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SILICON VALLEY IN METRO DETROIT?

United Shore has set a new standard for what a “Cool” workplace looks like in Michigan. The company is among the 100 Cool Places to Work in Michigan for 2018, part of a special report that begins after Page 8 of this week’s issue.

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The Center for Financial Planning workspace is open and collaborative for its 29 employees.

Client-centric

culture

The culture at Center for Financial Planning isnâ&#x20AC;&#x2122;t necessarily something you can see; but employees at the Southfield company say they can feel it as soon as they walk through the doors. Their passion is to help clients achieve their financial goals â&#x20AC;&#x201D; whether it be to save for retirement, for elder care or for college education. The company has 29 employees; the office space is open and collaborative with bright colors throughout. Beyond the physical space, employees have the benefits of a health and wellness committee, a charity committee and a creativity committee; each employee has a professional development plan to help them achieve career objectives and grow within their roles. For more photos the Center for Financial Planning space, visit crainsdetroit.com/CoolPlaces.

Snacks and coffee are plentiful for employees at Center for Financial Planning in Southfield.

Photos by Adam Sparkes for Crain Content Studio

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A stairway inside Bedrock, built in what was once a hotel, serves as a meeting place for team members.

Photos by Jacob Lewkow for Crain Content Studio

History at work

There are spaces to collaborate with coworkers and quiet corners to finish a project at Bedrock.

When Bedrock renovated the 1870s building at 630 Woodward Avenue into its company headquarters, the project became a billboard for what the real estate development firm does best. With more than 90 properties totaling more than 15 million square feet in Detroit, Bedrock has a knack for taking, for instance, a historic hotel and transforming it into a functional but unique workplace. Bedrock moved into its new space earlier this year. Itâ&#x20AC;&#x2122;s the setting for some of its core values - collaboration and openness - that make the company a Cool Place to Work in Michigan for 2017. See more of the office space and hear Bedrock leaders talk about its culture at www.crainsdetroit.com/BedrockVideo.

Team members embrace the open-door policy and open-air enviornment at Bedrock. An espresso bar and options to stand at your desk are added work perks.

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Warriors in action Some words here about Wayne State University right here in this spot. By Crain Content Studio writer Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a cam-

paign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with expats, readers, etc. Here is a story we will write as part of a campaign to highlight Wayne State via Homecoming with ex-

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Call to action here Hereâ&#x20AC;&#x2122;s where we include the call-to-action information about Wayne State, alumni, etc. Hereâ&#x20AC;&#x2122;s where we include the call-to-action information about Wayne State, alumni, etc.

Jane Colleague The Negotiator

This is where, in about 100 words, our writers at Crain Custom Content will tell the story of your colleague’s superpower. Maybe she’s a complex problem-solver, able to leap tall piles of purchase orders in a single bound. Maybe she has unflappable negotiation skills or is known throughout the office for her imagination, flexibility or even telepathy. Whatever it may be, we’ll tell the story of why she matters so much to your company and its mission.

e Joe Collearagtu or The collabo

Every company has one: a messenger; a collaborator; a comedian; a trailblazer. Whatever your colleague’s superpower may be, Crain Custom Content will tell the story, complete with a custom illustration by a Detroit-based comic artist. A company is only as successful as the personalities who make up its workforce, and we want to tell their stories in a creative, engaging way.

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The American Dream

ONE LOAN AT A TIME

A mortgage can be intimidating, but it’s tied to so much more than a stack of files on a desk Story by United Shore for Crain Content Studio

It’s the moment a homebuyer will always remember. The moment a homebuyer becomes a homeowner. The moment they hear the words “Here are the keys to your new home.” For many, it’s an emotional moment, and one we don’t think about enough when we talk about what it takes to get there. Because without a mortgage, that moment doesn’t happen. Mortgages and the mortgage industry in general usually carry a certain stigma. Let’s face it - getting a mortgage can be a challenging and intimidating process. A decade removed from the sub-prime mortgage crisis, the industry as a whole still struggles with its public perception. But here’s the thing: A mortgage is tied to a quintessential idea behind the American dream — home ownership. According to a recent survey by San Francisco-based home improvement lender Hearth, “owning a home I love” ranked higher than any other choice related to the American

dream. Those choices included “starting a family” and “finding a fulfilling career.” A home is much more than brick and mortar; it’s the place where we make memories that shape our lives. When you think about a mortgage from that perspective, it becomes much more than a stack of files on a desk. A mortgage is the vehicle that allows people to live their dreams. Similarly, United Shore is much more than a mortgage company. We are dream makers, helping people achieve their dreams of home ownership. Every day, 2,400-plus team members come to work to be a part of this. Last year, we closed more than 106,000 loans throughout America. That’s more than 106,000 dreams that came true. The goal this year: 132,000. And it doesn’t stop with borrowers. United Shore is home to United Wholesale Mortgage, the No. 1 wholesale lender in the nation. As a wholesale lender, we work exclusively with mortgage brokers. These are small business owners and entrepreneurs who live and work in communities like yours. Through unrivaled client ser-

Photo by United Shore At United Shore, experts help first-time buyers navigate the landscape of buying a home —and celebrate when that American dream becomes a reality.

vice and industry-leading technology, UWM gives mortgage brokers the tools they need to build and grow their business. Our brokers are more than just our clients. They’re our partners. A big part of that partnership is helping consumers understand the benefits of working with mortgage brokers. For years, borrowers have been conditioned to think that when it’s time to get a mortgage, you go to your

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bank. But when you go that route, you’re limited to the products that the bank has to offer. You also have to keep in mind that while mortgages are a part of a bank’s business, it’s not what they specialize in. When you use a mortgage broker, you’re getting someone who specializes exclusively in home loans. That’s because mortgage brokers only do one thing – mortgages. They are experts at finding the

best loan for each homebuyer’s situation. They know the intricacies of each lender, which helps the entire process run smoothly. And because they have access to better pricing, mortgage brokers save borrowers money by finding lower rates and, more importantly, lower monthly payments. Now you can see why using a mortgage broker is the best option for someone looking to get a home loan. By now, you’re probably wondering how to find one of these mortgage brokers. Findamortgagebroker.com is a great place to start. This website will help connect you with an expert to help navigate the landscape of home buying. This is especially important in an economy where interest rates are on the rise and the market faces a great deal of uncertainty. No matter what the future holds, we all want a piece of the American Dream. Owning a home has always been a part of that. It always will be. Getting the keys to a new home is a life moment you never forget. A mortgage is what makes it possible.

5/17/18 12:32 PM

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A business solution

At work, with autism

1 in 68 individuals have an autism spectrum disorder diagnosis. 50 percent of individuals with autism have normal or above-average intelligence; 12 percent fall in the extremely high IQ range, exceeding the proportion of the typical population. The mandated federal diversity hiring objective for disability is 7 percent for federal contractors.

Through a comprehensive training program offered by the Autism Alliance of Michigan, employees learn to understand and embrace the unique talents of co-workers with autism.

Employers receive a $2,400 direct federal tax credit per individual with a disability hired. Companies typically spend $3,500 to fill an empty position. AAoM’s retention rate is over 96 percent. 87 percent of Americans say they prefer to give their business to companies that hire individuals with autism, and 92 percent of Americans view companies hiring individuals with autism and related disabilities more favorably than those that do not. Source: Autism Alliance of Michigan

Story by Laura Cassar |Photos by Jacob Lewkow Crain Content Studio Imagine your job is to tell how many fingers a co-worker is holding up. The fingers change in random order; you need to say out loud how many there are. Seems simple enough. Now imagine this: air is blasting on the back of your neck and another co-worker occasionally shoves you from behind. Someone waves a strobe light in front of the hand that’s holding up the fingers. And two more co-workers read in your ears: They each read aloud different books at the same time. Now how many fingers is your co-worker holding up? This is a scene that Josh Stokes, a 26-year-old individual with autism, recently put to a role-play test at an employer training event led by the Autism Alliance of Michigan. The role-play and event was designed to illustrate some of the workplace challenges - and unique benefits - of individuals with autism. Founded in 2009, AAoM works to improve the quality of life for individuals with autism through education, access to comprehensive services, community awareness, inclusion efforts and coordinated advocacy. Within that mission is its growing push to impact the state’s unemployment rate and talent gap with an untapped workforce: those with autism. Between 75 and 90 percent of adults with autism are unemployed.

Josh Stokes, top, trains employees at Ford Motor Co. in Dearborn to work alongside individuals with Autism Spectrum Disorder. Stokes, whose presentation is part of an Autism Alliance of Michigan workplace initiative, says he doesn’t want his audience to just hear him: He wants them to experience life with autism, which is why they role-play different scenarios, at right. To join the dozens of metro Detroit businesses that are increasing workforce diversity and taking advantage of the talents of individuals with autism, visit www.aaomi.org, email employment@aaomi.org or call 877-4632266 (AAOM).

“Frequently we hear from businesses that they cannot find reliable employees. We have a talent pool of hundreds of individuals that, by clinical definition, have normal to high intelligence, arrive at work on time, complete tasks efficiently and with attention to detail,” said Tammy Morris, AAoM’s chief program officer. These individuals “present a business solution with potential of a high return on investment.”

Help for employers A key part of AAoM’s workforce effort happens before the individual with autism ever sets foot in the door. As part of the program, supervisors, human resources departments and staff receive training to learn what they can expect from these employees with autism. That training includes a “What is Autism” presentation by Stokes. Stokes works full-time as a chef and is studying to be a special education teacher. He was diagnosed at age 7. His presentation is a window to his world and that of others with autism. Stokes has given about 40 autism presentations at workplaces throughout metro Detroit. “Individuals with (Autism Spectrum Disorder) are great workers,” Stokes said. “We have great potential to focus, which makes us incredibly efficient.”

There are five things AAoM requests of new employers when hiring an individual with autism: assume they are competent, support their communication needs, be aware of their sensory needs, model appropriate behavior and friendships, and have fun. AAoM uses Josh’s presentation to help employers recognize and understand some of the sensory difficulties that some individuals with autism experience. By working with job seekers for many months in advance, AAoM knows these individuals’ specific abilities, including frequently a high degree of technical ability, and works with both the individual and the company to best manage them. In addition to social communication struggles, for instance, one core clinical feature of individuals with autism is the need for self-soothing repetitive behavior. A recent individual with autism who was placed in a job was guided to move pennies from hand to hand as a self-soothing mechanism that wouldn’t disrupt co-workers. Companies are beginning to recognize the broad range of talents and abilities among individuals with autism and other disabilities. Most companies seek help from this talent pool because of the high levels of unemployment in the group and the fact that a high percentage of individuals with autism have average or above-average intelligence. “The more big companies do this, the more it becomes the norm and we can really change things,” said Kirstin Queen,

manager of diversity and inclusion for Ford. Stokes presented to Ford employees this spring.

Help for employees In addition to its work with the employers, AAoM works with individuals with disabilities to help them prepare to find a job. The AAoM database houses about 300 job seekers from Michigan and an additional out-of-state pool of job seekers with disabilities. Jesse Sissom, 32, was one of Michigan’s job seekers on the autism spectrum. Sissom was having a hard time getting through the interview process to find meaningful employment. AAoM helped him prepare for interview questions. Sissom secured an interview with Michigan Blood, an independent, nonprofit blood bank that supplies 36 hospitals across Michigan. After AAoM’s coaching, Sissom got the job. “People with autism offer a lot of value to companies,” Sissom said, noting that the position is a good fit for him because of his attention to detail. “I make sure everything is right because people’s lives depend on it.” Attention to detail is just one of the notable strengths an individual with autism brings to the workplace, according to AAoM. Other strengths include visual thinking, systematic information processing, efficiency and disinterest in “office politics.” “A person who thinks differently is worth more than you can count,” Morris said.

