Companies from a dozen nations are in South Mississippi, and
economic development officials would like to have even more…
...It’s hard to come up with a project that better shows the duel nature of
awarding a project to a company with foreign roots than the ongoing
controversy over the $40 billion Air Force aerial tanker project.
...Boeing supporters say an EADS win would be tantamount to giving U.S.
jobs to foreigners. But economic development officials are aware of the
flipside: An EADS win would mean a new plant in Mobile, Ala., creating
1,500 jobs that didn’t exist before.
...It’s called “insourcing.”
...Some 5.3 million Americans owe their jobs to the investment of foreign-
owned companies in the United States. In South Mississippi, at least 18
companies have ties to foreign shores. They include some of the most
recognizable names in the world, including the UK’s Rolls-Royce and BAE
Systems and Italy’s Finmeccanica.
...The most obvious benefits of insourcing are the jobs created and tax dollars
that are paid. And there’s the less tangible: a successful launch of a new
operation can broaden international awareness of the attributes of an area like
South Mississippi.
...The value of foreign companies is indicated by the effort economic
development officials make to attract them. One recent example was the Paris
Air Show, which drew representatives from Mississippi, Alabama, Florida and
other regions.
...“Foreign direct investment has clearly played a major role in the economic
development of the Mississippi Gulf Coast region, and I predict that that it will
manifest itself in a number of different ways in the years to come,” said
George Freeland, executive director of the Jackson County Economic
Development Foundation.
...“Already, foreign investments have served to expand our traditional
industrial sectors in the form of petrochemical and commercial and defense
shipbuilding. I think they will increasingly impact other emerging sectors such
as aerospace and energy based projects,” he said.
The foreign footprint
...Foreign companies invest in the United States for a variety of reasons,
including proximity to markets, customers or materials, access to expertise,
access to a trained workforce and in some cases, a lower cost of doing
business.
...The size of the footprint of U.S. subsidiaries of foreign companies is large.
...They employ 5.3 million Americans – 4.5 percent of private sector
employment – and have an annual payroll of $364.2 billion. The average
compensation for each U.S. worker is $68,317, which is 32 percent higher
than compensation at all U.S. companies, according to the Organization for
International Investment.
...The manufacturing sector is the most heavily impacted, with 30 percent of
the jobs at U.S. subsidiaries in manufacturing. That accounts for almost 11
percent of American manufacturing jobs, according to OFII.
...According to IRS reports released in 2009, in 2006 U.S. subsidiaries tax
payments were up nearly 18 percent from the previous year to a record $50
billion. Over a five-year period, U.S. subsidiaries’ tax liabilities tripled from
$18.2 billion in 2002.
...“The U.S. economy is thirsting for new capital and investment,” said Nancy
McLernon, President and CEO for the OFII, in a March 2009 news release.
“This isn’t a mirage; it’s a deep well of insourcing firms that are committed to
bringing jobs to the United States. Policy makers should avoid isolationist
policies that would discourage these companies from continuing to invest in
the U.S. and ‘insource’ jobs.”
Hurdles
...Despite the benefit of attracting investments, there are problems associated
with “outsiders.” Some are real, like protecting the nation from the loss of
sensitive technologies to foreigners. Some have more to do with a sense of us-
versus-them.
...Foreigners have to overcome a few hurdles in order to invest in the United
States.
...The Treasury Department’s Committee on Foreign Investment in the
United States, CFIUS, is an inter-agency group authorized to oversee
international investment in this country. It has to determine the effect of a
transaction on the national security.
...The U.S. defense market is particularly difficult for foreign-based
companies to crack. The United States has restrictions on the purchase and
export of military assets, which includes restrictions on non-U.S. citizens’
access to defense technologies at the workplace.
...International companies have had to work around legal and policy
requirements through a variety of means, like setting up U.S. subsidiaries,
acquiring American companies or entering into partnerships with U.S.
contractors.
...Louis Gallois, CEO of European aerospace and defense giant EADS, said
during a talk in Berlin in 2008 that the company needs to be a “citizen” of the
places where it wants to do business. That’s why it set up its U.S. subsidiary,
EADS North America. But it’s also used other methods to enter the U.S.
market, including acquiring American companies and forming partnerships.
The most high profile is the EADS/Northrop Grumman partnership competing
for the Air Force tanker contract.
...Larry Cavaiola, CEO of Thales North America, subsidiary of French
aerospace and defense company Thales SA, said in late 2005 during a summit
that the company uses a variety of methods in order to do business in the
United States.
...“We use a lot of partnerships,” he said, adding that the indigenous
companies are the ones through which Thales sells defense capabilities. “I am
looking to create jobs in the United States.”
