Greenville Business Magazine October 2010 : Page 30

ver the past few decades, through good times and bad, South Carolina in general and the Upstate in particular have relied on international companies to fuel the economy and help create jobs. “The Upstate has a heavy ratio of foreign investment,” says Hal Johnson, president and chief executive of the Upstate Alliance, an economic development marketing organization. O 30 GreenvillebusinessMaG.coM | october 2010 by richarD breen HElpIng To kEEp THE UpSTaTE EConoMy rollIng

Foreign Investment

Richard Breen

<font size=2>Helping to keep the Upstate economy rolling</font><br /> <br /> <br /> Over the past few decades, through good times and bad, South Carolina in general and the Upstate in particular have relied on international companies to fuel the economy and help create jobs. “The Upstate has a heavy ratio of foreign investment,” says Hal Johnson, president and chief executive of the Upstate Alliance, an economic development marketing organization.<br /> <br /> Foreign investment in manufacturing facilities has paid off in jobs for local residents. According to 2007 numbers from the Bureau of Economic Analysis, South Carolina is the top-ranked state in terms of the share of manufacturing jobs created by foreign companies. In terms of overall jobs attributed to foreign-owned companies, the Palmetto State’s share ranked second behind Delaware.<br /> <br /> “If you just look at the size of our state and the population, it’s pretty impressive,” says Kara Borie, spokeswoman for the S.C. Department of Commerce.<br /> <br /> Those numbers slipped, however, for South Carolina and several other states in 2002-07. For example, 24.2 percent of South Carolina manufacturing workers were employed by foreign affiliates in 2002, compared to 21.6 in 2007.<br /> <br /> Kevin Landmesser, vice president with Greenville County’s economic development office, describes international interest in the Upstate as “subdued” during that period.<br /> <br /> “Foreign companies have been looking to China,” he says. “Prior to 2000-2001, international investment made up a significant amount of what we saw.”<br /> <br /> The Greenville Area Development Corporation has noticed an uptick in interest since the economic downturn began, according to Landmesser.<br /> <br /> “European companies are sitting on cash,” he says.<br /> <br /> The Upstate has announced more than $2.1 billion in capital investment and more than 6,100 new jobs by foreign affiliated companies since 2007, according to the Upstate Alliance. That doesn’t include the recent announcement that MAU Inc. will be supplying 500 additional long-term temp workers to BMW’s Greer manufacturing plant as the German automaker begins work on a new X3 model.<br /> <br /> Meanwhile, the courtship of new companies continues. The Upstate Alliance has recruiting trips planned for Canada, China, Germany, Japan and Spain. Businesses in the advanced materials, automotive, biosciences and energy sectors are being targeted.<br /> <br /> “It’s a huge part of our strategy to compound on what we already have,” Johnson says. “It is extremely strategic why we go where we go. That’s where you’ll find those companies that fit our target market strategies.”<br /> <br /> The Upstate Alliance counts 267 foreign-owned companies in the region, representing 27 countries. The roots of international investment run deep.<br /> <br /> “A lot of people think it all started with BMW, but that’s actually not the case,” Borie says.<br /> <br /> Before BMW, there was Michelin’s arrival in Greenville in the 1970s. The French tiremaker now employs 7,628 workers across South Carolina, with facilities in Duncan, Greenville, Lexington, Spartanburg, Sandy Springs and Starr.<br /> <br /> But even before Michelin, foreign-owned companies played a role in diversifying a South Carolina economy dependent on agriculture. The effort goes back to the 1950s.<br /> <br /> “It started with the textile industry,” says Fred Gassaway of the S.C. Power Team, an economic development organization sponsored by several South Carolina utility companies. “All the textile machinery was coming from Europe.”<br /> <br /> A strategy was developed to recruit chemical and machinery companies. Gassaway credits Richard Tukey, then head of the Spartanburg Area Chamber of Commerce.<br /> <br /> “He began organizing trips to Europe,” Gassaway says.<br /> <br /> Good transportation access, abundant water and sewer infrastructure, and a willing work force were all used by Tukey to sell the area.<br /> <br /> “You play to your strengths, and he knew how to play that game really well,” Gassaway says.<br /> <br /> One by one, Swiss and German companies began to establish U.S. operations in the Upstate. Other local leaders, such as Greenville construction executive Charlie Daniel, were on the recruiting trail as well.<br /> <br /> “Charlie Daniel was the first major economic developer in the state,” Gassaway says. “Greenville and Spartanburg counties were richly blessed with a number of people who knew what was required for growth.”<br /> <br /> Companies from countries such as France and England followed, then from other continents, all receiving good reports from foriegn firms already established here.<br /> <br /> “Familiarity builds on itself,” Gassaway says. “If one company has a good experience, they tend to share. If the Upstate is good enough for BMW, it’s good enough for anybody.”<br /> <br /> Now foreign companies hold the promise of helping the region make another transformation. The international touch has extended outside manufacturing to sectors such as insurance (Royal Bank of Canada) and IT (Ahold Information Services).<br /> <br /> Both Michelin and BMW have research centers in the Upstate, and Clemson University’s International Center for Automotive Research sets the tone for a new kind of manufacturing concept that takes ideas from the lab to the production floor without leaving the Upstate.<br /> <br /> “Another great example is Lab 21,” says John Moore, executive vice president with the Greater Greenville Chamber of Commerce.<br /> <br /> Lab 21, a health care diagnostics company from the United Kingdom, in 2009 acquired Selah Technologies LLC, a Greenville-based advanced materials startup.<br /> <br /> “Nobody recruited them,” Moore points out.<br /> <br /> Instead, Lab 21 heard about Selah through the World Wide Web and eventually decided to set up its American headquarters in Greenville.<br /> <br /> “It’s a very different model,” Moore admits, but it is one that conforms to how economic development can occur in the “world is flat” age. “It has the potential to grow dramatically here.” GBM<br /> <br /> <br /> <br /> <br /> <br /> <font size=3><b>Austrian enjoys Greenville’s “interesting flavor”</font></b><br /> <br /> Manfred Gollent admits that “nine out of 10” people that he meets at a networking function assume he is a German who came to the region by way of BMW.<br /> <br /> While his company, QLI International, is a BMW vendor, Gollent did not move to the Upstate because of the carmaker.<br /> <br /> “I came here working for a Norwegian company as an Austrian,” he says.<br /> <br /> The year was 2003 and Gollent, a turnaround specialist, was tasked with righting the ship at an aluminum extrusion plant in Belton. The project lasted until 2006.<br /> <br /> “My wife and I decided after that we were not going to move any more and we liked it here very much,” he says.<br /> <br /> So Gollent founded QLI International, a business coaching service. QLI stands for “quantum leap improvement.” Gollent believes it’s more important for executives and their organizations to uncover and apply what they already know rather than amassing additional knowledge.<br /> <br /> “To change your results, you really need to look into your attitude and your habits,” he says. “The mind is a very powerful instrument.”<br /> <br /> While Gollent focuses his business on what he calls “Charlanta” - a region stretching from Atlanta to Charlotte and Asheville to Columbia – he has also gained business from as far away as Colorado, the United Kingdom and Hong Kong. And he’s done it while waking up in his own bed each morning in a community where he still enjoys living.<br /> <br /> “First of all, the area is beautiful,” he says. “We like hiking. We like nature. But what’s really attractive is the business climate in the Upstate.”<br /> <br /> Gollent describes Greenville as “an interesting little town.”<br /> <br /> “It has a cosmopolitan atmosphere you don’t expect,” he says. “It has a lot to do with the international community that gives it an interesting flavor.”

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