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Desire for neutral site eliminated Milwaukee as an option for MillerCoors HQ
Published July 16, 2008 - BizTimes Daily
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MillerCoors executives, who announced yesterday that Chicago would be the company's corporate headquarters, eliminated Milwaukee as an option for the headquarters when they determined that they needed a "neutral site."
A neutral site, outside of Miller's Milwaukee home or Coors Denver-area home, was necessary to eliminate any perception that either of the partners in the joint venture had authority or power over the other, said MillerCoors spokesman Julian Green.
"Being a new company with a new corporate culture, we decided we would have to pick a neutral site," he said.
SABMiller plc and Molson Coors Brewing Company recently closed on the transaction to combine their U.S. and Puerto Rico operations to create MillerCoors LLC, which began operating as a combined entity on July 1. The company will bring between 300 and 400 executive and management jobs to Chicago beginning in June, 2009. The Chicago headquarters will move about 150 to 175 jobs away from the Miller Brewing headquarters in Milwaukee.
Once the company decided that it wanted a neutral site, Green said local officials were asked not to submit an economic incentive package to MillerCoors, because Milwaukee was not an option for the headquarters. Chicago and Illinois are offering an incentive package worth about $25 million.
"Early on, I made it clear that Milwaukee would do whatever it takes to be the new MillerCoors home city," said Milwaukee Mayor Tom Barrett. "I have no doubt we would have been able to put a competitive package for MillerCoors either in the current Miller Valley location or any other place in the City, just as we have done for Manpower, Bucyrus, Palermo's and others. That was not to be. The new MillerCoors board was committed to a neutral site."
"I am disappointed that MillerCoors believed that the joint venture headquarters, for corporate governance reasons, would have to be at a neutral site and that neither Milwaukee nor Golden (Colo.) would be considered," said Gov. Jim Doyle.
About 150 corporate and administrative jobs are expected to be shifted from Milwaukee to the new MillerCoors headquarters in Chicago.
However, the silver lining for Milwaukee is that MillerCoors has pledged to invest $50 million in improvements to the Milwaukee brewery and will increase production and the number of production jobs at the brewery. Green said it has not been determined how many production jobs will be added. About 900 production employees work at the brewery now.Yearly production at the brewery in Milwaukee will be increased from about 6 million barrels of beer a year to 10 million barrels a year, reaching production levels not seen at the plant since the 1970s, he said.
"MillerCoors serves up a good deal for Milwaukee County," said County Executive Scott Walker. "MillerCoors will invest over $50 million into the brewery in Milwaukee over the next three years and they will increase the number of jobs at the brewery in Milwaukee to levels not seen since the 1970s. In addition, they will continue their strong corporate leadership and investment in Milwaukee, Milwaukee County and Wisconsin. From Miller Park to the Miller Stage at Summerfest to the Miller Giraffe Experience at the Milwaukee County Zoo, they will continue to be a major player in our community. Overall, a strong MillerCoors means a strong Milwaukee."
Barrett said he is glad that the company will expand production in Milwaukee, but also wanted the headquarters.
"Look, I'm not going to sugar coat this," he said. "I wanted it all. I wanted the headquarters and I wanted the expanded brewery. Throughout my conversations with (MillerCoors CEO) Leo Kiely and (MillerCoors president) Tom Long over the past nine months, they have been candid, professional and sensitive to Milwaukee's brewing history. It's a tough business – both nationally and internationally. St. Louis is feeling the shock waves as InBev announced its intent to take over Anheuser-Busch. Companies throughout the country are feeling the effects of an increasingly flat world economy."
"At the same time, I want to put this news in context. In the last month alone, I've made
announcements about four business expansions that will bring $114.3 million to
Milwaukee's economy."
Barrett said he hopes Miller employees will decide to stay here, rather than move to Chicago, and he is asking area businesses to consider hiring them.
"I want to turn my focus to keeping the talent here in Milwaukee," Barrett said. "Even though the brewery operations will grow significantly as a result of this joint venture, creating new jobs, my concern is the unintended effect on the many sales, marketing and other corporate positions whose jobs may be eliminated or moved to Chicago. Chicago is a higher tax city in a higher tax state. Real estate is more expensive; commutes are longer. For those professionals who are committed to the high quality of life, affordability and ease of Milwaukee, I'm asking companies here to reach out to them with available jobs so we can keep them here and avoid the dreaded brain drain. Milwaukee is a spectacular place to live and do business. With the fifth-highest concentration of top companies in the country, a below-average cost of living and salaries paid to professionals comfortably above the national average, it's no surprise that many of the displaced MillerCoors employeeswill be looking to stay in the Milwaukee region. I will help them do just that."
