Canadian Manufacturing

Mercedes moving U.S. HQ, 1,000 workers from N.J. to Atlanta

With move, Mercedes becomes latest multinational firm to jettison from New Jersey thanks to tax breaks in U.S. South

ATLANTA—Daimler AG unit Mercedes-Benz said it’s moving its United States headquarters from New Jersey to Atlanta, in part to be closer to its manufacturing facility in Alabama.

Georgia Gov. Nathan Deal said the state offered an incentive package but said he couldn’t discuss the details yet.

The Fulton County Development Authority met briefly Jan. 6 to discuss its own incentive package for Mercedes’ estimated US$93-million facility but provided no details.

The decision comes after weeks of lobbying—some of it public—by New Jersey officials who sought to keep the company in Montvale, about 40 kilometres north of Newark, N.J., at a campus that’s about a five-minute drive from BMW AG’s North American headquarters.

About 1,000 jobs are to be moved starting in July.

The company said it will move first to a temporary facility in Atlanta before moving into a new space in about two years.

Deal and Georgia economic development officials would not discuss the location Mercedes is pursuing in metro Atlanta.

Mercedes said it would announce more details later this month.

Mercedes-Benz USA, LLC Ppesident and CEO Stephen Cannon said in a statement that the company will benefit by being closer to its growing base of customers in the U.S. Southeast as well as its port in Brunswick, Ga., and its manufacturing facility in Alabama.

Cannon praised New Jersey and the company said some operations will remain in Montvale and Robbinsville, near Trenton, N.J.

“The state has worked tirelessly with us as we evaluated our options,” he said in a statement. “Ultimately, though, 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.”

He also said the quality of life, schools and cultural options in Atlanta were reasons to move there.

Other recent Georgia projects in the automotive industry include the construction of a new U.S. headquarters for Porsche AG near Hartsfield-Jackson Airport and Kia Motors Corp.’s first U.S. manufacturing facility about 120 kilometres southwest of Atlanta.

Executives have cited access to the world’s busiest airport for employee travel and to the state’s ports for shipping.

Georgia’s Deal credited the state’s access to that infrastructure and an insistence on co-operation between economic development, utility and education officials for the results.

Deal said the most memorable portion of the state’s pursuit was being told that the automaker was seriously considering Georgia for its U.S. headquarters.

Deal said Mercedes approached Georgia officials several months ago.

“The prestige associated with that name is exciting to me,” Deal said.

Some New Jersey officials, including Gov. Chris Christie, say the state’s high taxes are a major factor for businesses and wealthy individuals moving away.

The state has been trying to counteract that with its new system of incentives.

In 2014, it promised more than US$2 billion in future tax breaks to companies moving to or remaining in the state.

That’s more than it promised from 1996 through 2009 combined.

New Jersey could have offered Mercedes as much as US$15 million to stay just from one incentive aimed at car companies’ U.S. headquarters.

Under New Jersey’s incentives last year, Subaru of America, Inc. agreed to stay in New Jersey, and the Philadelphia 76ers announced plans to move their offices and practice facility to Camden, N.J., while continuing to play in Philadelphia, a short drive away.

Subaru was asking the state for US$118 million in tax breaks to move to Camden, less than seven kilometres from its current home in Cherry Hill, N.J.

But the state has lost some major businesses to the South: Car rental giant The Hertz Corp. is moving to Estero, Fla., with the help of US$85 million in tax breaks, and bubble wrap maker Sealed Air Corp. is moving to Charlotte, N.C., with the aid of US$35 million in breaks.

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