EoW May 2009

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EuroWire – May 2009 22
Transat lant ic Cable
Business
Overseas firms seeking opportunities
under the US stimulus act proceed
confidently but carefully
American firms are not the only ones vying for contracts under
the $787 billion economic stimulus programme announced
by US President Barack Obama. Hundreds of foreign-owned
companies, believing that they offer more expertise than US
companies in the same industry, are intensifying their lobbying
efforts. Many are already active in the US and know their way
around state capitals as well as Washington, DC.
Their initiative has boosters in high places, among them Spain’s
Prince Felipe who, with his wife Princess Letizia, visited the
US this spring to scout business opportunities for Spanish
companies in the stimulus package.
In remarks at a business luncheon in New York, the prince set his
purpose in a global context: “Only by working together with US
businesses and government, as well as coordinating our needs
and priorities, can we get our countries, and world, back on track.”
While zeal in the pursuit of commercial advantage is acceptable
– even commendable – staff writer Dan Eggen of the Washington
Post pointed out that foreign companies, trade ministries, and
business groups are at some pains not to arouse nationalistic
sentiment in US lawmakers and their constituents. He said
the firms are being advised by consultants to stress that any
contracts they land would lead to jobs in the US rather than
overseas. (“Foreign Firms Eye Stimulus Dollars,” 23rd March)
Mr Eggen noted that the overseas-based companies are not
alone in going gingerly. President Obama wants the US to focus
on alternative energy, rapid transit, and other technologies
pioneered in Europe and Asia. But “Buy American” provisions
in the stimulus legislation and elsewhere in US law require
that most materials and work originate in the United States.
According to Mr Eggen, such statutes are “effectively silent” on
where the parent firm must be based.
Will strict interpretation of the law seriously thwart the
president’s aims? Jayson Myers, the chief executive of Canadian
Manufacturers & Exporters, an Ottawa-based industry group,
stated the problem: “Once you get into some of these specialized
technologies, only one or a few companies worldwide can
provide it. If you want to advance the innovation priorities of
the Obama administration, it becomes very difficult without
involving foreign companies.”
The stakes for the US president can be seen in a chief ❈ ❈
element of his stimulus programme. Mr Eggen of the Post
observed that most firms specialising in the transit and
high-speed rail projects dear to Mr Obama’s heart are based
overseas. Bombardier, of Canada, and Alstom, of France,
provide two examples. Transurban Group, of Australia, is a
world leader in the development of toll roads. It happens to
be already at work on high-speed toll lanes along the Capital
Beltway, in Washington.
Telecommunications is another area important to Mr Obama,
whose stimulus sets aside $7.2 billion for upgrading broadband
networks in the United States. Alcatel-Lucent, of France, with its
New Jersey-based research arm Bell Labs, would appear to be a
prime contender for some work under the plan.
The president’s stimulus package is very new; so, too, is the race
for preferment that it has set off. But already one thing is clear.
According to federal statistics cited by the Post, foreign-owned
firms employ 5.3 million workers in the US, spend $336 billion on
US payrolls, and account for 20% of US exports. This constitutes a
significant presence on the American scene. Firms so situated are
not disposed to wait for trifling eligibility questions to be settled
before moving to tap into stimulus-related business.
Sanyo North America, an arm of the Japanese technology giant,
provides a case in point. Officials of the company, which broke
ground recently on a solar-panel plant in Oregon, told Mr Eggen
that they are readying their strategies. Senate records show
that the firm recently registered as a lobbying organisation in
Washington for the first time since 2001.
Aaron S Fowles, of Sanyo’s San Diego unit, said, “With the new
stimulus package that the federal government has announced,
it is starting to appear that the US market will be a prime
location to focus much more effort on our environmental and
energy-related technology and products.”
Automotive
Canadian and American auto workers
show a new willingness to accept sacrifices
to help save their industry
The Canadian Auto Workers union on 8th March said that it had
reached a tentative agreement with General Motors Corp on a
freeze of wages and pensions until September 2012, together
with other concessions required to qualify the company for
Canadian government aid. GM’s Canadian unit is based in
Oshawa, Ontario, east of Toronto.
The Conservative government of Canada had made it a
condition of providing financial aid to GM and Chrysler Canada
that the union agree to bring labour costs into line with costs at
Canadian plants operated by Toyota and Honda. As in the United
States, the differential in labour costs between Japanese-owned
auto companies and others is a contentious subject in Canada.
In 2008, after 77 consecutive years as global leader in auto sales,
GM conceded first place to Toyota.
While currency fluctuation was not explicit in the agreement
announced in early March, the recent decline in value of the
Canadian dollar probably allowed the union to avoid wage
cuts. The Canadian dollar had fallen, over a year, from about
parity to a roughly 25% discount to the United States dollar.
At a news conference in Ottawa to announce the agreement,
Jim Stanford, chief economist for the union, acknowledged that,
if the Canadian currency were to return to par, labour costs at
Canadian plants would exceed those in the United States.