"GM needs to relocate to the Sunbelt"

[Patrick]

Over the last year or so I have heard the argument from certain folks that GM needs to relocate in order to succeed. One economist on [[Fox [[John Tamny) said this a while ago. People somehow think that being in Detroit doesn’t help GM and that it is some sort of bubble. What would make someone think that Atlanta is a better place for GM? Or Texas, or Boston or California? Do they think the Detroit area is full of hicks and retards? What, we don’t have enough talent here and somehow Dallas does?
http://www.thetruthaboutcars.com/gms...p=all#comments

It will never occur, but it says here GM’s saving grace would involve it moving its headquarters to a New York or San Francisco; two cities where there exists human capital that would never live in the economic mistake that is Detroit
http://www.realclearmarkets.com/arti...t_gm_fail.html

[Patrick]

Moving Time

If it’s serious about restructuring, GM needs to relocate its headquarters to Dallas.

by Glenn Hunter
Published 1.19.2009
From D CEO FEB 2009




An open letter to Rick Wagoner, chairman and CEO, General Motors Corp.
Dear Rick:

At this writing your company’s on life support, pleading to be rescued by the feds. Worldwide auto sales, after all, have fallen dramatically. The country’s in recession. GM was desperate for the dough, and we think you needed to receive it.


We’re no bailout fans, see. But if the Congress and the president are serving up billions to banks and insurance firms, surely the auto companies—which actually make something—are due their share.


Plus, we think you got a raw deal on Capitol Hill late last year. What was all that congressional grandstanding over private jets? Hell, the Wall Streeters didn’t even have to show their mugs to make off with their free loot.


But, here’s the thing, Rick: If GM is saved to fight another day, it’s past time to rethink your labor-heavy cost structure. As part of that, you’re going to have to trade in the Rust Belt for the Sun Belt. And that, I’d argue, means moving GM’s headquarters from Detroit to Dallas.


Simply put, you need to get more competitive quickly, and there’s no better place to do it than North Texas. Besides our central location and world-class airport, Dallas-Fort Worth offers low taxes; a highly skilled, mostly nonunion work force; and a generally pro-business atmosphere. Two dozen of your Fortune 500 peers already make their homes here, including such powerhouses as ExxonMobil and AT&T. Even Comerica—the big bank that was based for decades in your hometown—decided to join us recently.


Comerica made its move after seeing the handwriting on the wall. According to a 2008 study for the American Legislative Exchange Council by free-market economists Arthur Laffer and Stephen Moore, Michigan is a state in serious decline. In fact, the Wolverine State ranked dead last among the states in that study in terms of economic performance, with abysmal scores in personal-income growth, domestic migration, and nonfarm employment growth. Texas, by contrast, ranked first among the states, with solid scores in all three categories.


Given the current economy, I’m sure you’ll find a great deal on real estate in downtown Dallas, or Las Colinas, or wherever you decide to relocate, Rick. GM’s big, pacesetting SUV plant is in Arlington, of course, and your 60 local dealerships, which employ about 6,000 people, are scattered all over the place.


After so many years in the Motor City, it won’t be easy to cut the cord. But another CEO—R. Mark Syrstad of Sheplers, the country’s biggest Western wear retailer—said something very applicable to your situation in the January issue of D CEO. Syrstad, who recently moved Sheplers’ headquarters from Wichita, Kan., to Arlington, explained his “biggest challenge” as head of a 110-year-old company with a proud heritage: “I want to respect the [company’s] history and tradition; I just don’t want to be held hostage to it. … You need to learn from the past, but don’t get bound up by it.”


Thanks for listening to this argument, Rick, and good luck. We’ll leave the lights on for you.




http://www.dmagazine.com/Home/2009/0...ving_Time.aspx

[Retroit]

China would be the best choice.

[Detroitnerd]

Haha. After almost a century of dealing with auto companies, and all the great things they have done for this region, I should be only too happy to "bless" San Francisco or New York with them.

[iheartthed]

LOL. It's laughable that some local magazine writer in Dallas would think that GM could totally shed its cost structure by simply changing their address from Detroit to Dallas. Yeah, if it were only that easy. And other than "low taxes" and more sunny days per year, what does Dallas offer that Detroit can't match? Comerica's* argument for moving was that all of the new growth was found in the Sun Belt. That was in 2006, and my oh my was a difference three years makes. Now check out what the Sun Belt is looking like... Heck the only bright spot in the Sun Belt IS Texas!

