So Many Foreign Firms Have Headquarters Here That Washington Is Home to the World
By Martha M. Hamilton
Washington Post Staff Writer
Monday, March 30, 1998; Page F12
There are those who would argue that the Washington area isn't the center of the universe, but for a growing number of companies based in other nations it has become the center of U.S. operations.
Companies ranging from Japanese breadmakers to Dutch software applications firms to Italian shoemakers and European aircraft manufacturers have chosen the area as their U.S. or North American headquarters. Although there is no definitive list of such companies, Maryland's Office of Economic Development estimates that there are 150 in that state alone.
In some cases the choice was predetermined -- a foreign corporation acquired a company that already had roots in the Washington metropolitan region. But in many other cases, it was an active choice -- with the Washington area beating out other locations, including New York and California's Silicon Valley, for reasons as practical as proximity to customers or as ineffable as the quality of life.
Land Rover North America Inc., the North American arm of the British manufacturer of luxury sport utility vehicles, chose Maryland over New Jersey about 12 years ago, moving to Lanham in Prince George's County.
"First of all we wanted to be on the East Coast for the time zone, and we wanted a good port of entry for our vehicles," said Joel Scharfer, vice president of finance and administration. "We also wanted good airports, infrastructure, reasonable office rents and housing."
The company imports about 40 percent of its vehicles through the Port of Baltimore and employs about 150 workers in its headquarters building.
Shimadzu Scientific Instruments Inc., a subsidiary of Japanese science and technology firm Shimadzu Corp., moved to the area in part because it had a distributor in Silver Spring.
"But the real attraction was the density on the East Coast of environmental labs, pharmaceutical houses" and other potential customers, said Gerry Carder, vice president for human resources and administration.
Shimadzu is in a corridor that has pharmaceutical manufacturers to the north in New Jersey and the National Institutes of Health to the south. The company, which has about 220 employees in the area, has a corporate headquarters building and a customer training and education center in Columbia, which it has called home since 1975.
"We've been around for a while, and obviously it works well for us," said Carder.
Baan America, a fast-growing software applications and consulting company, is a relative newcomer, just breaking ground in Loudoun County for what it describes as one of its "dual corporate headquarters." The other is a renovated 400-year-old castle in Putten, the Netherlands.
"The culture of the Baan Company is not to have a glass high-rise along the freeway with its name on it," said Baan America President Kevin Calderwood.
Baan bought 281 acres on Route 7 in eastern Loudoun County for $13 million. The site is a historic property named Janelia Farm that includes a three-story Normandy-style manor house that once belonged to the artist Vinton Pickens. Baan plans to restore the manor house and build a campus around a lake. About 1,000 people will work there.
"All the buildings will be below the tree line, so we can maintain the setting, and the bulk of the property will remain in trees," said Calderwood, who said the site will include paths down to the Potomac River, which runs behind the property.
It will be similar to the company's other headquarters, where "the directors can take an inspiration and walk through the trees," Calderwood said. "It will be a high-tech home but will be in its original state."
But it wasn't just the river, just the trees, just the old farmhouse that convinced Baan that it had found its U.S. home, he said. The company had looked at other sites: a region in upstate New Jersey with a large Dutch population; Grand Rapids, Mich., which also has a large Dutch community; and the Silicon Valley.
The site in Loudoun County -- 15 minutes from Dulles International Airport -- provided better access to air transportation than New Jersey and Grand Rapids, and the Washington area provided a work force that was more attractive than the work force in the Silicon Valley, Calderwood said.
"The employee base here has much more loyalty than the employee base in the Silicon Valley," he said. "There are so many little start-ups [there] and so much opportunity there that people jump almost on a monthly basis. The demand far exceeds the supply. In the Silicon Valley you have to find a headhunter to find a headhunter to find a headhunter to find an employee."
Airbus Industrie moved its U.S. headquarters to the Washington area from New York City in 1987. The aircraft manufacturer owned by French, British, German and Spanish interests had operated with about two dozen employees out of high-priced real estate in Rockefeller Center in midtown Manhattan.
"At the time Airbus was planning to expand in a number of ways in North America to be a stronger player in one of the largest airplane markets in the world," said David Venz, vice president for communications.
Rents in Rockefeller Center, already high, were about to go up, he said, so the company looked at other options.
"We wanted to stay on the East Coast because of the time link with Europe, and we wanted to be in an area where there is excellent air transportation, and we wanted an area that would be attractive for current employees and other employees we wanted to bring on the payroll," he said.
"It didn't take us very long to settle on the Washington area," where the company now has about 160 employees at its headquarters in Herndon and its spare-parts facility near Dulles, he said.
Rolls-Royce Inc., a British aircraft engine parts, sales and support company that has its North American headquarters in Reston, moved to the area from Greenwich, Conn. in part because of the presence of companies such as Airbus. Rolls-Royce made the move in 1990 because of "our increasing involvement with U.S. government programs and the fact that a significant number of other airframers such as Boeing and other companies like that had a significant presence in Washington," said Rober Baugniet, vice president of corporate communications. "They are our customers."
Rolls-Royce employs about 100 workers in the Washington area.
Lafarge Corp., a U.S. firm whose parent company is the French firm Lafarge SA, also moved here from elsewhere. The company, a producer of ready-mixed concrete and other building materials, had two corporate headquarters in North America, one in Dallas and one in Quebec, said Lafarge President John M. Piecuch.
"The idea was to centralize our corporate headquarters in one location," he said. Although Lafarge looked at other sites, Washington won out because of its access to air transportation, its proximity to the federal government and its "excellent talent pool," Piecuch said.
"We're very much a global company, and we're interested in hiring people who are interested in an international or a global career," he said. "People in the Washington area have a proclivity to think that way."
One of the most international companies in the area may be Goldwell Cosmetics (USA Inc.), which has its U.S. headquarters in Linthicum Heights, Md. It is the U.S. subsidiary of a German firm, Goldwell GbmH, which is now owned by a Japanese company, Kao Corp. Goldwell Cosmetics, which manufactures hair coloring, shampoo and other products used in beauty salons, moved from Canada to Maryland in about 1985, said President Philip L. Hester.
"Back then all the products were shipping into the U.S. from Germany, and we needed to be in a port area," he said. The location also made sense as a center from which to distribute to the rest of the United States, he said.
The company has about 150 employees at a new center it opened about two years ago. Before that, its headquarters was in Annapolis Junction.
Some companies were originally home-grown and then acquired by foreign companies, which converted the original headquarters to the U.S. or North American headquarters of the larger operation.
Vie de France was born about 25 years ago at a time when good bread was in short supply in the Washington area. In 1991, Yamazaki Baking Co. of Tokyo, acquired Vie de France's food service division, adding Vie de France's restaurant division to its portfolio in 1994, said Richard Kuberski, vice president for marketing of Vie de France-Yamazaki.
The company has 10 manufacturing facilities in the United States, including one in Alexandria and another in Vienna. It employs about 100 workers at the headquarters site, which is also in Vienna.
Cable & Wireless Inc., the wholly-owned subsidiary of Cable and Wireless PLC of Britain, was founded in the Washington area as TDX Systems Inc. and acquired by the British firm in 1977. The choice of a location wasn't complicated, said Rich Yalen, the company's new chief executive officer. The company's headquarters is in Vienna and it has a major customer call center in Loudoun County. Altogether the company has about 1,400 workers in the area.
"The reason why we're here is this is where the action is," Yalen said. "It's the telecommunications center."
The industry grew up in this area because of the strong role in its development played by the Federal Communications Commission, he said, and "this is where the key telecommunications companies' headquarters are."
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