Bayer planning to maintain its presence in Pittsburgh region

Despite U.S. exec's move to N.J., many key jobs remain here


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In mid-May, a 40-meter-long airship emblazoned with Bayer AG's iconic white cross logo whizzed by the Statue of Liberty in Lower Manhattan and touched down for a few days in the northern New Jersey town of Whippany, where the German company is in the process of consolidating its U.S. health care business into one location.

The bright blue and green aircraft launched earlier in the year from Bayer's global headquarters in Leverkusen, near Cologne, as part of celebrations surrounding the company's 150th year in business. Among the airship's scheduled worldwide stops are Johannesburg, Rio de Janeiro, Sydney and Barcelona -- but Bayer's longtime U.S. corporate headquarters in Robinson isn't on the itinerary.

Nor is Pittsburgh a planned stop for the Bayer anniversary tour -- an interactive, multimedia exhibit scheduled to hit about 30 sites worldwide, including Raleigh, N.C., near Research Triangle Park where Bayer maintains the U.S. base for its CropScience business that makes seeds, insecticides and weed killers.

In the year since Bayer announced its top U.S. executive would be based in New Jersey for the first time, the Robinson campus appears to be shifting from the conglomerate's North American headquarters to simply the North American headquarters for the Bayer MaterialScience unit.

Bayer said it is still evaluating how many corporate headquarters jobs may eventually wind up in New Jersey and whether the U.S. headquarters could officially move there.

"Our internal analysis of U.S. corporate functions continues," said Bob Walker, a company spokesman. "The conclusions drawn ... may or may not affect the current designation of Pittsburgh as the headquarters location for the U.S. corporate function."

To be sure, it's been far from a mass exodus among Bayer employees to the East Coast. Several hundred who perform headquarters functions -- such as finance, accounting, communications support, legal work and technology services -- remain in Robinson, as do some key members of the U.S. leadership team including the general counsel and chief financial officer.

But since he was named Bayer's senior U.S. representative effective in July 2012, Philip Blake has worked in northern New Jersey -- the first Bayer U.S. president to do so since the company put down roots in Robinson more than 50 years ago.

Two other top management jobs formerly based in Robinson are also now in Whippany: the head of human resources, Richard Caldera; and the head of communications and public affairs, Ray Kerins.

After the former Bayer U.S. president, Gregory Babe, departed last year, Gerald MacCleary became the senior manager in the Pittsburgh region and succeeded Mr. Babe as president of the North American operations of Bayer MaterialScience.

Among the reasons Mr. Blake is stationed in New Jersey, said Mr. Walker, is that he also heads up Bayer HealthCare, which develops and produces the company's consumer drug brands and pharmaceuticals and which has operated for years primarily in the New York City region.

It's only since Mr. Babe's tenure that the chief Bayer executive in the U.S. has also managed one of the three operating businesses: health care, material science and crop science.

"Before Greg, the top executives were corporate," said Mr. Walker, noting that former Bayer U.S. presidents including Attila Molnar, Helge Wehmeier and Konrad Weis were responsible mainly for corporate operations.

"They were not running a business like Greg was running Bayer MaterialScience and Phil is running Bayer HealthCare. Now we see people wearing multiple hats."

That management strategy can be traced right to the top of Bayer in Germany, Mr. Walker said, where the global chairman and chief executive, Marijn Dekkers, espouses a philosophy of "more innovation, less administration.

"So there's a three-pronged approach to Bayer: Bayer MaterialScience in Pittsburgh, Bayer HealthCare in New Jersey and Bayer CropScience in North Carolina. The true headquarters for Bayer is in Leverkusen, Germany."

At HQ, jobs remain

As Bayer has continued global cost-cutting efforts under Mr. Dekkers, local employment has fallen to approximately 2,300 from about 2,600 a year ago. But the cuts included very few with headquarters-related jobs, said Mr. Walker.

"If you look at the reductions, it's probably not the corporate people," he said.