South Mississippi
...The foreign nation most represented in South Mississippi is the United
Kingdom, which has interests in at least seven operations. The only other
country with more than one company is France, with two. They are involved
in a range of industrial sectors, including defense, aerospace, security,
materials and advanced materials, energy and power.
...Rolls Royce has two operations in South Mississippi. It tests commercial jet
engines at Stennis Space Center and makes propellers for Navy ships at Rolls-
Royce Naval Marine in Pascagoula. The U.K. company’s U.S. subsidiary is
Rolls-Royce North America, which employs over 7,300 people at 64 locations
in the U.S. and Canada.
...Another major defense player is U.K.-owned BAE Systems, which has a
Navy defense systems operation in Gautier. The U.S. subsidiary of BAE
Systems plc is BAE Systems Inc., which has a special security agreement with
Washington that mitigates foreign ownership and allows it to supply products
and services to the Defense Department.
...Singapore Technologies Engineering’s U.S. subsidiary, Vision Technologies
Systems, owns VT Halter Marine of Pascagoula and Moss Point, and builds
ships, including those for the military. It also owns ST Mobile Aerospace in
Mobile, Ala.
...QinetiQ North America is the U.S. subsidiary of the U.K.’s QinetiQ, a
defense technology and security company founded in the U.K. as a national
defense lab, similar to DARPA. It has an operation in Long Beach.
...Two of the companies, both in Hancock County, are involved in airborne
sensor equipment and operation. Optech International is the U.S. operation of
Canada’s Optech, and Selex Sensors & Airborne Systems Inc., is the U.S.
business development, marketing and product support arm of Selex Galileo,
part of Italy’s Finmeccanica. Both have operations in Hancock County.
...Three companies have advanced materials operations in Port Bienville
Industrial Park. They are the former Mississippi Polymer Technologies, now a
part of Belgium’s Solvay Advanced Polymers, France’s SNF Polychemie and
Saudi Arabia’s SABIC, the former GE Plastics.
...Germany’s MG Industries in Pass Christian is in liquid nitrogen and oxygen.
...Avon Engineered Fabrications, which makes flexible structures like skirts for
hovercraft, is a subsidiary of Avon Rubber plc of the United Kingdom and is
located in Picayune. Soprema, founded in France in 1908, makes roofing
material for commercial, industrial and institutional buildings and has 14
manufacturing plant in Europe and America, including Gulfport.
...Five electric/energy/power companies operate in South Mississippi: New
Zealand’s Calgon Carbon in Port Bienville is an importer of coal, the United
Kingdom’s BP America Production of Moss Point is an oil and gas producer.
...Two of the foreign-owned companies make pipe for the oil and gas
industry: India’s PSL Inc., owns PSL North America of Port Bienville
Industrial Park, and the United Kingdom’s Hanson owns Hanson Pipe &
Products in Gulfport.
...Pan American Insulators makes electrical insulators and is located in
Hancock County. In 2008 it became a subsidiary of Dulhunty Engineering
Ltd., of Australia.
State and neighbors
...The importance of the foreign investments is clear when looking at the
entire state. U.S. subsidiaries in Mississippi employ 25,700 people, an increase
of 19.5 percent over five years. These subsidiaries provide a livelihood for
almost 3 percent of Mississippi’s private-sector workforce, according to OFII.
...The foreign presence in the manufacturing sector, which have a multiplier
effect because of the need for suppliers, is particularly impressive. More than
45 percent of these jobs – 11,700 – are in manufacturing industries. That
represents nearly 7 percent of all manufacturing jobs in Mississippi.
...While the foreign impact on Mississippi’s manufacturing sector is great, it’s
even greater in nearby Alabama. In that state, 42,100 jobs or over 55 percent
of the 73,600 jobs provided by U.S. subsidiaries are in manufacturing
industries. That represents nearly 14 percent of manufacturing jobs in
Alabama. The U.S. subsidiaries provide livelihoods for over 4 percent of
Alabama’s private sector workforce.
...In Florida, U.S. subsidiaries employ 248,000 Floridians, 5th highest in the
nation. That represents a livelihood for 3.5 percent of Florida’s private-sector
workforce. U.S. subsidiaries support 38,600 manufacturing jobs in Florida.
Ten percent of manufacturing jobs in Florida are supported by U.S.
subsidiaries.
...In Louisiana, U.S. subsidiaries employ 49,700 Louisianans. That represents
a livelihood for over 3 percent of Louisiana's private-sector workforce. Nearly
30 percent of these jobs – 14,700 – are in manufacturing industries. That
represents almost 10 percent of manufacturing jobs in Louisiana. - David
Tortorano
October 2009
economic development officials would like to have even more…
...It’s hard to come up with a project that better shows the duel nature of
awarding a project to a company with foreign roots than the ongoing
controversy over the $40 billion Air Force aerial tanker project.
