noting his companies work closely with 1-800-Flowers.com Inc. and Florists’ Transworld Delivery through FTD.com.

Amid it all, consumer complaints about the service and products delivered by FlowerDeliveryExpress.com and Wesley Berry ramped up online.

In May, the Better Business Bureau/ Detroit and Eastern Michigan said on its website that it had revoked its accreditation due to Wesley Berry’s failure to, among other things, promptly respond to all complaints forwarded to the agency and to make a goodfaith effort to resolve disputes.

Berry told Crain’s last year that his company makes every effort to follow up on issues and doesn’t have any greater failure rate on orders than its major competitors.

FDE’s growing footprint — with deliveries in 152 countries — put it into conflict and court with online florist giant Teleflora LLC, as Crain’s reported last year.

FDE had been a member of the Teleflora network going back to the 1950s and used its services for order fulfillment and credit card processing. But the two began sparring over issues stemming from a large number of refunds to credit card transactions. Teleflora cut Wesley Berry from its floral network in April 2015, and lawsuits filed by each side ensued.

After Wesley Berry was dropped from the Teleflora network, it filed suit in Wayne County Circuit Court alleging that Teleflora didn’t make

promised technology upgrades in its point-of-sale and e-commerce systems which would have helped reduce order fulfillment issues. As a result, the lawsuit said, Wesley Berry had to design and implement its own technology “at great expense.”

The lawsuit also alleged Teleflora didn’t communicate chargeback issues in a timely manner to allow Wesley Berry to respond to them and that the high rate of refunds was “a direct result of Teleflora’s failure to enforce its delivery requirements.”

Wesley Berry dropped that lawsuit after Teleflora filed two lawsuits in California in favor of bringing counterclaims in those cases.

The remaining federal case in California in which Teleflora accused Wesley Berry of false advertising,

trademark infringement and unfair competition, through, among other things, its alleged continued use of the Teleflora and Make Someone Smile trademarks, was dismissed Aug. 4 after a joint motion from the two companies. Teleflora had sought damages in excess of $20 million in the case.

Teleflora’s charges were dismissed with prejudice, meaning it cannot reintroduce those claims.

Wesley Berry’s counterclaims, however, were dismissed without prejudice, with the understanding they will be reasserted in an ongoing state case between the two companies.

In the state case, Teleflora is claiming breach of contract and seeking about $2 million from Wesley Berry. A January court date is set in the case.

The Clark Hill PLC attorney representing Wesley Berry in both cases did not return calls seeking comment.

Teleflora’s attorneys declined to comment.

“My read is there was an agreement between these parties regarding the use of (Teleflora’s) marks, and ultimately this dispute would land on breach of contract principles,” said Rudy Telscher, partner and head of litigation in the St. Louis office of Troy-based Harness, Dickey & Pierce PLC. Teleflora voluntarily dismissed its claims in the federal case in favor of the state case, which would indicate it believes its best claims are in the state case, he said.

Sherri Welch: (313) 446-1694 Twitter: @sherriwelch

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WEEK

C R A I N ’ S D E T R O I T B U S I N E S S // A U G U S T 2 9 , 2 0 1 6

ON THE WEB AUG. 20-26

DMC stung by Detroit Digits problems with unclean tools $20,000

A numbers-driven look at last week’s headlines:

D

etroit Medical Center admits

that unclean surgical tools have caused problems and sometimes forced doctors to delay procedures, including heart surgery on a 7-month-old girl, AP reported.

The Michigan Bureau of Community Health Systems started an investigation into issues related to the sterilization of surgical equipment at DMC facilities, its director, Larry Horvath, told The Detroit News. The newspaper obtained more than 200 pages of emails and reports on broken, missing and improperly cleaned instruments at the campus of five hospitals, some written by high-ranking medical staff.

COMPANY NEWS n A planned Eastern Market apartment project at 2801 Russell St. with first-floor retail space is about one-third larger than originally slated. The Russell Flats project, first reported by Crain’s in October, was originally planned to be about 60 units but is now expected to have 82 units by its estimated completion in second-quarter 2018. n A new, larger Motor City Harley-Davidson opened in Farmington Hills. The $15 million complex includes a showroom, service center, clothing store, training center and microbrewery.

