Shifting Sands of Globalization

You wake up one Monday and read in the newspaper that your employer intends to move its corporate headquarters to the Middle East. How is the rest of your day looking?

Undoubtedly, some Halliburton shareholders and at least some of its supporters may endorse the much-maligned government contractor and oil drilling firm’s plans to swap Houston for Dubai. But, amid mounting criticism by Democrats among others, the controversial move may spark a Congressional probe.

“My office will be in Dubai, and I will run our entire worldwide operations from that office,” Halliburton’s Chief Executive David Lesar declared at an energy conference in Bahrain on Sunday. “Dubai is a great business center.”

In the early reaction, the national media has overlooked an important angle, in my view: what about Halliburton’s 106,000 employees? On the bright side, there is air-conditioning in Dubai. But I don’t suppose that the United Arab Emirates affords the same protections and freedoms that American workers, especially women, enjoy now. According to Wikipedia, in the United Arab Emirates, “Salary structures and treatment based on nationality, sex, age, and race rather than on qualification are common.”

Repatriating corporate headquarters is a fairly uncommon move. Yet, in many ways, Halliburton, ranked No. 122 on the My Global Career 500, is an anomaly, given its recent transgressions against American taxpayers. Halliburton faces a major sandstorm, and not just from politicians, in pursuing this goal.

For that reason among others, it’s hard to see how repatriating corporate headquarters is likely to become a trend. Yet, what if some countries offer tax breaks, not just for establishing “captive” company-owned operations (as they do now), but for senior corporate executives to relocate both themselves and corporate headquarters? If Halliburton pulls this move off, it raises the stakes for all countries to retain large employers. But it also puts pressure on lawmakers to enact rules designed to prevent companies from expatriating themselves in the interests of a tax holiday or to avoid regulatory scrutiny.

And what does the future hold for Halliburton workers?