Foreign Investment Lifts U.S. Job Market
Kalish, David E., THE JOURNAL RECORD
NEW YORK _ Made-in-Japan and Made-in-Germany labels once made U.S. workers fear for their jobs. Now the jobs themselves are made overseas _ and Americans are grateful.
While scores of U.S. corporations are slashing payrolls, companies such as Mercedes, BMW and Toshiba are creating thousands of jobs in this country by opening new factories and expanding existing ones. Foreign investment here has surged this year, reversing a three-year decline.
The trend, some economists say, could give a small but timely boost to the fragile U.S. recovery, which has been undermined by widespread layoffs as companies struggle to pare costs.
It also suggests a brighter side to the rapid globalization of U.S. business, decried in the past for shipping jobs overseas in American industries ranging from textiles to electronics.
"However you cut this, this is good for the United States," said Paul Boltz, chief economist at T. Rowe Price Associates Inc., a Baltimore-based investment management firm.
To be sure, American businesses also are hiring workers, but large-scale layoffs have overshadowed any gains. Even healthy companies like Procter Gamble Co. and Anheuser-Busch Cos. are cutting payrolls.
By contrast, Mercedes-Benz will announce today its choice of Alabama as site of the automaker's first U.S. factory, which will employ 1,500 workers.
Last year, South Carolina won a multi-state competition for a plant from BMW, Mercedes' German rival in the luxury car market. BMW expects to begin production in Spartanburg, S.C., in 1995.
Indeed, any stigma patriotic workers used to attach to working for a foreign employer has been largely forgotten in today's hard-knock economy.
"If you ask most workers, there once was a lot of concern about who was the management. But a lot of that concern has dissipated," said Lynn Reaser, chief economist at First Interstate Bancorp in Los Angeles. "A lot of foreign companies will maintain U.S. management."
The story of foreign company interest in the United States is told in the numbers. Direct foreign investment here rose to $17 billion in the first half of 1993, up sharply from $2.4 billion for all of last year, Commerce Department figures show.
A previous surge in foreign investment in the 1980s mostly went toward buying existing American firms, not creating new jobs, said Robert Z. Aliber, professor of international economics and finance at the University of Chicago's Graduate School of Business. …