Exports Emerge as Lifesaver For Sinking Local Economies
NINE chief executives from Michigan will board a jet for Mexico today on a mission to attract new corporate customers for their American-made machine tools, maple wood products, and auto lubricants.
Leading the trip is Russell Leach of the Michigan Jobs Commission, who is better known around Lansing as an international traveling salesman.
Over the past several years, he has taken more than 400 corporate leaders to Asia, Europe, and Latin America where they have generated some $140 million in sales - a dividend expected to multiply in coming years.
State export missions are nothing new. But in an era when corporate layoffs, government shortfalls, and military base closings are hitting families and local economies hard, overseas sales are emerging as one of the fastest growing and most important sources of jobs and revenues.
Pushing Michigan-made products abroad has become the single best way ''to stabilize, if not increase the work force,'' Mr. Leach says. ''Exporting has meant that we've been able to boost our production, and that's given us one of the lowest unemployment rates in the country.''
Without California's exports of agricultural goods, Silicon Valley creations, and other manufactured products ''the state's economy would be a disaster,'' contends Jerry Levine, a San Francisco-based trade and investment consultant. Marketing the state's output overseas has helped to blunt the impact of base closures, the downturn in the defense industry and the migration of businesses to nearby states, Mr. Levine says. ''One in 10 California jobs is related to exports,'' he says
In many of the top 10 exporting states, overseas sales have been driving economic growth, whether it's petrochemicals from Texas, machinery from Ohio, or high-tech products from California. According to the latest US Census Bureau data, scores of other states posted dramatic export gains in 1994 and are expected to do so again this year.
One in 4 dollars in the nation's gross domestic product is related to trade, according to Commerce Department, and a fourth of the 8 million jobs generated during the past three years have been due to exports.
Traditional markets including Canada, Mexico, and Europe as well as in big emerging markets such as China, Brazil, Poland, and South Africa, ''are creating real jobs, right now across the US,'' says David Rothkopf, the Commerce Department's acting undersecretary for international trade.
''Trade is no longer an esoteric topic, it's a main street issue,'' Mr. Rothkopf says. ''Increasingly, state and local governments are realizing that exporting is one of the best routes to economic development.''
No one knows that better than Sven Langmack, chairman of Niagara Custombuilt Mfg. Company in Cleveland, who has served on his state's export council ever since President Dwight Eisenhower created a state-by-state export network some 40 years ago. Mr. Langmack divides his time between overseeing his industrial washing systems company and ''finding local companies that are good candidates to export, and teaching them how to do it.''
The state once considered to be the buckle of the Rust Belt has been well-oiled in recent years, Langmack says. He credits Ohio's exports for an unemployment rate well-below the national average. ''We have the country's largest number of manufacturing exporting companies with over 100 employees.''
MOST states have opened offices around the globe where American business leaders can meet agents and strike deals. Michigan has offices in Hong Kong, Tokyo, Mexico City, Toronto, Brussels, and Harare, Zimbabwe.
Charles McCallum, a trade attorney in Grand Rapids, Mich., who also chairs a district export council in his state, says many Michigan firms gravitate first to Canada and Mexico. ''But companies that 10 years ago were reluctant to mount a sales trip to London are now sending people off to China.''
Trade triumphs are not limited to the big corporations with branch offices around the globe. ''Some 80 percent of the companies we deal with in the International Trade Administration are small and mid-sized firms,'' Rothkopf says. ''The companies that come through our local offices and seek our help don't have overseas experience or big international research capacities.
The US Export-Import Bank, formerly wedded to financing aerospace and other big money deals, has been more generous with its time and cash for small- and mid-sized firms, say entrepreneurs. And the Small Business Administration has also helped these companies afford the risk of exploring unknown markets. But in places like Michigan, the ''local banks here have been very aggressive in supporting international finance,'' says Mr. McCallum. Linking local finance to export potential can take the economy a long way, he says.