Week of August 26, 2002
  Project Watch
Ritz-Carlton is relocating its headquarters to Montgomery County, Md., but will maintain its two hotels in Atlanta, including one (pictured) located in the same Buckhead neighborhood that's home to the company's current headquarters.
Ritz-Carlton Checking Out of Atlanta, Relocating HQ in Maryland

BETHESDA, Md. and ATLANTA – The Ritz-Carlton Hotel Co. is moving back in with its parent. And, unlike many a human household, the corporate parent is looking forward to the move-in.
        Ritz-Carlton has announced that it's checking out of its current headquarters in Atlanta, relocating the 142-employee operation next year to Montgomery County, Md. The driver in the relocation, said officials with the high-end hotelier, lies in the increased operational efficiencies of locating near parent Marriott International's headquarters in Bethesda, Md.
        "We are delighted to move to Montgomery County, a superb address for our company. The move will increase efficiencies in behind-the-scenes support operations while we continue to build upon our company's . . . service and unsurpassed luxury," said Simon Cooper, Ritz-Carlton president and chief operating officer.
        But mother Marriott, not Ritz-Carlton, was likely the real force that drove the corporate child's decision. Marriott has a pronounced penchant for clustering its operations' headquarters. The Ritz-Carlton, in fact, is the lone unit that's currently based outside Marriott's corporate cluster. All of the company's other divisions are based in either Bethesda or Washington, D.C.

Historic Independence May Be
Factor in Final Site Selection
Ritz-Carlton has also operated far more autonomously than Marriott's other divisions, business analysts say. That historic independence may play a role in the Maryland site that the company picks.
        Ritz-Carlton didn't specify a location in announcing its headquarters relocation. The company has picked Julien J. Studley Inc. to assist it in finding a site, with a final decision expected by late summer, officials said.
        The site selected will likely be an existing building that's not in Marriott's headquarters complex, Ritz-Carlton officials said. But the company hasn't totally ruled out developing a new facility, they added.
        Ritz-Carlton occupies 35,000 sq. ft. (3,150 sq. m.) in its current headquarters in Atlanta's Buckhead area. Officials didn't say how much space the company is looking for in Montgomery County.
        Ritz-Carlton will continue to maintain its two popular hotels in Atlanta, corporate officials said. The company was founded in Georgia's capital city in 1983 by local real estate investor William Johnson. Johnson created the company after he paid $70 million for the 100-year-old Ritz-Carlton name, a purchase that included the Boston Ritz-Carlton. Marriott entered the picture in 1995, buying a 49 percent interest in Ritz-Carlton. Marriott increased its stake to 99 percent in 1998.

1999 Incentives Kept Marriott Based in Bethesda
Incentives weren't a factor in the relocation - none were offered, state and local officials said.
        But incentives did play a major role three years ago when Marriott International was contemplating relocating its Maryland headquarters. A $40 million package from the state helped convince the company to maintain its base in Bethesda.
        "Over the years, we have worked to develop a strong partnership with Marriott and its subsidiaries, and this relocation decision on their part reflects the strength of their commitment to maintain and expand their business in Maryland," Gov. Parris Glendening said in welcoming Ritz-Carlton.
        The company will find quite a few fellow members of the hospitality industry in Montgomery County. In addition to Marriott, Choice Hotels International, HMSHost Corp. and Sodexho Inc. are all headquartered in the county.

James Hardie fiber-cement panels
James Hardie fiber-cement panels are used in a wide variety of applications in home building, remodeling and repair, including for floor cutaways for tile installation (pictured).
$27M Texas Expansion Will Further Cement
James Hardie's U.S. Capacity

WAXAHACHIE, Texas – Further cementing its U.S. presence, Australian building product conglomerate James Hardie Industries has announced plans to invest $27 million to add a new production line at its plant in Waxahachie, Texas.
        The production-line addition will be located in a new and separate plant, which will be built on the same site in Waxahachie that's home to the Sydney-based company's existing fiber-cement production facility. The new addition will almost double the operation's capacity while broadening its product line and boosting cost-efficiencies, company officials said.
        The extra line will add 160 million sq. ft. (14.4 million sq. m.) to James Hardie's annual production capacity in Waxahachie. Total capacity at the site will reach 360 million sq. ft. (32.4 million sq. m.) when the added line begins production in the first half of 2003.

Addition Will Lower Production Costs
The company's newest line in the Dallas metro will exclusively manufacture fiber-cement panels. Those panels are used in a broad range of exterior and interior applications in home building, repair and remodeling. The new line's sharp focus will free up existing production lines to concentrate on manufacturing both fiber-cement planks and James Hardie's thicker products, company officials explained.
        "By dedicating this new line to the production of panel products, we will be able to achieve a lower cost of production overall," said James Hardie CEO Peter Macdonald.
        Company officials haven't estimated how many employees will be added when the new Waxahachie line begins production. One hundred forty employees currently work at the plant. James Hardie took over the Waxahachie operation in October of 2000 from holding company Temple Inland, which decided to get out of the fiber-cement business.

