Details from GM’s business tax credit deal with the quasi-public Michigan Economic Development Corp (MEDC) came to light this week after a Michigan Supreme Court ruling lifted the lid on the agreement. While the tax kickback deal has received the majority of the attention, the Freedom of Information Act request has also unearthed interesting details about the automaker’s workforce at its Renaissance Center in downtown Detroit, The Detroit News reports.
Weeks before the COVID-19 pandemic took hold in the United States in March 2020, state officials removed a stipulation in the tax credit agreement that required GM to maintain a workforce of at least 4,000 employees at its Renaissance Center complex. The building now sits largely vacant, with GM enacting its flexible ‘Work Appropriately’ policy that allows its white-collar employees to work from home or another remote location when possible.
Gov. Gretchen Whitmer’s administration agreed to remove the stipulation for minimum employee count in early 2020. In exchange, GM agreed to a lower tax credit amount, with the state lowering its obligations by $325 million for the period between 2019 and 2029. The Detroit News alleges the city’s tax collections have now taken a “permanent,” hit as a result of this deal, as it seems increasingly unlikely that employees will return to the Renaissance Center in large numbers.
The FOIA request revealed this week that GM has received $3.8 billion in tax credit kickbacks from the state of Michigan since it filed for bankruptcy in 2009. A previous ruling made under Gov. Rick Snyder allowed GM to keep the total value of the tax credits a secret, however a recent Michigan Supreme Court ruling tied to a public records request has now made the information freely available. GM claimed it was keeping the value of the kickbacks a secret for competitive reasons, despite the fact that rivals Ford and Stellantis disclosed the value of their tax credits in 2015.
GM received the most significant tax breaks under this agreement with the MEDC, with Ford and Stellantis getting $2.3 billion and $1.7 billion, respectively. The tax credit program is no longer active, but Michigan lawmakers estimate the state will be paying out the tax credits until 2030.
Comments
I was just there. The place is a ghost town. No retail GM pro shop anymore. There were no reps to answer any questions about the product line in the automotive display area. Really depressing.
That’s what happens when you buy a used building from Ford.
It’s funny you should say that. Ford was loosing its shirt on that complex. Funny fact, you can see the Ren Cen from the Ford Rouge plant in Dearborn. Although I’m not a Ford guy, the pride and forward thinking by employees when I toured the Ford Rouge F150 plant was very refreshing. That is in stark contrast to the GM Heritage collection which is not open to the public to view.
Covid has change the world of commercial property in many ways.
I see many of the large headquarters anymore half or near empty.
I just went to my one work headquarters for 3 days of meetings and it was a ghost town.
I can only imagine how hard hit commercial property in NYC and other places are seeing values drop with no demand. Many cities are seeing major tax issues with people no longer working in their cities.
I am home and there are no plans to go back accept for meetings and such. I can operate globally from my home desk.
Detroit is faces with a building they don’t want and GM is faced with a building they don’t need.
Fed Ex just built a big new headquarters near me and it sits empty. Not sure what will become of it.
I’m in the same situation. All the white collar employees now work from home. One of my bosses decided to move to Las Vegas permanently and telecommunicate with everyone while the slot machines are running in the background. This pandemic has shown that you don’t need to be on the premises to do your job.
I beloeve that was part of the plan.
C8.R
Caterpillar’s former world headquarters building in downtown Peoria is half empty. Corporate cafeteria in this building has cut way back. Executive staff moved out a few years back to Chicago, and then exited Chicago due to deteriorating conditions in Chi Town for Dallas.
Caterpillar has always been challenged by attracting professional recruits to Peoria from outside the Midwest. If your a farm kid in the upper Midwest, Peoria is the shining city. Farm kids at one time made Caterpillar but the business has changed to hundreds of income generating products in several product families on a global basis. From farm tractors and road graders, to industrial turbines and mega sized mining trucks worldwide.
GM was a huge player of capital goods in it’s heyday. Railroad locomotives, busses, construction and mining equipment, Class 8 on highway trucks, oilfield engines and generator sets, marine diesels, etc.
Sadly, the General’s management became lethargic and myopic, and dry rot permeated throughout the corporation. Similar to what happened at General Electric after Jack Welch.
Various GM divisions had to be unloaded and discontinued for cash flow survival until a bail job by Barack Obama was needed to save what was left of the skeleton.
The carcus was fortunately saved by Mary Barra and her team. Let’s give some credit here. I hate all the Barra badmouthing and bashing. Although the value of the GM enterprise has been flat due to insane investor perceptions about Tesla and yuppie hero Elon Musk. Musk has done some wildly successful things to his credit. However, the Tesla car is a fairly straightforward electric vehicle and the value of Tesla will come back down to earth. The Twitter drama will be entertaining to watch. I like Musk. It’s an ongoing show with him that Hollywood screenwriters on steroids could not conjure up.
We are all watching from the peanut gallery how this EV thing will play out, with all the ongoing drama the likes we have never seen before on various fronts: Brandon, all his executive orders, and his administration, European War, Insane inflation, energy events, bio and cyber warfare, crazy bit coin, China strength, Supreme Court, ransomeware, deteriorating race relations, a Federal Reserve that has made miscalls, and a deteriorating American education system, and then we put California into the mix. The perfect storm seems to be brewing.
God help us.
Mary has got to go. She didn’t save anything. In fact let’s hope she doesn’t drive GM to its next bankruptcy.
The stock price is less that the ipo twelve years later.
Sell the Ren Cen. There is plenty of unused office space in the remaining assembly plants where the remaining jobs can go
I worked for Sears for 33 years. We had the Sears Tower in Chicago. Couldn’t fill it even with offering space for other tenants. Sears built a new smaller headquarter in Hoffman Estates in 1995 and left the tower. Now Sears’ Hoffman Estate headquarters appears to be vacant according to a Google Earth photo. Seems such a waste but maybe I’m missing something.
We will really miss the synergy of people actually really, truly, working together shortly. I know that this lack of interest in the actual workplace will have a bad effect on the finished product or lack thereof.
Bulldoze it and rebuild in a free red state!
gm has laid off a lot of people just like all the other companies. They don’t need a building like that anymore. Sad times.
Not to mention sending a lot of engineering and design functions to China and Mexico. This freed up a lot of empty space at the GM tech center as well.
Sorry to hear that. COVID was a bigger tragedy to some more than others. I lost a friend, but everyone in my family survived. I’m thankful for that. As far as real estate goes, I told my wife more than a year ago that would have bought a different house if we had known that having home offices was going to be so important. As far as real estate goes, I suspect that many people will need one or two home offices in the future. Otherwise your home, like these office towers, will be obsolete.
If the elevators can handle a full-sized car, move GM Heritage’s collection into the building and open it to the public. That should generate traffic to the building.
The inside of that outdated complex is smaller than you think. There is barely enough room for people let alone a car.
Sell it to Dan Gilbert for a gut rehab into residential condominiums.