Commentary: More companies betting on Detroit
There’s an old Russian saying that, even, if you covered the world with asphalt, eventually a crack would form.
And in that crack, grass would grow. I was reminded of that yesterday by an Italian businessman my age, a man who is betting on green shoots coming through a town caked with many layers of asphalt. His name is Sergio Marchionne, and he is the CEO of a company called Fiat. Three years ago, he did something many at the time thought stupid. He took over a dying bankrupt company.
It was a company with lousy product, plummeting sales, little vision and what looked like no future. You may have heard of it.
It was, and is, called Chrysler. Now it has some exciting cars and more on the way. It is making money again -- hundreds of millions -- and has found new life as a mostly-owned subsidiary of Fiat.
Fiat itself was once a joke. When it was importing cars into the U.S. back in the 1970s and '80s, the quality was so bad that people said the company‘s name was an acronym for “Fix It Again, Tony.” Well, they‘ve done a lot to improve that too.
Ask any of the thousands of Americans who have bought the zippy new Fiat 500. And now Marchionne is making another bet that seems risky, and maybe even a little bit crazy. He’s betting on real estate in the city of Detroit. The near-bankrupt, dysfunctional,City of Detroit. Last year, Chrysler quietly acquired space in an old skyscraper called the Dime Building, on Griswold at Fort Street.
They’ve been renovating it, and yesterday Marchionne made a stunning announcement. They are renaming the building Chrysler House, and this summer, the corporation will move about seventy people into the top two floors of the building. Marchionne, who is CEO of both Fiat and Chrysler, will himself have an office there.
Significantly, at his side during the announcement was Dan Gilbert, the Quicken Loans and former Rock Financial czar, who has moved his own operations downtown and has been voraciously buying up property -- nine buildings and four parking facilities -- since last year. One of those properties is the Dime Building. Obviously, Gilbert and Marchionne think they know something other people don‘t. They are betting on Detroit -- and they didn’t get to be fabulously rich and successful by making bad bets. I ran into a forerunner of theirs at a brunch on Sunday: Peter Karamanos, who 10 years ago, built a vast new headquarters for his Compuware company and moved thousands of employees from the suburbs into downtown.
Way back then, he told me the secret to success was knowing when to bet against a trend. When personal computers arrived, he decided to be the guy keeping corporate America’s old mainframes going as long as possible. That paid off for him. Detroit is still facing many challenges. Venture away from the revitalizing downtown and into its neighborhoods, and what you may see is beyond appalling.
Nobody has any idea if the city as presently structured will even survive. But new grass is definitely growing, and successful men from elsewhere are betting on a new future here. That is extremely good news, not just for Detroit, but for our entire state.