GM To Burn Rubber on Detroit?

GM To Burn Rubber on Detroit?

By Bill Visnic

The rumors started not long after General Motors Corp. accepted its first loan under the U.S. Treasury Dept.'s Troubled Asset Relief Program late last year: GM was looking to leave its global headquarters in what is downtown Detroit's most prestigious and recognizable building, the Renaissance Center.

This week, the Detroit News reports the nearby suburb of Warren, Michigan -- longtime home to GM's rambling Technical Center -- is actively encouraging GM to cut loose of the expensive "RenCen" HQ and relocate to Warren. One major carrot: Warren has no city income tax; workers currently located at GM's RenCen headquarters pay a 1 percent tax to the city of Detroit.

And Warren Mayor Jim Fouts reportedly is dangling tax abatements if GM relocates its HQ to his city. The paper said Warren already has delivered $100 million in tax cuts to GM in recent years.

Fouts was quoted as saying the city's offer could "save" GM.

In a press conference on Monday, GM CEO Fritz Henderson was asked about the possibility GM could leave the RenCen, site of Detroit's headquarters since 1996. Henderson would not deny the possibility, saying the company is examining "everything within our business," but said a potential move was not a priority.

GM purchased the landmark Detroit building for $75 million - but then sunk in another $500 million in renovations. The famous but sometimes bewildering-for-occupants design of the building, several interconnected cylindrical towers, often is referred to somewhat derisively as "The Tubes."

The company had been leasing the RenCen until last May, when it paid more than $600 million to assume full ownership. It proved to be an ill-advised time to buy the building and GM almost immediately began promoting a deal to sell the building and lease back its office space. But the tightening credit markets, a jittery investment atmosphere and the generally eroding economy meant the sale never got off the ground.

City officials were quoted as saying a GM move from downtown Detroit would be a heavy blow to the city's already battered economy. Newly installed mayor Dave Bing told the Detroit News he planned to call GM's Henderson to discuss the situation.

PHOTO:

Detroit's Renaissance Center complex has been GM's headquarters since 1996 (courtesy General Motors Corp.)

Bill Visnic:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter