It may be easy to overlook the impact GEICO has had on the Western New York economy, especially in the shadow of giant projects like RiverBend or the expansion of the Buffalo Niagara Medical Campus or the downtown impact of HarborCenter.
It would be a mistake, one that Tuesday’s announcement of new hiring underscores.
GEICO, the insurance company that, like The Buffalo News, is part of Warren Buffet’s Berkshire Hathaway Inc., led the way in Buffalo, opening an office here in 2004, long before the economic renaissance that has restored Buffalo’s confidence in itself. And it’s not just that GEICO came here, hundreds of good-paying jobs in tow, but that it has been as good as its word on hiring.
When the company arrived, it pledged to produce 650 jobs by 2006 and 1,800 by 2012. Wary Buffalonians, stung by too many unmet employment projections, might have been skeptical, but the company did even better than it had pledged, putting 830 workers on the payroll by 2005 and 2,400 by 2012 – one-third more than it had promised.
Now, GEICO is planning to bring an additional 600 jobs to Buffalo, adding to the 2,800 already on its books. With that, it will be one of Western New York’s biggest private-sector employers. The announcement represents a $15 million expansion, with $11 million funded by GEICO and the remainder by Empire State Development Corp., the economic development arm of state government.
It’s a significant expansion however you look at it. The immediate growth is 21 percent, and the company expects the new hiring to be done within a year. It’s also a remarkable rate of growth overall, considering that GEICO has increased from zero employees in 2004 to about 3,400 by next year. It’s an important factor in the local economy.
But if GEICO is one of Western New York’s most significant success stories, Western New York is also one of GEICO’s. The local operation, based in the CrossPoint Business Park in Amherst, is one of the company’s most productive. It has been a great match.
It’s also a development in which residents of this area can take heart. While GEICO has made use of public incentives, it came here on its own. The decision didn’t require a “Buffalo Billion” or “StartUp-NY” to put this area on its radar.
One of the reasons GEICO looked at Western New York is that The Buffalo News’ former publisher, Stanford Lipsey, pushed for it relentlessly. It was a business decision, in the end, but it didn’t hurt that Lipsey is a close friend of Buffett and was able to present the advantages of locating in a struggling area stocked with educated and hardworking people.
That workforce is an ace for Western New York. Its presence and GEICO’s decision to expand here sends a powerful signal to employers around the country – even around the world, thanks in part to the 43North business competition – that Buffalo should be on their radar. That’s true for many reasons, but when one of the country’s most successful and trusted business leaders makes a bet on Buffalo and then antes up again, only the unconscious could fail to take note.
To accommodate its growth, the company plans to lease a second building in CrossPoint Business Park, just down the street from its existing office, which it recently purchased after years of leasing. It’s here for the long haul.
GEICO is not only New York’s No. 1 car insurer but, just on the numbers, one of Western New York’s most valuable business assets. If Buffalo has been a safe bet for Buffett and GEICO, it’s a similarly safe wager for Buffalo to expect continued good news from this productive and synergistic relationship.