Mitsubishi Electric, the giant Japanese manufacturer of electronic and power-plant equipment, is seriously mulling moving its US headquarters to Baltimore, Maryland, from Orange county, California, Mitsubishi sources have told Capitol Intelligence.
Mitsubishi was greatly impressed with Baltimore’s unique investment opportunities and the pro-business policies of Maryland’s Republican governor, Larry Hogan, when they met with him during the National Governors Association Winter meeting in Washington, DC, the sources said. Hogan is the vice-chairman of the NGA and is to become chairman in July.
Baltimore is highly attractive because of its location between Washington and New York City; the most efficient deep-water port (Panamex) in the United States; and as the headquarters of the world’s biggest asset managers, such as Legg Mason, TW Rowe Price and Amsterdam-based Aegon unit TransAmerica.
Baltimore Mayor Catherine Pugh, speaking with Capitol Intelligence in Baltimore, said she welcomed Mitsubishi Electric with open arms and noted that Mitsubishi would be joining other major utilities players in Baltimore such as Chicago-based Exelon Corporation unit Constellation and France’s Voelia.
Hogan and Pugh worked hand-in-hand to persuade Amazon owner Jeff Bezos to locate the company’s second headquarters in Baltimore.
Mitsubishi’s apparent decision to abandon California, a state in steady economic decline, for one of America’s fastest-growing cities – Baltimore – is part of a new trend of Japanese companies rethinking their strategies to succeed in the world’s largest economy.
Another Japanese company likely to transfer its US headquarters is Kawasaki Rail Car, currently based in the affluent exburbs of New York City, in the town of Armonk.
A Kawasaki source said the company, which specializes in providing subway cars and trains to US mass transit systems, had fallen on hard times after losing several important tenders to its competitors.
“Kawasaki management sort of lost the plot in Armonk. They are in a bad-for-business state [New York], they cannot recruit the best people as Armonk and Westchester county is too expensive, and there is absolutely no diversity,” the source said
Another main reason that Mitsubishi is looking at Baltimore is US President Donald Trump’s Opportunity Zones tax-credit scheme for companies investing in America’s economically depressed urban and rural areas, the sources said.
The Opportunity Zones tax-incentives program offers companies such as Mitsubishi Electric the ability to pay zero capital gains if they hold their investment over a decade.
JPMorgan chairman and chief executive officer Jamie Dimon spoke to the nation’s governors and companies such as Mitsubishi Electric about the unprecedented economic growth potential of Trump’s Opportunity Zones program at the NGA Winter meeting.