The deal to shift the Mercedes-Benz headquarters from New Jersey to Atlanta, Ga., was sweetened with around $23 million in incentives from the Peach State.
The American base for Daimler's luxury arm, which has been in Montvale, N.J., since 1972, will bring at least 800 jobs to Atlanta, the state estimated in its formal offer.
The $23.3 million mix of tax breaks and development funds includes more than $17.3 million in five-year tax credits traded for new Georgia jobs, the Wall Street Journal reported.
Mercedes has around 1,000 employees at its New Jersey headquarters and has said that the Atlanta workforce will be around the same; the new office will employ both transfers and new hires.
The incentives deal comes to around $24,540 per job for 950 workers, according to the Atlanta Journal-Constitution. Mercedes' move seems to be part of a trend where automakers move to the South to save costs. Nissan made a similar move from Los Angeles to Nashville several years ago, while Toyota is in the middle of consolidating its North American operations in Texas.
States may tout incentives as a lure to bring in business, but major companies like Mercedes aren't truly drawn by tax breaks, outside experts told the Wall Street Journal.
"At the end of the day, it's more important for a headquarters to be in a strategic location than to get the money," said John M. Rhodes, senior principal of the Florida-based national corporate relocation firm Moran, Stahl & Boyer LLC.
More than $23 million may sound like a deal, but it's really pocket change for a large company.
"Corporations spend a lot of money figuring out these moves," Kenneth J. Meier, a political science professor at Texas A&M University, told the Journal. When you add in incentives, they're a rounding error for a company like Mercedes."
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