Flght brews over bllls on Gondemnatlon

DuTROIT
Cn,uI{S
BUSINE
SS
@Entire contents copyright 2005 by Crain Communications Inc. All rights reserued
Flght
brews
over
blllson
Gondemna
TIIIsJUST
IN
plans
Investnentgoup
tobuyUniBoring
An investment group led
by two private-equity
funds and a former FoldMotor Co. and Covisintexecutive agreedto buy auto supplier Unl BorlngInc. out of
bankruptcy.
The company will be renamed DlverslfledMachlne
lnc.
UCInvestorslnc.- which
includes The CarlyleGroup,
. TheRelatlvltyFundlJMEand
Bruce Swift - have an
agreementto buy Uni Boring for $21million plus the
assumption of several million dollars in liabilities.
Another private-equity
fund, Insight Equity L.L.P.,
was the highest bidder at a
Septemberauction with a
$27.3million bid. But the
fund walked away from the
deal last month.
Uni Boring, working
with investment banker
Stout RlslusRosslnc., then
contacted UC Investors,
which was the secondhighest bidder. Uni Boring
was owned by Facundo
Bravo. He will not be a part
of the reorganized company, said a spokesman for
the new owners.
But the Howell-basedautomotive machining supplier still will be a minority business enterprise, the
owners said in a release.
Joyce
Johnson-Miller,
managing partner of The
Relativity
Fund,
is
African-American. Johnson-Miller made an unsuccessful bid for Key Plastics
L.t.C.in 2001.
Swift, who was a purchasirrg executive at Ford
and was president of Covisint, will be CEO.Stephen
Bay, a former Metaldyne
Corp.and SimpsonIndustries
executive, will be COO.
Shankar Kiru, a former Covisint and AllledSlgnalexecutive,will be CFO.
The company employs
500and has plants in Howell, Detroit and Canton
Township.
- Terry Kosdrosky
SeeThis Just In, Page2
JOHN F. MARTIN
Some zrJorrA
Campbell/Manix Presldent Doug Manix says hls company has had to take on
new klnds of projects, such as Llberty Lofts In Ann Arbor.
Rebuilding
a
G0ntractor
[mnnur
DoMATN
cHANc[s
aboutsti,fli,ng
deaelopment
By Aryry Larn
CAPITOL CORRESPONDENT
Campbell
IM an'ind;iaers,if,ies
T,a'itll
condns,speci,alty
rnork
BY JENNETTn Snnnn
Manix, lost within about two
weeks.
Manix said the company alt
took
Campbell/Manlx
Inc.
I
ready had been working on
grow
decades
to
into
a
nearly
I
strategic planning, and had put
I $100 million contractor for
money in reserve in case of a
major automotive
slowdown. Still, facoffice buildings. It
ing such a dramatic
took days for most
loss rapidly sped up
of its upcoming
the company's diwork to disappear.
versification plan.
Clients like Oetptrl
"In
hindsight,
Corp.and ValeoS.A.
we've come out of it
hired the Southa better company,"
field-based compaManix said.
ny for research cenThe
biggest
ter
and
office
changewas to enter
projects in Troy and
the residential marAuburn Hills. It's
ket with condominiA recurringfeature
how
Campbell/
abouthowSoutheast um construction.
Manix rode the real
Michigan
businesses Other categories,
estate boom of the
areadjustingtoa
such as education,
late '90s along with
changing
economy.
were harder to
its peers.
break into, CampThen cameSept.11,2001.
With bell/Manix decided.
the uncertain business climate
"We did a lot of homework, did
that followed the terrorist at- interviews with attorneys,"
tacks, Campbell/Manix lost half Manix said. There was much to
its construction backlog. That learn, such as getting to know adamountedto about $30million to
$35million, said President Doug
SeeCampbell, Page 37
CRAIN'SDETROIT BT/SINESS
Reinvention
LANSING - Urban-development and private-property rights
are clashing in the Capitol over
measuresthat would make it harder for governments to condemn
blighted property.
SenateBill 693and a resolution
to amend Michigan's constitution
are meant to permanently preservea 2004MichiganSupreme
Court
ruling in favor ofproperty owners'
rights.
But the measures,passedearlier
this month by the Senate,go be-
What Senate Bill 693 and Senate
Joint Resolution E would do:
I Requiregovernments to show
"clear and convincingevidence"
that taking of property to remove
blight is a public use. There is no
clear standard in existing law.
I Preserve a2OQ4 Michigan
Supreme Court ruling that
governments cannot take private
propertyfor economic development
orto benefit another private party.
yond both the court decision and
current law. And to local governments,that's an alarming change.
"It is going to stifle redevelopment efforts," said Arnold Weinfeld. director of state and federal
a-ffairsfor the MlchiganMunlcipal
League."It will make it prohibitive
SeeCondemn,Page37
Covisinthasplan to
cut GM healthcosts
BY ANDREw Drnronnrcn
ffi
million in 2004.
Covisint CEO
Bob Paul said
Detroit-basedGovlsinthas subduring the conmitted a plan to GeneralMotors
ference that the
Corp.that Peter Karmanos Jr. said
savings would
could save the automaker a possicomeby making
ble $660million in annual health
health
care
care costs.
more manageKarmanos. chairman and CEO
able
through
of Compuware
Corp.,said on Nov. 7 Karmanos
more efficient
that Covisint submitted the proinformationposal to GM. He revealedthe infor- sharing amongprivate care physimation during the GoldmanSachs cians, hospital networks and inSoftware& lT ServlcesRetleat2005 surance companies via a secure
tech conferencein New York City.
