Officials in Connecticut say the Lego Group’s decision to build a new factory in Virginia will not impact the company’s North American headquarters in Enfield, but industry watchers say there could be cause for concern
ENFIELD, Conn. – The Lego Group’s recent announcement of building a new factory in Virginia has drawn attention to the company’s North American headquarters in Connecticut, with some industry observers saying it may not bode well for the company’s future 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 that is set to open in 2025. The facility will be the company’s seventh in the world and first in the United States
A company spokesman said the decision would not affect the size or scope of its Enfield headquarters, and a spokesman for Democratic Gov. Ned Lamont told Hearst Connecticut Media that Lego management has reaffirmed its commitment to keeping the office in the state .
“It’s common for companies to invest and expand in multiple states — and they do so for a variety of strategic reasons,” Max Reiss told the news agency. “Lego has been and continues to be a fantastic partner for our state and we look forward to strengthening that relationship now and in the future.”
Still, the development raises questions about whether headquarters might eventually move to Virginia, Fred Carstensen, a professor of finance and economics at the University of Connecticut, told Hearst.
“You had better worry,” Carstensen said of state officials. “The physical proximity of a headquarters to manufacturing facilities is definitely a factor that companies consider.”
A number of factors could have prompted the company to relocate the factory, said Donald Klepper-Smith, an economist at DataCore Partners.
“Economic trends today speak for 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, companies are encouraged to look elsewhere.”