Northrop Grumman decides to move headquarters to Northern Virginia
Tuesday, April 27, 2010
Northrop Grumman has chosen Northern Virginia as the new home for its global headquarters, ending a heated competition among Virginia, Maryland and the District for the prestige of playing host to the defense contracting giant.
Virginia Gov. Robert F. McDonnell (R) announced the decision Monday night in a joint statement with Northrop, describing the selection as a victory for what he called his administration's commitment to promoting business development.
"To gain the corporate headquarters of one of the largest global security contractors in the world is a testament to the strong business climate that we are focused on continually improving," said McDonnell, who has scheduled a news conference for Tuesday afternoon at Northrop's Rosslyn offices to discuss the move.
The statement did not specify a final site for the new headquarters. The company has been considering locations in Fairfax and Arlington.
Northrop is a major government contractor, with $25 billion in contracts, and is one of the region's largest employers, with roughly 40,000 workers in the Washington area and 120,000 worldwide. In January, Northrop's newly picked chief executive Wes Bush outlined plans to move the company's headquarters from Los Angeles to be closer to the U.S. government, a shift that will involve about 300 headquarters staff.
Virginia, Maryland and the District all sought to lure the company to within their borders. The District had proposed a package worth $25 million in tax breaks and grants. Maryland, too, offered incentives, and one state senator in Maryland contended in a letter to Northrop's chief executive that he should choose Maryland over Virginia because the state is more friendly to gay residents. Northrop Grumman has won awards from gay rights groups for workplace policies.
Bush gave credit to competitive offers from Maryland and the District but said in Monday's statement that the company's "final decision was driven largely by facility considerations, proximity to our customers, and overall economics."
Though the exact package of inducements is not yet clear, McDonnell had sought a number of changes from the General Assembly to help lure the company and provide a fertile ground for other businesses. He secured approval to use money from a state economic development fund to pay for renovations to private buildings.
The fund had previously been limited to developing public infrastructure. The legislature also agreed to raise a cap on grants available to companies that create high-paying jobs. The state had been nearing a six-year, $30 million limit on the program. Because of the legislative change, the state can now spend another $30 million over the next six years, starting July 1.
And just last week, legislators agreed to reinstate a tax deduction for Virginia manufacturers that legislators had previously agreed to begin phasing out. Aides to the governor told legislators privately that Northrop Grumman qualified for the domestic production tax break.
The political stakes of Northrop's decision have been building for McDonnell, who has endured several rocky weeks that included a turn on national cable news after he issued a proclamation in honor of Confederate History Month that at first omitted reference to slavery. The Republican had run for office in the fall pledging he could bring new business to Virginia with a commitment to limit regulation and keep taxes low.
That political philosophy, McDonnell indicated in the joint statement, had helped land the company. "This Administration will keep taxes and regulations and litigation at a minimum to attract job-creators from around the world to our state to ensure more new opportunities for all Virginians," he said.