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