The chances of Archer Daniels Midland Co. picking the Twin Cities for its new headquarters is barely on the plus side of zero, and it’s curious why anyone here would bother meeting with anyone from the agricultural products giant.
“It’s just good manners,” explained Michael Langley, the CEO of the economic development group Greater MSP.
Langley said he could not discuss the particulars of Greater MSP’s engagement with ADM, but suggested that he and state officials should enthusiastically welcome any leader in the food industry. It’s one of the state’s strongest segments.
Chasing Fortune 500 companies, of course, is a terrible strategy for long-term economic growth, and Langley agreed. The last and only time a Fortune 500 company moved here, the future Hall of Fame slugger Harmon Killebrew was playing Double-A ball for the Chattanooga Lookouts.
The year was 1958, and Bemis Bro. Bag Co. selected Minneapolis for its executive offices over Boston, Denver and St. Louis.
Three years earlier, when Fortune released its first list of the 500 largest U.S. companies, 11 of them were in Minnesota. Today, there are 19. But there isn’t a transplant on either list — including Bemis, as it’s long gone.
“What’s interesting about Minnesota is so much of the change has not been about movement here,” said Myles Shaver, a professor of strategic management at the Carlson School of Management at the University of Minnesota who has studied the origins of the state’s corporate community. “I was in Atlanta for a conference a couple of weeks ago, and they had the promotional materials for their Fortune 500s. You start reading and its ‘Newell Rubbermaid moved its headquarters to Atlanta in 2003,’ or something like that. Half of them read like that.”
In contrast, Shaver said, the Twin Cities has had to create its corporate headquarters community by growing little companies into Fortune 500s.
Langley agreed that the state should foster the growth of companies already here, but added that there is a portion of its economic vitality that comes from outside the metro area. Smaller companies, or even departments of larger companies, are well worth cultivating.
ADM announced in September that it was looking for a new location for up to 100 headquarters employees, plus an additional 100 jobs over time to staff a technology center. That would keep about 4,400 ADM jobs in its current headquarters town of Decatur, Ill.
But it turns out this national search is likely nothing more than a pro forma exercise designed to wring $1.2 million a year in tax breaks from the state of Illinois for ADM to move to Chicago. That’s because to qualify for the tax breaks, companies need to act as if they might be locating new jobs in another state.
“You never know,” Langley said, “Illinois may screw this one up.”
ADM, with about $19 billion in shareholder equity, conspicuously does not need any taxpayer help. But Motorola Mobility got it, as did Sears Holdings and Navistar International. That’s one of the problems with tax incentive programs, because if you let Sears game the state, you really can’t protest when ADM tries it later.
As ADM site selection meetings in Texas, Georgia and here have been revealed, officials in those states should know that ADM’s new general counsel, former Medtronic executive D. Cameron Findlay, last month paid $2.62 million for a new 21st-floor condo — in Chicago.
There are, or course, genuine reasons for a company to move its headquarters. Business can be dynamic, and through acquisition or growth the center of gravity for a company can shift. That was why Alliant Techsystems moved its executives to northern Virginia in 2011, to get closer to its defense customers.
And in looking at a few high-profile recent moves, having lots of air travel options is cited frequently. When Chiquita Brands picked up and moved from Cincinnati to Charlotte, N.C., it came out that Chiquita had been considering leaving Cincinnati because Delta Air Lines had turned Cincinnati/Northern Kentucky International Airport from a hub airport into a dot at the end of a spoke.
And if you want to go back to the move of Bemis to Minneapolis, perhaps the only thing to be learned is that we shouldn’t underestimate the influence of family.
Bemis’ Melanie Miller, vice president of investor relations and treasurer, was happy to share what she called the “legend” of the late 1950s move.
Bemis was by then about a hundred years in business, with significant operations in St. Louis, where it started, Minneapolis and Boston. Judson “Sandy” Bemis was about to take over as CEO, and he knew the executive offices should be consolidated. According to the legend, a vote was then taken — and Denver won.
Sandy Bemis carefully considered the results from the balloting. He then announced that as his wife was from St. Paul and they needed to take another vote.
The epilogue, of course, is that Bemis is now based in Neenah, Wis. There were good business reasons to go there, too. By the time the decision was announced in late 2005, there were nearly 10 times as many Bemis employees in Wisconsin as in Minnesota.
Then again, the CEO at the time, Jeff Curler, moved the headquarters about 35 minutes down the road from where his dad had co-founded a company that Bemis later acquired.
Patricia Woertz, ADM’s CEO, grew up in western Pennsylvania and graduated with an accounting degree from Penn State. If Illinois balks on the $1.2 million-per-year tax break, maybe Pittsburgh becomes home to ADM’s corporate office.
We know that’s more likely than here.