Comerica Heads South

March 9, 2007
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DETROIT— After calling Detroit home for 158 years, Comerica Inc. announced Tuesday it was relocating its corporate headquarters to Dallas, leaving Michigan for the greener growth pastures of the Sunbelt.

Ralph W. Babb Jr., chairman and CEO, said the company intends to diversify its customer base and extend its reach into the faster growing southern markets of Texas, Arizona, California and Florida, where the growth of Comerica's business looks to be.

Babb noted that a significant percentage of Comerica's earnings are generated in those four markets, so the Dallas area is a more centralized location for the bank's headquarters and gives upper management greater access to those markets. According to the company, 50 percent of its loans, 45 percent of its deposits and 46 percent of its earnings were generated from those four states in 2006.

In its news release last week, the company highlighted the fact that U.S. Census Bureau projections show two-thirds of all Americans will live in the southern and western United States and 30 percent of them will live in three states: California, Florida and Texas

About 200 job positions relating to corporate functions will be moved to Dallas over the next three years, but the bank will still have 7,300 employees in Michigan serving its branch offices throughout the state.

MichaelShore, spokesman for the Michigan Economic Development Corp., said Comerica's announcement really took the organization by surprise. As its natural order of business, MEDC staff makes 3,000 to 5,000 business retention calls every year to businesses of all sizes.

"A lot of the expansions we announce are a result of those visits," Shore said. "But there's not a whole lot you can do if a company is not forthcoming and not willing to reveal that they are, in fact, considering a move. A company that's been here since the 1800s, you don't figure it's going to pick up and move. Clearly, they decided that their future was not necessarily going to be built in Michigan."

Babb said the "vibrant and diversified" economies of Dallas, Houston and Austin — where Comerica has a collective 71 banking centers — will be helpful to Comerica as it seeks to continue attracting and retaining talented employees.

Had it become difficult to attract and retain talent to the Southwest Michigan region or Michigan in general?

Company spokeswoman Sara Snyder said Comerica uses headhunters, referrals and networking to recruit experienced people. Nationally, the company has 308 positions open, and that number stays fairly static, she said.

"There have been recruiting challenges, but I don't think Comerica is alone in that," she said. "If you talk to colleges and headhunters, I don't think we're alone."

Though 200 Comerica jobs will go south, Jim Marosi, manager and vice president of investments at AG Edwards'

Monroe Avenue
office, believes it's important to remember that the vast majority of Comerica employees in Michigan will maintain their jobs. His best guess is that Michigan's economy played a role in the company's decision to move its headquarters to Dallas

"I don't think there's any mystery to the fact that the southern and western parts of the country economically are in a little bit better shape than we are," Marosi said. "More than anything else, I think they're positioning themselves to benefit from that."

Paul Drueke, senior vice president and manager of the local Stifel, Nicolaus & Co. branch, said it's obvious that Comerica is just moving to where the growth is because they don't think the growth is going to be here in Michigan

Michigan is under a dark cloud," Drueke said. "It has to do with Michigan's economy and what Comerica expects over the next five to 10 years. They're probably going to be making more deals down in that area, so that could spur some growth. They still have to go about the banking business like they always have, but it's just not going to be in Michigan as much as it is down there."

Comerica expects the transition will be completed by the end of the third quarter and estimates the move will cost $15 million to $20 million over three years. Comerica received a $3.5 million grant from the Texas Enterprise Fund for its relocation efforts, as well as economic development grants from the city of Dallas and tax abatements.

Even though corporate decision-making will now be done in Dallas rather than Detroit, Babb said Michigan and the city of Detroit remain key markets for Comerica. Comerica's current headquarters on the 31st floor at OneDetroitCenter will be Comerica's Michigan Market headquarters.    

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