It's never a good time to lose a Fortune 500 HQ
My first reaction to the news about Black & Decker is that it's not good for Baltimore. Whether you call it a "merger" or a "sale," metro Baltimore is losing a major corporate headquarters that it has had for 100 years. It's also hard for the people who will lose their jobs. It sounds like there will still be a major white-collar presence in Towson. (Black & Decker's last factory jobs left Maryland six years ago.) The way the companies are talking, most of the jobs there will be preserved.
But the ones that get eliminated will be highly-paid, top-of-the-food-chain positions that overlap with those at Stanley's headquarters in Connecticut. When you lose a job from that level, especially in today's economy, it is difficult to find a new position with as much pay and responsibility. The disappearance of those positions also reduces the spending power of the Baltimore economy. Losing a corporate HQ often means fewer charity dollars locally and less autonomy for the jobs that remain.
Baltimore has seen this movie before: Rouse, Allfirst, Alex. Brown, Mercantile, USF&G, Maryland National etc. We're lucky to have so much federal money washing over the state at the moment. From a macro point of view, that will ease the pain. Other things being equal, you'd rather get laid off from Black & Decker in Towson these days than from General Motors in Detroit. But it will still be tough.
Comments
Jay,
What is the corporate perception of the state MD and the city of Baltimore? Given our location (45 minutes from DC) one would think companies would be inclined to give the state and city at least a second look. Does the state/city have that bad of a anti business rep? Why isn't business coming to MD?
Posted by: Waiting for the Sun to Set | November 3, 2009 8:42 AM
But O'Malley is doing everything he can to drive Constellation out of the state. It was recently reported that Maryland has created hardly any private sector jobs in the last decade. Maybe leeches like Glendening and O'Malley should learn that their constituents bodies aren't a never ending supply of money.
Posted by: chesepioc | November 3, 2009 9:23 AM
Jay - I'll take a stab at that one. Jsut look at Constellation Energy and what the state did to them to approve a sale of their assets even though the company is owned the the shareholders....not the state. The politician in this state will do anything to get re-elected
Posted by: JB | November 3, 2009 9:25 AM
chesepioc-
wasn't there another governor leading the state within that 10 yr period also? Funny how you overlooked him and any role he may have played. What was his name????????
Posted by: veal | November 3, 2009 9:51 AM
Just once, can't a Baltimore or Maryland-based company be the acquirer?? Just disheartening, especially when you consider that Stanley is the smaller company. The Power Tools division may stay in Towson for 10 years or so, but don't be surprised to see a gradual relocation of departments up to CT, like a slow painful drip. I see a "for sale" sign in from the BD hq in our future, sadly.
Posted by: DJP | November 3, 2009 10:17 AM
If one looks at the State's hostility to Constellation, it is easy to see why no one would want to move a corporate headquarters here and why, given the opportunity, one would relocate to another state.
Posted by: Garfield Rogers | November 3, 2009 10:52 AM
Let me add also one other thing. The conference call with analysts and Constellation's CEO that Jay referenced in his article on the State's intrusion into the EDF deal highlights the perception of businesses and their view of doing business here. When someone refers to us as the "Peoples Republic of Maryland", they are framing a perception of antagonism and hostility to business and, sadly, that perception has become reality. Every business I deal with avoids Maryland if at all possible because they find it hostile from a regulatory and a tax perspective. Until that perception changes, no new businesses, no new private sector jobs and no new revenue will come here.
Posted by: Garfield Rogers | November 3, 2009 11:01 AM
Is this Nolan Archibald's retirement plan? He is 65 and I am sure he will get a nice golden parachute to soften his landing in retirement. It is a shame that his greed is forcing a company that is bigger (revenue, asset, and net income) be purchased and moved up to CT by a company that is smaller. What is the price that Archibald decided to sell himself and the community out for? Just because you are the CEO, it does not entitle you to sell a company just so you can cash in a winning lottery ticket. I guess the $35 million he made the last 3 years was not enough for him to survive on.
Posted by: MB | November 3, 2009 12:32 PM
Why can't any governor or leader focus their attension towards attracting businesses here. It would definately help with the state budget
Posted by: JB | November 3, 2009 1:01 PM
Is this a good deal for B&D shareholders? From the description of Stanley's brands, it appears that much of their business is in lower-margin items. B&D may be desirable to Stanley, but Stanley doesn't look like as good an investment in the long run as B&D alone.
Posted by: Joseph | November 3, 2009 2:03 PM
I know veal, it's always Ehrlich's fault, isn't it? Funny how the Tax Foundation and Cato Institute have noted Maryland's freefall to the bottom in business and tax climate since Governor basement CD took office.
Posted by: chesepioc | November 3, 2009 6:52 PM
MB wrote: It is a shame that his greed is forcing a company that is bigger (revenue, asset, and net income) be purchased and moved up to CT by a company that is smaller. What is the price that Archibald decided to sell himself and the community out for?
A little lesson in corporate governance here. The BOARD OF DIRECTORS made this decision, not one man. And I bet that there will be NO (NONE, NADA) shareholder suits alleging breach of fiducary duty here. This is a sound business decision between two manufacturing companies trying to gain size to survive in a global economy. Black and Decker was here because Alonzo Decker was born here. No other reason. Despite public officials pronouncements, there is very little here to draw corporate headquarters.
Posted by: telecommutenow | November 3, 2009 8:02 PM
This is a very sad day for Baltimore and MD. While I have been to New Britian CT and like the area, I don't think it has the ammenities, sense of commmunity, etc., that our area has.
In any event, I hope that the Power Tools Division stays in Towson and prospers once again.
Posted by: Former employee | November 4, 2009 9:14 PM