By on December 18, 2014

Mercedes-Montvale-hq-a

With Cadillac getting its inner hipster on in SoHo, and Subaru trekking four miles west to conduct its American hustle in Camden, N.J., Mercedes-Benz USA is feeling the urge to heed the song of the South and go with the wind.

Automotive News reports MBUSA is looking at relocating its 800 employees to either Georgia, Florida or North Carolina, leaving Montvale, N.J. after 42 years. Representatives for the company wouldn’t confirm or deny the plans, believing it to be nothing more than rumor and speculation.

The company is currently looking over tax incentive packages, with New Jersey working on its own package in the hope of keeping MBUSA’s headquarters in Montvale. JLL Inc., the commercial real estate firm that is helping Toyota move its U.S. headquarters to Texas from California, is also lending assistance to the company.

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51 Comments on “MBUSA Looking South For New Home...”


  • avatar
    Lie2me

    Probably Atlanta, an hour away from it’s Alabama plant

  • avatar
    CoreyDL

    I would expect Mercedes to have a more exclusive looking headquarters. That looks more suited to the remnants of Peugeot USA. And they could share it with a credit union company.

    Also, American Hustle is a ghastly movie which I sincerely hated. I can’t get those hours of my life back.

  • avatar
    dal20402

    Sounds like management at the US arm was sick of shoveling their driveways in the winter.

  • avatar
    Chocolatedeath

    As much as I would love for it to be in my place of birth Chocowinity NC (or some town DownEast) or my current and final home Jacksonville FL, it will be in GA.

  • avatar
    Fred

    With Christi running for president I’d squeeze him for all I could knowing he don’t want Perry bragging how he brought Toyota to Texas and Christi can’t do a deal.

  • avatar
    OldandSlow

    Except for Florida, the only city that Lufthansa flies to in the South Eastern US is Atlanta.

    http://www.lufthansa.com/online/portal/lh/us/local?nodeid=3322347

  • avatar
    Toad

    GM is moving it’s luxury car division to a higher cost location with no automotive industry full of people who don’t buy their product. MB is moving their headquarters to a lower cost location with a rapidly growing auto industry which is full of people who buy their product.

    Want to guess which management team I would bet my money on?

    • 0 avatar
      jmo

      “which is full of people who buy their product.”

      The per capita income in New Jersey is 50% higher than in Georgia or Florida. The number of millionaires per 1000 population is also 50% higher in NJ than in GA or FL.

      • 0 avatar
        Roader

        Income isn’t the only metric. Taxes and cost-of-living matter too. Disposable income, adjusted for cost of living, is $42K in NJ vs. $38K in FL and $37K in GA. Not a tremendous difference.

        Weather is probably a big factor. Given the choice, why would someone move to a place where the weather is every bit as terrible as where they came from?

      • 0 avatar
        Rod Panhard

        The other part of that JM0 that’s a problem is that property taxes are many multiples higher in New Jersey, New York and Connecticut than Alabama and Georgia. Plus, with state budgets consistently not being met, the conventional wisdom of Northeastern politicians is “Tax the rich.” They keep lowering the definition on “rich.”

        So it makes sense for Mercedes-Benz to go. They’ll be writing huge property tax checks on that property, and their employees will be writing huge checks for property taxes on theirs.

    • 0 avatar
      Maseraudi

      So why is the South so attractive to the Automotive industry? I bet it has to do with labour laws…

      • 0 avatar
        Lie2me

        Cheap labor, little UAW involvement

      • 0 avatar
        Pch101

        Land is cheap in the South and the tax incentives are generous. Building factories in the northeast doesn’t make much sense these days.

        MB’s US business has changed from being an importer with a need for proximity to northeastern ports and an airport with flights to Germany to an OEM with a US production business to manage.

        The auto industry is prone to what are called “network effects.” An OEM sets up a factory in the South, the suppliers follow the OEM, a second OEM follows those suppliers, which attracts more suppliers, which draws in another OEM, etc., etc. Once critical mass is established, it creates a snowball effect; there is a synergy created by having all of these related businesses located relatively close to each other because of JIT manufacturing.

        Labor costs are relevant to a point, but further down on the list. If worker wages were the most important issue, then they wouldn’t build in the US at all.

    • 0 avatar
      dal20402

      The NY metropolitan area is by far the largest market in the US for luxury cars.

      • 0 avatar
        Rod Panhard

        I’m not so sure about that. You should visit California. And even if New York Metro area is the largest market for luxury cars, it doesn’t matter, because it’s still a lot smaller than LA and SFO combined.

    • 0 avatar
      Chicago Dude

      Well, one management team thinks that a new headquarters will give them a competitive advantage by increasing brand value.

      The other management team thinks that a new headquarters will give them hundreds of millions of taxpayer dollars for free.

      They’re both probably right.

      • 0 avatar
        Toad

        PCH 101 is right; MB is following the new (or at least post 1980) paradigm for auto manufacturing and management. Not to mention that for the MB employees that elect to move to the new HQ the much lower housing costs and taxes will effectively give them a nice raise.

        Nissan made the first move (to Nashville), Toyota followed (to Austin), now Mercedes is heading south. GM, in their eternal wisdom, is moving Cadillac to Manhattan, the least car friendly city in the US. If your goal is to get your executives as out of touch as possible with the car buying public moving them to Manhattan is probably a perfect strategy.

  • avatar
    Volt 230

    Daimler, move down to So Fla, most of your customers live here anyway and if you believe all the morons that are all exited about the Castro/Obama love fest coming through, there will be thousands of car-starved Cubans wanting their Mercedes. ( No money and Germany does not have an embargo) so it’s back to no money!

