Business Local Governments Get Personal To Attract International Dollars by Sanjay Talwani Foreign companies are flocking to Alabama, and the locals say it’s more than low taxes, cheap land and labor, and a good transportation system that’s drawing the world to the Deep South. After Daimler-Benz opened a Mercedes plant in Tuscaloosa County in 1997, numerous other European companies followed, notably European Aeronautic Defence and Space Co. (EADS) and ThyssenKrupp, the German steel company that announced a major new plant in April. It’s a history that economic development officials in Alabama are proud of—and it highlights the methods that local governments, businesses and politicians use to compete for precious investment dollars from around the world, especially for their rural and less prosperous areas. Residents of Alabama attribute the decade-long rush of European companies in part to their own hard work organizing and reaching out internationally. Plus, they say, the weather’s nice (at least much of the year) and Alabamans are just plain friendly. “People can’t believe how well they are received,” said Trish Coghlan, executive director of AlabamaGermany Partnership. Southern hospitality is no cliché when it comes to foreign investing in Alabama. It’s helped to build networks of companies and government bureaucrats that navigate prospective foreign investors through all the hassles of doing local business—the permits, banking, infrastructure, taxes—while spreading the reputation of Alabama as a place that’s not just good for commerce, but also a good place to live, work and set up shop in. Coghlan noted Alabama’s built-in attractions for businesses such as the enormous Port of Alabama, as well as the state’s mountains, rivers, farms and even beaches on the Emerald Coast, sometimes also jokingly called the Redneck Riviera. But in most cases, commercial enterprise seems to be preceded by cultural exchange and relationships. In Alabama, state officials have welcomed visiting German business leaders by taking them deep-sea fishing, holding barbecues with bluegrass bands, and even putting on Oktoberfest festivities—although one such event, held in a dry (i.e. nonalcoholic) county, drew national attention for the unintended irony. To make something last from those good feelings, Coghlan said the state’s comprehensive team then works to simplify state business matters for the newcomers. Her group’s board, for example, includes officials from the utility companies, port authority and other players who need to be on board before any deals are inked. The investment has grown, and with it so has Alabama’s economy. The state attracted almost $50 billion in foreign investment from 2002 to 2004, much of it in the automotive and aerospace industries. Nearly three-fifths of that money came from nations in the European Union, according to EU Ambassador John Bruton, who visited Alabama leaders in April. In fact, in 2004, EU companies invested $9.4 billion—more than the rest of the world combined—in Alabama. In addition, Alabama’s export growth is among the nation’s fastest, and the state currently exports more goods to Germany than to Canada and Mexico combined. The Mercedes plant that opened 10 years ago now claims direct or indirect responsibility for some 10,000 jobs and exports of $1 billion, making it the state’s largest exporter. AlabamaGermany Partnership lists nearly 50 German companies that have set up in Alabama, most of them in manufacturing. In May, the state also celebrated as ThyssenKrupp announced a new $4.19 billion steel plant in north Mobile County on the heels of a package of incentives from the state. Alabama Gov. Bob Riley said a “project this size, with this amount of economic impact, comes along perhaps once in a generation.” The company said the mill might ultimately create up to 38,000 new jobs in the region. Later in May, EADS announced it would use the Brookley Industrial Complex in Mobile to build a new refueling plane, the KC-330 tanker, for the U.S. Air Force if it wins the $23.5 billion contract. Alabama beat out Florida, Mississippi and South Carolina for the potential project. This follows EADS’s earlier incursion into Alabama, with a facility at Mobile Regional Airport to service U.S. Coast Guard planes. The steel mill and the aerospace company may seem to have little in common, but in an interview with an Alabama television station, EADS North America Chairman and Chief Executive Officer Ralph Crosby pointed to their common interest. “What you don’t know is we helped with ThyssenKrupp,” Crosby told WKRG TV in Mobile. “Because we know that it’s another German company … our CEO called the president of ThyssenKrupp and said, ‘Hey, you know, we understand Mercedes, we understand EADS, we understand Alabama, and Alabama delivers.’” Individual cities and counties within states also fight aggressively to gain and keep investment. St. Clair County, outside Birmingham, Ala., was largely rural a decade ago. Now it boasts three German companies including WKW Erbslöh, an automotive supplier, which is building a major facility in the county. “Our strategy is we take a very aggressive approach to economic development,” said Ed Gardner Jr., executive director of the St. Clair County Economic Development Council. That approach includes traveling abroad to visit prospective companies and looking at long-term returns—for example, giving away a 20-acre parcel of land in anticipation of an economic boost down the road. Furthermore, the state’s reputation for success helps attract new companies. “It’s a much easier sell than it was in 1993,” noted Gardner. On the other side of the investment equation are the embassies. An economic officer at the German Embassy noted that there are many organizations, such as German-American Chambers of Commerce, that work to connect German businesses with locations in the United States. The embassy is generally careful not to favor one company over another, and devotes plenty of energy promoting investment in Germany, rather than the other way around. But the embassy does connect German companies with local partners here and helps iron out any problems. In addition, many embassies work to smooth the paths for foreign companies trying to set up shop in the United States, with diplomats traveling the country to promote understanding and build relationships. EU Ambassador Bruton makes such trips a couple of times a month, an aide said. On Bruton’s recent trip to Alabama, he met with the usual gamut of business and political leaders, but, like most ambassador visits, the subject was culture, tradition and values—in addition to business. Bruton, for example, met with an Alabama group that opposes the death penalty and discussed the EU’s unease with Alabama’s use of capital punishment. He also spoke with some 1,000 high school students and a group at Auburn University, sharing some basics about the EU’s history and significance. A key point Bruton made to the Alabamans: Europe is essential to America’s economy. The EU accounts for about two-thirds of all international investment dollars flowing into the United States, and some 43,000 Alabama jobs come from EU investment. Ambassadors make such trips all the time, but Alabama has proven itself exceptionally attractive, according to Kevin Gilda, senior outreach advisor for the European Delegation, who noted that much of Alabama’s success is attributable to its people and high value on personal relationships. Next Page

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