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May 12, 2021

If GM does move, where will it go?

By Jason Buckland, Sympatico / MSN Finance

On the list of “bonehead decisions made with zero foresight,” the $625 million General Motors purchase of a downtown, glass-towered headquarter building in Detroit last year might rank somewhere between April’s Air Force One photo op and Al Pacino choosing to star in movies after 1999.

Not only does the timing of the buy seem a little, uh, poor looking back, but it comes across as that much worse for the auto maker following CEO Fritz Henderson’s claim that GM is actually open to moving its headquarters out of the Motor City.

Now, you can take his refusal to ensure his company will remain in Detroit as a cautious PR move, but there’s at least an intriguing case being made that GM could actually bolt from its Michigan home.

For one thing – like its good friend Chrysler – GM will almost certainly file for bankruptcy soon, likely in the next two weeks.

On top of the $15.4 billion in bailout cash it got from the U.S. feds, the company has said it will also need another $2.6 billion in May and $9 billion more for the remainder of the year.

Henderson wisely downplayed any sentiment that GM has already discussed moving internally (it’s called Detroit home since 1996), but a major flaw in his rebuilding strategy is what appears to be fuelling speculation the auto maker could leave.

GM says, in order to make the company’s profits more viable, it would like to increase vehicle imports from its plants in Mexico and Korea because it’s more cost-effective.

Well, yeah, but that comes to the obvious chagrin of the auto workers’ unions, which rightfully point out such a move would completely contradict the “job-saving intent of the U.S. government’s support for the automaker,” according to CNBC. This would be like taking 20 bucks from your grandma to mow her lawn, then making your wide-eyed little brother do it for five and pocketing the difference while you play Pac-Man or something. Not exactly the way the deal was supposed to work.

So, as a result of GM’s shaky future, a game of “Where to?” has popped up already.

Peter Cohan of thinks GM could ship its headquarters off to Brazil or China, but even mentions Canada as a dark horse candidate.

While we hope the auto maker doesn’t have to pick up its roots (at least, my lord, for the sake of the poor, good people of Detroit), it is amazing that I’m even writing an article like this in 2009.

Would a rumour that GM might flee Michigan - the home of the automobile - be able to gain even a scrap of momentum five, even two years ago? Isn’t General Motors about as American as something can get? Crazy how things change.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...