Business

What bragging rights? Charlotte has about half the Fortune 500s it did a decade ago

One Wells Fargo Center and Bank of America buildings in uptown Charlotte.
One Wells Fargo Center and Bank of America buildings in uptown Charlotte. Charlotte Observer

When Charlotte surpassed San Francisco in 2004 in the number of Fortune 500s it had, city promoters lauded the benchmark as not only an exciting talking point but a major boost for Charlotte’s corporate image.

“It tells me we’re on a roll,” said Tony Crumbley, then the Charlotte Chamber’s vice president of research, in a 2004 interview with the Observer. The city counted seven Fortune 500 companies, one more than San Francisco. “Looking at the future of the city, you’re looking at a trend for (Charlotte) to see more national headquarters move here.”

By 2007, Charlotte reached its peak of nine Fortune 500 companies. But now, it looks like the region may be down to five.

The reduction has been caused almost entirely by mergers and acquisitions (such as United Technologies Corp.’s 2011 acquisition of Goodrich), spinoffs (SPX spun off the SPX Flow business in 2015) and “marginal movement of company revenues,” the Charlotte Chamber said.

The latest change involves Sealed Air. The Bubble Wrap maker, whose move to Charlotte from New Jersey in 2014 marked the largest corporate headquarters relocation in the city’s history, spun off one-third of the company this year. Based on the company’s 2016 revenue without its spun-off Diversey unit, Sealed Air would not have made the Fortune 500 list, a spokesman said.

Companies on the magazine’s 2017 list had at least $5.1 billion in revenue. At No. 397 on the list, Sealed Air had $6.8 billion in revenue last year.

Bob Morgan, now the chamber’s CEO, said the decline in the number of Fortune 500 companies headquartered in Charlotte does not reflect poorly on the city. In fact, Morgan said, “We’re probably guilty of over-hyping it when the numbers look impressive.

“It’s nice when you have a simple headline, a soundbite to capture that,” he added. “But is there anything negative about that? Absolutely not. The business world is dynamic.”

A decade ago, the Charlotte region had nine Fortune 500 companies – Bank of America, Lowe’s, Wachovia, Duke Energy, Nucor, Sonic Automotive, Family Dollar, Goodrich and SPX.

When San Francisco-based Wells Fargo acquired Wachovia in 2008, the number of Fortune 500s based here slipped to eight. The figure fell again in 2015 when Dollar Tree of Virginia bought Matthews-based Family Dollar.

At No. 26, Bank of America is Charlotte’s highest ranked Fortune 500 company, with revenue last year of $93.7 billion.

Then there’s Domtar, a Fort Mill, S.C., paper company that’s appeared among the last 100 firms on the top 500 list for the past few years. It landed at No. 505 after a 2.3 percent drop in revenue last year.

Still, the chamber noted that more than half of the Fortune 500 companies have a presence in the Charlotte region. Several have expanded their footprint in the area, a sign of confidence in Charlotte’s robust economy, the chamber said.

For example, Allstate, the insurance company that’s No. 84 on the Fortune 500 list, this year announced its plans to create 2,250 jobs as part of a three-year expansion in Charlotte.

The chamber also emphasized that despite the spinoffs and takeovers, former Fortune 500 companies usually maintain their large employee bases in Charlotte. Wells Fargo has its largest employee hub in Charlotte, for instance.

Still, a growing number of Fortune 500 companies is a point of pride for any region.

At the time when proposals were due to land Amazon’s second headquarters this month, Charlotte could say it had six Fortune 500 companies; Raleigh had just one.

In the Bay Area, which Charlotte passed in Fortune 500 headquarter companies over a decade ago, the region’s three largest cities – San Francisco, San Jose and Oakland – are home to a dozen Fortune 500 companies, according to the most recent list.

Another bragging right San Francisco has snatched from Charlotte? The California city has passed Charlotte as the nation’s second biggest banking town, as measured by the value of loans and other assets held by banks, according to an analysis this year.

But the Charlotte region’s business environment remains strong, Morgan said. “We’re going to continue to attract companies ... how many of them fall off (of the Fortune 500 list) is unpredictable,” he said.

This year, the Charlotte region’s Fortune 500 list includes: Bank of America (26), Lowe’s (40), Duke Energy (121), Nucor (169), Sonic Automotive (287) and Sealed Air (397).

As for the future, Domtar remains on the fringe at 505. It’s an even steeper climb for other Fortune 1000 companies based in Charlotte: Albemarle (654), Snyder’s-Lance (862), Curtiss-Wright (908) and SPX Flow (939).

Katherine Peralta: 704-358-5079, @katieperalta

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