Tapping into unique talents Individuals with autism are hired to work in various industries and roles including: ■ Information technology ■ Engineering ■ Marketing ■ Finance ■ Business offices ■ Laborers ■ Retail ■ Health ■ Entertainment ■ Food

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EXECUTIVE INSIGHTS

LOOKING BACK TO MOVE FORWARD The Detroit Historical Society is RESTORING CIVILITY and guiding the city’s future by inspiring fearless conversations about the summer of 1967.

The Rebellion. A revolution. Detroit Riots. The uprising of Detroit. These are just a few names for the civil disturbance that began July 23, 1967, after a police raid at an unlicensed bar in the city. The result? More than 7,000 arrests, 1,700 fires, hundreds of injuries, 43 deaths and a deep-seated trauma that prevented Detroit from becoming what it could have been. Though there isn’t consensus on the progress made since ’67, most agree long-simmering frustration with racial inequity catalyzed the rebellion. “It’s not like a bunch of black people woke up one day and decided to burn down buildings,” said Bob Bury, executive director and CEO at Detroit Historical Society. “Every single day that gets validated through conversation and the hundreds of oral histories we have collected.” Conversation is, in part, how the Historical Society is commemorating the anniversary of the unrest. A major exhibit, opening June 24, surveys the 50 years before and the 50 years since 1967 in hopes of defining a positive Detroit future. On May 2, 2017, the Historical Society and Crain Content Studio, the custom publishing division of Crain’s Detroit Business, gathered 11 business leaders and community advocates for a candid discussion about the reasons behind the insurgence and what should have happened in the 50 years since. This conversation, moderated by Crain’s Publisher Ron Fournier, also focused on how to bring equity to the city.

How we got to 1967 “If you want to encapsulate the conditions, it was America’s slow progress — too slow, glacier slow — in recognizing that we are not a country of equality,” said John Rakolta Jr, chairman and CEO of Detroitbased construction company Walbridge Aldinger Co. and winner of New Detroit’s 2016 Leadership in Race Relations Award. Detroit endured two sizable riots prior to 1967, Rakolta said. “And we ignored them.” The first occurred in 1925 after eight months of police shootings and violent block busting; the second happened in the summer of 1943. In outset of the 1940s, thousands — black and white — were moving from southern states to Detroit seeking employment in defense industry production. The federal government neglected to enforce its own rule that communities couldn’t bring in more labor until they used local labor. Whites, who brought with them racial sentiments of the south, found themselves sharing labor opportunities; blacks, not welcome in white neighborhoods, found themselves living in slums. In 1942, the NAACP warned public officials they needed to act against police brutality, mob attacks on the homes of black citizens, job discrimination and other racial inequities or “all hell will break loose in Detroit,” according to an NAACP report. They didn’t. Then, on June 20, 1943, ferocious clashes between blacks and whites spread from Belle

Photo by Dr. Carol Chadwick Burleson, courtesy Detroit Historical Society

Isle to Paradise Valley, quelled after three days with the arrival of Army tanks and machine gun fire. Thirty-four people died. Police killed 17 of the 25 African-Americans who died. Josh McManus, chief operating officer at Rock Ventures LLC, described a scenario where attitudes and behaviors haven’t changed much. “I would make the argument that Detroit is the largest de facto military base that was never properly decommissioned post World War II,” he said. Despite a 20 percent plunge in the city’s population from 19501960, he said there was “a sort of second escape of Jim Crow” from 1950-1967 where African-Americans moved from the south in hopes of inclusion and economic opportunity only to find the promise wasn’t true. Influential, upwardly mobile African-Americans lived in the neighborhood of 12th (now Rosa Parks Boulevard) and Clairmount, where the trouble started. Back then, it was a diverse, walkable community that had all the necessary services and resources. But there were still unresolved issues and mounting resentment. “One of the things I always heard about growing up in Detroit was S.T.R.E.S.S. and that particular faction of the cops. I heard about the redlining. My parents still have stories. They wanted to stay in the city; but even when they looked outside the city, they were warned about not

LOOKING BACK TO LOOK FORWARD

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INSIDE: Don’t call it “driverless:” A guide to the six levels of automation in mobility technology. PAGE 4

DRIVING MOBILITY

SPONSORED BY PLANETM

he U.S. auto industry employs 1.7 million people, produces nearly 8 million spinoff jobs and contributes about 3.5 percent to the gross domestic product yearly. It’s no wonder, then, the United States economy relies heavily on automakers and that economists consistently call for the development of new industries — just in case. “For many years, we said we need to diversify away from the auto industry,” said Glenn Stevens, executive director of MICHauto and vice president of Automotive and Mobility Initiatives at the Detroit Regional Chamber. “I would argue that the greatest platform for diversification is the auto industry.” Stevens is referring to the way Michigan’s established and startup businesses are disrupting the world through development of advanced mobility solutions. For example: • The automotive supply chain is evolving low-level vehicles to include connected and automated options to improve road safety. • State and local governments are installing smart infrastructure to improve the lives of communities and individuals alike. • Tech companies are creating collaborative robots and other internet-of-things technologies that make businesses run more efficiently. Take Ford Motor Co. and General Motors Co., for instance. Last year, GM announced it would equip vehicle-to-vehicle (v2v) communications in the Cadillac CTS. And Ford recently said it would phase out sales of sedans in North America and accelerate the

development and deployment of autonomous vehicles (AV). Original equipment manufacturers (OEMs) — such as Ford and GM — and tier 1 auto suppliers aren’t evolving their brands alone. They are working alongside startups, local and state governments, academia and even former competitors to increase driver, pedestrian, bicyclist and aerial safety; generate equity; grow talent and jobs; and build smart cities for what futurists predict will be a highly automated, resource-scare future. “We’re all collaborating,” said Trevor Pawl, group vice president of PlanetM. A division of the Michigan Economic Development Corp., PlanetM connects resources and opportunities for its consortium of members in the Michigan mobility ecosystem. Made up of private industry, government and institutions of higher learning, participants in PlanetM share the common goal of leading the development of smart solutions that will change the way people and goods are transported across all modes of transportation. In the spirit of collaboration, PlanetM partnered with Crain Content Studio, the custom publishing division of Crain’s Detroit Business, to discuss with leading mobility thought leaders how Michigan is staying ahead of the competition.

Winning the mobility race Leadership from state government has been fundamental to Michigan’s ability to remain competitive as startups and so-called “big-tech” companies attempt to build cars they can pair with their technology.

ABOUT THIS PROJECT

Komal Doshi Ann Arbor SPARK

Ami Dotan Karamba Security

Paul Fleck Dataspeed Inc.

Crain Content Studio, the marketing-storytelling arm of Crain’s Detroit Business, worked with PlanetM to assemble, moderate and report on a roundtable discussion about the mobility industry. The discussion was held April 16, 2018. Writer: Leslie D. Green

Soraya Kim American Center for Mobility

Carrie Morton Mcity

Trevor Pawl PlanetM

Editor: Kristin Bull, Director of Custom Content Photographer: Aaron Eckels, Eighteen Photography Design: Mirabella Design Studio Group Publisher: Mary Kramer

Kirk Steudle Michigan Dept. of Transportation

2 | Executive INSIGHTS

Glenn Stevens Detroit Regional Chamber

Richard Wallace Center for Automotive Research

For information about this report, contact Director of Advertising Lisa Rudy at lrudy@crain.com.

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DRIVING MOBILITY

“PlanetM has created a home team that brings all of us together in such a unique way. We don’t see that anywhere else across the country. No other state is as coordinated as we are. And that has been really beneﬁcial.” – Carrie Morton, Mcity “People in California are our biggest competitor,” said Paul Fleck, founder and CEO of Dataspeed Inc., a Rochester Hills-based startup that builds autonomous test platforms and develops collaborative robots for plant use. “But they trivialize what it takes to build cars or to make money off cars.” Some companies are starting to understand, countered Richard Wallace, director of Transportation Systems Analysis at the Center for Automotive Research. Wallace said Michigan OEMs and tier 1s are reemerging as leaders. “Maybe Waymo (the autonomous-vehicle development arm of Google) is up there with them. But building a whole car that includes the automation?” While an app may have 50,000 lines of code and a fighter jet upwards of 7 million, land-based vehicles like the Ford GT contain 10 million lines of code. Stevens said this is just one proof point that Michigan was leading in transportation-related mobility technology five years ago and is still leading today. “The competition is just more intense,” he said. “You have Detroit, but you also have Stuttgart, Shanghai and Seoul and every place on the globe that wants to be the global center for mobility. But we set a blueprint for connected infrastructure some years ago.” Michigan Gov. Rick Snyder meets monthly with mobility-based assets, associations and strategic partners, Pawl said. As a result, he added, “We all know each other’s bottlenecks and opportunities

and help each other all along the way.” And, while other states gather task forces, none have the capabilities and caliber of participants of the Council on Future Mobility, said Kirk Steudle, director of the Michigan Department of Transportation (MDOT). The 21-person Council, launched in 2016, counts representatives from the state, OEMs, tier 1 suppliers, insurance and even a disability advocate among its participants. “(The Council is) focusing on liability issues, insurance issues, cybersecurity issues, talent issues and then some pilot projects,” said Steudle. One such project: high-definition map upgrades. Because accurate maps are necessary for AVs to operate safely, the Council organized a public-private partnership that allows public vehicles equipped with privately developed sensors to gather road data for R&D. According to the Council’s 2018 annual report, Michigan would be the only state with such a map database. Major corporations aren’t the only ones working with the state representatives. Cybersecurity startup Karamba Security came about to help minimize the effect of ransomware on the auto industry. “People expected me to go out to Silicon Valley or Portland or Seattle or Boston,” said Ami Dotan, CEO and co-founder of Karamba, which also has offices in Israel and Japan. Dotan

Executive INSIGHTS | 3

DRIVING MOBILITY

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“For many years, we said we need to diversify away from the auto industry. I would argue that the greatest platform for diversiﬁcation is the auto industry.” – Glenn Stevens, MICHauto and Detroit Regional Chamber

ultimately located his U.S. office in Bloomfield Hills, Mich., because, he said, Michigan “is where the action is.” In Michigan, he is able to meet regularly with U.S. Sen. Gary Peters, D-Mich., and Congresswoman Debbie Dingell, D-Mich. “I don’t think there is one other place in the U.S. where (support) goes all the way from the governor and legislators down to the research companies, centers and testing grounds. I don’t think if I were based in Silicon Valley that would happen.”

Coordination and collaboration The lack of cohesiveness in other tech communities is evident, said Dotan. He said companies like Apple, Uber and Tesla all are doing their own thing, but Michigan companies succeed because of cooperation and support. “If you look at Auto ISAC (Automotive Information Sharing and Analysis Center), of which we became members, everybody cooperates,” Dotan said. “You don’t need to disclose company secrets in order to cooperate.” Cooperation drives a feeling of acceptance, attracts companies to Michigan and helps them grow, said Komal Doshi, director of Mobility Programs at Ann Arbor SPARK, a SmartZone-funded business incubator. She said it’s important to look at how public and private sectors, startups and OEMs are engaged to work as equal partners and

4 | Executive INSIGHTS

Don’t call it ‘driverless’

ichard Wallace, director of Transportation Systems Analysis at the Center for Automotive Research, argued there’s a driver in each level of vehicle automation. “A fully automated vehicle is not a self-driving vehicle. It’s driven by a computer, a computer that uses artificial intelligence,” he said. The six levels of automation are: 0 – No Automation: Driver performs all tasks. 1 – Driver Assistance: Some in-vehicle driving-assist features, such as braking assistance. 2 – Partial Automation: Vehicle has some automated functions, such as acceleration and steering. Drivers perform most functions. 3 – Conditional Automation: Vehicle has environment-monitoring sensors and some automated functions. Drivers must be able take control. 4 – High Automation: Sensor-equipped vehicle capable of steering, braking, accelerating and determining when to change lanes and turn under certain conditions. Driver has the option of controlling the vehicle. 5 – Full Automation: Sensor-equipped vehicle capable of performing all driving functions under all conditions.

