Business Report: GEICO Expansion Brings 1,000 New Jobs To Katy, TX
By Ed Felton
From the March/April 2014 issue
Gov. Rick Perry and GEICO Chairman and CEO Tony Nicely recently announced the insurance giant will be expanding its Katy operations, creating 1,000 new jobs over the next three years and $8.5 million in capital investment.
“Whenever we hear about a major employer expanding or relocating to Texas, it affirms what we’ve been telling people all these years,” Gov. Perry said. “When you create a place that rewards innovation and hard work and frees people to do best in pursuit of their dreams, good things happen. Like many cutting-edge companies, GEICO knows that Texas is a great destination for innovative companies looking to excel.”
“We’re excited about expanding our claims operations with our new Katy office,” Nicely said. “We know from the experience we’ve already had in Houston that it’s a great environment for business; the workforce is excellent, and the quality of life is outstanding. We look forward to bringing more wonderful career opportunities to the people of the Greater Houston area.”
Texas Commissioner of Insurance Julia Rathgeber noted that Texas is the 12th-largest insurance market in the world. “We are consistently looking for ways to improve and make Texas a smarter regulatory environment with the goal of attracting more companies and more capital to Texas, she said.
GEICO was founded in Fort Worth in 1936 to provide auto insurance to federal employees and members of the military. It currently serves over 830,000 Texas policyholders and is now the fastest-growing major auto insurer in the U.S., with more 29,000 employees in 14 major offices around the country. The company’s southwest regional office is located in Dallas and employs more than 1,900 Texas residents. The Katy expansion will support GEICO claims operations.
In another recent expansion in the Lone Star State, athenahealth Inc. said it will grow its Austin operations, creating 607 jobs and a projected capital investment of more than $13 million. The state provided $5 million through the Texas Enterprise Fund (TEF) to close the deal. Execution of the state’s agreement is contingent upon finalization of a local incentive offer as required by program criteria.
“The Texas model of low taxes, smart regulations and fair courts continues to attract world-class companies like athenahealth looking to expand their operations,” Gov. Perry said. “This TEF investment will create hundreds of high-paying tech jobs in Austin, building on the city’s thriving technology sector and strengthening the state and local economies.”
“We’re thrilled at the prospect of growing our presence in Austin, a city with a culture and vibe that perfectly aligns with our own,” athenahealth Chairman and CEO Jonathan Bush said. “Austin offers a strong talent pool to aid in the important work we do at athenahealth to advance connectivity in health care.”
athenahealth is a leading provider of cloud-based services for electronic health records, practice management and care coordination. With this TEF investment, the company plans to establish a new facility in Austin to support its cloud-based health information technology services platform.
The Texas Legislature created the TEF in 2003 and re-appropriated funding in 2005, 2007, 2009, 2011 and 2013 to help ensure the growth of Texas businesses and create more jobs throughout the state. TEF projects must be approved by the governor, lieutenant governor and speaker of the House. The fund has since become one of the state’s most competitive tools to recruit and bolster business. To date, the TEF has invested over $513 million and closed the deal on projects generating 70,460 new jobs and more than $23.7 billion in capital investment in Texas.
WEBSENSE, DROPBOX BRING 615 JOBS TO AUSTIN
Gov. Perry has announced TEF investments in Websense Inc. and Dropbox Inc. that will create a total of 615 new jobs in Austin.
Websense is relocating its corporate headquarters from San Diego to Austin, creating 445 new jobs and a projected capital investment of more than $9.9 million. The state is providing $4.5 million through the TEF. Websense is a leading global cybersecurity company that protects organizations from the latest cyberattacks and data theft.
“We are expanding our presence into Austin because it represents an energetic, high-technology hub that will further enable us to meet growing demand for our technology and better serve our global customer base,”
Websense CEO John McCormack said. “Our top priority continues to be exceeding customer expectations and protecting organizations from data theft and advanced cyberattacks.”
Dropbox is expanding its Austin operations with additional sales and operations positions, creating 170 new jobs and a projected capital investment of $5.5 million. The state is providing $1.5 million through the TEF. The company simplifies the work and personal lives of millions of people by letting them easily access and share their documents, photos and videos from anywhere in the world.
“We were drawn to Austin because of the talented people and vibrant tech culture, and we’re thankful to the Governor’s Office for their support as we grow our presence in the area,” said Sujay Jaswa, Dropbox vice president of business. “Our Austin team is excited to build deep Dropbox roots here as we focus upon supporting our business customers and our 200 million users.”
OCCIDENTAL PETROLEUM MOVING HQ TO HOUSTON
Los Angeles-based Occidental Petroleum Corp. (NYSE: OXY) announced it is splintering off into two companies and moving its headquarters to Houston.
The oil and gas exploration and production company is separating to create a new company that will oversee its existing California assets as the state’s largest natural gas producer.
Occidental is reportedly the largest oil producer in Texas and already maintains its oil and gas operations and energy marketing offices in Houston at Greenway Plaza. The company extended its lease in Greenway Plaza in March of 2013.
But the change will move the overall headquarters from Los Angeles to Houston.
It will have exploration and production operations in the Permian Basin and other parts of Texas, the Middle East region and Colombia. It will also have a midstream and marketing segment and a chemical subsidiary, OxyChem.
