December 27, 2012
Protectionists, stop reading now. You can’t handle this much
One of globalization’s great myths holds that free trade fosters
a “race to the bottom” that sends “real” work fleeing to low-wage countries as America
descends into an irreversible “deindustrialization.”
It’s a shibboleth that ignores billions of dollars worth of foreign direct
investment (FDI) that flows into the U.S. each year -- and the jobs
created by all that revenue. It’s called “insourcing,” and while it is impossible for many to accept, we do it about
as well as the Chinese.
Despite its manifold problems, corporations abroad recognize
is still an attractive place to do business. Whatever the reasons -- lower
transportation costs, skilled local workforces, currency advantages, cheap and available
raw materials, excessive government meddling at home -- foreign firms continue
to flock to The Land of the Free.
In 2012, hydrocarbon reservoirs lured investment like never
before. Just 11 days into the year, CNNMoney.com found that nondomestic energy
companies put “nearly
$6 billion in U.S. gas and oil drilling in the last few weeks.” The fracking
revolution, which has brought cheap natural gas and soaring oil production, is
too sweet an opportunity to miss. Europe’s on board.
So is China, which is tentatively
returning to America’s
energy market several years after neocon
nuttiness scuttled CNOOC’s attempt to acquire Unocal.
South Africa’s Sasol is drafting blueprints for
a $14 billion facility to convert natural gas into clean-burning diesel. In
Bobby Jindal said that if approved, the complex “will be the largest single
manufacturing investment in the history of Louisiana
and … one of the largest foreign direct investment manufacturing projects in
the history of the entire United
In April, The Wall Street Journal
reported that Shell (based in the Netherlands)
a similar refinery in the Pelican State.
moonbats. It’s hopelessly diffuse and intermittent -- and propped up by an
obscene amount of taxpayer dollars -- but politically correct power wasn’t overlooked:
China Ming Yang Wind Power Group established
a research and development center in North Carolina and France-based Soitec
production at its $150 million solar factory in San Diego.
Autos are an
FDI specialty, and this year did not disappoint. BMW disclosed that exports
from its South Carolina plant have jumped 80 percent since 2009. November saw
Honda celebrate its 30th
anniversary of U.S.-based manufacturing -- throughout 2012, the Japanese
multinational made hundreds of millions of dollars in new investments and created
hundreds of new jobs at its operations in Alabama
and Ohio. Toyota
broke ground on a 300,000-square-foot expansion of its Alabama facility,
which assembles V6 engines for Highlanders built in Indiana. Volkswagen
announced the hiring of another
800 workers in Tennessee. Kia (Georgia) and Nissan (Tennessee) posted help-wanted ads, too.
FDI also supports
vehicles for the skies. In July, Airbus announced its intention to build a $600
million factory in Mobile, Alabama. “The town is right, the talent is
right and the time is right,” said the company’s president and CEO. The
plant’s A320 assembly
line is estimated to need 1,000 employees, with more hiring to come from Airbus’s
parts suppliers, who are clamoring
to secure beachheads in the region.
Florida is another beneficiary of aircraft-driven
investment. In late November, Brazilian jetmaker Embraer started
work a 67,000-square-foot engineering and technology center in Melbourne. Several
days later, the Sunshine State
welcomed Italico Aviation, which will
manufacture its “light sport aircraft” in Kissimmee.
As the clock
ticked down to the arrival of the “fiscal cliff,” the FDI community didn’t
appear all that worried. In December alone:
• A subsidiary
of Austria’s Klausner Group
announced the construction of a $110
million, 350-worker sawmill in North Carolina.
Sarla Performance Fibers established a U.S.
presence -- its $13.8
million operations center in South Carolina will have 100 staffers.
• Ceramica Del
Conca, an Italian tile company, unveiled
plans for a $70 million, 178-worker factory in Tennessee.
Biomaterials, a Dutch manufacturer of “resorbable polymers and monomers,” declared
million investment in Georgia that will create “more than 30 new jobs.”
supplier Siegwerk EIC, headquartered near Cologne, announced that it
will expand its North Carolina facility and hire 18 more employees.
untold story of free trade: More than 5 million of our countrymen earn their paychecks
affiliates of “foreign” corporations. But rest assured, the protectionist lobby
will go right on ignoring insourcing -- while insisting that globalization is
“bad for the American worker.”
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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