Photo by CoStar Group Inc.
Mayor Mike Duggan is expected to announce Nov. 22 that Adient Ltd. is moving into the downtown Detroit building owned by a Mexican billionaire.
The relocation for the auto seat maker, newly spun off from former parent company Johnson Controls Inc., adds a major corporate player to a downtown that has lured other big companies in recent years, notably that of Dan Gilbert’s Quicken Loans Inc. and Blue Cross Blue Shield of Michigan moving thousands of employees from Southfield.
Duggan’s office said Monday afternoon in a media advisory that he is expected on Nov. 22 to make an announcement about a Fortune 200 company making “a significant investment in the City of Detroit that will bring hundreds of jobs downtown.”
Sources said that company is Adient, and that it is expected to move about 500 employees into the Marquette Building at 243 W. Congress St. Adient is first Fortune 500 company to relocate its headquarters to Southeast Michigan since BorgWarner Inc. moved to Auburn Hills in 2004.
The announcement is scheduled to take place in Cobo Center, which is directly across the street from the Marquette Building, which telecommunications mogul Carlos Slim Helu purchased at the end of 2014 for $5.8 million.
The building is 164,000 square feet and vacant above the first floor, where there is currently a coffee shop.
Adient declined to confirm whether it is moving to the city.
Adient, the world’s largest automotive seating supplier, was weighing space in the city and Southfield.
The building would become Adient’s operational headquarters with roughly 500 employees, including 100 new hires in legal, accounting, audit and treasury. The majority of the company’s C-suite, including Chairman and CEO Bruce McDonald will also call the building home.
Adient, tax domiciled in Dublin, Ireland, spun off from Milwaukee-based Johnson Controls into a new public company on Oct. 31. JCI’s automotive seating business has been based in Milwaukee since 1985.
The supplier follows competitor Lear Corp., which opened its Detroit Innovation Center in the city’s Capitol Park last month. The Center, at 119 State St., is an open-office environment for Lear’s various business units to work independently of the day-to-day operations of Lear’s headquarters in Southfield.
Lear made the move to become part of the city’s resurgence and to recruit and attract talent intrigued by the thought of working, and potentially living, in the city of Detroit.
As part of its expansion in the region, Adient is also renovating its Plymouth offices on Halyard and Sheldon roads, which house about 1,000 employees, McDonald told Crain’s in a previous interview.
The company is projecting revenue of $16.8 billion to $17 billion for the fiscal year, which started Oct. 1, and adjusted net income of $850 million to $900 million. By domiciling in Ireland, Adient is expected to save millions in taxes with an effective tax rate of 10 percent to 12 percent.
McDonald said spinning off from JCI frees up Adient to reinvest in its seating business and interiors joint ventures, which had lower margins than JCI’s building HVAC and automotive battery units.
“Thee other businesses were higher margin businesses, so it made sense to take a dollar of capital out of automotive and put into those other two businesses,” McDonald said. “(Historically), the growth engine for JCI was the auto business. The company only constrained it in the last few years. We took the oxygen away. The board of directors and leadership team recognized. … JCI was no longer the best owner of that business.”