Chicago chasing MillerCoors
14.02.2008 15:00
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- Source: JS Online
If losing twice to the Chicago Bears this past football season wasn't bad enough, now the Windy City is stalking a much bigger trophy: the executive offices for the combined operations of Miller Brewing Co. and Coors Brewing Co. Chicago is among the metro areas pitching for the MillerCoors LLC headquarters, which could mean about 100 jobs and a huge mug of corporate prestige. Those efforts drew attention Wednesday when Pete Coors, chairman of Golden, Colo.-based Coors Brewing, was quoted as saying the proposed joint venture's headquarters would probably land somewhere other than the Milwaukee or Denver areas. "There's a fairly strong sense a neutral site would be important," Coors told the Rocky Mountain News. "If you pick one city over another, people in the other city will say, 'They're running the deal.' I don't think that's particularly healthy." Coors, who will be the nonexecutive chairman of MillerCoors, said a headquarters decision hasn't been made and that naming possible locations would be "totally speculative." Hastily issued statements from both Coors Brewing and Miller downplayed his remarks. But industry sources said there has been speculation that either Chicago or Dallas could be the future home of MillerCoors. Other cities are expected to make pitches. A spokeswoman for the Greater Dallas Chamber said the organization doesn't comment on its recruitment efforts. But, true to form, the Chicagoans weren't so shy. "We've got it all," said Jerry Roper, chief executive officer of the Chicagoland Chamber of Commerce. He cited the city's "huge transportation advantages;" its large, diverse labor pool; and its closeness to Milwaukee. Chicago is home to several well-known advertising agencies, which are key players in the beer industry. Also, among Coors Brewing's main outside law firms is Foley & Lardner, which has major operations in both Chicago and Milwaukee. Much of Miller's legal work is handled by Milwaukee-based Quarles & Brady, which is expanding its Chicago office. Milwaukee's closeness to Chicago has even been part of the effort to keep most of the Miller office jobs here. Pat O'Brien, president of Milwaukee Development Corp., southeastern Wisconsin's business recruitment agency, has noted that Chicago offers a lot of amenities within a relatively short drive of Milwaukee. Miller has 900 employees at its headquarters at 3939 W. Highland Blvd. Coors Brewing won't disclose specific numbers but has hundreds of nonbrewery employees in Golden, a city west of Denver. However, a MillerCoors headquarters would probably have a lot fewer workers. Mariann Montagne, an industry analyst at Minneapolis-based Thrivent Asset Management, said a MillerCoors headquarters could involve fewer than 100 jobs - mainly upper-level management and their support staff. Without discussing numbers, Coors Brewing spokeswoman Kabira Hatland said the headquarters is expected to be "relatively small." The rationale for having the headquarters in Chicago, Dallas or some other city would be to create neutral turf and reduce the "us vs. them" mentality that accompanies corporate mergers, Montagne said. In that scenario, hundreds of jobs could remain in both Milwaukee and Golden, especially if MillerCoors divided back office corporate functions - such as information technology, accounting, human resources, and purchasing - between the two cities. Of course, a worst-case scenario for Milwaukee would be the loss of not only the executive offices but also the back office operations. Some job losses are inevitable. The joint venture is designed to cut annual costs by $500 million, including the reduction of administrative and office employees. There are no plans to close any breweries, including Miller's Milwaukee operation, which has 800 employees. After Coors made his comments, Coors Brewing issued a statement that said a review of potential headquarters sites wouldn't begin until after the proposed joint venture receives antitrust approval. That isn't expected until summer. Miller issued a similar statement. "At this stage, no decision has been made about the (joint venture) headquarters location and no cities have been ruled out," the Miller statement said. "In fact, the selection process has not even begun since there are a number of steps that need to happen first, like determining which functions might be best located together in a central headquarters, and which functions would operate effectively in existing locations." Miller is owned by London-based SABMiller Plc, and Coors Brewing is part of Molson Coors Brewing Co., which splits its headquarters between Denver and Montral. Plans for the joint venture were disclosed in October. Graham Mackay, SABMiller chief executive, and Leo Kiely, chief executive of Molson Coors, say the combination will allow Miller and Coors to better compete with Anheuser-Busch Cos., which has a U.S. market share of 48%. The combination of Miller, the nation's No. 2 brewer, and Coors, the third-largest U.S. brewer, would provide MillerCoors with a 29% market share. SABMiller and Molson Coors will each have a 50% voting interest in MillerCoors. But, based on asset value, SABMiller will have a 58% economic interest in MillerCoors and will receive that share of the joint venture's income. Kiely will be CEO of MillerCoors and will serve at least two years. He is expected be succeeded by Miller President Tom Long, who will be MillerCoors' president and chief commercial officer.
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