This Crain`s Detroit Business Article

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Page 1
®
www.crainsdetroit.com Vol. 30, No. 49
DECEMBER 8 – 14, 2014
$2 a copy; $59 a year
©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved
Page 3
Change to bar exam tests
Cooley Law’s passing rate
Kroger’s $100M upgrade
Kroger planned to
reopen its
Birmingham store
last Friday after a
four-month closure,
during which the
grocery chain spent
$5.6 million to
remodel it.
Huntington looks to clean
up in the dry-cleaning biz
To drive growth, 2 auto
dealers become partners
Second Stage
Lessons learned by firms
featured in Crain’s, Page 11
CRAIN’S
MICHIGAN BUSINESS
Education,
vocation are
high school
classmates,
Page 17
JOHN SOBCZAK
Grocery chain remakes stores, adds gas stations
and products to boost stake in Michigan market
BY SHERRI WELCH
CRAIN’S DETROIT BUSINESS
T
he Kroger Co. is investing hundreds of millions
of dollars in its Michigan stores in a bid to
maintain and grow its top share of the local
grocery market,
Investments are taking the shape of store expansions at sites in Rochester Hills and Canton Township and renovations this year at 10 area stores, including one in Birmingham set to reopen Friday
after a four-month closure and remodel totaling $5.6
million.Cincinnati-based Kroger (NYSE: KR) is also
looking to establish as many fuel centers as it can,
adding to the 62 it operates near its 124 stores in Detroit, Ann Arbor, Flint and Lansing.
Its Howell store will have a new fuel center by
Dec. 17, and another is set to open near its Roseville
store at Gratiot and Frazho Road in January, weather permitting.
All told, Kroger will have invested more than $100 million in
its Michigan operations by year’s
end, said Jayne Homco, president
of its Novi-based division, The
Kroger Co. of Michigan.
And it plans to invest at least
that much in the state each of the
next two years.
“The Michigan market is very,
Homco
See Kroger, Page 29
Far afield in hunt for talent
MAKING THE VC SCENE
Bundled with this week’s issue
is The Michigan Deal, our
periodic special report on the
state’s venture capital scene
and an in-depth look at M&As,
tech transfer and investmentworthy companies.
Among the highlights: Tom
Henderson’s report on the
evolution of university tech
transfer programs, a directory of
spinoffs of note and a report on
major VC-driven deals of 2014.
Read the print supplement or
visit crainsdetroit.com/MIdeal
Skills gap imperils small-town manufacturing
BY DUSTIN WALSH
Sarepta is quintessential smalltown America.
It’s a one-stoplight town in
northwest Louisiana with a population of 877, complete with a single post office and a drive-in burger joint.
But it’s Sarepta, and small
towns across the South just like it,
that are creating a labor nightmare for Southeast Michigan’s automotive suppliers.
As labor needs transition from
low-cost, low-skilled workers to an
educated, highly skilled labor
force, auto companies are struggling to persuade this new type of
employee to live and work in
towns devoid of big-city amenities.
“These U.S. plants were established to be close to our customers
and to utilize the work ethic of
small farm towns, hard-working
and reliable people,” said Frank
Macher, CEO of Auburn Hillsbased Continental Structural Plastics
LLC. “As we come up with new
means of manufacturing, more automation, more sophistication, the
job requires a person that’s become
more technical than these standard
hardworking individuals.”
CSP, a supplier of composite
door panels, trunks and other
equipment to automakers, employs 175 at its plant in Sarepta —
about 20 percent of the town.
That plant is critical to CSP’s
supply of products to automakers
New Auto Alley
accelerator
aims to boost
manufacturing
BY AMY HAIMERL
Automation Alley is launching a
new accelerator targeting Southeast Michigan’s advanced manufacturing firms.
The 7Cs Program, as it is being
called, will assist firms that
are beyond the
idea stage and
can get to commercialization
within the next
12 to 24 months.
But what is most
exciting about
the program is
that it promises Kelly
to connect participating firms with
their first customer. Already Automation Alley has the chief innovation officers of more than two
dozen tier-one suppliers in Michigan signed on to review the participants when they are ready.
“Getting that first customer was
critical to the program because my
philosophy is that you don’t build
a company to raise venture capital
funding,” said Tom Kelly, who
See Accelerator, Page 27
Suppliers such as
Continental
Structural Plastics
have gravitated to
small towns. But now
they need more highly
skilled workers,
who generally
don’t settle in
small towns.
See Skills, Page 28
NEWSPAPER
BILLY HATHORN/WIKIPEDIA
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December 8, 2014
MICHIGAN BRIEFS
Treetops Resort files Chapter 11;
main creditors are the owners
The eight owners of Treetops Resort in Gaylord — who also happen
to be the primary creditors — voted to place the resort in Chapter 11
bankruptcy protection, the Traverse City Record-Eagle reported.
No bank is involved, General Manager Barry Owens said. The resort
will continue to operate.
“The filing is necessary to preserve the value of our business and
to ensure continued operations,”
Owens said. At stake is about $23
million in long-term debt to the
owners, Owens said. After the reorganization, the owners will remain
involved. Management and staff
are expected to remain unchanged.
Grand Valley students offer GR
tips on keeping them in town
A group of Grand Valley State University students gave the Grand
Rapids City Commission a report full
of recommendations on making
the city a place where college students are more likely to stay after
graduation, MLive.com reported.
The recommendations include
strengthening the “brand” identities of city neighborhoods, promoting diversity, offering more
“midrange” rental options and
adding chain stores and restaurants. Students also said the city
should create a smartphone app al-
voters turned it down.
Domino’s delivers to Kenya; Swahili Chicken, anyone?
Depending on your view of KFC, the birth scream
of a modern society or a sign of the apocalypse occurred in 2011 when Yum Brands Inc. put the first
U.S.-based fast-food chain in the Kenyan capital of
Nairobi. Which makes some sense, unless you’re a
dietitian. The International Monetary Fund forecasts
Kenya’s economy to expand 5.8 percent in the fiscal
year through June from 5 percent last year.
The latest entrant in the Kenyan Fast Food fray is
Michigan’s own Domino’s Pizza International, which
plans to grow its presence in East Africa after opening its first shop in Kenya last month, Bloomberg reports.
Richard Allison, president of the international
unit of Ann Arbor-based Domino’s Pizza Inc., said the
lowing users to access information
on public transportation and the
schedules of city sports teams,
among other things.
The students urged city commissioners to create a “Millennials’
Advisory Board” that would provide feedback on policy and act as
a bridge between the city and organizations such as Grand Rapids
Young Professionals.
GR real estate firm buys building
downtown near convention hall
Grand Rapids-based CWD Real Estate Investment purchased the 10story Calder Plaza Building, one of the
largest buildings in downtown
company considers Kenya “the gateway to East
Africa. There is a growing middle class, growing
spending power among consumers and a strong receptivity to international brands.”
Domino’s will be adaptable to challenges, including the threat of terrorism, which isn’t unique to
Kenya, Allison noted. Crime “happens all over the
world, and it even happens in the U.S.”
Domino’s operates in 75 countries, with more than
half its retail sales generated by international stores.
The company has adapted its menu for Kenyan
tastes, with offerings such as the Swahili Chicken
Pizza. And considering the country’s reputation for
producing long-distance runners, if any population
can afford to eat pizza, it’s Kenya’s.
Grand Rapids, the Grand Rapids
Business Journal reported. The
building is across the street from
the DeVos Place convention center
and just west of Calder Plaza. CWD
would not disclose the purchase
price of the building, which it plans
to renovate within the next year.
CWD’s real estate holdings encompass 2.7 million square feet,
half of it urban office space in
Grand Rapids.
After cuts and failed millage,
Holland Museum says it may close
The Holland Museum says that if it
can’t find a long-term funding fix in
the next three to six months, it will
have to close, The Holland Sentinel
reported. Staff and hours already
have been cut, and the operating
budget has been sliced 30 percent.
The Holland Historical Trust,
which operates the museum,
asked voters in the city of Holland
and Park and Holland townships
to approve a 0.2-mill tax. All three
communities had to OK the measure Nov. 4, but Holland Township
MICH-CELLANEOUS
䡲 The Federal Energy Regulatory
Commission delayed for at least
three months a $97 million annual
increase in electricity rates to operate the coal-fired Presque Isle
Power Plant in Marquette, The Associated Press reported. The commission wants more information.
䡲 The Michigan Department of
Transportation was expected last
week to complete a $70 million project that included an overhaul of
the Zilwaukee Bridge on I-75.
䡲 Travel writers from a Cincinnati-based organization called Impulcity have determined that Holland should rank No. 2 on its list of
the “19 Most Beautiful Small
Towns in America,” MLive.com reported. No. 1 is Beaufort, S.C.,
which probably won the warmweather tiebreaker.
Find business news from
around the state at crainsdetroit
.com/crainsmichiganbusiness.
Sign up for the Crain’s Michigan Morning e-newsletter at
crainsdetroit.com/emailsignup.
CORRECTION
䡲 A Page 1 story in the Dec. 1 issue should have quoted Staffing Industry
Analysts as saying that MSX International Inc. could be among the largest
independent managed service providers, overseeing contract staffing
contracts for clients, instead of that it is conclusively among them.
Reach up to 461,300* local and
international business leaders
and industry insiders with the 2015
North American International
Auto Show Guide!
For advertising information, contact Marla Wise at
[email protected] or (313) 446-6032.
CLOSE DATE: Dec. 10, 2014 | MATERIALS DATE: Dec. 17, 2014 | ISSUE DATE: Jan. 19, 2015
*Based on distribution and potential readership
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Bar exam pass rates test Cooley
School lags rivals in adjusting
to a new scoring standard
BY CHAD HALCOM
Why are graduates of the Western
Michigan University Thomas M. Cooley
Law School more often failing the
bar examination than students at
any other Michigan law school?
That’s a question Cooley offi-
cials are trying to figure out.
Like most law schools statewide,
Cooley saw a major performance
downturn in July 2012 when the
state started giving greater weight
to the essay portion of the exam.
Previously, a good score on the
multiple-choice portion could help
offset poorer results in the essay
part. The weighting was changed
again for the July 2014 test.
But while most other schools appear to be recovering from the
change, Cooley hasn’t made the
same progress.
In July, only 55 percent of the
199 Cooley grads taking the bar
exam for the first time passed.
When graduates taking the exam
for the second, third or subsequent
time are included, that percentage
drops to 44 percent — the third
summer in a row that’s happened
— while other schools have seen 8
to 15 percentage-point gains, according to data from the state
Board of Law Examiners. The improvement at other schools could
be significant for Cooley because
one of the accreditation criteria of
the American Bar Association calls
for the school to keep its bar passage rate within 15 percentage
points of exam-takers as a whole
for the states where most of its
graduates apply.
See Cooley, Page 27
Inside
Fans, sponsors think Detroit
soccer’s pitch perfect, Page 6
Company index
Martinizing
joins the fold
Acquisition makes
Huntington largest
dry-cleaning firm
BY GARY ANGLEBRANDT
SPECIAL TO CRAIN’S DETROIT BUSINESS
KENNY CORBIN
Wayne Wudyka, who owns The Huntington Co. LLC along with Jeffrey Snyder,
thinks one company is likely to dominate the dry-cleaning industry — which is
why he added Martinizing Dry Cleaning to his collection of businesses.
The purchase last month of the
Martinizing national dry-cleaning
chain has more than doubled the
size of a local dry-cleaning franchisor, making it the country’s
largest.
Berkley-based The Huntington Co.
LLC manages a slew of dry-cleaning-related entities and brands
owned by partners Wayne Wudyka and Jeffrey Snyder. A steady
march of acquisitions and launches already had made this family of
companies one of the largest in the
business.
Then, last month’s purchase of
Martinizing Dry Cleaning gave Wudyka and Snyder all of Martinizing’s
422 national and international outlets, more than any other U.S.-based
dry-cleaning business, according to
rankings from Entrepreneur magazine.
That’s on top of the 154 franchise
outlets under Certified Restoration
Drycleaning Network LLC, another one
of Wudyka and Snyder’s companies.
Wudyka and Snyder set up Martinizing International LLC to purchase the assets of the Martinizing
business, including all franchise
agreements, trademarks and intellectual property, in a cash deal
from Martin Franchises Inc.
See Huntington, Page 26
2 dealers partner to grow while retaining control
BY JESSE SNYDER
AUTOMOTIVE NEWS
After toiling to revitalize separate
single-point auto dealerships in
metro Detroit, two childhood
friends merged and expanded operations to compete with larger groups.
Sam Slaughter and Katie Bowman Coleman created Sellers Auto
Group by pooling their resources —
his Sellers Buick-GMC store in Farmington Hills and her Bowman Chevrolet in Clarkston.
“It’s not an acquisition, but a
partnership,” said Slaughter, 52.
The distinction is key. Without
making a big payout to a seller, the
two partners have invested their
combined assets in growth and to
develop proprietary technology
called YourOnlineDealer that allows online customers to choose,
buy, finance and even take delivery
of a vehicle without visiting a dealership.
The partnership contract wasn’t
final until this year, but the two
have been working toward the
arrangement since 2010, well before
the 2013 opening of Sellers Subaru in
Macomb Township.
“We wanted to grow and be part of
something bigger, but we both also
wanted to remain in control as dealers,” said Coleman, 50. “We couldn’t
have done this if we hadn’t been
friends since we were kids.”
They met as children living in a
close-knit community in BloomSee Dealers, Page 28
These companies have significant mention in this
week’s Crain’s Detroit Business:
All Star Lawn Specialists Plus . . . . . . . . . . . . . . . . 25
American Laser Skincare . . . . . . . . . . . . . . . . . . . 22
American Spoon Foods . . . . . . . . . . . . . . . . . . . . . 19
Arctaris Michigan Partners . . . . . . . . . . . . . . . . . . 25
Automation Alley . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Auto-Owners Insurance . . . . . . . . . . . . . . . . . . . . . 25
Belfor Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Bissell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Blue Care Network . . . . . . . . . . . . . . . . . . . . . . . . 10
Blue Cross Blue Shield of Michigan . . . . . . . . . . . . 10
Cambridge Consulting Group . . . . . . . . . . . . . . . . 16
Certified Restoration Drycleaning Network . . . . . . . 3
ChemicoMays . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Cherry Republic . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Consumers Energy . . . . . . . . . . . . . . . . . . . . . . . . 26
Continental Structural Plastics . . . . . . . . . . . . . . . . 1
Cooper-Standard Automotive . . . . . . . . . . . . . . . . 20
Detroit City Football Club . . . . . . . . . . . . . . . . . . . . 6
Domino’s Pizza . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Doner Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Essential Bodywear . . . . . . . . . . . . . . . . . . . . . . . 14
Fast Hands Hockey . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal-Mogul . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Freudenberg-NOK Seating Solutions . . . . . . . . . . . 28
General Motors . . . . . . . . . . . . . . . . . . . . . . . . 5, 20
Grand Rapids Public Schools . . . . . . . . . . . . . . . . 17
Grand Traverse Pie . . . . . . . . . . . . . . . . . . . . . . . . 19
Greater Macomb PHO . . . . . . . . . . . . . . . . . . . . . . 10
Grit Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Huntington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IAC Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ImageSoft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
IMX Cosmetics . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Innovation Central High School . . . . . . . . . . . . . . . 17
Kelly Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
KPMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Kroger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 20
Leelanau Cheese . . . . . . . . . . . . . . . . . . . . . . . . . 19
Lowe Campbell Ewald . . . . . . . . . . . . . . . . . . . . . . . 5
McLaren Health Care . . . . . . . . . . . . . . . . . . . . . . 22
MedNetOne Health Solutions . . . . . . . . . . . . . . . . 10
Meijer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Metaldyne . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Michigan State University . . . . . . . . . . . . . . . . . . . 27
Moguldom Media Group . . . . . . . . . . . . . . . . . . . . 25
MSX International . . . . . . . . . . . . . . . . . . . . . . . . 20
NSF International . . . . . . . . . . . . . . . . . . . . . . . . . 20
Original Murdick’s Fudge . . . . . . . . . . . . . . . . . . . 19
P3 North America . . . . . . . . . . . . . . . . . . . . . . . . . 27
PCS Insight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Penske Automotive Group . . . . . . . . . . . . . . . . . 7, 20
Phimation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Physician Alliance . . . . . . . . . . . . . . . . . . . . . . . . 10
Rockford Construction . . . . . . . . . . . . . . . . . . . . . 18
Sellers Auto Group . . . . . . . . . . . . . . . . . . . . . . . . . 3
Skidmore Studio . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Slows Bar BQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Team Detroit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
TI Automotive . . . . . . . . . . . . . . . . . . . . . . . . . 20, 28
Triangle Associates . . . . . . . . . . . . . . . . . . . . . . . 17
TRW Automotive Holdings . . . . . . . . . . . . . . . . . . . 20
Wellco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
West Construction Services . . . . . . . . . . . . . . . . . . . 4
Western Michigan University Cooley Law School . . . 3
Department index
BANKRUPTCIES . . . . . . . . . . . . . . . . . . 5
BUSINESS DIARY . . . . . . . . . . . . . . . . 23
CALENDAR . . . . . . . . . . . . . . . . . . . . 24
CLASSIFIED ADS . . . . . . . . . . . . . . . . 25
“We wanted to grow and be part of something bigger, but we both also wanted
to remain in control as dealers,” said Katie Bowman Coleman, who partnered
with Sam Slaughter to form Sellers Auto Group. “We couldn’t have done this if
we hadn’t been friends since we were kids.”
KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8
LETTERS . . . . . . . . . . . . . . . . . . . . . . . 8
MARY KRAMER . . . . . . . . . . . . . . . . . 17
OPINION . . . . . . . . . . . . . . . . . . . . . . . 8
PEOPLE . . . . . . . . . . . . . . . . . . . . . . 23
THIS WEEK @
WWW.CRAINSDETROIT.COM
Real estate rumblings ... and rubble
Remember Schweizer's German restaurant?
Kirk Pinho has the ... uh ... latest on the site
and other real estate news.
KIRK PINHO/CDB
RUMBLINGS . . . . . . . . . . . . . . . . . . . 30
STAGE TWO STRATEGIES . . . . . . . . . . 16
WEEK ON THE WEB . . . . . . . . . . . . . . 30
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December 8, 2014
Slows Bar BQ to open location in
Pontiac’s former Strand Theatre
BY KIRK PINHO
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Slows Bar BQ has signed a lease
to open a restaurant in the former
Strand Theatre in downtown Pontiac, which is planning to undergo a
$21 million renovation and reopen
in the fourth quarter next year.
Phil Cooley, co-owner of Detroitbased Slows, said he was drawn to
Pontiac because he was “blown
away” by economic development
in the city and the restaurant is
“ready for this kind of growth.”
“I was in love with Detroit when
I moved here, and I feel the same
way about Pontiac. There is a lot of
sensationalism about Detroit —
and about Pontiac.”
Cooley said the new Slows will
have capacity to seat 100-150. In
addition to its original Corktown
location, the restaurant has another location in Midtown and a
Grand Rapids site opening in the
spring.
Kyle Westberg, president and
CEO of Pontiac-based West Construction Services, the Strand redeveloper, said about $3.5 million is
still needed for renovation along
with $1.5 million to fund Encore
Performing Arts Center, a nonprofit
that will be the theater’s operations and business manager.
A campaign to raise the $5 million is underway.
Westberg and Bill Lee, who was
named president and CEO of Encore last month, said they believe
Slows’ name recognition and popularity will help attract donors to
the project, the latest in a string of
renovation proposals dating back
to at least 1999 that previously
have not come to fruition.
“We want it to be truly unique
and have a real hip and entertaining
vibe where it’s easily accessible
with great food and great bands,”
Westberg said. “I don’t know of any
venue in the U.S. that will have this
food experience available.”
Lee, former vice president of
Celebrity Events Group and vice president of sales and marketing for
Olympia Entertainment Inc., said outreach to potential donors has begun with the financial, medical, automotive
and
philanthropic
communities, but wouldn’t be
more specific.
The renovation is being funded
by $4.1 million in federal historic
tax credits, $2.27 million in Michigan
Economic Development Corp. funding
from the Community Revitalization
Program, $3.26 million in developer
equity, and $7.67 million in equity
from a city of Pontiac renovation
that was never completed.
Westberg, who has a 98 percent
ownership share of the theater
building at 12 N. Saginaw St. with
his brother Brent Westberg, expects to close on the financing in
the first quarter.
The Strand, which was last open
20 years ago, will reopen with 838
seats and host concerts, live theater, comedy shows, films, and
community and private events.
Kirk Pinho: (313) 446-0412,
[email protected].
Twitter:
@kirkpinhoCDB
JOHN SOBCZAK
From left: Kyle Westberg, Bill Lee and Phil Cooley inside the Strand Theatre,
where Slows Bar BQ plans to be serving customers next year.
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December 8, 2014
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LCE will rebound from loss of Cadillac account, observers say
BY BILL SHEA
Losing another major General
Motors Co. account will hurt, but it
isn’t the death knell for Detroitbased advertising agency Lowe
Campbell Ewald, marketing observers are saying.
Cadillac last week said it will
shift its marketing from New York
City-based Interpublic Group of Cos.
— one of the world’s four major advertising holding companies and
parent of Lowe Campbell Ewald —
to Paris-based Publicis Groupe SA,
one of the other mega ad conglomerates.
Tim Smith, owner and CEO of Detroit-based advertising and design
firm Skidmore Studio, was blunt in
his assessment of the situation.
“Lowe Campbell Ewald is an
iconic and creatively strong shop
that will be better off without the
drama that GM continues to create,” he said. “They are better off,
in my opinion, without the schizophrenic behavior of a bad client.”
Skidmore has done LCE client
work over the years, and Smith
said GM’s recent decision to shift
Cadillac’s headquarters to Manhattan is the real problem, and not
the agency’s work.
