Ford Buys Historic Train Station in Detroit for Redevelopment

By Christina Rogers 

Ford Motor Co. has purchased a long-abandoned train station in Detroit and is planning to redevelop it as a technology hub for electric and autonomous cars.

The 18-story beaux-arts building has for decades stood as a towering symbol of blight in the city, with busted out windows, graffiti-covered walls and razor wire fencing circling the perimeter. Completed in 1913, the historic Michigan Central Station building once served as a rail hub for Detroit before ceasing operations in the late 1980s.

The Dearborn, Mich., car maker isn't disclosing the purchase price or the cost of the project, which also includes acquiring other land nearby and creating a downtown campus that would span 1.2 million square feet when it opens in 2022.

Located less than 10 miles from Ford's suburban headquarters, the new campus will provide office space for about 2,500 Ford employees. It will also include mixed-use space for retail, residential housing and offices for other employers.

The move comes as Chief Executive Jim Hackett is working to implement a corporate "fitness" plan that aims to slash $25.5 billion in cumulative costs over the next four years and help Ford catch up with its two Detroit rivals on profitability.

Ford, once the healthiest of the Detroit car makers, is forecasting earnings will fall for a third straight year in 2018, and its stock, closing at $11.99 a share on Monday, has lagged behind the broader market since Mr. Hackett took over in May 2017.

Ford says the redevelopment costs won't add any incremental spending because the money was already budgeted as part of a previous plan to overhaul its main suburban campus.

Longtime Chairman Bill Ford Jr. is spearheading the campus project, saying he hopes it will serve as a catalyst for other high-tech startups and businesses to locate in the Motor City.

Ford is hoping the creation of a downtown campus will help it recruit younger, tech-savvy workers from Silicon Valley and elsewhere as it aims to transform itself from an old-line manufacturer to a seller of high-tech transportation services.

"Even as we're cutting costs and getting ourselves fit, we also know we have to invest in the future," Mr. Ford said during an event at the train station.

The company has already acquired other nearby properties in downtown, including a former pantyhose factory that it has turned into office for employees working on driverless and electric cars.

This isn't the first time Ford has tried to spur development downtown. In the 1970s, Henry Ford II -- the founder's grandson -- led the construction of the Renaissance Center, a collection of office towers that sit on the Detroit River waterfront. General Motors purchased the complex from Ford in the mid-1990s and made it its world headquarters.

Write to Christina Rogers at [e-mail]

(END) Dow Jones Newswires

June 19, 2018 15:00 ET (19:00 GMT)

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