The city, she said, is mounting a concentrated strategy to bring in foreign firms, which it sees as a way to blunt the impact of the departure of American firms. Many of the foreign firms pay higher wages and invest in training to boost traditional manufacturing workers into positions that require advanced skills, she said.
For example, the Danish firm Grundfos, a maker of water pumps including the Peerless brand, bought a small Indianapolis firm in 2013 as a way to expand its U.S. market. It did so after the local firm’s owners rejected a bid from a domestic company, fearing it would fold the local plant into its overall U.S. operation and move jobs out of the city. Grundfos kept jobs in Indianapolis and is looking to expand its plant, Elrod said.
"This example shows where it can be a good thing and reverse the narrative that foreign investment is bad," Elrod said.
Columbus, Ohio, has been attracting foreign investment for years, including Japanese automaker Honda, which has a parts and assembly plant that employs 4,200 in the city, and delivery service DHL Express (USA) Inc., a division of the German logistics company Deutsche Post DHL Group that located its US headquarters just outside of Columbus in Westerville.
More recently, according to Jung Kim, director of research and business intelligence for the city's economic development agency, the city has been trying to help foreign companies like DHL Express with their US operations. The delivery company a few years ago consolidated some US operations and now employs more than 2,200 people in Columbus.
In North Carolina, about 230,500 workers are employed as a result of foreign direct investment, which has amounted to $13.6 billion in the last decade, according to the Economic Development Partnership of North Carolina, a public-private entity.
One argument the agency makes to attract companies to the state is that because the US continues to be a strong market for sales, it’s advantageous to have the manufacturing here too, and avoid large shipping costs as well as long delivery times.
"If you are making product over in China and relying on a couple of months of shipping time, you lose the ability to adapt very quickly to consumer changes," said Christopher Chung, CEO of the economic development group. In addition, he said, labor costs have risen in China, and while they are not nearly as high as in the U.S., it’s just another factor that Chinese companies may weigh.
San Diego — home to huge US military installations and industry, as well as a large medical and pharmaceutical research industry — was anticipating a downturn in federal funding five years ago and looked to investment from abroad, said Nikia Clarke, executive director of the World Trade Center San Diego. About 40 percent of the foreign direct investment in the city comes from the UK and Japan, she said, and is largely concentrated in the information and communications industry, as well as pharmaceuticals.
Takeda Pharmaceutical Co., a giant Japanese firm that makes a variety of drugs, especially ones to treat diabetes and gastrointestinal diseases, consolidated all of its West Coast drug operation in San Diego. Electronic components manufacturer Murata Manufacturing Co., another Japanese company, acquired San Diego’s Peregrine Semiconductor Corp., a maker of air filters. They expected to add about a hundred jobs and are using Peregrine as the "spear for their North American expansion strategy," Clarke said.
Clarke said while domestic companies sometimes merge with San Diego firms and move the manufacturing plants to Texas or Iowa where costs are cheaper, foreign firms tend to keep their operations where they are. And contrary to some political rhetoric, San Diego's location on the border with Mexico is an asset, she said. Foreign companies like Japanese electronics manufacturer Kyocera Corp. locate their headquarters and high-skilled work in the US and put the lower-skilled manufacturing efforts right across the border.
"That model works very well here," Clarke said. "The border economy is such an engine of economic growth and that's something that's been left out of the debate."
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