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| Politics & Policy |
Inside Outsourcing
Nancy McLernon
07/01/2004
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Interestingly, foreign companies come to the United States not just to
produce things for American consumption, but to also create a platform to make
goods for the world. Subsidiaries in the United States produce approximately
one-quarter of all U.S. exports. For example, BMW Manufacturing, a U.S.
subsidiary of the German auto-maker, has been operating in Spartanburg, S.C.,
since 1994. The company employs 4,300 workers in a state-of-the-art, $2 billion
facility. In 2003, BMW exported almost 60 percent of the automobiles it produced
at the plant to 124 markets across the globe.
There is more good news about
insourcing. Direct foreign investment in the United States totaled $82 billion
in 2003, more than twice the total of the previous year. This new investment was
concentrated in high-skill sectors such as technology, pharmaceuticals, finance
and the automotive industry. Increased foreign investment means more factories,
more research and development and more insourced jobs.
According to
historical trends, the increase in foreign direct investment during 2003 could
boost jobs supported by U.S. subsidiaries by as many as 400,000. These
impressive figures show that an open trading system provides tangible employment
benefits and underscores the confidence these companies have in the U.S. economy
and its workers. So, should we be more concerned about the jobs leaving the
United States than the ones coming in? A good job is a good job, no matter where
the parent company is located. Over the years, a company’s nationality has
become increasingly irrelevant.
Businesses are not more loyal to one country
than to another. Decisions are based on what is best for the business. And,
businesses from around the world recognize that it is good for their bottom line
to expand their operations into the United States.
Nancy McLernon is deputy director of the Organization for
International Investment in Washington, D.C., a business association
representing U.S. subsidiaries of foreign companies.
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