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Oakland unfazed by jobs migration

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Oakland unfazed by jobs migration

As Detroit sees gains, its neighbor still thrives

December 18, 2003

BY BILL LAITNER

FREE PRESS STAFF WRITER

First it was Compuware.

Then came EDS. Now, OnStar.

To the casual observer, it might seem that high-profile companies are streaming from Oakland County to Detroit, helping the big city at the expense of its suburbs.

Not so.

In Detroit, hammered by job losses for 50 years, these new high-tech employers are a cause for celebration, and the announcements of their moves make front-page news.

But in OaklandCounty, with some of the nation's leading job-producing communities,the losses barely register.

The 6,000 departing jobs make up less than 1 percent of the more than 700,000 jobs remaining in Oakland -- twice as many jobs as in Detroit.

Economists, leasing agents and county Executive L. Brooks Patterson say the losses barely affect Oakland's office vacancy rates or overall employment.

"Now our job is to backfill with new companies to replace those that left, and we're doing that," Patterson said.

The firms moving to Detroit don't seem dissatisfied with Oakland. Instead, experts say that recent demand for office space in downtown Detroit was driven by General Motors Corp., which lured major suppliers and subsidiaries to its Renaissance Center headquarters to improve communication among them.

Next year, the outlook is good for workers both north and south of 8 Mile: Oakland County is expectedto gain 10,100 jobs in 2004, while Wayne County -- including Detroit -- will get about 3,700 new jobs, say SEMCOG and University of Michigan analysts.

Already this year in Oakland, small firms are expanding their job rolls in sales, production and high-tech design.

Among them, Alcan Automotive soon will hire 40 employees for a new plant in Novi, designing and producing aluminum bumper beams for automakers. In October, the firm moved its existing 20-person sales and design force from Farmington Hills to Novi.

Oakland officials also cite BorgWarner Inc., an auto-powertrain giant already entrenched with 450 technical workers in Auburn Hills. Now, a site nearby has landed the company's 60-employee corporate headquarters, which will move from Chicago in 2005.

Even GM, increasingly rooted in downtown Detroit, has told Patterson "they'll have good news for us in the next few months," he said.

Besides the lure of being near GM, new employers in downtown Detroit are enjoying big incentives in cheap land and relocation aid as rewards for moving against the tide of job loss in Detroit.

That tide continues, however. Moving soon from downtown Detroit to Southfield is a major law firm -- Jaffe Raitt Heuer & Weiss -- which will shuffle at least 150 employees while keeping a small office in Detroit. Leaders on both sides of 8 Mile say they don't like competing for jobs within the region. Instead, they hope -- as the recession lifts -- that new jobs throughout metro Detroit come from outside Michigan.

"It shouldn't be a dog-eat-dog thing," said George Jackson, CEO of the Detroit Economic Growth Corp., which provides low-interest loans to spur development in Detroit. "We have good working relations with Oakland County."

Both his staff and Oakland County officials are members of several regional partnerships, whose meetings and job-hunting missions aim to bring jobs from anywhere, to anywhere in southeast Michigan, said Dan Hunter, Oakland County's manager of planning and economic development.

Until the mid-20th Century, Detroit had far more jobs than all of its suburbs combined. Even as late as 1960, Detroit had about 700,000 jobs -- 170,000 more than all of Wayne, Oakland and Macomb counties, according to "Detroit Divided," a 2000 book about race and economics in southeast Michigan.

Then, things changed fast in the 1960s. By the mid-'60s, the suburbs' jobs had caught up with those in Detroit after years of rapid suburban expansion. Now, Detroit has fewer than 1 in 5 of all the jobs in the tricounty area, according to a SEMCOG analysis done in 2002.

Oakland County by itself is the state's biggest private-sector job creator and has been for a decade, economists say. Recent job gains in Detroit have done little more than dent Oakland's job juggernaut, said University of Michigan senior research associate Don Grimes, an expert on job growth in southeast Michigan.

In Troy, for example, officials say lease negotiations already are under wayto sign big new office leases that would offset EDS having emptied half of its three office towers and OnStar's planned departure, said Doug Smith, the city's director of real estate and development.

Despite hundreds of job departures from Troy, the city's office vacancy rate has stayed at about 20 percent -- matching the rate in the rest of suburban Detroit, said Southfield-based leasing expert Steve Morris. Downtown Detroit's rate for office vacancies, however, is about 25 percent, Morris said.

For Alcan, the decision to expand from Farmington Hills to anew North American headquarters in Novi was about location.

The company, a subsidiary of a Montreal-based aluminum producer, will soon make bumper beams -- rigid parts that go under cars' soft bumper fascia.

Alcan picked Oakland County for its key expansion because the county -- not Detroit anymore -- is the epicenter of U.S. automaking. In Novi, Alcan customers can easily drive over to see "our showcase North American plant," Vice President Michael Kelly said.

More expansively, he added: "Oakland County's culture matched our aspirations."

Contact BILL LAITNER at 248-351-3297.

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