“The more appropriate question
is how will Cadillac, an iconic Detroit brand, fare in New York City
— the taxicab capital of the world
— using the world’s largest
agency, which is based in Paris,
France?” he said.
Lowe Campbell Ewald moved its
500 employees to office space inside Ford Field in January to work
on the luxury brand, which basically supplanted the Chevrolet account that GM stripped it of in 2010
after a 91-year relationship.
LCE CEO Jim Palmer acknowledged displeasure with the Cadillac decision in a statement, but has
declined to elaborate or comment,
for now, on how the loss of the
work will affect the agency.
Cadillac spent $280 million in
measured media in 2013, according
to New York City-based data firm
Kantar Media.
LCE handled the account management work while London-based
Lowe and Partners Worldwide handled the Cadillac creative, so the
revenue was split in an undisclosed way.
Cadillac said it is moving the ad
work to accelerate global expansion, but sales numbers could have
played a role: The brand’s U.S.
sales have struggled all year,
falling 6 percent to 154,600 vehicles
through November in a strong
overall market that gained 5.5 percent. Sales plunged 19 percent in
November.
BANKRUPTCIES
The following business filed for
Chapter 11 bankruptcy protection
in the U.S. Bankruptcy Court in
Detroit Nov. 28 to Dec. 4. Under
Chapter 11, a company files for reorganization.
Mike’s K&G Deli #2 Inc., 15500 E.
Warren Ave., Detroit, voluntary
Chapter 11. Assets and liabilities
not available.
— Dustin Walsh
Other agencies have closed up
shop after losing car accounts: Omnicom in 2010 closed its BBDO Detroit office in Troy and cut 450 jobs
when Chrysler brand creative work
moved after 45 years to Minneapolis-based Fallon Worldwide.
When it lost Chevy, Lowe Campbell Ewald downsized from more
than 1,200 staffers at its former
Warren office building to about 500
today.
The 103-year-old ad agency became known for its Chevrolet TV
commercials such as “Like a
Rock” and “See the USA in Your
Chevrolet.”
Lowe Campbell Ewald had $121
million in 2013 U.S. revenue, ranking it 81st among all advertising
agencies by that metric, according
to data from Advertising Age.
“Campbell Ewald has some
amazing talent, people I would
love to work with. I’m absolutely
shocked that GM decided to move
on,” said Toby Barlow, chief creative office at Team Detroit, which
does Ford Motor Co.’s advertising.
While Cadillac is LCE’s major
local account, there is another of
equal or greater value to the
agency. In May, the U.S. Navy gave
Lowe Campbell Ewald a contract
extension worth up to $85 million
for a year of recruiting marketing
work. The marketing work for the
Navy’s recruiting has long been
one of the agency’s largest accounts, and dates back to 2000.
The Navy, which must put its
advertising contract up for review
every five years, told Crain’s in
May it will award the work on a
long-term deal before January.
Other major LCE clients include
OnStar, Alltel Wireless, Atkins Nutritionals Inc., Consumers Energy, Kaiser
Permanente, LifeLock Inc., Snuggle,
Unilever and USAA.
Rival ad houses understand
what Lowe Campbell Ewald is going through.
“Obviously, this a serious blow
— financially and emotionally. But
there are a lot of talented people at
LCE, and I’m sure they will carry
on in a positive manner,” said
David DeMuth, co-CEO and president at Southfield-based advertising agency Doner Partners LLC.
Doner lost the Mazda account in
2010, and was able to rebuild itself.
Said Jeff Stoltman, a marketing
professor at Wayne State University:
“The key for LCE will be their collective resiliency, their resolve
and ability to bring on new clients,
and most importantly, their ability
to hold onto and motivate the people who are the creative engine
that drives any agency.”
having options
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Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.
20141208-NEWS--0006,0007-NAT-CCI-CD_--
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1:37 PM
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December 8, 2014
Detroit City FC grows ticket sales, sponsors for new season
BY BILL SHEA
A year ago, a Cyber Monday season-ticket buying rush on the Detroit City Football Club’s website
caused a system crash.
This year, the popular semipro
soccer club’s owners spent months
preparing to handle the expected
online demand for 2015 season
tickets and new merchandise.
The site, DetCityFC.com, handled the demand without a hitch,
co-owner Alexander Wright said.
In fact, the team began this
year’s 2015 sale in earnest on Black
Friday and sold more of the eightgame season tickets (which are on
a plastic credit card-like pass) than
it did in the first month of sales a
year ago, Wright said.
The flurry of tickets and merchandise sold is the latest evidence
that the National Premier Soccer
League team’s popularity continues
to grow.
“At the rate we’re selling them, I
think it’s likely this year we’ll have
to cap our season-ticket sales,”
Wright said. The team doesn’t
make public its season ticket base.
“We do this internal math on
how many season tickets we can
move without worrying about
turning people away,” he said.
Le Rouge, as the club is nicknamed, averaged 2,878 fans per
game last season at Cass Tech High
School, including a season-high
3,398 on July 11 against the Fort Pitt
Regiment.
The club would cap season-ticket
sales to ensure that fans would be
able to buy single-game tickets,
Wright said. Some games last season saw more than 2,000 walk-up
sales.
In addition to being good — the
club is 24-5-9 in its first three seasons — Detroit City is profitable,
Wright said, but the team doesn’t
disclose financial specifics. The
team’s operating budget will be
just a bit more than $200,000, he
said, the most the team has spent.
Ticket sales account for about 40
percent of the team’s operating
budget, the club has said, while
corporate sponsorship makes up
15 percent to 20 percent, and merchandise sales are the remainder.
Expenses are kept relatively low
because there are no player contracts at DCFC’s level of soccer.
Club spending for the first time
includes TV spots during WDIVChannel 4’s telecasts of English Premier League soccer matches on Sundays, Wright said, alone with
digital advertising on the station’s
website.
The team has 23 corporate sponsors in 2014, most being bars and
restaurants. Ownership expects
that number to grow and diversify.
Sponsorship deals are a blend of
cash contracts and in-kind relationships.
“There is a lot of room for us to
grow on the sponsorship side of
things,” said Wright, who owns
Southfield-based Web content production company Good Problem Productions LLC, which does a lot of
work with Fox Sports Detroit.
The club’s popularity also is fueling a potential relocation. DCFC
is considering playing at Keyworth Stadium in Hamtramck in
2016, and is studying the stadium’s
suitability and physical status,
Wright said.
“It follows that we have to find a
bigger place to play soccer,” he
said. “There are not a ton of places
in the city, and we’re committed to
playing in Detroit. Hamtramck is
in Detroit. Maybe someday we’ll
be in a position to leverage what
we do and get a soccer-specific stadium together, but for now we’re
exploring our options.”
The club’s popularity has allowed it to boost revenue with
small price increases.
For example, season tickets for
2015 are $50, a $5 increase from last
season. Season tickets were $30 for
the inaugural 2011 season.
Individual game tickets are $10
at the gate, the same as 2014.
The team also makes money from
selling clothing, caps, scarves,
stickers and other goods from its
online store at DetCityFCstore.com.
Ann Arbor-based customer apparel maker Underground Printing
has taken over merchandise fulfillment for the club, something the
owners themselves did by hand
until recently.
“We would spend hours, every
other day, working out of one of
our basements. We’d go over there,
order some pizza and beers, and
Equal Housing Employer/Lender
The Detroit City Football Club
averaged 2,878 fans a game last
season at Cass Tech High School,
including a season-high 3,398.
See Next Page
TTY 1.800.382.4568
JOHN SOBCZAK
20141208-NEWS--0006,0007-NAT-CCI-CD_--
12/5/2014
3:44 PM
Page 2
December 8, 2014
From Previous Page
fill envelopes all day,” Wright said,
chuckling.
The season runs May-June.
Games in 2015 will be live-streamed
online, although details are being
worked out, Wright said.
The 2015 schedule hasn’t been finalized because the league has
been adding teams as a frantic
pace — more than 30 new clubs
since last season.
“It’s pretty impressive that our
fans are buying season tickets not
knowing who were playing or
when,” Wright said.
The club is analyzing its business functions and processes to
find more efficiencies to help general manager Donovan Powell,
hired last year to run the business
side of the club. He’s DCFC’s only
full-time employee, and the club
may add seasonal staff to aid him.
“It’s part of the growth process.
We don’t want to grow too fast, but
we want to give our people the
tools they need on the field and
off,” Wright said.
DCFC also believes it got an interest bump from soccer fans
thanks to last summer’s World Cup
and because of the exhibition
match in August at Michigan Stadium between Manchester United and
Real Madrid that drew a U.S. soccer
attendance record of 109,318.
“Every level of soccer in America benefited from the World Cup
last summer,” Wright said.
The team worked with Detroitbased Quicken Loans to host World
Cup viewing parties in Campus
Martius. “We knew this was something that was going to be big,”
Wright said.
Soccer observers laud what
DCFC has accomplished so far.
“I have met with them and I really like their vision and grassroots-level approach to building
their fan base,” said Andy Appleby, the Rochester sports entrepreneur who owns English professional soccer club Derby County.
“From my perspective, they appear to be doing a first-rate job.”
DCFC’s league, the NPSL, may
have 70 teams in 2015. It is a fourthtier amateur league within the
Chicago-based United States Soccer
Federation’s organizational pyramid,
which is topped by Major League Soccer and its 19 professional teams.
The federation is the U.S. soccer
system’s governing body for both
amateur and pro soccer.
Unlike European soccer, U.S.
What makes
your house a home?
The joy of the season’s first snowman is celebrated
with snowball fights that dissolve into shrieks of
delight. Paper snowflakes decorate the fridge,
and hot chocolate is ready to warm cold fingers
all the way down to their toes.
Memories make your house a home.
Investing in People. Investing in Places.
Visit michigan.gov/MSHDA to learn how we invest
in people and places all year round.
Page 7
teams do not jump up or down levels based on winning.
The team plays a 14-game regular-season schedule. It finished 8-33 last season, good for second place
in the NPSL Midwest Region’s
Great Lakes West Conference.
Lansing United won the conference.
DCFC won its division two seasons ago, and lost in the divisional
finals. Division rival Michigan Stars
FC, which plays at Hurley Field in
Berkley, finished 4-9-1 in 2014.
The New York Red Bull U23 from
Harrison, N.J., won the overall
NPSL championship in August.
NPSL rosters consist of unpaid
players, mainly high school, collegiate and former professional athletes. Because they’re considered
amateurs, athletes maintain their
college eligibility while playing in
the developmental league.
Lear, Penske eye
move to city
industrial park
BY DUSTIN WALSH
AND KIRK PINHO
Lear Corp. and Penske Corp. could
become two anchor tenants in a
large automotive industrial park
development in Detroit.
Mayor Mike Duggan is asking
the state Legislature to approve
land in the city as a Next Michigan
Development Corp. development,
Gongwer News Service reported
last week.
Anonymous sources confirmed
to Crain’s on Dec. 4 the development is the city-led, 189-acre I-94
Industrial Park.
As such a development, the site
near the junction of I-94 and I-75
would be able to offer economic incentives to businesses that use multiple modes of transportation. This
includes state and local incentives,
tax increment financing and property tax abatements — as long as
the business uses at least two of the
four designated transportation
modes: air, freight, rail or water.
Sources said there is interest
from Southfield-based Lear and
Bloomfield Hills-based Penske.
However, it’s unclear whether the
groups are close to signing a deal
or if that deal is contingent on the
Next Michigan designation.
Lear declined to comment.
Penske did not immediately return a phone call for comment.
Speaking to the Committee on
Economic
Development
on
Wednesday, Duggan told state lawmakers the deal wasn’t done, but
the approval of the NMDC designation would be “a key piece of getting it closed,” Gongwer reported.
House Bill 4783 is awaiting Senate approval after the committee
recommended passage.
The development is part of the
Detroit Economic Growth Corp.’s plan
for the I-94 Industrial Park —
which has been more than 15 years
in the making.
The park is just north of I-94 and
bounded by Mount Elliott Street,
Miller Street, Huber Street, Winfield Avenue and St. Cyril Street.
Dan Labes, senior managing director in the Southfield office of
Newmark Grubb Knight Frank, said the
site has enormous potential because of its proximity to I-94 and the
Coleman A. Young Municipal Airport.
Its renaissance zone designation
is also a large benefit, he said.
“Especially with the economic incentives, it’s a fantastic site,” said
Labes, who worked with Exel Logistics in its deal at industrial park.
The park is close to I-94, Van
Dyke Avenue and Gratiot Avenue,
and it has rail access via Consolidated Rail Corp. Incentives are also
available.
It’s unclear whether the DEGC
would lease or sell the land to a developer or one or both of the anchor tenants.
The Michigan Legislature, under a 2010 law, has approved six regions for NMDC designation: Areas near Detroit Metropolitan
Airport, a Lansing district, a Traverse City zone, a Flint trade corridor, a Grand Rapids region and an
Upper Peninsula site.
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December 8, 2014
OPINION
Time to right-size
schools’ landscape
harters and school choice were supposed to force public schools to improve to compete for students. That
hasn’t worked as planned, at least not in Detroit.
Mediocre or low-performing schools siphon students away
from better-performing schools for reasons like proximity to a
student’s home. The city also has an over-supply of classroom
seats. In 1990, Detroit Public Schools had 200,000 students attending school in one of 275 buildings.
Today, about 103,000 students attend classes in one of 230
buildings. Of those, about equal numbers attend DPS or one of
112 charter schools opened by 12 different authorizers, mostly
universities. That’s half the number of students as 1990 and
just 45 fewer buildings. (Auto executives grasp the concept of
“over-capacity” quite quickly.)
But there’s an opportunity. The term for Jack Martin, the
latest emergency manager for Detroit Public Schools, comes to
an end in January. What will Gov. Rick Snyder do?
What he could do is recognize that it’s unlikely anyone can
financially manage the district in the current environment of
too many schools and not enough kids.
He could engage Mayor Mike Duggan as a kind of central
authorizer for all schools — including DPS — who could also
coordinate transportation. And the mayor could convene community input to review data and make decisions on which
schools deserve state funding to operate.
Last week, Michigan ranked near the bottom of a report by
the National Association of Charter School Authorizers for
not holding charter school operators accountable for quality.
The governor could take a big step by helping Detroit “rightsize” the school landscape by rewarding the schools — traditional public or charter — that are serving children best.
C
House gas tax plan wrong way
Gov. Snyder has championed increased funding for roads
and infrastructure consistently in his first term.
He was inching closer to the goal line with the Senate approving a plan to add a wholesale tax on fuel. Then the state
House passed a competing plan to increase road funding by
phasing out the sales tax on fuel between 2016 and 2021 and replacing it with a fuel tax of the same amount. Public schools
and local governments, who are the primary beneficiaries of
sales taxes, would be the losers.
We prefer the Senate version that would create a new
wholesale tax on fuel for vehicles. But if the House won’t
budge on its plan, let’s split the difference and get more dollars
to roads by dividing in half the current 6 percent sales tax
charged on fuel sales — half going to roads, the other half to
schools and local governments.
LETTERS
TALK ON THE WEB
Overhead power lines
are the biggest failure
From www.crainsdetroit.com
Editor:
While I completely agree with
Keith Crain’s Nov. 24 column,
“Last one to leave? The lights are
already out,” that we are not
building enough new power
plants for the future, his column
misses the point of why we lose
power every time we have a
storm.
We could have a dozen brandnew nuclear plants in Michigan
and still lose power every time
there are high winds because our
antique electrical distribution
system is not up to the needs of
the late 20th century, much less
the 21st century.
Even when it was built in the
1930s, engineers understood that
Crain’s Detroit Business
welcomes letters to the
editor. All letters will be
considered for publication,
provided they are signed and
do not defame individuals or
organizations. Letters may be
edited for length and clarity.
Write: Editor, Crain’s Detroit
Business, 1155 Gratiot Ave.,
Detroit, MI 48207-2997.
Email: [email protected]
overhead power distribution was
inferior to underground distribution.
Charles Peacock
Wyandotte
Re: UM coach Brady Hoke fired
Unfortunately for UM fans, firing
another coach isn’t going to do the
trick. Revolving doors never work.
There’s something else deep within the culture of the program that
needs to be changed instead. Shortterm fixes never work.
John
Why coaches do well in some
schools and not so well at other
programs is the real mystery. UM
does not suffer from a lack of anything. It should be number one if
measured by available resources.
Whoever the new coach is, he will
have to rebuild recruiting and
work with what he has. It could
take years to get the program up
and running as their fans have
come to expect.
Timothy Dinan
See Talk, Page 9
KEITH CRAIN: Better hurry up with the power upgrade
Last week, Detroit once again
made national headlines in newspaper and television reports when
the lights went out. The power didn’t go out everywhere — but it
went out in enough places to get
everyone’s attention.
Just what our city needs. More
publicity about chaos.
No one bothered to read past the
first few paragraphs to discover
that this problem was caused by
the city-owned power department,
not DTE. Power was lost all over
the downtown area where the
city’s old and obsolete power company was supplying power.
City-owned buildings,
plus sites like the DMC
and the DIA, went black
along with lots of traffic
lights. Far too many
people were stuck in elevators in buildings that
lost power.
DTE didn’t originally
want to get involved
with this mess, and you
can’t blame them. But it
is their mess now, and
the sooner this antiquated power
company run by the city fades
away, the better off everyone will
be.
Obviously no one
should have the problem of getting stuck in
an elevator. And nonfunctioning
traffic
lights? That’s a real
recipe for disaster in a
modern urban area. Not
just inconvenience —
but serious danger.
DTE and the city are
at the very beginning of
a process to update the
city’s outdated electrical grid.
Work began in July, and in about
four years, the system will be upgraded and DTE will run the sys-
tem. It’s all following a request
from outgoing Emergency Manager Kevyn Orr to bring much-needed upgrades and better management to the system.
The sooner that DTE takes over
and invests in the upgrades, the
better it will be.
We all know about the frequent
power outages at DTE when
storms drop tree limbs on power
lines. It happens like clockwork after a storm, sending thousands
into temporary darkness.
But it is a very rare occurrence
when part of the basic grid goes
down. DTE has its interests and
the interests of its customers at
heart when it makes sure that the
core infrastructure is sound.
DTE has probably been beaten
over the head to take over the Detroit power company.
Unfortunately, it doesn’t have a
lot of choice. As a public utility, it
is going to have to take the good
and the bad.
It is the cost of doing business in
Detroit as a public monopoly.
Who knows? A successful transfer and upgrade might generate a
lot of positive vibes to offset the
next storm- generated DTE power
outage.
20141208-NEWS--0009-NAT-CCI-CD_--
12/5/2014
10:30 AM
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December 8, 2014
Page 9
NOMINATE YOUR WORKPLACE FOR HEALTHY COMPETITION
NOMINATIONS BEING SOUGHT FOR M&A AWARDS, BIGGEST DEALS
Is your workplace the healthiest in Michigan?
Find out by nominating your company for Healthiest Employers of
Southeast Michigan, an awards program that will be included in
a June 2015 Crain’s report.
The Healthiest Employers award, sponsored by Health Alliance
Plan, takes a look at the best practices that employers across
the state use to create a healthy workplace.
Judging will be handled by Indianapolis-based Healthiest
Employers LLC. The group has conducted similar competitions in
most of the major cities in the United States.
The contest is free to enter.
Winners will have their wellness efforts recognized as part of a
print supplement to run next year. They also will be featured in a
video series as well as honored at an event in April, with time
and location still to come.
To enter, go to crainsdetroit.com/nominate. The deadline for
entering is Jan. 26.
Involved in a merger or acquisition in 2014? You may be
eligible for Crain’s M&A Awards. Crain’s Detroit Business and
the Association for Corporate Growth will honor companies
and individuals in the following categories:
䡲 Best Deal of the Year: Under $100 million and $100
million or more. The deal must have closed in 2013. The
buyer or the business sold must be in Wayne, Oakland,
Macomb, Washtenaw or Livingston counties.
䡲 Dealmaker of the Year/buyer-seller.
䡲 Dealmaker of the Year/adviser. M&A experts, lenders,
CPAs, consultants and attorneys, among others, are
eligible.
Dealmaker candidates also must be in Wayne, Oakland,
Macomb Washtenaw or Livingston counties.
Winners will be profiled in the March 23 issue of Crain’s
Detroit Business and will be honored at an awards event in
May.
For questions about the awards, contact Executive Editor
Cindy Goodaker at [email protected] or (313) 4460460. For questions concerning the nomination process or
the nomination form, contact YahNica Crawford at
[email protected] or (313) 446-0329.
To nominate, see crainsdetroit.com/nominate. The
deadline for nominations is Jan. 12.
Biggest Deals
Deals of $10 million or more in transaction value initiated
or closed during 2012 will be published in the Jan. 26
issue. To be considered, the buyer or sold company or
company unit must be in Oakland, Wayne, Macomb,
Washtenaw or Livingston counties. Information needed is:
buyer, sold unit, cities for each, transaction value,
advisers, date the deal closed (if it has closed) and any
explanatory information. Please send an email by Jan. 12
to Executive Editor Cindy Goodaker at
[email protected].
TALK CONTINUED
■ From Page 8
Re: Michigan Senate defeats bill
to lower truck weight
This is the major difference in
roads between Ohio, Indiana, and
Michigan: weight per axle. The
Michigan Senate catered to the lobbyists. Enjoy your lobbyist-ruled
roads and highways this spring.
Don’t complain if you don’t vote.
linknet2
Until I see more communities,
counties and MDOT conducting
road maintenance on rotating
schedules, the argument that big,
heavy trucks are the biggest offenders regarding our road conditions just does not hold up.
I’m not discussing shoveling
cold patch into holes, but intensive
asphalt crack routing and sealing,
concrete pavement joint cleaning
and sealing, and drainage maintenance.
Roads do not reach their full life
expectancy if they aren’t periodically maintained.
putthehammerdown
Three generations and counting—on you.
