Shifts at Advance Auto lead to execs’ relocation
Roanoke-based Advance Auto Parts Inc. plans some dramatic organizational changes in the wake of the $2 billion acquisition of Raleigh, N.C.-based General Parts International.
Those changes will keep Advance’s headquarters in Roanoke but move three top executives — CEO Darren Jackson, President George Sherman and CFO Mike Norona — to the company’s Store Support Center in Raleigh.
The transition of corporate functions will take place gradually during the next 12 to 18 months. “We would have preferred the jobs stay here,” says Joyce Waugh, president and CEO of the Roanoke Regional Chamber of Commerce. “We hate to see any jobs leave.”
Advance’s acquisition of General Parts was completed in January. The changes taking place will keep approximately 1,600 employees in the Roanoke Valley with approximately 1,000 employees based at the Store Support Center. The long-term effects of the restructuring are unknown at this time. The company is keeping any future plans close to its vest.
What is known is that Advance Auto plans to create 600 jobs in Raleigh by the end of 2017 and invest more than $5 million in the city. It joins other major businesses in Raleigh and the Triangle (Raleigh, Durham and Chapel Hill) such as Martin Marietta Materials Inc., The Pantry Inc. and Quintiles Transnational Holdings Inc.
As the largest automotive aftermarket parts provider in North America, Advance was attractive to North Carolina because the state “wants to remain strong in the auto parts supply chain both in the retail and commercial mix,” says Kim Genardo, communications director of the North Carolina Department of Commerce.
North Carolina offered Advance Auto a Job Development Investment Grant that makes the company eligible to receive up to 12 annual grants that could yield the aggregate benefits of more than $17.4 million during that time period.
“If it was not a competitive project, we would not have considered the grant,” Genardo says.
Advance’s restructuring follows the “ebb and flow of mergers and acquisitions,” says Bob Kelley, assistant professor of management at Virginia Commonwealth University. “If you think about it from a logistics standpoint, Raleigh is a much bigger area that attracts bigger talent. It’s also an easier place to come and go. It’s more of a hub.”
The Raleigh area has a population of about 1.2 million, compared with about 312,000 in the Roanoke area.
Seeing Raleigh as a better place for their executives could be a “key reason why the company made the decision,” Kelley says, adding that this type of restructuring “is a fact of life. Cities will lose companies, and they will gain them.”