“Three words I didn’t know when I graduated,” says Chuck Hutchins, who earned his mechanical engineering degree at the U-M in 1957, “were computer, binary, and entrepreneur.” He learned all three on the job—and created one of Ann Arbor’s first great tech companies.

In the 1960s and 1970s, his Manufacturing Data Systems, Inc. pioneered the development of metalwork automation software. With veteran CEO Ken Stephanz, he built MDSI into an 850-employee powerhouse so prosperous that it built a 200,000-square-foot headquarters on Plymouth Rd.—and paid the nearly $30 million price in cash.

MDSI’s venture-capital backers cashed out in a 1976 IPO, and after a subsequent sale the company struggled to keep up with the fast-changing field. MDSI shrank almost as quickly as it grew, and the buildings were sold to the U-M in 1997.

Most Ann Arborites now know the tan-brick complex only as the university’s Arbor Lakes office complex. But recently, Hutchins told the MDSI story in his book Hot Tech Cold Steel: How Computer-Aided Manufacturing Caught Fire in Ann Arbor and Spread Around the World. This article is drawn from the book.

—

Manufacturing Data Systems’ world headquarters soon after its completion in the 1980s.

At his first job—designing auto factory machines at Ann Arbor’s Buhr Machine Tool Company on Greene St.—the mills, lathes, and drills were still hand operated by skilled machinists.

Two years later, Hutchins’s boss sent him to a conference on “numerical control.” Long before robotic factories, 3-D printers, and CAD-CAM, numerical control (NC) promised to transform manufacturing by automating metalworking machines. He came back, taught himself basic computer programming, and eventually developed Compact II, arguably the world’s first user-friendly NC software.

Buhr quickly integrated NC into its machining operations, but Chuck saw an opportunity to sell Compact II to other companies, like auto parts suppliers, appliance manufacturers, and aerospace contractors. In the late 1960s, he found a venture capitalist to support the idea with $1 million and an experienced CEO, Ken Stephanz. Stephanz ran the company while Hutchins led a small team of programmers working in the basement of rented office space on Packard.

Computers were still rare and expensive, so MDSI partnered with another early Ann Arbor tech company, Comshare, to provide customers with “timeshare” access to its computer center. Machine tool operators used a phone line to communicate their Compact II programs to Comshare’s mainframe, which then created a punched paper tape that told the metalworking machines how to cut a part or drill a series of holes.

Manufacturing Data Systems’ world headquarters as the U-M’s Arbor Lakes office complex today. MDSI’s software for numerically controlled machine tools was a forerunner of today’s CAD-CAM, robotic factories, and 3-D printers—and was so profitable that the company paid for the entire complex in cash.

MDSI quickly captured 10 percent of the American NC market and was hiring programmers and customer support personnel at a rapid clip. Soon after moving to a bigger office space on N. Main, Stephanz and Hutchins decided they needed their own building.

“A little-known fact is a lot of us wanted to move south,” Stephanz remembers. He put together a small team to look at options, but Hutchins—who still signs his emails “GO BLUE”—wasn’t about to abandon Ann Arbor.

So in 1974, MDSI bought fifty-two acres of undeveloped land on the corner of Plymouth and Earhart Roads. “This was a beautiful piece of land,” says Stephanz. “It was not hemmed in by anything. It had room for expansion. It turned out to be the right place.” They bought an additional twenty-five acres in 1979.

The site plan kept roadways, buildings, and parking lots near the entrance, leaving swaths of green lawn with room for flower gardens and even a softball field for the company’s annual picnic. The first office building—a two-story, 40,000-square-foot, brick structure—was mid-century-modern sleek with narrow windows, a flat roof, and a flush façade. Programmer Seth Powsner, who started at MDSI while still a student at Pioneer High (and eventually became a medical professor at Yale), claims the dark-brown carpeting was chosen after coffee was poured over samples to see which color best hid the stain.

By the time the first building was completed in 1976, MDSI had already outgrown it. Some staffers stayed on at the Main St. offices as planning began for a second building, twice as big as the first. It opened in 1979, followed by a third, 80,000-square-foot building in 1981.

Elliptical, enclosed, transparent walkways allowed employees to move between the buildings without going outside. MDSI’s workers affectionately dubbed them “gerbil tubes.” The walkways and some office windows looked out on a small courtyard with an aluminum, abstract sculpture, James C. Myford’s “Three Part Form”—apparently inspired by metal shavings coming off a cutting machine.

The final building featured a glass-domed dining room with seating for 300 where three meals a day were served to employees, many of whom were young, unmarried computer engineers working long hours—an early example of the office-as-home environment that big tech companies would “pioneer” decades later. MDSI also anticipated now-infamous tech IPOs when it went public in 1976.

By the end of the 1970s, MDSI software was programming almost 20,000 NC machine tools, and had opened wholly owned subsidiaries in Canada, England, France, Germany, Switzerland, Sweden, and Japan. “MDSI literally taught the world to program NC machine tools,” says Hutchins.

—

The company was sold in 1981 to international oil field services giant Schlumberger for $210 million. By then, Hutchins had moved on, and the technologies that made MDSI such a success were changing. Soon, factories could buy machine tools with built-in computers and custom software.

MDSI sought to innovate, especially in the area of computer-aided design, but corporate mergers and layoffs helped put the company on the road to obsolescence. Comshare saw a similar decline for similar reasons: the disrupters had become the disrupted.

U-M bought the offices, plus twenty-two acres of land. Domino’s Farms bought the remaining acreage. The courtyard, sculpture, and gerbil tubes are still there, but the brown carpets are long gone, and the domed dining area is now a conference room where the many windowpanes are covered to keep out the light. Currently home to U-M’s Information and Technology Services, the three beige-brick buildings have seen almost as much of the analog-to-digital transformation as Stephanz, now ninety-six, and Hutchins, now eighty-nine, who today both live in Florida.

The hallways at Arbor Lakes are adorned with photos of the U-M campus, including an image of a maize-and-blue solar car. Intentional or not, it’s an appropriate choice, given that Hutchins is a longtime supporter of the U-M Solar Car Team. He and his wife also recently endowed U-M’s Charles S. and Ann S. Hutchins Professor of Engineering Practice to advance engineering education through real-world learning experiences.

In 2018, Hutchins, Stephanz, Powsner, and many other former MDSI employees reunited in Ann Arbor for the fiftieth anniversary of the company’s founding. Attendees reminisced about writing code to fit within 64 KB of memory and about making friends around the globe. They told stories of running into former colleagues at subsequent jobs or of deciding to hire someone when they saw MDSI on the applicant’s resume.

As the group toured their former world headquarters, Hutchins was happy that the buildings they all made possible are now owned by his treasured alma mater. (Appropriately, for most of its ownership the U-M has used Arbor Lakes for IT services, though other units are now moving in.) He hopes one day to see a plaque at Arbor Lakes that honors its groundbreaking position in the tech revolution.