PhillyInc: LaHood's two views on development

Transportation Secretary Ray LaHood made two appearances involving economic development on the same day last week, and they could not have been more different.

LaHood gave a speech May 24 about funding for transportation projects, including high-speed rail, at a breakfast meeting hosted by the Greater Philadelphia Chamber of Commerce in Wilmington. The chamber's Select Greater Philadelphia arm, which markets the region as a good place to do business, offered its "State of the Region" report at the event.

Later that day, LaHood was in Chattanooga, Tenn., at the grand opening of Volkswagen AG's first factory in the United States since 1988.

Tennessee had offered $570 million in incentives to wrestle the $1 billion auto plant away from Alabama, which apparently could cobble together just $385 million to woo Volkswagen.

(Trivia alert: Remember where the last VW plant was? New Stanton in Western Pennsylvania, where the German automaker operated for about a decade with the help of $100 million in state grants and other assistance.)

I dislike the public-subsidies game played by business and government as much as anybody. But the difference between LaHood's two appearances that day were striking.

At one, he heard Select Greater Philadelphia talk about helping to attract nine companies to the region over the last 12 months. At the other, LaHood saw the new assembly lines where Volkswagen will make the new Passat and employ 2,000 people.

None of the businesses attracted to the Philadelphia area is on such a scale. But in truth, most of them mirror activities in sectors that are already here, such as life sciences and energy efficiency.

See if you can detect another theme from these companies that Select Greater Philadelphia says it had a hand in landing.

Webanywhere Ltd., a United Kingdom-based online learning-technology firm, opened its first U.S. office in Philadelphia in January.

Another U.K. firm, Car Group Holdings L.L.C., opened the U.S. headquarters for its used-car operations in Tinicum, Delaware County, earlier this year.

Phlexglobal Ltd., a contract research organization based in the United Kingdom, opened an office in Malvern in April. The company, which underwent a management-led buyout in March, said it would initially employ 20 people in Chester County and has plans to increase that to 50 within its first year here.

Swedish Orphan Biovitrum, a specialty-pharmaceutical company based in Stockholm, opened a Philadelphia-area office. It had 2010 revenue of 1.9 billion kronor, or $305 million.

Photocure ASA, of Oslo, Norway, established its U.S. sales and marketing subsidiary in Princeton to build its dermatology business. Mercer County is one of the 11 counties that Select Greater Philadelphia includes in its region.

British weatherization firm Mark Group Inc. established its U.S. headquarters last fall at the Navy Yard, where it hopes to employ 300 people.

That's right - six of the nine companies hail from Europe. Select Greater Philadelphia president and chief executive officer Tom Morr told me that his group has seen an increase in visits from international companies looking to establish U.S. offices.

He described last year's activity as "halting," even as 2010 was a stronger year for business attraction than 2009. So far this year, inquiries over Select Greater Philadelphia's website and by phone have been running stronger than 2010, largely because of interest from international firms.

However, Morr noted several headwinds that could cause that activity to fall again: the ongoing European debt crisis, weaker economic growth in the United States and the effect of high oil prices. "Things feel more sustained," he said, but they're not at 2007's strong levels.

Three companies that Select Greater Philadelphia included among its "wins" for the last 12 months are U.S. firms in very different businesses.

Scvngr Inc., a location-based apps company with headquarters in Cambridge, Mass., opened an office in Philadelphia for a pilot of its LevelUp local deal service. It was something of a homecoming for the well-funded private firm, which got its start in Princeton and participated in DreamIt Ventures business-accelerator boot camp in 2008.

Another energy firm, PaceControls L.L.C., also located its offices at the Navy Yard this spring, having relocated from York, Pa. It is leasing 2,200 square feet of space in what backers hope will become a center for boosting the energy efficiency of buildings.

Finally, Gardner Denver Inc., a $1.9 billion maker of industrial equipment, completed the relocation of its corporate headquarters from Quincy, Ill., to Wayne earlier this spring. But while the company is big, the 21,000-square-foot headquarters is small.

Annual meetings

Wednesday: Brandywine Realty Trust, Fibrocell Science, Met-Pro, Vishay Intertechnology; Thursday: C&D Technologies, InterDigital, Pennsylvania Real Estate Investment Trust, TelVue; Friday: Vishay Precision Group, Hill International.

Quotable

"So with my over-education in full view of the committee, I want to wish everyone Happy Nerd's Pride Day."

- Steve Tang, president and CEO of the University City Science Center, referring to his B.S. in chemistry, Ph.D. in chemical engineering and M.B.A. in testimony before the U.S. Congress Joint Economic Committee on May 25, the 34th anniversary of the release date of the first "Star Wars" movie.


Contact Mike Armstrong

at 215-854-2980 or marmstrong@phillynews.com. Read his blog, "PhillyInc," at www.phillyinc.biz