GM nixes plan to move jobs out of Detroit

General Motors has shelved plans to move hundreds of workers from its downtown Detroit headquarters and will keep about 5,000 people at its current offices, the automaker announced Friday.

“It came down purely to a business decision. The move was going to cost tens of millions of dollars and the decision was made that right now the best thing to do was spend that money on product and on efforts to support our dealers and reach customers,” said GM spokesman Tom Wilkinson.

Employees were told in an e-mail Friday, he said.

George Jackson, president of the Detroit Economic Growth Corp., said Detroit Mayor Dave Bing met with GM Chairman and CEO Ed Whitacre during the recent North American International Auto Show and “they hit it off very, very well.”

“Today’s decision by GM is great news for the City of Detroit,” Bing said in a statement today. “Retaining jobs is a top priority of my administration, and I appreciate their commitment to the city.”

GM’s decision to keep employees at the Renaissance Center in downtown Detroit was seen as a vote of confidence in Bing’s leadership.

“Mayor Bing deserves kudos in this. His persistence and involvement in reaching out to GM was instrumental,” Jackson said.

The City of Detroit through its Downtown Development Authority has tentatively agreed to provide $21 million over seven years in incentives to attract non-GM businesses to the Renaissance Center, Jackson said.

Michigan Gov. Jennifer Granholm and the Michigan Economic Development Corp. also have agreed to new incentives to make the agreement possible.

The decision to stay was first reported on the Web site of the Detroit Free Press on Friday morning. “The big move is off,” a person familiar with GM’s plans told the Free Press.

Late last year, GM received state tax credits that would have allowed it to keep just 2,000 of the 4,000 workers it had at the Renaissance Center.

Wilkinson said GM will have about 5,000 people at the Renaissance Center. The number is larger than the previously stated 4,000 number because it includes workers such as consultants, he said.

“We’ve got a lot of indirect people … that actually work in GM offices,” Wilkinson said.

The workers were expected to leave for facilities in Warren, Mich., and elsewhere as part of GM’s efforts to consolidate its white-collar work force.

In November, then-CEO Fritz Henderson said GM would consolidate about 10 southeast Michigan offices into the Renaissance Center, Warren Technical Center, Milford Proving Ground and Pontiac powertrain facilities.

Shortly after Henderson made those comments during a Free Press interview, he resigned.

Whitacre has since taken over as the permanent CEO and has put in place a new leadership team.

(c) 2010, Detroit Free Press. Distributed by McClatchy-Tribune Information Services.