Grace chief says state missed out


February 22, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

If Maryland's corporate climate had been a little warmer and unnamed Howard County officials been more receptive, J.P. Bolduc, president and chief executive officer of W.R. Grace & Co., might now be commuting to company headquarters from his Clarksburg home.

Instead, he has put his house up for sale.

Mr. Bolduc, who was in Baltimore last week to talk to the Baltimore Chemical Association, said Maryland was considered in 1989 when Grace, then based in New York, was deciding where to relocate its headquarters, particularly since the company already owned more than 100 acres at its Washington Research Center near Columbia.

But then politics, state income taxes and other considerations conspired against Maryland. The company chose Boca Raton, Fla.

"I wanted to try to locate this place at our Washington research facility," Mr. Bolduc said. "Just let me say the politics of trying to make that happen would have been too long and too difficult," he said.

While not naming the local officials involved, he said the company made inquiries about upgrading Route 32, which runs outside the Washington Research Center, so that it could handle the additional 500 people who would work at the headquarters.

"When I planted the seed, it was not received with open arms," Mr. Bolduc said. "And the end result was we were being received with open arms in other parts of the country."

Matters got even worse for Maryland after the company started ranking possible locations based on 18 criteria, ranging from the taxes in the state to the quality of education and commuting time. Maryland came in about seventh or eighth from the top, primarily because of the state income tax level, cost of labor, living costs and length of commuting.

Moving the headquarters to Columbia would have been very convenient for the 53-year-old Mr. Bolduc, who has maintained a home in Clarksburg since 1973 when he was the assistant secretary of agriculture in the administrations of Richard M. Nixon and Gerald R. Ford. It would have also boosted Grace's Maryland workforce, which already stands at more than 2,500 -- the second largest number of Grace employees in the country besides Massachusetts.

Aside from the research center in Howard County, Grace operations in the state include the Davison Chemical Division in downtown Baltimore, its silica plant in Curtis Bay and the American Cafe restaurants in Harborplace and Towson. It also owns Grace Culinary Systems in Laurel, which provides food for the American Cafe and its catering operation, and there are 10 National Medical Care clinics, a leading provider of kidney dialysis.

Mr. Bolduc said state and local officials need to do more to make Maryland attractive to industry. "If they want me to come to Maryland, they have to show me how I can be cost-competitive," he said.

The Maryland Department of Economic and Community

Development was not aware back in 1989 that Grace was looking for a new headquarters, according to spokeswoman Marilyn J. Corbett.

William H. Howard Jr., director of economic development for Howard County, said he did not have first-hand knowledge of events in 1989 since he has held his position only for four months. But he said the county government's attitude toward business has become more supportive in the last three years since the election of Charles Ecker as county executive.

"We would have gone down putting up a fight," Mr. Howard said.

A high-ranking Grace executive since 1983, Mr. Bolduc became chief executive officer of Grace on Jan. 1, replacing the legendary J. Peter Grace, who had run the company since 1945. The 79-year-old Mr. Grace, who is undergoing cancer treatment, is still chairman.

Competitiveness and the need for the U.S. government and businesses to shape up was the theme of Mr. Bolduc's speech to the business group. "We're fat, we're lazy and we're inefficient," he said to the group. And one of the first places he wants to shape up is his own company.

Two years ago the company announced a restructuring that should be more than 90 percent complete by the end of this year. That effort,which was largely formulated by Mr. Bolduc while he was president and chief operating officer, calls on Grace to focus on its six core specialty chemical and health care businesses, cut costs by $50 million a year and sell its nonstrategic businesses -- such as the American Cafe restaurant chain, Mr. Bolduc said.

The stock market has reacted favorably to Mr. Bolduc's new direction by pushing the stock up from $23.87 at the end of 1990 to about $37 a share now.

"This is just what the company needs," said Robert D. Hardiman, a security analyst who follows Grace for Merrill Lynch & Co. Inc. "Favorably impressed" by Mr. Bolduc and the new direction of the company, the giant stock brokerage firm is now recommending Grace stock to its customers, he said.

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