A major restructuring at Bechtel Corp. means many of the 1,100 employees in Frederick will relocate to Reston, Virginia.
Michelle Michael, spokeswoman for the company, said a “substantial” number of employees in Frederick will move because of the restructuring.
“We will have a presence in Frederick, but I don’t know what the number will be,” Michael said in a telephone interview.
Michael said the move will be in phases. Bechtel opened its operations in Frederick in 1999.
In 2011, Maryland officials negotiated with Bechtel to keep 1,250 jobs in Frederick through December 2018. Bechtel received a $9.5 million state grant in the deal. According to the deal, Bechtel must report the number of Frederick jobs at the end of each year to the Maryland Department of Business and Economic Development and pay money back if the employee level falls below the agreed-upon number.
At the end of 2012, the company had agreed to pay $1,600 for each position fewer than 1,250. In each year after that, the repayment falls to $857 per employee.
Karen Glenn Hood, spokeswoman for the Maryland Department of Business and Economic Development, said Bechtel didn’t get the full amount of the state grant all at once.
“It was in increments, $1.5 million to $2 million. The state has received the full amount back, so we didn’t lose anything. We got the money back, plus interest,” Hood said in a telephone interview.
“We were able to keep those employees in Frederick for three years, that helped with income and sales taxes,” Hood said.
“I know several people who work at Bechtel,” Frederick County Commissioners President Blaine Young said. “It is unfortunate due to their change, consolidating divisions.”
“We fought to get Bechtel to Frederick County,” Young said.
But he disagrees with the state’s payment to keep the company in Maryland. Young said. The state had asked the county for money during the state’s negotiations, up to $2 million from the county to keep Bechtel in Frederick.
“Frederick County is pro-business, but we weren’t going to give Bechtel $2 million to stay,” Young said.
The move reflects the difficulty of doing business in
Maryland, Young said, with higher taxes and regulations than Virginia. In 2011, Virginia provided Bechtel with $6.5 million in state grants to move some operations to Reston.
“Losing any portion of Bechtel will be a big loss to our community,” said Helen Propheter, manager of the county’s economic development office. Propheter said a Bechtel representative had contacted her office and provided information on the reorganization.
“We worked hard to keep (Bechtel),” Hood said. “We talked with them, but there was nothing we could do. It is for their future growth. It doesn’t reflect on Maryland’s business climate. We have an educated workforce, excellent education and infrastructure.”
The corporation’s creation of an Infrastructure Global Business Unit, which consolidates the Bechtel Power unit in Frederick with civil engineering, aviation and railroad units, is part of the restructuring. The other is creating a Nuclear, Security and Environmental global unit for nuclear power, environmental cleanup and facility security for the Department of Defense and defense departments of other governments.
The reorganization takes effect Jan. 1, 2015.