Porsche's move revs up Atlanta's image

/Home/Atlanta Business

Porsche's move revs up Atlanta's image
May 13, 2011
By Michael E. Kanell
The Atlanta Journal-Constitution

Porsche just gave Atlanta’s image a bit of a spit polish.

The decision to build a $100 million complex on the grounds of the former Ford assembly plant in Hapeville is not only a glitzy marketing move for the German carmaker, experts said, it is also a shiny endorsement of the city and state.

“This has marquee value,” said Don McEachern, president of North Star Destination Strategies of Nashville, a company that offers advice on reputations to cities. “It speaks volumes about Atlanta. You get the Porsche name and brand. You get the halo effect. It is nothing but good.”

And with Georgia still shakily emerging from a painful recession, Porsche provides more marketing glow for luring other companies to the area.

The project, announced days ago, will shift two offices from elsewhere in metro Atlanta – including Porsche’s North American headquarters – as well as an office currently in Chicago. It will also include “an experience center” – a test track – on 19 acres on the site, which is virtually next door to Hartsfield-Jackson.

The news highlights the region’s strengths: a deep talent pool, corporate diversity, the use of tax benefits for footloose companies and – perhaps most critically – access to the world’s busiest airport.

“It demonstrates the advantages that we have versus other cities in having Hartsfield-Jackson Airport,” said Ken Bernhardt, marketing professor at Georgia State University. “If you’ve got to go to Germany regularly – or elsewhere in Europe or to Latin America – what a great place to be.”

The company will get roughly $14 million in state and local incentives – along with a spot that is high-profile from both air and land: Passengers on many flights get a close glimpse of the site as planes land, while millions of drivers pass each year on nearby I-75.

Government officials routinely toss millions of dollars in tax breaks to induce companies to move here. Those decisions shift the burden of paying for government to other taxpayers, although government officials maintain that long-term compensation comes in hiring and overall growth.

Deals like the one with Porsche – which was after all, already in Georgia – proclaim the willingness of government to offer business incentives. Yet experts say the perks aren’t as persuasive as the actions of corporate peers.

“Headquarters do not want to be trailblazers,” said Mark Sweeney, a principal in McCallum Sweeney Consulting of Greenville, S.C., which advises companies. “One of the very early screening factors is: who else is there? What other headquarters are there?”

And Atlanta, once known merely as the home of Coca-Cola, now boasts a slew of large companies, many enticed away from other American cities. Among the recent arrivals are Newell Rubbermaid and NCR.

Porsche’s project “is not as impactful as if they were relocating here from somewhere else, but it is definitely reaffirming,” said Jonathan Sangster, senior managing director at CBRE Consulting in Atlanta, which counsels companies on site selection. “This clearly reinforces Atlanta as a headquarters city.”

Porsche’s choice is another embrace of metro Atlanta’s business climate, said Jeff Humphries, director of the Selig Center for Growth at the University of Georgia. “Companies don’t come to Atlanta for natural amenities like a coastline. Companies put their headquarters in Atlanta for dollars and cents reasons.”

Porsche looked at about 70 sites before settling on Hapeville, said spokesman Steve Janisse.

The company wanted to build a complex, to combine different corporate groups, to construct a test track to help sell cars – and to have quick access to an international airport, he said.

Yet when it comes to selling the state and city, officials reach for more than just bottom-line concerns, experts say.

In economic terms, the Ford plant was a greater force than Porsche is likely ever to be. At its peak, Ford employed more than 3,000 workers while buying many supplies locally. In contrast, Porsche is promising to ramp up eventually to 400 employees.

Yet Porsche can be “leveraged” in ways that Ford could not, experts say.

First, a corporate headquarters is more of a magnet to other white-collar moves than manufacturing. State officials say they’re glad to have an association with a vehicle noted for its high performance.

“I think it will be something that we can sell,” said Chris Cummiskey, commissioner of the Georgia Department of Economic Development. “Porsche’s name is synonymous with quality and excellence.”

Second, with prices ranging up to $245,000 a car, Porsche links Atlanta to a brand that has some flash, said marketing professor Bernhardt. “When you tell people that you drive a Porsche, they look at you differently. Porsche is a cool brand.”