*BTW Comerica was HQ'd in Detroit for far longer than GM.

[detmsp]

Do they think the Detroit area is full of hicks and retards? What, we don’t have enough talent here and somehow Dallas does?

have you never met someone from the coasts? to them, we are inbred hicks who live in "flyover" land. Seriously people in California have said things to me like "oh you should try sushi, you'd love it! Oh, they have that in the midwest?"

[Patrick]

Some interesting thoughts from some dickheads:

http://www.thetruthaboutcars.com/gms...p=all#comments

No, you don’t that’s why 2 our 3 of the car makers headquartered in your state have filed for Chapter 11. Why? Cause you don’t know how to make a decent car. The people in ATL or San Jose can’t really do any worse now can they?

It wasn’t deep down. The Michiganders are clearly clueless. Things wouldn’t be like this if they knew what they were doing.

Their insularity and home-team cheerleading led to their destruction. Instead of acknowledging that they were sliding, they just built an ideological moat and pretended that the majority of the country was either unpatriotic or wrongheaded. We can all see now how well that attitude worked out for Michigan.

California is the leading edge of automotive tastemaking, Atlanta is a good representation of the great middle of the country. The west coast will lead the trend; a trend that takes hold in the New South has clearly made the leap from quirk to mainstream. Anywhere but Michigan and the Rust Belt.

[DetroitDad]

have you never met someone from the coasts? to them, we are inbred hicks who live in "flyover" land. Seriously people in California have said things to me like "oh you should try sushi, you'd love it! Oh, they have that in the midwest?"

So wait, we're the idiots for living in an area with lots of fresh water during a nationwide water crisis, and few real chances of major natural disasters? This coming from people who built their houses in the dessert, a fault line, below sea level, or in the regular path of hurricanes or tornadoes.

That's not to mention that the rest of the nation is following Detroit's footsteps. Those mentioned regions are unsustainable and their governments and economies are about to crash worse than Detroit's did. Detroit is the city of tomorrow today, as far as those places are concerned.

[daddeeo]

Why would they want to move to areas where the Senators & Congressmen were willing to let them die and blow away?
Some people will speculate on anything without knowing what they are talking about.

[Detroitnerd]

It's just a kind of regional chauvinism. You know, they say things like, "Our area works."

Of course, as for the subsidies that flow to Texas and not to Michigan, well, that may have a wee bit to do with it. It works because we're all paying for it to work there.

[Roq]

The main reason this is promoted is so that GM can get away from the union workforce and their influence in this area. By moving to a "right to work" state, GM could [[in theory) drastically reduce it's labor costs.

And keeping with the theme, I love this area and would only move to the South [[ugh) if an employment offer was so ludicrous that it would be foolish not to, though I would hate living there the whole time.

[mjs]

Move the automobile industry to the oil state. That should make them competitive on fuel economy. No vested interest here. Never mind the man behind the curtain.

[CountrySquire]

In other words the smart and savvy CEO of the future will be one that can coerce his employees to work for as little as possible; Hell why not for free?! These schleps should be just glad they have a job! After all it will be ONLY that company that does this so it will have absolutely zero effect on the economy as a whole. There will ALWAYS be millions of cash heavy people beating down the show room doors willing to plunk down whatever the company wants to charge.

[crawford]

I love how the article brags about Dallas-Fort Worth Airport. That cheesy 1970's-era dump has to be the worst major airport in the country. It takes 30 minutes to walk from one gate to the other. In contrast, Detroit has arguably the best major airport in the country.

And Dallas as a "central location"? Huh? Central to Oklahoma and vacant West Texas? There are FAR more people within a 500-mile radius of Detroit than in Dallas.

And while it's true that the Dallas-Ft Worth metro area is booming, the city of Dallas itself is struggling. Downtown Dallas is probably more vacant than downtown Detroit. The booming areas are all disgusting sprawlburbs that look like Hall Road and Macomb Township.

[jt1]

"The main reason this is promoted is so that GM can get away from the union workforce and their influence in this area. By moving to a "right to work" state, GM could [[in theory) drastically reduce it's labor costs."

That is fine on paper but it applies to the plants which are dispersed throughout the country. The HQ is primarily white collar, employment at will so using the labor argument for moving the HQ makes no sense whatsoever.

