Foreign Firms Feel Right At Home in Loudoun, Fairfax

By Kendra Marr

Monday, November 12, 2007

Mention the Dulles corridor to Fairfax and Loudoun counties’ economic development gurus, and they’ll wax eloquent about the region’s 179 foreign-owned firms from 28 countries.

Both counties tout the diversity that international companies bring to the region and their benefits to the local economy. But many of these foreign-owned operations feel just as American as their domestic neighbors.

Often, the branch’s top executive is one of the few expatriates in the office. And managers like to stress that their staffs draw heavily from the local workforce.

“I’m an American. My staff is from the States,” said Brannon J. Carter, vice president of U.S. operations for Xwave, a Canadian systems integration company with an office in Herndon. “It’s just the ownership structure, stocks and assets are all owned by someone north of the border.”

Sometimes, the designation feels more marketing than melting pot. Companies such as the Herndon tech firm Digital Now, a spinoff of Australian Luminus Systems, is only 40 percent Australian funded, yet still winds up on county lists of foreign-owned firms. Accenture, one of the largest U.S. consulting firms, is counted because it moved its headquarters to Bermuda. And parts of what is now called BAE Systems started life as U.S. firms until they were acquired by the British defense and aerospace giant.

In fact, a special security agreement with the federal government requires BAE to go to great lengths to keep its American and British operations separate so that it can do business with the U.S. government.

At U.S. facilities, British chief executive Mike Turner can only tour certain areas. There are even separate Internet jacks in company offices so foreign employees don’t use the same servers as U.S. citizens.

Still, international companies have brought new consulting, food-retailing and transportation services to the Dulles corridor. A majority of the transplanted businesses are in technology, specifically software development and telecommunications, much like the domestic firms in Dulles.

Photo: David Murray

In Reston and Herndon, about 2.8 million square feet of office space has risen since 2005, but growth in the suburban business hub is now starting to slow.

About 300 Chantilly employees at Oberthur Card Systems, a French smart-card firm, crank out 60 million personalized cards — government-issued IDs, bank cards and holiday gift certificates — for U.S. clients each year.

“We like to stress that people view us as an American company,” said Martin Ferenczi, president of Oberthur’s North American operations.

Strategic Thought, a British firm, settled in Herndon to market risk-management software. TeliaSonera, a Swedish telecommunications company, opened its Herndon office for the international network division.

Many of these firms say they came to the region because of its proximity to a large international airport as well as the federal government.

When sky-high rents drove Rolls-Royce out of Greenwich, Conn., in 1990, flight schedules and affordable office space narrowed its choices to Atlanta and Dulles.

“The federal government has a significant impact for all of business from a legislative point of view,” said Barry New, a retired senior vice president who oversaw the move. “So it swung the balance and we began looking for a facility in Northern Virginia.”

Biovail Technologies, a Canadian drug development operation in Chantilly, is often scrambling to prepare for Food and Drug Administration meetings in Washington.

Both Fairfax and Loudoun have observed an increase in the number of foreign-owned firms over the years. The Fairfax County Economic Development Authority tries to build on that success by spending $500,000 annually to run recruitment offices in Bangalore, India; Frankfurt, Germany; London; Seoul; and Tel Aviv.

The Dulles Airport, with 10 domestic and 21 international airlines serving 120 destinations, is an obvious draw.

Chris Wooten, president of the public safety global business unit at Israeli security company Nice Systems, said he’s thankful his Reston office is just seven minutes from the airport.

The past three weeks he’s hopped from Mexico to Israel to Europe. And he also spends quite a bit of time in New York, Chicago and Los Angeles.

“It’s tough,” he said. “Sometimes I’ll go to London at the beginning of the week then to Israel, then I’ll come home.”

Hiring Americans to handle U.S. operations has advantages when it comes to cultural nuances. When Bob Hoffman, a sales account manager for Tesseract, a British technology firm with a Reston outpost, traveled to Britain for training, he said he was surprised to see his fashionable European colleague sporting a loud pink shirt and tie under a black pinstripe suit for a sales meeting.

“If you’re giving a demonstration in Milwaukee, Wisconsin, that’s not going to fly,” he said.

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