The decline in employment -- including about 100 at Medrad, a Bayer HealthCare subsidiary based in Marshall -- is largely a result of Bayer's worldwide restructuring plan that included attrition, retirements and job consolidation, he said.

Bayer declined to break out what specific jobs were cut.

The company generated nearly 40 billion euros ($53 billion) in worldwide sales last year with 9.6 billion euros (nearly $13 billion) of revenues coming from North America where it employs a little more than 15,000.

Though Mr. Walker described the current atmosphere at the Robinson campus as "business as usual," that's not to say Pittsburgh employees weren't worried in June 2012 when Mr. Blake was named head of all U.S. operations and the company said he would be based elsewhere.

"There was initial angst," Mr. Walker acknowledged. "But it subsided very quickly."

With Bayer's storied history in Pittsburgh, it's not surprising that the news was interpreted by some as a signal that the company might eventually change its corporate address just as aluminum producer Alcoa did -- very quietly -- in 2006. While Alcoa's top leaders work out of digs in New York City, many corporate jobs remain at its operations center on the North Shore.

Bayer's base in Pittsburgh goes back to 1958 when it opened an office for 35 employees of Mobay, a joint venture it maintained with Monsanto. That site eventually grew into the sprawling complex of buildings in Robinson just off the Parkway West.

While its name changed over the decades from Mobay to Miles and eventually Bayer, the German-owned business made a distinct hometown mark on the region through its civic leadership, philanthropic endeavors such as funding for the Pittsburgh Symphony, and prominent efforts to promote science education -- especially for girls in the STEM fields (science, technology, engineering, math).

For almost two decades, it has advertised its name and logo in lights on a Mount Washington sign that overlooks the city. Though the sign is worn with decay, the company continues discussions with owner Lamar Advertising to improve it, Mr. Walker said.

Despite maintaining headquarters elsewhere or being absorbed by new corporate parents, Alcoa and some other former locally based companies have continued to have an impact in the region. Bank of New York Mellon and Duquesne Light have large employee bases here and remain involved in civic affairs.

Bayer's influence hasn't been altered even with its top corporate executive in another state, according to the Allegheny Conference on Community Development, where Mr. MacCleary joined the board of directors when Mr. Babe left Bayer.

"From our perspective, Bayer and its local leaders, including Jerry MacCleary, are and remain very involved in the civic leadership of the region. None of that has changed," said Dennis Yablonsky, the conference's chief executive.

The Bayer USA Foundation also continues to be based here, even though it handles charitable giving for Bayer sites around the country, not just Pittsburgh, where it expects to disburse close to $1 million in grants this year.

"Bayer remains as committed as ever to the region and to maintaining and building our partnership with Pittsburgh," Mr. Walker said. "We have worked hard to build a solid reputation as a good corporate citizen and civic partner."

And though the corporate operations may be less prominent, Bayer MaterialScience has been engaged in a hiring spree.

"One of Jerry's core objectives is talent management: how to attract and keep the best and the brightest," said Mr. Walker. "We're hiring aggressively in MaterialScience now. We see the pendulum swinging back."

'The nature of global business'

Laurie Weingart, Carnegie Bosch professor of organizational behavior and theory and director of the Accelerate Leadership Center at Carnegie Mellon University's Tepper School of Business, said it's not unusual to have senior leaders in different locations, but it can present issues if executives in one place aren't closely connected with employees in another.

"The choice to not co-locate your top management team is a difficult one but one more and more companies face because of the nature of global business," she said.

"The key becomes how you manage the lack of co-location. Some interactions can easily be managed with technology ... but other things are more difficult to manage like random, pop-in-your-office type of meetings that happen when [people] are co-located. They decrease when you're remote."

Though Pittsburgh didn't get the airship or the traveling expo -- a company spokesman blamed "time and logistics" -- employees here did partake in one of the 150th anniversary events.

On June 18, they joined an estimated 110,000 Bayer employees worldwide who ate the same lunch menu created by five Bayer chefs including contributions from the executive chef in Robinson: namely, couscous salad and mint-kissed strawberry lemonade.

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Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.


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