Friday, July 19, 2013

Foreign firms invest heavily in small-town America

The economies of some small towns are making a big economic comeback, courtesy of foreign investors. Kentucky is one state whose small towns have relied heavily on business from outside the U.S. State Cabinet for Economic Development statistics show "Foreign companies made 30 percent of the investments announced in 2011 and 35 percent in 2012, and were responsible for 23 percent and 24 percent of the state’s job growth the past two years, with 2013 looking just as good," Mark Green writes in The Lane Report, a business magazine based in Lexington. (Lexington Herald-Leader photo by Charles Bertram: Toyota plant)

Kentucky isn't the only state soaring in foreign investments. "For the first time since 2001, the U.S. knocked China out of first place in an annual survey of executives rating favorable places for foreign direct investment," James Hagerty reports for The Wall Street Journal. A Chinese company agreed in May agreed to pay $4.7 billion for U.S. pork producer Smithfield Foods Inc., an Indian company announced plans to pay about $2.22 billion for Ohio's Cooper Tire and Rubber Co., while Toyota said it would invest $200 million to expand parts plants in Alabama, Missouri and Tennessee. (Read more)

"Kentucky is home currently to about 425 foreign-owned companies from 30 nations, employing more than 80,000 people," Green reports. "There are 156 Japanese-owned companies employing 37,000-plus and 178 European-owned companies that employ more than 26,000. The state has nearly 100 more foreign-owned operations in 2013 than it did in 2003." Over the past three years, foreign-owned firms have grown 12 percent, compared to the state's overall growth rate of 6 percent.

The automotive industry has invested heavily in Kentucky. "Since January 2010, more than 200 domestic and foreign motor-vehicle-related projects have been announced in Kentucky, representing more than 14,400 new jobs and nearly $3.5 billion in new investment, more than one-third of all new investment announced," Green reports. "Kentucky produced more than 1 million light vehicles in 2012, its most in five years, ranking the state fourth in vehicles made. So far in 2013, Kentucky ranks third in light vehicle production – on a per capita basis, the state ranks first." (Read more)

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