20141110-NEWS--0001-NAT-CCI-CD_-- 11/7/20145:55PMPage1 ©Entire contentscopyright2014byCrainCommunicationsInc.Allrightsreserved Bailey heart ofTexas VCfirm’s plan Ann Arborofficedeepinthe reboot bottomlines,Page11 3 firmsoverhaulITand troit lic the topicofethicsinbusiness. ness to BuildaCareerandBusi- The PowerofOwnership:How rector ofthefirmuntil2011. ley remainedamanagingdi- bert, Edwards&Associates. to GrandRapids-based enue beforesellingitin2009 grew itto$5millioninrev- mous PRfirmin1996and in business. speaks onthetopicofethics munications, andheoften Detroit officeoftheLansing- ness strategist. cott Rossman out ofretirementtojoin expert Truscott RossmaninDetroit PR veteranBaileytojoin
NEWSPAPER www.crainsdetroit.com Vol.30,No.45 Page 3 Second Stage This JustIn MICHIGAN BUSINESS He isamemberofthe Bailey alsoistheauthorof Bailey foundedanepony- Bailey willbebasedinthe Longtime publicrelations Relations SocietyofDe- ’s HallofFame. and afrequentspeakeron John Bailey CRAIN’S as itsfirstbusi- roads, Page17 with plantofix gets cracking Grand Rapids crisis com- lations and media re- strategy, lations public re- includes expertise tions firm. lic rela- based pub- is coming Bailey’s Lam- Trus- Pub- Bai- ship withaChinesecarmaker. says interferedwithitsrelation- ing actionagainstacompanyit based dated underbankruptcy. years afterhercompanywasliqui- Products Inc. mer CEOof Plastech inlegalbattleoverChinesecarcontract Plastech Holdingfiledasuitin Brown’s newventure,Dearborn- Julie Brown,theembattledfor- F CRAIN’S DETROITBUSINESS Plastech HoldingCorp. B Y A D sure that’snottheendofstory of it.He–andsomemajorstateemployersareworkingtomake orientation andlosthisnorthernMichiganstateHouseseatbecause rank Fosterchampionedtheendofdiscriminationbasedonsexual DEMS COULDN’TGETOUTVOTE,GOPLANDASENATE SEAT |PAGE 3 , isbackincourtsix USTIN A TL ON STILL WAR Plastech Engineered W A TELOST BATTLE ALSH , istak- NOVEMBER 10–16,2014 Brown with fered withPlastech’srelationship ATTORNEYS ATLAW Anhui JianghuaiAutomobileCo. | PAGE 34 tentionally inter- GreenTech in- on claimsthat Corp The casecenters tomotive WM GreenTechAu- Virginia-based Oct. 21against gan inDetroiton District ofMich- for theEastern U.S. DistrictCourt A BETTERPARTNERSHIP Yearning for legalpeace of mind? while Iwasthere.” something meaningful couldn’t, butdoing the constitutionsaidI in theLegislatureuntil drive wasn’ttoserve “My Frank Foster: Departing stateRep. . the contractdoesnotexist. JAC Motors,meanwhile,claims copy ofthecontractinquestion. ply thedefendantsorcourtwitha argue thatPlastechrefusestosup- Plastech. tract agreementbetweenJACand cars, despiteapriorexclusivecon- distribute JACMotors’electric tered intoanagreementthisyearto Motors Ltd. However, GreenTechattorneys Plastech allegesGreenTechen- , , morecommonlyknownas AL GOLDIS . ‰ state law)contemplates,”Rhodessaid. skilled andexperiencedjudgmentthat(the willing andabletoexercisetheindependent, point membersofthecommissionwhoarefully in hisrulingFriday. the implementationofplan,”Rhodesstated ing thecommission’seffectivenessinensuring the commission’svotingandrisksundermin- council presidenttohaveavote.Itbothskews terest forthemayorand fluence incheck. that cankeepcityofficials’in- Friday tobuildacommission appealed toGov.RickSnyder ruptcy JudgeStevenRhodes pendent members.U.S.Bank- Brenda Jonesandseveninde- Detroit CityCouncil cludes MayorMikeDuggan, that spending,agroupin- ber FinancialReviewCommissiontosupervise safety andblight-busting. new financialmanagementsystems,public vestment spendingspreeheavilyweightedin cluded bankruptcycase?A$1.4billioncityrein- systems, blight $1.4B focus: Safety, bankruptcy reinvest after City looksto “This problemrequiresthatthegovernorap- “It isaplainconflictofin- With itcomestheappointmentofanine-mem- What’s nextinthewakeofDetroit’sjust-con- JAC CRAIN’S DETROITBUSINESS 2010 toallowPlastechdistribute framework agreementinOctober plaint, PlastechHoldingsigneda Deal ornodeal? B According totheOctobercom- Y ready forChinese-madecars. whether theU.S.marketiseven all whileuncertaintyremainson trading jabsincourtdocuments— C Plastech andGreenTechare HAD President H See Bankruptcy,Page35 ALCOM See Plastech,Page37 $2 acopy;$59year Rhodes WNJ.com
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Page 2 CRAIN’S DETROIT BUSINESS November 10, 2014
MICHIGAN BRIEFS Sit down for this: Office furniture one of “America’s Best Cities for Global Trade,” putting it in its top activity index is highest in 7 years Stryker to pay more than $1B for recalled hip devices 10 “Emerging Cities.” A quarterly index measuring ac- Ⅲ The West Michigan Horticultural tivity in the office furniture indus- Kalamazoo-based Stryker Corp. agreed to pay more than $1.4 billion to cover costs of handling cases Society, owner of the Frederik Meijer try reached its highest point in than $1 billion to resolve lawsuits over thousands of over the recalled hips, so the settlement fell into the Gardens and Sculpture Park in Grand Rapids, bought the United Auto Work- more than seven years last month, hip implants recalled in 2012 after patients complained “low end of the range of probable loss.” ers Region 1-D building last month, MLive.com reported. Holland-based of pain, swelling and metal debris from the devices. Unlike other device makers, Stryker settled be- The Grand Rapids Press reported. Michael A. Dunlap & Associates sur- Stryker will pay a base amount of $300,000 per fore facing a trial over claims their hips suffered The building is named after former veyed industry executives and sup- case to patients who had the devices surgically re- from design flaws and the company failed to warn UAW President Owen Bieber, who pliers, crunched the numbers and moved, Kim Catullo, one of the company’s lawyers, patients about the devices’ risks. grew up in nearby Dorr and also came up with a figure that was the told a New Jersey judge. The device maker faces “It’s odd that they would not try any cases and was a longtime friend of the late best reading since July 2007, before more than 4,000 suits consolidated in New Jersey then settle so early in the litigation process,” said Frederik Meijer. the Great Recession hit the industry state court and federal court in Minnesota. Carl Tobias, who teaches product-liability law at the Ⅲ Michigan State University alum- and pretty much every other sector. Stryker withdrew its Rejuvenate and ABG II de- University of Richmond in Virginia. “Sounds like they vices in July 2012 after warning surgeons they could might have been afraid of facing even bigger liabili- ni Peter and Joan Secchia donated Results show the office furniture harm tissue around the hip and cause other health ty if they didn’t settle them now.” $3 million to support the men’s bas- industry “continues to move on a problems. The company said that it set aside more — Bloomberg News ketball program and to endow the very steady and improving trend football team’s defensive coordina- line,” Michael Dunlap, principal of tor position. Peter Secchia, former the firm, said in a statement. “We Bay County’s Monitor Township. James Hightower, The Associated company for tax reasons, will rank chairman and CEO of Grand are confident that the industry is The automotive parts manufactur- Press reported. In September, the among the world’s five largest Rapids-based Universal Forest Prod- still on course to achieve its best er expects to create 25 jobs. Michigan Court of Appeals ordered providers of over-the-counter health ucts Inc. and former U.S. ambas- year in more than a decade.” the recall be taken off the ballot. care remedies, the company said. Ⅲ Ⅲ sador to Italy, previously funded Election leftovers: School merger Voters in Grand Rapids ap- Warren-based Ascension Health MSU’s softball stadium. MEDC awards $650K to 2 firms proved a change to the city charter Michigan named Kathy Young presi- Ⅲ One reactor unit of the D.C. isn’t, recall wasn’t, mayor can’t be under which nobody can serve as dent and CEO of Kalamazoo-based Cook Nuclear Plant near Bridgman that plan to create 115 jobs mayor or city commissioner for Borgess Health effective early next was taken offline and the other op- Ⅲ In last week’s election, voters in more than eight years, MLive.com year, MiBiz reported, succeeding The Michigan Economic Develop- the Ann Arbor Public Schools turned erated at half power while a storm reported. George Heartwell has the retiring Paul Spaude. Borgess The ment Corp. awarded $650,000 in down a proposal to merge with the passed over Lake Michigan, been mayor for 11 years. Do the Health serves patients across 10 Grand Rapids Press reported. On grants for two projects, The Asso- Whitmore Lake Public Schools, while math. He can’t run for re-election counties in southern Michigan. Nov. 1, both reactors were shot ciated Press reported. voters in the latter district approved Ⅲ next fall. Calgary, Alberta-based En- down because of rough lake condi- LTC Roll & Engineering Co., based in the proposed merger, The Ann Ar- bridge Inc. said the pipeline compa- tions. So to recap: There’s a nuclear St. Clair County’s Cottrellville bor News reported. The measure ny has spent about $1.21 billion to plant next to a big lake where high Township, will receive a $450,000 had to pass in both districts. MICH-CELLANEOUS clean up a 2010 oil spill ignto the winds and waves often occur. performance-based grant through Ⅲ In news involving an election Ⅲ Perrigo Co. agreed to buy Belgian Kalamazoo River system. TV sta- the Michigan Business Develop- that didn’t happen, Edward health products provider Omega tions WOOD and WWMT reported Find business news from ment Program. The manufacturer Pinkney was found guilty of five Pharma NV for $4.5 billion, including that the updated estimate is about around the state at crainsdetroit plans to buy a new plant and create felony counts of election fraud for debt, in a deal that will expand Perri- $86 million higher than a previous .com/crainsmichiganbusiness. 90 jobs. changing dates on petitions used go’s presence in Europe, Bloomberg figure released in December. Sign up for the Crain’s Michi- Mando America Corp. was awarded to gather signatures in the planned News reported. Perrigo, formerly Ⅲ The new issue of Global Trade gan Morning e-newsletter at $200,000 to help renovate its plant in recall of Benton Harbor Mayor based in Allegan but now an Irish Magazine picked Grand Rapids as crainsdetroit.com/emailsignup.
