Detroit Free Press from Detroit, Michigan • Page 29

The Detroit News Jon Pepper I A if Section Sunday, October 1994 Minority Business Month Flourishing minority firms are wary about the future Mergers, diversification could be keys to longevity t- 1 Why happen? predict business Why 1 i mrvival off the fittest Reuter Bud Selig will speak Tuesday at the Economic Club of Detroit. Selig: Cost of baseball out of control 1 1 I l- 1 I i I I 'I 1 fi' 4 v- 1 V't 1 I r) 5 1 I 1 1 4 wait for it to We can 'l tomorrow's news wait for the business headlines? We can predict the future today: Oct. 10: President Clinton goes on national TV to say he's sending U.S. Marines into Japan to deliver American-made auto parts, whether Japan wants them or not. "If they don't start buying bur spark plugs, I will block the importation of Mighty Morphin Power Rangers," Clinton threatens.

The nation's kindergartners descend on Washington to protest, disrupting Pennsylvania Avenue traffic with their trikes. Oct. 11: As Michigan's unemployment rate falls to 5.5 percent, gubernatorial candidate Howard Wolpe complains that jobs created under Gov. John Engler pay a measly $5 an hour. "How can I live on that after the November election?" Wolpe asks.

Good news for Wolpe: An Oakland County Taco Bell pays its workers $10.50 an hour. Bad news for consumers: The price of a Grande Burpo Burrito With Gravy is now $24.95. Oct. 12: With his baseball and hockey teams already on strike, Little Caesar's owner Mike II-itch is struck by pizza delivery boys demanding an average salary of $1.2 million a year, an end to the salary cap, and gas money. Hitch says that if he knew then what he knows now, he would have never gotten into the pizza business.

Oct. 13: After a mission to California to recruit aerospace engineers for Michigan companies, Oakland County Executive Brooks Patterson returns to Detroit with a remarkable tan. "It took some incredibly hard work and a No. 4 sunblock, but I got the job done," Brookrsays. "Had I not fallen asleep by! the pool, I don't think this shade of bronze would have been possible." Oct.

14: Joel FergusorT 5ucv ceeds in thwarting CBSCpur chase of Channel 62 and buys jthe station himself. Fergusonrf man of the Michigan State Uni versity board, hires MSlMot ball coach George Perles.aa anchorman and demands have an "outstanding" newjeasfi Oct. 15: Former Presicenl Jimmy Carter intercedes iij JapS anese trade dispute. Saying'tuffi "embarrassed" Clinton wb'uld even consider a Power RarJgErS embargo, Carter fVfe need dinosaur power now.Xrt er instructs Clinton to Washington by the phone in dae he needs him. Commissioner says Tigers must have a new stadium or Mike Hitch 'can't make By David A.

Markiewicz The Detroit News Has anyone had a rougher year on the job than Bud Selig? The acting commissioner of Major League Baseball since 1992, he called off the remainder of the 1994 season in August after players went out on strike following fruitless contract negotiations with baseball By Katherine Yung The Detroit News Lansing's Trumark Inc. sees little choice but to merge with another parts supplier now that steel prices are soaring, the Big Three automakers are demanding lower prices and its own resoures are increasingly strained. Parts makers around the country are trying to link up to survive, but what makes this case unusual is that Trumark, a metal parts manufacturer, is minority-owned. Its likely partner will be nonminority. "Virtually every major minority company is having to step up to the plate and decide whether they want to play that game (mergers and acquisitions)," said Carlton Guthrie, Trumark's president Although the company's sales are booming, lower profit margins mean it can no longer generate the funding it needs to expand.

"Growing at 40 percent a year requires tremendous amounts of investment," Guthrie said. Trumark is not alone. To stay competitive and prepare for the next economic downturn, minority suppliers are diversifying their product lines outside of the auto industry, acquiring smaller companies and forming partnerships with each other and nonminority firms. Small, minority suppliers find it harder to raise the capital they need to expand operations than nonminority ones. And larger, more successful minority suppliers must contend with industry giants like United Technologies Automotive for a piece of a pie that the Big Three is determined will have fewer slices.

Although the boom in auto sales has kept these suppliers busy producing parts at levels not seen in more than three years, they know that the good times will end eventually. That knowledge, combined with the fact that the Big Three automakers are reducing the number of parts suppliers for their vehicles, has created an atmosphere of uneasy optimism. "We have been careful to be conservative on the financial side and not add any fixed costs that we couldn't carry during the next downturn," said James Merkhofer, president of Mexican Industries, a Detroit soft trim supplier with 1994 expected sales of $115 million. But a simple decline in car sales isn't the only threat to minority suppliers. Chrysler for example, expects to shave its roster of suppliers to 150 in the future from 3,000 a few years ago.

That means scores of smaller parts makers will lose crucial contracts. Lewis Metal Stamping and Manufacturing in Highland Park is one example. It is losing Ford Motor Co. as a client next year. It is making up that loss with more General Motors Corp.

business. Jacqueline Lewis-Kemp, who became Lewis Metal's president after her father's death in 1993, says her company is swamped with work now because of the boom in auto sales. But she's hedging her bets. About 80 club owners. For that, Selig was vilified: by players, for demanding the creation 1 Duane K.

