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.
Frank Ervan, Piston Group’s vice president of government affairs, is a Black man. The rest of the executive team, with exception to Chairman Johnson, is white. Bob Holloway is president of Piston Automotive, which accounts for $2.2 billion of the company’s nearly $2.9 billion in revenue. Joe Finn, serves as CEO of Irvin Automotive and Detroit Thermal Systems. Melissa Price is president of Piston’s office furniture unit Airea, which makes up a small percentage of the company’s overall revenue.
Gordon Fournier, Piston Group COO and CFO, and Rob Fisher, group vice president of marketing and sales, are also white men.
It remains unclear how the MMSDC determined Johnson was not in control of the daily operations of his company. 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 MMSDC told Crain’s in a statement.
Piston Group appealed the decision and said in April that it would seek a legal remedy to the decertification if it lost the appeal. On Monday, the MMSDC upheld its decision without a hearing, leading to Tuesday’s lawsuit.
“While the subsidiaries’ CEOs are currently white, Vinnie Johnson is the one who has ultimate authority for all decisions within each Piston Group company and is involved in the daily operations of these companies in a manner that would be expected for a business of Piston Group’s size,” Mark Zausmer, managing partner at Farmington Hills-based Zausmer PC and lawyer for Piston Group, said in the release.
The lawsuit alleges Robinson has an ax to grind with Piston Group, most notably being upset the company hired away then-council executive Ervin in 2018. The lawsuit also alleges Robinson threatened to decertify Piston on several occasions after Johnson declined to donate $300,000 to an MMSDC initiative and failure to participate as a sponsor in the organization’s golf outing fundraiser in 2019.
The lawsuit seeks a declaratory judgment to force the council to recertify Piston Group, alleging the pulling of its certification was improper because Johnson does run the day-to-day operations. The lawsuit also seeks monetary and punitive damages.
“We are confident that Piston Group’s rightful designation as a certified minority-business enterprise will be recognized by the courts, and we welcome the opportunity to present our case,” Zausmer said in the release.
In a statement, Piston Group said it has 516 salaried employees in its offices across the U.S., 34 percent of whom are minorities and 31 percent women.
Piston Group ranks No. 72 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $2.85 billion in 2019.
