Consumers Energy says that, over the last two years, it has increased its spending with contractors located in Kent, Muskegon and Ottawa counties by $125 million, thanks to the Pure Michigan Business Connect program.
Consumers has extended 344 purchase orders to 65 business suppliers in 16 West Michigan cities or towns as part of its commitment to the program.
Launched in 2011, Pure Michigan Business Connect is a public-private initiative developed by the Michigan Economic Development Corp. to increase business relationships with Michigan companies.
Consumers Energy, which was one of the first companies to make a commitment to PMBC, agreed to spend $250 million over a five-year period on in-state contracts. The program has been so successful that the company has increased that commitment to $1 billion. It has already signed $808 million in contracts across the state with 288 vendors toward that goal.
“It’s a common sense decision for us,” said Daniel Bishop, Consumers Energy media contact. “We made a shift in our spending decisions to think Michigan first when we look at the services, goods and equipment that we need.”
One company that has benefited is Grand Rapids-based Audu Engineering Consultants.
Audu has added employees and provided project support for a new training center at Consumers Energy’s J.H. Campbell Generating Complex in West Olive.
“The program has the effect of strengthening local companies, companies that go back generations in Michigan,” Bishop said. “That helps us strengthen the communities we serve.”
Bishop said in addition to its PMBC commitment, the company contributes at least another $2 billion in the state annually.
“So far with pledges from DTE and Consumers, and all these matchmaking summits we’ve been doing over the last two years, we’ve netted $1.6 billion in new contracts for Michigan companies — and growing,” said Trevor Pawl, managing director of PMBC.
“We set up more than 3,000 unique meetings between buyers and suppliers. We’ve worked with more than 150 buyers, from Boeing and GE, to Ford, Chrysler, GM and Whirlpool.”
Those meetings have garnered nearly $40 million of the $1.6 billion.
“But a large chunk of it is actually from DTE’s and Consumers’ commitment to spending more in Michigan,” Pawl said.
Pure Michigan Business Connect is essentially a matchmaking platform that connects qualified Michigan companies to purchasers in Michigan and globally.
“We first focus on need, and then from there we engage the Michigan supply base, we engage our constituents,” Pawl said.
MEDC hosts matchmaking summits on a nearly monthly basis targeting various industries.
He noted one of the most recent summits involved the agriculture industry; buyers included out-of-state companies Kroger and Whole Foods, which met with Michigan growers, packagers, brewers and others.
“For the agriculture summit, we worked with the Department of Agriculture to identify 15 key purchasers. We then worked with those purchasers to get a list of what they were buying — everything from ice cream to beer to carrots to materials to packaging for those things. Then we customized an online application with all of these different needs and we deployed that to thousands of companies in the state,” Pawl said.
“Say an onion farmer sees Whole Foods is looking for onions: He clicks on that (application) and lists why he deserves a meeting, why he is different. Then that application would be sent to the Whole Foods buyer and that person would select which companies he felt were the best and most relevant, and then he would report back to us and we would set up that meeting for him.”
The program is getting attention from out-of-state companies.
“Boeing has visited five times in the last year, and Whole Foods and Kroger came in from out of state,” Pawl said. “A lot of times with economic development, we focus on business attraction opportunities, having a company move their brick-and-mortar facilities to Michigan — and that is huge for the economy, but there is also the angle of bringing in new contracts, which directly relates to new hiring.”
The MEDC also has flown representatives of Michigan companies to visit with purchasers. He said a $12 million contract based on one of these visits is in the works and should be signed soon.
Besides connecting businesses with one another, Pure Michigan Business Connect also focuses on connecting businesses at all stages with local financing and professional services firms, and has inspired at least one bank to add more lending initiatives to its offerings.
Huntington joined the PMBC partnership in 2011.
“We made a $2 billion lending commitment to businesses and it was originally a four-year commitment, and we’ve surpassed that in only two years,” said John Irwin, Huntington Bank West Michigan region president. “We are really pleased with the appetite of the business community and how we were able to be that catalyst.”
Thanks to inspiration from the PMBC partnership, the bank has added two new lending programs, one launched in 2012 and the second in 2013, aimed at helping improve Michigan’s economic vitality.
“Subsequently, we made a $100 million affordable housing commitment that we are way ahead of schedule on,” Irwin said. “We really believe that sustainable neighborhoods change the economic climate in the communities where we live.”
The bank then added a micro lending program, also in partnership with the MEDC.
“It’s a $25 million commitment,” Irwin said. “The first $5 million is going to be in Detroit, and then we are going to be looking for other communities, and I am hoping that Grand Rapids will be the next one.”
He said the three programs all serve the same long-term goal: to strengthen communities across the state.
“We believed in the Michigan turnaround story before anyone else … that is why our partnership with the MEDC was critical at that point in time, to give confidence to the business community that we believed in Michigan and in the communities here,” he said.
Several other banks also have joined the PMBC partnership.
The MEDC also has been able to get commitments from several professional service firms across the state to assist fledgling businesses with needs like legal, accounting, IT and talent strategy.
Varnum was an initial service partner with the PMBC. The firm has a program dedicated to helping early-stage businesses with legal needs.
“Our MiSpringboard program has enabled Varnum to help 91 Michigan companies, with the total value of services exceeding $258,000,” said Harvey Koning, Varnum attorney. “We tailor the services to fit each client's needs, including entity formation, licensing agreements, intellectual property protection, employment agreements and contracts.
“The program is statewide, drawing clients located in mid-, northern and southeast Michigan in addition to West Michigan.”
With $1.6 billion to show for itself and two years left in the initial commitment, the PMBC program and its partners are pleased with the results.
“We’ve impacted thousands of Michigan companies,” Pawl said.