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Re: Comerica Bank execs offer
positive outlook for economy
Wages are not increasing, but
increases in utilities, taxes and
more continue to climb. Furthermore, Michigan wants to add another burden to the working class
by increasing gasoline taxes to fix
roads that should have been taken
care of all along. The politicians
have neglected their duties (but not
their wages), and now the lowerpaid employees will once again
have to pay.
253110
There’s nothing preventing companies from increasing employee wages
now. To have to wait until unemployment moves to 5 percent suggest companies won’t share earnings until forced to. That’s not a
healthy employer-employee relationship. Be proactive for once; it
would benefit individuals and the
economy in general.
John
Re: Covisint to move headquarters
from Detroit to Southfield
I hope the state ensures those 50
jobs are created. I wonder how long
this company will last. It has never
made a profit.
Bhoughton01
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20141208-NEWS--0010-NAT-CCI-CD_--
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10:31 AM
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December 8, 2014
Blue Cross starts high-intensity care program with physician orgs
BY JAY GREENE
Eight physician organizations in
Michigan have joined forces with
Blue Cross Blue Shield of Michigan
and Blue Care Network to coordinate
care for up to 2,500 seniors enrolled
in Medicare Advantage with six or
more chronic diseases.
Launched in a preliminary phase
Oct. 1, Blue Cross’ High Intensity
Care Management Program is
aimed at reducing costs and improving outcomes by coordinating care
between primary care, specialty
physicians, advanced practice nurses, social workers and other health
care providers,
said
David
Share,
M.D.,
Blue Cross senior vice president of value
partnerships.
The program
is
aimed
at
Medicare Advantage members in
Share
Southeast Michigan and Grand Rapids. “We have
enough of a density of membership
there and teams dedicated to working with them to travel and make
home visits,” Share said.
Services are expected to be pro-
vided in physician offices, patient
homes and, in some cases, nursing
homes. Depending on the condition
of the patient, the team could include nurses, therapists, dietitians,
social workers and health coaches
along with the physician.
Three of the physician organizations
are
Rochester-based
MedNetOne Health Solutions; The Physician Alliance, a Warren-based organization affiliated with St. John Providence Health System; and Greater
Macomb PHO, which is affiliated
with Henry Ford Macomb Hospital.
“This allows primary care physicians to really care totally for highrisk Medicare Advantage patients,”
said MedNetOne
CEO Ewa Matuszewski, adding that seniors
also have psychological and
social needs that
will be addressed
in the home setting.
She said the
Matuszewski
MedNetOne
team this year conducted a monthlong test of the program on 70
Medicare seniors and found home
visits were particularly effective in
reducing costs. MedNetOne also is
collaborating with the Greater Ma-
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comb PHO to ultimately care for
about 225 patients.
The high-intensity care model is
an extension of the Blue Health
Connection program, which provides telephone-based care management from a specially trained
Blue Cross nurse.
During the early phase of the
program, the nine physician organizations will identify patients
and voluntarily enroll them into
the program. Practices will assess
patients and develop comprehensive care plans, Share said.
“This program involves the very
frail elderly,” said Karen Swanson,
M.D., chief medical officer with The
Physician
Alliance. “It is a
challenging patient population
for physicians
because patients
have lots of medical needs, including social,
caregiver and
transportation
Swanson
issues.”
Swanson said The Physician Alliance expects to sign up about 300
seniors over the next six months
and hire additional medical team
members, including nurse practitioners, social workers, nutritionists and pharmacists.
“Fortunately there is some reimbursement for care in the
home,” she said.
Physician organizations will bill
for office services as usual, but
Blue Cross and Blue Care has created at least two new codes to help
pay for the home visits and other
administrative overhead costs.
Share said Blue Cross also will
work with practices to construct a
new shared savings payment model for the physician organizations.
“By April, we will have a more
robust reimbursement system,”
Share said. “Some physician organizations already have gain-sharing arrangements with Medicare
Advantage plans whereby if they
improve financial performance
over time, increase well-being of
members, decrease the need for
more costly services, they share
some of the savings.”
Swanson said The Physician Alliance has estimated it will incur a
small loss on the program based on
the additional staffing and administrative costs. She said the gainsharing bonus system will help put
the program in the black.
“Why do this program if we are
expecting a loss?” Swanson said.
“This goes back to knowing that
we are not doing a good job with
this complex population. We want
to do better.”
Share said Blue Cross will monitor costs associated with hospital
admission rates, use of emergency
departments and nursing homes.
“We will decide whether to continue the program based on our review,” he said.
The five other physician organizations that volunteered to be part
of the program are Advantage Health
Physicians, Grand Rapids; Integrated
Health Associates, Ann Arbor;
Lakeshore Health Network, Muskegon;
Oakland Southfield Physicians, Southfield; and United Physicians, Bingham
Farms.
Jay Greene: (313) 446-0325,
[email protected].
Twitter:
@jaybgreene
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December 8, 2014
Page 11
A HEALTHY RISK
Is Affordable Care Act here to stay?
Benefits consultant plans for it, Page 16
growing small businesses
EDITOR’S NOTEBOOK
Amy Haimerl is
entrepreneurship
editor and covers
the city of Detroit.
She can be
reached at (313)
446-0416 or at
[email protected]
Amy Haimerl
To small-biz
support: Cheers
This is the year that Detroit started
thinking small to grow big.
Small business and entrepreneurs were
the focus of the region’s economic
development efforts, from the city of
Detroit hiring Jill Ford to lead efforts to
foster entrepreneurship in the Motor
City, or Automation Alley building a new
accelerator for advanced manufacturing
companies. (See Page 1). And, of
course, Goldman Sachs came to town
with its 10,000 Small Businesses
program to help those poised for growth.
And the Detroit Regional Chamber
and Detroit Economic Growth Corp.,
two groups known for thinking about
big business, started advocating
loudly for the city’s small businesses.
Here are three ways the region
focused on small business this year.
1. #NEIdeas. The New Economy
Initiative served up $500,000 in
much-needed assistance to Detroit
small-business owners this year. The
nonprofit doled out $10,000 each to
30 local businesses, allowing City
Bird to expand its retail shop in
Midtown; Café con Leche to bring
coffee roasting in house at its
Southwest Detroit café; and Gleeor
Inc. to buy a skid steer and expand its
New Center-based construction and
landscaping business, among others.
2. Detroit Microloan Collaborative.
Huntington Bank extended a $5 million
line of credit to the Detroit
Development Fund to create a
microlending program for small
businesses traditionally considered
unbankable. But the DDF went a step
further, partnering with the Michigan
Women’s Foundation, Detroit MicroEnterprise Fund and Lifeline Business
Consulting Services to target minorityowned businesses and ensure they get
the money, coaching and development
skills they need to succeed.
3. D:Hive grows up. For the past three
years D:Hive has acted as both a
welcome center to the city and a
small-business development
organization. But starting in 2015 it
will split into two: Build Institute and
Detroit Experience Factory. That
means Build Institute can train more
people with ideas on how to make
them into businesses.
So as I think about my New Year’s
resolutions, I toast the many smallbusiness support organizations out
there, including FoodLab Detroit,
Detroit Food Academy, Hatch Detroit
and its partnership with the Detroit
Lions, TechTown Detroit, Invest
Detroit, Focus: Hope, the Center for
Empowerment & Economic
Development, Detroit Creative
Corridor Center, SCORE Detroit and
all those I have yet to meet and know.
Second Stage looks
D
ozens of Southeast Michigan companies shared their
stories this year in Second Stage, Crain’s monthly look
at issues pertaining to small and midsize businesses on
the grow.
For this final issue of the year, we revisit some of the companies featured to see how their year went and what their
plans are for 2015.
We hear from:
䡲 Jim Marinoff, owner of Fast Hands Hockey LLC, a
Northville startup featured in the July 14 issue, this page
䡲 Leon Richardson, president and CEO of ChemicoMays LLC,
who talked about diversity practices in the Sept. 8 issue, Page 12
䡲 Andrea Livingston, managing director of Grit Design
Inc. in Detroit, featured in the May 12 section on benefits
and compensation techniques to attract and retain talent,
Page 13
䡲 Carrie Charlick, CEO of bra business Essential
Bodywear LLC, featured in the July 14 section about going
global for the first time, Page 14
䡲 Scott Foster, president of Wellco Corp. and the subject of
the July 14 Stage 2 Strategies, Page 15
We also asked them to read the economic tea leaves for the
year ahead and share some New Year’s resolutions.
— Gary Anglebrandt
Hockey startup gets an assist from
a Red Wing – and a Japanese kid
W
hen 2014 dawned, Jim
Marinoff had no idea he
would spend part of it at
Pavel Datsyuk’s house.
But at one point during the year,
that’s exactly what he was doing.
Marinoff runs Fast Hands Hockey
LLC, a business based on a patented tool he invented to help hockey
players practice their puck-handling skills. The strength and conditioning coach for St. Mary’s
Preparatory high school in Orchard
Lake had younger people in mind
when he came up with it.
But then in October, the agent
for the Detroit Red Wings star called
to ask whether his client could get
his hands on one.
Marinoff runs the business out of
his Northville home with help from
his wife, who has a full-time job at a
shipping company. They have no
employees and launched the business with minimal marketing.
So calls like this aren’t expected.
The agent asked Marinoff to
bring over a few Fast Hands to the
Oakland County home of Datsyuk,
who was out of town, and gave
Marinoff the code to get in. “I
dropped some off with — I don’t
know if it was the butler or what,”
Marinoff said.
Similarly, he wasn’t expecting
Philadelphia Flyers General Manager
Ron Hextall to come calling in
April, asking for 12 units. Marinoff
figured the Flyers wanted the tool
to give away as a prize or something along those lines. He inquired
to see what Hextall had in mind.
“He said, ‘We’re putting them in
the Flyers training center,’ ” Mari-
noff said.
Fast Hands began operating in
2012, and 2013 was the first full
year of business. It sold 8,500 units
that year and doubled that this
year, to 17,000.
His plans for next year follow another bit of serendipity, something
Marinoff never seems short of.
This year, online videos began
circulating featuring a Japanese
boy showing off his puck skills,
and in some of them he’s using a
homemade version of the Fast
Hands tool.
The videos became a sensation;
a new one last month gathered
more than 1 million views and
caught media attention in North
America.
Marinoff contacted the boy’s father and sent a proper Fast Hands.
The father recommended Marinoff
get the product in stores in Japan,
where hockey is taking off, and
gave Marinoff the contact information for a big retailer.
They’re working to get something happening, but the language
barrier is slowing progress. Fortunately, Marinoff has a Japanese
connection.
“There’s a Japanese guy who
lives in my subdivision. I’m probably going to ask him” for help, he
said.
Marinoff also has investment
plans for next year. He and the
hockey coach from St. Mary’s, Brian Klanow, are developing a rebounder — a tool that shoots the
puck back at the handler. They’ve
spent $4,000 developing it at a prototyping program run by Lake Superior
State University in Sault Ste. Marie.
FAST HANDS HOCKEY LLC
Resolutions
䡲 Upgrade business processes.
This was the second full year of
operation at Fast Hands Hockey,
and Jim Marinoff still manages all
the billing and recordkeeping on
paper. So this year, he will “get
everything electronic.”
䡲 As for hiring a first employee,
Marinoff’s not quite ready. “I’m
kind of scared of hiring. If I want it
done right, I’ve got to do it myself,”
he said.
Economic outlook
Hockey is an expensive sport.
Parents have to shell out for ice
time, gear and coaching. But since
Marinoff sees no shortage of
demand for hockey products, he
figures that must be a good sign.
“Hockey goes along with a good
economy.”
Jim Marinoff’s
contraption that
develops nimble
stickhandling
attracted
attention from
one of the
masters of the
craft – Detroit
Red Wing Pavel
Datsyuk.
ANTHONY BARCHOCK
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December 8, 2014
Second Stage
JOHN SOBCZAK
Leon Richardson (right) learned that expanding ChemicoMays into Mexico involves more than having the right people and
resources. A simple oversight in taxation cost the company a year’s worth of taxes that could have been avoided.
Be it engines or global growth,
get down to the nitty-gritty
Leon Richardson, head of Southfield-based ChemicoMays LLC, said
the past year was a solid one with
no surprises — almost.
The company spent 2013 preparing for the launch of a new line of
business last January when it
moved into the high-precision
cleaning of engines being built at
automotive plants. ChemicoMays
takes the new engines, ships them
to another location, cleans the mill
grease and stamping oils off them
and ships them back.
Sounds simple enough. But in
the high-intensity world of automotive manufacturing — with its
tight margins, lean inventories
and breakneck deadlines — small
missteps are expensive.
CHEMICOMAYS LLC
Resolution
Economic outlook
After expanding into one new line of
business in 2014, Richardson plans
to keep building. “We’re going to
broaden our service offering to our
existing customer base.”
Expecting good things from low
energy prices: “Depressed energy
costs are going to drive positive
economic growth for the foreseeable
future. I’m very bullish.”
The launch involved the logistical pressures of receiving specialized washers from Germany and
specialized chemicals for the precision cleaning. Last-minute engineering changes — not uncommon
events in the automotive world —
pushed things to “the eleventh
hour,” Richardson said.
Fortunately, the company,
formed in 1989, had been through
the wringer before. “An engineering change will drive some individuals in other industries nuts,”
Richardson said. “We’re we used
to the pressures.”
Another big project this year, a
25 percent expansion of ChemicoMays’ Mexican business, also went
smoothly, with one small oversight:
taxes.
The project was to expand the
company’s work in Mexico from
automotive to aerospace and defense. Despite taking pains to put
in the right team and resources,
matters of tax structure and money repatriation were overlooked.
The result was the company
faced double taxation, once in
Mexico and once in the U.S.
“We didn’t pay close enough attention to legislative issues like
taxation,” Richardson said.
And this was no theoretical matter — ChemicoMays became
aware of its situation last summer,
12 months after the fact. It had to
pay a year’s worth of taxes that
could have been avoided.
This forced the company into reforming the entity it had set up in
Mexico. Consultations with Mexican and U.S. authorities eventually
squared things away to prevent the
same thing from happening next
year.
“No one got hurt. It was a good
year,” Richardson said.
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Second Stage
JOHN SOBCZAK
This summer, Andrea Livingston got a confidential tip that her company had won a $5 million contract. Alas, that was not
to be, reinforcing Grit Design’s aversion to requests for proposals.
Design firm’s RFP became RIP,
but biz kept buyout bids buzzing
Looking back on the year of running her digital marketing business, one moment stands out for
Andrea Livingston, managing director of Grit Design Inc. in Detroit.
It was late on a Friday in summer,
and a call came telling her, confidentially, that her firm had won a
$5 million contract. The official paperwork would arrive next week.
“We, of course, were overjoyed.
We love the client and what they
do,” Livingston said.
Another call came during the
middle of the following week saying the contract wasn’t finished
yet, but hang in there. Then on Friday came the apologetic call saying the contract was canceled.
From the sound of things, it never
really had been a possibility to begin with, as the potential client’s
IT department wouldn’t let go of
the project in question.
The people at Grit Design had
learned from similar experiences
to never count their chickens before they hatched, so there hadn’t
been any champagne parties that
week. But it was deflating nonetheless.
“We had been mentally organizing our operations to manage” the
new business, Livingston said.
The contract talks were initiated by a request for proposals,
something Grit already was leery
of doing because the amount of effort RFPs take. The experience reinforced the company’s skepticism. Next year, no more RFPs.
“The best business comes from
relationships,” Livingston said.
Grit also had a more pleasant
surprise this year — unsolicited
buyout offers. “Three different
companies offered to buy us out of
the blue for low dollar amounts,
assuming we weren’t sophisticated enough to understand our own
value,” Livingston said.
GRIT DESIGN
Resolution
䡲 The goal next year for managing
director Andrea Livingston is “to
work with people who we really
enjoy working with,” whether it’s on
the client side or in team efforts
with other businesses in the
marketing world. She wants to stick
to companies that provoke thought
The company was not looking to
sell, for an insulting price or otherwise, but the offers came as welcome encouragement. The Grit
team has been together for more
than 10 years, which is rare, and it
caught others’ attention, she said.
“As a small-business owner,
and mutual respect — “folks who
really think broadly.”
Economic outlook
䡲 Livingston expects significant
growth next year and is in talks with
investors to raise the money
needed to scale the company
accordingly.
you’re constantly second-guessing
yourself,” Livingston said. “When
people call out of the blue, even if
the offer is junk, it validates that
you still have something.”
Grit Design is looking for investors, however, to support anticipated growth next year.
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Page 14
December 8, 2014
Second Stage
GLENN TRIEST
Carrie Charlick (left) and Marcia Cubitt saw Essential Bodywear generate considerable press when the “Today” show and
“Late Night with Seth Meyers” made sport of their bra-fitting office parties. Notes Charlick: “It’s done in restrooms.”
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After a chilly year, bra-maker
gets a boost as comic fodder
The weather got things off to a
bad start this year for bra-maker
Essential Bodywear LLC.
The company has an army of
sales representatives, affectionately known as “bra ladies,” who buy
the products to sell through parties at homes and offices, where
women also get fitted.
The polar vortex didn’t put people into a partying mood, however.
With everyone hunkered down for
the duration, sales plunged.
“It was the first time in 11 years
the weather affected us,” CEO Carrie Charlick said. “It took a toll on
us; it took a toll on the reps.”
Then the Commerce Township
company spent much of the rest of
this year untangling itself from a
decision gone wrong.
In January, Essential Bodywear
introduced a lineup of fancier, lacier bras. But the bra ladies revolted. They wanted to stick to their
tried-and-true basic bras and just
wanted more colors to offer.
Because the bra ladies are the
ones most attuned to customers
and technically are Essential
Bodywear’s front-line customers
anyway, the company relented.
“They don’t want to be fashionistas,” Charlick said.
The wheels already were in motion and inventory ordered, requiring the company to make a
quick about-face. It’s not an experience Charlick and her fellow company owner, Marcia Cubitt, plan to
repeat. They promise to “stick to
the basics” from now on.
“It’s been a yearlong thing, dealing with this,” Charlick said.
The year wasn’t all bad. The
company’s quirky way of selling
bras caught national media attention one week in September, with
commentary on the “Today” show
and “Late Night with Seth Meyers” following a feature on Essential Bodywear’s office parties that
week in the New York Post.
“Companies have started setting
up bra-fitting events in offices
called bra parties,” Meyers riffed.
“Meanwhile, in offices in China
ESSENTIAL BODYWEAR LLC
Resolution
where entrepreneurs pitch ideas to
investors.
䡲 After an attempt to expand its
lineup went in the wrong direction,
the plan is to stick to “making an
impact with our basics,” CEO Carrie
Charlick said. “We’re going to focus
on who we are, what we do best and
what makes this company. We’re
known for our fully figured bras and
for making these women look great.”
䡲 The company also wants to land
some investors in the new year. “I
might throw my hat in the ring on
going into ‘Shark Tank,’ ” Charlick
said, referring to the CNBC show
and India, people are working.”
Kathie Lee Gifford and Hoda
Kotb, hosts of “Today,” wrinkled
their noses at the idea of walking
around in a bra at work. But Charlick said that’s not quite the way it
works.
“It’s done in restrooms,” she said.
Economic outlook
After sales took a bruising from last
year’s aggressive winter, Charlick
just wants better weather. This is
doubly so because she has seen
consumers grow a little tighter with
money in the past five months or
so. They’re willing to spend, but
they are waiting for deals and
specials first. “I do feel like people
are definitely tightening back on
spending.”
In 2015, Charlick and Cubitt
hope to pick up capital from investors so they can expand Essential Bodywear’s lineup of basic
bras and hire a sales manager and
an operations manager.
And they’re hoping for better
weather.
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December 8, 2014
Page 15
Second Stage
‘Annoying myself’: When success becomes excess
Scott Foster had one of those “be
careful what you wish for” years.
His company, Royal Oak-based
Wellco Corp., was featured in
Crain’s Stage 2 Strategies in July
for its work in turning the company’s business model on its head.
Wellco moved away from its traditional business of setting up employer wellness programs to using
software to analyze employers’ entire health care programs. The
move created more consulting
business and turned former competitors into customers.
That grew revenue and customers. But it also grew demand
for time with Foster, who spent
much of the year learning how to
reconfigure work-life balance.
Under the old regime, business
was cyclical. Foster would work
hard but then have a period to
catch up on personal and family
life. The new system flattened the
cycles, which was great for business but hard on Foster.
“It became challenging for me
personally. I reached almost
100,000 flight miles this year,” he
said.
At one point in early fall, Foster
found himself fully, and publicly,
becoming a character he loathed:
the self-important business guy at
the airport.
Immediate demands from new
and existing clients, the buildup of
work and airline flight issues had
conspired against him. Now he
was late for a flight in Atlanta,
running around with a phone
welded to his face, unsure whether
he was even going in the right direction to get to his gate.
“I was that traveler I never
wanted to be — on the phone, a
flight attendant telling me they
need to close the door, bullying
past everybody. ... I was annoying
myself,” Foster said. “Those are attributes I previously hadn’t strug-
gled with.”
He has been trying harder to “divert daily and withdraw weekly,”
doing things like taking walks
with his wife, playing tennis with
a friend and completely unplugging all electronics on weekends.
On the business side, Foster
plans to grow sales 35 percent next
year and has an acquisitive mind.
“We’re on the lookout to purchase
a company that has strong analytics to enhance and complement
our systems,” he said.
WELLCO CORP.
Resolution
Not to become “that guy” at the
airport again. “I’m scheduling
balance” to keep work from choking
out his personal time, owner Scott
Foster said.
He’s doing a kind of work-life jujitsu
by using work against itself to
bolster the personal side: One of
Foster’s software programmers is
making a simple form that will let
Foster track how he uses his time,
calculating percentages to show
whether he’s meeting goals.
“I’m going to be tracking my
success just as I would in
business,” Foster said.