The owners expect to hire an additional 20 employees for the site. n A garage in Detroit’s North End area opened as a new 800-squarefoot store and workshop called Douglas & Co. Detroit, a maker of leather handbags, wallets and other handcrafted items. n Troy-based metal stamper Gestamp North America Inc. will open a research and development

JACK ENTERTAINMENT

Jack Entertainment LLC, owner of Greektown Casino-Hotel in Detroit,

plans a $7 million renovation of St. Mary’s School in Detroit’s Greektown

for a new headquarters (shown in an artist’s rendering). In December, Jack will move its 140 employees into the five-story former school building at 1041 St. Antoine St. that has been vacant for more than a decade.

The amount of money to be awarded per year in Troy-based Crestmark Bank’s newly established five-year scholarship program for students in Oakland University’s School of Business Administration.

$2.5 million

The amount granted by the Detroit-based DTE Energy Foundation to The Heat and Warmth Fund to enroll about 3,000 low-income customers of DTE Energy Co. in a program to help them pay for the energy they use.

center in Auburn Hills later this year. The U.S. subsidiary of Spanish supplier Gestamp Automocion SL did not disclose the investment total. n WoodSpring Hotels, a Wichita, Kan.-based extended-stay hotel company, has teamed with Grand Rapids-based developer M2B2 LLC to build a new prototype WoodSpring Suites hotel in Wixom that is set to open in 2018. n Ann Arbor-based Arotech Corp., a defense and security products and services company, said it will discontinue a battery storage project of several years at month’s end and put its intellectual property out for bidders. n Firefighters Support Services, a charity in Wyandotte with a mission of supporting firefighters and fire victims, is closing after a state investigation found it misled donors, AP reported. n Fusion Coolant Systems Inc., a University of Michigan spinoff based in Canton Township, finished raising a funding round of $1.25 million, the first close of what is projected to be a larger Series B round, for laboratory expansion and to grow its engineering and sales teams. n Detroit Manufacturing Systems LLC broke ground on a 102,000-square-foot factory in Toledo that will produce instrument clusters for the next-generation Jeep Wrangler, Automotive News reported. The plant is expected to employ at least 140 people by summer 2017. n Troy-based auto parts and electronics company Delphi Automotive PLC is joining with Israeli software maker Mobileye to develop the building blocks for a fully autonomous car in about two years, AP reported. n Chicago-based United Airlines Inc. will begin a daily nonstop flight between Detroit Metropolitan Airport and San Francisco International Airport next June that is intended to link the Motor City’s autonomous vehicle industry to Silicon Valley. n Troy-based Inteva Products LLC

plans to invest $23 million to add capability to its plant in Adrian. The supplier of automotive closure and roof systems has been awarded new business, and plans to invest in new equipment and tooling. n Nexcess.net LLC, a Southfieldbased data center and managed-hosting company, doubled its footprint in the city to 26,000 square feet with a ribbon cutting at two new facilities adjacent to its headquarters on Melrose Avenue. n Ann Arbor-based Plymouth Venture Partners said it sold its equity stake in Troy-based 365 Retail Markets to Omaha, Neb.based McCarthy Capital. 365 Retail is a leader in food-service vending.

OTHER NEWS n The vacant Northland Center site in Southfield could be getting an entirely new look with a conceptual plan unveiled by the city that could include a hotel, apartments and retail and office space. n The Battery Fabrication and Characterization User Facility at the University of Michigan received a matching grant of $1 million from the Michigan Strategic Fund for the fifth and final year of a matching-grant program from the Michigan Economic Development Corp., the U.S. Department of Energy and Ford Motor Co.

n The Michigan elections board declined to review actress Melissa Gilbert’s withdrawal as the Democratic nominee for 8th Congressional District seat, allowing her to be replaced over Republicans’ objections, AP reported. Gilbert dropped out of the race in May, citing worsening head and neck injuries. Local Democratic leaders chose a replacement, Macomb County assistant prosecutor Suzanna Shkreli, to face GOP Rep. Mike Bishop in November. n Libertarian Party presidential nominee Gary Johnson will speak to the Detroit Economic Club on Sept.

14 at the Westin Book Cadillac Detroit hotel. The event will be open only to members and invited guests. n Pasquale Longordo, owner of Troy-based Modify Loan Experts LLC, pleaded guilty in Oakland County Circuit Court to two felonies and 27 misdemeanors on charges of stealing money from Michigan residents. n Portions of Woodward Avenue in Detroit will be intermittently closed over the next few weeks as M-1 Rail begins testing the QLine streetcar with a small motorized inspection car called a “speeder.”

