American Axle hopes demolition of Detroit complex will spark interest in property
Editor's note: An earlier version of this story did not accurately describe American Axle founder Richard E. Dauch's status with the company. Last year, he was appointed executive chairman of the company and signed a three-year employment contract. He did not retire, according to American Axle spokesman Chris Son.
DETROIT -- American Axle & Manufacturing's historic Detroit Manufacturing Complex is set for demolition as the supplier pushes forward with a new plan to unload the shuttered property.
The supplier announced last week that it would demolish 1.9 million square feet of the complex just off Interstate 75 just a few miles north of downtown Detroit.
The company hopes the move will spark interest in the property, which has been idle since February, after the last 300 positions at the site were terminated.
American Axle spokesman Chris Son said the company is in talks with potential buyers and that the property is ideally suited for a logistics firm.
"We have some discussions with potential buyers and they feel that by doing the demolition, the transition of the property gives a buyer the things that they need," Son said.
The things a logistics company needs includes close access to I-75 and the rail line that runs through the property, Son said. He declined to reveal the interested parties or the cost of demolition.
About 540,000 square feet of manufacturing space, or two plants, will remain of the seven-plant complex, the company said. Plant 6 and Plant 3 will remain, Son said, with American Axle maintaining Plant 3 as a storage facility.
Plant 6 is currently being leased to a small logistics firm for the sequencing and assembly of parts for a Detroit automaker, Son said.
American Axle nearly leased 300,000 square feet of floor space in 2011 to Detroit Manufacturing Systems, a then-new joint venture between Rush Group and French supplier Faurecia.
But Rush CEO Andra Rush ended talks with American Axle over the space because the $2 million investment and time to retrofit the plant was too steep.
DMS ended up leasing space at the Gateway Industrial Center in Detroit near I-96 and Southfield Freeway.
The inability to lease space at the complex also killed American Axle's hopes of securing an extension to its renaissance zone tax exemption for its world headquarters.
Detroit City Council members were skeptical of extending the renaissance zone due to American Axle's laying off of more than 1,000 workers at its Detroit manufacturing complex since 2008, after the council extended abatements that had saved the company as much as $534,000 annually over the past decade.
General Motors originally built on the lot where the complex sits back in 1917. American Axle took control of the space in 1994 after Richard E. Dauch co-founded the supplier in 1993 as part of an investment group that acquired five GM plants in Michigan and New York.
The Detroit Manufacturing Complex has been contentious since American Axle acquired the space. Dauch famously battled alcohol and drugs in the workplace in the mid-1990s by buying and bulldozing a dozen bars, drug houses and party stores around the complex.
The Detroit complex borders Hamtramck and once housed eight factories. As recently as 2007 it employed about 2,200 workers.
But the operations suffered irreparable harm in 2008 when 3,650 UAW members staged a bitter strike at five American Axle plants, including the Detroit Manufacturing Complex. The strike halted or disrupted output at 30 factories of American Axle's dominant customer, General Motors.
Management took a hardline stance against the UAW and shuttered plants after it couldn't reach a competitive agreement, including the 2012 closing of its Cheektowaga, N.Y., plant, its last remaining plant in a state that once housed several plants and employed 2,800 in 2000.
It closed the heralded Detroit complex in February 2012 after failing to reach an agreement with the plant's remaining 300 UAW workers. Axle wanted to reduce total compensation, including benefits, to $30 an hour from $45 an hour.
"We don't have any entitlements to the business we have today, therefore they can't have any entitlements, either," said David C. Dauch, CEO and successor to his father who was appointed executive chairman last year, told Crain's Detroit Business, an affiliate of Automotive News, last September. "Those facilities that weren't willing to be market competitive, they were closed."
American Axle was able to reach a competitive deal with the UAW at its Three Rivers plant, where much of the Detroit work had been transferred.
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