Source: http://worldcityweb.com/home/MIA/publications/magazine/6/622/

Tracking the big ones

by Mary Dempsey

Some 155 Fortune 500 companies now have a presence in South Florida, with many of them including ExxonMobil, GE, Citigroup, AIG, Hewlett-Packard, Bank of America, Johnson & Johnson, UPS, Intel, Merrill Lynch, Walt Disney, AT&T and Caterpillar using the area as a springboard to Latin America and the Caribbean.

The tally marks 19 fewer Fortune 500s than two years ago, when WorldCity did its first review of the nation’s biggest companies with offices and employees in South Florida.

Of the 10 largest U.S. companies, six have administrative or sales offices in Miami-Dade County, one in Broward County and one in Palm Beach County. The two without a South Florida presence are No. 1 Wal-Mart, which distributes through Miami with a logistics provider and has numerous stores, and oil company ConocoPhillips.

The six Top 10 Fortune 500 companies in Miami-Dade County are ExxonMobil, Chevron, GE, Citigroup, AIG and IBM. GM is in Broward County and Ford is in Palm Beach County. In addition, some South Florida operations are subsidiaries of ranked companies. Kraft, a subsidiary of Fortune 500 company Altria, has established a local office for Latin America in Coral Gables.

The Fortune 500 list includes Ryder System, which has headquarters in Miami. Company spokesman David Bruce said that each time the trucking and logistics operation expanded its headquarters, there was discussion whether the company founded in Miami in 1933 would leave South Florida.

“We have never threatened to leave South Florida. Some companies have found it advantageous to start a high-stakes game by opening up that possibility, but we’ve always thought that our people here are integral to what we do and what we offer our customers,” says Bruce. “Any significant change in our location would have meant losing some of the team that has the potential to take us further as a company.

“This location has allowed us to attract executives as well as the right people who have come up through the local university system,” Bruce adds.

There are multiple reasons for the shrinkage in South Florida’s Fortune 500 list. Nearly all the companies that were on the 2003 list, but not the 2005, retain a presence in the Miami area. But they have fallen off the Fortune roster, pushed out by other faster-growing companies. In isolated cases, they have disappeared as a result of acquisitions.

Since 1954, when Fortune began its rankings, only three companies have led the venerated list: Wal-Mart, General Motors and Exxon Mobil. The companies in line to see themselves favored for a spot in the Fortune 500 list for 2006 include energy companies, particularly oil companies, thanks to rising oil prices at a time when demand is high. But they do not have a strong presence in South Florida.

Many industries that call greater Miami home, including telecommunications companies, airlines and pharmaceutical firms, are not expected to see as strong growth. Airlines have been struggling and telecoms have seen their markets divided by increasing competition. Pharmaceutical companies, meanwhile, have seen their exclusivity rights on high-profit products expire. A new generation of blockbuster drugs has not yet replaced them, although a Boca Raton company has moved forward on an anti-smoking vaccine that could have a global market

Still, Miami could see a Fortune 500 boost from an unexpected place: China. Four Chinese companies with offices in the United States joined the ranking last year, bringing to 16 the number of Chinese firms on the Fortune list. A decade ago, there were just three. None have operations in South Florida, but Miami is courting Asian companies by promoting itself as the spot for them to place their Latin American regional headquarters. Trade missions have already taken place. And now the Beacon Council, Miami-Dade County’s economic development partnership, is focusing on Asia.

“With this fiscal year beginning Oct. 1, through our international task force committee, we are putting together a group of people that will design the best strategy for approaching the Chinese market,” says Mario Sacasa, senior vice president of international programs at the Beacon Council. “We want a targeted approach.”

The Miami market plays a key role for so many multinationals interested in Latin America for three intertwined reasons: its geography and proximity to Latin America; the presence of Miami International Airport, which offers more flights to the region than all other U.S. cities combined; and the cultural affinities that began with a Cuban influx but now engulf most of Latin America and the Caribbean.

Now poised to cross the $60 billion mark in annual imports and exports, South Florida is the 13th most important trade area in the United States. More importantly, it is the leading Customs district for every nation in South America, Central America and the Caribbean, with only three exceptions: Venezuela, Suriname and Mexico. In addition, it is the only remaining U.S. Customs district with a trade surplus, largely because it supplies import-hungry Latin America and the Caribbean.