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November 10, 2014 CRAIN’S DETROIT BUSINESS Page 3 Texas VC firm opens branch in Ann Arbor Inside
Blair Garrou, a partner and co- a secondary of- erations in 2008. Some portfolio founder of Mercury Fund, said that fice in Ann Ar- Garrou said Mercury, which was his firm has big plans for the Michi- bor.” founded in 2005 to provide seed- and gan office. He said that not only will He said there early-stage funding to tech compa- companies the new fund invest in local early- is a depth of en- nies and now has more than $225 stage high-tech companies, but it gineering, com- million under management, ex- may move here plans to move here other Midwest puter science pects to finish fundraising on its companies in which it invests. and machine- third fund, Mercury Fund Ventures III learning talent LP, in the next two or three weeks. Garrou said Mercury looked BY TOM HENDERSON in the area, bol- “I don’t know what our final hard at opening an office in Chica- CRAIN’S DETROIT BUSINESS stered by gradu- close will be, but it will be more go but chose Ann Arbor because Fortino ates of the Uni- than $100 million, and that’s the “there’s so much development tal- A Houston-based venture capital versity of Michigan. One of fund Adrian will be investing out Q&A: New EAA leader spells ent in Michigan. We couldn’t match firm that has raised more than $100 Mercury’s main areas of invest- of,” he said. that in Chicago. As we invest in million for its newest fund is to an- ment is biotech, and there are nu- Fortino was managing director out her priorities, Page 4 Midwest companies, we’ll want to nounce Monday that it has opened merous contract research organi- of both of Invest Detroit’s funds, an office in Ann Arbor and recruit- move some of them to Ann Arbor. zations in Ann Arbor that were the First Step fund, which typically ed Adrian Fortino, formerly a vice And we’ve already got a company founded by former Pfizer Inc. em- president at Invest Detroit, to run it. in Texas; we are looking at opening ployees after it closed its local op- See Invest, Page 33 Company index These companies have significant mention in this week’s Crain’s Detroit Business: Aisin World ...... 25 Autoliv ...... 25 Avanti Law Group ...... 23 The Big Salad ...... 13 Botsford Hospital ...... 6 An elephant and a donkey Business Leaders for Michigan ...... 10 Causley Automotive Group ...... 7 Colliers International ...... 30 Core Partners ...... 30 County Road Association of Michigan ...... 19 Crest Automotive Group ...... 7 Cribspot ...... 11 in need of horse sense Danlaw ...... 15 Detroit Materials ...... 23 Detroit Wallpaper ...... 10 Domino’s Pizza ...... 25 REPUBLICANS: Campaign stumbles DEMOCRATS: Johnson’s high-tech Dow Chemical ...... 25 Education Achievement Authority ...... 4 El Vocero Hispano ...... 22 plan to get out the vote fizzles Etkin ...... 30 helped sink Land amid GOP wave General Motors ...... 25 Inteva Products ...... 25 BY CHRIS GAUTZ BY CHRIS GAUTZ Johnson Law ...... 28 CAPITOL CORRESPONDENT CAPITOL CORRESPONDENT Kelly Services ...... 25 Main Street Strategies ...... 36 hen it came to Michigan’s open U.S. Senate emocrats traditionally do not fare well in Metaldyne ...... 25 seat, 2014 seemed to have it all for Republi- midterm elections. But Lon Johnson, the new Michigan Democratic Party ...... 3 W cans. DMichigan Democratic Party chairman, came in Michigan Freedom Fund ...... 3, 36 It was a midterm election year, which typically fa- planning to change that. Michigan Manufacturing Technology Center . . . . . 15 vors the party not in the White House; there was an For more than a year leading up to last week’s Michigan Municipal League ...... 18 unpopular Democratic president to run against; and midterm election, Johnson spoke confidently about Michigan Republican Party ...... 3, 36 there was a well-financed and organized effort na- his plan to turn out at least 200,000 Democratic vot- Miller Buckfire ...... 35 tionally to support Republican candidates to regain ers who didn’t vote in 2010 to help propel his candi- MSX International ...... 25 control of the Senate. dates to victory. NSF International ...... 25 One Detroit Center ...... 30 “This was a good shot for us,” Michigan Republican But the plan didn’t work. Penske Automotive Group ...... 25 Republicans won almost across the board Party Chairman Bobby Schostak said. Land Johnson Pinkerton Consulting & Investigations ...... 25 But it ended up being a huge oppor- in the major statewide offices and the Leg- Plastech Engineered Products ...... 1 tunity missed, as former Republican islature. Gov. Rick Snyder defeated De- Plastech Holding ...... 1 Secretary of State Terri Lynn Land mocrat Mark Schauer by 4 percentage PRapid Global Business Solutions ...... 11, 12 lost in a landslide to U.S. Rep. Gary points, Attorney General Bill Schuette Regional Transit Authority of Southeast Michigan . 10 Peters, D-Bloomfield Township, by and Secretary of State Ruth Johnson RevSix ...... 36 14 percentage points. were re-elected with ease, the state Root 4 Creative ...... 10 Her resounding defeat, though, Senate increased its super majority by ShindelRock ...... 14 came in the midst of a huge one seat, and the state House picked up SkySpecs ...... 11 Republican wave in the four more Republican seats, giving Sommers Schwartz ...... 37 TI Automotive ...... 25 state and nationally, mak- the party a 63-47 majority. TRW Automotive Holdings ...... 25 The notable excep- ing the reason for her loss Truscott Rossman ...... 1, 36 simple to understand, po- tions were the drub- Vanguard Public Affairs ...... 36 litical watchers say. bing of Republican U.S. Vera and Joseph Dresner Foundation ...... 6 “We had a bad can- Senate candidate Terri W3R Consulting ...... 11 didate, who then Lynn Land by 14 per- made a series of centage points to U.S. bad strategic decisions,” said Rep. Gary Peters, and Greg McNeilly, president the near sweep of all but of the Michigan Freedom one of the university board Department index Fund, a Republican-ori- races by Democrats. BANKRUPTCIES ...... 6 ented nonprofit. But not only did De- BUSINESS DIARY ...... 32 So why was Land the candidate? Essentially, she was the only mocrats lose most of Republicans won CALENDAR ...... 31 one to raise her hand. the biggest races, Popular and respected Republican U.S. Reps. Dave Camp of Mid- almost across the turnout overall ended CLASSIFIED ADS ...... 33 land and Mike Rogers of Brighton decided to retire from Congress up being less last week CRAIN’S LIST ...... 27 this year and both were considered top prospects for the board – with one than it was in 2010 by KEITH CRAIN...... 8 seat. U.S. Rep. Candice Miller, R-Harrison Township, about 80,000 votes. LETTERS...... 8 took herself out of the running early, saying she in- “We are not happy notable exception MARY KRAMER ...... 17 OPINION ...... 8 See Republicans, Page 36 PIERRETTE DAGG/CDB See Democrats, Page 36 OTHER VOICES ...... 8 PEOPLE ...... 32 Picture this: We’re on Instagram RUMBLINGS ...... 38 THIS WEEK @ You follow us on Twitter and like us on Facebook. Now share your photos. Follow us at Instagram.com/crainsdetroit, and STAGE TWO STRATEGIES ...... 15 WWW.CRAINSDETROIT.COM tag your photos with #crainsdetroit. WEEK ON THE WEB ...... 38 20141110-NEWS--0004-NAT-CCI-CD_-- 11/7/2014 2:34 PM Page 1
Page 4 CRAIN’S DETROIT BUSINESS November 10, 2014 Priorities of new EAA leader: Improve learning environment, internal oversight
