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Auf Wiedersehen, y’all: Mercedes moving U.S. headquarters south

Preparations Ahead Of The Geneva Motor Show 2014Preparations Ahead Of The Geneva Motor Show 2014
A protective cover sits on the hood of a silver Mercedes-Benz C-Class 220 BlueTEC automobile, produced by Daimler AG, during the 84th Geneva International Motor Show in Geneva, Switzerland, on March 3, 2014. Photograph by Chris Ratcliffe — Bloomberg via Getty Images

Mercedes-Benz’s U.S. headquarters will pull up stakes from outside of New York City, where it’s been for half a century, and relocate to a new building in Atlanta— mirroring recent moves southward by other foreign automakers in the U.S.

In Paris, the French automaker Peugeot SA said it was closing its headquarters in the city and moving to the suburbs in a move to cut costs. Last year, Toyota’s U.S. sales headquarters said it was closing its Torrance, Calif., offices and reopening in Plano, Texas.

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Peugeot has been struggling financially while Daimler AG, the German parent of Mercedes-Benz, is on an upswing since weathering the global financial crisis.

Mercedes-Benz USA is located in Montvale, N.J. and employs a thousand people. NJ.com reported that the company paid nearly $1 million last year in property taxes on its 37-acre campus in Bergen County. The maker of luxury vehicles was No. 1 in the category in the U.S. until last year, when it was displaced by BMW. The U.S. is Mercedes-Benz’s biggest single market worldwide.

Moran said that Steve Cannon, the chief executive of Mercedes-Benz’s U.S. operations, met with Gov. Chris Christie in December. New Jersey subsequently offered the automaker an incentive package to stay.

Rob Moran, a spokesman for Mercedes-Benz, said “this move positions us for growth and marks a trajectory for our next half-century.” Among several factors for the decision are proximity to a Mercedes-Benz assembly plant in Alabama and port facilities near Jacksonville, as well as the expense and congestion of the metropolitan New York area – on top of Atlanta’s rising attraction as a cosmopolitan enclave for international corporations and its lower cost of living.

NJ.com reported that the automaker received an incentive package worth about $50 million. Mercedes-Benz has declined to discuss financial incentives.

He said Atlanta offers numerous international flight connections, including a direct flight to Stuttgart, Germany, Daimler’s home. The southern metropolis also has “an urban experience for young people and great suburbs for families and those want it. Other automakers that have changed U.S. locations have told Mercedes that usually about 40% of the staff moves with the company, Moran said.

Some Mercedes-Benz workers will shortly begin to set up operations in temporary offices in Atlanta. A new building, to be constructed in an as yet undisclosed location, will open in 2017, Moran said.

The southern United States has evolved into a center for the international automobile business over the past few decades as Nissan, Honda, Volkswagen, BMW, Mercedes-Benz, Toyota, Hyundai and KIA have opened factories, office and research laboratories. Nissan announced in late 2005 that it was leaving suburban Los Angeles for Nashville, which is near one of its assembly plants. As non-U.S. automakers have expanded their U.S. facilities, the South has proven attractive because of the relative weakness there of the United Auto Workers union, whose relations with Detroit automakers often have been rancorous.

In the past half dozen or so years, Mexico has displaced the South as the hemisphere’s latest hot bed for auto manufacturing. Mexico offers lower costs than the southern U.S. and favorable trade agreements that facilitate vehicle exports.

Moran, the Mercedes-Benz spokesman, said he and others have begun practicing their use of the expression “y’all.”