Executive exodus: Pittsburgh's good times carry a corporate asterisk

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Let's start with the good news. The Pittsburgh region has done well in recent years. Its economy has been transformed from a base of steel to the twin pillars of meds and eds -- medicine and education. It has weathered the Great Recession better than many other places. The city has reclaimed its riverfronts and has lately -- wonder of wonders -- become attractive to young people.

But just when Pittsburgh has become personally livable in ways beyond flattering national rankings, an ironic and depressing development has taken hold: The city is, for some mysterious reason, less attractive to the CEOs of its remnant corporations.

This unhappy news has broken sporadically over a period of years. The latest dose came Sunday in a Post-Gazette story about Bayer Corp., the German pharmaceutical company which for more than 50 years has had its American headquarters in Robinson. But as reporter Joyce Gannon noted, a year ago Philip Blake was named the company's senior U.S. representative and he bucked tradition to become the first in his position to work elsewhere.

Since then, the company's American health care operations -- which Mr. Blake runs -- have been in the process of consolidation in Whippany, N.J. While Pittsburgh may remain the nominal headquarters, the inevitable seems to have happened; the CEO and two other top executives have left and the center of gravity may be shifting, despite the fact that several hundred headquarters-related jobs remain here, including general counsel and chief financial officer. The Bayer USA Foundation also continues to operate from here. But for how long?

As Ms. Gannon wrote, "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."

This is not a knock on Bayer -- far from it. It is a concern and a lament prompted by memories of Bayer's long connection with this area as a provider of good jobs and an enlightened practitioner of corporate citizenship.

A company spokesman insists that "Bayer remains as committed as ever to the region and to maintaining and building our partnership with Pittsburgh." We hope so, but we'd have more confidence if this didn't seem like another chapter in an unfolding sad story.

Not so long ago, Pittsburgh was a corporate headquarters city that stood in the top ranks, trailing only the likes of New York City and a few others. Yet the names that were once bywords of Pittsburgh's corporate greatness -- companies like Mellon and Alcoa -- now are led from other cities or have disappeared entirely. Some of this has been caused by the natural dynamism of free enterprise, but some is the result of corporate chieftains who simply did not have a sufficient connection to Pittsburgh to stay.

After H.J. Heinz Co. -- another storied Pittsburgh name -- announced in February that it was being purchased by 3G Capital and Berkshire Hathaway, outgoing CEO Bill Johnson managed to make keeping the headquarters in Pittsburgh part of the deal. That was good, but it did not stop the new owners this week from eliminating 350 Pittsburgh jobs, among 600 positions cut worldwide. Once again, out-of-towners show little loyalty.

This isn't Pittsburgh's fault. This is increasingly the way of the world. The good news is that Pittsburgh has done well in spite of it. The bad news is that CEOs in the swoon of costly and congested New York fail to see that, now more than ever, Pittsburgh is an ideal location for corporate headquarters.



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