Column

Starkman: Thanks to Whitmer, GM’s Detroit Headquarters Is RenCen Ghost Town

March 08, 2024, 4:40 PM

The writer is a Los Angeles freelancer and former Detroit News business reporter. He blogs at StarkmanApproved.com

By Eric Starkman

The Detroit Free Press had a big scoop Thursday, although the publication was either unaware of it or it didn’t want to embarrass GM CEO Mary Barra and Gov. Gretchen Whitmer. Auto writers adhere to what I call the 11th Commandment, an unwritten rule prohibiting unflattering stories about GM’s top executive. The Michigan media won’t win any Pulitzers for its Whitmer smooches.

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GM CEO Mary Barra (GM photo)

Buried in this story about the impact of Barra requiring employees to work in the office three days a week was this nugget: “According to a screenshot of GM's website dated Oct. 3, 2023, which was obtained by the Free Press, GM listed 1,320 employees assigned to the RenCen at that time.”

At this writing, GM's website lists 857 employees working at the RenCen. Tara Stewart Kuhnen, director of corporate news and broadcast, told the Freep that number has not yet been updated to reflect increases since implementing a mandatory three day return to the office policy in January, but she refused to provide the Freep with an updated figure.

There’s good reason for Kuhnen being tongue tied.

Even if there are as many as 1,320 employees assigned to GM’s supposed global RenCen headquarters, that’s a far cry from the 5,000 employees the Freep reported in 2022 were assigned to work there. In a major diss to Detroit, GM slashed its RenCen workforce in the past two years and it’s debatable whether GM is genuinely a Detroit-based company.

The guts of GM’s Michigan operations are in Warren, where the company’s most critical and highest paying jobs are located.

GM’s Warren technical center has 24,000 employees earning taxable wages of $4.3 billion, according to GM’s website. GM boasts that it has donated $660,000 to Warren area nonprofits since 2019, which strikes me as miserly but I’m not a corporate charity expert.

Meanwhile, GM’s RenCen employees earn taxable wages of $332 million, while GM has donated $64 million to Detroit area nonprofits since 2019. Barra in 2021 and 2022 alone was paid $58 million in compensation, the most of any auto executive.

GM In Mexico

GM’s Factory ZERO Detroit-Hamtramck plant employs 2,162 employees, according to the company’s website. By comparison, GM’s Silao plant in Mexico has 6,500 workers and its Ramos Arizpe plant in Mexico has 5,600 employees. GM pledged to build only EVs at Ramos Arizpe beginning this year, where the company’s problem-ridden EV Blazers and its EV Equinox compact SUVs are manufactured.

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Although GM was bailed out by U.S. and Michigan taxpayers, the company under Barra’s leadership became Mexico’s biggest auto manufacturer. What makes the downsizing of GM’s RenCen workforce especially galling is that Michigan Gov. Gretchen Whitmer was ultimately responsible.

The Detroit News reported in July 2022 that the Whitmer Administration two years earlier removed a requirement that GM maintain a minimum of 4,000 RenCen jobs to remain in compliance with the provisions of the billions in subsidies the company sponges off Michigan taxpayers. The move to allow GM to slash its RenCen workforce was made before the pandemic, so Whitmer can’t use Covid as an excuse to justify the move.

The Whitmer Administration and GM had hoped to keep their sweetheart pact a state secret, but unfortunately Michigan’s Supreme Court ruled that Michigan taxpayers had a right to know details of the deals Michigan Economic Development Corp. (MEDC) was cutting with the Detroit 3 automakers.

The News reported that GM far and away was the state’s biggest corporate moocher, having received $3.5 billion in state tax credits that could be applied between 2010 and 2029. By comparison, Ford and Fiat Chrysler Automobiles, now part of Stellantis, voluntarily disclosed the value of their tax credits respectively was $2.3 billion and $1.7 billion.

As an example of why GM’s brigade of PR folks has no credibility with me, the company had the audacity to argue it was keeping its generous Michigan tax credits under wraps for competitive reasons.