DRIVING MOBILITY

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create a kind of “living lab.” “That opportunity is really rich here just because all the players are well-connected,” Doshi added. Last fall, PlanetM and the Detroit Regional Chamber established the PlanetM Landing Zone, a 65-desk co-working space in the heart of downtown Detroit for startups and larger companies to benefit from automated, shared and electronic vehicle business development and resources. “PlanetM has created a home team that brings all of us together in such a unique way. We don’t see that anywhere else across the country. No other state is as coordinated as we are. And that has been really beneficial,” said Carrie Morton, deputy director of Mcity, a proving ground for testing connected and automated vehicles and technology on the campus of University of Michigan. PlanetM connected Mcity with startup Dataspeed, a company that is helping the test facility improve not only the safety of technology being developed and tested on site but also in protecting the technology itself. “Leveraging that platform…, we can test faster, safer and cheaper,” Morton said. “These vehicles with all of their prototype sensors, they’re very expensive. So, we’re able to provide an opportunity for them to come and either test their sensors or test their artificial intelligence capabilities on that platform. It’s also allowed us to develop…augmented reality testing, which means we can test our vehicle in and amongst dozens, if not hundreds, of virtual reality vehicles reacting to each other in real time. “But it’s going to take time, again, to really understand how we prove and validate that these technologies are safe or safer than with human drivers,” she added. “And that’s where we like to work with our colleagues at American Center for Mobility (ACM).” ACM, a product development site located on a 500-acre former World War II bomber plant, is one of 10 federally designated proving grounds for developing and testing autonomous vehicles. It has a 2.5-mile highway speed loop, a 700-foot curved tunnel, two double overpasses, intersections and roundabouts, said ACM Chief Innovation Officer Soraya Kim. ACM held its soft launch for testing in December with its grand opening in April. Supporting partners include Visteon Corp., Toyota Research, Hyundai America Technical Center Inc., Ford Motor Co. and AT&T. ACM announced a non-automotive cohort in April. “We now have Microsoft as our latest partner. So, it is tech companies that are starting to partner with us, so that we can say, ‘Hey, it’s not just GM or Ford,’” she said. “It’s also Microsoft, it’s Karamba. So, we can frame a little more differently that high-tech message.” With help from Microsoft, ACM plans to design a cloud-based platform to collect, store and analyze data from tests held there.

Safety a priority More people are recognizing the need for testing and validation sites such as Mcity and ACM after three recent, highly publicized autonomous vehicle crashes. A driver of an autonomous Tesla died last summer in Florida and another in March in California. Also in March, an autonomous Uber vehicle struck and killed a pedestrian in Arizona. All three drivers

What’s new in mobility

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umerous mobility-related project launched in Michigan in the past year and many others are underway. Continental AG and Magna International Inc. in July test drove automated vehicles for 300 miles with two border crossings — one in the Detroit-Windsor Tunnel into Canada, where the cars would not have access to GPS, and then they returned on Blue Water Bridge from Sarnia back into Michigan where the technology communicated with the area infrastructure. FCA U.S. LLC in August announced it would partner with BMW Group, Mobileye, an Intel Corp. company, to develop an AV platform scalable for Level 3 to Level 4/5 driving that automakers around the world can use and still maintain their own brand identities. The U.S. Army Tank Automotive Research, Development, and Engineering Center (TARDEC) demonstrated platooning technology during drive across the Blue Water Bridge from Port Huron to Sarnia last fall. The convoy of four vehicles included two tractors equipped with autonomous technology that drives the vehicle along a pre-programmed path and includes driver-warning features. Part of the test included autonomous steering and leaderfollower platooning where the lead vehicle communicates and with follower vehicles so they follow each other closely and brake, accelerate and steer according to the lead vehicle’s instructions. “I was in that vehicle. It was quite amazing to watch this 60,000-pound truck steer itself and to watch the steering wheel controls,” said Kirk Steudle, director of the Michigan Department of Transportation. “Where the consumer should be interested is (platooning) is an efficiency in the trucking system of about 10 to 12 percent, which means the cost of shipping goes down 10 to 12 percent.” MDOT plans to launch a $1 billion project to turn part of I-75 — from Hazel Park to Pontiac — into one of the first “connected work zones” to test V2I communication. Three miles of the freeway will have all-weather lane markings, retroreflective signs with smart sign technology and Dedicated Short-Range Communication Devices. Ford earlier this year announced plans to deploy a new vehicle-as-a-service platform later in the year. The automaker also plans to work with Qualcomm to bring cellular vehicle-to-everything technology to all of Ford’s vehicles. And Ford said it would partner with delivery service Postmates to test autonomous driving technology for deliveries. General Motors Co. announced a partnership with Amazon in April that would allow the online retail giant to deliver packages to the trunks of newer GM vehicles. The automaker also said it plans to begin manufacturing the Cruise AV for deployment next year. The company hopes not to include steering wheels or pedals in the vehicle.

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“That opportunity (for public-private collaboration) is really rich here just because all the players are well-connected.” – Komal Doshi, Ann Arbor SPARK were using autopilot driver-assistance systems in Level 2 vehicles. “Unfortunately, we have to take the good side of a bad thing,” said Dotan. “The technology allows us to correct and improve and reduce those unfortunate cases. (Automobiles have) the most complex transportation platform existing, more than an airplane. (But this) is like a black box thing. We find something was wrong, either with the pilots or with the equipment, and we correct it.” More than 37,000 people died in car crashes across the country last year; that’s more than 100 people a day. Of those 100, about 15 a day were pedestrians. Vehicle-to-infrastructure (V2I) can help eliminate or at least reduce those figures, Pawl said. “If there were more V2I at that intersection in Arizona, maybe some DRSC (dedicated short-range communications) technology could have prevented the crash.” Steudle agreed. He said MDOT announced in 2014 it would deploy technology in intersections along 125 miles of roadways. The state has 155 roadside units up in Southeast Michigan, Ann Arbor and Lansing. “By the end of this year, we will be at 350 miles,” he said, adding, “by the end of next year, we’ll have 550 miles.”

Mobility to support equity In society, transportation is one of the biggest costs after housing. Employees are not able to move up in their careers because they

6 | Executive INSIGHTS

can’t get to work. Children are consistently absent because they can’t get to school. Patients can’t receive much-needed healthcare treatment because they can’t get to their appointments. Accordingly, experts say the mobility technology being developed and piloted should not just be about competition and getting from point A to point B, but it should bridge gaps in society and generate equity. Mobility is about democratization, said Fleck. It’s about giving people choices they may not have had in the past and ways to attain mobility so they can be viable and add to their quality of life. Doshi said current technology is enabling the development of shuttles that can take optimized routes and pick up multiple people. “That’s what Mobility as a Service (MAAS) is all about.” Mcity launched an autonomous shuttle research project at UM this spring that is studying how passengers react to the technology and track ridership and usage patterns to guide researchers on ways to create safer, more efficient vehicles. The pilot is similar to the autonomous shuttle pilot May Mobility is doing with real estate company Bedrock in downtown Detroit. France-headquartered NAVYA manufactured the two Level 4 Mcity shuttles. While MAAS is available to others through ride- and bike-sharing and car-hailing services, Wallace said it isn’t yet available in lower-income communities like Detroit where one-third of residents don’t have internet. “If Detroiters can’t tap into it because they lack a smartphone or

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DRIVING MOBILITY

PlanetM road sign at the American Center for Mobility. PlanetM

Comcast…then, really, we’ve created a two-tier Detroit,” he said. Similarly, Morton said it’s important to ensure people with physical limitations aren’t left behind. To be successful, Steudle said MAAS has to be integrated into transit services already available. In Detroit, Detroit Economic Growth Association late last year put out a request for proposals for two mobility pilot transportation services “to understand barriers to bus riders using a ride-hailing service” and “to better understand the impact that mobility plays in participants of a (workforce) training program.”

Addressing the talent gap Vehicles are software platforms on wheels. But leading in that space will depend on whether we have an ecosystem that’s fed by talent and business incubators, said Stevens. In previous decades, he said, the top positions to fill at an automaker or supplier were mechanical and electrical engineers. Today, companies need connected systems and software engineers, coders and application developers. “That’s why we’re involved in immigration reform, bringing veterans back into the workforce and the retraining and reskilling of people,” said Stevens. This summer Ann Arbor SPARK plans to hold Tech Trek, where tech companies show off their latest innovations to high schoolers and undergrads.

In February, ACM held a career exploration day for veterans in the morning and students in the afternoon and they matched each prospective employee with one of 23 industry representatives, including the National Highway Traffic Safety Administration, said Kim. Yet, Kim said ACM doesn’t want to wait for kids to reach college to begin recruiting. “The talent pipeline really starts to dwindle at junior high school,” she said. By middle school, she said, kids begin to lose interest in science, technology, engineering and math. “So, we are working with different organizations to try to offer maybe a day during the summer for STEM camps. We are also, as part of our academic consortium, exploring K-12 grant-funding opportunities, so we can have that continuous pipeline,” she said. Even with talent, however, Michigan needs more aggregators, or business accelerators like TechStars Mobility or the incubators out of Michigan’s 17 SmartZones, according to leaders in the mobility landscape. ACM intends to help fill that gap. Kim said ACM is leading a trip around the world to identify hubs of innovation and new technologies. The idea is that these organizations would come to ACM. “I think we’ll be able to be that showcase for prospective funders and partners and customers. Eventually when our technology park is built out, we will have an incubator accelerator,” she said. Be part of the mobility ecosystem in Michigan. Learn more at PlanetM.com.

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T:8.875”

PURE MOBILITY

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As the automotive world moves toward fully connected and self-driving cars, it’s no surprise who’s driving the future of the industry. Michigan. Home to the world’s first and only real-world testing facility for autonomous vehicles, Michigan leads the country in research, development, innovation and technology. And it all makes up the epicenter of mobility known as PlanetM. Find out why Michigan is the hands-down choice for your business at planetm.com

EXECUTIVE INSIGHTS

OPPORTUNITY JOURNEY Michigan and Israeli business leaders gather in an ancient port to curate a vision for the FUTURE OF MOBILITY.

INSIDE: Israel mobility startups talk about collaboration and testing. PAGE 7

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fleet management, parking and other elements critical to a driverless future. “Any industry that’s going through digitalization should come and check out the Israeli market’s technologies and innovation,” said Orlie Sol Dahan, executive director of EcoMotion, a Smart Transportation startup hub based in Tel Aviv. Over their four-day trip, the Michigan delegation met with Israeli counterparts in Jaffa and discussed upcoming advances in autonomous cars. They visited a lab at the Technion in Haifa where researchers are building a selfdriving, track-learning racecar; they met representatives from Innoviz, a company developing LiDAR remote sensors for robocars that German automaker BMW has said it would incorporate in future vehicles; and they visited the Jerusalem

facilities of Mobileye, the driverless tech giant acquired by Intel last year for $15.3 billion. One highlight of the visit was a roundtable discussion about mobility that was held at Otzarin, a restaurant in the ancient port town of Jaffa, overlooking the Mediterranean Sea. Members of the Michigan delegation, along with Israeli mobility industry leaders, took time out to talk about their shared vision for the industry – and some of the potential opportunities for future collaboration. The delegates said their mission was about laying the groundwork for a “pipeline” or “conduit” to draw nascent companies from Tel Aviv to the established corporations in Southeast Michigan. “There’s a lot of positive things going on in our state, and one of those positives is this commitment to the

Michigan Israel Business Accelerator 2018 Mission Delegation

Mark Davidoff Michigan Managing Partner Deloitte LLP

Laurence B. Deitch Lawyer Bodman PLC

Jeffrey Hood Principal Deloitte Consulting LLP

Zoran Kehler Director of Global Strategy Trillium Secure Inc.