Economic outlook
Clients are growing steadily and
hiring again. “Companies seem to
have more cash to invest to
improve on their businesses in
2015.”
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December 8, 2014
Second Stage
Despite health reform’s uncertainty, firm invests in optimism
BY GARY ANGLEBRANDT
SPECIAL TO CRAIN’S DETROIT BUSINESS
If one type of company stands to
gain from the Affordable Care Act,
other than health insurance companies, one would think it’s benefits consulting companies.
These are companies that employers bring in to help them manage,
among
other things,
health
care
programs for
employees. So
a
historic
A look at
piece of legisproblem-solving
lation suddenby growing
ly makes that
companies
entire sphere
much
less
clear, and these consultants
should be seeing dollar signs before their eyes, right?
Maybe,
maybe
not,
said
Cameron Kennedy, president of
Cambridge Consulting Group LLC.
Many of these consultants were
leery of investing the money it
would take to grapple with the complexities of the legislation, for themselves or on behalf of their clients,
Kennedy said. They assumed the
ACA was a quick steppingstone to
nationalized health care. As soon
as they got up to speed on the
ACA, it would all change again,
with the likely result being that
STAGE 2
STRATEGIES
CAMBRIDGE CONSULTING
GROUP LLC
figured that the Affordable
“ (Competitors
Care Act) was the death of the
Location: Troy
Description: Insurance and
benefits consulting firm
President: Cameron Kennedy
Founded: 1985
Employees: 61
Revenue: $12.5 million in 2013
employers no longer would be in
the health care game.
“A lot of agents said, ‘This is the
end of our role,’ and didn’t want to
make the investments they needed
to,” Kennedy said.
Cambridge was among those
that chose the more optimistic
view and began preparing.
Problem: There were a lot of
preparations. A big wave of companies seeking help was about to
hit Cambridge, so it had to be able
to handle it. Its clients are small
and midsize businesses, just the
sort that would have the hardest
time understanding what they’d
have to do meet the requirements
of the Affordable Care Act.
Cambridge — not a large company itself — would have to steep its
people in the new health care model and do it on a tight budget. It
also would have to reconfigure its
teams and technology to meet the
broker in the benefits consulting
world. They thought individuals
are going to go to exchanges, or
it’s just going to be a
nationalized system.
”
Cameron Kennedy, Cambridge Consulting Group LLC
new needs of clients.
“We were pinched on revenue,
but there was a whole ton more service,” Kennedy said. “We were creating the ability to do more with
less.”
Solution: The first step was to educate the staff. Cambridge spent
money on attorneys and human resource organizations and sent employees to conferences to get the
knowledge they needed. The company added a director of compliance to educate employees as well
as clients on the new regulations.
The consulting teams each needed to add one administrative person
to take over duties held by account
managers. This would free managers to go on the road to meet with
clients directly. This led to the hiring of about six more people.
Another staffing adjustment was
the hiring of a director of exchange
solutions. Clients wanted to have
private exchanges where employees could shop for health care plans
using money from the employer as
a starting point. Employers wanted
this for the potential savings to offset costs that might be incurred to
meet the requirements of the Affordable Care Act.
This was the most difficult part,
Kennedy said, because to do it costeffectively meant building a “plug
and play” version of an exchange
that small businesses could use.
Cambridge would lose its shirt if
it started sending in teams to
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www.mispringboard.com
every 20-person business to build
customized systems.
Also on the technology side,
Cambridge spent $50,000 on modeling software it uses to show clients
the financial outcomes of various
scenarios under the ACA, including not providing health care at all
and letting employees go to the federal exchange.
Kennedy reckons the education,
hiring and technological development has cost between $2 million
and $3 million since 2010. “And a lot
of that is recurring expense,” he
said.
Revenue is on track to reach $14.5
million this year, compared with
$10.5 million in 2010, before Cambridge began bracing for the ACA
wave. Kennedy thinks the investment has only just begun to pay off.
“I think it’s minor compared to
what it will be in two or three
years,” he said.
Risks and considerations: One risk
was that if Cambridge didn’t invest,
it would lose out to competitors that
did. Another risk was that the company could spend the money, only
for the federal government to
change its mind about health care
a few years later and toss the
whole thing up in the air again.
Plenty of competitors thought
that’s just what would happen.
“They figured this was the death of
the broker in the benefits consulting world,” Kennedy said. “They
thought individuals are going to go
to exchanges, or it’s just going to be
a nationalized system.”
But business is for risk-takers,
Kennedy said. Yes, the government could upend the whole thing.
But so can an automaker yank its
business from a supplier almost
entirely dependent on that one
customer. It’s up to owners to scan
the field and make the call.
“Are you willing to make bets?
When it’s not clear it’s going to pay
off? That’s all about being an entrepreneur and taking risks,” Kennedy
said.
Expert opinion: “When you have
dramatic external change, get
close to your customers,” said
Dave Haviland, CEO of Ann Arbor-based consultancy Phimation.
“That is job No.
1. They’re going
to guide you
through what’s
going to work
and not going to
work.”
Cambridge did
that when it
freed its account
managers
to
Haviland
work more closely with customers. And it did something else that other companies facing similarly dramatic market
changes should consider — which is
take a look at what competitors are
doing.
Getting close to customers to
learn what needs to be done and
looking at competitors’ responses
form a picture of what it will take
to deal with the shifting landscape,
whether it’s hiring, buying equipment or something else.
“New strategies need organizational design to energize that strategy,” Haviland said.
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PUBLISHER’S NOTEBOOK
Contact Mary
Kramer at
mkramer
@crain.com.
CRAIN’S MICHIGAN BUSINESS
Mary Kramer
Courses
to careers
Economist asks:
Are we too late?
Walter Williams is among the handful
of conservative African-American
academics, authors and essayists who
buck the group-think of what ails
predominantly black cities like Detroit.
“Black people could benefit from an
honest examination of the bill of goods
they’ve been sold,” he wrote last year
in a column that included references to
Detroit. “Such an
examination would
not come from
black politicians,
civil rights leaders
or the black and
white liberal elite.
Those people
have benefited
politically and
financially from
keeping black
Williams
Americans in a
constant state of grievance based on
alleged racial discrimination. The longterm solution for the problems that
many black Americans face begins with
an absolute rejection of the selfserving agenda of hustlers and poverty
pimps.”
And that’s just for starters.
A free-market economist who
teaches at George Mason University
outside of Washington, D.C., Williams
is the subject of “Suffer No Fools,” a
bio-documentary that its creator, Bob
Chitester, is trying to find a home for
on public television stations.
It has already aired on public TV in
Grand Rapids; it airs on Detroit’s
WTVS-Channel 56 at 10 p.m. Dec. 22.
Chitester and Williams spoke last
week at a dinner in Bloomfield Hills
convened by the libertarian group
Friends of Liberty.
Chitester is no stranger to public
television. He persuaded economist
Milton Friedman and his wife, Rose, to
create the landmark series “Free to
Choose” in the 1980s.
Williams, 79, last week invoked
Friedman’s adage: “There’s no free
lunch, everything costs something; it’s
a matter of who pays the price.”
As a student at UCLA after an Army
stint in Korea, Williams said he began
to think deeply about economics,
concluding that minimum wage laws
depressed the hiring of lower-skilled
workers. “When the price of anything
rises, people seek substitutes,” he
said, blaming minimum wage for the
disappearance of jobs ranging from
gas station attendants to theater
ushers. The fast-food industry will
adapt to new technologies, he
predicted.
So is he optimistic about America’s
future?
“For the first time in my life,
Americans are talking about our
Constitution, arguing about our
Constitution,” he said last week,
crediting President Obama’s first term
in office for mobilizing many
Americans.
“It’s a question of whether it’s too
late. A question we might ask
ourselves is: Are we different from the
Romans, the French, the Spanish, the
British — all the great empires in the
past. Will we have another fate?”
Innovation academies
put Grand Rapids
high school students on
vocation-focused paths
ISTOCK PHOTO
BY ROD KACKLEY
SPECIAL TO CRAIN’S MICHIGAN BUSINESS
S
tudents at Innovation Central
High School in Grand Rapids
study construction drawings
in the classroom before going
out into the field with hammer guns and nails to get their hands
dirty building houses with Habitat for
Humanity.
Building is part of learning at the Grand
Rapids Public Schools’ Academy of Design & Construction, one of four academies that make up
Innovation Central High. All four academies
began in the early 2000s as separate, smaller
alternative or theme schools in the district.
The idea was to bring public school officials and teachers together with higher education professionals and business leaders to
build a new, career-focused model of secondary education.
These are comprehensive high schools
where students spend the day learning math,
science, foreign languages — everything the
state of Michigan says they need to know.
But everything is also career-focused.
In 2012, the Academy for Design & Construction — along with the Academy of
Business, Leadership & Entrepreneurship,
the Academy of Health Science & Technology and the Academy of Modern Engineering — moved into a former high school building near
downtown Grand Rapids as
part of the school system’s districtwide transformation plan.
That plan was put in place after the district
had seen enrollment decline by more than
7,000 students, closed 25 schools and programs, and cut $100 million from its budget.
The district has a graduation rate below 50 percent and a dropout rate near
20 percent.
A fifth academy, University Prep
Academy in downtown Grand Rapids,
is intended to help students move
from high school to college with individualized educational programs.
Moving students from high school to college is a goal of the other academies. But
Mark Frost, principal of Innovation Central
High, said the district realized that students
who do not do well in high school are probably not going to do well in higher education.
As a result, those students are being shown
other avenues, such as trade schools that
could come after high school.
John Helmholdt, executive director of
communications and external affairs for the
GRPS, said the academies
were switched to a centersof-innovation model in
2007. While such centers
might act and quack like a
charter school, they carry
none of the political baggage of the charter school.
“Our centers of innovation benefit from the size,
scope and economy of scale
Helmholdt
that a large district brings
while at the same time being afforded a large
amount of the autonomy, flexibility and sitebased decision-making that charters enjoy,”
Helmholdt said.
Also, the instructors are Grand Rapids
Public Schools teachers who are part of the
state retirement system and receive the same
wages and benefits as other teachers. Many
are GRPS teachers who ap-
ISTOCK PHOTO
plied for the postings. But Helmholdt said
some came from outside the district.
Some have specialized degrees, Frost said.
For instance, two teachers have business degrees, while one in the Design & Construction academy is a builder.
“The turnaround and the environment we
have here is phenomenal,” said Kathy Hodder, the department head for science and the
lead teacher at the Academy of Health Science
& Technology. “The kids are excited about the
programs and everything we have to offer.”
Many students enter Innovation Central
sure of the career path they have chosen. But
some receive an awakening when they actually get into the classes.
Not to worry. Not everyone who comes out
of the Academy of Health Science & Technology needs to go to medical school or even college. They have other opportunities, such as
an emergency medical technician course
that offers the potential of a job as soon as the
student graduates from high school.
For the 2014-15 school year, Helmholdt
said, 782 students are enrolled at Innovation
Central, a figure that isn’t close to capacity.
“We are expecting numbers to grow significantly and that there will soon be a waiting
list,” he said.
To be accepted into Innovation Central, an
applicant must be in “good standing,” which
means the student has not failed any classes
and is working on their high school class
credits. Frost does make exceptions, however.
More than 16,500 students are enrolled in
the Grand Rapids Public Schools, based on
last statewide count in October.
Craig Datema, chairman and CEO of Triangle
Associates Inc. in Grand Rapids, has been involved in developing the curriculum since the
inception of the Academy of Design & Construction in 2009 and is chairman of the
school’s advisory council. Triangle provides
construction management, design-build work,
general contracting, development services,
integrated project delivery and sustainablebuilding services.
When discussion began about an Academy
of Design & Construction, Datema said, “The
first thing I said was, ‘How can we help?’ ”
See Academy, Page 18
20141208-NEWS--0018-NAT-CCI-CD_--
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10:42 AM
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December 8, 2014
Academy:New lesson plan
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Another early participant in the
academy was Rockford Construction
Co.
Jennifer
Boezwinkle, the
company’s vice
president
of
business development, said the
academy
fit
with Rockford’s
history of philanthropic
involvement
in
Boezwinkle
Grand Rapids.
“A secondary piece of that is
supporting up-and-coming talent
and training and really encouraging young people to consider a profession in a construction-related
field,” Boezwinkle said. “Construction, as does manufacturing,
sometimes has trouble attracting
people into the industry.”
Besides showing students how
to design and build, then taking
them out into the field to put those
skills to work, the teachers and
businesspeople also help them
move forward with their construction careers, Boezwinkle said.
Some of these students could be
the first in their families to go to
college, so they need some extra
help sorting through career options.
Rockford Construction and Triangle Associates are not alone.
The biggest names in the Grand
Rapids business community are
involved.
A representative of Ada-based
Amway Corp. sits on the advisory
council of the Academy for Business Leadership & Entrepreneurship, as do representatives from
Huntington Bank, the Grand Rapids
Area Chamber of Commerce and the
law firm Warner Norcross & Judd
LLP, among others.
Michigan State University’s College
of Human Medicine, Grand Valley
State University, Western Michigan
University, Grand Rapids Community
College and Spectrum Health are
represented on the advisory council of the Academy of Health Science & Technology. Also on the advisory boards are teachers from
each school.
Frost said having business professionals on the advisory boards
and in many of the classes has
proved to be “vital because they
have real-world experience and
real-world ideas on what students
will need to become successful in
their industries.”
“We have human resources people saying, ‘We need specific
things out of these students.’ ”
Moving businesspeople into
high school classrooms might
seem to be a recipe for awkward
interactions. And it was at first.
But Frost called the experience
“tremendous.”
“I can’t tell you how many people have contacted us,” he said.
“The support from this community has been unbelievable.”
Frost said the Academy of Design & Construction has had a
strong mentorship program that
soon will be expanded to the other
academies.
The mentors from the business
community each meet with two or
three students once a month beginning in ninth grade. The mentors
will stay with their students
through the end of high school.
“In the surveys that these students turn in, they always come
back to the mentors. They love
them,” Frost said.
“It is awkward at first. But after
two or three meetings, they are
building relationships so they can
talk about all different kinds of
things.”
Helmholdt of the GRPS said the
school district’s relationship with
the businesses began in the early
2000s. As the academy concept was
developed, GRPS officials began
looking for more job providers
who could join the Innovation Central programs.
“We looked at the top employers, the employers that had the capacity to dedicate staff time,” he
said. “This is not like serving on
any old board. We are looking for
some hands-on volunteers.”
Oftentimes, the volunteers do
more than serve on the advisory
council, Helmholdt said. Some
work in the classrooms with the
teachers. Others are involved in
after-school activities.
Still others have helped create
the curriculum for the academies.
“The teachers were not trained
or skilled in the design or construction industry, and it was apparent
that we could really help them out
by putting together a curriculum
committee,” said Datema of Triangle Associates, who is now chairman of the Academy for Design &
Construction’s advisory council.
“We knew that for the program to
be successful, they had to have industry partners that could help
them set the direction of the program.”
Beyond helping the GRPS and
city of Grand Rapids, Datema also
thought the academy could help
Triangle with
one of its biggest
challenges: recruiting young
people who have
chosen a career
path in design
or construction.
The Centers of
Innovation is far
from finished.
Datema
Helmholdt said
the GRPS plans to use the model to
develop other schools.
“The new Grand Rapids Public Museum School is the next Center of
Innovation that opens next year,”
he said.
Interest from students and their
parents has been phenomenal,
Helmholdt said. Hundreds of parents and teachers show up for parent nights at the academies.
“They had over 650 people show
up for one parent night,”
Helmholdt said. “That is virtually
unheard of in the world of monthly
parent meetings. If we got 50 to 100
parents at any other parent night,
it would be considered a good
night.”
Said Datema: “Without a strong
public school system at its core,
Grand Rapids will not be a strong
community. We were hoping that
by supporting our core city, we
could also enhance our diversity of
employment as students graduate
from these programs.”
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COURTESY OF (FROM LEFT) ORIGINAL MURDICK’S FUDGE, GRAND TRAVERSE PIE CO., CHERRY REPUBLIC INC. AND AMERICAN SPOON FOODS
A number of northern Michigan companies can attest that food has no off-season, be it fudge, pies, covered pretzels or jam.
A taste for up north gives food
sellers a mail-order holiday boost
BY AMY LANE
SPECIAL TO CRAIN’S MICHIGAN BUSINESS
Like most businesses on Mackinac Island, Original Murdick’s Fudge
closed for the season in late October.
Last year and this year, though,
it reopened in December and fired
up its copper kettles to feed a new
holiday mail-order business.
“It really was brought on by
many of our seasonal customers
and corporate having a great interest in doing holiday gift-giving,”
said Original Murdick’s owner
and president, Bob Benser.
“We close, and then we reopen
basically four weeks later.”
It takes logistics: Fudge, brittles,
caramel corn and toffee made at the
reheated store on the island are
packaged into gift boxes at an adjacent pizzeria that Benser, who lives
in Bloomfield Township, also owns.
Those packages then are loaded
onto luggage carts and shipped on
an Arnold Transit Co. ferry to St.
Ignace, where FedEx collects them.
It’s a roughly three-week order
and production period that ends
Dec. 18 and should employ about 15
people, said Benser, who hopes
this year to double last year’s holiday mail-order sales of $80,000. He
declined to state Original Murdick’s total annual sales, which include others through mail order
and at stores on Mackinac Island
and in St. Ignace, Mackinaw City
and Martha’s Vineyard, Mass.
To many north-country food purveyors, mailing a taste of Michigan
during the holidays means significant — and for some, growing —
business. Among the factors: an improved economy and an increased
consumer inclination to spend, marketing tactics and spinoff from the
state’s Pure Michigan campaign,
which send into stores visitors who
become mail-order customers.
During the holiday ordering time,
Traverse City-based Grand Traverse
Pie Co. ships several thousand pies
that include top sellers apple crumb,
cherry crumb and cherry ganache,
among the more than 15,000 baked
items it mails in the season.
Some of the holiday business
comes from households and some
from corporate customers, including the Showtime cable network,
which recently placed an order for
450 northern Michigan Montmorency cherry pies with the Showtime
logo in the pastry top.
The holiday shipments amount
to less than 10 percent of Grand
Traverse Pie’s overall annual sales
of about $20 million, but the holi-
day mail-order sales have been getting “bigger and bigger every
year,” said Margaret Alexander,
director of brand essence.
Shipping growth can be attributed to a number of factors, such as
catalogs mailed to buyers of similar
online products, improved Internet
search engines that enable potential customers to more easily find
the company, a growing email list
and a monthly email newsletter.
The region’s strong tourist draw
also has been a boost, Alexander
said. Visitors connect with Grand
Traverse Pie products at its Traverse City or Petoskey stores. It
also has 15 company-owned or
franchised shops throughout the
state, including four in Southeast
Michigan, and also wholesales its
products through grocery stores.
Alexander said the company adds
seven people to handle phone orders, shipping and baking — more
than doubling the number of employees in those areas.
The rush is also heavy at Cherry
Republic Inc. in Glen Arbor, maker
of more than 170 cherry products.
The company — which has stores
in Charlevoix, Traverse City, Glen
Arbor and Ann Arbor and sells
wholesale to Michigan specialty
food stores — does about half of its
annual business in November-December mail-order sales, President
Bob Sutherland said.
He declined to state sales but said
about 40,000 orders ship over the
two months from Cherry Republic’s warehouse in Empire. That
means adding about 100 employees
for jobs such as answering phones
and packing gift boxes — an expansion that can be challenging to fill.
“We have about 275 employees
that we’ll have at Christmastime,”
Sutherland said. “And in our little
towns of Glen Arbor and Empire,
that’s about everybody that we can
find, that we can get,” from retirees to “every gardener, waiter
that works during the summer.”
Most mail-order customers are
those who have come in to Cherry
Republic stores “and identified with
us … asked for a catalog,” and it has
progressed from there, he said.
As with many retailers, Cherry
Republic catalogs, email, online
ordering and store walk-in traffic
all contribute to holiday mail-order sales.
The company’s weekly Orchard
Report e-newsletter, which includes news and product specials,
goes to about 55,000 people, and
“more and more, people order off
that,” Sutherland said.
Said Tom Scott, senior vice president of communications and marketing for the Michigan Retailers Association: “Successful retailers
provide all the channels possible
to satisfy their customers, and
they use each of those channels to
promote the other ones.”
Megan Feeley, marketing director at American Spoon Foods in
Petoskey, said the company tries
to make a connection with customers, such as in its catalog highlighting local sources and stories
behind fruits used in products.
The company’s offerings include
jams, jellies, maple syrup, fruit
butters, grilling sauces and salsas
sold at six American Spoon stores
throughout the state, wholesaled
to specialty shops and shipped.
Feeley said that over the past few
years, the company has increased
the frequency that it emails customers during the season and has focused email content, such as to promote a specific gift. The hundreds of
thousands of catalogs the company
mails in November and December
drive mail-order business, she said,
producing about 80 percent of its orders during the period.
Holiday mail order represents
about 20 percent of American
Spoon’s overall annual business,
said Feeley, who declined to state
dollar amounts. Holiday business
also swells a six-employee count in
customer service and shipping departments to about 60.
At Leelanau Cheese Co., visitors
and summer residents who have
headed out and year-round residents who want to send “a little bit
of home” to families elsewhere are
among holiday mail-order customers that fortify sales.
Anne Hoyt, who with her husband, John, makes cheese and owns
the Suttons Bay business, said the
cheeses, made from local cow’s
milk, generate hundreds of orders
between Thanksgiving and Christmas — business that works well for
several reasons.
In the summer, cheese is difficult
to ship and the shop is busy, she
said. But post-season, “we slow
down so much with walk-in retail
business,” Hoyt said. Leelanau
Cheese last year did about $17,000
in holiday shipping; Hoyt declined
to state overall annual sales.
