German Automotive Supplier Mahle Gets Up-Close Look at Michigan’s Automotive and Mobility Leadership

Showcasing Michigan as a major global automotive and mobility epicenter, MICHauto, in collaboration with the Michigan Economic Development Corp. (MEDC), led a one-day tour of the region in March for 12 executives from Mahle, a leading global auto components supplier.

The tour highlighted the region’s research and development facilities, OEMs, advanced manufacturers, leading suppliers, education institutions and next-generation mobility testing assets.

“Working closely through the Michigan Mobility Initiative, this was the first opportunity to really leverage the Planet M campaign to tell the state’s automotive and mobility leadership story to a visiting group of executives,” said Glenn Stevens, executive director of MICHauto.

“It was an opportunity for us to establish the perspective and potentially change perceptions that not only is Michigan an automotive capital because of its vast resources, testing sites and development work, but also it is a leader in connected and automated vehicle innovation,” he added.

The tour included welcome remarks by Gov. Rick Snyder and a tour of the University of Michigan Battery Labs, Toyota North America Technical Center, MCity, Lear Innovation Center in Detroit, TechStars Mobility and Shinola.

The tour was preceded by a presentation by John Maddox, CEO of the American Center for Mobility, and Kevin Kerrigan, senior vice president of the MEDC’s Automotive Office, who spoke on Michigan’s e-mobility economy.

Following the tour, attendees enjoyed networking during a strolling reception at the Detroit Regional Chamber, featuring remarks by Mark de la Vergne, chief of mobility for the city of Detroit, and Kirk Steudle, director of the Michigan Department of Transportation (MDOT).

View photos from the tour here.

Under Construction: Michigan’s Build-To-Suit Market

By Paul Vachon

Several years into Michigan’s economic recovery has provided the business community with a unique perspective: One that has begun to show the fruit of years of rightsizing, innovating and reimagining their mission. The return of a healthy economy has cleared away excess inventories and set the stage for new expansion.

Despite significant industry diversification, however, automotive and manufacturing dominates Southeast Michigan, which makes the status of the industrial real estate market a key indicator of economic health. According to a recent report by Colliers International, the region’s overall vacancy rate stands at 4 percent — a historic low.

Justin Robinson, vice president of business attraction at the Detroit Regional Chamber, attributed this durability to a strong local economy and not just to the routine swing of the market pendulum.

Fraza“Right now, the market looks stable for the next several years. One factor is that during the last downturn many of the older, more inefficient buildings were demolished, thus removing that space from the market,” Robinson said. “These were mostly legacy buildings constructed from the 1950s to the 1970s that had been home to OEMs and tier one suppliers. The market has thus been rightsized, so even if it were to experience a downturn, I don’t think it would have a significant impact.”

Despite the tight supply, new space is being added slowly and cautiously, with build-to-suit as the predominate mode of construction. Industry experts say that this is due to a low appetite for risk on the part of many investors.

This approach has both pros and cons, Moran explained. A big disadvantage is the lead time involved with these types of projects. A company opening a new plant generally wants to be up and running within six to nine months, a realistic timetable if a preexisting building can be found. However, Robinson said the schedule for a build-to-suit project is much more time consuming.

“An average building can take as much as 18 months to deliver by the time you identify the site, address potential brownfield issues, get the infrastructure in the ground and put up the structure,” he said.

“This type of timeline can be difficult for many companies.” Robinson pointed out that in other major metropolitan areas, speculative building is common, but its relative scarcity in Southeast Michigan often forces tenants to be creative.

“They might have to take an older or smaller structure and modify it to meet their needs,” Robinson said. An advantage to the build-to-suit option is the ability for the client to specify features that will meet his or her unique needs and operate at maximum efficiency.

As Moran explained, some examples might include a minimal floor thickness to support heavy equipment, steel framing strong enough to accommodate overhead cranes or other equipment, and a sufficient HVAC system that meets state and federal regulations.

