Corp! Magazine: Regional Chamber Helps Lead Detroit’s Business, Reputation Renaissance

Corp! Magazine spent some time with Detroit Regional Chamber President and Chief Executive Officer Sandy K. Baruah to discuss how the Chamber is helping change the narrative surrounding Detroit.

Read and watch the full interview below.

Corp! Magazine
Aug. 28, 2024
Brad Kadrich

Sandy Baruah remembers the times – although they’re fading fast – when a local resident would get on a plane and a conversation would ensue:

Passenger: “Where are you from?”

Resident: “I’m from Detroit.”

Passenger: (Bows head a little and whispers) “Oh, that’s too bad. I’m so sorry.”

For at least the last decade, though, it hasn’t been like that. There have been improvements in both atmosphere and reputation. Developments like Dan Gilbert’s renovation of the old Hudson’s site, where GM will be the main tenant, and the refurbishing of the old Michigan Central Station property driven by Bill Ford Jr. and Ford Motor Company have changed things.

Anyone who doubts the attitude shift wasn’t paying attention when hundreds of thousands of people poured through the city for the NFL Draft last April. They weren’t looking when the Detroit Grand Prix raced through city streets in June.

“The national narrative or the international narrative on Detroit has changed dramatically in the last decade,” said Baruah, President and Chief Executive Officer of the Detroit Regional Chamber. “We are now really a city that keeps popping up as one of the most interesting, one of the best places to visit, one of the most dynamic. So that has been a real sea change.”

If anyone knows, it’s Baruah, who has seen the change — he’s spearheaded a lot of it — since coming to the Detroit Regional Chamber, the third largest chamber of commerce in the nation.

The DRC represents the business interests of a region of some 5.4 million residents and 11 Fortune 500 companies. The chamber under the direction of Baruah also executes the statewide automotive and mobility cluster association, MichAuto, and hosts the Mackinac Policy Conference. Additionally, the Chamber leads the most comprehensive education and talent strategy in the state.

Baruah joined the Chamber in 2010 after a distinguished career in Washington, D.C. He served President George W. Bush as administrator of the U.S. Small Business Administration, where he was responsible for the SBA’s 4,000 national employees and $18 billion small business loan portfolio.

He was also one of the senior officials shaping the federal government’s response to the 2008 credit crisis and assistance to the U.S. automotive industry.
So, it’s safe to say he knows both sides of an economy when he sees it, and right now Baruah says the U.S. economy — though not everyone sees it that way — is humming right along.

“The economy is still doing well,” Baruah said. “We’re seeing some really solid economic growth numbers. We’re seeing still a very lush labor market. And, most importantly, we are still seeing strong consumer spending.

“So, consumers are cranky, they’re unhappy, they don’t like the state of the economy, but they’re still spending,” he added. “Basically, consumers have the attitude that, while the general economy is terrible, my economy is doing great.”

Baruah earned his Bachelor of Science from the University of Oregon and a Master of Business Administration from Willamette University in Salem, Ore.
Baruah just finished a term serving on the board of the Federal Reserve Bank of Chicago, and serves the U.S. Council on Competitiveness, Automotive Hall of Fame, and Detroit Economic Club, among others. He is a contributor to Harvard Business School’s U.S. Competitiveness Project, a Leadership Circle member of the George W. Bush Presidential Center in Dallas, Texas, and chairs the Great Lakes Metro Chambers Coalition. He is also a former Advisory Board Member of Spain’s Institute on Competitiveness

Prior to leading the SBA, Baruah served as U.S. Assistant Secretary of Commerce. In this role, he was responsible for the U.S. Economic Development Administration, served as the senior advisor to the Secretary of Commerce for the 2010 Census, and represented the U.S. government before the Organization for Economic Cooperation and Development in Paris, France.

Before serving President George W. Bush, Baruah was a corporate mergers and acquisitions consultant for the Performance Consulting Group and served both President George H. W. Bush and U.S. Sen. Bob Packwood. After leaving government service in 2009, he was a Distinguished Fellow at the U.S. Council on Competitiveness, a Washington-based think tank focused on economic competitiveness policy.

Baruah and his wife, Lisa, have one son and, according to his bio, live in a household “run by the family pets.”

Baruah talked to Corp! Magazine about the renaissance of Detroit, the business outlook for the city, his career and a variety of other issues.

Corp! Magazine: Detroit has obviously experienced a resurgence, and more than just recently. What is it about the city that is driving the resurgence?

Sandy Baruah: There’ve been a lot of factors that have driven what we’ve seen in Detroit, and I would say particularly downtown Detroit, but across the neighborhoods, as well.

