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NCR Corp.'s decision to relocate its worldwide headquarters to Duluth, Ga., from Dayton, Ohio, where John Patterson founded the company in 1884 as National Cash Register, is keeping with the ATM manufacturer's strategy to become and remain the industry's low-cost operator, one analyst says.
NCR has often discussed its plans to become the ATM industry's low-cost operator compared with competitors by moving to areas with comparatively low labor costs.
"The company also can save money by hiring fewer people at its new headquarters, which will be a significant savings," Gil Luria, an analyst at Wedbush Morgan Securities in Los Angeles tells ATM&Debit News.
"And because of the economic downturn in commercial real estate, attractive leases are available," Luria says. "Local governments also offer significant tax breaks to companies' to relocate their headquarters."
NCR announced its decision to relocate Tuesday. Last year, NCR reported sales of $5.3 billion, up 8.2% from 2007.
In deciding to leave Dayton, NCR rejected a $31.1 million incentive package from Gov. Ted Strickland to remain in Ohio. The package included a nonrefundable $28.6 million job-retention tax credit against NCR's commercial activity or state income tax obligations. Strickland also offered NCR a $2 million grant to purchase and to install new equipment and $500,000 to train its workforce.
NCR is moving into a building occupied by the manufacturer's retail business, says Jeff Dudash, an NCR spokesperson. NCR, however, may construct a separate building to house its headquarters. Duluth will serve as a hub to centralize business strategy, technology development and support functions into a single U.S. campus from several offices, NCR says.
"The decision to consolidate functions in Georgia and build a technology-focused corporate headquarters campus is right in line with our business strategy to drive growth, improve our innovation output, increase productivity and continually upgrade our focus on the customer," Bill Nuti, NCR chairman and CEO, said in a statement. Nuti, however, and some of the company's senior managers will continue to work out of NCR's suite of offices in Lower Manhattan (ADN, 11/8/07).
"They have a reason for being there," Luria says. "It's a convenient location for executives of other companies to visit, and there are a lot of banks in New York." The company's ATM-demonstration center also there.
The move to a new headquarters will add 1,250 jobs, NCR says. There are currently 600 jobs in Duluth.
NCR will begin immediate relocation of staff who choose to move, and the company expects to complete the transition in 18 months. NCR also will relocate employees to Duluth from operations in other parts of the country, Dudash says.
Besides relocating its headquarters, NCR will take over the manufacturing of its SelfServ line of ATMs for North America at a plant in Columbus, Ga. NCR had outsourced the manufacturing to Flextronics International Ltd, a Singapore-based electronics-manufacturing services company.
To facilitate NCR taking over manufacturing, the city of Columbus will spend federal stimulus-package funds to renovate a vacant 345,000-square-foot plant and lease it to NCR, Dudash says. On it Web site, Columbus says it applied for $82 million in federal stimulus funds. NCR will create 870 new jobs at the plant. NCR's decision to bring ATM manufacturing in-house to serve machines sold in North America represents a trend.
"Diebold has for decades manufactured in-house customized ATMs for the North America at its plant in Lexington, N.C.," says Mike Jacobsen, a Diebold spokesperson. "There is a lot more customization in North America, and making these machines in-house give us a lot more control."
The relocation of NCR's headquarters to Georgia comes nearly a year after the company moved its worldwide customer-service business to Peachtree City, Ga. (ADN, 11/6/08). Columbus, Peachtree City and Duluth are close to Hartsfield-Jackson Atlanta International Airport, making it easy for NCR employees to catch flights across the country or to other parts of the world. ATM
