Virginia, Maryland and D.C. pitch strengths while Northrop Grumman shops for a new headquarters
- January 18, 2010
What ever happened to the secrecy of corporate recruitment? Companies scouting locations used to keep plans hush hush. In fact, corporate recruiters often wouldn’t know the identity of an interested company. And if they were informed, projects would be referred to by a code name for fear that loose lips would sink a deal.
Enter giant defense contractor Northrop Grumman Corp. Ever since the company announced plans earlier this month to relocate its corporate headquarters from Los Angeles to the Washington area, corporate recruitment has taken on the qualities of a circus hawker.
Everyone is pitching their wares.
Virginia is touting Fairfax County. Only minutes from the Pentagon, Northrop Grumman would be close to its biggest client. Plus, Virginia offers a 6 percent corporate tax rate — lower than rates in Maryland, 8.25 percent; or D.C, 9.97 percent.
Not to be outdone, D.C. officials note that a law intended to recruit technology firms could come into play, eliminating the city’s higher rate for five years. After that, Northrop Grumman would pay at the same rate as in Virginia. Plus the Washington Post reports that D.C. is willing to throw in general property tax abatements and up to $1 million in credits for employees who want to move to the district.
As for Maryland, that state is hawking a qualified work force and its cluster of top defense firms, including Lockheed Martin. Northrop Grumman already has offices there.
In Virginia, it serves as the state’s largest private employer, with 32,000 workers, including 20,000 who work at Newport News Shipbuilding. But everything isn’t peaches and cream for Northrop Grumman and its relationship with the Old Dominion. For months, the company has been embroiled in an ugly contract dispute over its controversial implementation of a 10-year, $2.3 billion contract to update Virginia’s IT systems. Gov. Bob McDonnell has stated publicly that the dispute will not become a bargaining chip as efforts to woo Northrop Grumman play out.
With job creation top of mind as the country moves out recession, Virginia, Maryland and D.C. all want the 300 high-paying jobs and promise of additional tax revenues that would come with the relocation.
And what does Northrop Grumman want? A good deal, of course. Randy Belote told the Washington Post that the company plans to reach a decision by March based in part on which locality can offer “the best deal.”
Two years ago, Virginia offered Volkswagen of America Inc. nearly $6 million in incentives to locate to Herndon. Since then, other corporate headquarters have followed, including Hilton Hotels and defense contractor SAIC, both of whom left California for Fairfax County.
Virginia’s style, though, is bound to be cramped as the state faces a $4.2 billion budget deficit over the next two fiscal years. In this new open process of wooing corporations, maybe the loudest hawker draws the crowd. Seems to work for the circus.