One is really solid governmental leadership. I mean, there’s really no substitute for adult supervision at the top levels. The fact that we have a mayor (Mike Duggan) that is very action-oriented, very results-oriented, really focused on not the optics and the fluff stuff, but really doing the big things that are necessary to make sure that people’s lives get better, that neighborhoods get better, that business opportunities get better.

That is huge. And we have been surrounded, frankly, with an extraordinary level of support from the corporate community, which is obviously where an organization like ours, but many others, would come in the philanthropic community. The Detroit region has one of the most lush and active philanthropic communities in the country, second only to maybe a place like San Francisco or New York City.

And then, of course, support from the other elected officials, the other governmental officials from across the state. We’ve had two governors in a row that have been very supportive of the positive trajectory in Detroit. We’ve seen a lot more collaboration across the Detroit region, especially with the county executives. And we’ve seen a lot more unified action in Lansing with legislators from all parts of the state and of both parties.

So it’s certainly taken a village, but fortunately we’ve had some really great village elders.

Corp!: Tourism is such a big part of Michigan’s economy. We just had the NFL draft, we just had the Grand Prix, the NCAA is coming back. How can Detroit take advantage of the state’s popularity as a destination spot to increase its visibility and its viability really for national and even international business?

Baruah: Well, that is already very much in progress. In fact, if you talk to Claude Molinari over at the Visit Detroit shop, they’ve got more prospects and more business than they can shake a stick at. Right now, they’re really only limited by our capacity at this point, capacity for meeting space, capacity for hotel rooms. Both those things are getting better, by the way, but that’s really the only limitation that they have.

They are now working on potential international or national conferences that would take place in Detroit a decade out.

Corp!: You serve on a variety of boards, Automotive Hall of Fame, Detroit Economic Club, etc. You contribute to the Harvard Business School. With all that knowledge and all of that involvement, what is your forecast for the next year or so economically, and is there anything that businesses should be aware of that’s coming up in the next year or so?

Baruah: Well, the big thing that everyone is watching is interest rates that could drive some different decision-making in C-Suites across the country. I just finished seven years on the Federal Reserve Bank board, and frankly, I miss it dearly because it was such a great source of intel that I was able to share with my colleagues and my members.

But the Fed just met (recently). They are, not surprisingly, keeping interest rates steady. I would be really surprised if they did more than one rate cut before the fall.

Corp!: Why do you think collectively the economy is not getting the credit it deserves? It’s the strongest economy in the world, but people are still cranky.

Baruah: That’s exactly right. We’ve been talking about that now for over a year and a half because we do a lot of polling. We’ve been polling on this issue now for over two years now. There are a couple issues.

One, yes, the United States right now is frankly by far the strongest industrialized economy in the world, but Americans don’t live in other countries, so the only thing they have to compare it to is here at home. The fact that we’re doing better than the rest of the world really doesn’t matter to them. That kind of makes sense.

The other issue is a kind of political perspective. It used to be that your view of the sitting president was based on how the economy was doing, kind of the hard numbers (such as) unemployment rate, GDP growth, the misery index, if you remember that from the 1970s. I do, the inflation rate plus the unemployment rate equaled the misery index.

But now your view of the economy is based on your view of the president. So, if you’re a Democrat-leaning voter and you’re inclined to (support) President Biden, your view of the economy is much stronger. You give it much higher marks than if you’re not a supporter of the president. So, we’re seeing the tail wag the dog here.

And then finally you have to recognize that inflation — in 2022 that reached up to 9% at one point in time — has been a huge driver for dissatisfaction with people. Even though wages have been rising, people don’t feel it.

Corp!: After their most recent meeting, the Fed hinted again that the first rate cut could come in September. A lot of economists seem to think that’s what’s going to happen. What will that mean for Detroit?

Baruah: I’d say it’s going to be good news for Detroit. One, if you lower the cost ofcapital, then that just makes that many more projects, I don’t care what they are, investment projects, capital projects that much more viable. So, companies that are sitting, it’s like, ‘Oh geez, do I want to finance this, that or the other thing? Do I want to build a new plant or this, that, or the other thing? It makes it that much more likely that they’ll say yes, and that obviously drives the economy for our companies that sell big heavy things that are generally financed over time. That’s good news for our economy.

If we get a quarter-point cut in interest rates, it’s not going to have a transformative impact, but I think it’ll send the message that we really have achieved a soft landing. The Fed is confident enough that we can start cutting interest rates. ‘Our company can be more confident in the trajectory of our economy.’

