Big chance to improve its fortunes
5/15/2005Perhaps it's better to give than to receive in most cases, but not when it concerns prestigious, highly sought-after Fortune 500 companies.
Perrysburg is celebrating getting its first such firm, while Toledo is suffering angst over losing another one. This time it's Owens-Illinois Inc., the 102-year-old glass-container giant that will move to a new headquarters in Perrysburg's Levis Development Park next year.
O-I's chairman and chief executive officer, Steven McCracken, announced 10 days ago that the firm chose the campus location over One SeaGate, its downtown Toledo home for 24 years, and possible sites in Miami, London, and Tecumseh, Mich.
For Perrysburg, it's a chance for success to breed success. Some area officials say the suburb south of Toledo, with a population of fewer than 17,000, has a chance to build on its O-I coup and emulate the record of several suburbs in other states that have attracted multiple Fortune 500 headquarters.
"I would like to think that's a possibility," said Tom Blaha, executive director of the Wood County Economic Development Commission.
"When the first one comes in, that makes it so much more attractive for others."
Northern Wood County, he said, is "an emerging enclave of corporations desiring to be in wooded campuses visible from the Interstate."
The chief development officer for the county envisions several business parks and the growth of hotels and conference centers to accommodate out-of-town clients and international executives.
Perrysburg isn't the smallest city to have one of America's largest corporations. About 40 of the Fortune 500 headquarters communities are smaller or the same size as the northwest Ohio burg.
So far, no one is suggesting that Perrysburg could do as well as the "superstar" of small communities with a big presence in the Fortune 500.
El Segundo, Calif., is a city of 16,500 with a daytime working population of 80,000, including the headquarters of four huge firms. The community, situated next to Los Angeles International airport, is home to Computer Sciences Corp., Unocal Corp., Mattel Inc., and DirecTV Group, as well as number of other large companies.
"Part of it is the fact we do have a location advantage," said City Manager Mary Strenn. But responsive government is a key element, she added.
"Companies like to be able to call city hall," she said. "We staff for a city that's much larger."
Businesses, she explained, want a calm political environment and want communities to be responsive. The benefits for El Segundo include a proliferation of incubators for small businesses, a plethora of hotels, and enhanced city revenue. "Our residents don't even pay for trash collection," she pointed out.
John Alexander, city administrator of Perrysburg, said the possibility of attracting other large companies is "an interesting scenario."
He conceded there is certain prestige factor, but most important, he said, is helping a local global company change its culture from vertical to horizontal in a campus-like environment.
Perrysburg will become one of the "haves" in the corporate world, joining 170 or so communities, big and small, that have a single Fortune 500 company. Most of them are suburbs of larger cities.
More than half of America's 500 largest corporations with publicly traded stock are in 43 cities, including Toledo, but the lion's share of those are in 17 cities.
Topping the list is New York City, with 43, followed by Houston, 20. Chicago has 10, Cincinnati has seven, Cleveland has five, Columbus has four, and Detroit has one.
Toledo is among 18 cities with three, but when it drops to two, it will join 34 other cities. For Toledo, it's a big comedown from the late 1970s and early 1980s, when the Glass City was home to seven Fortune 500 companies before most of them fell to mergers and takeovers.
Ten states and 14 cities larger than Toledo have no such firms. Among such cities, those with populations over 500,000 are El Paso, Texas; Portland, Ore., and Tucson, Ariz. Fortune magazine, which puts out the annual list based on corporate revenues, does not consider suburban sites part of their nearby cities. .
James Dunn, president and chief executive of the Greater Richmond (Va.) Chamber of Commerce, said Fortune 500 companies are good for the local economy.
"It sends a message about the quality of life, for other companies that might consider the area," he said.
Jobs at big companies often are high paying, big corporations draw vendors and suppliers, and they usually are good corporate citizens, he said. Richmond has four such firms, and more in the metro area.
One possibility for Toledo to gain another Fortune 500 firm to replace O-I would be for Manor Care Inc., the nation's largest nursing-home chain, to grow enough to make the list.
For several years, Manor Care has just missed it. This year, its revenue of $3.2 billion ranked it No. 536. The lowest revenue on the list of 500 corporations was $3.6 billion.
With some headquarters cities, it's easy come, easy go. After the spectacular bankruptcy of WorldCom Inc., that firm left Jackson, Miss., later emerged from bankruptcy, changed its name to MCI Inc., and moved to new headquarters in Ashburn, Va. But MCI is being acquired by Verizon Communications Inc.
Robert Edmister, dean of business at Bowling Green State University, was teaching at the University of Mississippi when WorldCom imploded.
"It was a major employer in Jackson. I knew a number of people who worked at WorldCom, and they were proud to work there. They were demoralized when it left."
The city suffered the loss not only of prestige but also of money and jobs, he said.
As for the O-I situation, he said, "Certainly, Toledo feels like it lost out, and Perrysburg feels like it won.
"But I'm not sure outsiders view it that way. The Toledo area still has O-I associated with it. What we need are more innovators who will create companies that will be the O-Is of the future."
Contact Homer Brickey at: homerbrickey@theblade.com or 419-724-6129.