Soraya Kim Chief Innovation Officer American Center for Mobility

John Maddox President and CEO American Center for Mobility

Trevor Pawl Group VP PlanetM

John Peracchio Managing Member Peracchio & Company LLC

Sandy Selinger CEO Michigan Israel Business Accelerator

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“We used to call ourselves a MichiganIsraeli company, and being modest, we spent the better part of two years in Michigan understanding the industry.” – Yoav Etgar, Director of Global Operations & Delivery, TowerSec

next generation of mobility,” said Mark Davidoff, Michigan Managing Partner of Deloitte LLP. “We own this space. This is our heritage and we are in a fight to retain our no. 1 position with regards to autos and everything related to it. This is our destiny.”

Shared vision: Mobility’s future

In a 2015 report on the future of mobility, Deloitte predicted rapid advances in vehicle connectivity; shifts in the preferences of younger generations from owning vehicles to ordering them on demand and paying per use; and maturing powertrain technologies, especially batteries and fuel cells. A year later, it reported on the emergence of acceptance in how the future of mobility may unfold — a move away from personally owned driver-driven vehicles to a mobility system shaped by shared driverless vehicles. Many analysts, such as Munich-based Roland Berger, believe partly-autonomous vehicles capable of cruising 4 | Executive INSIGHTS

unassisted on highways will already be on the market by 2020. Gideon Stein, chief research scientist of Israeli cybersecurity firm Mobileye, points out that many vehicles already feature advanced driver-assistance systems. “I’ve had this experience where I was showing to friends what Mobileye can do. And they said, ‘When is this going to be in vehicles?’” Stein told the visitors from Michigan. “And I said, ‘It’s in vehicles. It’s been in vehicles. There are a million cars driving this system already.’” As advanced AI features make their way into increasingly automated cars, designers “are going to shift from a driving experience to a journey experience,” said Dahan. “And in this whole shift a new world of mobility opens up, and we have a lot of technologies in that sense.” John Maddox, CEO of the American Center for Mobility and chair of the mission, took that shift a step further. “If we can design a vehicle purpose-built for delivery goods, then we the human don’t have to get into a vehicle.”

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“The idea that the vehicle no longer even has to be designed to accommodate a human really frees up the designer.” – John Maddox, President and CEO, American Center for Mobility

“The idea that the vehicle no longer even has to be designed to accommodate a human really frees up the designer,” he said. Maddox said he was impressed by the Israeli mobility firms’ “boldness to try to make those ideas reality.” But all these new advances for driverless cars will only make it to consumers once they’ve been put through the paces and vetted to near 100 percent efficiency.

Opportunities: ‘The sooner the better’

Israel had a short-lived automotive industry that was founded in the 1950s, but had ended production by 1980; local legend says camels would gnaw holes into the cars’ fiberglass body. Today that industry is nonexistent in Israel, and the country also has “a dire shortage” of proving grounds for driverless car technology, said Gadi Hornstein, head of smart mobility at the Israel Innovation Authority. A

one-mile stretch of highway north of Tel Aviv was dedicated last year for testing driverless cars, but local critics say it’s insufficient. More established Israeli companies, such as TowerSec and Mobileye, have looked to American automotive giants in Michigan to test their products. “TowerSec was founded on the bridge between Michigan and Israel,” said Yoav Etgar, the cybersecurity startup’s director of global operations. Harman International’s Novibased automotive division acquired the company in 2016, four years after it launched. “We used to call ourselves a Michigan-Israeli company, and being modest, we spent the better part of two years in Michigan understanding the industry.” Mobileye, an autonomous driving hardware and software supplier, was acquired by Intel Corp. earlier this year; several metro Detroit suppliers and automakers use Mobileye’s products. Executive INSIGHTS | 5

OPPORTUNITY JOURNEY

Maddox said he aims to draw more Israeli tech firms to the Detroit area, where testing grounds and research centers enable real-life trials of new technologies. “ACM and Deloitte, as our Strategic Advisor, are reviewing a possible methodology whereby ACM would initiate a program to work with partners like EcoMotion, identifying new technologies, and then leveraging our position in the mobility space to introduce them to prospective funders, customers and partners,” he said. Trevor Pawl is group vice president of Planet M, a division of the Michigan Economic Development Corp., which connects resources and opportunities for its consortium of members in the Michigan mobility ecosystem. Pawl said that Michigan and Israel’s strengths and weaknesses complement one another. “Where our software prowess drops off is where the Israeli ecosystem picks up. Where their hardware prowess drops off, that’s where Detroit and Michigan lead the world. We have production capabilities unlike anywhere else in the world for hardware, and I think this will be the catalyst for growth in the Israel/Michigan relationship,” Pawl said. Willow Run’s ACM is one such facility where Israeli innovations can be rigorously tested in ways unavailable in Tel Aviv. “We have an incredible test facility, and we have access to some great partners, OEMs and tier ones, and you guys have amazing technologies that you’re developing,” said Soraya Kim, chief innovation officer at ACM. “What we want to do is build relationships with those companies and invite them to Michigan so that we can introduce them to potential partners, to potential funders, to potential customers.” Among those partners is the state of Michigan, which has prioritized the development of autonomous vehicle technologies through legislation, regulation and installing equipment on highways for testing cars. In 2016, the state tasked a 21-member Michigan Council on Future Mobility with providing the governor and legislature with recommendations to ensure the state “continues to be the world leader in automated, driverless, and connected vehicle technology.” Israel is adopting a similar approach. Whereas the Israel Innovation Authority largely provided funds for early stage companies, Hornstein said it was planning to pump several million dollars in the years to come into dozens of startups – some of them involved in driverless car technology – for proof of concept stage development. Hornstein argued that greater cooperation between governments and companies in Israel and Michigan is essential. Michigan is “the global knowledge center” for autonomous vehicle development and a “one stop shop” for testing new technologies, and more intensified collaboration would be a boon for Israeli businesses. “The sooner the better,” Hornstein said. For the Americans, visiting Israel was “an opportunity to see how we can collaborate with the Israeli government, with Israeli business,” said John Peracchio, co-chair of the Michigan council. 6 | Executive INSIGHTS

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Technion engineering student Netanel Dabush, left, shows the Michigan delegation a driverless formula racing car in production.

“My take on my time here in Israel is that, as a matter of public policy, as a matter of state policy, we need to have a very clear plan to collaborate and coordinate with the state of Israel on all of these technologies.” Davidoff agreed. “We have two current MOUs between the state of Michigan and the state of Israel: one on water; one on cyber. I think we should advance those MOUs, which stands for Memorandum of Understanding, and we should enter into one agreement called a Memorandum of Action, an MOA, that covers mobility, cyber, water and agriculture … because we have an amazing opportunity here. “ More about the Michigan Israel Business Accelerator at michiganisrael.com

ABOUT THIS PROJECT Members of the Michigan Israel Business Accelerator partnered with Crain Content Studio, the marketing storytelling arm of Crain’s Detroit Business, to produce this report. Writer: Ilan Ben Zion Editor: Kristin Bull Photographer: Debbie Hill Designer: Mirabella Design Studio Group Publisher: Mary Kramer For feedback on this report or the Executive Insights series, contact Director of Sales Lisa Rudy at lrudy@crain.com.

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ISRAEL MOBILITY STARTUP STORIES EcoMotion: Helping Israeli startups collaborate

ne of the main drivers at the center of the Israeli smart transportation scene is EcoMotion, a nonprofit communications network that is working to position Israel as a global hub in the industry. The company, which is funded by the Israeli government and industry sponsorships, works to bring entrepreneurs, government officials and automotive representatives together “for knowledgesharing, networking and collaboration” in the field of smart mobility. Its meet-ups in Tel Aviv allow specialists in different aspects of mobility technology to cross-pollinate ideas. “We’re not talking about the future anymore. Everyone keeps saying the future of mobility,” EcoMotion Executive Director Orlie Sol Dahan said of autonomous vehicle technologies. “It’s happening.” Since EcoMotion was founded in 2012, the smart mobility community has boomed into a major force in the Israeli tech ecosystem. “No one was in the field of smart transportation back then,” Dahan said. “We had meet-ups of like 15 people.” Now the community includes over 600 startups and around 7,000 members, she said, with an emphasis on five sectors: autonomous and connected vehicles, urban mobility and infrastructure, electrification and energy, shared mobility, and drones and aviation. Autonomous and connected vehicle companies are the bulk of EcoMotion’s partners – “it’s hot to be a start-up in this field now,” Dahan said – but shared mobility is growing fast. “It’s something that grew in the last year or two. It wasn’t really existent before that,” Dahan said. Israeli companies in the EcoMotion community like Gett, Moovit and Via, have become major players in the field. “And now I think shared mobility is a great solution and a lot of people realize that.”

“Everyone keeps saying the future of mobility. It’s happening.” – Orlie Sol Dahan, Executive Director, EcoMotion

“It’s in vehicles. It’s been in vehicles. There are a million cars driving this system already.” – Gideon Stein, Chief Research Scientist, Mobileye

Mobileye: Eyes on the road

ndoubtedly the powerhouse of the Israeli mobility sector, if not the country’s startup scene altogether, is Mobileye. The company was acquired by Intel last year for a record $15.3 billion, an unprecedented sum for any Israeli firm. Mobileye was founded in 1999 and is headquartered in Jerusalem. Following its acquisition, Intel moved its automotive department to Israel. The company has pioneered Advanced Driver-Assistance Systems (ADAS) that use cameras to read the road ahead and behind, and detect and warn drivers of approaching objects, lane departure and speed limits. From early on, Mobileye cooperated with American automakers in Michigan in developing its products, such as its collision warning and lane keeping technology with General Motors that was rolled out in 2010. Earlier this year the company said that its road-reading sensor systems are installed in 24 million cars, and increasingly automobile manufacturers are making them standard features in new models. More recently it has started developing road mapping systems that would greatly assist highly autonomous automobiles in navigating complex and unfamiliar urban environments. Gideon Stein, Mobileye’s chief research scientist, said that future advances in the company’s automated driving technology will “sneak up” on consumers. “ADAS, what used to be warnings, is now active,” he said. “It’s braking, it keeps you in your lane. Gradually, you’ll be in a car that is almost autonomous without even knowing it.” Mobileye and Intel have built a fleet of 35 self-driving cars and are planning to increase that fleet by another 65, company cofounder Amnon Shashua said earlier this month. A report in the Israeli business paper CTech published in May said that Mobileye’s autonomous vehicles were already being tested surreptitiously on the winding mountain highways around Jerusalem, and that the company was expanding its testing operations to California and Arizona.

Executive INSIGHTS | 7

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With live performing arts, tech startups and iconic barbecue, Pontiac is a case study in how banks, developers and community leaders come together to drive ECONOMIC OPPORTUNITY.

INSIDE: 6 ways communities and businesses can work together to grow the economy. PAGE 6

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It could easily have become another nightclub. It was 2012, and in Pontiac, a group of government and business leaders came to the table to discuss the Strand Theatre. The shuttered, art deco-style cinema house, built in the 1920s, was listed among the assets the bankrupt city was looking to sell. Among those seated at the table were Kyle and Brent Westberg. The brothers and owners of West Construction Services were developing the nearby Lafayette Place Lofts and Market and had a commitment to historic preservation — and community. “There were three candidates looking to purchase the theater,” said Kyle Westberg. “One was a local business owner who had the right heart but wasn’t going to be able to do much with it. Another one fell off pretty quick. The third one, which was the leading candidate, was actually someone who was going to buy the theater and convert it into a nightclub. He said he wasn’t, but his history was that.” The Westbergs couldn’t let that happen. So they bought the building themselves. “It was purely community development, in our minds,” Westberg said. “It was economic development also, but it was really driven because we knew we needed to get that theater up and running.”

Westberg’s first choices, but he needed a sales pitch. He got just that when, completely by chance, Slows owner Ron Cooley agreed to tour the space and the duo ran into Oakland County Treasurer Andy Meisner on the street. Meisner, who as the county’s chief financial officer is among Pontiac’s biggest salesmen, remembers simply telling Cooley: “We want you here.” “I see Pontiac as an incredible place that has great history and incredible architecture and affordability,” he told him. Cooley accepted the invitation. After a $20 million renovation, the theater opened last fall and Slows opened earlier this year But the serendipitous run-in between the restaurateur and the county’s CFO was just one part of the story of Pontiac’s economic revival.