As the overall market matures, developers report that build-to-suit options are becoming more specialized. Ryan Dembs, CEO of Dembs Development in Farmington Hills, said that while his company’s build-to- suit volume is increasing, much of it is for technology-related companies. Dembs said his company does do a limited number of on-spec buildings and anticipates other developers will gradually fall in line as their confidence level increases. One developer that recently resumed embracing speculative development is New York-based Ashley Capital, which builds and manages industrial real estate throughout the eastern United States and has an office in Canton.

“In Michigan, we manage 18 to 20 million square feet, the clear majority of which is space we built on greenfields or brownfields, or existing, often blighted, buildings we renovated. In both cases, we worked without a tenant in hand and subsequently leased the buildings out,” said Susan Harvey, senior vice president at Ashley Capital.

“We’re just finishing our first speculative project since the end of the Great Recession, on the site of the Hazel Park Raceway, a 575,000-square-foot building,” she added. For Ashley Capital and others, the gradual emergence from the recession has been fraught with obstacles.

“Lending practices have changed, and it’s gotten more difficult for developers to put together deals for spec buildings,” Harvey said. She does, however, express cautious optimism for the future both locally and throughout the nation.

Paul Vachon is a metro Detroit freelance writer.

Read more from this issue below: 

Detroit-Area Developers Choose to Reuse

Dan Gilbert Taking Detroit to Overdrive

The Ilitch Touch: Transforming Detroit’s Downtown

 

 

Brinks Gilson & Lione attorney: copyright infringement fears fade with new guidelines allowing vehicle software changes

ANN ARBOR, MICH. – John Lingl, a shareholder in the Ann Arbor office of Brinks Gilson & Lione, one of the largest intellectual property law firms in the U.S., says recent guidelines allowing car owners to modify their vehicle’s software without infringing on the copyrights of automakers is a big win for individuals and aftermarket companies. The Library of Congress, which oversees the U.S. Copyright Office, announced the ruling last week. Prior to the decision, aftermarket companies and individuals who modified their vehicle powertrain controllers to change what is often called “fuel and spark mapping” did so at the risk of copyright infringement.

“Many liken the ability to modify a vehicle’s software and control systems to the ability of mechanics to modify engines, transmission and exhaust systems in an effort to improve vehicle performance,” Lingl said. “Today individuals and aftermarket companies are modifying their vehicle’s software to accomplish some of the same goals – and the new guidelines say they will be able to do so lawfully.”

Some view the push by OEMs to prevent software modification as an effort to wall off aftermarket companies, allowing OEMs to become the sole providers of modified software. In so doing, the OEMs would have the ability to set and control pricing for any software modifications and/or possibly prevent third-party repair shops from performing any modifications to a vehicle’s software. Lingl says there are other considerations, however.

“Industry insiders have legitimate concerns that individuals having the ability to modify one or more elements of a vehicle’s software may make their vehicle vulnerable to cyber security threats and safety issues,” Lingl said. “For example, an individual may inadvertently disable safety systems, such as antilock brake systems and airbags. Also, as Volkswagen has shown, modification of the vehicle’s software could result in vehicle emissions that do not comply with state and/or federal laws.”

With the introduction of the new guidelines, Lingl says to expect OEMs to increase their security measures regarding modification of vehicle software to make it more difficult to for individuals and aftermarket companies to modify.

“The automotive industry wants to protect its technology from improper use and will continue to increase the complexity of its software safeguards,” Lingl said. “At the same time, vehicle owners view their vehicles as their own and want the right to alter them as they see fit. This back and forth won’t be resolved through these new copyright guidelines, but more clear-cut definitions of ownership are certain to evolve.”

The guidelines take effect in 2016 and will be reviewed again in three years.

Brinks Gilson & Lione
The attorneys, scientific advisors and patent agents at Brinks Gilson & Lione focus their practice in the field of intellectual property, making Brinks one of the largest intellectual property law firms in the U.S. Clients around the world rely on Brinks to help them protect and enforce their intellectual property rights. Brinks attorneys provide counseling in all aspects of patent, trademark, unfair competition, trade secret and copyright law. More information is available at www.brinksgilson.com.

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