  • avatar
    seth1065

    MB has been in NJ for over 40 years, this may be just a tax dollar incentive grab, they would lose a lot of talent if they moved south, metro NY is a very big market for them , and do not count out the appeal of going to New York City when the corp folks coming into US. And BMW headquarters are just down the block, do you want all of your employees who will not move to just cross the street to work for BMW???

    • 0 avatar
      Lie2me

      You do realize that a large percentage of Atlanta’s growth over the last 30 years has been from the NY/NJ area?

    • 0 avatar
      skor

      MB have been in Jersey for over 50 years. They originally set up in Fort Lee, and then moved to Montvale in 1972. The site of their current North American HQ was farm land up until MB bought it. The reason they are moving is because it’s impossible to live in New Jersey anymore….I was born and raised in NJ, and still live here. NJ has more incorporated municipalities than does California, even though Cali has 20 times the land area, and 4.5 times as many people. Back in the day the costs to carry all these idiotic Podunks were reasonable, but in the last thirty years costs have skyrocketed. Every little one-stop-sign town now has a $250K chief of police and a $300K school superintendent. This is the reason why the median property tax bill in NJ is highest in country. MB currently pays the municipality of Montvale $960K in annual property taxes.

      Even if NJ agreed to reduce MB’s property tax bill to zero, it would still pay MB to move down South. The cost of living in NJ is insane, due mostly to insane property tax bills that support legions of do-nothing public sector workers, almost all of them nepotism or crony hires. This in turn means that companies like MB have to offer very high pay to attract top talent. They could move to Georgia, and cut their workers’ pay by 25% and said workers could still have as good, or better, lifestyle than they currently have in the NYC area.

      Hertz Rent-A-Car is currently in the process of leaving Jersey for the South. MY guess is that BMW and Jaguar will be leaving in the near future as well.

      • 0 avatar
        petezeiss

        No sarc, skor… that’s one of the most erudite and pertinent comments I’ve ever seen here.

      • 0 avatar
        Rod Panhard

        My property taxes have doubled in the 10 years I have lived in Essex County. The sum of my property taxes is slightly higher than my property taxes were in Fulton County, Ga. My commute to Dunwoody/Sandy Springs takes the same time as an express train into Manhattan. My commute to downtown ATL took the same time as a non-express train into Manhattan.

        So what’s the advantage to living in NJ? If the taxes hadn’t doubled in 10 years, it would have made sense. Now it doesn’t.

        • 0 avatar
          skor

          Property taxes are insane in New Jersey. I have relatives that live in Ridgewood, they both work in the city. There property tax bill is $18K. Yes, $18,000 on a single family house.

    • 0 avatar
      Toad

      “And BMW headquarters are just down the block, do you want all of your employees who will not move to just cross the street to work for BMW???”

      Seth, BMW has over 7000 blue and white collar employees building cars in Greer, South Carolina and the factory is expanding. Dozens of BMW suppliers have set up shiny new factories and offices nearby employing many thousands more. BMW set up an engineering partnership with nearby Clemson university to churn out more engineers. The only thing BMW has in NJ is the headquarters office, in an expensive high tax state, hundreds of miles from where they are rapidly expanding…

      I wouldn’t count on BMW keeping the HQ in New Jersey much longer.

    • 0 avatar
      Ion

      A lot of the montvale employees are already from places across the us.

  • avatar
    dahammer

    Subaru just recivd $108 million in tax incentives over 10 years to move from Cherry Hill, NJ to a new site in Camden, right next door to Campbell’s Soup. This will retain 500 employees and possibly hire another 100. I think the closest Subaru plant is in Indiana. Pure and simple corporate welfare and it should be outlawed. This move by MB is just a shakedown and an attempt to grab some economic development funds. Besides, I don’t see those corporate types moving to bug tussle, GA or AL. They can’t even get good rye bread down there.

    BTW, skor is spot on. New Jersey has 528 municipalities and an almost equal number of school districts. A school district superintendent makes $300k per year plus benefits and a generous retirement. Teachers with an Masters make $120k for a job with summers off. They can retire with a great pension plus health benefits. Yet voters don’t want to merge districts, so they are stuck with the high cost of govt. they vote for.

  • avatar
    Ion

    I’ve been to montvale. The grounds are well kept. The cafeteria is amazing and all the food is subsidized by MBUSA. I do envy the guys who get free airfare, boarding and loaners to get there though. If we do move I’ll get to have my own mini vacation.

  • avatar
    Rod Panhard

    One of the more fascinating road trips I’ve taken down South, and there have been many since I lived down there for 27 years, was from Auburn, AL on the backroads to the Redneck Riviera. We were just motoring along 2-lane highways, would occasionally see a clearing and low and behold, there would be small factories in those clearings. Based on the Korean names, one would assume they’re making parts for Hyundai and Kia. But that was in Alabama. I know it’s happened over in South Carolina too.

  • avatar
    seth1065

    I am not saying NJ is not messed up it is and too dam pricey but I still think the lure of NYC is big to corp, and the fact is most folks in metro NY want good schools and a safe towns, do not know about the safety of Hotlanta but the perception is NJ has some great schools, the reason property taxes are so high is 75% of that money stays in the town for schools and does not matter if it makes sense or not people vote yes to keep it that way. As soon as my last kid gets out of high school here I will think about moving out of the state but not before that time, I bet MB stays in NJ. Yes the winter suck here but I doubt the summers are a joy in Hot lanta . I think NJ leads the US in auto HQ, who would have thought that.

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