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Published: Sunday, 8/17/2003

Compuware a piece of the Detroit puzzle

DETROIT - People and jobs have been pouring out of Detroit for half a century now, ever since the concrete began to be poured for the freeways and the first big shopping mall, appropriately named Northland, opened in the suburbs.

But this year, an amazing thing happened. Compuware, a huge computer services corporation, moved 4,000 workers out of the suburbs - where the firm was founded in 1973 - and relocated them to downtown Detroit, in a new $350 million building.

Contrary to rumors, the firm didn't get any major tax breaks to do this. Pete Karmanos, co-founder and chairman of the board, didn't even ask the city for any favors. He just decided it would make sense to move his firm there, and he did.

“We came here for a couple of very basic, rational business reasons,” said Mr. Karmanos, a balding, plain-speaking man of 60 who radiates a cheery, no-bull attitude. “We had grown up in the suburbs, and we had people spread out all over the map of the Detroit area, and we were looking for a home. And it turned out the most logical place to move your headquarters is in the center of that, which is downtown,” he added.

Then he looked a trifle wistful. The son of Greek immigrants, he had grown up in Detroit, waiting on customers in Pete's Place, his parents' diner, from the time he could walk. He had gone to high school there, gone to college there until he realized he already knew what he wanted to do and how to do it.

Now he wants to reintroduce a generation to the city. “We have a lot of young people who have literally been denied the urban experience. And I thought there would be a lot of energy and interest on the part of our workers, especially those from their 20s to their early 40s, on having the opportunity to work in that kind of environment.”

Sad to say, there are more than a few suburban kids who are afraid of Detroit. When Compuware announced it would be leaving the upscale bedroom suburb of Farmington Hills, a few bailed out. “Voted with their feet,” the chairman chuckled. “But there haven't been many of those. And when we first offered tours of the building, many of them took the time to e-mail me and say what a great experience it was.”

The company is one workers think twice about leaving; it provides on-site fitness, parking, and day-care facilities. The 15-story building itself, on Woodward Avenue just a couple blocks from the river, has also won rave reviews. Compuware occupies a million square feet of it. Construction crews are still finishing the last 60,000 square feet, which will be leased to retail stores, including Michigan's only Hard Rock Cafe.

When Compuware announced it was going downtown four years ago, the reaction from the business community was derision. “It'll never happen,” one executive told me. Apart from the usual fears of the urban jungle, Detroit's bureaucracy is legendarily difficult to deal with. There were some who told Mr. Karmanos - sometimes to his face - that he was nuts to move his company downtown.

Which made him laugh. They have been telling him throughout his career that he couldn't do what he set out to do. He fell in love with computers when he was still in high school, and got a job working with punch cards for a direct mail house.

But he fell in love with computers not in a geekish way - he saw the potential of what they could do. When he was 30, he and two friends founded Compuware. The idea was to service businesses' computer needs so that they could concentrate on taking care of business. “People said you can't do that, there is no such business.”

He shrugged. “I couldn't figure out what they were talking about. I wanted to build a blue-collar firm - which means going in every day and getting something done, giving value for the money.” Compuware had total revenues of $300,000 its first full year. It reached $2 billion by 2000, though that's dipped with the economy since.

Typically, a key decision came when personal computers appeared on the scene, and everyone said mainframe computers were dead. Pete Karmanos realized “businesses have trillions of dollars tied up in mainframes that they can't afford to throw away.” Compuware would service them. The company took off.

“We don't want to be pioneers. We want to make what you have work better,” he said. That includes Detroit. What does the city need to make it back? “Detroit right now is a jigsaw puzzle,” he said. “I think it's got all it needs. You put the pieces in, and it's a very painful, slow process, but the more pieces you put in, the more that puzzle starts to be a picture. And we've reached the point where putting it together is much easier.”



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