Specious Argument

“(GM’s) argument was so specious,” Jerome Goldberg, the Detroit attorney who sued the MEDC on behalf of a former GM employee, told the News. “They were giving GM an economic advantage by not disclosing it. Give me a break.”

Citing an unnamed source, the News reported that MEDC agreed to relax the requirement that GM maintain a minimum of 4,000 employees at its RenCen headquarters to entice GM to invest $2.2 billion in retooling the Detroit-Hamtramck assembly plant to build only electric vehicles.

In other words, Whitmer was prepared to sacrifice thousands of presumably higher paying white collar RenCen jobs for some 2,100 high risk factory jobs. The Detroit-Hamtramck plant builds electric vehicles, which exposes workers to potential lithium spills. WDIV recently reported on the health risks the Detroit-Hamtramck plant poses to its workers and the surrounding communities.

Whitmer and her media apologists might argue that creating 2,100 jobs in Detroit and allowing GM to relocate RenCen employees to Warren is still a net gain for Michigan, but that ignores the ancillary jobs and revenues that are created from typically higher paying headquarters’ positions.

Notably, Warren’s population between 2020 and 2021 grew 3.6% to 138,996 while Detroit’s population has shrunk in every census since 1950. Warren’s median household income is $61,633, while Detroit’s is $37,361.

Warren is also home to GM’s customization showroom for customers who can afford its showcase Cadillac Celestiq, which starts at $340,000. Had GM opted to locate the showroom in Detroit, it would have given the city an undeniable prestige and attracted some very high net worth tourists.

The Freep’s Thursday story didn’t make clear the job functions of the paltry GM employees still working at the company’s RenCen headquarters. The story featured Dana Tilden and Stephanie Brooks, whose LinkedIn bios say they specialize in Kronos timekeeping software.

Typically, a company’s headquarters is home to its top executives and those who report to them. As I recently reported, GM’s critical software and electrification jobs, which pay lucrative compensations, are increasingly in California.

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Mike Abbott

Mike Abbott, GM’s executive vice president of software and services who reports to Barra, is based in Northern California. Barra recently disclosed that Abbott poached employees from Apple, his former company, as well as Google and Meta. Those employees likely are based in the Bay area, where GM’s troubled Cruise driverless taxi subsidiary is based.

GM also has an advanced design and technology campus in Pasadena near Los Angeles, no doubt paying six figure salaries to most of its employees.

Arden Hoffman, who Barra lured from Cruise and promoted to serve as GM’s chief people officer, told employees when she joined the company last year that she would be dividing her time between San Francisco, Detroit, and Montana, where she presumably owns a home.

Lin-Hua Wu, who was hired from Google to oversee GM’s communications and reports to Barra, is based in San Francisco, according to her LinkedIn page.

It’s not even clear where the primary offices of Barra and President Mark Reuss are located.

Barra's Chicken Greek Salad


The chicken Greek salad at the RenCen

"(GM President) Mark Reuss used to come here two times a week. Not anymore," Tony Keros, a RenCen restauranteur told the Freep. "(CEO) Mary Barra used to come three times a week for the Chicken Greek (salad). Not anymore.”

Barra conducted a recent interview with a San Francisco-based Barron’s reporter at GM’s technical center in Warren, which is also where a Freep reporter interviewed Barra for a gushing puff piece published in June 2022.

What was also telling about the Freep’s RenCen story is that two GM PR persons were assigned to spin one reporter. In addition to Kuhnen, spokesman Kevin Kelly was cited as saying GM doesn’t have any near-term plans to require GM employees to work in the office five days a week.

I noticed that the Freep’s Phoebe Wall Howard quoted two Ford PR people in her recent Pulitzer-Prize worthy story about Ford’s faulty air bag repairs. In all my years working in journalism and PR, I can’t recall many, if any, stories where two corporate PR people were prominently quoted in a single story.

It’s a wonder how auto writers keep track of all their Ford and GM’s PR contacts, an issue they don’t have writing about Tesla. Elon Musk years ago did away with Tesla’s PR department, saying it provided no real value.

Even with a 25% decline in the value of Tesla’s stock this year, the company is still valued more than GM and Ford combined.

 



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