OBITUARIES n Miroslav David Poulik, M.D., former chief of immunopathology at Beaumont Hospital in Royal Oak, died Aug. 17. He was 93. n Lawrence Voight, president of Ann Arbor-based nonprofit Catholic Social Services of Washtenaw County, died Aug. 18. He was 58.

RUMBLINGS

New plans for old Kmart HQ site? Maybe

A

move is on to the 1.1 million-square-foot redevelop the former property that sits on about Kmart Corp. headquarters 40 acres. property in Troy.

A previously planned On Friday, Nate Forbes, development, the Pavilions at Troy, would’ve cost $320 managing partner of million when put forward Southfield-based owner The Forbes Co., said in a years ago under previous statement that his ownership, but that project company is “reviewing stalled under a crushing Nate Forbes: development plans” for economic collapse.

Reviewing the long-vacant site at Kmart, now owned by development plans.

West Big Beaver Road and Hoffman Estates, Ill.-based Sears Holding Corp., vacated its Coolidge Highway. former headquarters in 2006. It But let’s not get too excited yet.

There were no specifics released. once housed 5,000 employees.

Forbes Co., through Forbes No time frames. Just the confirmation, following rumors in real estate Frankel Troy LLC, owns the Kmart property as well as the Somerset circles, that forward momentum is Collection mall across the street. taking place to find a new use for

Neurable leaves for Massachusetts Neurable Inc., the most talked-about company at the Michigan Growth Capital Symposium in May, has given up on raising money from local venture capitalists and on staying in Ann Arbor. Its team of five held a farewell party at the Ann Arbor Spark Central incubator Thursday night, loaded up a big U-Haul truck on Friday and on Saturday drove to Cambridge, Mass.

The company generated a lot of deal heat here, but no deals, and the offer of an investment of $400,000 and free office space for a year to move to the Boston area was too good to pass up, President and CEO Ramses Alcaide told Crain’s.

“I’ve been trying to fundraise here for nine months. We went to Boston for one day and got what we wanted,” he said. “In Michigan, we got a lot of ‘Whoa, that’s really cool,’ but we never got a term sheet. ... We all really love Michigan. This is our home. This is bittersweet; we’re all heartbroken, but at the same time,

we’re excited about the future. My job is to build the best company I can, and Boston is the environment that’s best for us.”

Neurable, a University of Michigan spinoff, won $50,000 by finishing second at the prestigious Rice Business Plan Competition in Houston in April for its noninvasive brain-computer interface that, thanks to artificial intelligence software developed by Alcaide, allows people to control software and objects with their brain activity, including wheelchairs and even a car.

Subsequently, the Houston-based OWL Investment Group, made of some 40 angel investors nationwide, including some of the judges at the Rice event, invested $380,000 in Neurable. The Boss Syndicate, an angel-investor group, and Accomplice, an early-stage venture capital firm, met with Alcaide after the Rice event and eventually joined in an offer he couldn’t refuse.

Awards to laud progress, cooperation PVS Chemicals Chairman James Nicholson and the Rev. Faith Fowler, executive director of Cass Community Social Services, will be among the

honorees at this year’s Shining Light Regional Cooperation Awards.

The awards, an effort of the Detroit Free Press and the Metropolitan Affairs Coalition, honor contributions to progress, cooperation and understanding in Southeast Michigan.

Nicholson will receive the Neal Shine Award for Exemplary Regional Leadership. He has a long record of leadership and is past chairman of the Detroit Symphony Orchestra and current chairman of the Community Foundation for Southeastern Michigan.

Fowler will receive one of two

Eleanor Josaitis Unsung Hero awards for her commitment to helping disadvantaged people. The other award will go to Frederick Hoffman, of counsel at Clark Hill PLC. The awards program cited Hoffman’s long record as a lawyer, executive, writer, public servant, volunteer and philanthropist, among other roles.

DeAnte Thompkins, metro region workforce development technician, Michigan Department of Transportation, will receive the Dave Bing

Future Leader Award for fostering opportunities for disadvantaged young people.

Tickets to the Oct. 6 awards at Ford Motor Co. Conference & Event Center in Dearborn are $55. More

information is at (248) 336-8623 or www.shininglightawards.com.

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