Minneapolis - St. Paul Business News

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Silophant
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Re: Minneapolis - St. Paul Business News

Postby Silophant » April 28th, 2016, 10:12 am

Is there any particular reason to assume they're going to lay off or relocate their thousands of employees? Obviously there will be some elimination of redundancies, but that article didn't really read like St. Jude is going to completely move out.

mnmike
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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 28th, 2016, 10:13 am

Not yet probably...but we know the drill by now, eventually, probably.

MNdible
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Re: Minneapolis - St. Paul Business News

Postby MNdible » April 28th, 2016, 11:30 am

I'd say that it's actually very unlikely, aside from the actual HQ jobs, that there will be any meaningful reduction in the core R&D, product development, licensure, and certification areas. You may have noticed that there's a ridiculous concentration of medical device manufacturers based in the MSP area, including some local ones, but also a number of international ones who do their work here because of the highly specialized workforce that exists in the area. That's frankly not replicable, and is hugely valuable to companies.

So, yeah, it's a bummer and it's a blow to our ego. But practically, it probably doesn't mean that much.
Last edited by MNdible on April 28th, 2016, 11:54 am, edited 1 time in total.

kirby96
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Re: Minneapolis - St. Paul Business News

Postby kirby96 » April 28th, 2016, 11:52 am

^agreed. There were definitely job reductions after Boston Scientific's acquisition of Guidant, but they still have a significant presence in the Twin Cities. These acquisitions tend to be for product lines that, while complementary, are fairly unique, so my guess is it's not quite as easy to consolidate everything.

acs
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Re: Minneapolis - St. Paul Business News

Postby acs » April 28th, 2016, 12:02 pm

I think we'd all love to have the other corporate HQ jobs on top of that, though. There are probably a lot of people who would want to work for a medical device company but aren't engineers or doctors themselves.

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Re: Minneapolis - St. Paul Business News

Postby MNdible » April 28th, 2016, 12:08 pm

Sure.

But perhaps you've noticed that mergers are a thing? I mean, it's one thing if a company picked up and said we're moving somewhere else because we don't like being in Minneapolis. But the fact is that businesses everywhere are concentrating and getting bigger. It's not a good thing, but it's also not a thing that is within the control of Minneapolis or Minnesota.

I'm not suggesting that SJM merging with Abbot is a good thing. But it points to the things that we, as a state and a region, can control: making sure we've got an outstanding, educated workforce -- and probably decent infrastructure (Trains and Roads too!).

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Re: Minneapolis - St. Paul Business News

Postby Tiller » April 28th, 2016, 12:13 pm

http://www.theatlantic.com/business/arc ... ge/417372/

A very relevant article about this phenomenon.

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Re: Minneapolis - St. Paul Business News

Postby mattaudio » April 28th, 2016, 1:08 pm

In most industries, mergers seem much less damaging now than they would have been even two decades ago. Primarily because nearly all work is done electronically and not on paper, and because conference calls, screen sharing, and videoconferencing are commonplace. I've worked at multiple Fortune 500 firms here in Mpls where there are split HQs or regional centers or whatever else. It's almost as if big firms *need* to have many different markets in order to get a good workforce. The Delta/NWA merger seems like the big exception, since most jobs were "Move to ATL or else." But even if Honeywell/Allied Signal happened today rather than 17 years ago, I think you would have seen Honeywell retain more of a corporate presence here, at least back-office and IT and the rest.

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Re: Minneapolis - St. Paul Business News

Postby MNdible » April 28th, 2016, 2:36 pm

acs wrote:There are probably a lot of people who would want to work for a medical device company but aren't engineers or doctors themselves.
I'd also note that a major R&D operation also requires all sorts of other employees to support them. HR, Supply Chain, even something arcane like IP is likely to stay largely tied to the R&D operation. To say nothing of janitors, security workers, and cafe line cooks.

