The writer is a Los Angeles freelancer and former Detroit News business reporter. He blogs at StarkmanApproved.com.
By Eric Starkman
Psst. Hey Deadline Detroit readers, can you keep a secret? Promise not to tell Mayor Duggan or the folks at the Free Press and the News. This is just between us, okay?
Hudson's Detroit development
GM’s headquarters is in Warren. It has been for quite some time.
Yeah, I know, CEO Mary Barra said this week that "it's important to all of us at GM that we continue to call Detroit our home for a long time to come” and that she’s relocating the company’s headquarters from the RenCen to the Hudson’s Detroit complex because the heavily taxpayer subsidized Dan Gilbert building is “very personal to me.”
I’m always touched when CEOs share their feelings about what matters to them most.
But this is the same Mary Barra who told employees they could “work appropriately” from home indefinitely and then ordered them back to the office three days a week.
The same Mary Barra who for years said GM by the end of 2025 would be selling more electric vehicles than Tesla. That ain’t going to happen. Even Ford and Hyundai sell more EVs than GM.
The same Mary Barra who said GM’s 2023 executive compensation would be tied to the success of the company’s EV transition. Given that GM’s transition to EVs has been an undeniable disaster, don’t hold your breath that Barra’s 2023 compensation, which will be disclosed in short order, will reflect a massive pay cut from the $29 million she awarded herself the previous two years. (Barra is chair of GM’s board, which means she has undue control.)
There is no law requiring that certain parameters must be met to qualify as a company’s headquarters. Dave Calhoun, Boeing’s arrogant and failed CEO, once declared that his company’s headquarters was where he and his CFO happened to be.
“Remember now what headquarters is – it’s me, CFO,” Calhoun said at a June 2022 press event for the official launch of Boeing’s new Virginia office.
GM CEO Mary Barra
In addition to them both getting paid more than $20 million a year, I see lots of other disturbing similarities between Calhoun and Barra. Both are overseeing the decline of two once great American corporations, their futures threatened by better run rivals in Europe and China. I consider it a bad omen that GM is moving into a building named after another once vaunted Michigan corporation that was merged out of existence decades ago.
Barra’s top lieutenants don’t appear all that bullish about GM’s future, otherwise they wouldn’t be dumping their stock given the runup that’s resulted from Barra spending $10 billion to buy back GM’s shares and made them just slightly more valuable than they were when she took over the company more than 10 years ago.
Warren Design Studio
Barra has long been the Queen of PR shuck and jive, a skill I imagine contributed mightily to her ascent as CEO. While Barra was regaling reporters about GM’s forever bonds to Detroit, her PR folks were flacking the impressive design studio GM opened in Warren in recent months.
Fast Company article on the Tech Center
I draw your attention to this article the tech-focused publication Fast Company published on Thursday about GM’s sprawling new design center that was written by Nate Berg, who is based in Detroit, and as best I can tell, scooped the local and auto media with the first eyewitness account of the innovative facility that will dramatically change GM’s design processes.
As reported by Berg, the new design studio is located at GM’s Technical Center campus in Warren. The 360,000 square foot facility expands capacity for up to 1,500 designers, with much of the area dedicated to the 44 mills where full-sized model cars are sculpted and formed out of clay. Combined with the old design building, itself covering more than 225,000 square feet, GM now has what it maintains is the largest automotive design facility in the world.
That’s impressive, particularly given that most automotive design, even by foreign automakers, is done in California.
The design center was part of a previously reported $1 billion upgrade of GM’s Tech Center in Warren, which was designed by architect Eero Saarinen and opened in 1956. The facility’s Design Dome has received architectural acclaim and the complex is designated as a National Historic Landmark. Barra appears deservedly proud of the Tech Center because I’ve noticed that’s where reporters say they met with her for interviews where Barra shared other touching personal insights, such as that running GM is a “lonely job.”
