By Peter White
NASHVILLE, TN — The electronics giant Philips has been in Nashville for a decade. Two years ago it decided to build one of its seven global hubs in Nashville. On Tuesday, company execs were joined by Governor Bill Lee, Lt Gov. Rand McNally, Speaker of the House Glenn Casada (R-Franklin), and Commissioner Bob Rolfe, TN Department of Economic and Community Development to celebrate the opening of Philips Plaza, the Philips Global Business Services hub in Nashville.
It is housed in five floors of a high rise on 414 Union St. in space vacated by Bank of America. Philips gutted the old offices, got rid of all the cubicles, and redesigned their new hub into a series of collaborative work spaces. Work stations have two monitors and specialized equipment depending on their job function. Workers are together in one large space although there are small conference rooms with frosted glass and more privacy located around the center of the hub for specific projects.
The move was made possible by an $11 million grant from the TN Department of Economic and Community Development. There are 700 employees moving into the new digs.
“We are definitely in favor of finding local talent,” said Matt Holland, Human Resources Business Partner. Holland said about 80 percent of Philips Nashville jobs have gone to locals.
Metro City Council passed a resolution in December 2017 to pay Philips $500/job for seven years. The deal has an estimated value of $2,852, 500. The total number of expected jobs at the Global Business hub is about 800. It is unclear what the bulk of the money is for but Nashville officials have really sweetened the pot for Philips to expand beyond their current footprint.
“Through the years we have actually transformed ourselves from becoming electronics and lighting company to becoming a health tech global leader,“ said Philips Chief Financial Officer Abhijit Bhattacharya.
Bhattacharya said Philips used to be a $45 billion/yr. company with low profit margins. Since 2011 the company has been transforming itself from the inside out and he said Nashville is going to be a central point of the company’s transformation. In the last few years Philips, with annual revenues of $18 billion, has acquired 18 healthcare companies, 7 are in the U.S. and Philips is growing its revenues at about 5 percent a year.
It has 77,000 employees, about 21,000 in the U.S. One third of Philips business come from the U.S. and the company spends half its R&D money here, and one third of its manufacturing facilities are located in the U.S.
“Philips is a global leader and one of the things that’s kept it around for 128 years is that it has continued to transform and change. Maybe there a lot of people here who don’t know what a cassette recorder is but I remember when cassettes were a new technology,” said Governor Bill Lee. Philips made durable low-cost audio recorders in the 1970s. Their medical devices have the same reputation. They are rugged, cost competitive, and work well.
The governor said Tennessee now has an opportunity to lead the country in healthcare.
“We certainly are a hub for the healthcare businesses, for healthcare innovation, and for healthcare technology. It is a valuable piece of the equation for us to have a company like Philips here so we thank you,” he said.