“Thanksgiving and then Christmas is definitely a good time for
us,” she said. The period “can keep
my staff busy (and) is a good way
to sell our product. We love having
that business. It would be a long
winter otherwise.”
happy
holidays!
from the team at Kerkstra Precast
KERKSTRA PRECAST
www.kerkstra.com
20141208-NEWS--0020-NAT-CCI-CD_--
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10:45 AM
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Monthly
December 8, 2014
China
WHERE MICHIGAN DOES BUSINESS
Belfor Holdings Inc.
Based: Birmingham
Operations: Offices in Shanghai and Dongguan
Employees: 20
Products/services: Commercial and industrial fire, smoke and water restoration services,
data recovery, mold remediation, electronics
and machinery restoration
Top executives: Tommy Kang, greater China
regional director; Richard Chang, China operations manager
C
hina is the world’s second-largest economy with
a 2013 GDP of $9.33 trillion. Its major exports include electrical machinery such as data processing equipment, as well as apparel, phone equipment,
textiles and integrated circuits, according to the CIA
World Factbook. Its major export partners are Hong
Kong (17.4 percent), the U.S. (16.7 percent), Japan (6.8
percent) and South Korea (4.1 percent).
Crain’s reported in November that China ranks
third in Michigan’s export markets with almost $4.1
billion in exports to China in 2013 — a 28 percent increase from $3.3 billion in 2012. This makes Michigan
the eighth-largest U.S. exporter to China, according to
research by the Michigan Economic Development Corp.
Top executive: Felix Cheng, vice president
and general manager for China and Korea;
Keith Power, president of Asia Pacific FederalMogul Motorparts
General Motors Co.
Grand Rapids-based Bissell employs 100 in China.
Bissell
Based: Grand Rapids
Operations: Regional headquarters in Hong
Kong, marketing and sales offices, two tech
centers for global product development and
engineering in Shenzhen and Suzhou
Employees: 100
Products/services: Floor care devices and
consumer products, global hard surface products plus product testing
Top executive: Paul Voets, vice president of
global operations
Based: Detroit
Operations: Headquarters and two technical
centers in Shanghai, and 20 plants across the
country
Employees: 58,000
Products: Buick, Cadillac, Chevrolet, Baojun, Wuling and Jiefang vehicles and automotive products
Top executive: Matt Tsien, GM executive
vice president and president of GM China
Domino’s Pizza Inc.
Based: Ann Arbor
Operations: 35 stores in Shanghai and 22
stores in Beijing
Employees: 1,200
Products: Pizza and other food products developed for regional markets.
Top executive: Doug DeBoer, president and
CEO
Federal-Mogul Corp.
Based: Southfield
Operations: Plants in Dalian, Zhengsheng,
Changshu, Nanchang, Shanghai, Qingdao,
Anqing, Changsha, Chongqing, and Shanghai
technical center and sales office
Employees: 5,500
Products: Engine bearings and materials,
rings, sealing, ignition, cylinder liners, valve
seats and guides
Penske Automotive Group
Based: Bloomfield Hills
Operations: Headquarters in Shanghai; logistics facilities in Shanghai, Suzhou,
Yanzhou, Langfang and Tianjin
Employees: 100
Services: Distribution center, transportation and industrial logistics management,
customs clearance
Top executive: Angela Yang, managing director
Clients: Allison Transmission, Pirelli, Landsberg
Orora, TRW Automotive, Carlisle, Master Lock,
Nissens, Hilti
COMING UP
January: South Korea
Operations: Headquarters in Shanghai, seating operations in Changchun, Changshu,
Chongqing, Liuzhou, Nanjing, Rui’an, Shanghai, Shenyang, Wuhan and Wuhu; electrical
operations in
Chongqing, Nanjing,
Wuhan and Yangzhou
Employees: 11,000
Products/services:
Seating and electrical
structures and mechanisms, seat covers,
seat foam, wiring harnesses, terminals, connectors, junction boxes and electronic
control modules.
Top executive: Jay
Kunkel, president of
Asia Pacific operations
Clients: Audi, BMW,
Ford, General Motors,
Hyundai, Nissan, Volkswagen
Beijing
CHINA
Metaldyne
Cooper-Standard Automotive Inc.
Based: Novi
Operations: Facilities in Changchun,
Chongqing, Guangzhou, Huai-an, Jingzhou,
Kunshan, Qinpu, Shanghai, Shenyang, Wuhu
Employees: 3,854
Products: Sealing and trim systems, fuel and
break delivery systems, fluid transfer systems and anti-vibration systems
Top executive: Song Min Lee, president, Asia
Pacific
Clients: AutoAlliance, BAIC, BMW, Changan
Ford Mazda, Chery, Daimler AG, Dongfeng Peugeot Citroen Automobile, Ford, Geely, General Motors, Mazda, Mercedes-Benz, Nanjing Tata, Nissan-Renault, Opel, Shanghai Automobile Import
and Export Co., Volkswagen
Top executives: Greg Brown, managing director of NSF China and managing director of
NSF Global Seafood
Each World Watch features
a different country. If you
know of a Michigan company
that exports, manufactures
abroad or has facilities
abroad, email Jennette Smith,
managing editor, at
[email protected].
General Motors’ headquarters in Shanghai
International Automotive
Components Group
Based: Southfield
Operations: Asia headquarters in Shanghai;
13 manufacturing facilities, design, technical,
and commercial centers along the east coast
of the country
Employees: 2,300
Products: Vehicle interior components and
systems, headliner and overhead systems, instrument panels, consoles and cockpits, flooring and acoustics and door panels
Top executive: Brian Pour, vice president of
north Asia
Kelly Services
Based: Troy
Operations: Offices in Shanghai, Beijing,
Guangzhou, Chengdu, Suzhou
Employees: 70
Products/services: Recruitment process outsourcing, outsourcing, consulting, professional and technical services
Top executives: Nathan Li, chief administration officer and CFO for North Asia; Natalia
Shuman, senior vice president and general
manager for Europe, Middle East, Africa,
Asia Pacific and COO for North Asia
Lear Corp.
Based: Southfield
Based: Plymouth
Operations: Plant in Suzhou
Employees: 315
Products/services: Forged and machine engine connecting rods, forged powertrain gears
and shafts, engine crankshaft dampers, transmission valve bodies
Top executive: Jose Miranda, general manager, Metaldyne Suzhou
Clients: CAF (Ford joint venture,
Chongqing), CFME (Ford Mazda joint venture,
Nanjing), DPCA (PSA joint venture, Wuhan),
Cummins NA, Shanghai GM, Sinotruk, Nexteer
MSX International Inc.
Based: Detroit
Operations: Headquarters in Shanghai
Employees: 100
Products/services: Parts and accessories
sales programs, dealer standards and process
improvements, training, body shop and express service upgrading and services to vehicle manufacturers and dealer networks
Top executive: Stuart Faid, managing director for China region
Clients: BMW, Jaguar Land Rover, Ford, Infiniti,
Volvo, Fujian Benz, Mercedes-Benz, John Deere
NSF International
Based: Ann Arbor
Operations: One office and a laboratory in
Shanghai
Employees: 49
Services: Auditing, testing, certification and
training services to consumer products, food,
agriculture, health science, plastics, bottled
water, retail, management systems and water
industries
Chongqing
Nanjing
Wuhan
Shanghai
Wuhu
Guangzhou
Hong Kong
TI Automotive Ltd.
Based: Auburn Hills
Operations: Plants in Changchun,
Guangzhou, Haikou, Chongqing, Qinhuangdao, Shanghai, Shenyang, Tianjin, Wuhan
Employees: 3,374
Products/services: Gasoline direct injection
lines, GDI rails, turbo charger lines, brake
and fuel lines, engine lines, transmission
lines, quick connectors, fuel tank assemblies,
AC lines, water lines
Top executives: Plant managers Alex Feng;
Yan Jun Gao; Geoffrey Qian; Black Guan;
Gaofeng Qian; Johnny (Zhe Ning) Zhao;
James (Jianshen) Bao; Max Li; Chi Ma
Clients: FAW-Volkswagen, BMW, Brilliance
Auto, Kautex, Nissan, Toyota, Audi AG, ShanghaiVolkswagen, Changan Ford, Changan Mazda, LiFan, DFL-Nissan, Geely, Dongfeng Nissan Motor,
Daimler China, Great Wall Motor, BAIC (Beijing
Automotive Industry Holdings Co.), BBAC (Beijing
Benz Automotive Co. Ltd.)
TRW Automotive Holdings Corp.
Based: Livonia
Operations: 20 facilities including headquarters in Shanghai, technical center in Anting
and winter test track in Heihe
Employees: 9,000
Products: Braking, steering, airbags, seatbelts, steering wheels, aftermarket components, engineered fasteners and engine components
Top executive: Mark Stewart, vice president
Asia-Pacific
Clients: Toyota, FAW VW, GM, Shanghai VW,
Ford, Isuzu, Suzuki, Chery, Beijing Benz, Brilliance
More information: 19 percent of global TRW
sales in 2013 were in the Asia Pacific region.
— Compiled by Natalie Broda
20141208-NEWS--0021-NAT-CCI-CD_--
12/5/2014
10:46 AM
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December 8, 2014
Page 21
Web-based tools help courts, government cut costs
BY CHAD HALCOM
Michigan’s courts and related
government agencies could
shave tens of thousands of
hours in operating costs next
year with Web-based tools now
in testing by IT service vendors
for possible statewide use.
Last week the State Court Administrative Office wrapped up a
two-month pilot program for
Garnishment of Income Taxes,
or GarnIT, an online software
tool to automate the business
process for issuing writs to garnish individual income tax refunds to satisfy court judgments
or other balances through the
36th District Court in Detroit.
The online tool allowed the
court to process 6,954 writs
through Nov. 30, saving about
175 hours of processing time
compared with processing writs
by hand during the two-month
period, the Administrative Office estimates.
More local courts could take
part in the second phase of GarnIT when the program relaunches in August. IBM Global
Business Services, which has
been operating GarnIT for the
Detroit court, also has been
meeting with officials in two
other local courts who could be
potential users in the second
phase next year, to discuss
court needs and help in software design, IBM project manager Joseph Magyar told
Crain’s via email.
If GarnIT’s bulk online filing
feature is eventually adopted
statewide, the state court office
estimates it could take less
than 65 hours to process the
635,000 garnishment requests
brought annually to the Michigan Department of Treasury,
trimming more than 15,000
hours of court staff time.
Also last week, Southfieldbased ImageSoft Inc. on Monday
held a soft launch of its TrueFiling online software platform under a new pilot program for the
Michigan Supreme Court. The
high court, which previously
has accepted document filings
by hand at its Lansing offices,
now accepts electronic filing for
existing court cases only from
the State Appellate Defender Office, the Wayne County Prosecutor’s office and the Attorney
General under the pilot program, said ImageSoft President
Scott Bade.
If all goes well, the new program would be expanded by
next year to allow e-filing from
all attorneys and new cases.
Bade said ImageSoft also hopes
to take over e-filing for the
Michigan Court of Appeals,
which currently provides e-filing by contract with Texasbased Tyler Technologies Inc.
“Michigan has a very distributed, more autonomous model
in terms of the organization of the
courts, while other states’ courts
are much more centrally managed. In those states it’s easier to
roll out a statewide filing services
program,” Bade said.
“But Michigan has also been
very motivated in pushing these
customer-service friendly advances.”
ImageSoft, which previously
has launched TrueFiling electronic filing platforms in Macomb, Ottawa, Grand Traverse
and other counties, has provided
Michigan has also been very
“motivated
in pushing these
customer service-friendly
advances.
”
Scott Bade, ImageSoft
either online or internal software
services to more than 20 courts
statewide since landing its first
Michigan court contract in 2002,
Bade said.
ImageSoft also announced last
month it had secured a new contract for its JusticeTech Prosecu-
tion digital document management platform in the Lenawee
County prosecutor’s office.
JusticeTech is also expected to
launch in the Macomb County
prosecutor’s office next year, and
Monroe County has used the service since 2011. An ImageSoft case
study estimates the Ingham County prosecutor has saved about
$450,000 per year in labor costs
with the system.
Chad Halcom: (313) 446-6796,
[email protected].
Twitter:
@chadhalcom
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20141208-NEWS--0022-NAT-CCI-CD_--
12/5/2014
11:47 AM
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December 8, 2014
American Laser Skincare files for Chapter 7 bankruptcy State Senate
Farmington Hills-based American Laser Skincare LLC has filed for
creditor protection in Delaware
bankruptcy court so it can liquidate its assets.
The provider of laser hair removal and skin-care services listed assets of less than $50,000 and
debt of more than $100 million in
Chapter 7 documents filed last
week in U.S. Bankruptcy Court in
Wilmington, Del.
“We are sorry to announce that
all of our clinics have been
closed,” the company said on its
website. “We too are disappointed
in the sudden developments and
regret the impact that it is having
on our loyal clients, valued employees and business partners.”
No reason was given for the filing.
Crain’s reported last month that
American Laser closed its 100 clinics, including 11 in Southeast
Michigan.
Sources told Crain’s that em-
ployees were notified of the closure Nov. 14 when CEO John Harlow told them the company was
closing because a key investor
pulled out.
The company is trying to locate
alternative providers for clients
who have treatment packages that
haven’t been completed and have
asked them to check the website
for developments.
American Laser had local locations in Troy, Royal Oak, Novi,
Macomb, Ann Arbor, Dearborn
and Plymouth. The company also
operated clinics in Grand Rapids,
Grand Blanc and Okemos.
In 2011, American Laser Centers, the
previous company name, filed for
bankruptcy, closed 50 centers and
reopened as American Laser Skincare. At the time, Philadelphiabased private equity firm Versa Capital Management bought the company
for an undisclosed amount.
— Bloomberg News
rejects bill for
new McLaren
hospital
BY JAY GREENE
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In what may be the last option for
Flint-based McLaren Health Care to
get a new hospital built in Independence Township, the Michigan Senate last week voted down a bill 26-11
pushed heavily by Majority Leader
Randy Richardville, R-Monroe.
McLaren wants to transfer 200
beds from its half-filled McLaren
Oakland hospital in Pontiac to a
new $303 million hospital on 80acre tract it owns and where it operates the McLaren Health Care Village at Clarkston.
Located at off I-75 at 5701 Bow
Pointe Drive, McLaren Health Care
Village plans include senior housing, assisted living, restaurants,
banking, retail and joint ventures
with medical device manufacturers
and pharmaceutical companies.
In an editorial board meeting
with Crain’s, McLaren executives
said an option would be to invest the
$300 million elsewhere, possibly in
other states, and further build out
the McLaren Health Care Village.
“We put a lot into this, especially the last several weeks,” Greg
Lane, McLaren’s chief administrative officer, told Crain’s on Dec. 4.
“We need a breather.”
Lane said McLaren had been
waiting on a final decision on the
future of the hospital before moving forward on adding new services at the Clarkston facility.
“There is still a need for a hospital out in Clarkston,” he said.
“There will be a hospital out there
one day.”
In support of a new hospital,
McLaren has argued that population growth in the region supports
the need for a new hospital. Hundreds of construction and health
care jobs would be created, it said.
But hospital competitors and
the Economic Alliance for Michigan
said another hospital would increase health care costs for patients and employers.
“Lawmakers in Michigan have
done the right thing by not allowing this bill to pass,” stated Bret
Jackson, president of the Economic Alliance. “We thank them for
caring about health care cost containment for the state. A ninth hospital in an area with too few of patients
would
have
caused
significant financial stress to the
health care industry.”
McLaren wanted similar treatment to that provided by the Legislature in 2002 when it allowed new
hospitals to be built by Henry Ford
Health System and St. John Providence Health System in Oakland
County.
Last December, McLaren lost an
administrative appeal to build the
$303 million hospital when Circuit
Judge Colleen O’Brien of Oakland
County ruled against the 12-hospital system. McLaren then appealed
to the Michigan Supreme Court,
which has yet to rule on the issue.
20141208-NEWS--0023-NAT-CCI-CD_--
December 8, 2014
12/5/2014
10:47 AM
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1HHGDQ,QYHVWPHQW
5HDO(VWDWH/RDQ"
PEOPLE
FINANCE
Mara Bloink to assistant vice president, branch manager, Huron Valley
State Bank , Milford, from assistant
vice president, branch manager, Independent Bank,
Livonia.
Leanne Osterhagen to workplace
banking market
manager for Detroit and Southeast
Michigan,
PNC Bank , Troy,
from senior business development
officer in workplace banking.
Osterhagen
ical officer, Atterocor Inc., Ann Arbor,
from vice president, clinical development, Shionogi Inc., Florham Park,
N.J.
Maureen Murphy to director of field
care management clinicians for the
High Intensity Care Management model, MedNetOne Health Solutions, Oakland Township, from clinical supervisor for the Children’s Health Project of
Detroit Mobile Medical Unit, Henry
Ford Health System, Detroit.
HOSPITALITY
Michael Kornacki to director of operations, Detroit Marriott Renaissance
Center, Detroit, from director of operations, Renaissance Cleveland Hotel,
Cleveland, Ohio.
INSURANCE
Jeffrey Trees to
vice
president
of infrastructure,
Amerisure Mutual
Insurance
Co.,
Froimson
Walters
Farmington Hills,
from
assistant
vice president of
information tech- Trees
nology.
HEALTH CARE
MARKETING
Mark Froimson, M.D., to executive
vice president, chief clinical officer,
Trinity Health, Livonia, from president and orthopedic surgeon, Euclid
Hospital, a Cleveland Clinic hospital,
Euclid, Ohio. Also, Barbara Walters ,
D.O., to executive vice president,
chief population health officer, from
chief medical officer, OneCare Vermont Accountable Care Organization
LLC, Colchester, Vt., and executive
medical director, Dartmouth-Hitchcock Health, Bedford, N.H.
Pharis Mohideen, M.D., to chief med-
Greg Heist to chief
Diversified Chemical Technologies
Inc. has named
Peter Holmes
as CEO.
Holmes, who
has 28 years of
experience in
the chemical
industry, first
joined the
Detroit-based
company in
Holmes
August 2013 as
COO. Before that, he worked with
Rohm & Haas, Dow Chemical Co.
and Celanese Corp.
Holmes, 55, succeeds George Hill,
who will remain chairman of DCT Inc.
Holmes earned a bachelor’s degree
in chemistry from Virginia Tech
University and a doctorate from
Howard University, and completed
his executive education at the
University of Pennsylvania’s
Wharton School of Business.
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Grosse Pointe Park.
RETAIL
innovation officer,
Gongos
Inc.,
Auburn
Hills,
from vice president, strategy and
innovation.
NONPROFITS
IN THE SPOTLIGHT
David Van Elslander to senior vice
president and president of Art Van
PureSleep, Art Van Furniture Inc.,
Warren, from vice president of merchandising for Art Van PureSleep.
Heist
Mary Kummer Naber to president and
CEO, The Center for Senior Independence, Detroit, from president, MKNaber Leadership Consulting LLC,
TECHNOLOGY
ZZZHFOLSVHFDSLWDOJURXSFRP
2UFKDUG/DNH5G6\OYDQ/DNH0,
Jim Brown to partner and director of
sales and marketing, C/D/H, Detroit,
³6LQFH´
from president, Coil Group Inc.,
Rochester.
BUSINESS DIARY
ACQUISITIONS/MERGERS
Agree Realty Corp., Farmington Hills,
acquired 22 retail net lease properties
for approximately $19.5 million. They
include a 14-property AutoZone portfolio with stores in Alabama, Florida,
Louisiana, Mississippi, South Carolina and Tennessee; a seven-property
Sonic restaurant portfolio in Virginia; and a Dollar General Market
store in Red Bay, Ala.
CONTRACTS
Aqaba Technologies Inc., Sterling
Heights, a Google-certified agency,
has contracted with Adco Circuits
Inc., Rochester Hills, to create a mobile friendly website, search engine
optimization and pay-per-click Google
advertising.
Hirschmann Solutions, Auburn Hills,
a supplier of antenna and transceiver
systems for machine-to-machine and
automotive communications, and
Novotech Technologies, Ottawa, Ontario, a global distributor of M2M
products and services, announced a
distribution agreement for Iridium
antennae that allow satellite communications worldwide.
NEW SERVICES
Western Michigan University, Kalamazoo, will offer classes from its psychology-behavior analysis master’s
program starting in January at the
Macomb University Center at Macomb Community College, Clinton
Township.
Quizzle LLC, Detroit, the free credit report and score site, introduced a new
identity theft protection service for
Quizzle users that includes public
records monitoring, lost wallet protection and $1 million identity theft
insurance policy.
Trusted Business
FindBusinessesYouCanTrust
www.bbb.org/detroit
Businesses:
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BecomeaBBBAccreditedBusiness
Email:[email protected]
Call:248.356.5085
Visit:www.bit.ly/applyBBB
20141208-NEWS--0024-NAT-CCI-CD_--
12/5/2014
10:49 AM
Page 1
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December 8, 2014
CALENDAR
WEDNESDAY
DEC. 10
State of the Region/Annual Meeting.
5 p.m. Detroit Regional Chamber. The
chamber discusses an analysis of
business and economy trends. Westin
Book Cadillac Detroit. For members,
$25 in advance or $40 walk-ins; otherwise, cost is $595 and includes membership. Contact: Janelle Arbuckle,
(313) 596-0340; email: jarbuckle@
detroitchamber.com;
website:
detroitchamber.com/events.
Holiday in the D. 6-10 p.m. Adcrafters.
Holiday networking and a benefit for
Bottomless Toy Chest. MotorCity
Casino Sound Board, Detroit. $80.
Walk-ins accepted. Contact: (313) 8727850; email: [email protected]; website: adcraft.org.
chairman, CEO and president of PG&E
Corp. Westin Book Cadillac Detroit.
$45 DEC members, $55 guests of members, $75 others. Ticket sales end noon
Dec. 10 . Contact: (313) 963-8547;
email: [email protected]; website:
econclub.org.
