Ford Motor Co. said Thursday that it will move the U.S. headquarters of its foreign and domestic luxury lines to Irvine, creating 225 jobs and cementing Orange County as the hub of Southern California's burgeoning automotive industry.
The long-expected relocation from New Jersey of Aston Martin, Jaguar and Volvo--to join Lincoln in Ford's Premier Automotive Group--is the latest of what industry analysts see as a continuing migration of automotive-related companies to the region.
Irvine has become the focal point. City officials have been selling the city as "Motown West" in business recruiting drives throughout the country over the past year. With the Ford group, the city boasts headquarters to seven auto companies, a major motorcycle firm and half a dozen automotive design studios.
The car companies already have attracted a host of support services as well. Lincoln alone has brought advertising agency Young & Rubicam, which now has 250 employees, and Exhibit Works, a Detroit firm that designs and builds elaborate auto show displays.
"I think it's a very positive move for the county's image, and for its job picture, given these will be high-paying, high-quality jobs," said economist Anil Puri, chairman of Cal State Fullerton's College of Business and Economics. Ford's move doesn't bring "just another design center" to the West Coast," said Paul Hiller, who heads Destination Irvine, a private economic development program.
"These are headquarters facilities, and top management will be running their programs from Irvine," Hiller said. "This is one of the biggest economic development projects that has occurred for Irvine."
Indeed, economists and business leaders say that adding new headquarters is important to the county, which has lost a number of corporate offices in the last decade.
"Any time you add jobs, it's good for the economic impact," said Stan Oftelie, head of the Orange County Business Council. "But even better is the symbolic value of the headquarters."
While no one is betting on wholesale moves by other major auto makers, the plethora of advertising agencies, design studios and other businesses moving in to support the car industry is pushing the momentum.
"California is the place where trends are set, and you've got to be there," said Brad Fox, an analyst at AutoPacific Inc. The Tustin consulting firm is among dozens of car-related companies based in Southern California.
"Car people who don't already know that Southern California is important in the global auto industry are either unwise or foolish," Fox said.
General Motors Corp. underscored that with its recent decision to reestablish in North Hollywood the Southern California advanced design center that it closed for budget reasons just four years ago.
It is one of about 20 automotive design studios in the region, all of them fed by the Art Center College of Design in Pasadena, home of one of the three top-rated automotive design schools in the world.
The automotive design studios add to Southern California's reputation as a mecca for design and style innovations. The area's casual lifestyle and diverse population have spawned creative influences for a wide variety of products, from apparel and jewelry to toys and furniture.
There are no auto manufacturing plants here. But hundreds of companies make automotive performance and appearance parts, handle design work, perform marketing studies, build custom vehicles, restore classics and sell, repair and maintain the more than 20-million passenger cars and light trucks that fill Southern California highways daily.
About 53,000 are employed in Southern California's automobile industry, said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.
Ford's move will bring about 225 administrative, planning, sales and design employees to Irvine to join nearly 200 Lincoln Mercury workers.
Though the Japanese car companies began locating their U.S. headquarters in the area in the late 1960s, the growing presence of the auto industry was little noticed until Ford shook things up in 1998 by moving the global headquarters of its Lincoln Mercury unit to Irvine--the first time since World War II that a domestic car maker had been located outside of Michigan.
Since then, Lincoln and Mercury sales have begun climbing and company officials have boasted long and loud about how the area's cultural and ethnic diversity has helped them see things in a new light.
'It's Time to Go West'
Because of Lincoln Mercury's experience, Kyser said, "I think you'll start to see some of the other divisions say it's time to go West, and revitalize our health."
A spokesman for the Irvine Spectrum industrial center said Young & Rubicam has begun negotiating for a "significant" expansion of its 150,000-square-foot office in anticipation of increasing its auto-related client roster in the area.
And officials at Ford confirmed Thursday that the agencies that handle U.S. advertising for Jaguar and Volvo also will relocate large staffs to Southern California to keep in close contact with their clients. The two car companies together spend about $150 million a year on U.S. advertising, industry sources said.
Wolfgang Reitzle, London-based president of Ford's Premier Automotive Group, said the company's new North American headquarters will include an advanced design center dedicated to the four brands. Ford will also retain its Lincoln Mercury Concept Center design studio in Valencia.
"The benefits of this move from a designer's point of view are that you can avoid overlapping brand identity" by putting the decision makers together so they can communicate easily and frequently, said J Mays, Ford's vice president of design.
Car makers in the 1990s have learned that many customers see autos as status symbols and fashion accessories.
"People here put a certain emphasis on their cars, there's a special car culture, and we want to be here to take advantage of that,' Reitzle, a former top executive at German's BMW, said about the Southland.
Both Reitzle and Mays suggested that a first fruit of the relocation to Southern California could be a new type of Volvo that combines attributes of sport-utility vehicles and sedans.
"When we see here [in Southern California] how people have SUVs done in a very special way with fat tires and [riding] very low on the road, then we think that if it fits with the Volvo brand, why not develop a Volvo that is still a Volvo but fits that place in the market?" Reitzle said.
Ford will keep the global headquarters of its premier group in London, and Victor Doolan, former BMW of North America president, will oversee the North American operation from Irvine.
To house the Premier Automotive Group, its advanced design center and the corporate offices of Lincoln Mercury, Ford is building a 300,000-square-foot, five-story building in Irvine on land adjacent to the headquarters of Mazda North American Operations. Ford owns controlling interest in Japan's Mazda Motor Co.
Including parking garages and the Mazda facilities, the entire Ford campus will encompass 800,000 square feet of space.
About 75 Jaguar employees and 150 Volvo employees will be transferred from the two companies' headquarters in New Jersey. Three Aston Martin executives, out of only six administrative employees in the U.S. are making the move west.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
North American headquarters locations, unless otherwise noted.
* American Honda Motor Co.
* American Isuzu Motor Co.
* American Suzuki Motor Co.
* Daewoo Motor America
* Daihatsu America Inc.
* Hyundai Motor America
* Kawasaki Motors Corp. USA
* Kia Motors America
* Lincoln Mercury/Ford Motor Co. Premier Automotive Group
Opened: Schedule to open in 2001. Currently at temporary site in Irvine.
* Mazda North America Operations
* Nissan North America Inc.
* Mitsubishi Motor Sales of America
(includes Mitsubishi Research and Design)
* Toyota Motor Sales USA
* Yamaha Motor Corp. USA
Information not available
Source: Individual companies
Researched by JANICE JONES DODDS/ Los Angeles Times