Mercedes 'will lose talent' in move

DETROIT -- Steve Cannon, CEO of Mercedes-Benz USA, says only about 40 percent of its 1,053 employees are likely to move when the U.S. headquarters moves from New Jersey to Atlanta, based on the experiences of other companies.

Mercedes has made offers to the employees it wants to keep, and they have until April 15 to decide. Cannon would not give details on how many offers have been made.

Mercedes-Benz will be leaving its home of more than 40 years in Montvale, N.J., and will build a new headquarters in Atlanta by 2017. Employees will begin to move from New Jersey this July into a temporary building about a mile away from the new site, Cannon said.

"We will lose talent, and that is an unfortunate byproduct of a move like this. It will be painful for people who have helped our company," Cannon said. "For us, this is an important opportunity for the future."

Cannon said the new headquarters will be only two hours away from the Mercedes-Benz factory in Tuscaloosa, Ala., where a new employee immersion center opened late last year. More than 26,000 corporate and dealership employees will have to attend a two-day immersion program in Mercedes-Benz culture over the next few years.

Because of the lower cost of living -- estimated to be up to 30 percent less than Montvale -- "it will be easier to move people from the field force and vice versa," Cannon said.

"We looked at this as a 50-year decision. We have outlived the useful life of the building we are in. That building does not support our future growth."

In a wide-ranging interview, Cannon said Mercedes-Benz will add other vehicles to the new Maybach sub-brand that debuted at the Los Angeles Auto Show and was on display in Detroit with an ultra-luxury version of the S-class sedan.

The next model could be a Maybach E-class sedan, Cannon said: "You will see more from the Maybach brand."

Dieter Zetsche, CEO of parent company Daimler AG, said he could also "see the Maybach brand moving into SUVs."

That would give Mercedes-Benz a vehicle to compete with such newcomers as the Bentley Bentayga that goes on sale next year and a Lam- borghini model that's awaiting the green light from parent company Volkswagen AG.

Cannon also said Mercedes-Benz is considering a front-wheel-drive car smaller than what it now sells in the U.S. The A-class hatchback is sold in Europe but not in this market. When that car is replaced in the next few years, a variant could be sold here, Cannon said.

"The A class will change from what you have seen and from what you are used to," Cannon said.

A smaller vehicle off the flexible fwd architecture can help Mercedes-Benz meet the stringent corporate average fuel economy standard of 54.5 mpg for the 2025 model year, Cannon said.

The new A-class variant could be built in Mexico where Daimler and Renault-Nissan will produce 300,000 compact Infiniti and Mercedes vehicles a year. Production for Infiniti is slated to begin in 2017 and Mercedes production starts in 2018. The plant will make the new generation of the compact fwd CLA sedan and GLA crossovers that are currently selling in the U.S. A third model off the fwd architecture sold in the U.S. is the B-class Electric Drive hatchback electric vehicle.