September 25, 2014
America must be doing something right.
disincentives generated by Obamacare’s carnage, an absurdly high tax on
corporate income, and the threat-inflation
about impending terrorist attacks, the U.S. continues to draw foreign
direct investment (FDI). Pharmaceuticals, automobiles, chemicals, airplanes, plastics,
real estate -- enterprises abroad still see The Land of the Free as an promising
place to put their money.
Last year, an
issue brief compiled by the Department of Commerce and the president’s
Council of Economic Advisers featured a fact that “deindustrialization”
myth-spreaders probably can’t handle: Since 2006, the U.S. has been “the
largest recipient of FDI.” In 2012, the market value of foreign ownership here topped
acquisitions represent the bulk of FDI. (Russia’s Oasis Beverages recently
co-purchased the brewer that makes Pabst Blue Ribbon, Colt 45, and Old
Milwaukee.) But articles about new factories, as well as plant expansions/renovations,
appear regularly in local media’s business coverage.
Airbus, for example, is establishing
an A320 assembly
line in Mobile, Alabama. (Hiring has already begun -- mechanics,
engineers, test pilots, and quality inspectors, take note.) And high-visibility,
multinational behemoths aren’t the only companies coming to America. Most
FDI arrives via firms that are far from household names. Let’s look at some
investments made since the start of the year.
have been busy:
• KWS SAAT, a specialist
in seeds, made
public its intention to construct a $13.7 research-and-development park in St. Louis, Missouri.
• ISA TanTec announced
that it will build its first U.S.-based tannery in Vicksburg, Mississippi.
Schneider Automotive Systems, whose customers include BMW, Audi, and Ford, commenced
operations at a renovated factory in Russell
• Evonik chose
to host its American “Innovation
other EU members share Deutschlanders’
• Norcross, Georgia
celebrated the arrival of Denmark’s
Power Stow, which will
operate a complex for “sales and after-market support services, as well as
the manufacturing of [its] patented Rollertrack baggage conveyor system.”
• Genan, also
based in Denmark, opened
“its $140 million U.S.
headquarters and state-of-the-art tire recycling facility in Houston, Texas.”
• Italy’s Meter Bearings Group disclosed
that its initial U.S. footprint,
a $4.5 million, 48,000-square-foot factory, will be in Walterboro, South Carolina.
• KONE, a
Finnish elevator and escalator manufacturer, announced
plans to expand in Allen,
based in the Netherlands, opened
a distribution warehouse for agricultural equipment in Cedar Falls, Iowa.
Japan, with more FDI in the U.S. than any nation except the U.K., remains
• In Mesa, Arizona, Bridgestone
the ribbon on its “10-acre research and innovation campus,” which will investigate methods
“to extract natural rubber from guayule,
a shrub native to the southwestern U.S.”
• Asahi Kasei
a new, $30 million plant in Athens,
Chemical, “a leading manufacturer of titanate friction material,” chose
to establish its North American headquarters in an industrial park near Atlanta, Georgia.
And South Korea’s
holdings are growing:
• Haier Group picked
Evansville, Indiana for a technology center to support
and develop “appliances, home comfort products and home entertainment products.”
manufacturer KMIN announced
a $17.3 million commitment to build a factory in Chambers County, Alabama.
anything about the locations of these
facilities? Occasionally, FDI gambles on California
or New York. But
in liberal havens, it’s rare to spot shovel-turning ceremonies attended by CEOs
with foreign accents. Investments from offshore are flowing toward low-cost,
low-tax, right-to-work states.
labor,” an executive with the SSOE
Group recently told The Birmingham News, offers a strong instigation to
avoid the Northeast and the Pacific Coast: “In Germany, there is a huge union
influence, so when German companies are looking at the U.S., that’s not something
they want to deal with. They’re trying to get away from union influence, so
that’s a big plus for Alabama.”
of FDI is in manufacturing, and since it takes energy to make things, “eschew the
blue” is smart strategy. States that
ban fracking, and/or block the construction
of infrastructure to move natural gas, win plenty of praise from the
environmental left. But they don’t create favorable ecosystems for foreign businesses.
intensifying failure to attract domestic investment is matched by its inability
to lure capital from abroad. Behind in the race for FDI from Europe, Japan, and
South Korea, unlimited-government confines are likely to lose out on the trillions
of dollars soon to flow out of Brazil,
FDI is another
reason why job creation in blue states is DOA.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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