Corp!: You mentioned businesses are already lining up to come here. Talk a little bit about your role and the chamber’s role in making Detroit a destination.

Baruah: One of our primary roles as a business association, and we’re the largest in the state, is to make sure that the policy environment across the state is conducive to our companies staying here, our companies being able to access the right talent and an environment in which other companies will want to locate here.

So now our job isn’t to go out and recruit the other companies, we help with that, but there’s a partner organization, the Detroit Regional Partnership, that was carved out from the chamber about six years ago. So, they’re the ones kind of hitting the planes, hitting the phones, bringing people in.

But our job is to make sure that the environment here is one where businesses that are in either Taiwan or Texas say, ‘Oh, OK, this is a good environment. I’ve got access to talent. I know what my policy environment is going to be, the needs that I have. I know that government’s going to be responsive. I know organizations like the Detroit Regional Chamber or the DEGC or whoever it is, is going to be responsive to my needs once I get to Michigan.’

Corp!: So what are the most pertinent investment opportunities, businesses that are considering coming to Michigan or primarily to Detroit? Are there industries that Detroit is more conducive for? And what advice do you give businesses that are considering coming here?

Baruah: You don’t want to be all things to all people. That just never works out. But certainly, we’ve got a real competitive edge in a handful of areas. So, one is anything around the engineering and mobility sciences. We are one of the top per-capita places on the planet for engineering.

And if you relate that to next-generation mobility, Michigan is home to 96 of the top 100 automotive/mobility suppliers. Not to mention that all the major OEMs are located here.

And if you want to be providing technology to these companies to put in these four-wheeled wonders that we call automobiles, there’s really no better place than the Detroit region or Michigan as a whole.

Health sciences, our university research corridor, MSU, Wayne State, University of Michigan has, I think it’s the third-largest share of federal research grants around health and medicine in the country. Not to mention we’ve got world-class healthcare institutions with these world-class, university research, health research … So that is a huge, huge area for us.

Areas like FinTech because we are growing our technology and our innovation and our skills in those areas very, very strongly. And you can see that in the success of Dan Gilbert’s companies.

Corp!: It’s great that Detroit’s image is expanding like that, but it is still primarily an automotive town. From your perspective, what is happening in the automotive industry, both domestically and globally? For instance, with electric vehicles, there’s been a lot of chaos in that sphere. Do you have any insight as to what’s going on and whether that kind of chaos is going to level off?

Baruah: It’s a hugely important issue, and I’m glad you raised it. So, we also run the statewide automotive industry cluster (MichAuto) and so we’re constantly looking at the issues around autonomous vehicle transition, electrification, transition trends in the industry.

So, first of all, there’s no doubt that the growth in EV demand, certainly in North America, but globally as well, too, has slowed compared to the frenzy that was taking place in 2021 and 2022, but starting in 2023 that really started to (wane). That doesn’t mean that we’re not selling more EVs, right? I mean, we had a frenzy when really the only kind of EVs that were sold were expensive ones like the Audi E-tron or the Jaguar.

You had a Chevy Bolt here and there, but not really many affordable ones. That market has changed dramatically. Now you’re seeing just a plethora of different options available.

Secondly, EVs have really become a political issue, and that’s really unfortunate because it’s pretty clear that the industrialized world is moving to electrification. I don’t know if it’s going to take 15 years or 25 years, but at some point, in certainly our lifetimes, a majority of personal vehicles sold in the industrialized world will be EVs, just full stop. And we can either choose to be part of that revolution or not. And if we’re not part of that revolution and our companies don’t compete in that space, we could be left holding the bag. And that’s just not a good place to be.

I didn’t live here in the 1970s, but there were a lot of people in the 1970s that kind of ignored the threat from Japanese companies around quality or around fuel efficiency. And frankly, I think it’s safe to say that our auto industry never really recovered from some of those fundamental fumbles in the 1970s. So, let’s not make the same mistake again.

Corp!: We’ve obviously got an election coming up for president and also the state offices. What can Detroit expect economically, depending on how the election goes? Is it going to make a difference who gets elected, or do you guys still just go about your business?

Baruah: Well, we certainly don’t opine on the presidential race. To the best of my knowledge, the chamber never has. There’s no value in that. But certainly, when it comes to the city of Detroit, the amount of support that the city has received from the recent Democratic administrations, the Obama administration, and then the Biden administration, has been substantial. In fact, President Biden when he was vice president was probably Detroit’s biggest booster and champion.

