Would Coca-Cola ever leave Atlanta?
Most Atlantans would probably disagree, just as I imagine the fine folks in Dayton, Ohio, did a week or so ago if asked about the prospect that NCR would move somewhere else — why, it’s been in Dayton 125 years!
Who would have thought that Boeing would move its headquarters from Seattle to Chicago, or Georgia-Pacific from Portland to Atlanta (and then merge with another company) or RJR Nabisco from Winston-Salem to Atlanta — I’ll bet you forgot that one, which was also acquired.
Other companies on the latest Fortune 1000 list relocated to Atlanta from somewhere else include UPS, AGCO, Newell Rubbermaid, Mueller Water Products, and Spectrum Brands.
Let me make it clear that there’s absolutely no reason to think that Coca-Cola will ever move its headquarters, since it can do everything it needs to do from Atlanta as well as anywhere else. But make no mistake, sentiment and history to the contrary, I really believe that if its back were against the economic wall and survival was at stake, it would relocate or else fail its stockholders.
I learned one or two things in covering business at the AJC for 40 years, focusing on Atlanta and the South: companies make bottom line decisions when they must — and when they can.
I will say this, however, that NCR’s chief executive, Bill Nuti, does plan to violate one piece of conventional wisdom about where companies locate. Traditionally, the headquarters is wherever the CEO lives, but Nuti told the AJC he plans to stay in New York while moving 1,250 jobs to Duluth.
Georgia’s industry hunters and NCR executives gave all sorts of dollars and cents reasons why they decided to move the automation giant to metro Atlanta. My first reaction was: wouldn’t you get away from those Ohio winters if you could?
I’m joking, of course, but just barely. Climate has always been an asset in what we used to call “the Sun Belt,” a term not used much these days but which occurred frequently in the 1960s and ‘70s press to refer to the population shift — migration — from North and Midwest to Old South and Far West.
Capturing NCR is a stunning coup, given today’s economy. But to my way of thinking, the real story of the NCR move is that it reinforces once again the reality of Atlanta as a business town, with a business culture. It’s not an industrial city, which doesn’t always protect it from economic recessions.
The latest Fortune 1000 list shows 29 large corporations headquartered in Georgia, 13 of them on the 500 list. This puts Georgia in the upper ranks of corporate headquarters sites.
Years ago in a freelance travel article I inverted a well-known cliche about New York to make this same point: “Atlanta is a great place to live but I wouldn’t want to visit there.”
I recall one major research firm some years back that identified a list of factors that corporate executives “ought” to consider when deciding where to build a plant or open an office, variables that together represented a city’s “economic climate.” In addition to wage levels, the list included such things as crime rates, high school and college graduation rates, climate and cultural and arts amenities.
Typically, northern tiered cities, places like Minneapolis and Portland, posted the highest “climate” scores, which the researchers concluded made them the best places to move to. But I compared the “climate” study — where companies ought to locate — with where corporations were actually opening offices and plants and they were mostly in the Sun Belt, including Atlanta, Houston and Dallas.
Cultural fru-fru, it seems, did not trump bottom line advantages such as the South’s largely non-union, comparatively lower-paid labor, “generous” local and state governments and, for Atlanta, one of the best transportation systems in the world, including the world’s busiest airport.
Granted, with a metro population pushing five million and a major convention industry, Atlanta has become a sophisticated, urban center with features that attract the kind of white-collar, educated and high-skill types who work in a corporate headquarters. These are people who demand good school systems for the kids, join country clubs, are active in civic clubs, live in big suburban houses and take vacations in far-flung places.
Obviously, the tax breaks helped lure NCR away from Ohio, which apparently offered only half as much.
NCR said it picked Georgia “after extensive analysis of potential U.S. locations, using independent data and the available workforce, infrastructure, financial incentives and government tax structure.”
“Infrastructure” in this case almost certainly means Hartsfield-Jackson International Airport, the intersection of three Interstate Highways, abundant rail connections and increasingly important, electronic communications networks of all sorts. It doesn’t necessarily mean the daily street traffic we all know about.
But lest this begin to sound like a rah-rah piece for the Chamber of Commerce, I’d be the first to caution that Atlanta and Georgia do not have a lock on future growth in the Southeast.
NCR’s decision reinforces the upside of this community, but it could also add to problems of population growth, demand on public services, a still unresolved regional water problem and other environmental issues that impact health and lifestyles.
While Georgia can claim to be home to 13 major Fortune 500 corporations on the latest list (plus one more for NCR next year), so can North Carolina, and Florida has 14. Those are the two states east of the Mississippi that offer the greatest challenges to Georgia’s economic development.
The AJC did a good job covering the NRC story, but I would call the reader’s attention to one other story on Sunday (June 7) by AJC business writer Michael Kanell, well worth reading. He concludes that “after decades of leading the nation in growth, Georgia and the Southeast have stumbled. And the fall has been harder than for most of the rest of the country.”
That was also the theme of stories that appeared in the AJC in 2007 and 2008. Those reports also raised a caution flag about local growth, something along the line of, don’t get too comfortable, somebody may be gaining on you.