...Boeing supporters say an EADS win would be tantamount to giving U.S.
jobs to foreigners. But economic development officials are aware of the
flipside: An EADS win would mean a new plant in Mobile, Ala., creating
1,500 jobs that didn’t exist before.
...It’s called “insourcing.”
...Some 5.3 million Americans owe their jobs to the investment of foreign-
owned companies in the United States. In South Mississippi, at least 18
companies have ties to foreign shores. They include some of the most
recognizable names in the world, including the UK’s Rolls-Royce and BAE
Systems and Italy’s Finmeccanica.
...The most obvious benefits of insourcing are the jobs created and tax dollars
that are paid. And there’s the less tangible: a successful launch of a new
operation can broaden international awareness of the attributes of an area like
South Mississippi.
...The value of foreign companies is indicated by the effort economic
development officials make to attract them. One recent example was the Paris
Air Show, which drew representatives from Mississippi, Alabama, Florida and
other regions.
...“Foreign direct investment has clearly played a major role in the economic
development of the Mississippi Gulf Coast region, and I predict that that it will
manifest itself in a number of different ways in the years to come,” said
George Freeland, executive director of the Jackson County Economic
Development Foundation.
...“Already, foreign investments have served to expand our traditional
industrial sectors in the form of petrochemical and commercial and defense
shipbuilding. I think they will increasingly impact other emerging sectors such
as aerospace and energy based projects,” he said.
The foreign footprint
...Foreign companies invest in the United States for a variety of reasons,
including proximity to markets, customers or materials, access to expertise,
access to a trained workforce and in some cases, a lower cost of doing
business.
...The size of the footprint of U.S. subsidiaries of foreign companies is large.
...They employ 5.3 million Americans – 4.5 percent of private sector
employment – and have an annual payroll of $364.2 billion. The average
compensation for each U.S. worker is $68,317, which is 32 percent higher
than compensation at all U.S. companies, according to the Organization for
International Investment.
...The manufacturing sector is the most heavily impacted, with 30 percent of
the jobs at U.S. subsidiaries in manufacturing. That accounts for almost 11
percent of American manufacturing jobs, according to OFII.
...According to IRS reports released in 2009, in 2006 U.S. subsidiaries tax
payments were up nearly 18 percent from the previous year to a record $50
billion. Over a five-year period, U.S. subsidiaries’ tax liabilities tripled from
$18.2 billion in 2002.
...“The U.S. economy is thirsting for new capital and investment,” said Nancy
McLernon, President and CEO for the OFII, in a March 2009 news release.
“This isn’t a mirage; it’s a deep well of insourcing firms that are committed to
bringing jobs to the United States. Policy makers should avoid isolationist
policies that would discourage these companies from continuing to invest in
the U.S. and ‘insource’ jobs.”
Hurdles
...Despite the benefit of attracting investments, there are problems associated
with “outsiders.” Some are real, like protecting the nation from the loss of
sensitive technologies to foreigners. Some have more to do with a sense of us-
versus-them.
...Foreigners have to overcome a few hurdles in order to invest in the United
States.
...The Treasury Department’s Committee on Foreign Investment in the
United States, CFIUS, is an inter-agency group authorized to oversee
international investment in this country. It has to determine the effect of a
transaction on the national security.
...The U.S. defense market is particularly difficult for foreign-based
companies to crack. The United States has restrictions on the purchase and
export of military assets, which includes restrictions on non-U.S. citizens’
access to defense technologies at the workplace.
...International companies have had to work around legal and policy
requirements through a variety of means, like setting up U.S. subsidiaries,
acquiring American companies or entering into partnerships with U.S.
contractors.
...Louis Gallois, CEO of European aerospace and defense giant EADS, said
during a talk in Berlin in 2008 that the company needs to be a “citizen” of the
places where it wants to do business. That’s why it set up its U.S. subsidiary,
EADS North America. But it’s also used other methods to enter the U.S.
market, including acquiring American companies and forming partnerships.
The most high profile is the EADS/Northrop Grumman partnership competing
for the Air Force tanker contract.
...Larry Cavaiola, CEO of Thales North America, subsidiary of French
aerospace and defense company Thales SA, said in late 2005 during a summit
that the company uses a variety of methods in order to do business in the
United States.
...“We use a lot of partnerships,” he said, adding that the indigenous
companies are the ones through which Thales sells defense capabilities. “I am
looking to create jobs in the United States.”
