Go West, Young Motown?
Irvine Lands Ford's PAG HQ
Call it another strong shot of "Motown West": On the heels of Lincoln-Mercury's historic move 18 months ago, Ford Motor Co. (www.ford.com) has announced that it's also locating its Premier Automotive Group (PAG) headquarters in Irvine, Calif.
As PAG's home base, the new Irvine facility will become the North American headquarters for Jaguar, Volvo and Aston Martin, as well as housing the global headquarters for Lincoln-Mercury.
The PAG headquarters will be located on Ford's existing campus at the Irvine Spectrum. Company officials project that the new facility will be completed in 2001. The 300,000-sq.-ft. (27,000-sq.-m.) building, which will be able to house some 800 people, will include a product development wing, a conference center, a vehicle display area, a fitness center and a cafeteria, company officials said.
Establishing the PAG headquarters in California, company officials explained, will increase the consumer focus for each of the Ford-family luxury brands. At the same time, officials said that the co-location of multiple brands will increase the group's synergies and cost-efficiencies.
"As we look to develop our North American luxury automotive business, we can leverage the strength and synergies of our premium brands by co-locating Jaguar, Aston Martin, Volvo and Lincoln," said Dr. Wolfgang Reitzle, Ford Motor group vice president and Premier Automotive Group president.
"As the Lincoln-Mercury experience has demonstrated," Reitzle continued, "California is an energetic, consumer-focused culture that will serve as an ideal location to plan the growth of these premium brands. The new headquarters will provide the Premier Automotive Group with a strong bi-coastal understanding of luxury consumers."
The announcement, however, entails some job losses for PAG group brands' East Coast operations. Ford officials, however, stressed that Jaguar, Volvo and Aston Martin will all maintain a significant presence in New Jersey. In addition, all the PAG luxury brands will retain regional sales offices to promote a strong nationwide consumer focus, they added.
Volvo announced, as part of the PAG headquarters project, that it will relocate to California the executive management, sales, marketing, communications and corporate service functions that are currently located in Rockleigh, N.J. Volvo expects some 150 jobs to be relocated to Irvine.
Jaguar announced that it, too, will relocate to Irvine its executive management and strategic functions, including dealer development, marketing, communications and direct support, from the company's current headquarters in Mahwah, N.J. Jaguar officials projected that between 50 and 75 positions will be relocated to California.
The new facility will also house the Lincoln-Mercury headquarters, which is currently located in a temporary facility in Irvine. In 1999, Lincoln-Mercury had its best year ever, becoming the best-selling U.S. luxury brand.
That sterling year came after Ford shocked the auto industry in 1998, relocating Lincoln-Mercury's corporate headquarters to Irvine. That move marked the first time since World War II that an existing domestic automobile brand had left Michigan.
Detroit clearly remains the epicenter of the U.S. auto industry. But the PAG deal underscores California's growing auto-sector prominence. The Beach Boys, of course, long ago made California car culture an embedded element in the pop culture landscape. The state's auto-industry emergence, though, has been more recent (though undoubtedly no less "Fun, Fun, Fun" for state economic development leaders).
Today, 10 Asian car companies have their U.S. subsidiaries headquartered in Southern California -- including Honda, Nissan, Mitsubishi, Mazda, Kia, and Hyundai. And some two dozen automotive companies have located design studios in Southern California, including Mercedes-Benz, Nissan Mazda, Kia, Honda and Toyota.
The PAG headquarters marks another big win for both the city and the state.
Founded in 1971, Irvine is the first and largest master-planned community in the United States. And it's proved to be fertile corporate location turf. Microsoft, Apple, Bristol-Myers Squibb, Eastman Kodak, Hughes Aircraft, AT&T, Canon, Toshiba, Sony, Cisco Systems and Gateway all have significant operations in Irvine. And Irvine-headquartered companies include Con Agra, Home Base, Broadcom, Allergan, Western Digital, and Taco Bell.
"Ford's commitment reinforces Irvine's emerging reputation as an automotive headquarters center," said Ned Snavely, chairman of Destination Irvine (www.irvinechamber.com), the city's economic development group.
Irvine Mayor Christina Shea was similarly ebullient. "We're very excited to welcome the Premier Automotive Group to Irvine," said Shea. "Our city has become a destination location for some of the world's leading companies, and the prestigious addition of Jaguar, Volvo and Aston Martin is a resounding endorsement for the city."
Lon S. Hatamiya, secretary of the California Secretary of Trade and Commerce Agency (www.commerce.ca.gov) also weighed in on the Golden State's landing such a prestigious plum.
"This announcement shows how the dedicated efforts of the [Gov. Gray] Davis administration can bring a significant positive impact on the state's economic health," Hatamiya said. "We are delighted that Ford recognized the incredible attributes that our state has to offer in making its decision. Southern California is emerging as the place to be for automobile companies."
Auto officials also unveiled an artist's rendering of the new facility at the PAG headquarters' announcement.
Officials also took the occasion of the announcement to name a number of the major service providers that will be working on the headquarters project. The participating companies that were announced included:
©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.