WorldCity Business Magazine

Toyota: New Kid on the Block

by Mary A. Dempsey

At the end of the first quarter of this year, a cluster of Toyota employees will relocate to Miamis Blue Lagoon office park. They are part of the Japanesee auto giants strategic research and planning unit for the Americas.

And their move is yet another example of South Floridas appeal as a gateway to Latin America.

“At the beginning of 2001, Toyota Motor North America had nothing in Miami. And now were going to have more than a dozen people,” said Michael Warren, national manager for the automaker’s Americas Strategic Research and Planning Group, now working out of New York. “I consider that pretty significant for a company that operates lean like we do, and it demonstrates Toyotas commitment to the region.”

The unit will join two other small Latin American groups already in South Florida: the area marketing team, which arrived in Miami in April 2001, and the customer service unit, which was moved from Panama in 2004.

“The Internet service in Panama was not good at that time. And you could get better flight connections from Miami,” Warren explained.

The Miami-based Latin American marketing group for Toyota Tsusho, the automakers sister company handling parts, supplies and built-up units in the region, will share the same floor of an office building.

Toyota, which is expected to surpass Ford Motor Co. this year as the No. 2 automaker in the United States, does not break down its revenues by geographic region. Its overall operations for Latin America are managed from Japan.

But Toyota is not the only multinational that is fostering deeper roots in South Florida. Miami International Airport has confirmed that a Brazilian air cargo company will open warehouse facilities in Miami. Airport officials declined to identify the company, which they said was based in So Paulo, until the deal is concluded.

Meanwhile, a global toy company, described as one of the world’s biggest, reportedly will move its Latin American regional headquarters this year to Miami, known unofficially in multinational business circles as the “capital of Latin America.”

“Miami is the only Latin American city where youll find a First World legal system, telecommunications systems, financial system, logistics and infrastructure,” Lawrence Woerner, managing director at human resources consulting firm Mercer, told participants at a recent WorldCity CEO Roundtable (see Loyalty pays off, page 46). “I think Miami will be at least as important to international business down the road as it is today.”

When Jos Duarte, president and general manager of SAP Latin America, released the 2006 revenue figures for his unit of the software provider, he did it from a seventh-floor office in Miami. Duarte gave some thought to where he would work when he took over eadership of SAP Latin America in mid-2006. He decided to keep the operation in South Florida.

“I could have chosen New York or So Paulo or Buenos Aires,” he said. “But there was one big difference about Miami the airport.” He said getting to the airport from his Blue Lagoon office was a snap and MIA not only had service everywhere he needed to go, but flight times were manageable for most destinations.

“I know all about the flights,” he added. “I am a flying manager. Within three months of arriving here, I had executive platinum status on American Airlines.”

Duarte said safety was also a concern. ”[In Latin America], I could travel in an armored car but here I come to work in a convertible every day,” he said.

If results are the benchmark of effectiveness, the Miami office can show them. SAP Latin America saw year-on-year revenue growth of 38 percent in 2006, making it the companys fastest-growing unit. Latin America represents 8 percent of SAPs global business.

Preliminary 2006 results put SAPs global product revenues?at euro 6.64 billion.

Among the big players moving over to SAP technology solutions last year was Cemex, the Mexican giant that has evolved through acquisitions into the worlds No. 3 cement maker.

“Cemex was already a customer on a smaller scale, but now our work begins,” Duarte said. “Cemex is one of the best if not the best branded companies in Latin America.”

Fine-tuning the roster

In 2001, when WorldCity began compiling the Who’s Here database, the list contained 850 multinationals from 47 countries that also had a presence in South Florida. It now has more than 1,230 companies that meet a list of criteria, including offices in multiple countries or ownership outside the United States. Those Who’s Here multinationals have a dramatic reach: Collectively they oversee 4.5 times as many global employees as they do South Florida workers.

South Florida’s multinationals can claim credit for more than 188,000 jobs in Miami-Dade, Broward and Palm Beach counties up from the 169,000 in last year’s database. But more telling is the number of people outside South Florida who are managed from those local offices. That figure is 843,000, up from 560,000 a year earlier.

As global trade increases and more and more companies look to Miami, Fort Lauderdale and Boca Raton as convenient gateways to Latin America, Miami’s profile as a “world city” continues to gain ground.

South Floridas appeal to multinationals stems, to a great extent, from its geographical proximity to Mexico, Central America, the Caribbean and South America. By the same token, Latin American companies see multilingual Miami as their gateway into North America. And, increasing, Asian and even European companies are choosing South Florida for their Latin American regional headquarters.

South Florida continues to face the challenge of how to fine-tune its appeal. Stepped-up security and new immigration regulations including new passport requirements for Mexican and Canadian executives flying to the United States have business leaders complaining.

Meanwhile, South Floridas growing pains, including traffic congestion, rising housing prices, complicated hurricane insurance policies and less-than-world-class educational facilities, also are frequently cited as barriers for some companies contemplating relocation. WC