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The Honolulu Advertiser
Posted on: Sunday, June 14, 2009

Detroit suburb will embrace Fiat execs


By Serena Saitto
Bloomberg News Service

BIRMINGHAM, Mich. — Some people in Birmingham, Mich., can't wait for the Italians to take over Chrysler LLC.

Karen Daskas, owner of a women's fashion shop called Tender, carries Chrissie Morris high-heeled sandals — original price $1,595, now $795.50 — that she said might appeal to Italian expatriates from Fiat SpA. A few doors away, jeweler Gary Astreins said "new blood" should bring new jobs to an ailing economy. Next year, students at a local public high school may study Italian as well as the current French, Spanish, German and Chinese.

"I'm preparing to work for the relocation of Fiat's executives," said Carolyn Bowen-Keating of Weir Manuel Realtors. "I'm organizing a presentation of our services at the Italian consulate in Detroit."

Bowen-Keating, 57, is trying to win business from the expected arrival of executives from Turin-based Fiat, which would control Chrysler following court approval of a sale. Chrysler is based in another Detroit suburb, Auburn Hills.

Should the acquisition go as planned, 100 to 200 executives may relocate to Michigan within 18 months, according to Gerald C. Meyers, a University of Michigan's business professor and a former chairman of American Motors Corp.

Chances are those managers will live in or near Birmingham, population 20,000, if the housing choices of other car industry executives are any guide.

'GREEN AND BEAUTIFUL'

During his almost two-year tenure as Chrysler's chief executive officer, Robert Nardelli used to stay in Birmingham at the Townsend Hotel. Rick Wagoner, General Motors Corp.'s former CEO, lives in the city. His successor, Fritz Henderson, lives a mile away in Bloomfield Hills. Dieter Zetsche lived nearby when he ran the U.S. operations of DaimlerChrysler.

Birmingham is in Oakland County, where much of Detroit's middle class moved after the city's riots of 1967, said Robin Boyle, a professor of urban planning at Wayne State University in Detroit. Birmingham's downtown is about 10 miles northwest of Detroit, and is within 20 miles of the headquarters of GM, Ford Motor Co. and Chrysler.

"The place is very green and beautiful and conveniently located for those working in the auto sector," said Stefano Aversa, the Florentine co-president of restructuring firm AlixPartners LLP, who has lived in Turin and Birmingham. "The reputation of Detroit and its surroundings is much worse than it deserves."

COSMOPOLITAN AURA

Michigan has experience with European car executives moving in. Renault SA of France bought American Motors in the late 1970s, for example, and Germany's Volkswagen AG had its U.S. headquarters in Auburn Hills before relocating last year to Virginia.

Most recently, German carmaker Daimler bought Chrysler in 1998 for $36 billion. The combined company lasted until August 2007.

The Detroit area already has a global flavor, said Richard Florida, director of the Martin Prosperity Institute at University of Toronto. He said an Italian influx would only make it more cosmopolitan.

"Despite the trauma of the Big Three's crisis, Detroit remains the most international auto city in the world," Florida said. "It is a small-scale global auto economy."

As the recession pushed Chrysler and GM toward bankruptcy, the state's unemployment rate reached 12.9 percent in April — the highest in the U.S.

BRAND RENAISSANCE

While the DaimlerChrysler deal didn't work out for shareholders, it helped the Detroit area in other ways, according to Boyle, the Wayne State professor.

"The venture had a positive social impact thanks to the many Germans that moved here," said Boyle, who has lived in Birmingham for 17 years and chairs the city's planning board. "If Fiat will be able to do what Daimler couldn't, the benefits for the U.S. auto industry and the local economy will be huge."

Fiat's deal with Chrysler "brought positive attention to the brand and increased Americans' awareness of the fact that Fiat is also Maserati and Ferrari," said Nate Wonboy, 40, a Maserati dealership manager in nearby Troy.

"Personally, I'm very excited at the idea that soon we might have a local Alfa Romeo dealership," Boyle said. Fiat also makes Alfa-Romeos. Only the most expensive model, the limited-edition Alfa 8C Competizione, listed at $289,515, is currently available in the U.S.

WARMING UP TO AREA

"I'd love to have Italians as my clients," said Daskas, the fashion shop owner. She specializes in high-end brands such as Miu Miu and Valentino, and pointed out Chrissie Morris sandals made in pink stingray and green python leathers with black suede trim.

Even if Fiat managers go for Daskas' footwear, there's still the question of how much they'll like the rest of the Detroit area. Turin, host city of the 2006 Winter Olympics, is an hour's drive from the Alps. It's in Italy's Piedmont region, famous for truffles and wines.

Aversa said that while Italians may find the Michigan winters harsh and the cultural life wanting, the place does have its advantages.

"The school system is first class and people are very friendly," said Aversa, 48, the AlixPartners co-president, whose two teenage children attended the private Detroit Country Day School. Wagoner sent his children there. Microsoft Corp. CEO Steve Ballmer is an alumnus.

Another big plus is home prices. In Birmingham, $1 million buys a 5,000-square-foot house with a yard. In Turin's city center, where a Fiat manager is likely to live, $1 million would get a 2,000-square-foot apartment, according to Pirelli Real Estate SpA in Italy.