Reading Berg’s review of GM’s new design center, this detail caught my eye: “Other more formal spaces are also a big part of the new building, including a prime corner conference room for GM’s board (emphasis mine) and an executive presentation room that features a curved 55-foot-long screen made up of 76 million pixels.”
Mmm. Why would GM’s board be traipsing out to Warren to rubber stamp the agenda Barra provides for them?
Tech Center Growing
Here’s what else I’ve noticed. In this May 14, 2015, Freep story on GM’s planned $1 billion Tech Center investment, reporter Greg Gardner said there were 19,000 employees working at the complex. When I last checked GM’s website about six weeks ago, a company graphic listed 24,000 employees working at the Tech Center and 857 employees working at the RenCen.
GM’s Tech Center employment appears to have risen by 5,000 in the past decade, while the company’s RenCen employment plummeted. Tara Stewart Kuhnen, GM’s director of corporate news and broadcast, told the Freep last month that GM’s RenCen employment numbers weren’t yet updated to reflect increases resulting from Barra’s reversal mandating that GM employees show up at the office at least three days a week. Kuhnen refused to provide the publication with an updated figure.
The Free Press said a screenshot of GM’s website dated Oct. 3, 2023, listed 1,320 employees assigned to the RenCen. Notably, GM subsequently updated its website to include a decline in RenCen employment, but Kuhnen would have us believe that GM never got around to updating the number to reflect added personnel.
Surprise, surprise! GM no longer breaks down the number of employees working at its Tech Center or the RenCen. Might you have any thoughts as to why?
In any case, even if the 1,320 employee number was accurate, that’s a far cry from the 4,000 employees GM was originally required to maintain at the RenCen as a condition for the billions in Michigan taxpayer largesse Gov. Gretchen Whitmer showered on GM over the years. The Detroit News reported that Whitmer removed the RenCen employment minimum as a sweetener to entice GM to invest $2.2 billion to retool its Detroit-Hamtramck assembly plant to build electric cars.
GM’s Orwellian website information scrubber didn’t think to omit the reference that GM occupies 5.5 million square feet in the RenCen, although the Detroit Free Press puts the number at 2.3 million square feet. In any case, the number of square feet the Freep says GM occupies in the RenCen exceeds the 1.5 million rentable square footage in the entire Hudson’s Detroit complex.
GM reportedly is only leasing the top two floors of Dan Gilbert’s showcase building, representing a total of only 150,000 square feet. The best-case scenario is that GM plans to jam employees currently occupying more than two million square feet of office space onto two floors of only 150,000 square feet.
It’s no surprise that GM President Mark Reuss said the automaker doesn’t yet know who will occupy its “headquarters” space.
"We don't know exactly how many people we're going to take from the RenCen, from Warren and populate this, because we're architecting the offices," Reuss was quoted in the Freep as saying.
Even Crain’s Detroit Business, whose bread and butter is real estate news, couldn’t provide details about the terms of GM’s lease in Gilbert building. Kirk Pinho, the publication’s real estate writer, speculated that based on publicized rates, GM at most would be paying $8.85 million a year in rent.
Given the $29 million a year Barra has been receiving in annual compensation, she could afford to pay GM’s rent out of her own pocket. It wouldn’t surprise me if Gilbert gave GM such a sweetheart deal that Margaret from accounting could pay GM’s headquarters rent from petty cash for the entire length of the lease.
Gilbert, with an estimated net worth of $26 billion, received at least $60 million in tax breaks from Detroit to build his upscale office tower in a city with an office vacancy rate of nearly 20 percent. He, in turn, lured GM from the landmark RenCen, which will likely replace the former Hudson building as a Detroit real estate boondoggle. GM downsizes its Detroit footprint, but Barra insists how committed the company is to Detroit.
Sorry, I’m not buying it. Rather than displaying a commitment to Detroit’s best long-term interests, Barra and Gilbert flipped Detroit the bird. And for those who believe that GM’s headquarters is in Detroit, I urge you to visit Warren and behold what a real world-class corporate headquarters looks like.
Reach the writer at eric@starkmanapproved.com. Confidentiality is assured.
