President Barack Obama reassured Michigan Congress members on Sunday that GM will not move its headquarters out of the Renaissance Center as part of its bankruptcy restructuring efforts, quelling fears that the automaker would capitalize on tax incentives offered by Warren Mayor Jim Fouts.
GM CEO Fritz Henderson said last month that the automaker was open to moving out of its headquarters at the Renaissance Center in downtown Detroit, eliciting negative feedback from Michigan Governor Jennifer Granholm and spurring preventative measures from Detroit Mayor Dave Bing.
GM moved its headquarters from midtown Detroit to the Renaissance Center in 1996, paying $75 million to occupy the space and doling out another $500 million to renovate it. The move helped inspire the renovations of several other downtown Detroit buildings as well, leading many to see the Renaissance Center -- with GM's presence -- as a driving force of a downtown resurgence.
But as financial hardship struck GM, the Renaissance Center became increasingly unoccupied. Just weeks before GM was expected to file for bankruptcy, Fouts mounted a campaign to lure GM to Warren, a Detroit suburb. Fouts vowed to provide the company with a 30-year break on personal property taxes and a 12-year, 50-percent cut in general property taxes if it would relocate its world headquarters to Warren, where the automaker already has a sprawling research and development center.
But Obama said Sunday that GM would not abandon its current headquarters. He called it a "GM business decision," according to a congressional aide cited by the Detroit News.
Fouts said Sunday night that GM could have saved millions by moving its headquarters, and that he hopes the decision to stay in Detroit wasn't made out of "political correctness."
"My mantra has been it's not about the image," he said. "It's about saving jobs and saving GM."
An interesting statement, considering it may well have been GM's image -- as a maker of gas-guzzling, unreliable SUVs -- that played the biggest role in its path to bankruptcy.
Source: The Detroit News