U.S.A., the country that has most improved its manufacturing competitiveness

Publicado el por N.B // REDACCIÓN (autor)

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United States is the largest economy in the world, recognized as the most important global market. However, the vast majority of companies, including the North American, were not considering U.S.A. as a competitive destination for manufacturing or operations. This situation is changing really fast. US companies themselves are repatriating their production, and companies from all over the world are following, choosing North America as their destination.
   
In the latest report from Boston Consulting Group on the competitiveness of the exporting countries, the U.S. is positioned globally as the country that has most improved its manufacturing competitiveness. Based on its energy policy (relying on natural gas), the increasing productivity of its workers and the lack of upward pressure on employment costs, the country has positioned itself as the second most competitive manufacturing economy in the world, just behind China.

If we add other elements such as the stability of the country, the dynamism of its economy, the heavy investments being made in infrastructures, the current low value of the dollar and thediversity of its 50 states, European organizations face some very good business opportunities in the US. This is why companies should seriously consider North America as a priority destination when going international.
 
When considering the US a destination, businesses should take into account its diversity and understand that the market is conformed as a set of 50 states, numerous counties and even more municipalities. Each one of them promotes its most competitive economic sectors or industries, competing among them in order to become the right destination for domestic and foreign businesses. This regional competitiveness generates different benefits for companies, depending on the economic region. Some of these benefits may be:

  • Tax advantages
    • No state property tax, No local income tax, No inventory tax
    • No sales tax on manufacturing machinery, industrial power or materials for finished products
    • No wholesale tax
    • No unitary tax on worldwide profits
  • Favorable corporate income tax structure 
  • Tax incentives to businesses choosing to locate or expand their manufacturing operations:
    • Job Development Tax Credits
    • Economic Development Set-Aside Grants
    • Corporate Headquarters Tax Credits
    • Research and Development Tax Credits
  • Customized recruiting and training incentives
  • Special economic development zones and foreign trade zones
  • Specific incentive programs for qualifying businesses

More and more companies around the world select North America as their destination. A local expert team is needed in order to get the most out of the different opportunities and advantages, as well as to find the right location, understand the business climate, explore the business opportunities and learn about what is needed to start operations at the selected new destination .

The European American Enterprise Council, in its aim to support European companies in the U.S., has organized a multi-sector trade mission to USA for European companies, where the participating companies will visit three different States, meet with industry peers, learn first hand about the major projects that are being undertaken in each of these states, visit locations and interact with different state and local economic development authorities, that will indicate in each case the type of support they are able to offer. The mission will take place in June and registrationis open until the end of May.

This trade mission is the best way to know on the spot the opportunities that the U.S. market can offer to European companies.

As a good example for european companies, EAEC´s team has selected three very different states: South Carolina , Virginia and Pennsylvania, where a large number of European companies are already located and doing business.

These States that are characterized by their good location, their openness to foreign companies and their support to businesses that are considering the U.S. as a business destination. States that are very different from each other, but where many european companies call them home.  

South Carolina

  • GDP: $ 191,000 Mill ( More than Peru, Qatar or Romania)
  • Population: 4,625,364
  • The Boeing Company’s final assembly and delivery facility for the Boeing 787 Dreamliner is bringing recognition as a top destination for the aerospace and aviation industry.
  • More than 180 aerospace manufacturing companies and suppliers, distributed across the state, includes aerospace engineering companies, design firms, service providers and distributors.
  • more than 20,000 workers in Aerospace.
  • The automotive industry , with more than 250 companies and the BMW mega-plant as the lead (just invested $1 Billion to expand its plant).
  • These two mega-factories have generated significant industrial base, with companies ranging from material development to manufacturers of all kinds of supplies.
  • Universities and R&D centers fully integrated with the industry.
  • Distribution and logistics sector plays an important role in the region, with 75,000 jobs.
  • Walmart, Amazon, Starbucks and Home Depot have logistic centers in the State.
  • Biotech sector plays an increasingly important role in the State´s growth
  • Large multinational presence, many with manufacturing plants.
  • Highly competitive production costs, property and taxation
  • One of the states with better tax conditions for businesses
    • No property tax 
    • No sales tax on industrial machinery, energy industry and production materials
    • Different incentives and tax credits for job creation, R&D and establishment of corporate headquarters
  • Customized training for new workforce
  • Constant infrastructures upgrade
  • Charleston port is ready for Post-Panama ships
  • Right to work State - No obligation to belong to unions.
  • Other companies present in South Carolina : Aerospace: Honeywell , Carbures , GKN , General Electric, Tighitco . Automotive: Bridgestone , Michelin, Continental, Bosch, Gestamp , ZF Group, Proterra 

Virginia

  • GDP: $ 478,747 Mill (Greater than Taiwan, Austria and Denmark)
  • Population: 8,001,024
  • The third state with lower labor costs in manufacturing
  • Industrial electricity cost of 5.3 Euro cents kw/h .
  • Fourth state with lower taxes on businesses
  • Availability foreign free trade zones and special enterprise zones with additional advantages
    • Sales tax exemption to companies in the purchase of goods and services for production (gas , electricity , software, etc .)
    • Incentives for job creation and investment in (industrial and commercial) properties
    • Tax credits
  • Customized recruitment and training programs
  • Right to work State - No obligation to belong to unions.
  • Cost of construction, 15% below the national average
  • Investment funds availability
  • Home of the Norfolk Naval Base
  • Best state to do business according to Forbes 2013 list

Major companies based or with presence in the State : Capital One (Finance), Altria Group 

  • (Tobacco) , Dominion Resources (Utility), Genworth Financial (Insurance), Owens & Minor (Health), Car Max (Automotive), MeadWestVaco (Packaging), Brink's (Security), Massey Energy (Mining), Universal (Tobacco), Markel (Insurance ), New Market (Chemistry), Bae Systems (Aerospace), Amazon (IT ), Microsoft (IT ), Northrop Grumman (Aerospace), General Dynamics (Aerospace), Insmed (Health), Corporation Tradegar (Chemical), Alfa Laval (Machinery ), UPS Freight (Logistics), Captech (IT), AgilQuest Corporation (IT), Tridium Inc (IT).              

Pennsylvania

  • GDP: $ 647.447 Mill (Greater than Sweden, Saudi Arabia and Norway)
  • Population: 12,702,379
  • Stands out as the 20th largest economy in the world
  • Located between Washington and New York
  • Main economic sectors: Biotech, Healthcare, advanced manufacturing, materials, technology, agro-food, pharma, chemical industry and energy
  • One of the largest Shale Gas producers ( Marcellus Shale )
  • In the area of influence of New York. Great advantages in living and operating costs
  • 125 Bio-Pharma companies and more than 2,000 health-related businesses
  • Eight of the largest U.S. pharmaceutical companies are in a radius of less than 50 kms of Philadelphia.
  • Funds available to support technological companies
  • Within a radius of 800 Kms, 40% of the purchasing power of U.S.A.
  • Philadelphia International Airport among the 10 largest of the world (transit).
  • Companies : AmerisourceBerger (Distribution), Comcast (Media), Sunoco (Energy), American Steel (Industry), Rite Aid (Health), PNC Financial (Financial), PPG Industries (Chemical), HJ Heinz (Food) , Hersey (Food) .

Document produced by the European American Enterprise Council, representing the Enterprise Europe Network in the U.S. and organizers of the USAWEEK conference.

For more information on trade missions or other USA support programs, such as USADirect , contact German Loperena - gloperena@eaecouncil.com.