By Jeff Bennett And Cameron McWhirter
Mercedes-Benz USA will move its headquarters to the Atlanta area
from New Jersey starting in July in an effort to move executives
closer to its U.S. auto assembly plant.
The company said it plans to construct a new building that would
be completed in early 2017. Employees will begin relocating to the
Atlanta area in July and work from a temporary location until the
new headquarters is completed, it said.
Mercedes-Benz and Georgia state officials declined to provide
details on how much the luxury auto maker would receive in tax
incentives to make the move.
The location of its new headquarters will be Sandy Springs, a
northern suburb of Atlanta, according to people briefed on the
matter.
Officials with New Jersey's Economic Development Authority and
Gov. Chris Christie's office didn't respond to requests for
comment.
Mercedes-Benz's decision to move as many as 1,000 jobs from the
state is "another body blow for new jersey's labor markets," said
Joseph Seneca, a Rutgers University economist. The company said
several operational areas would remain in Montvale and
Robbinsville, N.J.
New Jersey has retooled its incentives policy in the last year,
giving companies outside of urban areas readier access to tax
breaks. But the state's recovery from the downturn has proven slow
and uneven.
"It became apparent that to achieve the sustained, profitable
growth and efficiencies we require for the decades ahead, our
headquarters would have to be located elsewhere," said MBUSA Chief
Executive Stephen Cannon. "That brought us to Atlanta."
The decision will end a more than 40-year connection to New
Jersey. Mercedes-Benz USA is a U.S. arm of Germany's Daimler
AG.
In the last month, local billboards pleaded "Bergen County
Mercedes-Benz #Please stay."
John Boyd, principal of the Boyd Company Inc., a Princeton,
N.J.-based site selection consultant, said that New Jersey has the
country's most appealing incentives policy in his assessment, but
it was outweighed in this case by the cost-savings and convenience
of moving to the U.S. South. He said that the move would reduce
Mercedes-Benz's costs, including rent, energy and property taxes by
about 20%.
Mr. Boyd said companies are showing an increasing willingness to
relocate their corporate headquarters as well as manufacturing and
back office facilities. For Mercedes-Benz USA, the move to an urban
center could help give the car maker a more appealing image to
young consumers, he said.
The move puts the luxury car maker's U.S. headquarters much
closer to its growing Tuscaloosa, Ala., assembly plant, which has
been expanding and is expected to reach an annual output of 300,000
vehicles by 2016.
The move would put company executives close to other major
corporate headquarters in Atlanta, including Coca-Cola Co., Delta
Air Lines Inc., United Parcel Service Inc. and Home Depot Inc. Its
executives will have quick access to Hartsfield-Jackson Atlanta
International Airport, the world's busiest airport in terms of
passengers.
Porsche Cars North America Inc. has had its headquarters in
Sandy Springs since 1998 but plans to move this month to a new
headquarters closer to the Atlanta airport, according to a
spokesman.
Mercedes-Benz USA had considered a move once before but backed
away from the idea. In 1998, the company agreed to relocate its
Montvale corporate headquarters to nearby Pearl River, N.Y. The
move was later dropped over rising costs.
The move reflects an ongoing shift of U.S. auto industry
operations and corporate headquarters to the South. Companies are
attracted by low union membership in right-to-work states, low
corporate taxes, state and local incentives to relocate and easy
access to relatively well-maintained highways, rail lines, ports
and airports.
South Korea's Kia Motors Corp. opened a plant near Columbus,
Ga., in 2010. A year later Volkswagen AG opened a plant in
Chattanooga, Tenn. Other operations include BMW AG's plant in South
Carolina and Hyundai Motor Co.'s plant in Alabama. The Georgia
Ports Authority's port at Brunswick, Ga., is one of the nation's
leading importers of new automobiles.
Last April, Toyota Motor Corp. said it would relocate the
majority of its U.S. operations to a new campus in Plano,
Texas.
Over the next three years, Toyota will move its manufacturing,
sales and corporate headquarters to Plano from different sites
throughout the U.S. The bulk of the people will come from the
corporate headquarters now located in Torrance, Calif.
Commercial real-estate firm JLL Inc., which helped Toyota in its
site selection, is assisting with Mercedes-Benz USA's relocation.
The firm had no comment on the search process.
General Motors Co.'s Cadillac brand announced plans in September
to open its own headquarters in New York next year, breaking away
from the auto maker's home in Detroit. The office will be located
in Manhattan and likely will open in the second quarter employing
about 120 people.
Laura Kusisto contributed to this article.
Write to Jeff Bennett at jeff.bennett@wsj.com
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