Two-thirds of Post-recession Manufacturing Jobs Were a Result of Foreign Investment, Says Study
As the Trump administration applies pressure to encourage companies to manufacture goods within U.S. borders and bolster American employment (or potentially face towering tariffs), the president has more recently come out against foreign automakers directly. In late May, Trump responded to criticism from German Chancellor Angela Merkel by accusing her country of having a trade surplus with the United States — claiming its automakers send vehicles to North America while providing little else. Trump has levelled similar criticism at China.
However, there’s a problem with his assertion. Foreign companies may not always contribute the majority of their wealth towards improving the U.S. economy, but they do invest heavily into the country. In fact, a recent analysis of federal jobs data shows two-thirds of the 656,000 manufacturing jobs created between 2010 and 2014 can be attributed directly to foreign investment.
Accurate employment figures for the following years aren’t yet available. But, with an additional $700 billion in capital coming in from non-domestic sources, total foreign investment reached $3.7 trillion by the end of 2016 — a new record.
According to an analysis published by Reuters, the United Kingdom, Japan, and Germany spent a combined total of more than $300 billion on U.S. investments over the last few years. China, which has only recently begun pouring money into North America, saw its investment grow by more than 300 percent between 2011 and 2015. It’s expected to pursue an expanding interest, along with Germany and Japan, in the years to come.
Much of this investment targets the South, where foreign companies have made a home for themselves over the last few years. Mercedes-Benz recently finished an assembly plant for its Sprinter van in Charleston, South Carolina, employing over 1,200 local workers, and Volvo Cars intends to complete its own factory there by 2020.
BMW has invested $8 billion in order to construct a colossal assembly plant in Spartanburg, South Carolina. The site has become the single largest exporter of vehicles by value for the entire country and BMW’s largest factory throughout the world. Earlier this week the automaker announced it would invest an additional $600 million into the plant, creating 1,000 extra jobs.
“The presence of this company changed everything in the trajectory of our state,” said Governor Henry McMaster during Monday’s unveiling of BMW’s updated X3.
Before you break out into humming The Stars and Stripes Forever while saluting the German flag, know that BMW is a global company. It has interests in many other nations and is wary of the current political climate within the United States.
“We have a big footprint here, and we are flexible enough,” Oliver Zipse, BMW’s board member responsible for manufacturing, explained. “We will build the X3 not only in Spartanburg, we will split it into South Africa and then to China, so we will have some flexibility to produce cars somewhere else,” he said. “If something happens at the political level — which we don’t know yet — we are able to have a flexible response.”
Officially, the Trump administration has stated it welcomes outside investment — even if the president himself has proven himself less than cordial on occasion. However, with the renegotiation of NAFTA underway, some within his own party have accused him of being inflexible — and potentially bad for the economy.
Senator Lindsey Graham recently suggested the current administration’s tactics could severely harm an American workforce dependent on foreign companies. “Negotiate a trade agreement with Europe, modernize NAFTA, don’t tear it up,” Graham told Reuters at the BMW factory. “We’re going in the wrong direction. We need more trade agreements, not less.”
[Images: BMW]
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"Two-thirds of Post-Recession Manufacturing Jobs Were a Result of Foreign Investment, Says Study" If that is true then we are a glorified third world manufacturing nation. When a nation can no longer make things, its economy will go downhill. Still, the nation has a proud history and it is worth fighting for. A trade war may restore some pride in the country. I don't like America being relegated to second tier status.
Great news! Now America finally competes with Mexico for the honor to become industrial colony of manufacturing superpowers of Japan and Germany. Now we have to beg Chinese companies to bring jobs back to US. Because there are no American companies left, all either bankrupt or owned by one these three superpowers.