The Education Achieve- you turn that around? and documentation around what ment Authority, the turn- There was a drop after should be approved travel and around district for the the first year. It has been what should not be. That is part of state’s lowest-performing stable from last year to the operational review. schools, officially has a this year. In fact, we pro- Everything is up for review. new chancellor now that jected 6,100 and, with the Everything from instruction — its board appointed inter- charters, about 7,000. We and how we are doing it — to how im Chancellor Veronica are at 7,300. We exceeded we are doing safety, security … Conforme to the position our projections. how we can continue to improve vacated by John Covington I wasn’t here during on that, to the policy on conflict of in June. that time when enroll- interest, ensuring that we have Conforme, a graduate ment dropped so I can’t high integrity and standards for comment about when the of Syracuse University and Q&A all of our employees. Columbia University, previ- precipitous drop hap- ously held posts with The Veronica pened. We have stabilized What else is important to add? College Board and the New Conforme, enrollment. When schools One of the things I’m still doing York City Department of Ed- Education are improving, when they is really getting into schools. I’ve ucation. She was appoint- Achievement are demonstrating results Authority held teacher and staff forums in ed last week. — when the families start Within the next 30 to see that these are great every single one of our schools to days, Conforme, 41, said she will schools — they will come. hear directly from our teams as to present a plan for what she will do what is working and what’s not. to improve the nine elementary After some uproar over travel and That, coupled with the top-to-bot- and middle schools and six high credit card expenses of EAA adminis- tom review and my meetings with schools, all in Detroit, in the EAA tration, you revamped those policies parents and community members and its administration. as interim chancellor. What other … will be taken into account as we She spoke with Crain’s reporter oversight or administrative aspects of prepare a plan for improving our McDonald Hopkins BUSINESS HOUR LIVE WEBCAST Kirk Pinho on Thursday. The inter- the EAA need to be addressed? schools and operations. We have view has been edited for clarity We now have more oversight no more time to waste. EmploymentE Law Risk Management Series and length. Talk about your priorities for your How to say “you’re fired!” first weeks and months as the new Avoiding mistakes in EAA chancellor. I have had two major goals I’ve terminating employees been focused on the last four months that will continue to be priorities moving forward. First, Thursday, November 13, 2014 enhancing the student experience Noon to 1:15 p.m. EST – in our schools by ensuring they Live Webcast have a safe, secure and nurturing Scan to register Register at mcdonaldhopkins.com learning environment that is fo- or call: 800.847.6424. cused on improving academic achievement. The second priority has been really doing an internal operations review of the EAA and starting to address some of the is- sues that we’ve found. Some things that I’ve already McDonald Hopkins PLC 8PPEXBSE"WFOVF 4VJUF #MPPNöFME)JMMT .*t done include improving financial controls. My goal is to continue to James J. Boutrous II, Detroit Managing Member make changes in the operational $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI and organizational infrastructure. NDEPOBMEIPQLJOTDPN Carl J. Grassi, President Today we announced a conflict- of-interest policy and an ethics hotline. We did have a policy in place, but employees were not signing off on confirming that they did not have a conflict of interest, and there was no actual way that people were able to report ethics violations anonymously.
What types of challenges lie ahead and how will they be addressed? I think we have a number of them. One is how we focus on im- proving outcomes for students, and that’s in a variety of ways. I think we have a challenge around recruiting the best talent, retain- ing that talent, and supporting and helping staff and teachers grow over time. We have to recruit the best peo- ple, retain them, incentivize them and support them. I would say that the EAA schools have done a lot of work improving the culture and climate in all the schools. That includes improved safety in all the schools.
Falling enrollment in EAA schools has been a concern, dropping from 11,000 from when it started running the schools in 2012 to around 7,200 for the current academic year. How do DBpageAD_DBpageAD.qxd 9/29/2014 2:02 PM Page 1 20141110-NEWS--0006-NAT-CCI-CD_-- 11/7/2014 2:51 PM Page 1
Page 6 CRAIN’S DETROIT BUSINESS November 10, 2014 Dresner Foundation assets hit $140M; to begin accepting grants
BY SHERRI WELCH Kevin Furlong, the Council of Michigan Foundations. eas that were important to both $5 million to Ann Arbor-based CRAIN’S DETROIT BUSINESS who served as Serving on the foundation’s board Joseph, who was 87 when he died, North Star Reach to construct a accountant for with Furlong are Lori Dresner, and his wife, Vera Dresner, who camp for children with chronic A private foundation funded by the Dresner fam- Dresner’s daughter in Colorado; died in the late 1990s. Those areas and life-threatening health chal- the late real estate developer Joseph ily, Dresner’s Gary Weisman,a principal with Gen- are health research, youth pro- lenges and their families. Dresner is coming into its own. Highland Cos. and eral Development Co. in Southfield; grams and animal welfare. $3.25 million to the Jewish Feder- Transfers of cash, real estate in- the family’s oth- and Mark Cohn, a shareholder of Joseph Dresner’s struggle with ation of Metropolitan Detroit and United terests, cash and stock from Dres- er apartment Southfield-based Seyburn Kahn PC. the blood disorder myelodysplasia Jewish Foundation to support several ner’s estate following his death in and industrial Over the past two years, the Dres- gave him an appreciation for the programs, including the Jewish Fami- 2012 increased the assets of the sites develop- ner Foundation has quietly been need to fund health research, Fur- ly Service of Metropolitan Detroit’s West Bloomfield-based Vera and Furlong ment companies making multimillion-dollar grants long said. He donated a total of $5 emergency needs for families pro- Joseph Dresner Foundation Inc. to in metro Detroit. as it puts in place systems to begin million to the Barbara Ann Karmanos gram. $78.5 million in 2012 from $1.5 mil- Another $10 million or so in as- accepting grant requests, Furlong Cancer Institute while he was alive. $2 million to the Michigan Hu- lion in 2011. sets has yet to transfer from the es- said. In September, it hired a pro- Today, the foundation continues mane Society to help fund the con- By the end of last year, the foun- tate, Furlong said. gram officer to assist Lori Dresner to support the areas the couple was struction of its new Detroit Ani- dation’s assets had reached The foundation’s existing assets in the grant review process. passionate about, Furlong said. mal Care Campus. $140.3 million, according to rank it among the 20 largest foun- Grants made in 2013 and this Multiyear grants made last year $1.3 million to Jewish Family Ser- the foundation’s CEO and CFO, dations in Michigan, according to year have been focused in three ar- and this year have included: vice of Colorado for the Safety Net and Lunchbox Express programs. $125,000 in grants to Warren- based Winning Futures to help fund its mentor programs for high school students. As the remainder of the assets transfer from Dresner’s estate into the foundation, Furlong said he ex- pects the annual grant budget to be $6 million to $7 million. The foundation plans to roll out a grant solicitation process next year. Until then, it is only taking grant requests by invitation. having options Sherri Welch: (313) 446-1694, [email protected]. Twitter: @sherriwelch
Botsford plans $160M expansion
Two months after agreeing to combine into eight-hospital Beau- mont Health, 330-bed Botsford Hospital announced last week a $160 million expansion plan for its Farmington Hills campus. Botsford CEO Paul LaCasse, D.O., said the osteopathic hospital plans to begin construction next summer after receiving expected certificate-of-need approval in the spring from the Michigan Depart- ment of Community Health. LaCasse said construction will include a five-story, 80-bed tower, bringing the total number of pri- vate patient rooms to 160 with an additional 24 private beds in the in- tensive care unit. Most hospitals in Southeast Michigan have been converting semiprivate rooms into private for patient convenience. “This has been overdue for a number of years,” LaCasse said. Botsford’s emergency and trau- ma center also will be expanded and critical care and observation units added. Surgical services will be up- dated with nine new operating rooms.