The Flagstar investment Last fall, Troy-based Flagstar Bank committed $10 million to drive economic development in Pontiac. The commitment includes $5 million for home mortgages, $2.5 million for startups and small businesses, $1 million for financial literacy training and $1.5 million for naming rights to the Strand Theatre for the Performing Arts.

And here’s something else they knew: The theater building had room for a restaurant. Detroit mainstay Slows Bar-B-Q was among

Bank leaders say Pontiac is big enough to matter and small enough to make a difference. For Flagstar, a Pontiac partnership offered an opportunity to move the needle in a community that was in need of an ambassador.

Matt Allen, CMO, Flagstar Bank

Sandro DiNello, President and CEO, Flagstar

Mike LaFaive, Director, Mackinac Center for Public Policy

Jim Logue, COO, Cinnaire

Andy Meisner, Treasurer, Oakland County

Eric Nichols, Founder, Nichols Financial

Drew Ottaway, Executive Vice President and Michigan Market President, Flagstar

Jonathan Silberman, Professor, Oakland University

2 | Executive INSIGHTS

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“When I toured the city with Andy, I saw opportunity,” said Sandro DiNello, president and CEO of Flagstar. “The Westbergs were already there with their developments; I had already met Bill Lee, CEO of the Strand Theatre, socially, and he piqued my interest in the theater. There were spotty things happening, and you had the mayor, Andy, Kyle and Bill Lee—key people in key places—pushing to get some momentum going.” The investment made sense. Flagstar is headquartered nearby and investing in the community is part of the bank’s mission. “It seemed a place where we could really make an impact,” he said. Then he met Hall & Hunter Realtor Mona Parlove. “Mona is passionate about all things Pontiac, and she nicely but forcefully said to me, ‘You’ve got to do something to get people to move into the city.’ Mona introduced me to the mayor, and that was the genesis of our $10 million investment.” Added Beverly Meek, Flagstar first vice president: “We looked at where we were making our contributions, where employees were volunteering. We felt that with our $10 million allocated to Pontiac, we’d be able to leverage that maybe two or three times over, with foundations and other contributors, but to really focus on the fundamentals such as mortgages and small business and financial literacy. And those were the areas that the mayor said Pontiac needed the most help.”

became invested in what was happening in Pontiac. He’s a very numbers-oriented guy. But he just became passionate,” Meisner said. That passion goes beyond the naming rights sponsorship of the Flagstar Strand. “They’re working on some mortgage programs right now that are going to really make a difference. Addressing appraisal gaps with a soft second mortgage to be able to get everybody to come and enjoy some of the great neighborhoods in Pontiac. That’s what it was all about,” Meisner said. “Flagstar learned from its experience with the Detroit Land Bank and Detroit Home Mortgage about crafting a mortgage loan for a community like Pontiac, with an older housing stock and a large population of renters,” said Drew Ottaway, executive vice president and Michigan market president for Flagstar. “We knew there were a lot of veterans in Pontiac, and we wanted to leverage Flagstar’s expertise as a top 10 VA lender. It made sense to create a special incentive for veterans,” said Ottaway. So the bank created its Community Comeback loan, which provides 100 percent financing to veterans. “The great news is we’re off and running. We’ve already closed our first loan.”

Meisner agreed.

Mayor Deirdre Waterman is intent on changing Pontiac’s narrative. And thankful for the partners.

“Flagstar answered the call. And DiNello in a very personal way

“Some people can see further down the road than others. When I

ABOUT THIS PROJECT Flagstar Bank and Crain Content Studio, the custom publishing division of Crain’s Detroit Business, gathered 11 government, business and community leaders for a roundtable discussion at the Crain Communications Inc. headquarters in Detroit on May 3, 2017. Crain’s Publisher Ron Fournier moderated the conversation, which is captured in this report. Flagstar executives Sandro DiNello and Drew Ottaway separately weighed in on the conversation. Mary Mbiya, Vice President, Flagstar Bank

Beverly Meek, First Vice President, Flagstar Bank

Writer and Editor: Kristin Bull, Director of Custom Content Photographer: Jacob Lewkow Design: Mirabella Design Studio Publisher: Ron Fournier For information about this report, contact Director of Sales Lisa Rudy at lrudy@crain.com

Jonathan Tower, Founder and General Partner, Arctaris Capital Partners

Kyle Westberg, President and CEO, West Construction

Deirdre Waterman, Mayor, City of Pontiac

Cover Photo by Steve Ragland Photography.

Executive INSIGHTS | 3

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A $20 million restoration project brought the 95-year-old Strand Theatre back to life in 2016. Photo courtesy of the Flagstar Strand Theatre took office, the (emergency manager) had just left and Pontiac was extremely demoralized. We were the laughingstock of the world. The first thing we had to do was build the morale of the city itself. “Pontiac is extremely lucky. We’ve reached a critical mass. So now we’ve brought in Peter Karmanos (and Mad Dog Technology), that is the high-tech industry. We’ve been able to say Pontiac is emerging as a high-tech hub. We have the highest proportion of unused fiberoptic cable east of the Mississippi. I like to tell people we still have assets to work with. “We’ve brought in an entertainment base downtown. We actually have traffic jams downtown on Fridays and Saturdays.”

Diversiﬁcation as an economic driver Flagstar executives acknowledge the theater — a performing arts venue — can be a catalyst for diversifying the business community. “I commend Kyle for wanting to get a big name restaurant like Slows into the mix,” DiNello said. “Our hope is that it will spill over into retail and residential. Once you get a critical mass, you’re home free, as we’ve seen in Midtown, Ferndale and other areas in metro Detroit. It shouldn’t be lost either that the Flagstar Strand has a unique value proposition. The venue itself — a beautifully restored architectural gem — is its own draw.” In approaching diversification, Flagstar drew on its own experience of relying on years of mortgage revenue. “A strength was our leadership as a national mortgage lender; our weakness was in

4 | Executive INSIGHTS

“Economically, you look at downtown districts in the country and internationally and the arts really drive economic development. You see it all over.” – Kyle Westberg not having other types of loans to provide revenue when mortgage originations fell off,” DiNello said. “We started building a commercial lending business in 2011 and gradually brought on more and more experienced commercial lenders from other banks.” Ottaway was one of those key players the bank brought in. Under his leadership, the bank has made significant strides in diversifying its business — creating assets like homebuilder financing, equipment financing and leasing, and capital markets products. “We now have a $3-billion commercial loan portfolio, and instead of 90 percent of our revenue coming from mortgages, it’s now down to 60 percent. And we’ve seen the payoff — the last six months have been the most challenging for mortgage revenue that I can recall. Flagstar not only made money, but in the first quarter, we beat the Street’s expectations.” DiNello suggested such diversification could be a road map for the region. “If you’re diversified, no one thing can kill you, he said. “If you do it when times are good, the bad times won’t be so bad. No question,

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it takes discipline. That’s why we live and die by managing our concentrations.” Meisner points to Pontiac as “leading the charge” in diversification. In addition to bolstering performing arts venues, he points to: •

The Wessen Lawn Tennis Club, an outdoor tennis facility in a repurposed abandoned community center. “You go there and it looks like Wimbledon,” Meisner said.

•

The M1 Concourse: “This was 70 acres of environmentally damaged concrete and grass. Brad Oleshansky and his team put in car condos that leveraged the region’s focus on automotive,” he said.

•

DASI Solutions, a 3-D printing company in downtown Pontiac.

And then there’s the solar roof maker.

“The opportunity is to think about not how the (mobility) research can apply to the automobile industry but how it can be applied to a new industry … or to create something entirely new.” – Jonathan Silberman targets established Michigan companies looking to grow out-of-state companies by opening operations in Michigan. It helped Sader set up shop in Pontiac. “The company initially set up a P.O. box in Bloomfield Hills,” Tower said. “I said, ‘What? Why’d you do that? You’re in Pontiac.’ They said they thought it gave a more established look. I said, ‘No, don’t do that. Let’s make this a Pontiac success story.’” Since coming to Pontiac, the company has patented a more efficient solar panel installation system and is “getting calls from Walmart and Sam’s Club and Menards and different big box retailers,” Tower said.

New Orleans-based Sader Power LLC grew from a need for solar roof installations in the wake of Hurricane Katrina. The company opened a manufacturing plant in Pontiac in 2015.

“What we’ve created here is a net exporter in Pontiac.”

Jonathan Tower is an investor in and champion of Sader’s company. Tower’s Arctaris Michigan Partners LLC is an investment fund that

To learn more about opportunities to grow your business and work alongside community partners, visit flagstar.com/commercial.

To share this report online, visit crainsdetroit.com/pontiac

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6 ways to increase economic opportunity Building on the Pontiac case study, roundtable participants offered advice for encouraging growth and inclusion within communities and for small businesses in general.

1. Leverage your anchor institutions. Jonathan Tower: “Use a market-based incentive system to encourage buying from Pontiac-based companies, to encourage buying from Detroit-based companies. This worked well in Philadelphia. You’ve got universities, museums, hospitals. They’ve increased their local buying by 6 percent in the last two years.” Kyle Westberg: “The institutional piece is something that I’ve been an advocate of for 10 years, getting Oakland University not just talking but physically doing something. I want students downtown. I thought the medical school should have been downtown, not on campus. That was something that years ago was a missed opportunity. And then there’s philanthropic: We do not have a philanthropic organization engaged in Pontiac right now. That’s a shame. General Motors Foundation should be that. It’s a missed opportunity for nonprofits.”

Deirdre Waterman: “We have three hospitals. One of the things they brought up was a patient-care technology program. We are now training some of our high school students as well as some of our unemployed technology workers.”

2. Diversify. Eric Nichols: “It’s always boggled my mind that in Michigan, this fabulous state, which has the Great Lakes and also all the interior lakes, that we’ve dominated ourselves with automotive only. Absolutely foolish decision; never been changed and never been fixed. Why did we do that? We had an educated workforce, a motivated workforce. The things we suffer from — high property taxes and high house costs — are still high because the automobile industry created the wage base. The wage base is declining. That industry is suffering. But we still have those high costs of living in Michigan.” Jonathan Silberman: “I did a simple correlation back 40 years 6 | Executive INSIGHTS

SPONSORED BY FLAGSTAR BANK

between total employment in metro Detroit and domestic auto sales. That correlation is .94. So total employment is heavily dependent on what happens with domestic auto sales. … Going forward, I’ve been thinking a lot about technology disruption in the automobile industry, about what an opportunity and threat this is. If I was going to focus on something this is it: We’re talking autonomous vehicles, car-sharing, connected vehicles. The opportunity is to think about not how the research can apply to the automobile industry but how it can be applied to a new industry or different industry to create something entirely new.”

3. Boost skilled trades education. Eric Nichols: “You talk about welders and electricians. The unions are willing to train these people for free. But we are a society that believes that education is the only route to success. A client told me yesterday his father was a carpenter and he told him he should become a carpenter, too. He told him to find something to do with his hands and he’ll always make a living. He went a different route; he became a welder, then he became a manager for a firm in Troy and made a sixfigure living. And he basically only had an associate’s degree. He got that later because the corporations push you toward that degree. You have to get to the younger people. That’s the generation that’s going to have to make the change.”

Mary Mbiya: “(Workforce development is) a huge, huge factor that’s even affecting the engineering companies around us. So you get engineering firms that can actually speak to the colleges and universities and actually speak to the problems that are happening in skilled trades as well, and also go to the schools and speaking to the younger generation and let them know that ‘it’s OK for you to get a skilled trades opportunity instead of going straight to university and get a four-year degree.’” Deirdre Waterman: “We had unemployed auto workers, and now we’re taking down houses. That was a chance for us to train these auto workers in construction and deconstruction.”