THURSDAY
UPCOMING EVENTS
DEC. 11
Morning Mingle . 8-10 a.m. Dec. 16 .
Detroit Economic Club Presents. 11:30
a.m.-1:30 p.m. With Anthony Earley Jr.,
Detroit Regional Chamber. Members
networking event. Detroit Athletic
Club. Free for members, $585 for future members. Contact Maggie Oldenburg, (313) 596-0482; email: molden
[email protected]; website:
detroitchamber.com/events.
a.m.-1:30 p.m. Dec. 16. With Lily Eskelsen Garcia, president of the National
Education Association. MotorCity Casino Hotel, Detroit. $45 DEC members,
$55 guests of members, $75 others. Contact: (313) 963-8547; email: info@
econclub.org; website: econclub.org.
2014 Excellence in Southfield
Awards. 7:30-9 a.m. Dec. 19. Southfield Area Chamber of Commerce
and the city of
Southfield. Kim
Yost, CEO, Art
Van Furniture, is
guest speaker at
this
awards
breakfast. Hilton
Garden
Inn
Southfield.
$25
members,
$35
Yost
nonmembers.
Contact:
Tanya
Markos-Vanno, (248) 557-6661; email:
[email protected]; website: southfieldchamber.com.
Detroit Economic Club Presents .
11:30 a.m.-1:30 p.m. Jan. 8 . With
Michael Finney, president and CEO,
Michigan Economic Development
Corp ., and Rodrick Miller , president
and CEO, Detroit Economic Growth
Corp. MotorCity Casino Hotel Detroit. $45 DEC members, $55 guests of
members, $75 others. Contact: (313)
963-8547; email: [email protected];
website: econclub.org.
13th Annual NAIAS Breakfast . 7:309:30 a.m. Jan. 15 .
Inforum. Keynote
speaker is Werner Struth , board
member, Robert
Bosch
GmbH .
Michelle Krebs ,
senior analyst for
AutoTrader.com,
leads a discussion with Struth;
Sheryl Connelly ,
Connelly
manager for global consumer trends
and futurist for Ford Motor Co .; and
Suzanne Dickerson , director for international business development
and
marketing
at
Clemson
University ’s International Center for
Automotive Research. Detroit Marriott Renaissance Center. $40 Inforum members, $55 nonmembers, $25
students. Contact: (877) 633-3500.
Register at inforummichigan.org.
Multicultural Media Luncheon. 11 a.m.2 p.m. Jan. 15. The Ajamu Group LLC.
Keith Clinkscales, CEO of Revolt Media & TV, emcees this awards program
and speaks on brand reinvention.
Westin Book Cadillac Detroit. $75 general admission, $150 VIP. Contact:
Cheryl Ajamu, (248) 223-0904; email:
[email protected]; website: ajamugroup.com.
Grow Your Business Through Export-
ing: Tips to Get
Started . 11 a.m.-1
p.m. Jan. 15. Automation
Alley.
Noel Nevshehir ,
director of international business
services, Automation Alley , is
keynote speaker.
Southfield Public
Nevshehir
Library. $10 in
advance, $20 at the door. Preregistration closes end-of-day Jan. 13 . Contact: (800) 427-5100; email: [email protected];
website:
automationalley.com.
2015 Macomb Economic Forecast &
Luncheon. 11:30 a.m.-1:30 p.m. Jan. 16.
Chamber Alliance of Macomb County. Jim Jacobs , Macomb Community
College president. Andiamo Banquet
Center, Warren. $35 chamber members, $45 nonmembers. Contact: Briana Koehn, (586) 731-5400, ext. 11;
email: [email protected]; website:
shrcci.com.
2015 AutoGlow. 4:30 p.m-1 a.m. Jan.
16. Ford Motor Co. Fundraiser benefits the Children’s Center; the theme is
“The Future Starts Here.” Ford Field,
Detroit. $275 through Dec. 15, or $325
beginning Dec. 16. Contact: (313) 2627123; email: autoglow@thechildrens
center.com; website: thechildrenscen
ter.com/autoglow.
Open City: Be the Change. 6-8 p.m.
Jan. 19. Build Institute. A panel discusses social entrepreneurship in Detroit. Cliff Bell’s, Detroit. Free. Contact: Muna Danish, (313) 318-1328;
email: [email protected]; website: buildinstitute.org.
Breakfast of Champions . 7:30-9 a.m.
Jan. 21 . Leadership Oakland. Kent
Snyder, financial adviser, Kent Financial Group, discusses “The Economics
of Happiness.” MSU Management Education Center, Troy. $25 members,
$36 nonmembers. Contact: (248) 9526880;
email:
info@leadership
oakland.com; website: leadership
oakland.com.
a.m.-1:30 p.m. Jan. 28. With Mike Petters, president and CEO, Huntington
Ingalls Industries. Westin Book Cadil-
Rehmann advisors have
hands-on, practical experience
in the industries they serve.
MIKE POWELL
ELL
Principal
CHRISTINE SING
Principal
Manufacturing, financial institutions,
dealerships … and more. We’re effective
at serving our clients because we share
common industry perspectives. In
today’s competitive business world, that
understanding can translate into the
edge you need to top next year’s lists.
DON BURKE
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GHT
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CPAs & Consultants Wealth Advisors Corporate Investigators
rehmann.com | 866.799.9580
To learn more about Rehmann advisors and their
industry experience, visit rehmann.com/perspectives.
lac Detroit. $45 DEC members, $55
guests of members, $75 others. Contact: (313) 963-8547; email: info@
econclub.org; website: econclub.org.
Breakfast of Champions. 7:30-9 a.m.
Feb. 18. Leadership Oakland. Jennifer Korman, community relations,
Mercedes-Benz Financial Services,
moderates a panel of young professionals who will talk about what it
means to be a leader. MSU Management Education Center, Troy.
$25 members, $36 nonmembers. Contact: (248) 952-6880; email: info@
leadershipoakland.com;
website:
leadershipoakland.com.
CALENDAR GUIDELINES
If you want to ensure listing online
and be considered for print
publication in Crain’s Detroit
Business, please use the online
calendar listings section of
www.crainsdetroit.com. Here’s
how to submit your events:
From the Crain’s home page, click
“Detroit Events” in the red bar
near the top of the page. Then,
click “Submit Your Entries” from
the drop-down menu that will
appear and you’ll be taken to our
online submission form. Fill out
the form as instructed, and then
click the “Submit event” button at
the bottom of the page. That’s all
there is to it.
More Calendar items can be found
on the Web at
www.crainsdetroit.com.
20141208-NEWS--0025-NAT-CCI-CD_--
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11:01 AM
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December 8, 2014
Page 25
Arctaris fund ‘planting the flag’ for media company in Detroit
BY TOM HENDERSON
Arctaris Michigan Partners LLC has
made the first investment from its
new private equity fund, $2.25 million, in Moguldom Media Group LLC, a
fast-growing black-owned media
company based in Fort Lauderdale,
Fla., that opened an office in downtown Detroit last month to house
its documentary film division.
“Planting the flag in Detroit,
with its big automotive brands, was
really important
for us,” said Jamarlin Martin,
Moguldom Media’s
founder
and CEO.
In October,
Inc. magazine
ranked Moguldom
Media
Group the 14th
Martin
fastest-growing
company of the 100 fastest-growing media companies in the U.S.
and No. 882 on its list of 5,000
fastest-growing companies across
industries.
Moguldom has a three-year
growth rate of 510 percent and 2013
revenue of $15.4 million.
Moguldom Films LLC has hired
five of the 20 employees it plans for
the Detroit office in Harmonie
Park and has hired five temporary
employees, including a director,
production manager and camera
operators, to work on a documentary on police brutality that began
shooting locally a month ago. It
has a budget of $200,000 and has yet
to be given a title, said Martin.
Martin said the company will invest up to $3 million in a film.
Arctaris Michigan Partners,
based in Grosse Pointe Farms, is a
subsidiary of Boston-based Arctaris
Capital Partners LLC. In October 2013,
Arctaris Capital announced it had
launched a Michigan operation and
was raising what it hoped would be
a fund of at least $150 million, the
Michigan Income and PrincipalProtected Growth Fund LP.
In 2009, Arctaris
Capital
first made news
here when it
arranged funding for New Center Stamping on
Milwaukee
Street in Midtown.
According to
Tower
Jonathan Tower, managing partner of Arctaris
Michigan, paperwork for the second investment from the Michigan
fund will be done soon, for Sader
Power Enterprises Michigan LLC, a
subsidiary of Sader Power LLC of
New Orleans that plans to hire 220
full-time employees in Pontiac to
manufacture racking systems for
rooftop solar panels.
Tower said Arctaris has committed to a first round of funding
of $4.8 million in Sader and expects
to fund a total of $9.5 million for
the company, both from the Michigan fund and from the Bostonbased Arctaris Income Fund LP.
Arctaris had a first close on the
Michigan fund of $22.5 million last
year, including $4.5 million from
the Michigan Strategic Fund of the
Michigan Economic Development Corp.
In August, it had a second close
of $20 million and has $85 million
committed for a third close, if the
state approves another $15 million
in matching money.
board of advisers.
“We built a relationship,” said
Martin. “We had a couple of options for funding our growth, but
Arctaris is committed to minority
entrepreneurship in Detroit.”
“Jimarlin has a strong entrepreneurial spirit and has been completely bootstrapped,” Tower said.
“He hasn’t raised any outside capital since he launched the company
seven years ago by buying a domain name for $7.
“Jamarlin fits our model of replacing traditional bank financing
for companies. He’s got the No. 1
digital media company focused on
the African-American demographic. He’s got more clicks and more
unique visitors than all the other
African-American websites combined,” said Tower.
“But Michigan banks were saying, ‘You’re a profitable minorityowned business and you can’t get a
loan from a New York bank?’ And
New York banks were saying, ‘You
want us to loan you money to open
up in a bankrupt city?’
“This made sense for us. It’s a
very profitable media company
with verifiable equity value.”
According to Martin, Moguldom
has more than 29 million unique
visitors for its various websites,
more than 391 million page views a
month and 135 million mobile page
views a month. The company’s
nine websites have 1.5 million followers on Facebook and Twitter,
and its seven YouTube channels,
which produce more than 20 videos
a week, have had 28 million views.
Websites include Mommynoire, a
site about parenting; Madamnoire,
a lifestyle site for black women;
AFKTravel, a site about African
tourism; and HipHopWired, about
the music and entertainment industries.
The company has more than 100
employees in offices in New York
City, Los Angeles, Atlanta, Fort
Lauderdale, Johannesburg and London.
The movie division will release
12 titles this year. The first, “A Genius Leaves the Hood: The Unauthorized Story of Jay-Z,” has sold
almost 10,000 units since its launch
in March.
Tom Henderson: (313) 446-0337,
[email protected]. Twitter:
@tomhenderson2
REAL
ESTATE
MARKET
PLACE
DEVELOPMENT PROPERTY
BUSINESS OPPORTUNITIES
built a relationship. We had a couple
“ ofWeoptions
for funding our growth, but
Arctaris is committed to minority
entrepreneurship in Detroit.
”
Jamarlin Martin, Moguldom Media Group
Tower said other investors in the
Michigan fund include Pittsburghbased PNC Financial Services Group
Inc., Troy-based Flagstar Bancorp
Inc., Farmington Hills-based Level
One Bancorp Inc., Southfield-based
Meadowbrook Insurance Group Inc.,
Grosse Pointe-based Robinson Capital LLC and Michigan foundations.
Tower said Arctaris will invest
another $1 million in Moguldom
Media by the end of the year, pending state approval, which is expected to be a formality.
Arctaris’ funding is in the form
of loans and often in conjunction
with equity funding from other
sources. Tower said that portfolio
companies must have minimum
revenue of $10 million and a minimum of $1 million in EBITDA
(earnings before interest, taxes,
depreciation and amortization).
Martin said Moguldom has what
he described as “a vanilla banking
and lending relationship” with City
National Bank in New York, but that
traditional bank funding was unavailable for his expansion plans
into Detroit and Johannesburg,
South Africa, despite his company’s continued rapid growth.
He said he had been introduced
to Tower in 2010 by an investment
banker in Silicon Valley. Tower
eventually joined Moguldom’s
û DOWNTOWN FARMINGTON û
Development Opportunity
Injured worker can seek benefits under
auto insurance, Michigan high court rules
BY SHEENA HARRISON
CRAIN NEWS SERVICE
Injured workers in Michigan
are employees of a company,
rather than independent contractors, only if they meet three criteria under Michigan’s workers
compensation law, the Michigan
Supreme Court has ruled.
The ruling late last month
stemmed from a suit brought by
Joseph Derry, who was injured
while vacuuming leaves for Sterling Heights-based All Star Lawn Specialists Plus Inc., court records show.
All Star had commercial general
liability insurance, commercial
no-fault automobile insurance and
workers’ comp insurance with
Auto-Owners Insurance Co. at the
time of Derry’s accident.
Derry sued All Star and one of
the company’s owners alleging
negligence for failing to properly
secure the leaf vacuum to a company truck, causing it to fall and
strike him. He also sued AutoOwners for no-fault benefits under
the auto insurance policy.
Lansing-based
Auto-Owners
sought a ruling that Derry was an
employee of All Star, and that
workers’ comp was the exclusive
remedy for his injuries, according
to court records. But Derry argued
that he was an independent contractor who marketed his services
to the public, and that he was entitled to coverage under Auto-Owners’ liability and no-fault policies.
A Macomb County circuit judge
agreed that Derry was an independent contractor at the time of his
accident, and ruled that he was entitled to coverage under AutoOwners’ general liability and nofault policies, records show.
Auto-Owners appealed, and a
special panel of the Michigan Court
of Appeals found in December 2013
that Derry was an employee of All
Star at the time of his accident,
and that workers’ comp was the
exclusive remedy for his injuries.
Derry then appealed.
In its 6-1 decision on Nov. 25, the
Michigan Supreme Court ruled
that Derry was an independent
contractor and could seek benefits
under Auto-Owners’ commercial
liability and no-fault policies.
Michigan’s workers’ comp law
says workers are employees of a
company if they do not maintain a
separate business in relation to
the work they’re performing, if
they do not offer that service to the
public and if they are not an employer to other workers, the high
court said in its ruling.
If a worker fails to meet one of
those three criteria, they should be
considered an independent contractor, the state high court said.
Additionally, the Michigan
Court of Appeals improperly interpreted the state’s law because it
found that workers must fail to
meet all three criteria before they
can be considered independent
contractors, the high court ruled.
“Each criterion of (the statute)
must be satisfied for an individual
to be considered an employee; conversely, failure to satisfy any one
of the three criteria will exclude
an individual from employee status,” the Michigan Supreme Court
ruled in remanding the case to Macomb County.
The Court of Appeals ruling
showed that Derry does not employ other workers, and therefore
did not meet one of the three criteria.
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20141208-NEWS--0026-NAT-CCI-CD_--
12/5/2014
1:35 PM
Page 1
Page 26
December 8, 2014
MPSC report: Utilities need to increase tree trimming
BY JAY GREENE
A Michigan Public Service Commission report released last week is
critical of Michigan utilities’ track
record when it comes to tree trimming — a key variable affecting
electricity reliability for state customers.
Officials for DTE Energy Co. and
Consumers Energy Co. have said in
interviews during the past two
years that their companies have
upped the amount they have spent
on improving electric reliability
for customers. That’s through tree
trimming, electric line improvement and technologies to reduce
power outages for millions of
homeowners and businesses in
Michigan.
But the MPSC indicated last
Thursday the steps weren’t
enough.
The MPSC ordered DTE and Consumers to get more serious about
trimming trees next year, especially
by taking out trees outside of their
normal rights of way if the trees or
limbs could fall on power lines.
Spokesmen for DTE and Consumers have told Crain’s the companies plan to fully comply with the
commission’s order. Improvements
include accelerating investments
on projects that will minimize outage frequency and duration.
But tree trimming, or lack thereof, is recognized by many as the
No. 1 reason for power outages and
the sometimes dayslong time it
takes to restore power to some
neighborhoods.
The December 2013 ice storm
that took down power for 625,000
customers and the more recent
September high-wind storm that
turned out the lights on 462,000
customers are cases in point.
During the past year, widespread power outages in Michigan
— mostly from fallen trees and
limbs — have taken days to repair
and knocked out power for more
than 2 million people.
The MPSC report — based on
the investigation of the December
ice storm — found that 40 percent
of the tree-related outages were
caused by trees growing outside of
the utilities’ official right-of-way
corridors.
DTE Energy already has allocated more funds for tree trimming and
line reliability technology, and Consumers has promised more.
One continuing challenge in
this area is the death of millions of
ash trees. During the past 13 years,
thousands of ash trees have been
killed by the Emerald ash borer.
The foreign beetle now threatens
up to 700 million ash trees.
For its part, DTE has removed
more than 7,000 dead ash trees in-
side and outside of utility rights of
way.
The MPSC order also requires
utilities to develop more detailed
reports on the duration and frequency of power outages and make
it easier for customers to get credits on utility bills when they suffer
losses due to outages by improving
website applications.
However, the MPSC did not order the utilities to compensate customers for spoiled food, purchases
of temporary power generators or
hotel bills. State law limits the
credits to a maximum of $25.
A longer version of this story appears as a Jay Greene blog at
www.crainsdetroit.com.
Huntington: Firm looks to become dominant player in industry
■ From Page 3
Huntington would not disclose
the sale price other than to say it
was less than $10 million. Wudyka
said it was less than a private equity buyer would have paid, but that
“culture was more important than
money” to the sellers.
The Martinizing name will remain and the business, founded in
1949, will continue to be based in
Milford, Ohio, until its office lease
runs out in a few years, after
which the headquarters will become part of Huntington operations in Berkley. President Kevin
Kaeding and the existing Martinizing staff will continue to run the
company, Wudyka said.
Martinizing
outlets
are
spread across
the country, and
Michigan’s
roughly 20 outlets put it among
the bigger markets. Huntington also was attracted
to
Dubois
Martinizing’s
eight international outlets and the
possibility of growing globally.
Following Martinizing in the
Entrepreneur listing of dry-cleaning franchises is Miami-based
Dryclean USA, which has 389 outlets, and Arlington, Texas-based
Comet Cleaners Franchise Group LLC,
at 210 outlets. Huntington’s Certified Restoration Drycleaning Network, or CRDN, holds the No. 4
slot with its 154.
Wudyka sees the industry as
ripe for a company to dominate at
a national level and sees his collection of companies as the way to become that dominant player.
Freshening the pile
Huntington gets its name from
the original dry-cleaning shop at
the core of the enterprise, Huntington Cleaners Inc., which opened in
Huntington Woods in 1950. Wudyka and Snyder bought it in 1992 for
$265,000.
They have added several business lines since. The biggest one is
CRDN, a franchise operation specializing in cleaning textiles damaged in fires, floods and the like.
CRDN gets paid by insurance companies for restoring clothes,
CLOTHES-MINDED
In 1992, Wayne Wudyka and Jeff Snyder bought Huntington Cleaners, a
retail dry-cleaning shop in Huntington Woods that opened its doors in
1950. Since then, they have added an ever-growing collection of drycleaning businesses to their holdings, which are managed by another of
their companies, The Huntington Co. LLC in Berkley.
䡲 Bizziebox
䡲 Dry Cleaning Station
Launched: 2013
Number of franchises: 22
What it does: Pickup and delivery
service using lockers in office and
residential buildings
䡲 1-800-DryClean
Acquired: 2012
service, mainly for residential
customers
䡲 Pressed 4 Time
Acquired: 2014
service, mainly for office customers
䡲 Martinizing Dry Cleaning
Acquired: 2014
What it does: Traditional retail drycleaning service
Acquired: 2014
What it does: Traditional retail drycleaning service
䡲 Certified Restoration Drycleaning
Network
Launched: 2001
What it does: Restoration of textiles
damaged in fires, floods and other
disasters
䡲 Wesch Cleaners
Acquired: 2009
What it does: Stand-alone shop in
Birmingham offering high-end drycleaning service
䡲 Huntington Window Fashions
Launched: 2014
What it does: Sales and cleaning of
custom window treatments,
shutters and drapes. Based in the
Michigan Design Center in Troy.
drapes, area rugs, teddy bears and
linens.
Wudyka and Snyder also own
Wesch Cleaners in Birmingham
and Huntington Window Fashions in
Troy, and the Martinizing acquisition came with Dry Cleaning Station, a small franchise business of
12 outlets based in Columbus,
Ohio.
Early this year, they bought
Pressed 4 Time, a pickup and delivery service previously based in
Boston. In 2012, they bought the 1800-DryClean pickup and delivery
service.
In 2013, Wudyka and Snyder
launched bizzie, now called
bizziebox, a pickup and delivery
service that uses lockers placed in
apartment and office buildings.
Customers use PINs to drop off
clothes in the lockers and later to
pick them up.
In early 2013 when bizziebox
was launching, Wudyka hoped to
have up to 100 franchises by
year’s end. There’s only about 25
now.
Acquisitions made around the
same time as the bizziebox launch
slowed down the rollout, Wudyka
said. And, as Crain’s reported last
year,
Huntington
originally
planned to fold 1-800-DryClean
into bizziebox. But it has since decided to keep it separate.
Wudyka said bizzieboxes are
now in more than 750 buildings in
the country, and about 60 of those
buildings are in Southeast Michigan.
Huntington takes what Wudyka
calls an “inside-out” approach to
franchising, offering existing drycleaning shop owners franchise
services to add to their offerings.
So a given dry-cleaning shop also
can run a CRDN textile restoration business and a bizziebox
pickup and delivery business
from the same shop. None of the
Huntington franchises has any
corporate outlets, so these franchises always are sold to separate
franchisees.
Wudyka and Snyder see this approach as their ticket to national
growth and had it in mind when
they bought Martinizing. “Every
Martinizing in the country should
have bizzie lockers,” Wudyka
said.
