Tom Gores: The Platinum Effect
Tom Gores is best known as the new owner of Palace Sports and Entertainment and the Detroit Pistons, but his investments in Michigan don’t stop there.
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DB: Platinum currently has 12 portfolio companies in Michigan, with more than 3,200 employees. Do they have anything in common?
TG: All these businesses, the way we’ve looked at the economy in Michigan, they really revolve around providing unique services. They’re in a very unique position to provide their products. With Four Winns (a manufacturer of luxurious sport boats and cruisers), we saved the plant in Cadillac. We worked with (then) Gov. (Jennifer) Granholm in terms of saving jobs. It’s a great little company. For us, it’s a small company. But for Michigan, it’s a real important company to stay alive. We made good changes with the product, and that’s a very small example of keeping jobs in Michigan.
Acument Global Technologies Inc. is a fastener company (in Holly) that we’ve owned since August 2006. It’s not a huge company. It has several hundred million in revenue (and 750 employees). We had to make a lot of adjustments when the economy fell apart in 2009 or so, and it really did a very nice job in surviving. And I think without our leadership, it would have had major problems and potentially (would have) gone out of business. I think half of its business on the fastener side was (dependent on) auto, and for a good six months there was nothing coming in from auto. So we figured out how to survive and scale the business, and we’re very proud of the fact that we adjusted to what was going on.
Our biggest entity in Michigan is the merger between Diversified Machine and SMW International. These are two large manufacturers of steering and chassis products for cars. That was very strategic. We bought (DMI in Wixom in December 2011, which today has 535 employees), and then bought the other (SMW in Troy in January 2012, with 826 employees) and we started integrating them. They are very important in their space and obviously a big part of the auto industry. They’re very large, right in the core of Detroit’s wheelhouse from a manufacturing and distribution standpoint. They’re two companies we’re bringing together and building for the future.
DB: So when you think about future investments in Michigan, is there a particular area or sector you’ll be focusing on?
TG: I’m a big believer in core competency. In Michigan, we know how to manufacture. We have an engineering talent that compares almost to no one. We have great universities and a very skilled work force. We have to put that to work. A lot of folks talk to me about how much new stuff there is in Michigan, and I think that’s fine, but we have a core competency that, compared to the rest of the country, we should really leverage. I mean, there’s a tremendous engineering base, and great universities where you have great people coming out of there. There’s a work force, both white collar and blue collar, that is hard-working and has the right values. So I really think that’s where we should be leveraging ourselves in Michigan. You know, the new things will come, but those are going to take time. And people have to eat, they have to put food on the table, they have to educate their kids, they have to do the very basic things necessary to move forward in their lives, and we should be continuing to leverage our core competency and grow at the same time. But we should really leverage what we do uniquely.
DB: So moving forward, can Platinum have an even greater impact in Michigan and, if so, how do you do it?
TG: Jobs and kids. It’s providing people jobs; we’re doing that and helping the economy. And that will help folks educate their kids and move that forward. Those are the two big things. And we have a unique asset in the Pistons, where I think we can really reach people. My plan is to leverage that the most we can and transfer our knowledge on business, to help people with small businesses improve their businesses. At some point we’d like to have an organization that does that. There are so many small businesses in Michigan we’d love to be able to impact, and we have the expertise. So we haven’t even begun to really implement the plans to affect an impact on people. In my own mind, I have big plans for it. And if we bring our resources together with our expertise and caring, I think it’s a very powerful formula.