By Jeff Bennett, Laura Kusisto and Cameron McWhirter
Daimler AG is moving down south, uprooting Mercedes-Benz USA's
headquarters from its longtime perch in New Jersey with plans to
relocate it to an Atlanta suburb.
Wooed by lower costs, proximity to a Mercedes-Benz factory and
government incentives, the German luxury car maker in July will
begin moving about 1,000 U.S. personnel to a temporary facility and
later move to Sandy Springs, Ga.
The operation, which includes staff working on the Sprinter van
business and the Smart mini car lineup, will permanently move into
a new building erected on a 10-acre site in the same city.
Daimler executives turned down a significant inventive package
from New Jersey to keep its U.S. headquarters in Montvale, where it
had been running operations since 1972. Now the second-largest
luxury car brand in the U.S. behind BMW AG, Mercedes is joining
several other auto makers to have moved operations and corporate
headquarters to the South to take advantage of low union membership
in right-to-work states, low corporate taxes and easy access to
well-maintained highways, rail lines, ports and airports.
"We think the infrastructure in the States has changed," Daimler
Chief Executive Dieter Zetsche said in an interview on Tuesday.
"The South is much more relevant than it used to be. We think it's
like a new start, a rejuvenation of our company to make that
move."
A small group of employees will continue working in New Jersey,
the company said.
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 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 real estate, energy and property taxes, by about
20%.
Daimler and Georgia state officials declined to provide details
on how much the luxury auto maker would receive in tax incentives
to make the move. Mercedes has a plant in Alabama, which builds
about half the vehicles sold by the German auto maker in the U.S.
and is expected to reach an annual output of 300,000 vehicles by
2016.
Last April, Toyota Motor Corp. said it would relocate the
majority of its U.S. operations to a new campus in Plano,
Texas.
Commercial real-estate firm JLL Inc., which helped Toyota in its
site selection, is assisting with Mercedes-Benz's relocation.
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's plant in South
Carolina and Hyundai Motor Co.'s plant in Alabama. The Georgia port
in Brunswick is one of the nation's leading importers of new
automobiles.
Outside of the auto industry, Mercedes-Benz joins corporations
based in Atlanta, including Coca-Cola Co., Delta Air Lines Inc.,
United Parcel Service Inc. and Home Depot Inc.
The move would be a welcome boost to the metro Atlanta area,
which has struggled since the recession and still has an
unemployment rate above the national average.
Officials with New Jersey's Economic Development Authority
didn't respond to requests for comment. New Jersey was in the
running until the end, according to a person briefed on the matter.
Other sites included Tampa, Florida; Charlotte, N.C.; Dallas and
Plano, Texas.
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 more ready access to tax
breaks. But the state's recovery from the downturn has proven slow
and uneven.
Recently billboards pleaded "Bergen County (hearts)
Mercedes-Benz #Please stay."
Mr. Boyd said that companies are showing an increasing
willingness to relocate their corporate headquarters as well as
manufacturing and back office facilities. For Mercedes, the move to
an urban center could help give the car maker a more appealing
image to young consumers, he said.
"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
Mercedes-Benz USA Chief Executive Stephen Cannon. "That brought us
to Atlanta."
Mr. Zetsche also pointed to the easier access to the
Hartsfield-Jackson Atlanta International Airport which is the
world's busiest airport in terms of passengers.
Christina Rogers contributed to this article.
Write to Jeff Bennett at jeff.bennett@wsj.com
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