Article written for www.annarborbusinessmagazine.com

“If you would know the value of money, go and try to borrow some.” – Benjamin Franklin

Whether you’re a start-up looking to get your business off the ground, or you’re a going concern looking to expand, the move can be difficult to make without an infusion of capital. This capital infusion can come in many forms (angel investors, venture capital, lines of credit, government grants, etc.). But for small businesses in the Ann Arbor area, banks loans are the most common. Read more…

For four straight years, the Michigan Manufacturers Association (MMA) and Baker Strategy Group (BSG) have partnered to conduct the annual Michigan Manufacturers Outlook Survey. This instrument has become a valuable tool for measuring year-over-year trends in the manufacturing industry and to gauge the collective outlook for manufacturers in Michigan.

This year we received feedback from 400 respondents. The majority (59%) of the respondents are executives at their companies, but we also received solid representation from plant management, sales and marketing, human resources, operations, regulatory compliance, government relations, and accounting/finance.

In conducting our analysis, we focus primarily on respondents representing companies who manufacture in Michigan. Some salient statistics on these companies include: 61% are family-owned businesses, 56% have 100 or fewer employees, 60% have only one facility in Michigan, 37% manufacture automotive products, 92% 6manufacture non-automotive products, and 80% have a non-unionized workforce.

With four years of data, we are able to look back and see progress and changes over time. What follows are 8 Key Findings we observed in the data, along with some quotes from one-on-one interviews conducted by MMA staff.

Article written for www.annarborbusinessmagazine.com

How do the next 6-12 months look for the automotive industry? “It’s uncertain because of the uncertainties in the economy,” says Dr. David E. Cole, Emeritus Chairman and Board of Directors member of the Ann Arbor-based Center for Automotive Research (CAR). “But the main thing in the near future, particularly for the domestic, Michigan-based manufacturers, is that they will be increasingly profitable and they will be hiring.”

Cole is a prolific, oft-quoted expert on the auto industry known by virtually everyone who is intimately involved with the industry. His thoughtful and analytical perspective of the industry has earned Cole respect in accurately understanding and communicating automotive trends. So, Cole’s positive outlook is encouraging for the Ann Arbor area.

Incidentally, regarding the federal government selling of its shares of Chrysler, Cole says “It’s no big deal. It means that the government is getting rid of its equity and Fiat will now have a controlling interest in the company. The UAW Healthcare Trust still owns a significant fraction of the company and we’ll see how that develops over time. I think it’s a good move.” Read more…

Article written for www.annarborbusinessmagazine.com

What do you get when you combine the engineering and research talent of a top-ranked university with one of the largest automotive companies in the world? You get the GM/U-M Institute of Automotive Research and Education.

This joint institute is right here in Ann Arbor and it brings together the expertise of GM engineers and U-M researchers and professors. In May, 2009, the formation of the Institute was formally announced with great excitement. Tom Stephens, General Motors Vice Chairman for Global Product Development, was clear about the Institute’s ambitious mission. “The Institute’s vision,” Stephens exclaimed, “will be to develop and deliver world class research and education with a strategic focus on energy diversity and sustainability to reinvent the automobile.”

Read more…

Ann Arbor Area Business Monthly Article
Small businesses in the Ann Arbor-area are turning hot new technologies into thriving upstart businesses. Recently we spoke with Scott Hanson (Ambiq Micro) and Adrian Fortino (Shepherd Intelligent Systems).

The world is getting smart. Electronic sensors embedded in the physical world provide enormous technological opportunities. Such devices are already abundant: smart phones, smart cards, smart buildings, smart cars, etc. As IBM describes it, we are building a smarter planet. Scott Hanson, CEO, Ambiq Micro Micro, thinks his company is positioned to ride the wave of new devices. Ambiq Micro makes microcontrollers that operate these small devices.

If you’re in Ann Arbor and you’re taking a University of Michigan bus, it may be on a Magic Bus. While you’re waiting for the bus, just send a text message to a number posted at the stop. The Magic Bus 1.0 project started in 2005 by a project team at the University of Michigan College of Engineering . Jahan Khanna joined the Magic Bus team as one of the key software architects in 2007. Khanna and Adrian Fortino co-founded Ann Arbor-based Shepherd Intelligent Systems (SIS) in 2009 and launched Magic Bus 2.0.

by David A. Baker and Margaret J. Baker
www.bakerstrategy.com

View Survey Results
For the second year in a row, the MMA has partnered with Ann Arbor-based Baker Strategy Group to conduct the Annual Manufacturing Survey. This valuable member feedback will help MMA direct its efforts in improving the business climate in Michigan for manufacturers.

In general, survey respondents seem to indicate that the worst is behind us, yet uncertainty about the future remains. With so much political and economic tumult, many manufacturers are hesitant to invest what little capital they do have. As one respondent explains, “We would like to buy more equipment but are afraid to use what cash we have.” To help assuage these fears, Michigan legislators must commit to a business-friendly environment and help provide more economic certainty for manufacturing to grow. According to another respondent, the primary business challenge for 2010 is “managing through the uncertainty created. . .in Lansing.”

For those who are still in business, there may be opportunities to expand and diversify within Michigan. These manufacturers will likely need resources to support strategic planning and market diversification to capitalize on these opportunities. As one respondent puts it, “I am looking beyond our traditional customer base to
shore up sales over the next 5 years.” With a better business climate, continued efforts from great employees, and a smart strategic approach, manufacturers can still thrive in Michigan.

by David Baker and Margaret Baker
www.bakerstrategy.com

Many manufacturers see this slump as a chance to reinvigorate exports, particularly to Asian countries. This article from Woodward Parners’ Robert Salomon, professor at NYU Stern School of Business, identifies three keys to succeeding in exporting to Asia: 1) enter markets similar to home markets, 2) take time to really learn the new export market, and 3) set up clear governance structures for communication and knowledge transfer.

Woodward Partners
www.woodward-partners.com

Marketing strategy is a critical component in business planning. Hybrid and electric cars, for example, are all the rave, but to date customers have not been willing to pay a premium for this technology. Now this study from Roland Berger’s Automotive Competence Center shows that customers are more willing to pay for green. However, for these vehicles to be successful, manufacturers must do more than provide innovative products. According to Ralf Landmann, Partner at Roland Berger, “Communicating and marketing across the board are what also really counts in this race.”

Roland Berger Strategy Consultants
www.rolandberger.com

Baker Strategy Group partnered with the Michigan Manufacturing Association to survey 158 Michigan executives on their outlook for the coming years as well as their priorities and the management tools on which they plan to focus in 2009. Looking at the feedback we identified Five Success Factors to succeeding in manufacturing: cost management, market diversification, strategy clarification, organizational development, and collaboration engagement.

by David Baker and Margaret Baker
www.bakerstrategy.com

How can manufacturers of engineered product thrive in volatile business cycles? This Roland Berger study based on 300 interviews demonstrates that “companies that react quicker to changes in the market are able to stay solidly in the black even during a downturn.” The study finds that while many companies are highly customer oriented, few are able to see and react to external changes.

Roland Berger Strategy Consultants
www.rolandberger.com