Mercedes Benz USA is pushing through with its plans to move its headquarters from Montvale, New Jersey to Atlanta, Georgia, in a move that is the latest blow to a state that is still struggling to recover from the recession.
The German car company is Montvale's second-biggest corporate employer and one of the biggest in the entire Bergen County. According to Mercedes, the transfer of headquarters, which will start in July, will affect around 1,000 jobs.
New Jersey officials tried to prevent the move of Mercedes by offering significant financial incentives in talks with the company's executives. However, Mercedes decided to turn down the undisclosed offer made by New Jersey, joining other big companies that have shut down operations in the state and have moved jobs to other locations.
Companies that are leaving New Jersey mostly share the similar reason of doing so to pursue lower costs for operations.
"Mercedes USA made one thing very clear about its decision to leave - the cost of doing business and the tax environment is just too high here to be competitive with a state like Georgia," New Jersey Gov. Chris Christie's spokesman Michael Drewniak said.
According to Trenton legislative staff, the administration of Gov. Christie has generously offered tax breaks and incentives worth a total of almost $1 billion per year to companies in a bid to retain the jobs within the state.
However, Mercedes went with the trend of vehicle manufacturers relocating to the Southeast after it received a $50 million incentive package from Georgia to move its headquarters to the state.
"New Jersey has been a wonderful home to our U.S. operations for our first 50 years, and still is today," Mercedes Benz USA CEO and President Stephen Cannon.
Cannon added that despite the efforts of New Jersey, the company decided to relocate its headquarters to Atlanta to achieve sustainable and profitable efficiencies and growth for the future.
Reports reveals that Mercedes is considering a location in Sandy Springs, where fellow German car company Porsche's United States headquarters is also located.
The loss of the jobs presented by the headquarters of Mercedes will only add to New Jersey's struggles as it continues to recover from the recession that hit the United States six years ago. Unemployment in the state was at 6.4 percent in November last year, which is still higher compared to the national rate of 5.8 percent.
Assemblywoman Holly Schepisi said that the effects of the departure of Mercedes will go beyond the loss of the jobs at the company, as other business that service the company and its employees will also feel the impact.