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BY SHERRI WELCH CRAIN’S DETROIT BUSINESS
Causley Automotive Group LLC has purchased the Macomb Town- ship dealership property and Hyundai franchise that formerly operated as Crest Volvo Hyundai. Causley paid Crest Automotive Group $3.13 million for the real es- tate and an undisclosed amount for the Hyundai franchise. The deal closed Oct. 31 and took the bet- ter part of a year to negotiate, said Joseph Sowerby, partner at Mt. Clemens-based Anton, Sowerby & As- Bernie Kent, JD, CPA, PFS | Jason Zimmerman, MBA, CLU, CAP | Marc Schechter, CLU | John Stein, MBA, CFA | Brad Feldman, JD, CLU sociates, who served as broker on Ilana Liss | Jeff Vieder | Aaron Hodari | Jordan Smith, JD, LLM | Paul Snider | Chris Hale | Kevin Beauchamp the deal. The dealership began operating as Causley Mazda Hyundai on Nov. 1. The 28,000-square-foot dealership, which sits on 4.5 acres fronting Hall Road, is undergoing signifi- cant renovations, Sowerby said. Contact a Schechter Expert to learn more about how an Independent advisor can make a difference: WWW.SCHECHTERWEALTH.COM The Volvo franchise that Crest Call 1.866.731.9500 or email [email protected] BIRMINGHAM, MI | NEW YORK, NY previously operated was not part of the deal. It was closed as part of Securities may be offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Investment Advisory Services may be offered through NFPAS or Schechter Investment Advisors, LLC. Schechter Investment Advisors, LLC. a consolidation program, said Bill is not affiliated with NFPAS. SIA is an SEC registered investment adviser; please consult the Firm’s Form ADV disclosure documents, available on the SEC’s Investment Adviser Public Disclosure website. Chope, president of Crest Automo- tive Inc., in an email. Thirty employees continued on with Causley Automotive, he said. Rob Causley, president and CEO of Causley Automotive Group, which operates Jim Causley Buick GMC in Clinton Township, did not return calls last week. Chope said the decision to sell the dealership was made after Sowerby opened a discussion about a deal. “We were excited by Rob Caus- ley’s plan for Hall Road and the en- ergy he would bring to the market Congratulations, for Hyundai and now with Maz- da,” he said. Bruce Goodman! The deal will allow Crest “to continue to expand our business, first with our existing remodeled Trail blazer, role model, mentor locations and then the opportunity to grow in the future,” Chope said. Crest operates Crest Lincoln in Inducted into the Energy Innovators Sterling Heights, Crest Ford in Cen- ter Line and Crest Ford Flat Rock. Business Hall of Fame by the Michigan Its owner is Paul Alandt, who is married to Lynn Alandt, a great- Energy Innovation Business Council granddaughter of Henry Ford and cousin of Ford Motor Co. Executive Chairman Bill Ford. The automo- tive dealership group recently completed a $3 million expansion and renovation at Crest Ford in Center Line, Chope said. That fol- Ŷ Environmental and energy law practice lowed a $750,000 renovation at Crest Lincoln in 2013. Next year, the group plans to in- vest $100,000 to add a Lincoln “Black Label” studio at the Ster- ling Heights dealership, he said. Lincoln plans to begin rolling out top-of-the-line Black Label trim levels for nameplates includ- ing the MKZ and MKC compact crossover at year’s end, according to Automotive News, a sister publi- cation of Crain’s Detroit Business. Chope said Crest Automotive also plans to begin a $750,000 ex- pansion and remodeling of Crest Ford Flat Rock in the coming year. Sherri Welch: (313) 446-1694, Contact Bruce Goodman at [email protected] [email protected]. Twitter: @sherriwelch 20141110-NEWS--0008-NAT-CCI-CD_-- 11/7/2014 2:51 PM Page 1
Page 8 CRAIN’S DETROIT BUSINESS November 10, 2014 OPINION LETTERS Showcase Motown sound in revue Patterson should Editor: would make an ideal home for a needed a Motown-themed bar in I was reading Mary Kramer’s permanent Motown revue show. town – a bar whose walls were dec- Oct. 23 column on You could get a small cast of orated with Motown memorabilia crainsdetroit.com regarding being three males and three females to like a Hard Rock Café, and many able to hear the Motown sound in do a medley of songs. The Motown video screens that could play non- back transit options Detroit (“Detroit needs more op- collection is so deep that the show stop Motown videos. portunities to hear Motown sound could be refreshed with different I think of when people visit a Brooks Patterson has been a tireless cheerleader for year-round”), and I couldn’t agree songs every few months. By using Hard Rock Café to look at memora- his beloved Oakland County. And as Crain’s report- more. a smaller theater, you would get bilia, they’d do the same for Mo- L. ed Nov. 3, Oakland continues to be a major economic I’ve always felt that either the visitors and tourists, but also lo- town. engine in terms of job growth and investment. City Theatre by the Fox or the Cen- cals, to attend. Roman Nestorowicz tury Club by the Gem Theatre Of course, I have always felt we Warren Patterson’s latest initiative — Tech248 — will try to do what Medical Main Street has done: Focus on a key sector in Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not the county and try to grow it. defame individuals or organizations. Letters may be edited for length and clarity. Email [email protected] Still, we winced when Patterson used the Tech248 launch last week to send a volley Dan Gilbert’s way by asking him to stop trying to recruit Oakland County companies to downtown. Two ironies struck us: Ⅲ First, Patterson never seemed to mind when companies exited Detroit over the past 30 years to new headquarters and of- OTHER VOICES fices in Oakland. So he shouldn’t gripe about the reverse. The county’s doing fine and does best when the region does well. Ⅲ Second, if he really wants to build IT jobs — jobs often held by millennials — he should get on board for plans for strong bus Ideas for new water authority rapid transit. Millennials like to text, not drive. Patterson has a great opportunity to become a champion of expanded transit op- Now that the new Great Count Port Authority. The sewerage system, and P3s could tions for the whole region. His support for a dedicated revenue Lakes Water Authority port authority will grow help alleviate these future costs to has been created, replac- significantly with the ex- rate payers. Such arrangements stream — likely to come to voters in 2016 — would be a big boost. ing the dysfunctional and pansion of the Panama would not wrest system control antiquated Detroit Water Canal to from public own- and Sewerage Depart- allow for ers. Learning from risky business ment, the regional orga- super con- Ⅲ Consider es- nization will be meeting tainer Southeast tablishing a pro- The Allen Park/Unity Studios saga came to an end last to map its mission, strate- ships to gram whereby gy and future action. I proceed Michigan must look rate payers will week with the U.S. Securities and Exchange Commission set- suggest that the authority from Asia have a voice in tling fraud charges against former Mayor Gary Burtka and do the following: Joe Neussendorfer to ports at the big picture future rate hikes former city administrator Eric Waidelich. Ⅲ Consider creating a broad- along the Eastern when it comes to and water con- Burtka and Waidelich were accused of misleading prospec- based strategy that brings together Seaboard. Con- servation and tive investors in a $31 million bond issue for the project. Burtka all parties associated with water tainer traffic will using its water sustainability technology, water economics, wa- grow from the programs. will pay a $10,000 fine, and Waidelich agreed to be barred from ter usage and sustainability to Port of New York resources. Southeast participating in municipal bond offerings. work on growing Southeast Michi- and Montreal to Michigan must The project hinged on being able to use bond proceeds to gan’s overall economy. This initia- the Port of Detroit look at the big tive could be modeled after Mil- via the St. Lawrence Seaway. picture when it comes to using its buy land that would be turned over to an entity it had created Ⅲ with Detroit native Jimmy Lifton to build a movie studio. But waukee’s Global Water Center, Develop a partnership with water resources. It was the water which was created by business, ed- Michigan’s University Research that brought historical economic using the proceeds for that purpose proved to be illegal, and the ucation and government leaders to Corridor composed of Michigan development to the Detroit River developers then withdrew $20 million commited to the project. transform their region into a State University, the University of and the Great Lakes. Innovative Burtka and Waidelich proceeded with the bond sale any- “world water hub.” Our region Michigan and Wayne State Uni- programs to develop our precious could do likewise. versity. These universities have water resources will contribute way, failing to tell investors about the change in plans and in- Ⅲ curring debt the city couldn’t afford to pay back. Allen Park Consider creating an econom- received nearly $300 million in greatly to a turnaround. Let’s ic development arm to assist exist- awards for water-related research transform the moniker “Water ended up with an emergency manager. ing and new customers with its and outreach from 2009 to 2013, ac- Wonderland” to “Water Technolo- All of this falls into a “what were they thinking?” category services. There could be a linking cording to a report from the An- gy Innovation Land.” that we suspect was based on an inability to let go of the pro- of current and new efforts by coun- derson Economic Group. Joe Neussendorfer is an affiliate ject even after its financial underpinnings disappeared. ty and city economic development Ⅲ Consider the use of public-pri- member of the American Society of We hope Allen Park’s hard experience has made other pub- departments, such as Macomb vate partnerships to help with fi- Civil Engineers, a member of the County and Executive Mark Hack- nancing and sharing the risks and Engineering Society of Detroit and lic officials less starry-eyed. There are a lot of ways to foster el’s “blue economy.” rewards on infrastructure pro- the Detroit Economic Club. He is economic development, but making risky bets shouldn’t be Ⅲ Consider a development part- jects. Public funds will be limited president and CEO of U.S. Con- one of them. nership with the Detroit/Wayne to maintain the existing water and struction Research.