4. Push for pro-business policies. Mike LaFaive: “I would consider broad ones such as tax cuts across the board. I’d like to see the state lower the cost of automobile

PARTNERS IN PONTIAC

SPONSORED BY FLAGSTAR BANK

insurance and the unemployment insurance tax. That will go a long way in allowing local units of government to rise with the tide. We just published a study on occupational licensing where we catalogued all the licensing and permit requirements not only at the state level but at the city level. I think we found it takes 56 times longer to become an athletic trainer than it does to become an EMT. We’ve got to zero-in on those that do not affect health and safety. It takes longer to become a barber than it does to become a commercial pilot by several factors.”

Jonathan Silberman: “What you want to do is remove barriers to self-employment and entrepreneurship. There’s also land use regulations — minimum lot sizes, height restrictions, prohibiting multifamily housing units. Remove those barriers. How easy is it to actually open a business? How long does that take?”

Kyle Westberg: “We’re one of a handful of cities in the state that has an income tax. We also have a business license fee, and at one point it was $400 for a business to open. That’s the biggest barrier.”

5. Get creative with funding sources. Jim Logue: “The fund that we used to invest in the Flagstar Strand was a fund that was developed in conjunction with the state of Michigan Strategic Fund and other financial investors ... and even some smaller banks and credit unions. It was an effort that came out of the lack of commercial real estate financing (after) the Great Recession. It was a real forward-thinking program that we discussed with the state for quite a while. The structure is that the state is the investor in the fund; they provide the very important backstop for the other investors. The fund

was designed to work in markets that are not easily served, with a lack of philanthropy, or maybe even some of the (Community Reinvestment Act) motivation that banks are attuned to in making their investments.”

Drew Ottaway: I think Jim is spot on with respect to getting creative. It’s tempting to try to fit every opportunity into some standard box. The challenge is to actually craft custom solutions that help facilitate even the most difficult of projects. That’s exactly how Flagstar approaches each and every one of our customers and their unique needs. Investments in organizations such as Arctaris, Grow Michigan and Develop Michigan bring even broader means of diversification.”

6. Engage the community. Beverly Meek: “We are working to develop stakeholder groups so that the community is working alongside us in this rebirth of Pontiac. We have hired a consultant and a community engagement specialist to be on the ground and work with the community and get to know the businesses, the residents and the neighborhoods so that they can be a part of this.” Deirdre Waterman: “What Sandro DiNello has done is customize (products) for the Pontiac community. One of the things that makes us unstable is that we have 70 percent of people who are renters, who for generations have never had a stake in the community. And that makes a difference for us. When (Flagstar) came in, they said they wanted to do some mortgages for first-time home-buyers but then also train people and give them financial literacy. That’s going to be transformative for our community.”

Executive INSIGHTS | 7

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EXECUTIVE INSIGHTS

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‘I HOPE MY KID’S OK TODAY’

Why CHILDREN’S MENTAL HEALTH matters to your company’s bottom line and what local health, nonprofit and education leaders are doing to expand opportunities for treatment.

INSIDE: Kids and smart phones: How many hours should they spend a day? PAGE 5

WHY CHILDREN’S MENTAL HEALTH MATTERS

ental illness affects one in 5 adults and costs U.S. employers upwards of $193 billion annually. Half of chronic mental illness begins before age 14; however, fewer than 20 percent of children with mental illness get the treatment they need.

Yet cardiovascular disease, cancer, diabetes and respiratory illnesses typically dominate healthcare conversations. And when it comes to corporate wellness campaigns, employers emphasize weight-loss challenges, blood pressure screenings and smoking cessation. That’s because for most people, mental health is not a watercooler conversation. It’s a stigma company leaders just don’t understand. Matt Friedman, co-founder of Farmington Hills-based communications firm Tanner Friedman, knows from experience. His daughter was diagnosed with obsessive-compulsive disorder while in elementary school and then, in middle school, she began to suffer from anxiety and depression. “I think businesses are in denial that mental health affects every family they employ,” said Friedman, who spoke at a recent roundtable discussion about children’s mental health that Children’s Hospital of Michigan Foundation (CHMF) sponsored; he is chair of the foundation’s board of trustees. “The business community does not get this at all. The business community is largely silent.”

SPONSORED BY CHILDREN’S HOSPITAL OF MICHIGAN FOUNDATION

“Kids don’t wake up one day and say, ‘Today’s a great day to get myself thrown out of school.’” – Jaimie Clayton, Oakland Family Services

Friedman is grateful he’s self-employed. While medication has helped his now-teenaged daughter over the years, he said regular therapy has been a necessity. “I’ve got my cellphone and my laptop, and I’m working in the waiting room,” he said. “I’m looking around thinking, ‘All of these people don’t own their own businesses. How do they do it?’ They probably don’t talk to their bosses very comfortably, saying ‘I need an hour a week to take my kid to therapy.’” Research shows fewer than 40 percent of employees discuss mental health issues with their employers because of the stigma and an associated fear of employers not taking them seriously, according to the Anxiety and Depression Association of America, a partner of the National Institute of Mental Health. But statistics from the World Health Organization show why mental health needs to be part of each company’s wellness narrative. Last year, WHO reported that for every $1 a company invests in depression and anxiety alone, it would see a return of $4 in better

Douglas Barnett, Ph.D. Wayne State University Psychology Clinic

Larry Burns Children’s Hospital of Michigan Foundation

Jaimie Clayton Oakland Family Services

Jennifer Jonika Starfish Family Services

Anne Kalass Starfish Family Services

Jill Meade, Ph.D. Wayne State University, Children’s Hospital of Michigan

2 | Executive INSIGHTS

SPONSORED BY CHILDREN’S HOSPITAL OF MICHIGAN FOUNDATION

health and productivity. “If kids can have their mental health treated, they’ll be better students, they’ll be better educated, they’ll be better equipped to be in the workforce and contribute to our community,” Friedman said. “It starts when they’re kids.”

The earliest of interventions According to Anne Kalass, CEO of Inkster-based Starfish Family Services, treatment needs to start at birth. Starfish serves more than 10,000 at-risk kids and families each year and has 64 therapists working in its Infant Mental Health Program. Team members, including psychologists, social workers, speech pathologists and occupational therapists, visit each home for about two hours a week — sometimes for a few months, sometimes for several years up until age 6 — to help kids become resilient enough to withstand the toxic environments in which they live. “There is … an overwhelming body of research that tells us the earlier we can get in, we can help children develop in those critical periods where their brains are very malleable,” explained Kalass. “And we want to get them into kindergarten physically welldeveloped, emotionally well-developed with exposure to language and literacy.”

WHY CHILDREN’S MENTAL HEALTH MATTERS

Jennifer Jonika, director of Starfish’s early childhood clinical services, said the therapists assess what’s going on in the homes and what the families’ needs are and then try to connect them to other services that can help meet those needs so they can then focus on the parents’ mental health, their relationship with their child and the child’s development. But the therapists are reporting increased domestic violence, higher stress levels in families and more families that are extremely isolated, she said. That isolation is often the result of parents who grew up in foster care and never experienced close relationships and don’t understand how much a strong parent-child relationship can support a child’s development. Kalass described these situations as toxic stress, which puts children in a persistent state of readiness to fight and leads to long-term health outcomes like diabetes, heart disease and mental health disorders. Changing the infant-parent relationship can do much for the brain and for the psychology of the mind said Douglas Barnett, Ph.D., director of Wayne State University’s Psychology Clinic. Barnett’s colleague, Jill Meade, Ph.D., agreed. “I’ve got parents of 9-month-olds who will say, ‘He’s bad. He’s just bad.’ The parent already has an opinion and an attitude and a style of parenting this child that could benefit from intervention

ABOUT THIS REPORT

Andrea Cole Ethel & James Flinn Foundation

Matt Friedman Children’s Hospital of Michigan Foundation

The Children’s Hospital of Michigan Foundation and Crain Content Studio, the custom publishing division of Crain’s Detroit Business, brought together leaders in business, family service, medicine and education to talk candidly about children’s mental health and why employers need to pay attention. The conversation, moderated by Crain’s Editor and Publisher Ron Fournier, took place in October. Writer: Leslie D. Green Editor: Kristin Bull, director of Custom Content Photographer: Aaron Eckels Design: Mirabella Design Studio

David Rosenberg, Ph.D., M.D. Wayne State University, Children’s Hospital of Michigan

Tarence Wheeler River Rouge School District

Publisher: Ron Fournier

Executive INSIGHTS | 3

WHY CHILDREN’S MENTAL HEALTH MATTERS

SPONSORED BY CHILDREN’S HOSPITAL OF MICHIGAN FOUNDATION

“There is … an overwhelming body of research that tells us the earlier we can get in, we can help children develop in those critical periods where their brains are very malleable.” and education,” said Meade, an assistant professor of pediatrics at Wayne State University and Psychology Internship Training Director at Children’s Hospital of Michigan. The perception that kids suffering from mental health issues or illnesses are “bad” can carry over into the schools. By the first week of this school year, Pontiac-based Oakland Family Services was working with preschool students who already were expelled, said President and CEO Jaimie Clayton. “Kids don’t wake up one day and say, ‘Today’s a great day to get myself thrown out of school,’” she said. “Something happened. Something traumatic has happened that we can help them understand to help them then act differently or have the people and adults (in their lives) act differently.”

Growing up: Social media and pressure to ﬁt in Oakland Family Services mostly treats kids who are struggling to adjust at school or have behavioral issues, like attention defi cit disorder, but are able to attend weekly, interactive therapy. The staff also treats children who have problems — such as mental

4 | Executive INSIGHTS

– Anne Kalass, Starﬁsh Family Services illnesses that keep them from functioning in school or cause police involvement — that require more care, along with kids who may have parents dealing with their own mental illnesses. Clayton said these difficulties often compound when kids reach middle school. That’s often when they become highly self-aware and then suffer anxiety when they see how different they are from those around them. For instance, she described seeing kids trying to cope with living in a trailer park while attending school with kids living in mansions right down the street. At that age, Clayton said, “It’s all about self-esteem…about who we are and what we’re projecting and if we’re accepted or not.” Tarence Wheeler, director of parent engagement and community outreach at River Rouge School District, said social media adds yet another layer of stress and gives middle- and high-schoolers more opportunities to see they are impoverished and don’t have some particular shoe or purse. While that may seem trivial to a mentally healthy and economically secure adult, these things add significant pressure in a child’s life.

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On top of that, Wheeler said, there are a notable number of children who are lacking basic necessities like lights, gas or even panty liners. Poverty exacerbates the toxicity that can lead to mental health issues. “We have kids doing their homework off the dome light (in the car they’re living in). So, if that light goes out, that kid can’t do their homework,” he said. Sometimes, Wheeler said, kids have all of the physical things they need but are lacking parental involvement. “You have kids who are dealing with untimely deaths, untimely incarcerations. If you are participating in an after-school program, you want the people you love to come and support that. But if your mother or father never come to a game, never come to see you cheer, never come to see you play in a band, you feel some kind

WHY CHILDREN’S MENTAL HEALTH MATTERS

of way about that,” he said. “We have a lot of young people who feel like ‘no one cares about me, that I’m not loved, that I can’t accomplish anything.’” Barnett said that even the stress of not getting the grades an adolescent is working toward can add pressure that leads to mental distress. “I haven’t met a kid or a teenager anywhere that doesn’t want to succeed,” he said. “That’s very scary and devastating when they’re not seeing their work pay off, and that is leading to a lot of the emotional and behavior problems.” Low self-esteem and self-worth — whether or not the child has both parents present or whether their families are well off or impoverished — can lead to children cutting themselves, taking drugs or attempting suicide.