So, if there’s a switch, if former President Trump becomes current President Trump, again, I think you can expect some less support directly to the city. I think the issue of electrification … is America going to continue to push to be competitive in this globally growing space around electrification? I think President Trump … has really indicated that that’s something he wants to back away from. I think that’d be unfortunate from a business standpoint.

But if we have a return to Trump, Trump did some massive tax cuts that, while they blew a huge hole in the deficit, it really energized business. So, you’ve got to take the good with the bad with whoever is elected.

Corp!: You really have two hats on. You’re a community leader, you’re driving the city forward, and then you’re the leader of your team. Reflect on everything the Detroit Regional Chamber has accomplished and a couple of things that you are the most proud of.

Baruah: I’ve always taken that (team leader) role really, really seriously, and I’ve been in this job now well over a decade. And keeping yourself fresh, I think, is hugely important.

About a year ago, I embarked on an effort with a professional executive coach to come in to kind of coach our entire organization, including me, and really being able to take a look at ourselves in a third-party way to really kind of pressure test, we’ve got a great reputation, but how are we really functioning?

It was basically kind of kicking over some rocks, and that has been a terrific experience because the reputation of the organization, and it’s not because of me, it’s because I am surrounded by just this terrific team of people. There’s 92 of us who are bouncing around here, all working on different things, but between the work that we’ve been able to do around some of the big legislative pushes, including the Gordie Howe Bridge, which has our fingerprints all over, it took a long time to get there. Things like starting up MichAuto — we did not have a statewide automotive association in Michigan committed to the economic development of the auto industry, I was surprised by that considering how much we depend on the auto industry — has been hugely successful.

I’m really proud of the team in terms of how they’ve handled and grown the Mackinac Policy Conference and kind of lifted the veil, but just vastly, vastly improved the programming of that. So, there’s just a tremendous amount to be proud of. Education and talent is now our largest portfolio, and so we do more around that than we do any other topic.

Corp!: There are young people who are trying to be leaders. What advice would you give future leaders?

Baruah: The one thing I tell people is that there are different ways to get where you want to go. One of the questions you need to ask yourself is if the pathway to get where you want to go something you’re willing to take?

For example, when I was much, much younger, I said, ‘I’d love to be a United States senator.’ I grew up working for one, I was 20 years old when I started working for one. But then I realized the pathway to get that job, to run for office and all that it takes, and the pathway is like, I don’t think I’m going to enjoy that. So, the end path might’ve been great.

The other thing I tell people is get different perspectives in life, in your career. One of the things that I’m most thankful for in my background, my career is that I’ve worked in different parts of the country. I’ve worked for different kinds of organizations. I’ve worked for large organizations, small organizations, and just having that perspective of being in different places, working for different people with different organizations and even different parts of the country where the culture is different.

To me, it is just a tremendous value to be able to walk into any situation either in my day job or any other situation and bring lots of different perspectives to it. It’s not just one organization or one city or one kind of culture. I’m bringing this kind of different cultures and different experiences, and to me, that’s the greatest gift I’ve given myself.

Corp!: What about a book? Is there a book you recommend for other leaders?

Baruah: I do the world’s most-boring book reading (laughs). I do political books and political biographies. I mean, that’s pretty much all I do. In fact, I just was just at an event in College Station, Texas, and celebrating the 100th birthday of George Herbert Walker Bush, and the author John Meacham, who has been one of our speakers at Mackinac, just wrote another book about George Herbert Walker Bush called Character Above All. So, I’m just getting ready to crack that as we now enter the August summer reading season.

Corp!: So, say you’ve got friends or people coming to town. What businesses do you recommend they go visit? What do you want them to see?

Baruah: Well, it certainly kind of depends on what their interests are. We just had family in town earlier this summer and just seeing what’s going on downtown. I love taking people to the riverfront. That is such a spectacular thing. The Henry Ford Museum out in Dearborn. People love that. We love taking people there.

So, it just kind of depends. We’ve got some of our little favorite restaurants, like I love taking people to Elk Bar Zone out on Michigan Avenue, and then you make that left turn onto Junction and people are always surprised to see that there’s just a really fabulous restaurant there.

So, there’s just so many things. It really just kind of depends on what people are doing. We’ve taken people up to Mackinac Island, people who aren’t from here, just find that an incredibly unique experience.

Corp!: Did you ever run for office?

Baruah: I never did. I wasn’t interested in the pathway. I wanted to be a United States senator, but I didn’t want to be in the State House. And I was bouncing back and forth between Portland, Ore., and Washington D.C., I really didn’t have a political base. I really didn’t have a political home. And you’ve got to have a political home. You need a constituency that knows you.