“Creating two separate energy companies will result in more focused businesses that will be competitive industry leaders,” Occidental President and CEO Stephen Chazen said in the announcement.
The board of directors also revealed that Chazen has been asked to remain as president and CEO to lead the transition and ensure that a suitable management team is in place for Occidental. He has agreed to do so through the 2016 Annual Meeting of Stockholders.
Occidental plans to announce the management team of the new California company in the third quarter of the year and to complete the separation by the end of 2014 or early 2015.
The new California company will have 8,000 employees and contractors and will be California’s largest natural gas producer and the state’s largest oil and gas producer on a gross-operated barrels of oil equivalent basis.
Occidental headquarters in Houston will oversee its operations in the United States, the Middle East, northern Africa and South America.
AUSTRALIA OPENS TEXAS TRADE OUTPOST IN HOUSTON
Gov. Rick Perry recently highlighted important trade opportunities between Texas and Australia at the grand opening of the Queensland Government North America Trade and Investment office in Houston, which will serve as the Australian state’s dedicated office for further developing international trade and investment with the U.S. and Texas.
Queensland’s trade office was previously located in Southern California. The governor was joined by Queensland Premier Campbell Newman and Trade and Investment Commissioner to North America David Camerlengo.
“Our two states have long enjoyed a close relationship, but this office represents a giant step toward further strengthening our economic and cultural ties,” Gov. Perry said. “Close partnerships with friends from around the world, like this one, helps both of our states succeed. I congratulate everyone involved in bringing our states closer together, and I look forward to hearing more great things coming out of the Texas-Queensland friendship in the days and years to come.”
“This new office is the beginning of a new era for the state’s business relationship with the U.S., and will bolster our trade and investment ties with this important region,” Premier Newman said. “Houston serves as an ideal gateway to the rest of the United States, as well as Canada and Mexico.”
Premier Newman and Gov. Perry officially opened the office by signing a Memorandum of Understanding to formalize a Sister State Agreement.
“The opening of this office demonstrates the LNP Government’s commitment to further developing Queensland’s business links with the United States,” Mr. Newman said. “The LNP Government is unashamedly about jobs and showing that Queensland is open for business on the world stage. We have taken the shackles off Trade and Investment Queensland by making it a statutory authority.
In the 2012-13 fiscal year merchandise trade between Queensland and the U.S. was valued at $6.4 billion. Newman said the Memorandum of Understanding would formalize the close relationship between Queensland and Texas.
“Texas shares many similarities with Queensland’s four pillar economy of resources agriculture, tourism and construction industries—so the opportunities for increased trade are enormous,” he said. “I have tasked the North America office to work with industries and governments from across the US to deliver even more for Queensland, securing our international ties and growing our economy.”
Texas has maintained a strong trade relationship with Australia, exchanging $2.9 billion in goods in 2013. Australia is Texas’ 24th largest export market worldwide, and Queensland is Australia’s second largest exporting jurisdiction.
The Lone Star State is a global trade leader, holding its position as the top U.S. exporting state for 12 years in a row. Texas export revenues for 2013 amounted to nearly $279.7 billion, up 5.4 percent from the 2012 and outpacing U.S. export growth. Additionally, Texas is now the national leader in technology exports, with more than $45 billion in technology products exported in 2012.
Earlier this year, Gov. Perry also extolled Texas’ leadership position in global trade in a speech to the World Economic Forum in Davos, Switzerland. The governor summarized his presentation in an Op-Ed piece.
“Texas has emerged as a critical figure on the world stage,” he said. “The facts support this. We’re the nation’s top exporter, as we have been for 11 years in a row. Our economy—on its own—is the 14th largest in the world. In 2012, the Texas real GDP grew by 4.8 percent, vastly outstripping the U.S. growth of 2.5 percent. Our jobs-friendly economic climate attracts attention and investment from companies around the globe.”
As the only U.S. governor in attendance at the Davos summit, Perry noted he had “a rare perspective” to share with world leaders in business and government. The Texas chief exec reported that he “sensed was a growing malaise at the idea of governments handing money out to the people they represent. Too many people have grown up in generations that know no other way of life, but the truth is, that approach is simply doomed to ultimate failure.”
Perry also stressed the Lone Star State’s continued investment in industries of the future, exemplified by his recent announcement of a $1.5-million Texas Emerging Technology Fund (TETF) grant to support the University of Texas’ (UT) and Texas A&M University’s (TAMU) participation in the Defense Advanced Research Projects Agency (DARPA) Robotics Challenge (DRC).
“Texas is home to world-class universities that continue to advance exciting new technologies and groundbreaking research,” Perry said. “This investment has the potential to save lives through innovation in robotic technology that could assist in disaster responses around the world.”
DARPA initiated the DRC to develop effective human responses to nuclear disasters. During the challenge, eight real-world tasks are identified to mimic a disaster recovery, including opening doors, climbing a ladder, driving a utility vehicle, turning a valve, moving debris and traversing a debris-filled landscape.
Teams were competitively selected to participate in the challenge from around the world. UT and TAMU belong to the Team Valkyrie and the R5 robot, led by the National Aeronautics and Space Administration’s Lyndon B. Johnson Space Center in Houston. UT will be responsible for the Whole Body Control framework software, while TAMU will be responsible for the bi-pedal locomotion software over rough terrain. The final challenge, scheduled for December 2015, will come with a $2 million cash award for the overall winner.