IRVINE, CA â€“ Newspaper publisher Horace Greeley in the 1840s proclaimed "Go West, young man." A lot of folks still are following that advice today.
Only this time, it's not young hardy males making the trek westward to find wealth. Instead, it is foreign auto makers that are transplanting manufacturing, sales and marketing and design operations on U.S. soil in order to compete in the worldâ€™s largest auto market.
Many are locating in Irvine, just south of Los Angeles, nestled comfortably in the Orange County area.
The migration first began in the late 1980s whenMotor Corp., by all accounts, became the first to establish roots here with a $23 million research and development center. Today, Mazda North American Operations is headquartered in Irvine Spectrum, the country's largest R&D development park.
In 1990, Mercedes-Benz established a state-of-the-art design studio in northwest Irvine. Mercedes-Benz Advanced Design started with three employees and now has 20, a testament to the centers growing influence on Mercedes design.
Kia Motors America Inc. built its North American automotive headquarters in the city in 1994. It was followed by Premier Automotive Group (PAG),Motor Co.â€™s luxury division, which officially opened its North American headquarters here in 2000.
All five PAG brands now are housed in a complex at Irvine Spectrum. They include Volvo, Land Rover, Jaguar andâ€“ all once located on the East Coast. Fittingly, several Volvo Car employees drove Cross Countrys to their new digs.
Domestic auto maker Lincoln Mercury also moved its headquarters from Dearborn, MI, to Irvine in 1998. The company has a new design studio called the Lincoln Mercury Concept Center.
Just after PAG opened its new headquarters, Mong Koo Chung, chairman of South Koreaâ€™sMotor Co. Ltd. and its Kia subsidiary, broke ground on the Hyundai/Kia California Design and Technical Center. The $25 million facility will house 150 auto designers, engineers, model makers and technicians â€“ many of whom were responsible for design successes such as Hyundai's Santa Fe SUV and the HCD 6 concept vehicle.
In all, 16 global auto makers now have a significant presence in Irvine, which city officials have dubbed the "Motor City West," or "Detroit West." One civic booster here suggests Detroit should start referring to itself as "Irvine East."
What's spurred the Western migration? One motivator is Irvine's aggressive plan to lure "attractive" companies. "We're not looking for the manufacturing operations but the brains behind the operations," says Paul Hiller, executive director for Destination Irvine, a local group set up to attract new business to the city. "We want the headquarters, sales and marketing offices and the design studios."
It isn't a tough sell. The 30-year-old city has held to its goal of becoming one of the world's leading technological and R&D centers. Companies have access to a highly educated population â€“ 62% hold a college degree, with 50% having a bachelor's degree or higher.
Karlheinz Bernhard, president of the Mercedes design studio, says one reason for building here is that Orange County is the country's "newest emerging technology hub."
Hiller agrees. "The more companies that move into an area, the more attractive it becomes for other companies," he says. "Irvine has no where the automotive critical mass of Detroit, but you never can tell what the future holds."
Yet, says Victor Doolan, PAG's director of North American Operations, "When we first started considering Irvine, our biggest question was, 'Can we sell the move to our employees?'"
It was not exactly a tough sell. With an average winter temperature of 50 degrees, average summer temperature of 75 degrees, an unemployment rate of 2% and the lowest crime rate in the nation according to the FBI, who wouldn't want to live here?
The majority of PAG employees did agreed to make the move. Likewise, Lincoln Mercury brought more than 70% of its staff when the division relocated four years ago.
For the PAG brands, which previously had done poorly in the southern California market, the move West represents a serious attempt to establish a beachhead in a market dominated by Asian and German brands.
Volvo has had a very weak presence in southern California, says a spokesman for Volvo Cars of North America Inc. Regardless, he says, "It is the place to be. We realized we could learn a lot by being in the center of the world's largest luxury market."
PAG President Wolfgang Reitzle agrees. "The area between the Rocky Mountains and the Pacific comprises the largest luxury vehicle market in the world, and it makes terrific sense for us to be at the epicenter," he says.
What it all comes down to is product â€“ who can design the next big hit. Auto makers believe being in southern California will inspire them. Thatâ€™s because the region is considered the trend-setting capital of the country, and the automakers hope their designers can tap into the next wave.
Says Kia Motors America President and CEO B.M. Ahn, at the groundbreaking ceremony for the companyâ€™s new design center: "The big benefit of this design center is having a California-based design staff that understands how to take automotive trends and make them appealing to U.S. consumers on a bigger scale."
Adds Reitzle: "California offers a trend-setting, diverse and consumer-focused culture and is the ideal location to plan the growth of our premium brands."
It also doesnâ€™t hurt to have the world's top design school located close to Irvine. In fact, over half of the world's automotive designers are graduates of the Pasadena's Art Center College of Design. "Graduates would rather stay in southern California," a school spokesman says. "No one wants to live in Detroit. Really, who wants to shovel snow?"
"There is a lot of talent out here," agrees AutoPacific auto analyst Jim Hossack. "The auto makers find it liberating to have designers living and working in an exciting and invigorating environment."
Many here say it a culture that breeds design, styling and experimentation. "Californians have a love affair with their vehicles," says a spokesman for for Saleen, a high-performance vehicle manufacturer that just moved to Irvine. We know what we want from our vehicles."
Bernhard agrees there is a strong car culture here, but there also is strong cultural diversity. "We are ethnically diverse. We have young and old here, rich and poor â€“this helps us know what people want."
Additionally, Bernhard believes being close to Hollywood helps. "The design and entertainment industries offer a unique environment for cutting-edge design and trends."
Citing Out of Africa as an example, he says, "The movie influenced colors dramatically. For a while, vehicles had more earth-tone type colors." Others say the upcoming Star Wars movie The Phantom Menace likely will impact future vehicle design. If so, we could start seeing that influence in 2003.