The Lego Group’s recent announcement that it will build a new factory in Virginia has drawn attention to the company’s North American headquarters in Connecticut, with some industry watchers saying it may not be. a good sign for the future of society in the state.
The Denmark-based global toymaker announced last week that it plans to invest more than $1 billion to build a factory in suburban Richmond, which will open in 2025. The factory will be the company’s seventh in the world and the first in the United States.
A company spokesperson said the decision would have no impact on the size and scope of the Enfield headquarters, and a spokesperson for Democratic Gov. Ned Lamont told Hearst Connecticut Media that senior management at Lego had affirmed its commitment to keeping the office as it was.
“It’s common for companies to invest and grow in multiple states — and they do so for a wide variety of strategic reasons,” Max Reiss told the outlet. “Lego has been and continues to be a fantastic partner with our state and we look forward to strengthening this relationship now and in the future.”
Still, the development raises questions about whether the headquarters could eventually move to Virginia, said Fred Carstensen, professor of finance and economics at the University of Connecticut, Hearst.
“They better be worried,” Carstensen said of state officials. “The physical proximity of a head office to manufacturing facilities is certainly a factor considered by companies.”
A number of factors could have persuaded the company to locate the plant elsewhere, said Donald Klepper-Smith, economist at DataCore Partners.
“Economic development these days is about cost structures,” Klepper-Smith told Hearst. “Forty percent of your long-term job growth is a function of the cost of doing business. And when it comes to Connecticut, businesses are encouraged to look elsewhere.