CEO: 40 percent Sales Increase,
'Seasonal Peaks' Drove Expansion
Strong product demand from a strong U.S. housing sector prompted the company's decision to expand.
        "Demand continues to grow strongly, and we are expanding our product range," Macdonald said. "Our first-quarter 2002 results announced on Aug. 15 included a 40 percent increase in sales volume compared to the same quarter last year.
        "We are expecting strong growth for exterior and interior products, for both new housing construction and repair and remodeling applications, in both the southern and northern U.S. regions," he continued. "The additional capacity will accommodate growth and seasonal peaks in demand, which are now quite pronounced."
        Pronounced U.S. demand also earlier prompted James Hardie to begin adding a new line to its existing plant in Peru, Ill. With an annual production capacity of 200 million sq. ft. (18 million sq. m.), the new line in Peru will double total capacity at the Illinois operation. The new Illinois line will begin production next month, company officials said.
        James Hardie further extended its U.S. presence in late 2001, when it acquired Cemplank's fiber-cement operations. With that acquisition, the company added Cemplank's existing plants in Blandon, Pa. (Cemplank's headquarters city), and Summerville, S.C. James Hardie also has U.S. plants in Cleburne, Texas; Fontana, Calif.; Plant City, Fla.; and Tacoma, Wash..
        The company began U.S manufacturing in 1989 at its Fontana plant. James Hardie's set up its U.S-Canadian headquarters in the same area, locating in Mission Viejo, Calif.

Ferdinand von Zeppelin
Though it's just expanded to serve Ford and Mercedes-Benz, ZF Industries' corporate history began on a higher plane. Founder Ferdinand von Zeppelin (pictured) created the first rigid dirigible, which later became known as the zeppelin. Thought ZF Friedrichshafen is the world's 15th-largest auto-industry supplier, the company's product line is also aimed at the airplane, marine and railroad sectors.
German Auto Supplier ZF Enlarges U.S. Footprint with Alabama, Illinois Expansions

CHICAGO and VANCE, Ala.ZF Industries North America has just gained some major ground in hitting its ambitious goal of upping sales by 50 percent in only two years - a lofty $1 billion target that's fitting for a firm founded by the inventor of the zeppelin. The North American division of Germany's ZF Friedrichshafen, the world's 15th-largest auto-industry supplier, has just announced two major expansion projects - one in Alabama and one in Illinois.
        The Alabama expansion will serve a familiar North American client: the Mercedes-Benz plant in Vance, Ala. By adding 38,000 sq. ft. (3,420 sq. m.) of new space inside its 115,000-sq.-ft. (10,350-sq.-m.) facility in Tuscaloosa, ZF will boost boosting the operation's capacity by a third.
        One of ZF's 15 U.S. production operations, the 240-employee Tuscaloosa facility is being expanded to increase production of front and rear axle modules for Mercedes. Supplying the Vance plant's M-Class SUVs initially spurred the company to open its Alabama operation in 1997. ZF Industries Tuscaloosa had expanded earlier in 1999.
        "The expansion allows ZF to fulfill contracts as a key supplier of high-quality parts for the next generation of Mercedes-Benz M-Class vehicles," said ZF Industries North America President Bernd Habersack. "It is another example of ZF's continuing growth in the North American market."         The project, he said, boosts ZF North America's drive to increase its 2001 sales of $2 billion to $3 billion by 2004.

Chicago Project for Ford Marks Milestone
In contrast, ZF's Illinois expansion is something totally new: The project in Chicago will mark the first time that ZF North America has supplied front and rear axle chassis systems for a non-German automaker.
        Ford is the manufacturer in question. ZF is moving into a 100,000-sq.-ft. (9,000-sq.-m.) existing facility in the Ford Chicago Manufacturing Campus. Opened earlier this summer one mile (1.6 kilometer) from Ford's Chicago assembly plant, the campus is the automaker's first U.S. manufacturing supplier campus. ZF's new plant on the Chicago campus will supply front and rear axle chassis systems for Ford's new CrossTrainer and Five Hundred models.
        The Ford contract, Habersack explained, marks an important milestone in ZF's worldwide expansion of its chassis system business.
        "We will soon announce several other significant contracts with other OEMs in North America, Europe, South Africa and Asia," Habersack said. "We believe this will triple our sales in chassis system business - $550 million during 2001 - within the next four years."
        Until the Ford signing, ZF's U.S. chassis supply business was limited to the Mercedes plant and BMW's plant in Greenville-Spartanburg, S.C. ZF first came to America in 1996 to supply the BMW plant with front-axle systems.
        ZF's corporate history stretches considerably farther back. The company was founded in 1915 by Ferdinand von Zeppelin. The founder's pioneering work in aviation, however, is what turned his name into a readily recognizable word. In 1900, Zeppelin created and flew the first rigid dirigible. The lighter-than-air vehicle eventually became known as the zeppelin.


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