Its name has been part of Toledo for more than a century, but its leader for a year has decided to move Owens-Illinois Inc. to the suburbs.
O-I, Toledo's second-largest company and the world's largest glass-container manufacturer, said yesterday it would give up its high-rise home for the last 24 years to move next year to a campus-style site it owns in Levis Development Park in Perrysburg.
The move, a sharp psychological blow to downtown Toledo, was attributed, among other factors, to a desire to have a bigger cluster of O-I employees, to have a campus atmosphere rather than an office tower, and to shed what the company leader, Steven McCracken, viewed as a somewhat ostentatious quarters.
Company officials put a positive spin on the decision, noting that the firm could have moved to another state but elected to remain in metropolitan Toledo.
"We're happy to be staying [in northwest Ohio]," said Mr. McCracken, O-I's chairman and chief executive officer, at a hastily called news conference yesterday morning at the global headquarters in One SeaGate downtown.
O-I will move its 340 headquarters employees from the 32-story office tower on the Maumee River to its campus in Perrysburg starting in a year and be out by the time its lease expires in September, 2006, he said.
The firm has about 550 workers now in three buildings at its Perrysburg property in the 393-acre Levis park along State Rt. 25 and Roachton Road.
Owens-Illinois has owned property there since 1966, and once the headquarters moves, Mr. McCracken said it would be labeled "One O-I."
The move, which otherwise shouldn't affect the firm's operations or its employees, means Toledo will have just two Fortune 500 firms - Dana Corp. and Owens Corning.
Thirty years ago, Toledo was home to seven Fortune 500 firms.
It will put the vacancy rate in one of downtown's most notable landmarks at nearly 50 percent. O-I occupies about 200,000 square feet of One SeaGate, the tallest building in the city's skyline.
The departure, however, could cause other tenants to leave, either because of lost business or to be near the glass giant.
The new facility, Mr. McCracken said, hasn't been designed, but it will be a low-rise building. An architect will be hired soon.
The company will construct a 75,000 to 100,000-square-foot building and will renovate the three existing buildings in Perrysburg which have 400,000 square feet.
All the CEO would say about the design was: "We're a glass company. You'll see a lot of glass."
Mr. McCracken declined to estimate the cost of the new facility or the total cost of the move.
The new campus-style environment will help O-I's headquarters employees work better in teams, he said.
He told The Blade in an interview that he visited Owens Corning's riverfront campus a couple of weeks ago and was impressed.
"You feel the culture when you walk in there," he said. "You see all these ad hoc groups that are meeting here and there and elsewhere.
"I think they've succeeded in creating that kind of mood and mentality in a campus setting," Mr. McCracken said.
O-I is much different than it was in 1981 when it moved into One SeaGate, the chief said. Then, it had 2,200 employees at its headquarters and was a much bigger company with substantially less debt.
The CEO, who came to O-I in April, 2004, after being an executive with Du Pont, said he considered many options, including moving the headquarters to cities that are major airline hubs, such as Detroit, Miami, and London.
"We looked at so many alternatives, it would make your head spin," he quipped.
He said the move to Perrysburg ultimately will be good for Toledo, too, because the jobs remain in the area.
"We will be eating our dinners in the same places," Mr. McCracken said.
The decision was a tough one, he said, and one he "did not want to make until all the facts were on the table and all alternatives were evaluated I'm not a black-and-white person. I operate in the shades of gray."
Putting the downtown employees together with the suburban work force made sense, he explained.
"We feel stronger together than apart," Mr. McCracken said.
Determining where and what sort of headquarters the company should have, he said, was hastened by two factors: the expiration of its lease on Sept. 30, 2006, and the firm's sale last year of most of its plastic-bottle operation, which vacated space in Perrysburg because it had 215 workers in that operation.
Company employees were notified yesterday.
The firm had been leaning toward a move to the suburbs. The CEO told The Blade in early February there was a 60 percent chance it would move to Perrysburg.
He also said that most of the headquarters employees, in a survey, said they preferred the move.
It will be the sixth headquarters in O-I's 102-year history. Until now, all five of its headquarters have been in Toledo, and four of them downtown.
For many years O-I was Toledo's largest company, and now is second only to Dana. And for years it was a major employer, with as many as 5,150 workers as late as the 1970s.
Over the years, it has had business units in as many as 30 Toledo-area facilities.
At its peak, O-I employed about 1,500 scientists and technicians in its technical center, once located on Westwood Avenue but more recently at the Levis park campus.
In the early 1980s, O-I had 64,000 employees globally, compared to fewer than 30,000 today, and its debt was $600 million then, versus $5.3 billion now, he added.
The Toledo company was offered incentives from several communities and the state of Michigan, but the CEO said "incentives were secondary, not primary [in the decision]."
He insisted, as he had earlier, that O-I did not want to create a bidding war between Toledo and Perrysburg.
"We didn't want that to be our legacy," he said.
The Ohio Department of Development offered incentives totaling more than $11 million for O-I to develop its new headquarters, either in Toledo or Perrysburg.
The department had notified Owens-Illinois in late February that it was offering the incentives based on the understanding that the company would retain at least 300 headquarters jobs and 600 research-and-development jobs in the region. The incentive offer also was based on the company investing either $9 million at One SeaGate or up to $40 million in Perrysburg, presumably covering a new headquarters facility and renovation of the existing buildings.
Ohio's package includes grants for machinery, road work, workforce development, tax credits, and loans for buildings.
The city of Perrysburg offered O-I roughly $6 million of incentives to relocate to Levis Development Park.
The incentive package included tax breaks and promises to facilitate infrastructure improvements at the site.
Mr. McCracken declined to pinpoint the exact location of the new headquarters.
But he told The Blade it "will be near" a knoll that longtime O-I employees and retirees say was selected as the headquarters site in the mid-1970s when O-I was outgrowing its old location on Madison, the 31-story structure now known as National City Bank Building.
A plan the company submitted this year to Perrysburg shows the building in that location.
Thirty years ago, the late Edwin Dodd, longtime chairman and CEO of Owens-Illinois, vetoed the suburban headquarters in favor of the $100 million One SeaGate, which he viewed as the centerpiece of downtown Toledo's revitalization effort in the late 1970s and early 1980s.
Mr. Dodd was not alone in his assessment. Joseph Lemieux, who retired at the end of 2003 after 13 year as O-I's chief executive, said in 1999:
"We'll be the last company ever to leave. We will keep this building full. It's a great building."
However, Mr. McCracken believes his spacious 27th floor office - with a grand view of the Maumee River, East Toledo, and much of downtown Toledo - is too lavish.
He said yesterday that the sumptuous offices might be appropriate for a pharmaceutical or electronics firm, but "we're a humble bottle company."
He added that when customers visit his offices, "I usually apologize [because they're thinking]: 'Am I paying for this?' "
Blade staff writers Rachel Zinn and Tom Troy contributed to this story.
Contact Homer Brickey at:
homerbrickey@theblade.com
or 419-724-6129.
First Published May 6, 2005, 10:43 a.m.
