Why Mercedes-Benz Is Ditching New Jersey, Moving South

UPDATE: 5:15 p.m. EDT: Mercedes-Benz USA LLC confirmed Tuesday afternoon the company will relocate its headquarters from Montvale, New Jersey, to Atlanta, "in a move designed to better serve its growing customer base and strengthen the company's position for long-term sustainable growth."

The company will begin moving employees to a temporary location while it constructs a new headquarters that's expected to be completed in 2017. Some operations will remain in Montvale and nearby Robbinsville, the company added.

“New Jersey has been a wonderful home to our U.S. operations for our first 50 years, and still is today,” MBUSA President and CEO Stephen Cannon said in a prepared statement. “The state has worked tirelessly with us as we evaluated our options. 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. That brought us to Atlanta."

Original story begins here:

Georgia reportedly is luring Mercedes-Benz USA LLC to Atlanta from New Jersey with a package of incentives worth an estimated $50 million. The North American division of the luxury German automaker refused comment early Tuesday, but WSB-TV, Atlanta, said it confirmed the deal through sources and reported Mercedes would make an announcement sometime Tuesday.

The deal is expected to bring 1,000 jobs to the state. The company's move comes at the expense of Bergen County, New Jersey, which has been home to Mercedes-Benz USA headquarters since 1972.

“Atlanta offers several benefits for Mercedes-Benz, from easier access to already used ports in Georgia to direct commercial flights into Alabama where Mercedes-Benz operates a large assembly plant,” said the Truth About Cars auto blog, which last year was the first to report Toyota’s U.S. headquarters would move from Torrance, California, to Plano, Texas in early 2015. In 2006, Nissan moved from Los Angeles to Nashville to be closer to its factory in Smyrna, Tennessee.

Mercedes-Benz USA officials were to meet with employees Tuesday, and some employees told the Bergen Record anonymously they expected to hear the announcement about the move during the session. State Sen. Gerald Cardinale said New Jersey had offered a “substantial” tax incentive package to keep the company in the state, but he declined to offer details. Cardinale, a Republican, said his state is having trouble competing to keep and attract businesses because of high property and income taxes.

Mercedes is being offered an incentive package worth as much as $50 million to relocate to Atlanta, according to the newspaper. New Jersey and Georgia state officials declined comment on the deal Tuesday.

Foreign automakers -- including including Toyota, Mercedes-Benz, Nissan, Honda, Hyundai and BMW -- have been attracted to the South by low labor costs, large incentive packages and a lack of a strong union culture in the past 25 years. The 2009 bankruptcies of General Motors and Chrysler were used by anti-union Republicans to lambaste Michigan’s strong union tradition.

Southern Republicans like Sens. Mitch McConnell of Kentucky, Richard Shelby of Alabama and Bob Corker of Tennessee opposed the 2009 auto industry bailout and called for lowering wages at U.S. automakers to make them more competitive with the wages earned by nonunion workers at Southern factories run by foreign automakers.

Republican lawmakers have gotten their way to some extent. Five years after the multibillion-dollar bailout of General Motors and Chrysler (now an Italian-U.S. venture based in London called Fiat Chrysler Automobiles NV) auto manufacturing is a less lucrative career choice. Even in union shops, employees doing the same job can be paid differently as the result of a two-tiered system based on seniority. Some auto factory workers make as little as $15 an hour and have had to take second jobs, Marketplace reported Monday. Automakers say the wage system is necessary to create and keep jobs.

Last month the National Labor Relations Board upheld a ruling that Mercedes-Benz violated labor laws by stopping United Auto Workers supporters at its Tuscaloosa, Alabama, plant from passing out literature to recruit union membership.