“1-800-DryClean and Pressed 4
Time can and will use Martinizing to do their cleaning services.
There will be opportunities for
Martinizing operators to acquire
those routes and fold them in, or
vice versa.”
Pressing ahead
The combined direct revenue
for all of the brands and entities
was about $19 million last year,
said Wudyka, who expects this
year’s total to come in at $21 million. The companies directly employ 200 people. Systemwide, the
companies had revenue of $125
million last year, employing between 4,000 and 5,000 people, and
are on pace to surpass $160 million this year.
The Martinizing buyout should
add at least $30 million in revenue
systemwide, but Wudyka was unsure because Huntington is still
sifting through the franchise
agreements.
The national presence, combined with the tangled nest of
brands, might make some companies eager to form an overarching
brand, but Huntington’s not ready
for that just yet.
“I won’t say we plan to merge
them all together. Each business
has its own definite franchisees
and strengths,” Wudyka said.
“That’s not to say it couldn’t happen, but it might panic the other
franchisees and brands.”
The international foothold that
came with Martinizing will be one
area of focus in the future. The
company also wants to take advantage of mobile technologies.
Bizziebox and CRDN already have
apps, and Wudyka plans to invest
more in technology.
In the meantime, the plan is to
improve communications with
franchisees, support the brands
and add more stores.
Change-resistant
The dry-cleaning industry has
seen “ebbs and flows” of consolidation in the past, including one
sparked by 1-800-DryClean, but
none has stuck, said Kevin
Dubois, CEO of Lapels Dry
Cleaning, based in Hanover, Mass.
Most dry cleaners are familyowned and have been for a long
time. They run their businesses
well and keep their profits secret.
“It’s hard to consolidate those
people,” Dubois said. “They’ve really been resilient. They’ve been
happy and satisfied forever.”
Lapels has 63 outlets, about half
of which are in Massachusetts,
and in the past six months it has
signed agreements to open 70
more. The company expects to
open up to 500 outlets in the next
five years, and Michigan is in its
sights. It plans to open 16 outlets
in Southeast Michigan beginning
next year, having announced an
agreement with a local Great Clips
hair salons franchisee last month.
The push into Michigan will begin with the opening of a central
dry-cleaning plant in West Bloomfield Township in spring, followed
by two outlets later in the year,
probably in Bloomfield Hills and
Troy or Rochester Hills. It chose
the Canton-Rochester Hills arc after studying the demographics.
“All those ZIP codes are great
dry-cleaning customers,” Dubois
said.
The sort of large, polished storefronts expected of national brands
don’t fit well with dry cleaning operations, either. They require lots
of investment, which then requires drawing customers from a
wide geography. This doesn’t jibe
with a business where convenience is king. Dry-cleaning customers come from a tight threemile
radius
around
the
storefronts, Dubois said.
“There are only so many drycleaning dollars in a ZIP code,” he
said. “The No. 1 decider is convenience. That’s ultimately the way
this industry gets consolidation.”
Any would-be consolidator will
have to have good customer service, clean shops and a continuing
neighborhood feel, he said. Huntington has a good shot at accomplishing this, but, apart from the
industry’s general resistance to
consolidation, it will have a difficult time untangling exclusive
territory rights, Dubois said. For
example, Martinizing franchisee
rights could clash with the rights
of CRDN franchisees operating in
the same market.
“You have to be a good psychologist to make that work,” Dubois
said.
20141208-NEWS--0027-NAT-CCI-CD_--
12/5/2014
4:25 PM
Page 1
December 8, 2014
Page 27
Accelerator: Program stresses getting customers, not just money
■ From Page 1
started developing the accelerator
last spring when he was appointed
to be AA’s director of entrepreneurship.
“You build a company to get customers. As you get customers, venture capital funding will come to
you. Stop trying to get money and
valuing yourselves at $5 million;
just focus on the blocking and
tackling of getting customers.”
Kelly is seeking 10 companies to
participate in his 7Cs Program —
which stands for concept, context,
community, clarity, customers,
capital and commercialization —
though he’s open to more firms if
there are enough good concepts.
The initial investment in each
firm is $25,000, which Automation
Alley is covering with funds already allocated to it by the Michigan
Economic Development Corp. Companies are expected to pay it back
within two years of completing the
program or offer an equity stake to
Automation Alley.
The $25,000 ensures that each
founder gets to work with a dedicated CEO coach from Clawsonbased PCS Insight LLC to become an
effective — not just enthusiastic —
leader. They will also get access to
legal and financial consultants as
well as work with experts from
Troy-based Sandler Training on how
to sell to customers — not funders
— and complete their first sales
video.
“Business owners don’t get
enough training on how to be good
salespeople, how to land and talk
to customers,” Kelly said. “One of
the pet peeves I have is that people
GLENN TRIEST
The first test company in Automation Alley’s new accelerator for advanced
manufacturing businesses is IMX Cosmetics LLC. Founder Julie Bartholomew
already has found a customer interested in installing her automated cosmetics
customization machine in department stores.
say, ‘I just need money to build
this thing and customers will flock
to it.’ No. You need the confidence
to go to a customer and say, ‘If I
build this thing, will you buy it?’
We’re going to train them to be
good salespeople and sell something they haven’t yet built.”
Kelly started working with his
first test pilot company in the accelerator, IMX Cosmetics LLC, this summer, and already company founder
Julie Bartholomew has secured a
customer interested in installing
her automated cosmetics customization machine in department
stores.
“I was able to get my machine out
there and do a lot of the pieces by
myself,” said Bartholomew. “But to
get this last push, because the idea
is to take the technology and build
it out globally, I honestly believe I
wouldn’t be as far along as I am
without Tom. He was instrumental
in closing the deal with my first customer and moving beyond one machine here and one machine there,
and looking at a global reach.”
IMX Cosmetics already has 67
patents in 18 countries (filed under
Cosmetic Technologies LLC) because
Bartholomew started the company
more than a decade ago. At the
time, she pitched her idea of a machine that can “mix” its own lip
gloss on site, with more than 40,000
possibilities, allowing customers
to customize their own shades. Barneys New York and other high-end
department stores excitedly embraced the technology, and installed proof-of-concept machines.
But just as things were heating
up, Bartholomew said, she had to
step back and focus on raising her
children. Now she’s ready to refocus
and update her work. For example,
those early machines could turn out
one lip gloss every 11 minutes; her
new technology allows for one every
four minutes. She is also focused on
the technology so that all brands can
be mixed with her machines, rather
than selling a line of cosmetics
unique to IMX Cosmetics.
“You get to make what you
want,” she said. “There is a difference between buying something already on the shelf and being able to
adjust something or match something that is specific to your needs.
This millennial generation loves
that; they love customization.”
Of course, scaling up to a global
level isn’t a task to take lightly.
And that’s exactly the next step on
the 7Cs Program. Each of the firms
involved will work with Troybased engineering consulting firm
P3 North America Inc. to help them
move beyond the first customer.
Because it’s one thing to make 10
and another thing for a client to
believe you can suddenly build
10,000 a month.
“P3 helps companies adopt new
innovation,” Kelly said. “They are
going to be our vetting company,
so they will write a report that
says how the company scales and
how they manufacture at scale.
That way a Bosch, for example,
can look at a new product and say,
‘P3 has already given me the
roadmap on how to adopt this.’ ”
For Kelly, this is a critical step
that will set his 7Cs Program apart
from others. His focus is building
each business and thereby creating
stable jobs that stay in Michigan.
The effort joins that of the White
House, which announced this year
that a $148 million advanced manufacturing research institute is
coming to Detroit. The American
Lightweight Materials Manufacturing
Innovation Institute, which is a 60member consortium that includes
federal agencies, universities and
private manufacturers, will open
in a 100,000-square-foot building in
the Corktown neighborhood.
“I wanted to focus on advanced
manufacturing firms because it’s
our pedigree,” said Kelly. “I wanted
to focus on the trillion economy in
our back yard: advanced manufacturing. We’re building alternative
energy and life sciences, and those
are fun, but the customers that are
all within Southeast Michigan are
advanced manufacturing customers. So if I want the company to
build here and stay here, then I
need to build companies that are
sticky and want to be here because
their customers are here.”
Amy Haimerl: (313) 446-0416,
[email protected].
Twitter:
@haimerlad
Cooley: The bar (exam) is higher as lawyers-to-be adjust to test
■ From Page 3
Specifically, the ABA requires
that either the first-time taker pass
rate stay within the 15 percent
margin for three of the past five
years, or that 75 percent of all
exam takers eventually pass.
As of 2012, Cooley was 15.91 percentage points below, according to
a report it submitted to the ABA.
More recent results are not available.
“The overall pass rate in Michigan (82 percent of first-time takers
in 2011 to 64 percent in 2012) has
dropped precipitously, and we
know that has been a topic of discussion for the deans in Michigan
for some time,” said Barry Currier,
managing director of accreditation
and legal admissions to the bar at
the ABA.
“If the overall pass rate in Michigan falls, Cooley or any other
school would have to be evaluated
as to how its drop and its scores are
measured against state results as a
whole.”
Review visit
Currier said the council of the
Section of Legal Education and Admissions to the Bar, the accrediting body for law schools, visited
Cooley’s campuses in March as
part of an accreditation review
that takes place every seven years
at law schools. He would not say
whether the review is complete.
PASSING PERCENTAGES
Percentage of total applicants passing the July bar examination:
2010
2011
2012
2013
WMU Thomas M. Cooley
70%
71%
44%
44%
University of Michigan
96
91
86
94
Michigan State University
84
86
65
76
Wayne State University
90
76
66
72
University of Detroit Mercy
74
62
45
55
2014*
44%
87
80
74
55
Percentage of first-time takers passing the summer bar examination:
WMU Thomas M. Cooley
80%
80%
52%
53%
55%
University of Michigan
96
94
88
97
87
Michigan State University
87
89
69
82
84
Wayne State University
93
80
72
76
81
University of Detroit Mercy
76
66
53
63
65
*2014 numbers are pre-appeals
Cooley, the nation’s largest law
school by total enrollment with
more than 2,300 students, had far
and away the most applicants for
the latest July bar exam, at 317 of
the total 953 applicants; 177 of
them failed it.
The latest exam results are preappeal statistics. A 30-day appeal
period that began when the board
released its July results Nov. 6 expired Dec. 6.
Timothy Raubinger, interim executive director of the Board of Law
Examiners, told Crain’s last week
no information was immediately
available on how many appeals get
filed. But historically, appeals have
been known to change results as
much as 4 percentage points.
The state Board of Law Examiners oversees the bar examination
twice a year, in February and July,
with a much larger overall turnout
in summer because of recent graduations from law schools in the
spring semester.
Cooley has done better in the
February exams. Some 60 percent
passed this February including 65
percent of first-timers, according
to post-appeal data.
“The school’s faculty has adopted
a bar examination results improvement program, and the faculty remain actively involved in carrying
it out,” Associate Dean of External
Affairs James Robb told Crain’s last
week. “At least as to first-time takers, I think we’re starting to see
some results on that.”
Cooley first-time takers improved from 52 percent passing in
July 2012 to 53 percent passing last
July and a pre-appeal 55 percent
passing this summer.
Among Michigan’s other four law
schools, the July pass rate for all
takers was 87 percent from University
of Michigan, 84 percent from Michigan
State University, 81 percent from
Wayne State University, and 65 percent
from the University of Detroit Mercy.
Lower grades
Cooley’s students in aggregate
enroll with lower grade point averages and scores on the LSAT, the
law school qualifying exam.
Cooley students who first enrolled in 2013 had a median LSAT
score of 145 — about the 26th percentile — compared with a median
151 for Mercy, 157 for both MSU
and Wayne State, and 168 at UM,
according to ABA reports. The
50th percentile is about 152.
The median GPA for those Cooley students was 2.96, compared to
3.13 for UDM, 3.44 at Wayne, 3.52 at
MSU and 3.71 at UM.
Joan Howarth, dean of the College of Law at MSU, said the best
overall predictor of success at the
bar is grades earned in law school,
although LSAT is a more oblique
predictor of passing the bar because the test is designed to gauge
likely first-year academic performance, which in turn factors into
overall law school performance.
MSU has been working to improve its recent performance in
part by working with the Board of
Law Examiners about the state criteria, she said, as well as tailoring
course selection and offering academic assistance to students most
likely to take the Michigan bar.
About half of all MSU law students
are from out-of-state and likely to
practice law outside Michigan after they graduate, she said, so
preparation is
sometimes
state-specific.
“The
new
scoring change
in July was a
welcome
change, but I do
not yet know to
what extent any
relative success
Howarth
of MSU has to do
with that change,” she said. “But
we stress grades, because we believe the best predictor (of bar passage) is course grades. That’s true
for our law school, and it’s true for
any other law school I know
about.”
Chad Halcom: (313) 446-6796,
[email protected].
Twitter:
@chadhalcom
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Page 28
December 8, 2014
Dealers: Partnership allows diversification, major projects
■ From Page 3
field Township.
The partners also just opened a
fourth location up the road from
the Chevy store, the site of the
closed Randy Hosler Buick-GMC.
Coleman moved the collision shop
there to create more service space
at Bowman Chevy.
A Sellers Bowman Auto Center
banner is lashed to the building
until the permanent signage arrives for the used-car center, but
inside is the large shared office
where they jointly run their operation.
Both desks face the door,
Slaughter on the left, Coleman on
the right, with a conference table
for impromptu meetings with
managers.
“We depend on our general
managers to run the stores day to
day,” Slaughter said. The partners also have five senior managers that handle used cars, business development, marketing and
advertising, finance and accounting, and information technology.
Value of diversification
Slaughter says the partnership
makes several things possible.
The partners have more diver-
SELLERS AUTO GROUP
䡲 Four locations in metro Detroit
䡲 Franchises: Chevrolet, Buick-
GMC, Subaru
䡲 Monthly sales: 600-650 new
and used
sification to smooth the ups and
downs of individual brands.
Slaughter recalls losing 65 percent of his volume at his then-Pontiac-GMC store in 2009 before
adding Buick.
As a group, “we can offer customers a choice,” he said. “We can
refer a customer to another store
or even bring a vehicle from another store to the customer.”
The partners have greater combined marketing power to develop
a brand with a unified marketing
message and to compete with other groups.
“And Katie and I share a philosophy: treat customers well, treat
employees well,” Slaughter said.
Said Coleman: “We have a lot of
talented people, and this gives
them a chance to build their careers without having to go somewhere else.”
The partnership also allows for
major projects. Last week, the
group launched YourOnlineDealer, virtual showroom proprietary
software that expands the capabilities of each dealership’s website.
With YourOnlineDealer, online
shoppers can continue to surf
through inventory and store personnel, check hours and addresses and schedule service appointments. But the new software
invites visitors to click to “Buy
your new car online” and engage
in a video chat with an auto
guide, a salaried Sellers employee
who answers questions and helps
customers research vehicles.
The primary setup is a two-way
live video chat, although customers can opt to not be seen by
the employee. As an auto guide
conducts research, he or she can
display results on screen for the
customer to see during the explanation.
“We figured people already are
doing research online, so why not
let them talk to somebody who
can walk them through the
process?” Slaughter said. “They
can use YourOnlineDealer for as
much or as little as they want.”
Online shoppers can select a ve-
hicle in stock, arrange financing,
get a trade-in quote and agree to
buy a vehicle. As yet, the process
doesn’t have capability for an
electronic signature. The credit
application and purchase contract require a physical signature, but the Sellers Auto Group
will mail or messenger any necessary paperwork to the customer.
“We encourage buyers to at
least come to the dealership to
take delivery, but if they really
don’t want to, we’ll deliver the
car to their home or office,”
Slaughter said.
Joe Jackson, the group’s chief
marketing officer, said the new
system offers customers more options.
“We can communicate in person, by phone, email, chat or twoway video chat,” he said. “It’s
however the customer wants.”
“We’re trying to capture more
millennial buyers,” Slaughter
said. “They do everything online.
But by going for millennials, you
get everybody.”
‘Divide and concur’
During the partnership’s long
gestation, Slaughter and Coleman
planned to ease the transition for
loyal employees used to singlepoint operations. The company
now has about 310 workers at four
locations in two counties.
“The exciting part is creating a
new corporate culture,” Coleman
said.
On shared processes, the partners tried to develop new methods rather than simply impose
one party’s system on everybody.
“Not A or B but C,” Slaughter
said.
The partners split most functions and share others. Coleman
handles finance, accounting and
IT. Slaughter has new and used
sales, business development and
tactical advertising. They share
marketing and strategic advertising.
“It’s divide and concur,” Coleman quipped.
The partners see a rapid return
on their efforts. Monthly group
sales are 600 to 650, about 275 of
those used.
“Our same-store sales are up 20
percent this year, with used and
certified used growing about the
same rate,” Slaughter said. “And
our same-store, year-over-year
service revenue is up 30 percent.”
Skills: Highly skilled workers needed but scarce in small towns
■ From Page 1
in the region, and skilled labor is
essential, Macher said.
The makeup of its plant workforce is 10 line workers for every
skilled worker, but that equation will get close to 1-to-1 in the
future, Macher said.
“The interface between
chemistry and mechanics is
more and more important for
us,” Macher said. “This is no
longer a wrench-and-nut business; everything is totally interrelated from process to product, and we’re recognizing the
sensitivity of having skilled people
in all phases of production.”
Auburn Hills-based TI Automotive
Ltd. also struggles to fill positions
at its plants in Caro and Cass City
in the Michigan thumb, said Kirk
Fournier, director of advanced
technology.
“The pay rates aren’t comparable to more suburban or city locations, and you really have to find
the people who want this type of
lifestyle,” Fournier said. “Maybe
this is where they are from and
they want to come back home, or
they prefer a rural existence, but
this is not the norm in our industry right now.”
Migration patterns and gaps
The inability to secure labor talent in small rural towns is a symptom of the overall trend of people
migrating back to metropolitan
epicenters.
In 2013, there were 269.9 million
people living in, or near, U.S.
cities, up by 2.3 million over 2012,
according to U.S. Census Bureau
data.
Young professionals and retiring baby boomers are driving the
boom toward cities, according to
no longer a
“ This iswrench-andnut
business;
everything is
totally
interrelated
from process to
product, and we’re
recognizing the
sensitivity of having
skilled people in all
phases of
production.
”
Frank Macher,
Continental Structural Plastics
William Frey, a demographer at
the Brookings Institution, a Washington, D.C.-based think tank.
Frey, in a USA Today interview in
March, called the trend a “180 degrees” shift from the rush to the
exurbs prior to 2010.
The number of college-educated
people age 25 to 34 living within
three miles of city centers has
risen 37 percent since 2000, according to an October report by Portland, Ore.-based think tank City Observatory.
Kimberly Rodriguez, principal
in the advisory practice at KPMG
LLP in Detroit, said this issue has
been exacerbated by an overall
manufacturing labor shortage.
“This is not limited to a big company or small company and isn’t
just a U.S. issue,” Rodriguez said.
“There’s need for technical talent
across the board, in logistics, engineering, computers, etc., and it’s
starting to stress management and
limit some production.”
The skills gap remains an almost universally shared issue for
U.S. manufacturers.
Nearly 98 percent of CEOs say
the skills gap is a problem for their
companies, according to a survey
released last week by nonprofit
Change the Equation.
The transportation, trade and
manufacturing companies surveyed by the organization represent an employment base of 3.1
million — approximately 2 percent
of the entire U.S. workforce.
Change the Equation is a CEOled effort to improve science, technology, engineering and math education formed in 2010 and
supported by President Barack
Obama.
Recruiting plans
Plymouth
Township-based
Freudenberg-NOK Sealing Technologies recognized the issue coming
out of the recent recession and
went on the offensive.
The automotive sealing component supplier began in 2012 engaging deans at universities with
strong engineering programs as
near to its rural plants as possible,
said Ari Gelberman, a recruiter
for the company.
For instance, Gelberman has
built a relationship with two deans
at the University of Wisconsin-Stout
in Menomonie, Wis. The universi-
ty, which has a strong plastics engineering program, is only a few
hours from Freudenberg-NOK’s
plant in Necedah, Wis., population
923.
“We’ve been able to find ‘A’ students who want to be close to home
and close to family,” Gelberman
said. “We’ve had success because
we’ve been proactive.”
CSP is also getting creative to
combat the reluctance of the
skilled workforce to move to rural
plants.
The composite plastic component supplier is hiring engineers
to work at those plants — which
also include locations in Indiana,
Ohio and North Carolina — on the
promise that after two or three
years, they can transfer to the
Michigan headquarters or its
plants in Spain or China. These
have always been options, but are
now part of marketing itself to new
recruits.
Macher said the supplier is also
considering other incentives, like
paying premium wages to those
skilled workers who transfer to its
small-town plants or providing
company-paid trips or other entertainment options.
“We have to entice a skill set to
an area where none exists,” Macher said. “This has become a significant endeavor.”
CSP, like many other suppliers,
is looking at apprenticeship programs to spur resident small-town
workers into higher-skilled jobs.
Having an international presence is a bargaining chip, said Ted
Duclos, president of FreudenbergNOK.
“Even if someone is at our plant
in Necedah, it’s likely they are going to wind up on business trips to
Japan or Germany.” Duclos said.
“Employees won’t just stay there;
they will have opportunities to see
the rest of the world.”
Rural collapse?
While the experts remain optimistic about placement, the fate of
rural plants and the small towns
that host them is grim.
Macher said the trend will certainly shutter rural plants over
time — a necessary evil.
“I hate shuttering plants; stores
get boarded up and small towns go
away when these plants close,”
Macher said. “In some cases, this
will have to happen.”
But it’s not a move Macher plans
to make just yet — largely because
it’s expensive. It costs nearly $1
million to move one four-ton press
from its plants, he said.
Rodriguez said that while technology is creating the issues with
the workforce at rural plants, it’s
also trying to solve it.
