I-R CEO explains why company
is based in Bermuda, not U.S.
Herbert Henkel, chairman, president and CEO of Ingersoll-Rand, explained Friday, June 6, 2008, on CNBC's "Squawk Box" why his company is officially based in Bermuda even though it is run out of New Jersey.
"If we move back to the U.S., we would lose significant tax advantages that we have, and frankly we would lose some of the ability to move money around the world freely without having the regional tax structure of what the U.S. has got ... it would be a disservice to our shareholders if we did that," Henkel said to a question from Becky Quick.
He said that "more than half" of his company's profit comes from outside the United States, and the company would get hit by the 35 percent corporate tax rate if it would "repatriate" those monies to the U.S.
Shareholders approved the relocation to Bermuda in October 2001. Henkel defended the move in a Forbes interview in 2003. "If the tax laws were different, we wouldn't have moved in the first place." He added, "I want to be competitive."
Henkel, 60, who is also a director of C.R. Bard and 3M Co., attended Polytechnic University in Brooklyn, N.Y., where he received a B.S. in aerospace engineering and applied mechanics and an M.S. in mechanical engineering in 1970 and 1972. He also earned a master's in business administration from Pace University. He joined Ingersoll-Rand in 1999 from Textron. He was elected chairman of the board of I-R in May 2000.
According to the Federal Election Commission, he has given political donations in recent years to North Dakota senators Byron Dorgan and Kent Conrad. Ingersoll-Rand's Bobcat construction division, headquartered in West Fargo, N.D., was sold in July 2007 to Doosan Infracore for $4.9 billion. I-R had acquired Bobcat in 1995. It is one of the few major manufacturing companies in North Dakota and said to employ 2,600 workers. I-R recently acquired HVAC supplier Trane.
Henkel on Feb. 15, 2008, reported owning 116,300 shares of I-R via acquisition.