KEITH CRAIN: Now all we must do is live within our means The journey to the end of bank- been lucky to have today’s political leaders can’t happen ever again. Every deci- Let’s hope that they all work. ruptcy has been long and painful. Kevyn Orr as well as a to toe the financial line sion that is made by city employees Things were pretty easy up to There has been a lot of giving federal judge who under- today and tomorrow. and politicians will be watched and the bankruptcy. Everyone got with little or no taking, and now it stood what was happen- The mayor and the scrutinized under a microscope for away with whatever they wanted would appear that we’re at the end ing and, more important, Detroit City Council decades in the future. and let the financial consequences of that particular road. what had happened over cannot for a single That’s the real world. happen sometime in the future. But it’s not the end; it’s just the the past half century. minute assume that it’s The city has had a terrible histo- Those days are over. These 16 beginning. While the end of the The real success is business as usual. It ry of political malfeasance and fi- months under bankruptcy were bankruptcy case leaves the city that no one is complete- will never be business nancial improprieties. Everyone not pleasant. No one wants to see with a clean balance sheet, now ly happy. All the parties as usual again. That’s connected to this system for the that happen again. the real work begins in trying to involved with this set- what brought this city past half century will have to It will be up to the mayor and make sure everything is in place tlement are unhappy. to its knees before — share the blame. council to keep this ship on course for the right financial conduct for The conclusions simply and no one wants to see Going forward, this city cannot af- and make sure it’s heading in the the decades ahead. were not designed to make anyone it happen again. ford to have it happen again. Checks right direction financially. Everyone owes the emergency completely happy. Political decisions that don’t refer- and balances have been put in place It was a tough journey. Now, the manager a great debt. The city has But the real challenge will be on ence financial implications simply to prevent this from happening. real challenges begin. 20141110-NEWS--0009-NAT-CCI-CD_-- 11/7/2014 10:21 AM Page 1
November 10, 2014 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: CBA would boost neighborhoods, small biz
We have all heard the Detroit’s economic Marathon expansion: a $175 mil- good on deliverables based on ing $4 million annually for local tale of two Detroits, the progress and further dis- lion tax abatement in exchange for signed agreements. No less should residents; a full-service grocery whispered interplay be- enfranchises communi- 15 Detroit jobs. be expected of major developers store where 95 percent of the em- tween the haves and the ties of color. Although a small percentage of who receive massive public subsi- ployees are minorities and 65 per- have-nots, the rich versus Detroit’s leadership business leaders have expressed dies and need to be a good fit for cent live in the Hill district; and a poor, black versus white must move past emotion- their dissent toward a CBA ordi- the communities that host their new $13 million neighborhood and corporate versus com- al and opinion-driven nance, a large percentage of De- projects. partnership program that sup- munity. rhetoric by adopting a troit-based businesses, especially In August 2008, the Pittsburgh ports home maintenance, re-entry While Detroit is witness- policy that would include those of African-American descent Penguins, the city of Pittsburgh, programs for former offenders and ing a paradoxical resur- targeted hiring, first- operating in Detroit’s neighbor- Allegheny County (Pa.) and scores a variety of additional social ser- gence between downtown source employment, em- hoods, call for a return of invest- of community groups entered into vices. Ken Harris and Midtown (commercial ployer training, forecast- ment. the Hill District CBA. These are not empty promises. corridor), amounting to billions of ing, Detroit-based procurement, What the community benefits In return for $750 million in pub- These are real outcomes that can dollars in investment, the city’s enforcement and monitoring. ordinance offers is something that lic investment, the One Hill coali- be achieved when there is a legally neighborhoods (urban corridor), Such measures are needed to most businesspeople and business- tion negotiated $32.5 million in di- binding CBA. which comprise more than 82.7 avoid the repetition of Detroit’s es crave: a clear framework with rect community benefits, Ken Harris is president and CEO percent African-Americans and spotty history, from the urban re- established expectations. Develop- including a first-source hiring sys- of the Michigan Black Chamber of 32,490 black-owned businesses, moval of Black Bottom on up to the ers expect subcontractors to make tem for newly created jobs generat- Commerce. have largely been ignored for any economic opportunities, resources and benefits. The absence of diverse partici- pation and inclusion in Detroit’s economic revitalization efforts has become a serious problem in a city that’s majority minority. The lack of a clear economic pol- icy for Detroit’s neighborhoods has led to insurmountable socio- economic disparities, resulting in increased unemployment and job- lessness, small-business and entre- preneurial neglect, community de- spair and a sense of hopelessness. A community benefits agreement can help achieve equitable and in- clusive development that will ad- dress Detroit’s “neighborhood problem” and bring together the two Detroits. CBAs are the best-known eco- nomic policy for underserved neighborhoods, where large per- centages of economically disad- vantaged minorities and commu- nities of color reside and own businesses. It allows for large-scale projects and sometimes-controversial new development projects, which nor- WANT A HEALTH PLAN THAT mally depend on a range of public subsidies, to work with elected of- ficials and residents to support the inclusion of robust community TREATS YOUR EMPLOYEES benefits. Detroit taxpayers have public skin in the game, and the resulting LIKE INDIVIDUALS? public benefit should be quantifi- able. CBAs are a way for the city to also adopt a living-wage ordinance policy, local hiring standards, mixed-income housing require- ments, procurement with Detroit- based businesses and other poli- cies that apply to future large-scale projects. CBAs can be used as one solution to job creation and eco- HealthPlus plans come with the benefits your employees need. nomic growth in Detroit’s neigh- borhoods. From fully-funded HMO, PPO, and Medicare plans to self-funded plans, HealthPlus has options for any budget. In Detroit, several large-scale projects, including the new arena And all of our plans come with great benefits like prescription coverage and preventive care. And if HealthPlus is your project, the entertainment district, sole health benefits carrier and you have 51+ employees, the HealthPlus Worksite U™ Wellness Program is free! M-1 Rail, a second bridge to Cana- da, expansion of hospitals and uni- HealthPlus is accepted at leading hospitals all over Michigan, so call your agent today at versities, philanthropic entrepre- neurial targeting, community 1-800-530-9071 or visit HealthPlus.org. reinvestment, and new housing and commercial developments represent hundreds of millions of dollars, if not billions, in invest- ment. A CBA will ensure that there are best practices and policies with measurable outcomes — think ROI — that can have a direct impact on Detroit’s most distressed and un- The Right Plan for a Healthier You derserved neighborhoods. The lack of meaningful public ©2014 HealthPlus of Michigan, Inc. participation in the planning and land use regulatory process hurts 20141110-NEWS--0010-NAT-CCI-CD_-- 11/7/2014 11:46 AM Page 1
Page 10 CRAIN’S DETROIT BUSINESS November 10, 2014 CEO Summit focuses on keeping companies competitive
BY DUSTIN WALSH tation is titled more. 4 Creative LLC, will be on the panel ties for exposure; business leaders CRAIN’S DETROIT BUSINESS “Do You Know Other notable speakers at this titled “Getting Your Business off from around the region to become Who Your Com- year’s summit include Jeff Fettig, the Ground.” aware of our product,” said Josh The third annual Michigan CEO petition Is?” CEO of Whirlpool Corp.; James Hackett, Brown, attending his first CEO Young, co-owner of Detroit Wall- Summit from the Business Leaders X Prize is a vice chairman of Steelcase Inc. and Summit, said understanding the paper. for Michigan will focus on keeping nonprofit that interim athletic director at the Uni- business trajectory in Michigan is “We’re also looking forward to the state’s companies competitive, provides prize versity of Michigan; Blake Kreuger, critical to his firm’s success, as meeting other Michigan-based locally and globally. money for inno- chairman, president and CEO of well as the networking. makers and help bring the frame- The Nov. 14 event is designed to vative techno- Wolverine World Wide Inc.; Florine For the second year in a row, the work to help support us and sup- create and express ideas and con- logical develop- Mark, president and CEO of WW CEO Summit will feature the Made port other companies like us.” cepts from the business communi- ment. Its board Group Inc.; and Jonathan Woetzel, di- in Michigan Lounge, where entre- The CEO Summit will be held Diamandis ty on how the state can outperform members in- rector of the McKinsey Global Institute. preneurial companies will display from 8 a.m. to 3 p.m. at the Westin others in job growth and innova- clude Tesla CEO Elon Musk, Google Crain’s Detroit Business Publish- their work. Book Cadillac Detroit. tion. CEO Larry Page, filmmaker James er Mary Kramer is moderating the Ferndale-based Detroit Wallpaper Tickets are $125 for individuals Peter Diamandis, chairman and Cameron and others. panel “Growing Innovation Co. will showcase its customizable and include breakfast and lunch. CEO of Culver City, Calif.-based Past X Prize challenges have in- Through Collaboration.” wallpaper and rug creations. For more information, go to X Prize Foundation and noted author, cluded suborbital flight, genome Jaeson Brown, partner at Detroit- “As a small business, we’re al- www.businessleadersformichigan. will keynote the event. His presen- sequencing, oil spill cleanup and based digital marketing firm Root ways trying to find new opportuni- com. Transit summit showcases new RTA chief Ford