Belanger I he Detroit News Jacqueline Lewis-Kemp, president of Lewis Metal Stamping and Manufacturing, is seeking contracts to supply appliance makers while business with GM is still good. of salary controls; by fans, for officially ending one of the most exciting seasons ever; and, by some fellow owners, for taking too harsh or, too soft a stance in bargaining. Selig also suffered personally. As owner of the Milwaukee Brewers, a small-market club with an old stadium and limited revenues, he was a money loser himself. Selig will be in Detroit Tuesday to speak on the business of baseball at the Economic Club of Detroit luncheon.

The Detroit News talked with him about subjects ranging from baseball's labor issues to the stadium status of the Detroit Ti- k. gers: Qa Major League Baseball players walked out, National Hockey League owners locked out, and the National Basketball Association may suffer a work stoppage in the upcoming season. Why can't the owners and players in major league sports get along anymore? Please SELIG, 3D instrument panels, rather than just sending hundreds of individual parts to auto factories. Suppliers that can provide systems have a better chance of remaining with the Big Three. Lewis-Kemp anticipates moving her company into a larger plant and installing more automated equipment.

"There are always those preconceived notions of what doing business with a minority supplier is like," she said, referring to the perception of higher prices, less service and lower quality. "I think they will be surprised once they start doing business with us." Please see SUPPLIERS, 3D percent of Lewis Metal's business involves autos. Lewis-Kemp said she is slowly diversifying the firm to win contracts from appliance makers. Unlike Detroit's Big Three, the companies building washing machines and refrigerators are expanding their supplier lists. Lewis-Kemp also said her company is doing work for the Defense Department.

Lewis-Kemp also said she wants her company, which opened in 1978, to move toward more assembly of components, rather than just basic parts manufacturing. To reduce costs, the Big Three increasingly want suppliers to design, engineer and manufacture entire systems, such as doors and Coming Monday ASC president aims to build on success fct. Strategies Howto Oct. 16: Pizza delivery brjy settle their contract, but IlitcbAj children walk out on strike, "demanding $1.2 million a freedom to select new pareataj and a say-so over what's Td dinner. Hitch says that ifTiS knew then what he knows now, he would have never had kids.

Oct. 17: As U.S. aircraft carriers prepare to fire carburetors into downtown Tokyo, Carter emerges from talks with the chief Japanese trade negotiator and announces a deal. Carter says the breakthrough came with an appearance by the negotiator's wife, whom he said had "ripe, red lips" and "great gams." Says Carter: "She's almost as much of a babe as Mrs. Cedras." Oct.

18: Rebuffed in its bid to buy Channel 62, CBS sets its sights on a ham radio operator in Plymouth. A CBS spokesman says the network will pay $40 million for the basement operation, but will probably sell the washer, dryer and power tools. Oct. 19: General Motors hires 779 more workers at its Buick City complex in Flint and agrees to pay them after they're dead. "Pay shouldn't stop when your heart does," says UAW president Owen Bieber.

"Neither should dues." The company orders special coffins with mail slots. Jh" 4 "fTI fur yf "Tfl 1 I I -wr? interests. Barefoot said he plans to meet with Prechter one evening each week to discuss business issues. "Frankly, it would be a mistake for me to let him loose," Barefoot said. "But even working 18 hours a day, you really need a full-time executive to run a business of this size.

He has been thinking about this a long time." Barefoot is a Pontiac native who rose to assistant superintendent of manufacturing engineering at Oldsmobile during a ten-year stint with the General Motors Corp. He started with the automaker as a student at the General Motors Institute in Flint, where he earned an industrial administration degree. Impatient to run his own company, Barefoot left GM for Emerson Electric, where he spent 12 years in key management positions at several of its industrial divisions, most recently in Pittsburgh. Barefoot doesn't intend to maintain the status quo at ASC, which has 2,000 employees and 27 Please see BAREFOOT. 3D Donald Barefoot will run the day-to-day operations of sunroof supplier.

By Katherine Yung The Detroit News As the new president and chief operating officer of ASC Donald Barefoot aims to take a successful, well-run company and make it better. "I want to maintain the edge and value we can provide our customers in the design and creative side, while at the same time becoming known as a superb supplier as he said. Barefoot, 40, was named president of the sunroof, convertible and custom builder powerhouse in Southgate Monday. Famous for designing and manufacturing the convertible tops of Chevrolet Corvettes, Toyota Celicas and Dodge Vipers and the sunroofs of Honda Accords, ASC was founded by German-born entrepreneur Heinz Prechter nearly 30 years ago. For the first time, someone other than Prechter will be mak- Strategies Bloomberg Personal The October issue of Bloomberg Personal, the new personal finance magazine produced by Bloomberg L.P., will be available Monday in home delivered editions of The Detroit News.

This month's issue features articles on disappearing frequent flier plans; how to size up HMOs and Sheldon Jacobs' views of the mutual fund market. Duane E. Beanger The Detroit News Barefoot: The company needs "a little more focus, a little more strength on the details." ing decisions. Prechter, 52, isn't completely stepping aside. Although Barefoot will run day-today operations, Prechter will remain chairman and chief executive, an arrangement that frees him to spend more time on ASC's creative side as well as on other Moonlighting can bring much needed cash, it can also create problems at work and at home.

Read the Strate- gies section of Monday's Detroit News to find out from moonlighters and career counselors how to find a second job and how to keep it from interfering with your primary job and family life. Jon Pepper's column appears Wednesdays. Fridays and Sunday in The Detroit News. 5 i 1 i 4, I.