[Bobl]

GM, Ford, and Chrysler-Fiat would all do just fine right here if we had a sane fair trade policy, one that levels the playing field.
Two examples: Those AM Radio talkers who have suggested boycotting GM and Chrysler for taking government bailouts neglect to mention that, just recently, the government run Bank Of Japan infused 300 billion dollars into Toyota so that they can continue zero interest loans. They also fail to mention that the government of Japan subsidizes retirement plans and health coverage.

[Patrick]

And yet another reason the move GM to California from some genius:

Californians tend to lead the country in creating vehicle tastes. Nobody has to follow California’s car culture, but they often choose to follow. Not every trend makes it out of the west coast, but if you find a trend ending up in the South, then it’s probably everywhere else in the country outside of MI. A car company trying to predict the future had better be in California and sorting out which trends are going to take and which one’s are just fads that won’t.
The imposition comes from Detroit, which insists on trying to sell cars that people outside of Michigan apparently don’t want. Of course, consumers are free to choose, and they respond by buying other cars that they actually do want. Meanwhile, Detroit accuses them of being unpatriotic, instead of meeting their wants, before begging for handouts.

[staticstate]

"right to work" state? tell that to all the Dell employees that lost their jobs to India.

[mjs]

If the big three don't take advantage of this, new, better competitors will emerge. I heard the Beach Boys are going to open a new automotive manufacturing company in Southern California and the Duke Boys are partnering with JR Ewing to do the same in the Dallas area. And don't try calling on Friday's. The receptionist will just tell you everybody's gone surfing at Best Cars USA.

[rb336]

"right to work" state? tell that to all the Dell employees that lost their jobs to India.

"right to work" means, and anyone with a lick of sense knows this, that the owners have the right to your work

[Ocean2026]

I don't personally like Dallas but the advantages are :

1. Lower property taxes
2. No state income tax
3. Almost no heating costs but more A/C
4 Closer to growing markets
5 Much lower wages -because Texas isn't pro union.
6. A large pool of skilled labor - Dallas may be growing faster than the jobs- people will move to Dallas to go to work- not sure many would move to Detroit.

In my opinion Dallas doesn't have the character and nice architecture that Detroit has, and it attracts the likes of GW Bush who has killed more than any criminal in Detroit. Still the advantages are there.

[jt1]

1. Lower property taxes: GM will not have to worry about property taxes because they will get a deal to stay in Michigan.

2. No state income tax: Don't know what kind of deal may be worked here.

3. Almost no heating costs but more A/C: Silly argument

4 Closer to growing markets: How so? Their market is cars being sold nationally so this makes no sense.

5 Much lower wages -because Texas isn't pro union: Not applicable for HQ. I don't understand why people think that the HQ is impacted by unions.

6. A large pool of skilled labor - Dallas may be growing faster than the jobs- people will move to Dallas to go to work- not sure many would move to Detroit: Metro Detroit has a much larger talent base for Auto HQ and R&D jobs. People will re-locate for jobs but the jobs simply aren't here.

[lilpup]

All you have to do with these @ssholes is tell them that Toyota, Nissan, and the nation's largest solar cell manufacturer are also in Michigan. Just ask Californians why Steve Jobs and Apple choose to manufacture in China despite developing the tech in California. And remember to point out that Boeing moved to Chicago from the west coast in order to be more centrally located to their international markets.

[[Detroit = first city in the country that had direct flights to China!)

[Patrick]

Well you will not find more hate for Michigan and Detroit than you will on that TTAC site.

[Ocean2026]

Jt1

1. Are you saying GM will get an abatement to exempt them from property tax? Those deals often negatively impact an areas taxpayers but hopefully the jobs are worth it.

2. No State income tax- what kind of deal do you think will happen? Besides this is an incentive to WORKERS - its much nicer to work where you don't have fill out and pay extra taxes/forms

3. You miss the impact on the workers. Energy expenses -heating in winter definitely impacts potential employees- in fact cold winters are a major reason many northern towns have lost people.

4 You didn't understand this one either - closer to growing markets means less shipping costs.

5. IF Gm isn't paying union wages than you are correct- but my understanding was that the avg GM worker makes much more than their Texas counterparts.

6 Not everyone would re-locate to Detroit for a job- some would some wouldn't

I still prefer Detroit - but not on these issues.