Digital devices and the ‘window of opportunity Internet and cellphone use are taking a toll on children’s mental health, regardless of age or economic background. Key parts of the brain — particularly the pre-frontal cortex, considered the brain’s chief executive — can be damaged and not function properly in children and adolescents who excessively use the internet, said David Rosenberg, Ph.D., M.D., chair of Psychiatry and Behavioral Neurosciences at Wayne State University and director of Child and Adolescent Neuropsychiatric Research at Children’s Hospital of Michigan. “We recommend that there be no more than two hours a day of internet use for children and adolescents — and only after homework and chores have been finished. That would be 14 hours a week,” Rosenberg said. However, he said the average kid spends far more than 40 hours a week on their digital devices. “It doesn’t take a rocket scientist to figure out that this can’t be good for a child’s brain,” he said. But there is hope. “What’s exciting is that we had these children/adolescents go on an internet fast for two to four weeks and their brain normalized. This is the window of opportunity,” he said. “That being said, what we found in those children who relapsed, much like someone with drug and alcohol abuse, if they go back to the same environment, their symptoms come back. Not only do the symptoms come back, but brain abnormalities come back.”

“It doesn’t take a rocket scientist to ﬁgure out that this can’t be good for a child’s brain.” – David Rosenberg, P.h.D., M.D., Wayne State University

Executive INSIGHTS | 5

WHY CHILDREN’S MENTAL HEALTH MATTERS

SPONSORED BY CHILDREN’S HOSPITAL OF MICHIGAN FOUNDATION

“We have kids doing their homework off the dome light.” – Tarence Wheeler, River Rouge School District

About 85 percent of people with mental health issues have co-occurring substance abuse issues. And the country is currently experiencing an opioid epidemic that is costing $78.5 billion and more than 33,000 American lives annually. About 22 children are on suicide watch in local emergency rooms on any given summer day, said Children’s Hospital of Michigan Foundation President and CEO Larry Burns. And the Centers for Disease Control and Prevention reports that suicide is now the third leading cause of death for 10 to 24 year olds. Andrea Cole, executive director and CEO of the Ethel & James Flinn Foundation, a Detroit-based nonprofit focused on improving mental health services in Michigan, said schools have lost funding necessary to help address issues surrounding children’s mental health. “For every five (Detroit Public) schools there is one social worker, and their funding is prioritized to special-needs children. What about all the other kids that are having problems that haven’t met that threshold that really are falling through the cracks?” she asked. In addition to the decreased funding to school programs, David Rosenberg noted the millions of U.S. families that lack access to adequate mental health care coverage. “Children and adolescents are the diagnostic and therapeutic orphans of American mental health care,” said Rosenberg, P.h.D., M.D., chair of

6 | Executive INSIGHTS

Psychiatry and Behavioral Neurosciences at WSU and director of Child and Adolescent Neuropsychiatric Research at Children’s Hospital of Michigan.

Treatment, hope Yet, all is not lost. Community and health organizations are working to understand, mitigate and eliminate some of the mental health problems children face today — problems that, if not addressed early, could be exacerbated when they become adults. Rosenberg said Children’s Hospital of Michigan Foundation funds WSU research into objective markers for psychiatric illness, such as the biological underpinnings, brain abnormalities and genetic abnormalities that can lead to mental illness. “What we found, when we’ve identified certain brain changes in children with depression, obsessive-compulsive disorders and schizophrenia, is that rather than worrying or alarming parents and the children, (getting a diagnosis) is often validating,” he said. “Knowledge heals.” Other funding and advocacy initiatives working toward healing:

SPONSORED BY CHILDREN’S HOSPITAL OF MICHIGAN FOUNDATION

WHY CHILDREN’S MENTAL HEALTH MATTERS

Mental health by the numbers 1 in 5 adults in America experience some form of mental illness each year. The number of people suffering from depression or anxiety globally rose nearly 50 percent to 615 million in 2013 from 416 million in 1990. The U.S. economic cost of depression alone was more than $83 billion in 2000 — including more than $26 billion in medical costs, $5.4 billion in suicide-related costs and $51.5 billion in “indirect workplace costs.” 30 percent of employees have taken prescription drugs to treat stress, nervousness, emotional difficulties or sleeplessness. Half of chronic mental illness begins by age 14. The economic costs in the U.S. for childhood mental illness were about $247 billion per year in 2007. Fewer than 20 percent of children with mental illnesses are receiving the treatment they need.

“I think businesses are in denial that mental health affects every family they employ.” – Matt Friedman, Children’s Hospital of Michigan Foundation

■

Children’s Hospital of Michigan Foundation is investing in the next generation of pediatric psychologists by funding two American Psychological Association-accredited Ph.D. interns at Children’s Hospital of Michigan. “They are trained in understanding the connection between the brain and the body and mental and physical health, and the interns are right in there working with the kids in the hospital,” said Meade. Public mental health systems in Wayne County have been working to create greater access points for kids by putting school-based therapists into early childhood classrooms, elementary schools, middle schools, high schools, even OB/GYN practices, said Kalass. The Flinn Foundation, in collaboration with the State of Michigan, is working toward getting primary care doctors to intervene early by looking at each child’s social and emotional development as part of a well visit, said Cole.

Still, much work is needed to support the programs and eliminate the

Suicide is the third leading cause of death for 10 to 24 year olds, and 90 percent of those youth were suffering from an underlying mental illness. Sources: Children’s Hospital of Michigan Foundation; Psychiatrist.com; National Institute of Mental Health; Centers for Disease Control and Prevention; American Psychological Association; Anxiety and Depression Association of America; National Alliance on Mental Health

stigma surrounding mental health. Talking about mental illness is different than talking about physical illness at work, Friedman said. If a company’s insurance didn’t cover the treatment for an employee’s sick child, co-workers would talk about it openly and come together to help. “There’d be a GoFundMe account. There’d be a bake sale, a jeans day,” he said. “But if that problem is mental health, that (discussion) doesn’t happen. The only time mental health is a watercooler conversation is when there’s a mass shooting. But there are kids in every classroom, in every school, in every community in this region whose parents wake up every morning and say, ‘I hope my kid’s OK today.’” To share this report online, visit crainsdetroit.com/mentalhealth To read more about resources and treatment options for children’s mental health, visit chmfoundation.org

Executive INSIGHTS | 7

Advancing Possibility Through funding and advocacy dedicated to three core pillars - Community Benefit, Pediatric Research and Medical Education - the Childrenâ&#x20AC;&#x2122;s Hospital of Michigan Foundation enables researchers and community organizations to identify and implement innovations capable of advancing childrenâ&#x20AC;&#x2122;s health.

FIVE FOCUS AREAS

INJURY PREVENTION By far the leading cause of death in children is unintended injury, nearly all of which are preventable. ABUSE & NEGLECT 1 in 10 children in Michigan live in families investigated for abuse or neglect, an increase of 41% since 2006. ONCOLOGY & CARDIOLOGY RESEARCH Cancer is the number one disease killer of U.S. children. Pediatric research is the key to developing advances in medical care and treatment. MENTAL HEALTH Mental health disorders are the most common diseases of childhood - more than cancer, diabetes and AIDS combined. Less than 20% actually get the treatment they need. NUTRITIONAL WELLNESS Malnourished children, either over or undernourished, are more likely to get sick, recover more slowly from illness, require hospitalization and perform poorly in school.

TO HELP OR DONATE, VISIT CHMFOUNDATION.ORG CHMF_17_CRAINS_NEW.indd 1

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EXECUTIVE INSIGHTS

THE TALENT GAP OPPORTUNITY Apprenticeships are an economical and sustainable option for businesses LOOKING TO ATTRACT AND RETAIN TALENT.

INSIDE: Apprenticeships: How they work and where to find more information. PAGE 6

THE TALENT GAP OPPORTUNITY

SPONSORED BY TALENT AND ECONOMIC DEVELOPMENT DEPARTMENT OF MICHIGAN

“We all, at one point, have been guilty of saying college is the only pathway to success.” – Roger Curtis, director of Talent and Economic Development Department of Michigan

rowing up, Derrek Schwab listened as everybody — even his wood shop and metal-shop teachers — told him he needed to go to college. So, that’s what he did. After graduating from high school in Standish, a blue-collar town about 30 minutes north of Bay City, Schwab enrolled in an athletic training program at Saginaw Valley State University. He graduated in 2010. But life didn’t play out as people told him it would. “Finding a job in that career field was incredibly hard, especially a decent paying job to pay off my student loans and afford my housing,” Schwab said. Schwab is a case study in the country’s $1.5 trillion student loan debt crisis. His story also helps illustrate the lack of knowledge youth and parents have regarding the variety of career paths available to them — a knowledge gap that has contributed to a mounting talent shortage. Nearly half of U.S. employers are struggling to fill jobs, particularly Professional Trades, despite more than 33 percent of adults older than 25 holding academic degrees, according to a 2017-18 report from ManpowerGroup. There are more than 6.7 million job openings nationwide. “It’s starting to impact every business in every industry,” said Roger Curtis, director of the Department of Talent and Economic Development (Ted) of Michigan. “Every state is facing this challenge.” Michigan’s talent gap became clear when the state was working to convince Amazon to open its second headquarters in

2 | Executive INSIGHTS

Detroit earlier this year, Curtis said. “We have a lot of great programs in place, but we need to do more,” he said, adding the No. 1 question companies looking to move to the state ask the Michigan Economic Development Corporation is not about incentives but about whether Michigan has the skilled talent it needs.

Key ingredient: Apprenticeship

Curtis said Michigan needs to do more than just prepare for those companies to move here; the state needs to help keep

ABOUT THIS PROJECT Talent and Economic Development Department of Michigan partnered with Crain Content Studio, the marketing storytelling arm of Crain’s Detroit Business, to discuss efforts to close the talent gap impacting Michigan businesses. Crain Content Studio Director Kristin Bull moderated the roundtable discussion in August at Crain Communications in Detroit. Editor: Leslie D. Green Photographer: Aaron Eckels, Eighteen Photography Design: Mirabella Design Studio Group Publisher: Mary Kramer Director of Crain Content Studio: Kristin Bull For information about this report, contact Director of Advertising Lisa Rudy at lrudy@crain.com.

SPONSORED BY TALENT AND ECONOMIC DEVELOPMENT DEPARTMENT OF MICHIGAN

already established businesses thriving. One way to help alleviate skilled-trades staffing challenges in particular is through training programs such as apprenticeships. On Aug. 22, the state’s skilled-trades training funding program finally became law. Now called the Going PRO Talent Fund, the law introduced by Sen. Ken Horn (R-Frankenmuth) is part of Gov. Rick Snyder’s Marshall Plan for Talent and provides Michigan companies with tools to invest in and develop their own workforces through programs such as apprenticeships. The Talent Investment Agency, a division of Ted, awards the funds to employers through Michigan’s workforce system, also known as Michigan Works! agencies, after fact-finding sessions to assess their talent gaps. The Agency’s Fiscal Year 2019 grant applications opened Sept. 12. Marcia Black-Watson, division administrator for the TIA, said she fields calls and emails often from employers frustrated with the number and types of jobs they are looking to fill. “It’s a good problem to have in an area of recovery for our economy here, but it takes going that extra step and making people aware of the programs. It’s an opportunity for employers to work to develop a structure of training that’s in their facility,” Going PRO Talent Fund spends about $30 million yearly to help businesses with short-term customized training that can lead to an employee becoming credentialed or certified and help employers bring on new hires and retain current workers.

THE TALENT GAP OPPORTUNITY

Many degrees, higher debt

• Over 44 million U.S. residents have student loan debt. • The largest concentration of student loan debt is $10,000 to $25,000. • More than 2 million borrowers have debt exceeding $100,000. • The financial impact on the labor shortage in the U.S. will be $435.7 billion in the financial and business services sectors, $73 billion in manufacturing and $162.2 billion in technology, media and telecommunications by 2030. • Hospitals will face a shortage of medical professionals by 2025 despite an additional 2.4 million jobs expected to be added to the sector by 2026. Sources: 2017 United States Census Bureau figures, New York Federal Reserve, Kaiser Family Foundation, Korn Ferry Institute and Healthcare Finance

Since 2014, more than 2,200 companies throughout Michigan received an average $32,068 each through Going PRO Talent Fund to develop curriculums that enhance current worker skills and develop jobs. In 2017, Going PRO Talent Fund resulted in 2,516 employees being hired and trained, 8,814 current employees being trained and an 88 percent retention rate six

Roundtable participants

Dr. Rose Bellanca President Washtenaw Community College

Jennifer Sulak Brown Vice President of Human Resources Barton Malow

Roger Curtis Director Talent and Economic Development Department of Michigan

Michelle Elder Manager of Government Affairs Borg Warner

Janene Erne Regional Apprenticeship Administrator Workforce Intelligence Network

Sen. Ken Horn Michigan Senate

Dr. Russell Kavalhuna President Henry Ford College

Derrek Schwab Journeyman Line Worker and Former Apprentice, Consumers Energy Co.