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Re: Minneapolis - St. Paul Business News

Postby David Greene » April 28th, 2016, 3:42 pm

Tiller wrote:http://www.theatlantic.com/business/arc ... ge/417372/

A very relevant article about this phenomenon.
Wow, that is fantastic!
mattaudio wrote:In most industries, mergers seem much less damaging now than they would have been even two decades ago. Primarily because nearly all work is done electronically and not on paper, and because conference calls, screen sharing, and videoconferencing are commonplace.
Read said article. It's not just about the actual work. It's about how the company is or is not engaged in the community.
MNdible wrote:I'd also note that a major R&D operation also requires all sorts of other employees to support them. HR, Supply Chain, even something arcane like IP is likely to stay largely tied to the R&D operation. To say nothing of janitors, security workers, and cafe line cooks.
Ditto. The real money is going somewhere else far away.

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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 29th, 2016, 8:19 am

http://www.bizjournals.com/twincities/n ... rters.html

With St. Jude sale, Minnesota med-tech loses some HQ swagger
Apr 28, 2016, 2:50pm CDT

While Medtronic's exit to Ireland was more technical than practical, St. Jude Medical is really saying goodbye.

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Re: Minneapolis - St. Paul Business News

Postby Silophant » April 29th, 2016, 9:43 am


mnmike
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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 29th, 2016, 9:48 am

None of this is the end of the world, no...and we can sugar coat and say "it's not that bad" every time this happens (as I typically have)...but the truth is, it keeps happening. I hate to say it, but the tax system in MN is very unfriendly to big companies. We still have to play the game to stay competitive, whether we think we should have to or not. Perhaps someday the playing field will be leveled and more fair, but it isn't. I think we will see this trend continue. In most consolidation situations, companies will not choose MN as their HQ.

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Re: Minneapolis - St. Paul Business News

Postby MNdible » April 29th, 2016, 10:37 am

Please point to a single big company that left Minnesota because of our corporate tax structure.

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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 29th, 2016, 10:58 am

I didn't say that they necessarily left because of it...but what I did say is it makes us less likely to retain the HQ in consolidations. St. Jude? Delta? Nash Finch? The St. Paul Comanies/Travelers? I can think of a couple high profile situations where a MN company was the dominant one in a merger and we lost the HQ. Delta is the biggest....and Wells Fargo. Wells has maintained a huge presence though.

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Re: Minneapolis - St. Paul Business News

Postby Qhaberl » April 29th, 2016, 11:10 am

Where is their main offices located? It will be interesting to see what fills the empty spot.


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mnmike
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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 29th, 2016, 11:12 am

They aren't leaving their offices...not at this point.

MNdible
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Re: Minneapolis - St. Paul Business News

Postby MNdible » April 29th, 2016, 11:15 am

mnmike wrote:I didn't say that they necessarily left because of it...but what I did say is it makes us less likely to retain the HQ in consolidations. St. Jude? Delta? Nash Finch? The St. Paul Comanies/Travelers? I can think of a couple high profile situations where a MN company was the dominant one in a merger and we lost the HQ. Delta is the biggest....and Wells Fargo.
I didn't ask you to give me a list of mergers. Can you point to any instance where Minnesota's corporate tax structure was cited as a reason for a company leaving? Instances where a sweetheart package of tax incentives was dangled don't count.

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Re: Minneapolis - St. Paul Business News

Postby mnmike » April 29th, 2016, 11:18 am

Again, I never said it was a main reason for companies leaving. I think my two posts have been pretty clear. It is a reason for companies not staying. If you are happy with other companies acquiring MN companies and taking the HQ to places where it is cheaper...then there is no problem. In these situation it is unlikely the merging companies are going to choose to stay in MN, one of the highest taxed states. No, it isn't likely a company is going to just up and move without being purchased or merging.

Also, you just further illustrated the point from my first post...sweethart deals do indeed count, because sadly, it still happens. If we don't want to play the game, fine...but there are consequences. I wish we didn't have to.

Basically you are going over all the points of my first post. "well, but they just left because of A, B and C and it wasn't that bad"...and putting all sorts of qualifiers on it. The hard truth is, losing fortune 500 HQs is losing fortune 500 HQs.
Last edited by mnmike on April 29th, 2016, 11:25 am, edited 1 time in total.

Didier
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Re: Minneapolis - St. Paul Business News

Postby Didier » April 29th, 2016, 11:24 am

The company "left" because another company bought it, not because Minnesota taxes are crippling compared to those in Illinois.


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