BY BILL SHEA CRAIN’S DETROIT BUSINESS
An upcoming business-oriented transit summit will introduce Michael Ford, the new CEO of the Regional Transit Authority of South- east Michigan, to local business, civic and religious leaders. “Build Transit, Build Busi- ness” is a free event scheduled for 8:15-11 a.m. Nov. 18 at Ford Field and is a follow-up to “Better Tran- sit, Better Business,” which drew 100 participants to its Detroit Zoo location in June. “We are introducing Michael Ford to a diverse group of region- al leaders, some who will offer to arrange meetings with him in the future,” said longtime transit ad- vocate and event co-organizer Marie Donigan, a former state legislator and partner at Royal Oak-based Donigan McLogan Con- sultants LLC. “In June, the RTA was in a hold- ing pattern; now they can get down to business,” she said. “We want to give Michael Ford a head start, meeting the people he needs to know.” The RTA is expected to seek a re- gional transit tax in 2016. The summit also will include leaders from local colleges, hospi- tals and business. “We are convening a panel of higher education presidents and chancellors to discuss the issues they face with regards to transit for their students and faculty and the development of their campus- es,” Donigan said. Additionally, Jason Jordan, di- rector of the Washington, D.C.- based Center for Transportation Ex- cellence, will speak about trends in transit planning, ballot issues, messaging, champions and transit campaign best practices. The summit is a product of the Metro Coalition of Congregations of the Detroit-based Harriet Tubman Center. Eight churches in Oakland and Macomb counties make up the MCC. Donigan said she expects at least 300 participants. Those interested in attending the summit must RSVP through tubmanorganizing.org. 20141110-NEWS--0011-NAT-CCI-CD_-- 11/7/2014 12:07 PM Page 1
November 10, 2014 CRAIN’S DETROIT BUSINESS Page 11
REMADE IN AMERICA How an auto electronics company brought its manufacturing back home, Page 15
growing small businesses
REPORTER’S NOTEBOOK
Tom Henderson covers banking, finance, technology and biotechnology. Call (313) 446- Hardware, 0337 or write thenderson @crain.com.
Tom Henderson Accelerate software Michigan picks winners ... beware SkySpecs LLC, an Ann Arbor-based maker of drone aircraft to inspect bridges, water pipelines, and other infrastructure, won the grand prize of $500,000 last week at the finals of the fifth annual Accelerate Michigan Innovation event. It was the third year the company has competed at the three-day event. Launched in 2012 by a team of engineering students at the University of Michigan, SkySpecs finished third in the student category that year and was a semifinalist last year before being named one of the 10 finalists this year. Finalists made five-minute presentations to a panel of four judges that decided the big payoff GLENN TRIEST Thursday night. To grow quickly and stay competitive, Troy-based Rapid Global Business Solutions Inc. had to update its information technology, said Ravi Kumar, Now all SkySpecs CEO Daniel Ellis vice president of global operations. “Because,” he said, “technology can really take you forward or hold you back.” and other drone makers need is the long-anticipated approval by the Federal Aviation Administration for arise. Little issues gath- commercial drones to take to the air. 3 firms said ‘bye’ to old tech, overhauled er over time and present Ann Arbor-based Cribspot.com, themselves during over- which helps college students find hauls and upgrades. places to live while helping mom-and- pop owners manage rental properties, IT and rebooted their bottom lines “It’s exceptionally won $100,000 as runner-up. common to run into an The other Accelerate finalists were BY GARY ANGLEBRANDT environment that has Akervall Technologies Inc. of Saline, SPECIAL TO CRAIN’S DETROIT BUSINESS IT INVESTMENTS:3 THAT DARED been allowed to decay to a maker of mouth guards; Ann Arbor- Rapid Global Business Solutions Inc.: The a point to where simple based AMF-Nano Corp., which makes nce upon a time, it seemed Emsley engineering services company reconfigured its upgrades become an im- sensors to monitor crop and animal as if every business was IT and replaced all hardware — then doubled conditions; Ann Arbor-based touting the latest in infor- revenue from 2010 to last year, added 25 possibility,” Emsley said. FreeStride Therapeutics Inc., which mation technology it used employees in the past year and moved to Anything from staff time to legacy- makes drugs to alleviate joint paint larger headquarters this year. Page 12 software surprises can become part of and arthritis symptoms in animals; to be more efficient and O The Big Salad LLC: Having replaced the what Emsley called “scope creep,” as the Levanto Financial Inc. of Troy, a gain a competitive edge. inventory and time management systems at project swallows up more and more re- cloud-based “CFO” for high-income Nowadays, businesses are more like- the heart of his restaurant chain’s business, households; Ann Arbor-based sources because of lack of front-end plan- ly to groan when faced with investment owner John Bornoty said, “However long you Movellus Circuits Inc., which makes think it’s going to take, triple it, then double ning. Even off-the-shelf software systems decisions for their back-office manage- electronic device circuits; Ann Arbor- it.” Page 13 that appear ready to go usually aren’t. based Ornicept Inc., which provides ment systems and IT infrastructure. ShindelRock: The Novi accounting firm This month, Crain’s talks with three cloud-based data management; Bothering with these things seems more ditched its ’90s-era billing software a few SurClean Inc. of Wixom, which years ago and spent six months building a companies that recently overhauled provides laser-based removal of akin to changing the carpet than any- new one. The result: A customer management their business management technology surface coatings and dirt; and thing having to do with improving oper- system that peers deeper into the firm’s — the software and hardware that make TurtleCell LLC, an Ann Arbor-based ations. operations, spots trouble areas and improves maker of smart-phone cases. the overall business. Page 14 their operations run — to see how they This is especially so for small and Since awards were given out in did it and what snags they hit. various sectors, companies were able to midsize businesses, said Stephen the CFO that these systems we put in If one thing can be learned from win money even though they had not Emsley, technology director at place increased performance by this their stories, it’s that businesses should been selected among the finalists. The Webrunners Inc., a Southfield IT staffing much or saved costs by this much,” Em- not underestimate the time it will take sector awards went to: Solartonic LLC; and consulting company better known sley said. “IT directors are always ask- Ornicept; Akervall; SurClean; FreeStride; to upgrade back-office systems. While AlertWatch LLC; Inventev; BEET as W3R Consulting. ing for money.” the financial costs aren’t always daunt- Analytics Technology; and TurtleCell. “A lot of companies see IT on their But sooner or later, improvements are ing, the cost in time it takes to get the For information on student winners, balance sheets and just see it as a big needed, and waiting a long time to do it systems up and running is easy to mis- see longer story at crainsdetroit.com minus sign. It’s very hard to prove to increases the chances that problems will judge at the outset. 20141110-NEWS--0012-NAT-CCI-CD_-- 11/7/2014 10:09 AM Page 1
Page 12 CRAIN’S DETROIT BUSINESS November 10, 2014 Second Stage BIRMINGHAM’S IT changes present peabody mansion is on the market a challenge – even for engineering firm
Rapid Global Business Solutions Inc. in Troy doubled its revenue in three years. With that growth came Newer business a need to scale up the company’s back-office technology to match the owners should take new size of the enterprise. The engineering staffing and ser- this as a word of vices company, which does business under the name RGBSI, brought in warning: If a $35.5 million in 2010. Last year, its revenue came in at $74.9 million. technology overhaul RGBSI has about 85 internal em- was challenging for ployees (excluding workers the com- pany places for its staffing services). an engineering firm, Twenty-five of those employees were added in the past year. it’s not likely to be After “just surviving” the 2007- SEIZE IT BEFORE DAN GILBERT SEES IT!! 09 period, the company embarked easier for anyone else. on an aggressive growth plan to hit $100 million, a goal it expects to trieve and send files from central Here’s your chance to own a signature commercial building to showcase your business. reach next year, said Ravi Kumar, storage to the individual employ- vice president of global operations. ees who needed them. Switches BILL MILLIKEN, MILLIKEN REALTY COMPANY — CALL TO SCHEDULE A TOUR Growth has been driven by a needed to be programmed and per- [email protected], 734-821-4321 ext.101 hard push to diversify the customer mission issues dealt with before base, offer new products and ser- things were properly functioning. vices and, more recently, an agree- Newer business owners should ment with Dassault Systemes to act take this as a word of warning: If a as a reseller of the French design technology