Dr. Nikolai Vitti General Superintendent Detroit Public Schools Community District

Marcia Black-Watson Division Administrator Talent Investment Agency

Executive INSIGHTS | 3

THE TALENT GAP OPPORTUNITY

SPONSORED BY TALENT AND ECONOMIC DEVELOPMENT DEPARTMENT OF MICHIGAN

Talent shortage, explained Here’s why employers say they can’t fill their open positions. 26%: A shortage of applicants 21%: Lack of experienced applicants 16%: Applicants requesting higher pay than offered 14%: Scarcity of hard skills (expertise needed to successfully perform a job) 7%:

Absence of soft skills (ability to communicate effectively and amicably with others)

3%:

Applicants requiring better benefits

3%:

Organization-specific issues

10%: Other Source: ManpowerGroup

months after training. Black-Watson called apprenticeships premier training programs for customizable work-based learning. SVSU graduate Schwab agreed with her assessment. When he couldn’t find work in his degree field after college, Schwab switched tactics and enrolled in a journeyman line worker program at Lansing Community College. About six months later, he got into an apprenticeship program at Consumers Energy. “I think that’s the only way you can learn a skilled trade, especially one as in-depth as journeyman line worker,” Schwab said. “Basically, I am the guy who goes out and fixes the power when the wind blows or does routine maintenance on power lines. There’s always something new to learn… and the job is constantly changing.” Consumers Energy partners with Michigan Works! Southeast, Center for Energy Workforce Development, Troops to Energy Jobs and Lansing and Alpena community colleges to implement its School-to-Work program. Schwab said apprenticeships not only lead to six-figure salaries but also can lead to opportunities for travel for work and open doors for growth into management roles in the company. Yet, Janene Erne, regional apprenticeship administrator for Workforce Intelligence Network for Southeast Michigan (a

4 | Executive INSIGHTS

partnership of 10 community colleges and six Michigan Works! Agencies) said some employers assume they can’t afford an apprenticeship program or that they don’t have the time to manage such a program. “Apprenticeships are economical and sustainable,” Erne encouraged. She said her team of apprenticeship administrators will go into a company and set up the apprenticeship program, then work with community colleges and Michigan Works! To find funding for those programs. Employers and employees can combine credit classes with workforce development classes and customize apprenticeships at a low cost. “Once you’ve got your first round of apprentices complete, they become journeymen, and they’re the next trainer,” Erne said. “And the process can just seamlessly keep going.”

What’s at stake for business

Barton Malow Co. is playing a key role in the rebuilding of Detroit with projects that include the Shinola Hotel, the redevelopment of the former Hudson’s site and District Detroit, home of Little Caesars Arena. However, the labor shortage could hinder progress, said Jennifer Sulak Brown, vice president of human resources at the

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“Let’s not forget about college. But industry has to take a step back and a step into the actual high schools to say ‘let’s build it at the high schools so students can have the exposure.’” – Nikolai Vitti, general superintendent, Detroit Public Schools Community District Southfield-based general contractor and construction manager. “Construction as a career has gotten a bad rap over the last 40 years. Our growth as an industry is limited by the number of people we have. The biggest impact (to not having the necessary talent) is that we’re not going to be able to build these buildings the same way,” Sulak Brown said. Construction’s bad rap includes the perception the industry is dirty, low-paying and low-tech. Not so, Sulak Brown explained. “You can make a really good living in construction. The salaries are great. The benefits are great. It’s a mobile career.” There’s also more technology coming into construction, she said. “The industry will change, and we have to be able to react. We’re looking for technology to run in parallel with apprentices and journeymen.” To improve understanding about the industry, hire more than 3,000 new apprentices over the next four years and attract young people to construction-related trades, Sulak Brown said Barton Malow has been holding community outreach events with job seekers, subcontractors and company owners. TIA’s Black-Watson said such promotion is essential. Moreover, Ted’s Curtis believes clarifying perceptions about certain jobs, and changing long-held beliefs that everyone needs

to go to college, can help bolster skilled labor in the state. That’s why the Going PRO Talent Fund marketing campaign will try to teach kids, parents and job seekers how industries have changed and what careers are available by showing a day in the life of a welder, a lineworker, a cybersecurity expert and other professional trades.

How we got here

In part, said Sulak Brown, fewer people enter construction fields because parents and teachers have been pushing for fouryear academic degrees over trades training and professions. “We all, at one point, have been guilty of saying college is the only pathway to success,” Curtis explained. Horn, the state senator who has been a champion of the Going PRO Talent Fund initiative, described what students likely hear: “For all you smart kids, we have this college readiness program and we’re going to take good care of you. For the rest of you, we have the beautiful second-class opportunity, and this will segregate you away from your smart friends.” Yet, every child has a different set of talents and interests, said Nikolai Vitti, general superintendent of Detroit Public Schools Community District. “Some students can grow on that college pathway. If that’s

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THE TALENT GAP OPPORTUNITY

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their interest, it makes sense to continue to offer a celebrated coursework,” said Vitti, adding that other students may have interests that align more closely with career academy vocational and technical work and such coursework should be available to them. “The school system should be designed to maximize those individual talents and interests through different pathways,” he said. Vitti said A. Philip Randolph Technical High School is probably the best example in Detroit of a school that does just that. Randolph collaborates with workforce development agencies, private support, city support and industries to provide more opportunities to youth and increase skilled labor for employers. A year ago, Randolph, which trains students in high-wage construction, business, drafting and design technology trades, had 100 enrolled students. Now, Vitti said, it has 300. “I think that’s a model of what we need to be thinking about throughout Michigan, which is to recreate high schools,” Vitti said. “Let’s not forget about college. But industry has to take a step back and a step into the actual high schools to say ‘let’s build it at the high schools so students can have the exposure.’” From this perspective, Vitti suggested the talent gap in Michigan could be thought of as an “opportunity gap.” And the K-12 arena’s

role in the workforce conversation should be about helping future workers learn soft skills — curiosity, imagination, teamwork and problem-solving — that are equally in demand in today’s world. “We’re not getting individuals, whether they went to college or not, that can critically think, that can analyze information, that can write, that can stand up and defend an argument and explain it. Because they have not been engaged at the highest level in the K-12 system. And that’s not just a Detroit problem, that is a national problem,” Vitti said.

Partnerships

Going PRO Talent Fund program employers work closely with educational institutions to build training protocols and initiatives that provide a talent pipeline that isn’t just responsive to today’s needs but is responsive to future requirements, TIA’s Black-Watson said. For instance, BorgWarner Inc., by partnering with Going PRO Talent Fund, the Michigan Alliance for Greater Mobility Advancement, Michigan Works! and others, can deliver specific training to its employees that they can then apply to their jobs, said Michelle Elder, manager of government affairs for the tier one auto supplier. The return on investment is actualized in employee retention in

Understanding apprenticeships Michigan students ages 14-30, and their parents, know considerably more about community colleges and four-year universities than about apprenticeships, according to a 2017 state survey. • About 55 percent of parents are unaware of the benefits of apprenticeships. • Only 21 percent of parents view an apprenticeship as a good option for their children after high school. • About 80 percent of high school students say their parents are the biggest influencer of their career and job choices. In general, apprenticeships are one-to-five-year programs that unite classroom study with on-the-job training. Often, students receive employer-paid tuition to earn an associate’s degree while training. There are different types of apprenticeships: • Time-based apprenticeships: The employer or labor organization determines what skills its employees/trainees need and works with the Department of Labor to determine how many hours they will spend teaching those skills. Then, the employer and a school determine the necessary course and integrate the company’s best practices, industry needs and DOL requirements to create programs. • Competency-based apprenticeships: Like time-based apprenticeships, but these apprenticeships end when the employee becomes competent in required tasks. • Hybrid apprenticeships: These combine time-based and competency-based models but require apprentice to demonstrate a defined competency within a specified time range.

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Ready to start an apprenticeship program at your workplace? For details on how to begin, including a step-by-step guide to the process and an ROI calculator for your business, visit miapprenticeship.org or call the apprenticeship hotline at 734-229-3559. Here are some specific apprenticeship programs, to give you an idea of the diversity of options. • Michigan Advanced Technician Training Program (MAT2®) is where an apprentice rotates between his or her employer and school. • Michigan Apprenticeship Program Plus (MAP+), a partnership between Grand Rapids and Macomb community colleges, MIWorks!, employers and others. Learn more: grcc.edu. • Focus: HOPE American Apprenticeship Programs is comprised of four apprenticeship programs targeting jobs in advanced manufacturing and IT in Michigan. • The UAW-Labor Employment and Training Corp. funds the UAW American Apprenticeship Initiative Program, which has more than 45 apprenticeship programs in Michigan. • Advance Michigan Center for Apprenticeship Innovation is partnership of six community colleges along with economic development partners tasked with expanding apprenticeships in Southeast Michigan. • Advanced Manufacturing Partnership (AMP), in partnership with Grand Rapids Community College and local employers. • Detroit Registered Apprenticeship Program (D-RAP) trains in a variety of fields, including carpentry, pharmacy tech, construction, landscaping and culinary. Source: Crain Content Studio research

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“Construction as a career has gotten a bad rap over the last 40 years. Our growth as an industry is limited by the number of people we have. The biggest impact … is that we’re not going to be able to build these buildings the same way.” – Jennifer Sulak Brown, Vice President of Human Resources, Barton Malow

addition to developing a more skilled workforce. “You are investing in that person, and they see the company as caring,” Elder said. As part of its long-term, talent-building strategy, Elder said BorgWarner engages heavily with educational institutions. Last year, the Auburn Hills-based company sponsored First Robotics programs for K-12 students in Benton Harbor and Clarkston. The Clarkston team took a national award. In addition, employees advise students at the University of Michigan, and BorgWarner provides STEM (science, technology, engineering and math) kits to teachers in South Carolina to expose students to those fields. Washtenaw Community College (WCC)– also sponsors teaching kits for classrooms to help instructors teaching about technology, robotics and mobility because sometimes they don’t have the resources, said WCC President Rose Bellanca. In addition, the college unites industry leaders to learn what skills they need their employees to learn most. Bellanca said the school can even put trainers on shop floors to understand those needs.

Filling the gap

The path to filling jobs is straightforward: Employers need employees trained in specific skills, and K-12 institutions and

community colleges can help provide that training. Henry Ford College President Russell Kavalhuna suggested businesses leaders who are sensing a talent shortage treat the gap the same way they would any other resource gap. “When you don’t have enough resources, you test the market and you find out where that resource is being produced best. Why wouldn’t a business executive search a community college campus to find who can deliver a skill or the curriculum for IT security, journeymen, heating and cooling or other types of in-demand jobs? It’s not a difficult choice to make, because government’s already subsidizing that product (through apprenticeships),” Kavalhuna said. “If I were a CEO of a company who saw for the next three years we’re going to have a shortage in ‘X’ skill. I would task someone in my organization to develop a plan for the next three years so that question is answered in three years.” Kavalhuna said he would be surprised if that person didn’t then decide to partner with a school. “It seems a pretty simple fix, particularly in Southeast Michigan.” Want your company to experience talent pipeline success sooner through Michigan apprenticeships? Visit MiApprenticeship.org.

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