Automobile

Minority supplier gets support from Michigan manufacturers in certification dispute

The Michigan Manufacturers Association is throwing its support behind Vinnie Johnson’s Piston Group in its battle to remain a certified minority business enterprise.

The $3 billion-a-year auto supplier had its certification revoked in late February, by the Michigan Minority Supplier Development Council over a lack of minorities in key leadership positions. At the center of the dispute is whether Johnson runs the day-to-day operations of his large supplier, which operates four subsidiaries — Piston Automotive, Irvin Automotive, the Detroit Thermal Systems joint venture with Valeo and office furniture unit Airea.

To be certified, a company must be 51 percent majority-owned by a person of color; actively managed in the day-to-day operations by a person of color; and operate independently.

While Johnson serves as the founder, chairman and CEO, the heads of the company’s largest business units are white men.

Piston Group is currently engaged in negotiations over the matter as part of an appeal process.

“I think the rules were written and not expecting something to be this successful,” said John Walsh, CEO of the Michigan Manufacturers Association. “We think this is a minority business and we’d like the certification to continue. This affects their business and is important to other companies in the supply chain. We’d like this resolved in a more positive way.”

Piston is the largest Black-owned auto supplier in the country and a major supplier to Ford Motor Co. and Stellantis, formerly FCA. All three companies are members of the Michigan Manufacturers Association as well.

It’s unclear why the role of chairman and CEO is not considered in control of the daily operations. But the minor said in a statement its decision to decertify Piston was reviewed by third-party organizations. The certification process involves a rigorous review involving attorneys, accountants and certified fraud examiners and the determination to decertify Piston Group was verified by a third-party, the the minority supplier council told Crain’s Detroit Business in a statement. Crain’s is an affiliate of Automotive News.

The argument is that Johnson is not using his position as a minority business leader to spread the benefits certification brings among the minority community.

Walsh said the the Lansing-based lobbying group is not in contact with the minority supplier council and is not engaging with the organization about whether it should alter its rules, but called the former Detroit Pistons star and his company an “icon” in the industry.

If the minority supplier council and Johnson are unable to settle the dispute through the appeals process, Johnson told Crain’s legal action may be the next action.

“I am deeply disturbed regarding the actions taken to alter my long standing status as a minority business enterprise,” Johnson said in the statement. “I own and control 100 percent of Piston Group. I am actively engaged in all aspects of the business and have been since the business was started in 1995. My commitment to my 10,000-plus employees, our customers and the local communities that we support through our charitable contributions is unwavering.

“I expect the Piston Group to be judged by our customers on the merits of our work product and service. The certification issue will be handled through an appropriate legal process and I am confident we will be vindicated. We are evaluating all legal options and we will not be able to decide a course of action until we see the outcome of the pending appeal.”

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