overhaul was challeng- and product software maker’s sys- ing for an engineering firm, it’s not tems to students. The push led to likely to be easier for anyone else. new customers in the aerospace, de- “It’s not straightforward,” Kumar fense and railroad industries and a said. tripling of the total number of cus- This year, the company went tomers, now numbering several through another overhaul, this hundred, Kumar said. time of its IT infrastructure. To better grapple with the in- Business growth prompted creased volume of work, RGBSI RGBSI to move from its old head- wanted new and nimbler systems quarters in Madison Heights to a to support a bigger and more mo- larger space in Troy. The company chooseHAP.org/group bile workforce. figured it might as well replace all The first of two major shifts was its computers, Internet, IT and tele- last year’s installation of a “virtu- phone hardware while it was at it. al desktop infrastructure,” sys- About 95 percent of the equip- tems whose benefits include re- ment powering these systems was duced power and hardware costs, replaced. “We essentially started a but also support greater mobility new company,” Kumar said. by storing employees’ work on a The revamp included beefing up central server instead of their in- network security in a way that dividual hard drives. This allows prevents different departments in them to bring up their desktops the company — HR and account- anywhere. ing, for example — from being able The project meant an IT overhaul to access each other’s files. The “To attract the best people, of more than $100,000, but it was separation makes it harder for deemed worth the expense because files to be accessed by outsiders, as offer themm thethe best.”best. of the speed with which new cus- well as mishandled by insiders. Rob Farr, President and CEO, Bank of Birmingham tomers and employees could be tak- The company’s customers, a en on under the new system. Where group that includes government it used to take at least a day or two agencies and companies like Boe- to get new employees up and run- ing, demanded this. “Some cus- One of the things that persuades a job candidate is our benefits program with HAP. ning at their workstations, it now tomers put in their terms that if takes just a few minutes. you don’t meet these guidelines we Almost every one of our employees has a positive story about HAP – including me. Besides the planning and financ- can’t issue POs. Some actually do We review our health plan provider every year. Renewing with HAP is a no-brainer. ing, the other big challenge was audits,” Kumar said. getting employees to change their The total bill for this hardware workstation habits to suit the new overhaul came to $180,000, he said. virtual desktop environment. To hear the full story, visit myhapstories.com. The two big technology upgrades “Typically, people are averse to weren’t done just to get the latest change,” Kumar said. “We com- toys. RGBSI plans to reach its municated that this is what we’re $100 million revenue goal in 2015. thinking about doing, this is the “That’s where we saw that to advantage it will have.” grow fast and be competitive, we Once employees saw how well have to upgrade our back-end in- Individual • Group • Medicare • Medicaid the new system worked, they had frastructure and technology, be- nothing but good things to say, he cause technology can really take said. you forward or hold you back,” The company had trouble get- Kumar said. ting the system to correctly re- — Gary Anglebrandt 20141110-NEWS--0013-NAT-CCI-CD_-- 11/7/2014 10:09 AM Page 1
November 10, 2014 CRAIN’S DETROIT BUSINESS Page 13 Second Stage Big Salad owner finds tech overhaul a lot to digest
One of the gravest oversights “People is needed and how it needs to be ma- feature for turn rates, they asked business heads can make when em- underestimate the nipulated is where businesses get him what a turn rate is, an answer barking on a technological over- time it takes to themselves into trouble in a hurry. he did not receive well. “How can haul is that of time. That is, not the put in data,” said That can lead to months of wasted you have an inventory system that John Bornoty, time it takes to get and install the founder of The Big labor and the system spitting out a doesn’t give a turn rate? ... It does system, but to make it work after Salad LLC. “Just hodgepodge of useless data, Borno- everything else!” he said. those steps are taken. getting the data ty said, so dedicated resources are In one instance, he met a guy ped- “When it comes to technology, it in the system can needed. dling a consumer rewards card sys- never goes as planned — never,” take a year.” “Someone’s going to have to take tem that looked great and did every- said John Bornoty, founder and ownership of it because they’re go- thing Bornoty thought it should to CEO of The Big Salad LLC, a Grosse ing to be on the phone for six months suit his business, except one critical Pointe Farms-based chain of six fast with the developer,” he said. thing: It only worked for credit card salad restaurants and 90 employees. The project cost Big Salad purchases. So customers paying Bornoty knows of what he speaks: $100,000 over two years, most of it in with cash — roughly half of the to- Before getting into the restaurant labor. And that was with a plan. tal — wouldn’t collect reward business, he owned a technology COURTESY OF THE BIG SALAD LLC “However long you think it’s going points for their purchases. business whose services included Or they might see that an extra ers. This would be the company’s to take, triple it, then double it. “A lot of software out there is back-office infrastructure support. employee at a certain hour of the day third-generation system. The first Then it’ll be there,” he said. written by developers and not In high school, he had a side job re- will yield thousands of dollars in was based on Microsoft’s Excel Coming from the tech world, users,” he said. “I’m still surprised pairing Commodore 64s. revenue over a year, Bornoty said. spreadsheet program; the second Bornoty wasn’t surprised at this. at how dumb tech companies can “People underestimate the time “Everything in our world, and was custom-made by the company. But he was surprised at the lack of be, for how smart and innovative it takes to put in data,” Bornoty in any business, you have product Managing the custom-built sys- tech support he received from the they can be.” said. “Just getting the data in the costs, labor costs and sales. Every- tem became too expensive, so The software maker. This has become The Big Salad is using a spread- system can take a year.” thing boils down to that,” he said. Big Salad bought one off the shelf a trend over the years, he said, sheet to work around the invento- This is nowhere truer than in the “We have to find ways to get extra and integrated it with its point-of- making it difficult for businesses. ry turn rate problem while twist- restaurant business, with its tight pennies, or see why certain tasks sale system. The challenge lay in Similarly, he gets frustrated at ing the developer’s arm to add that profit margins and inventories of are taking too long. Over the entering all the information need- seeing great software missing one feature. Bornoty said if he had to perishable goods. In Bornoty’s com- years, we’ve had to come up with ed to make it do things like track vital component that ruins the rest do it again, he would exercise his pany, which had 2013 revenue of ways with a click of a button to see average chickpea usage per cus- of the program. One gap in his new IT background a little more by ask- $2.2 million, it might be tempting to what’s going on; otherwise, we’d tomer, calculate how many ounces system was the ability to account ing deeper questions about how raise the price of a menu item by a have to raise our price without of lettuce come out of a case and for inventory turn rates, a pretty the software was developed. penny. But when given more pre- knowing what’s going on.” show how many customers were important piece of information For those without such a back- cise data, managers might see that Two years ago, the business be- served at specific times of day so when it comes to items like raw ground, he recommends hiring a lowering the price by a penny is the gan an overhaul of its systems sup- managers can staff appropriately. chicken. consultant who can ask those way to go, because that would boost porting inventory, ordering and Going into this process without a When he asked the developers questions. sales volume. time management for hourly work- specific plan as to what information why the software didn’t include a — Gary Anglebrandt 20141110-NEWS--0014-NAT-CCI-CD_-- 11/7/2014 10:10 AM Page 1
Page 14 CRAIN’S DETROIT BUSINESS November 10, 2014 Second Stage Software upgrade improves numbers for accounting firm
