In an unexpected announcement, Daimler AG announced that its North American headquarters will move from New Jersey to Michigan. The news comes even as Daimler’s Mercedes-Benz USA subsidiary completes its own move from N.J. to suburban Atlanta.
In terms of jobs, the impact will be modest, involving only about 30 employees working in the German maker’s U.S. treasury, legal and accounting departments, along with a handful of executive positions. The Mercedes move to Atlanta involved about 1,000 employees.
“I think it’s just another reaffirmation that Michigan is the place to be for the auto industry,” Gov. Rick Snyder told the news service MLive.
Daimler already has a strong presence – and about 3,000 workers in Michigan, including those at the Detroit Diesel factory and Mercedes-Benz Financial Services office near Detroit, as well as at two Mercedes-Benz Research and Development facilities, one near Detroit, the other in Ann Arbor.
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Snyder revealed the news on Daimler’s home turf, during a visit to the 2015 Frankfurt Motor Show, where he planned to meet with about 60 auto suppliers that already operate in Michigan. While the state’s role as a manufacturing center has declined over the decade’s, along with the market share of the Detroit-based Big Three automakers, Michigan has actually seen a surge in the number of suppliers and, in particular, R&D centers moving there.
One reason is the EPA environmental research and testing facility in Ann Arbor. Many of those supplier and automaker operations setting up in Michigan focus on such things as powertrain development and, more recently, autonomous vehicle projects. The University of Michigan recently set up a large test center in Ann Arbor designed to replicate real world conditions for testing self-driving technology.
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Daimler, which generated about $146.8 billion in revenue last year, had long had its corporate operations based in New Jersey. But it announced plans to move Mercedes’ sales, service and marketing HQ to the Atlanta area, a move just now being completed. While no specific reasons were given, the high cost of operating in New Jersey took much of the blame.
Even after Daimler North American Corp. heads to Michigan, some back office operations for Mercedes are expected to remain in the Garden State for at least a couple more years, a Daimler official told TheDetroitBureau.com.
A number of automakers have picked up and moved their operations in recent years, most often to cut costs. That includes Nissan Motor Co., which left suburban Los Angeles for Nashville, and Toyota Motor Sales USA, which similarly decamped from California for Texas.
General Motors briefly considered moving out of downtown Detroit following its 2009 bankruptcy ultimately deciding to remain along the city’s now resurgent riverfront. But last year, new Cadillac President Johan de Nysschen ordered his senior management and support team to transfer operations to New York City. The South African-born de Nysschen said he wanted Caddy to be closer to the type of luxury buyers it has long struggled to attract.
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While Michigan certainly has it’s pros and cons, the illusion that moving offices out of metro Detroit some how offers executives a clearer view of the industry or better understanding of consumers is just nonsense IMO. More often than not the execs prefer locations where they can mingle with celebrities and politicians. That would explain the moves to outside DC and NYC more than a clearer view.
Back in the late 70’s and early 80’s Northeast NJ was the “Detroit” of European import headquarters. Mercedes, BMW, Volvo and Fiat were located within a few miles of each other. Jaguar, Ferrari, Maserati and Alfa Romeo were also nearby. A lot of talent jumped from one manufacturer to the another without missing a beat.