She said mobile devices, such as
the iPad, have created scenarios
where line workers can get specific
direction from off-site engineers.
Suppliers also enlist firms like
KPMG, and its stable of engineers
and plant managers, to set up programs to keep small-town plants
operational. A common practice of
late is to train a traveling team of
highly skilled launch engineers to
assist rural plants in production,
and technology, ramp up.
“We’re seeing a general trend,
but I don’t think that means the
end of small-town manufacturing,” Rodriguez said. “We’re seeing the use of technology stemming that.”
Dustin Walsh: (313) 446-6042,
[email protected].
Twitter:
@dustinpwalsh
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December 8, 2014
Page 29
Kroger: ‘We have to present a better, fresher, friendlier store’
■ From Page 1
very important to Kroger Co.,”
Homco said.
She declined to say what percentage of the company’s $98.4 billion in
total revenue last year came from
its Michigan operations.
But Ken Perkins, a stock analyst
covering grocery retail for Morningstar Inc. in Chicago, estimates
the Michigan division’s revenue
accounted for roughly 5 percent of
the company’s $77 billion in revenue, not including fuel, last year.
Kroger has a long history here,
forged organically and through acquisitions such as its 2007 purchase
of 20 local Farmer Jack stores from
Montvale, N.J.-based Great Atlantic
& Pacific Tea Co. Inc., Homco said.
“We have facilities we’ve outgrown here in Michigan, and we
want to make sure we can continue to grow.”
“When you look at some of the
other players here, we have a lot of
mass (product retailers) with Meijer and Wal-Mart. ... We fill a very
nice niche with our traditional
grocer status,” she said.
The number of regional independent grocers in Michigan spurs
Kroger to be more competitive,
Homco said. Among them are
Busch’s Fresh Food Market, Hiller’s
Market, Hollywood Markets, VG’s Groceries, Papa Joe’s Gourmet Market &
Catering and Nino Salvaggio International Marketplace.
“Those independent operators
very much serve a niche and are
very fresh operators. I think that
makes us better,” Homco said. “We
have to present a better, fresher,
friendlier store.”
But with Grand Rapids-based
Meijer Inc. nipping at its heels for local market share and Wal-Mart
Stores Inc. holding the next-largest
share, Kroger is also looking to
compete with expanded-format
stores. In February, the state’s first
123,000-square-foot Kroger Marketplace opened at 23 Mile Road and
Hayes Road in Shelby Township,
with nonfood departments including housewares and apparel.
And the hope is to open more superstores soon, if the company can
find the large sites needed, Homco
said.
“The metropolitan statistical area
in which we operate is very dense;
it’s amazing,” she said. “To find that
kind of real estate to be able to fit
one of the stores has been a challenge.”
Kroger, which operates 2,631
stores across the country, is fortunate, Homco said, to have so many
different store formats available. In
addition to its traditional grocery
stores of 30,000-90,000 square feet
and its marketplace stores of
123,000-125,000 square feet, it also
operates convenience stores that
are 10,000-15,000 square feet in other
states, she said.
MARKET SHARE FOR METRO
DETROIT’S GROCERS
28.3%
%
2.1
3%
12.9%
Kroger
Meijer
Wal-Mart
28.5%
25.2%
Spartan Stores
Busch’s
Others
All data as of October 2013.
Source: The Nielsen Co., Stagnito
Business Information Marketing Guidebook
complete major remodels at 10
stores in Michigan, at an investment of $4 million to $6 million
each, Homco said. That includes redoing the floors, rearranging food
cases, adding new décor and often
flipping departments — a pricey endeavor since it means moving walls
and rewiring.
Kroger “reopened” a Port Huron
store in early December and plans
to hold a grand reopening celebration at a second Canton Township
store Dec. 10.
It’s also renovated stores this
year in Bloomfield Township,
Troy, West Bloomfield Township,
Farmington Hills, Springfield
Township, Lansing and Flushing.
But only the Birmingham store
at East Maple Road and Woodward
Avenue closed during renovations,
Homco said.
“We just turned that store upside down. We weren’t going to
give customers a good shopping
experience while we renovated
that store,” she said.
The store was stripped down to
its bare walls, she said. Every department has been rebuilt, and
many are in different locations.
Shoppers will also find a repaved
parking lot, a new foyer, a better
presentation and selection of food
and some as-yet unannounced
changes in the deli department,
Homco said.
The chain has begun offering
Mediterranean food at some local
TOP 20 GROCERY COMPANIES IN SE MICHIGAN BY MARKET SHARE
Company trade names
1. The Kroger Co.: Kroger; Kroger Marketplace
2. Meijer Inc.: Meijer
3. Wal-Mart Stores Inc.: Wal-Mart Supercenter
4. Costco Wholesale Corp.: Costco Wholesale
5. Sam’s Club: Sam’s Club
6. Target Corp.: Target PFresh grocery
7. Aldi Inc.: Aldi
8. GFS Marketplace: GFS Marketplace
9. Family Dollar Stores Inc.: Family Dollar
10. Whole Foods Market Inc.: Whole Foods Market
11. Hiller Inc.: Hiller’s Market
12. Trader Joe’s Co.: Trader Joe’s
13. SpartanNash Co.: Family Fare Supermarkets; Spartan Foods; ValuLand;
VG’s Food Center & Pharmacy; VG’s Fresh Market; VG’s Grocery
14. Busch’s Fresh Food Market: Busch’s Fresh Food Market
15. Hollywood Super Markets Inc.: Hollywood Supermarket
16. Dollar General Corp.: Dollar General
17. Kmart: Super Kmart
18. SuperValu Inc.: Save-A-Lot
19. Saturn Food Center: Hartheart Land Marketplace; Saturn Food Center;
Saturn Super Foods
20. Oak Ridge Markets: Oak Ridge Market
Market share rankings are estimated by grocery-specific revenue for each company.
Source: Chain Store Guide, 2014 Grocery Industry Market Share Report
stores, she said. And in August, it
opened a Godiva Boutique at its
Ann Arbor store.
The boutique — its first— offers
candy made from the chocolatier’s
recipes, prepared by Kroger employees who are trained by Godiva, Homco said.
The boutique has been doing
well, but the true test will be the
holiday season, she said. It’s a concept Kroger is looking at for other
parts of the country.
“Certainly, part of our merchandising strategy is to try new things
and see how they work,” like the
Godiva boutique or the cheese
shops with offerings from New
York’s Murray’s Cheese Shop, Homco
said.
“We’ve got another couple ideas
up our sleeve for another couple
stores.”
Food from home
Increasing the level of fresh food
at Michigan Kroger’s is also part of
her strategy, Homco said, as is
sourcing locally wherever possible.
The milk, sour cream and cottage
cheese sold at area Kroger stores
come from its Michigan Dairy in
Livonia. And other products, like
the cranberries sold in its Michigan
stores over Thanksgiving, are
grown here.
“It’s neat to be able to procure it
locally,” Homco said. “People want
to support the local economy ...
and I think you get a fresher product that way.”
Margins for grocery stores are
typically just 2-4 percent, “so hopefully, you’re growing sales and
you’re growing market share,”
Homco said.
Kroger’s loyalty and fuel programs are designed to do exactly
that. Kroger offers personalized
coupons for items customers regularly shop for and a free mobile
app that provides electronic
coupons and shopping lists, prescription reordering and customer
loyalty point tracking.
Customers can also earn discounts off the price of gas purchased at Kroger and participating
Shell gas stations by buying groceries, prescriptions and gift cards
in its stores. Kroger offers a higher
discount off gas purchased at one
of its 62 area gas stations.
Those include gas stations recently opened in Farmington Hills,
Major makeovers
Kroger recently unveiled its expanded Rochester Hills store at Livernois Road and Walton Boulevard,
which grew to 90,000 square feet
from 60,000 square feet after a $10
million to $12 million investment.
In the next couple of weeks, it will
complete a similar expansion of its
Canton Township store at Canton
Center and Ford roads, Homco said.
It also has completed or soon will
COURTESY OF MEIJER INC.
Meijer Inc. — a close No. 2 to Kroger in local market share — has spent more than $200 million on new and remodeled
stores in Southeast Michigan and plans to open four of 11 new stores in Michigan, including its second in Detroit.
New Baltimore, Port Huron and
Hillsdale.
Before year’s end, Kroger expects to open additional gas stations in Springfield Township and
Howell. And if the weather cooperates, another gas station will open
at 13 Mile Road and Gratiot Avenue in Roseville in January,
Homco said.
Stores and stations
Like Kroger, Meijer also operates
gas stations near many of its stores,
and it, too, offers customers who
make purchases in its stores discounts toward fuel at those stations.
“Our gas stations have always
been a part of our offering and our
customers expect the convenience,”
said Frank Guglielmi, senior director, communications, in an email.
Most Meijer gas stations were
built with its stores, he said.
Meijer launched mPerks in 2010
and has expanded the program in
recent years with a smartphone app
and free Wi-Fi for customers, he
said.
More than 3 million customers at
Meijer’s 213 stores across Michigan,
Ohio, Indiana, Illinois and Kentucky have enrolled in mPerks, and
as many as 26,000 more customers
are joining mPerks each week, he
said.
About half of Meijer’s stores are
in Michigan. Of those, 30 are in
Southeast Michigan — which includes stores in Howell, Port Huron
and Monroe.
During the past several years,
Meijer has invested more than
$200 million in new and remodeled
stores in Southeast Michigan,
Guglielmi said. In the coming year,
it plans to open four of 11 new stores
in Michigan, including its second in
Detroit, at the former Redford High
School site, and others in Alpena,
Manistee and Acme Township.
“Southeast Michigan has always
been a very important market for
Meijer, demonstrated by our continued investment in new and remodeled stores, as well as our ongoing commitment to building stores
in the city of Detroit,” Guglielmi
said.
Price and location, traditional
competitive factors for grocery
stores, are still very important,
Morningstar’s Perkins said, as is a
strong focus on fresh, natural and
organic products.
Fuel and loyalty programs are
also important strategies, given
that other retailers use them to drive traffic to their stores and some
smaller competitors aren’t using
them. Kroger’s loyalty program and
its personalized coupons are very
effective in bringing customers
back, Perkins said.
One of the newer competitive tactics Kroger is now evaluating is the
click-and-collect system it acquired
with its purchase of the east coast
grocery chain Harris Teeter Supermarkets Inc. early this year.
Through the system, customers
order food online and pick it up at
the grocery store.
Kroger is assessing the economics of the system and seeing how applicable it could be to its different
stores and markets, Perkins said.
Sherri Welch: (313) 446-1694,
[email protected].
Twitter:
sherriwelch
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Page 30
W
Google event to aid small
biz, nonprofits in Pontiac
Google Inc. is coming to
downtown Pontiac — but
not in the way you might
think.
On Dec. 10, Google will
host a free public event devoted to small businesses
and nonprofits, in cooperation with the city and the
Pontiac Regional Chamber.
Colby Chilcote, small-business marketing manager for
Google, said event organizers hope to draw more than
100 people to 7 N. Saginaw
downtown between 10 a.m.
and 1 p.m.
“We picked Pontiac because we are piloting this
program and Michigan is the
first state where we rolled
out the pilot,” Chilcote said.
“Pontiac (and the chamber)
were the first partners to
host a workshop.”
Local catering will be provided by Downtown 51 Grille,
Lafayette Market, Traveling
Chef Catering and Delec-
December 8, 2014
RUMBLINGS
New owner
soon for
Crittenton?
ord is out that the
board of independent Crittenton Hospital Medical Center in
Rochester Hills is leaning
toward a decision on its
next owner.
Nobody is talking yet, but
sources and employees are
saying it is down to three
systems.
The three finalists are fivehospital Henry Ford Health System in Detroit, 12-hospital
McLaren Health Care Corp. in
Flint and St. Louis-based Ascension Health, the nation’s
largest Catholic health care
system and owner of five-hospital St. John Providence Health
System in Warren.
Officially, Crittenton says
a decision will be made and
announced by the end of the
year. Stay tuned.
Page 1
tabowl Food Truck & Catering.
One-on-one sessions with
Google experts will cover
areas such as online marketing and website analytics. Registration for the
event is recommended at
gybo.com/mievent.
Legislation would keep
alcohol flowing until 4 a.m.
If legislation approved by
the state Senate last week
moves ahead for approval
in the state House, it may be
possible to party Miamistyle in the D next year.
Well, without the palm
trees or sand. The late-night
part.
A bill approved Thursday
would let bars and restaurants pay a $10,000 annual
fee to sell alcohol until 4
a.m. That fee revenue
would go to local police, the
state Liquor Control Commission and the communities
where the late-night/early
morning bar permit is issued.
Bill sponsor Virgil Smith,
D-Detroit, said in reports
published by The Associated Press and MLive.com
that the move is meant to
give downtown businesses
the same status as those in
other big cites (Miami, New
York, Atlanta, D.C., Chicago.) But Mike Tobias of the
group Michigan Alcohol Policy
said the change would be
“terrible” for public health
and safety.
City Bird flies higher with
more space, new vendors
Holiday shoppers seeking
locally made jewelry, apparel and other products have
more options now that Detroit retailer City Bird has
bulked up its inventory,
thanks to a program de-
COURTESY OF CITY BIRD
Siblings Andy and Emily Linn opened City Bird in Midtown in 2009
and recently completed an expansion.
WEEK ON THE WEB
FROM WWW.CRAINSDETROIT.COM, WEEK OF NOV. 27-DEC. 5
signed to strengthen local
entrepreneurship.
Andy Linn and his sister,
Emily, opened City Bird in
2009. In October, they received $10,000 from the NEIdeas program and used that
money to expand the 600square-foot retail shop at
460 W. Canfield St. to 1,100
square feet.
New vendors include Detroit-based Aptemal Clothing
LLC, known for its “Detroit
Hustles Harder” line, and
Rebel Nell L3C, which employs disadvantaged
women in Detroit to make
its unique jewelry.
Linn said City Bird had
one year to spend $10,000 and
report on how it was used,
but they wanted to get started right away. All that’s left
to do is polish the concrete
floors.
NEIdeas is part of the
New Economy Initiative and
Community Foundation for
Southeast Michigan and will
award a total of $500,000 to
more than 30 businesses.
Chalkfly founders remain
upbeat after company sale
Did Detroit Venture Partners LLC, the early stage
venture capital company
co-founded by Dan Gilbert,
Josh Linkner and Brian Hermelin, pull the plug on Chalkfly, a company founded in
2012 to sell office and janitorial supplies?
That’s the word in the local VC community, though
those involved in the sale of
the company for an undisclosed amount to Novibased Global Office Solutions
declined to discuss details
last week.
In the summer of 2012,
Chalkfly joined the Bizdom
accelerator founded by
Gilbert and later became
the first Bizdom graduate to
become a DVP portfolio
company. It was housed,
like many of DVP’s tech
companies, in the Madison
Building downtown.
Gabe Karp, a partner at
DVP, which led an investment of $750,000 in Chalkfly
in March 2013, confirmed the
sale of the company’s assets,
which basically amounted to
its list of clients, but declined
to comment further. Two of
Chalkfly’s nine employees
have joined Global Office Solutions.
Andrew Landau co-founded
the company with his
brother, Ryan.
The two founders remain
upbeat. Ryan, who left a job
in Washington with IBM to
start Chalkfly, said he will
continue to be part of “Detroit 2.0.”
Andrew, who left a job in
Chicago with Google to join
his brother, said: “Whether I
join another startup or start
my own company, Chalkfly
was chapter one. I’m looking
forward to chapter two.”
Orr predicts
post-bankruptcy
budget surplus
etroit Emergency
Manager Kevyn Orr,
who helped take
Detroit into bankruptcy, told
the city’s financial oversight
board Friday that he projects
a budget surplus of about
$100 million by the end of
next fiscal year, The Detroit
News and Detroit Free Press
reported. Orr told the panel
he’ll ask a federal judge to
make the bankruptcy exit
official this week, and said
he’ll resign when the
financial emergency is
completed, which he hopes
will come by mid-month.
D
ON THE MOVE
䡲 Pontiac-based human
services agency Lighthouse
of Oakland
County
named Lisa
Machesky,
44, as CEO.
She was executive director of
the Baldwin
Center, a
Machesky
human services agency in Pontiac, before her departure in October. At Lighthouse, she
succeeds John Ziraldo, 56,
who left in October.
䡲 The Ann Arbor-based
Michigan Venture Capital Association named Maureen
Miller Brosnan as executive
director. The president of
the Livonia City Council and
chairman of the board of directors of St. Mary Mercy
Livonia hospital replaces Carrie Jones, now director of the
Detroit-based Studio Center.
䡲 Alfred Diebel, 60, was
named executive director
of the Detroit-based Municipal Advisory Council of Michigan. The former treasury
manager at the Detroit Water and Sewerage Department replaces Jim Bickley,
who is retiring Dec. 31.
䡲 Lynne Friman, 55, director of strategic projects for
CultureSource, the Detroitbased arts and cultural association, was named interim
director. Executive Director
Maud Lyon is leaving at
year’s end to become president and CEO of the Greater
Philadelphia Cultural Alliance.
䡲 Peter Grady will retire
as head of Chrysler Group
LLC’s dealer network on
March 31, and will step
down as head of Maserati
North America at the first of
the year, Automotive News
reported. Grady, 54, will retain his current responsibilities until then, Chrysler
said. Christian Gobber will
assume responsibility for
leading Maserati North
America, effective Jan. 1.
䡲 Chevrolet hired former
Ford Motor Co. social media
manager Craig Daitch as senior manager for social media, Automotive News reported. Daitch, 39, joins
General Motors Co. from SapientNitro, where he was vice
president of digital marketing strategy and managed
the Detroit office. He was at
Ford before joining SapientNitro late last year.
䡲 Michael Cavanagh, a 32year Michigan Supreme
Court justice, will join Lansing law firm Alane & Chartier PLC early next year. Cavanagh couldn’t seek
re-election because the
state constitution bars candidates who reach age 70.
䡲 University of Michigan
head football coach Brady
Hoke was fired after four
seasons, capped by a 5-7
record in 2014.
COMPANY NEWS
䡲 Auburn Hills-based
automotive leather supplier Eagle Ottawa LLC announced a $10 million,
16,500-square-foot expansion to its Rochester Hills
tech center, adding workspace for 50 new employees,
new prototyping and validation capabilities and new
space for its customers.
䡲 Detroit-based private
equity firm Rockbridge
Growth Equity LLC acquired
Robb Report, a Malibu,
Calif.-based company that
reports on luxury lifestyles
through magazines, websites, smartphone apps,
events and a private club.
The company will open an
office in downtown Detroit.
䡲 Fuel systems supplier
TG Fluid Systems USA Corp.
is spending $12.9 million to
expand its operations in
Brighton and is expected to
create 36 jobs.
䡲 Swedish retailer Ikea
plans to add 765 solar panels
to its 8-year-old Canton
Township store next spring
and summer, increasing the
total panels to 4,925.
䡲 After a two-year development of its Corktown location, Gold Cash Gold prepared for a weekend
opening for dinner. Normal
business hours at the new
restaurant at 2100 Michigan Ave. will begin Dec. 9.
䡲 Overall revenue at the
three Detroit casinos fell
slightly in November after
rising in October, with
Greektown Casino-Hotel reporting the only increase for
the month, said the Michigan
Gaming Control Board.
䡲 Honda North America
said it will expand its recall
of potentially explosive driver-side airbag inflators nationwide in accordance
with a request from federal
regulators, even as airbag
manufacturer Takata Corp.
continued to insist it’s not
necessary, Automotive
News reported.
OTHER NEWS
䡲 The Somerset Collection’s CityLoft returned to Detroit’s Woodward Avenue,
bringing more than 30 retailers downtown. CityLoft,
now on the ground floor of
the First National Building,
will be open 10 a.m. to 7 p.m.
Monday through Saturday
through Dec. 23.
䡲 Detroit Labs, a mobile
app development company,
will launch an app today for
the Detroit Police Department.
DPD Connect, available as a
free download across all
platforms, will provide the
community with breaking
news, crime updates and
statistics and posts about
wanted suspects, and feature a tool for people to
make anonymous tips.
䡲 General Motors Co.’s
Chevy Silverado campaign
“Purple Roads,” created by
Troy-based Leo Burnett Detroit, took the Best of Show
honor at the eighth annual
D Show advertising awards
gala sponsored by the Adcraft Club of Detroit.
䡲 A nearly 130-year-old
building near the Detroit
riverfront that once housed
Schweizer’s German restaurant was demolished. Riverfront Holdings Inc. bought the
vacant building in May.
䡲 An industrial warehouse building at 5757 Trumbull St. in Detroit’s New Center was sold to two Austin,
Texas, investors planning a
loft-style multifamily residential development. Bill Ball
and Jerry Lindenmuth purchased the building, occupied by Boston-based document management company
Iron Mountain Inc., for $2.5
million last month.
䡲 The long-awaited Boeing 787 Dreamliner made
its debut at Detroit Metropolitan Airport when Royal Jordanian landed one to begin
twice-weekly passenger
service to Amman.
䡲 A $2 million grant
from the Detroit-based Skillman Foundation is expected
to help create a plan to
boost young men of color in
Detroit, AP reported.
䡲 The Michigan Economic
Activity Index grew by onetenth of a percentage point
in September to 120.5 for the
sixth straight month of
growth. The Southeast Michigan Purchasing Managers Index was 56.8 in November,
up from 54.7 in October.
䡲 The Michigan House approved a $1.2 billion plan to
boost road funding without
raising taxes by instead using money that would otherwise go to schools and local
governments, AP reported.
OBITUARIES
䡲 Patrick Nowak, former
director of the Michigan Department of Transportation
and a former Oakland
County deputy executive,
died Nov. 22. He was 76.
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CELEBRATING 25 YEARS OF EXCELLENCE
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This Crain`s Detroit Business Article

Transcription

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