Discussion Forum

Who's Courting You?
Original Comment:
With all the political chatter about building a wall or imposing travel bans to keep certain people out of America, there is no such conversation about keeping foreign investment out. In fact, most public officials in the economic development arena are actively recruiting foreign companies to open facilities on U.S. soil, often offering generous incentives to do so. And I’m not suggesting that is a bad thing.

Reuters analysis of federal jobs data shows that out of 656,000 new manufacturing jobs created between 2010 and 2014, two thirds can be attributed to foreign direct investment. More recent jobs numbers are not yet available, but over $700 billion in foreign capital has poured in over the last two years bringing total foreign investment to $3.7 trillion at the end of 2016, a world record.

For example, German carmaker BMW has invested $8 billion in a 1.2 million square foot assembly plant in Spartanburg, South Carolina, which has become the largest single exporter of cars by value from the United States. (source: Fortune Magazine June 30, 2017).

And again, I’m not suggesting this is a bad thing, because it does bring much needed jobs.

In my last article about the 20,000 modular home development in Chicago, I admitted that maybe I was naïve or even jealous. That was wrong. The appropriate emotion I’m feeling is frustration!

I’m wondering if anyone reading this has ever built a home or modular building in Chicago. If so, I’d love to hear your story about how the city leaders greeted you with open arms, with reporters on hand to take pictures, and the tax incentives and training grants that economic development officials no doubt showered on you.

Didn’t happen like that? How about this – you felt as if you were being prosecuted for crimes you hadn’t yet committed while city officials had their eyes on you. They buried you in a mountain of paperwork, permits, and approvals. You were questioned about the quality of your work and your workers’ union status.

My point is simply this – while its all well and good for elected officials to go after new employers, who’s taking care of the existing ones? Who is making sure that the company that has already been employing local people and paying taxes is healthy? Because our industry is made up of a lot of smaller companies, we don’t often make the splashy headlines or land the mega deals – or gain the attention of our elected officials.

There are over 150 commercial and modular home builders in North America (excluding HUD code builders) each employing an average of 65 people in their plants. That’s 10,000 factory workers, not including all the builders, subcontractors, suppliers, and others supporting the industry.

Now there have been some deals made to existing U.S. manufacturers recently. President Trump was quick to the podium to pat himself on the back for saving 1,000 jobs at the Carrier HVAC plant in Indiana. And it seemed like State officials opened the coffers and worked overtime to make that happen.

So yes, its frustration I’m feeling. It’s fine that foreign companies and being asked to the prom, and great that some larger U.S. manufacturers have been shown some interests as well. But who’s courting the existing modular manufacturers?

While foreign companies and large manufacturers ae being showered with incentives, existing companies are being showered with regulations, taxes, fees, and tough labor laws.

I’m not feeling the love; are you?

In my next article on this subject, I’ll focus on what our industry can and should be doing to better position ourselves for industry growth (I’ve been getting A LOT of input on this lately).
Started on August 9, 2017 by Tom Hardiman
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Additional Comments:
I agree Tom; I'm not feeling the love that's for sure. All the things you mention are offered to new companies coming to my town also, but nothing for those that have been in business, paying taxes, etc. for more than 50 years. It is extremely frustrating to see things like the Chicago US Steal. Also, most foreign companies locate in the US so they don't get hit with bad publicity about foreign goods as they now can claim it is made in the US (not imported), but all profits and other perks go out of country after taking all they can in the incentives.
Updated on August 9, 2017 by Stephen J. Stump

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