It has become commonplace in America to read about companies moving their jobs and operations overseas, in search of less expensive pastures.
But here is one story you likely haven’t heard: our company recently spent nearly $200 million to build a world-class facility, to produce gas turbines in North Carolina. It will create 1,000 direct new jobs and more than 2,000 indirect ones. It will actually cost us less to build these turbines in Charlotte than in any of our other manufacturing sites, even Shanghai, despite paying competitive U.S. wages.
And here’s the kicker: the decision to build that manufacturing plant was made in Germany, at our global headquarters, where I serve as chief executive officer.
If we had one wish, it would be to participate in a lighthouse project in the U.S. – be it a high-speed rail project, wind farms on the open sea, or high-tech smart grids: built by Americans for America. Strong infrastructure, energy efficiency and clean technologies in sustainable cities: three activities that could create thousands of jobs.
This March, I had the unique pleasure of speaking to the U.S. Export-Import Bank, where I delivered this message: rumors of America’s decline have been greatly exaggerated. When given the choice of building our new facility in any of the 190 countries where we operate, we chose America.
Why do we believe so strongly in America? Despite the hangover feeling of the past few years, Americans embody an old German saying: “Faith can move mountains.” In other words: “Nothing is impossible.” Whether it was the lunar landing, the invention of the personal computer or the internet – Americans have always achieved pioneering feats because they had great faith in their ability to move mountains.
Germans have also a proud history of innovation and might even invent more things than Americans. But no one is better at transforming technological innovations into commercial success than Americans. Germans may have invented the fax or come up with the mp3 standard, but companies like Xerox, Amazon and Apple commercialized these innovations and turned them into global success stories.
That is one reason why we think our investment in Charlotte will pay off. But there are others as well. When we are looking for a new place to manufacture a product, we take three main considerations into account:
First, we want to be close to our customers in the leading markets.
Second, many of the positions in our company require highly skilled workers, so we look for areas with a commitment to workforce development and higher education.
And third, we look to link our innovation engine to our manufacturing sites, particularly for early stage technologies.
On all three fronts, the U.S. offers enormous opportunity. By manufacturing here, we get proximity to our largest market, we get highly skilled workers educated at some of the world’s best universities-with access to the best research facilities-and we get cutting edge innovation that we can link directly to our manufacturing sites.
And this happens across the country where we employ 62,000 people who are part of the fabric of communities in all 50 states. This means we employ about as many Americans as, for example, Microsoft, Honeywell or Hewlett-Packard. In fact, we’ve been in this country since 1854 when, our founder, Werner von Siemens, landed his first order in America, a contract to supply railroad telegraphs to Philadelphia.
A lot has changed since this pioneering technological achievement laid the foundation for our success as a global exporter today. Now, more than eighty percent of our business comes from outside of Germany. And the days when the U.S. was primarily a destination for exports from Germany are long gone. Today the U.S. is not only by far our largest market, but is also an extremely vital production location, one of our most important research centers and a key base from which we export about $2 billion worth of goods to the rest of the world. We not only believe that President Obama’s goal of doubling U.S. exports is possible-we expect to help him achieve it.
This is why we believe manufacturing in America is a wise investment. We believe in America’s future, in its ability to reinvent itself and to continually be at the cutting edge. The gas turbines we will be producing in Charlotte will be sold in North and South America and Asia. And because we will link our innovation engine to our manufacturing sites, we will be able to push down the cost curve relentlessly.
One institution can be very helpful in making a wish come true. The Export-Import Bank is ready to break new ground and help even foreign companies with strong US roots. It has offered its support, with the goal of creating more production, more exports, and more jobs-the three-part formula that should guide any industrial agenda. We are ready to break that ground with them.
We work to make progress together. With the Export Import Bank, we were able to land a major multi-million contract to deliver power generation equipment to South Korea. Many other contracts will follow – and German and American engineers will not only fight for them hand-in-hand, but work together to tackle the jobs. I keep the faith, that we can move mountains together.
Peter Loscher is President and Chief Executive Officer of Siemens AG.
