Arrow Electronics to move HQ to Colorado
Arrow, a distributor of semiconductors, computer servers and other electronic components, is receiving $11.4 million in tax credits from Colorado in return for transferring the headquarters designation to a large company office in Englewood, near Denver. Arrow promised to create 1,250 jobs in the Rocky Mountain State during the next five years.
Executives pledged that no jobs would be cut on Long Island. About 550 people work at the administrative center on Marcus Drive in Melville, an office in Hauppauge and the Nu Horizons Electronics subsidiary, also in Melville.
"Our New York operations will continue to play a key role in the company," said Arrow chief executive Michael J. Long, a Colorado resident.
Despite such assurances, local business executives and economic developers Tuesday expressed concern about the company's long-term commitment to Long Island.
"This occurring in a weak economy on Long Island is psychologically extremely detrimental because it shows our technology leaving," said local builder Jack Kulka, who helped start the Hauppauge Industrial Association and went to high school with former Arrow chief Stephen Kaufman.
"Based on what has happened to other companies that have shifted their headquarters, there has been a gradual decrease in their employment," Kulka said, referring to Grumman Co., once the Island's dominant employer.
Colorado Gov. John Hickenlooper has ordered his economic development team to lure some of Arrow's 1,200 suppliers to the state, an initiative endorsed by Arrow. Information about New York suppliers wasn't immediately available.
Asked why Colorado was a better headquarters location, Arrow spokesman John Hourigan cited that state's four-year plan to expand technology employment, which will be centered on Arrow. He also said the company's Colorado operations, where about 1,000 people work, accounted for 57 percent of last year's sales of $18.7 billion.
"This is an address change," Hourigan said. "No one is leaving New York."
Arrow began as a radio store in Manhattan in 1935 and expanded to Mineola in 1956. Over time, Arrow has grown into an electronics giant; Fortune Magazine ranked it the nation's 140th largest public company by sales last year. The other Long Island companies on the magazine's list are medical supplier Henry Schein Inc. (No. 317) and Cablevision Systems Corp. (No. 321), which owns Newsday.
Despite Arrow's New York roots, state officials said they weren't given the chance to counter Colorado's incentives.
Suffolk County Executive Steve Levy and an official at Empire State Development Corp., New York's key economic agency, responded Tuesday by telephoning Arrow about possible aid to keep its headquarters on Long Island.
"We would have made every attempt to provide the company with an incentive package," said Austin Shafran of the development corporation.
In 1995, the state gave Arrow $400,000 in exchange for protecting 450 jobs and creating another 50. The county's Industrial Development Agency also provided help in the early 1990s.
Arrow's move comes weeks after IBM, Global Foundries and other computer chip makers agreed to invest $4.4 billion upstate and employ 6,900 workers. In addition, Canon USA is moving its North American headquarters from Lake Success to a new building in Melville.
Nevertheless, executives at a Long Island Association meeting Tuesday were depressed. "This was an anchor company for Long Island," said Michael Faltischek, chairman of the Long Island Angel Network, which links investors with entrepreneurs. "I hope this leads to efforts to stem the tide" of businesses leaving.
With James Bernstein
and Ellen Yan
Arrow at a glance
Headquarters: 50 Marcus Dr., Melville
Leadership: Michael J. Long, 52, chairman, president and chief executive
Business: Distributor of electronic components and computer equipment for industrial and commercial uses.
Employees overall: 12,700 worldwide
Employees on Long Island: 550
2010 sales: $18.7 billion
2010 profit: $480 million or $4.01 a share
NYSE ticker symbol: ARW
Rank in Fortune 500: 140 (by sales)
Arrow Electronics timeline
1935: Maurice ("Murray") Goldberg opens Arrow Radio on Cortlandt Street in Manhattan, selling used radios and parts at retail. Later sells new radios and parts.
1946: Incorporated as Arrow Electronics Inc.
1956: Second store opens, in Mineola.
1961: Shares go public, on American Stock Exchange. Headquarters moved shortly afterward to Farmingdale.
1968: Partnership of three recent Harvard Business School grads -- B. Duke Glenn Jr., Roger E. Green and John C. Waddell -- leads private investor group to acquire controlling interest in Arrow. Glenn is chairman.
1970: Sales total $9 million, Arrow is the 12th largest U.S. electronic distributor.
1979: Stock listed on New York Stock Exchange.
Dec. 4, 1980: Thirteen executives, including chairman and president Glenn and co-founder Green, die in a fire at a Westchester conference center. Waddell, who wasn't at the meeting, becomes chairman. Sales in 1980 total $177 million and Arrow is country's second largest electronics distributor.
Dec. 13, 2000: Agrees to lease an entire 163,762 square-foot office building in Melville from Reckson Associates Realty Corp.
May 28, 2003: Announces elimination of 400 jobs, 30 of them on Long Island, in restructuring. At that time, about 1,100 New Yorkers work for the firm at sites in Yaphank, Hauppauge and Melville.
July 25, 2003: Announces it will shut Yaphank distribution facility, eliminating 130 more jobs.
April 4, 2005: Announces it will eliminate 180 sales support jobs, including one on Long Island, and outsource the work. Arrow employs 800 locally and 11,000 globally.
Oct. 30, 2009: Announces layoffs of 100 of 543 employees from Melville headquarters. Positions being relocated to Englewood, Col.
April 27, 2011: Stock hits new high on profit jump -- $47.50. It closed Tuesday at $30.22, down $1.45.
Oct. 11, 2011: Announces plans to shift headquarters from Melville to Englewood, Col.
Compiled by Tom Incantalupo