USF&G's life subsidiary to remain in Baltimore F&G Life isn't moving to Florida or Tennessee

April 25, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

USF&G Corp. told employees yesterday it will keep the headquarters of its F&G Life Insurance subsidiary in the Baltimore area rather than moving it to either Florida or Tennessee.

The decision means that Baltimore will retain 90 white-collar jobs and a 36-year-old unit of the $14.6 billion corporation. Moreover, it marks a psychological victory in the state's efforts to keep key businesses in the wake of recent defections by Procter & Gamble Co., Bausch & Lomb Inc. and others.

"The significance here is that F&G Life is part of a national company, and we want to see those operations both stay and grow here," said James T. Brady, secretary of the state's Department of Business and Economic Development (DBED).

In exchange, DBED will grant F&G up to $600,000 in training dollars and facility-improvement assistance. USF&G officials said the incentives were necessary to maintain competitiveness.

"The combination of economic incentives, the stress of relocating on the company and employees and the potential work interruption pushed the decision in favor of the Baltimore region," said Harry N. Stout, president of F&G Life.

USF&G officials also cited the work of the Greater Baltimore Alliance, a consortium of business and economic development leaders, as contributing to the decision to remain here. "It was impressive to see such a coalition of regionalism," said G. Jay Erbe Jr., USF&G's vice president of administration. "The efforts of the Greater Baltimore Alliance were the sparks that kept business and government together."

"The marketing effort on Baltimore's behalf was a true regional project where leaders worked cooperatively under a tight deadline to meet F&G Life's needs," said Mary E. Junck, chair of the alliance and publisher and chief executive of The Baltimore Sun Co.

USF&G decided to move the F&G headquarters as part of the planned consolidation of 2,400 employees at its 72-acre Mount Washington campus later this year, mostly of employees from its 35-story tower downtown.

F&G Life, whose operating income rose 58 percent to $19 million last year and whose sales grew 22 percent to $348 million, has been headquartered at Mount Washington since 1989.

Various economic development analysts believed that F&G Life would follow USF&G's claims reception division to Tampa, which the company selected in January as the site of a national center that will eventually employ 500.

That belief was heightened last month when F&G terminated 88 employees as part of a shift of its back office operations to South Carolina, a move that is slated to save the company $7 million annually. Mr. Stout said it would have been five times as expensive, however, to relocate F&G Life to either Tampa or Nashville, Tenn.

F&G Life has not decided on a new headquarters location here, and sources said it is focusing on the Rouse Co.'s Centerpoint project in Hunt Valley, a Manekin Corp. building occupied by General Physics Corp. in Columbia, the 26-building Airport Square complex in Linthicum developed by Dickinson-Heffner Inc. and the 100 E. Pratt St. skyscraper downtown that is owned by a joint venture of IBM Corp. and T. Rowe Price Associates Inc.

A decision is expected within a month. F&G Life will probably commit to a lease for roughly 30,000 square feet valued in excess of $4 million. The company hopes to be operational in its new location by mid-August, Mr. Stout said.

Pub Date: 4/25/96

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