Compuwarebought Covisint for g7
See Couisint, Page 35
CRAI N'S DET ROI? BUSINSSS
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for
jewelers, Woman-owned
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businesses,
pages
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lenders, 1r,zo
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raEs se
GovisintPlan couldsaveGM money
lFromPage 1
network fully compliant with the
Health Insurance Portability and
Accountability Act. The potential
is to provide real-time information
about health care coststo the company, Paul said.
CYain'sdid not attend the conference, but listened to the comments from an audiotape.GM confirmed the proposal.
"We have received a proposal
from them," said Carey Osmundson, assistant manager for health
care communications at GM.
"However, we have not had the opportunity to evaluate it. We are
certainly going to review it and
will know something at a later
date."
In a written statement, Karmanos objected to Crain's reporting the figure that he used during
the conference. "The projection
that Compuware discussedat the
Goldman Sachs Software and IT
Services Retreat remains exactly
that - a projection basedon government and industry data to form
a basis of discussionswith our customer," the statementsaid.
Covisint was started in 2000bv
Inc. in January 2004.Terms were
not disclosed.
Karmanos sa,id
Compuware bought Covisint's
assets in March 2004.
during the call that remaining
Covisint sells in three areas:messaging and Web services, identity
Coa'is'intwill
security, and portal platforms,
which are highly secure, custom"eas'ily" haae
made networks. Much of the technology was developedbefore Comreue,nueof more than puware
bought Covisint.
Since being purchased by Comff1 00 mi,lli,on w,ithi,n puware,
Covisint has been trying
to sell into new markets, such as
four Aears.
health care and finance.
Paul said during the presentaGM, FordMotorGo.,DalmlerChrysler
tion that studies
AG, RenaultS.A. and NlssanMotor
from the federal
Co. Ltd. They'd hoped to create an
government inonline trade exchange that would
dicate that 30
percent
link suppliers and automakers and
of
parts
essentially make car
a comhealth
care
modity.
costs in the U.S.
Paul said the companiespoured
could be saved
million
into
developing
the
by
consolidating
$400
technology. But Covisint flouninformation and
dered as suppliers questioned its
improving the
value.
flow of commuThe trade exchange part of Cov- nication among the entities inisint's original business was sold volved in providing health care.
"For the first time in a long
to Pittsburgh-basedFreeMarkets
time, you're seeing these corporations actually proactively invest in
health care information technology - giving it to the providers, to
the hospital networks, the primary
care physicians and everybody
else - becausethey know it's going to have an impact downstream
on overall health care costs," Paul
said at the conference.
General Motors has made cutting health care costs a priority after losing nearly g4 billion so far
this year. GM and the UAW agreed
to a deal Oct. 17in which $t billion
in health care costs would be cut
annually. As Crain's first reported
Which is to soy we don't hondoff cosesor clientsto ossociotes
May 23, health care is an area
or
where Covisint executives see
other portners.Our ottorneysore totollyhondson,with the
potential. In early Septemhuge
legol skillsto help you from stortto finish.
ber, BlueCrossBlueShleldof MlchlColl Mork Schlussel:
248-723-1650.And we'll hondleevery'hing.
gan said creating a statewide
health care portal through CovS CHL U S SE L
isint would be part of its plan to
I:'I
spend $200million to $300million
SCHEFMANpLT
modernizing its information techlcgll rnindl.lurircscnindcd.tr
nology.
During the presentation to investors, Paul said the company
322NorthOldWoodword,
Birninghom,
Michigon
48009
also is now looking into expanding
into financial servicesand government.
In an Oct. 27 conferencecall for
Compuware, Paul said Covisint
continues to grow. GM and DaimIerChrysler expandedthe scopeof
existing contracts with Covisint in
Locating Debt and Equity for the following:
the company'ssecondquarter. The
company also added six new supI BusnwssAceutsITIoN
plier contracts, openedan office in
Shanghaiand said it plans to open
r ExpaNsroN
an office in Frankfurt, Germany,
o TunN.qRouND
in January. Also, it added three
new logistics customers.
Karmanos said during the call
Additional servicesinclude:
that Covisint will "easily" have
o BusINess BRoKERAGE
revenue of more than 9100million
within four years.
r LocatrNc
vENTURE cApITAL
"We think Covisint should be
I
AIvo MUCH MoRE
able to grow its bookings around
100percent per year over the next
few years ... given its growth proTo learn more about Mid-States Capital contact us at:
file, dominance in the auto sector
18720Mack Avenue, Suite200
and the potential around the health
GrossePointe Farms, MI48236
care vertical," David Rudow, senior research analyst in the MinT e l : ( 3 1 3 )8 8 6 - 9 7 8 0F a x :( 3 1 3 )8 8 6 - 9 2 8 1
neapolis, Minn. ofiice of plper JafEmail: jpa@midstatescapital.com
fray& Co.,said in a Nov. 4 report.
Contact: Joseph P. Alam
Andrew Dietderich: (AIJ) 4460315, adietderich@arain.com
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