Uh-oh. Subaru, whose sales have soared over the last several years, wants to move to a new headquarters.
This could mean trouble.
Subaru of America Inc. says its building in Cherry Hill, N.J., is too small, with staffers spilling over into adjacent buildings. It is looking at sites in New Jersey and Pennsylvania, but won't say whether it wants a larger existing building or a site on which it can build a new one.
Subaru of America, then listed on the New York Stock Exchange, moved into its current, custom-built building in 1986. A stock market analyst told me at the time that there's no better "sell" signal on a stock than when a company builds a headquarters.
It means management can't find anything better to do with its money than spend it on bricks and mortar, and management attention gets diverted from the real business.
Sure enough, Subaru suffered. After an 11 percent rise in 1985, Subaru's U.S. sales rose just 3 percent in 1986 to 179,100, and then fell each year until 1996. Sales didn't return to the 1986 level until 2001.
Or consider Toyota Motor Corp. It moved from its decades-old, low-rise Toyota City, Japan, headquarters to a gleaming new high-rise in 2005. Soon after -- about when showrooms began to fill with cars that had been designed when the top brass were reviewing architectural plans -- sales tripped over global recalls and other problems.
To be sure, this isn't a law of physics. Volkswagen AG opened a new U.S. headquarters in Herndon, Va., in 2007, and VW/Audi sales haven't suffered.
Subaru's U.S. sales surge is behind the crowding at headquarters. U.S. industrywide sales in 2012 were 39 percent above 2009's recessionary nadir. But Subaru's 2012 sales were 55 percent above its 2009 tally.
Maybe Subaru will rent an office complex without management becoming distracted. But its search for a new headquarters could be a lot more belabored than that. And there's another cause for concern:
Subaru's parent, Fuji Heavy Industries Ltd., plans to move into a new Tokyo headquarters in 2014.
You may e-mail James B. Treece at [email protected]