South Mississippi
...The foreign nation most represented in South Mississippi is the United
Kingdom, which has interests in at least seven operations. The only other
country with more than one company is France, with two. They are involved
in a range of industrial sectors, including defense, aerospace, security,
materials and advanced materials, energy and power.
...Rolls Royce has two operations in South Mississippi. It tests commercial jet
engines at Stennis Space Center and makes propellers for Navy ships at Rolls-
Royce Naval Marine in Pascagoula. The U.K. company’s U.S. subsidiary is
Rolls-Royce North America, which employs over 7,300 people at 64 locations
in the U.S. and Canada.
...Another major defense player is U.K.-owned BAE Systems, which has a
Navy defense systems operation in Gautier. The U.S. subsidiary of BAE
Systems plc is BAE Systems Inc., which has a special security agreement with
Washington that mitigates foreign ownership and allows it to supply products
and services to the Defense Department.
...Singapore Technologies Engineering’s U.S. subsidiary, Vision Technologies
Systems, owns VT Halter Marine of Pascagoula and Moss Point, and builds
ships, including those for the military. It also owns ST Mobile Aerospace in
Mobile, Ala.
...QinetiQ North America is the U.S. subsidiary of the U.K.’s QinetiQ, a
defense technology and security company founded in the U.K. as a national
defense lab, similar to DARPA. It has an operation in Long Beach.
...Two of the companies, both in Hancock County, are involved in airborne
sensor equipment and operation. Optech International is the U.S. operation of
Canada’s Optech, and Selex Sensors & Airborne Systems Inc., is the U.S.
business development, marketing and product support arm of Selex Galileo,
part of Italy’s Finmeccanica. Both have operations in Hancock County.
...Three companies have advanced materials operations in Port Bienville
Industrial Park. They are the former Mississippi Polymer Technologies, now a
part of Belgium’s Solvay Advanced Polymers, France’s SNF Polychemie and
Saudi Arabia’s SABIC, the former GE Plastics.
...Germany’s MG Industries in Pass Christian is in liquid nitrogen and oxygen.
...Avon Engineered Fabrications, which makes flexible structures like skirts for
hovercraft, is a subsidiary of Avon Rubber plc of the United Kingdom and is
located in Picayune. Soprema, founded in France in 1908, makes roofing
material for commercial, industrial and institutional buildings and has 14
manufacturing plant in Europe and America, including Gulfport.
...Five electric/energy/power companies operate in South Mississippi: New
Zealand’s Calgon Carbon in Port Bienville is an importer of coal, the United
Kingdom’s BP America Production of Moss Point is an oil and gas producer.
...Two of the foreign-owned companies make pipe for the oil and gas
industry: India’s PSL Inc., owns PSL North America of Port Bienville
Industrial Park, and the United Kingdom’s Hanson owns Hanson Pipe &
Products in Gulfport.
...Pan American Insulators makes electrical insulators and is located in
Hancock County. In 2008 it became a subsidiary of Dulhunty Engineering
Ltd., of Australia.
State and neighbors
...The importance of the foreign investments is clear when looking at the
entire state. U.S. subsidiaries in Mississippi employ 25,700 people, an increase
of 19.5 percent over five years. These subsidiaries provide a livelihood for
almost 3 percent of Mississippi’s private-sector workforce, according to OFII.
...The foreign presence in the manufacturing sector, which have a multiplier
effect because of the need for suppliers, is particularly impressive. More than
45 percent of these jobs – 11,700 – are in manufacturing industries. That
represents nearly 7 percent of all manufacturing jobs in Mississippi.
...While the foreign impact on Mississippi’s manufacturing sector is great, it’s
even greater in nearby Alabama. In that state, 42,100 jobs or over 55 percent
of the 73,600 jobs provided by U.S. subsidiaries are in manufacturing
industries. That represents nearly 14 percent of manufacturing jobs in
Alabama. The U.S. subsidiaries provide livelihoods for over 4 percent of
Alabama’s private sector workforce.
...In Florida, U.S. subsidiaries employ 248,000 Floridians, 5th highest in the
nation. That represents a livelihood for 3.5 percent of Florida’s private-sector
workforce. U.S. subsidiaries support 38,600 manufacturing jobs in Florida.
Ten percent of manufacturing jobs in Florida are supported by U.S.
subsidiaries.
...In Louisiana, U.S. subsidiaries employ 49,700 Louisianans. That represents
a livelihood for over 3 percent of Louisiana's private-sector workforce. Nearly
30 percent of these jobs – 14,700 – are in manufacturing industries. That
represents almost 10 percent of manufacturing jobs in Louisiana. - David
Tortorano
October 2009
Economic development
Foreign investments
Foreign investments
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