Accounting firms don’t always sociates PC, which does business as in 2001, making it quite possibly a sake,” said managers to better analyze opera- get speedy access to the latest tech- ShindelRock. “Our technology lags 1990s-era system. Wisinski, who tions. nological toys that other industries the rest of the world. We’re just More important, it just wasn’t also manages ShindelRock also in the past year do. starting to have apps on our good at doing what the firm needed. the firm’s IT. made a push to go paperless. This “The accounting industry is a phones.” The central role of an accounting So when the was done to make operations more bunch of Luddites when it When 2011 rolled around, Shin- firm’s business software is billing right software efficient, and also because more cus- comes to technology,” said Steve delRock had been using the same and tracking of billable hours. Shin- came along, it tomers expect it — they want to Wisinski, partner at Novi-based business management software it delRock’s system spit out two types was an easy de- share tax documents electronically. accounting firm Shindel, Rock & As- had when Wisinski joined the firm of billing reports, and reconciling cision for Shin- ShindelRock now scans all paper the two was problematic. delRock to go documents that come in, which re- “The different reports weren’t Wisinski get it. quires more labor on the front end, tied to each other,” Wisinski said. Business man- especially when the system was “We’d print things, and new infor- agement software is meant to mir- new, but speeds things up later. It mation would show up that didn’t ror real-life processes, a point that’s also set up an online portal for show up before.” easy to overlook when planning an sharing documents with clients. Let the Giant Buy Your Part of the problem was that staff upgrade. That means closely con- “New clients have been pretty members had to track their client sidering exactly how a company steadily asking for something like hours in a Microsoft Excel spread- does its day-to-day business and that,” Wisinski said. sheet, then someone else entered then making changes to suit the This move to paperless only took that into the billing software, a software, and vice versa. a few months because training was process prone to user error. ShindelRock spent a month on minimal and the company already “We’d been trying to get better this step, building the infrastruc- had the software to do it. IT A$$ET$ information about the internal ture of the new program to match ShindelRock, which has 20 em- workings of the company. Our how client tax forms come in and ployees and had 2013 revenue of $4 business is based on billing of what process those forms would million, spent about $11,000 on the time; the prior software we had experience until project comple- business software and another wasn’t able to give us reliable in- tion. “We changed our billing pro- $40,000 when training and staff time formation on that,” Wisinski said. cedure from that,” Wisinski said. were factored in. The software for While many businesses drag After that step came testing, the the paperless system cost $500 and their heels on investments in back- hiring of a consultant to train the another $20,000 in time and train- office technology because of the cost staff, and a few months of fine-tun- ing. and hassle, accounting firms are ing. The whole project, including The new client management slow because they have little choice. the initial time to find the system, system isn’t perfect. The database “Sometimes we don’t implement took six months. has plenty of information, but E-waste recycling/data destruction/computer liquidation when we could because the soft- Once done, the new system pro- takes coaxing to make it spit out ware’s not there. We have to wait a duced clear billing reports — the needed information. When called couple years before they straight- original goal — and also showed upon to provide anything beyond Call: 248-891-7330 or Email: [email protected] en it out. I’m not going to imple- more specific information on work the “canned list of reports” it of- ment technology for technology’s being done for clients, allowing fers, it balks, and then the devel- oper’s technical support people have to be called to make the re- ports happen. “Sometimes they do, sometimes LENDING | TREASURY MANAGEMENT | BANKING | BUSINESS SERVICES they don’t. If not enough cus- tomers are squawking about it, they won’t do it,” Wisinski said. Another frustration is finding people adept at handling the tech- nology. Technically skilled people $7,057 added back to your who happen to be accountants are hard to come by. “I’m looking for people that * have that technical bent. It’s hard bottom line…every year. to find people who have the skill set we’re looking for but also have that viewpoint,” Wisinski said. But the work has paid off in the Business solutions that help form of being able to see how much time was spent for, and what ser- vices were provided to, a particular you succeed. client. Managers can compare that to work done for similar clients and spot differences. If work for one client took too long, they can see Your hometown why. In most cases, the issue has to do with the quality of the information provided by the client. But this is advantage. not the worst problem to have. ShindelRock can then go to the *Savings based upon deposit volume, mileage, employee time and cost. Your savings may vary. client and show how making some small changes to its tax infor- mation can cut in half the time Being your trusted local banking partner means finding ways to add value to your business. ShindelRock spends on a client, It’s providing tools like our Business Express Deposit, which allows you to scan and deposit saving the client 50 percent on its checks at your desk and on your schedule. So you can run your business instead of running tax preparation bills. to the bank. Trust us, that’s a big advantage for small business. It also knows how much time a 1040 will cost a particular type of Contact Tom Snapke at (586) 447-4849 to learn more. client by looking at past examples from similar clients. This helps www.thefsb.com/expressdeposit | 866-372-1275 when making sales pitches. The overhaul wasn’t about just fixing the old software furniture How much can you save? lying about the office. It was about Use our remote deposit calculator to get started. making the whole business more efficient, Wisinski said. “We became more profitable as result of it,” he said. — Gary Anglebrandt 20141110-NEWS--0015-NAT-CCI-CD_-- 11/7/2014 10:11 AM Page 1
November 10, 2014 CRAIN’S DETROIT BUSINESS Page 15 Second Stage Danlaw builds automation to return manufacturing to this nation
BY GARY ANGLEBRANDT base for doing electronics manu- hassles over time zones, communi- than American-made ones — a SPECIAL TO CRAIN’S DETROIT BUSINESS DANLAW INC. facturing has left us over the cation differences, shipping and IP close enough gap to cover with course of a decade. Being able to worries, Coast said. Labor costs in productivity, technology and effi- Location: Novi Danlaw Inc. isn’t a stranger to new confidently get the process tuned- China aren’t as cheap as many ciency gains. challenges. Description: Automotive electronics in was quite a risk and took a lot think, and the gap is closing. “That’s within striking dis- testing service provider; maker of The company was formed in longer than it would have in Chi- The MMTC did a study five tance, and that was five years 1984 as a tester and developer of automotive telematics devices for the insurance industry na, to be honest,” Rzeznik said. years ago that showed prices of fin- ago,” Coast said. “Their (China’s) automotive electronics systems. The switch to U.S. manufactur- President and COO: Tom Rzeznik ished Chinese-made products were labor rates are going up, and our Automotive manufacturers would ing took a few extra months be- only 17 percent to 18 percent lower productivity rates are going up.” Chairman and CEO: Raju Dandu send their systems to Danlaw for cause the manufacturers had to third-party testing and validation. Founded: 1984 buy and set up new equipment to This worked fine until the most Employees: 150 make high-density miniature recent economic downturn, which Revenue: $58 million in 2013 electronics — not the sort of man- motivated ufacturing Michigan is known Danlaw to di- new tooling to make the miniature for — and then find people to run STAGE 2 versify its of- parts that compose the telematics it. ferings and device, Rzeznik said. Expert opinion: A shortage of STRATEGIES client base. The automated process saves skilled labor is affecting small The answer time and money, shifting the man- manufacturers A look at to the problem ufacturing advantage stateside. across the problem-solving was obvious “Add in the logistics and cost to board, includ- by growing because the companies ship parts, and dealing with cus- ing ones that company al- toms and deeds, and it’s a lot more try to bring ready had an- beneficial for us to do it here,” manufacturing other industry knocking on its back home, said door: In 2007, automotive insurers Rzeznik said. Mike Coast, began asking that it build a telem- Now, local manufacturers are atics device — one of those plug- gaining new business from Dan- president of the ins insurers offer to track driver law’s growth. Danlaw’s revenue Michigan Manu- has risen from $10.8 million in facturing Tech- habits and vehicle information, os- Coast tensibly to save drivers money. 2010, before any significant telem- nology Center in But having always been a ser- atics money began to flow, to Plymouth. vice provider and not a manufac- $58 million last year. About half of Preparing the road ahead by turer, this solution presented a revenue comes from the telematics working with local high schools new set of challenges. Besides hav- business, which turns out more and community colleges to build a ing to develop a product and find a than 1 million units a year. talent pipeline is one way to ad- contract manufacturer in China to Risks and considerations: The dress that problem. make it, Danlaw had to meet the company’s biggest concern was Manufacturers are realizing it’s tough standards required to oper- that of talent. “A lot of the talent worth the effort, given the reduced ate on cellular networks. That alone took more than a year and risked a delay of another year if Danlaw’s product failed to meet the standards. Problem: After wading through these issues, Danlaw began its first production run, of 2,000 units, in 2009. But logistics and intellectual property protection weighed on the minds of Danlaw’s managers as it did business with its Chinese Quality intelligence is the basis contract manufacturer. Product quality was good, but it was hard of a strong case. to work through any manufactur- ing and engineering issues with a Our team consists of professionals who can provide company on the other side of the comprehensive litigation support, consultation and world. solutions in many areas, including: Danlaw wanted to bring the manufacturing back home, but its s "USINESS VALUATIONS first-generation device was labor- intensive to build, having more s &RAUD