Stellantis wants to sell its Auburn Hills HQ and lease space in it

Stellantis wants to sell its Auburn Hills HQ and lease space in it

Ford Motor Company’s global headquarters is the Henry Ford II World Center — or Ford World Headquarters, or Glass House — located in Dearborn, Michigan and completed in 1956. GM’s global headquarters is 12 miles away in Detroit, Michigan, a set of seven connected towers completed between 1977 and 1981 and known as the Renaissance Center, or RenCen. Stellantis’ global HQ is in a small town in The Netherlands called Hoofddorp. But home base for its U.S. outpost is about 30 miles north of the RenCen at the Chrysler World Headquarters and Technology Center, or CTC, in Auburn Hills, MI. The Detroit News reports that Stellantis might use the CTC like a giant Airbnb, selling the building and leasing back only the space it needs.

This isn’t a new consideration, Stellantis has been looking at options for the 500-acre campus and 15-story, 5.4-million-square-foot main building since at least early 2022, when the Detroit Free Press wrote about it. At that time, one of Covid’s effects was to deepen the discussion about remote work as companies pushed to reopen offices and a fair number of employees made it clear they didn’t want to resume their commutes. A company spokesperson told Freep, “As part of our company’s evolution to a more flexible work environment, called the New Era of Agility, we are currently evaluating how we work to enable our teams to be their most innovative, creative and efficient. That analysis includes potential adjustments to our real estate portfolio.” As characterized by Freep based on information from an anonymous source, “The company is considering what the right ‘footprint’ will be going forward and whether it needs to maintain so much space.”

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Before the Freep piece ran, the automaker had already ceded one leased building near HQ and moved those workers into the main complex. And agility might still be necessary since it’s tough to tell where remote work trends are going to go. Fortune just reported that “Fewer than 26% of US households still have someone working remotely at least one day a week, a sharp decline from the early-2021 peak of 37%, according to the two latest Census Bureau Household Pulse Surveys. Only seven states plus Washington, DC, have a remote-work rate above 33%, the data shows, down from 31 states and DC mid-pandemic.” On the other hand, in February of this year, the same outlet ran a piece titled, “Office vacancy will increase by 55% by the end of the decade as hybrid and remote work push real estate to an ‘inflection point.’”

Stellantis’ Euro-centric base probably also contributes to the discussion; of the conglomerate’s 12 vehicle brands, only four are based in the U.S. And beyond the ‘right-sizing’ benefits of selling the complex and leasing space in it, the economic boon of a sale is estimated to be worth between $250 and $500 million.  

Mark Stewart, COO of Stellantis North America, said, “[Like] everyone in the hybrid working environment, and looking at our overall footprint across the region, and specifically in the U.S., we have a lot of the building here in Auburn Hills that we’re not utilizing today.” None of this means it will happen. There still doesn’t appear to be a timetable, and because a fair number of the thousands of workers at CTC are UAW members, Stellantis would need to work out terms with the UAW before a sale. Such potential terms were part of Stellantis’ fourth counteroffer to the UAW during contract negotiations as part of wider moves with respect to facilities. The Detroit News reported earlier this month, “Stellantis has sought the ability to close or sell 18 facilities, from its Auburn Hills headquarters, which it could lease back, to Mopar parts distribution centers across the country it wants to consolidate and make more efficient.” 

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