A Briton woos US business stakes
Recession has driven some American businessmen to batten down hatches and shelve investment plans. But for others, recession has highlighted the value of expanding overseas.
"A great many Americans firms have never before thought about expanding overseas have suddenly realized that the companies which have come through the recession best are those which have invested overseas," says Nicholas Edwards, a member of British Prime Minister Margaret Thatcher's Cabinet and leader of a British trade delegation touring the Midwest.
Close behind Japanese trade teams, here to buy into troubled US companies short of capital, Mr. Edwards reports finding American businesses eager to internationalize.
After corporate board-room sessions in Pittsburgh, Milwaukee, and Chicago, Mr. Edwards explained the US companies are looking outward, with a new awareness that "different economies exist in different time scales." Businessmen he meets here need little convincing, Mr. Edwards finds: They have studied performance sheets and conclude that a US company with overseas subsidiaries can balance its overall operations better, being less governed by economic conditions in a single market.
American businessmen are being attracted to Britain, Mr. Edwards says, because they have "a great interest in and a certain sympathy for what Margaret Thatcher is attempting." Many business leaders he has spoken with on this trip say "they feel there are similar problems in the United States, and they would like your government to take similar tough action to deal with the problems," he says.
Mr. Edwards reports finding some US companies "flush with funds" and simply looking for suitable markets to expand into profitably. Britain is appealing, he explains, partly because it provides direct access to the 260 million people of the European Community.
But more important, the British Cabinet minister insists, is Britain's political climate under the Conservatives.
"We probably have got the freest economy of any in the world today," he boasts. "We have removed price and incomes controls. Business asked us to free the economy, to remove the restrictions. Now if business doesn't succeed in this environment, then it has only itself to blame."
Mr. Edwards says that Thatcher policies of cutting back on public spending and public borrowing and accepting high and rising unemployment are bound to be unpopular at home. Yet he says that he believes this is the only way to control inflation and that his government if well braced to weather the unpopularity. He feels that US businessmen support such tough policies and so are investing in a country where they see a government sticking to unpopular policies.
As secretary of state for his native Wales, Mr. Edwards naturally is particularly keen to win new investment for Welsh towns badly hit by sharp cutbacks in the area's traditional coal and steel industries. And he has done well this trip, lining up a score of new prospects for Wales.
One reason for this success is that many of the 109 US companies now operating in Wales are expanding -- a sign that they've tested the economic climate and found it profitable. Their experiences clearly have helped encourage other American companies to set up shop in Wales, sparking a chain reaction that breeds new success stories. One example: Within a year of first considering an overseas operation, Daniel Woodhead Inc. of Northbrook, Ill., is producing hydraulic hose reels in Wales -- and loudly praising Wales.
Latest major expansions include the Ford Motor Company and Standard Oil of Indiana. Standard Oil's public affairs coordinator for overseas petroleum operations, Alan White, reports that after operating in Wales for seven years, "We have great confidence in the British economy. . . . We have a fine working relationship with the U.K. [United Kingdom] government, with the Welsh authorities, and with the local authorities."