Bigger Subaru sales, bigger office building

CHICAGO — This is what happens to automakers that keep growing — they have to move to bigger digs.

As it chases another year of record U.S. sales growth for 2018, Subaru of America will be loading up furniture vans this spring to move from Cherry Hill, N.J., to a newly built office building in Camden, N.J., that will bear a large Subaru sign to tell the world that the auto brand is moving up.

A decade of growth in sales and organization has made it necessary for Subaru to find more floor space and also to tighten up its internal organization. Currently, 600 U.S. employees are scattered around multiple buildings in Cherry Hill, as well as at two office locations across the Delaware River in Philadelphia.

The new U.S. headquarters will be 250,000 square feet, with a separate 107,000-square-foot national service training center next door. Subaru currently is cramped into 115,000 square feet.

But as sales grow, so do companies.

When it moved into the Cherry Hill building in 1986, Subaru’s annual volume totaled 183,242 vehicles. Last year, Subaru sold 647,956 vehicles in the U.S.

The challenge of the relocation, according to Subaru President Tom Doll, will be holding on to what Subaru is and has been.

Rather than splurge on all-new furniture, Doll has ordered that some aspects of the Cherry Hill building be carried to Camden as heritage items. Among them: the conference room tables from the executive conference room and its boardroom.

“We’re going to take some of those key items where major, major decisions were made,” Doll told Automotive News on the sidelines of the Chicago Auto Show this month. “We’re going to be taking them over to the new building because they’re part of our history and part of our culture.”

Subaru’s move is unlike other recent automaker relocations. Toyota’s move from the Los Angeles area to Plano, Texas; Mercedes-Benz’s relocation from Montvale, N.J., to Atlanta; and Nissan’s move from L.A. to Nashville a decade ago, played administrative havoc with the companies. Despite urging employees to come along, the automakers lost a significant number of staff as people declined to uproot and relocate.

Those losses are normal, according to relocation consultants.

But Subaru’s headquarters move is only 5 miles away. Doll anticipates losing no one. But it still represents a new start for the company.

“I think it’s starting to hit people now,” Doll said of the plans. “We’re getting to the point where we’re starting to clean out our offices and getting ready for the move. People are going through files and cabinets that they probably haven’t gone through in 10 years.” 

Holding on to Subaru’s culture is a big concern for the executive. Subaru has grown fast in recent years, after two decades of modest performances in the U.S. market. People have changed and others added to the headcount. Doll says that 40 percent of the company’s employees did not work there just six years ago.

“It’s important for older people like myself to transfer the culture and the key aspects of who we are as a brand to that next generation of people that’s coming up so they can continue on with the good works that we’re doing,” Doll said. “I had that same benefit when we moved into this building in 1986. We had older people and younger people and it was important for us to learn from the older people.”

The new site offers employees a fresh setting in a commercial area anchored by Campbell Soup Co.’s global headquarters. The state of New Jersey awarded the automaker a $118 million grant to construct the office building in Camden, a gritty industrial town that has been going through rapid development lately.

“We think that area is going to redevelop,” Doll said of Camden. “When we moved to Cherry Hill back in 1986, there was nothing around us at the time. Across the street was an old, burned out race track, essentially an open field.”

Subaru’s now outgrown offices actually sparked commercial development there in the late 1980s and 1990s, Doll said. Restaurants and retail stores gradually joined them in the neighborhood.

“We think the same type of development is going to happen in Camden. But I think it will happen faster.”