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Economic Development Opportunities Trends, Progress, & the Future of European Investment

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Page 1: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Economic Development OpportunitiesTrends, Progress, & the Future of European Investment

Page 2: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

1. Europe’s Economy

2. Foreign Direct Investment

3. Industry Trends – Past, Present & Future

4. Will European Businesses Invest ?

5. Expectations of your Communities

6. How to Prepare your Communities

7. German Investment Today

8. Q & A

Overview

Page 3: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Europe’s Economy

Source: Eurostat, 2013

GDP Growth

EU

USA

Page 4: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Europeans & Americans Benefit from FDI

Foreign Direct Investment

Source: Eurostat, 2013

Page 5: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

German Investment - USA

Source: U.S. Bureau of Economic Analysis, 2013

Page 6: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

1950

Page 7: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

1960

Page 8: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

1980

Page 9: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

1990

Page 10: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

2000

Page 11: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Automotive Assembly Trends

2010

Page 12: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Industrial Trends

Present and Future Industrial Trends

Page 13: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Drivers for Industrial Migration

1. Operating Costs• Wage rates; logistics; taxes; utilities

2. Infrastructure• Roads; bridges; rail; ports

3. Business Environment• Work Force

• Unions

4. Quality of Life

Page 14: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Why Europeans Invest

• Following customers into North America

• Cost competitiveness (logistics; wage rates)

• Matching currency US$ Revenues and Costs

• “Window of Opportunity” for products

• Seeking technology or innovation

• Lack of investment opportunities elsewhere

Page 15: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Your Expectations

• Large German companies• Large employers; Major capital investment

405,000 employees

300,000 employees

180,000 employees

110,000 employees

Page 16: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Reality

• The German Mittelstand• Mid-sized employers; Moderate capital investment

4,000 employees

600 employees

560 employees

550 employees

Page 17: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Preparing your Community

How can you prepare your community?

• Understand the Business Culture

• Understand the Customer

• Understand the Customer’s Expectations

• Be Yourself

Page 18: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Business Culture

Industrial Tradition• Social Market Economy• German Mittelstand – Hidden Champions Product + Innovation Liquid + Low-risk

• Engineering Focus Product Quality

Values• Prudent Business Behavior• Embrace Stability• Direct Communication• Process-driven

Page 19: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

The Customer

Americans seen as Salesmen• Show + Tell Effect• Biggest, Best, # 1…

The German CEO• Chief Engineer + Business Administrator + Owner• Conservative Planner• Cautious decision-maker

German Mittelstand• Family-owned; Family Decisions• Value Preservation• Focus on Quality

Page 20: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Customer’s Expectations

Start-up & Operating Costs• Lease quotes; construction costs

• Utility cost quotes

• Corporate taxes; property tax

American Work Force• Mobile; high turnover

• Productivity issues

• Recruiting & Interviewing

• HR Benefits

Page 21: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Tips

• Be Prepared !

• Stick to the Facts

• Keep your Presentation Short

• Avoid discussion of Politics, Religion or Sex

• Every Community Participant is an Ambassador

• Eliminate Stereotypes

Page 22: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

German Investment Today

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

Chemicals Plastics andrubber products

Primary andfabricated metals

Machinery Transportationequipment

OtherManufacturing

Investment in Manufacturing Assets in USAGerman Subsidiaries 2010 ($ Millions)

Source: Bureau of Economic Analysis,  2013

Page 23: Economic Development Opportunities · German Investment Today $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Chemicals Plastics and rubber products Primary and fabricated

Q & A

QUESTIONS & ANSWERS