de en
Nexia Ebner Stolz


"America First" – Does it still make sense to invest in the United States?

Nu­me­rous mid­size com­pa­nies from Ger­many are cur­rently doing busi­ness in the United Sta­tes or are plan­ning to set up shop there. But many are skep­ti­cal about the cur­rent po­li­ti­cal trends in the "Land of Op­por­tu­nity." Should they be?

In the au­tumn of last year the Ger­man Mit­tel­stand still see­med quite calm about fu­ture busi­ness re­la­ti­ons with the United Sta­tes. In the me­an­time, busi­ness ow­ners can see the si­tua­tion more cle­arly - and US Pre­si­dent Do­nald Trump is ad­vo­ca­ting his "Ame­rica First" stra­tegy of eco­no­mic pro­tec­tio­nism, as his re­cently pre­sen­ted tax plan shows. But not­hing with the cur­rent US go­vern­ment is set in stone. And the in­iti­ally harsh tone has be­come in­cre­asin­gly mild, as the sub­se­quent mo­di­fi­ca­ti­ons of the tax plan show.

America First – Does it still make sense to invest in the United States?© Thinkstock

But what prac­tical con­se­quen­ces will this have for Ger­man Mit­tel­stand com­pa­nies that al­re­ady have a sub­si­di­ary, a branch of­fice or a re­pre­sen­ta­tive of­fice in the United Sta­tes or plan to make this kind of in­vest­ment? Can a Ger­man Mit­tel­stand com­pany live with these ups and downs?

"Ame­rica First" as a dri­ver of in­vest­ments

The fact is: Apart from the daily Twit­ter mes­sa­ges from the White House a strong will to in­crease coope­ra­tion is cle­arly noti­ce­able on both si­des of the At­lan­tic. Com­pa­nies, as­so­cia­ti­ons and or­ga­niza­ti­ons are stan­ding to­ge­ther in these po­li­ti­cally chal­len­ging ti­mes. It is true that we can no lon­ger take for gran­ted the things that were a gi­ven in the past few de­ca­des, such as free trade and free ac­cess to re­sour­ces, ca­pi­tal and la­bor. But still: right now might ac­tually be a gol­den age for Ger­man Mit­tel­stand com­pa­nies to in­vest or ex­pand their ac­tivi­ties in the United Sta­tes. Be­cause when you look at it the other way around, "Ame­rica First" me­ans that in­vest­ments in the US are more wel­come than ever be­fore. The bound­less wil­ling­ness to coope­rate and in­crease fri­endly re­la­ti­ons bet­ween Ger­many and the United Sta­tes is an im­pres­sion that ran like a th­read th­rough the count­less dis­cus­sions held by Hen­ning Günther Wind LL.M., a tax ad­vi­sor, fi­nance gra­duate and part­ner at Eb­ner Stolz, du­ring his vi­sits to the United Sta­tes, in­clu­ding at a high-ca­li­ber "100 Days of Trump" event in New York with mid-si­zed com­pa­nies and re­pre­sen­ta­ti­ves of as­so­cia­ti­ons, cham­bers and busi­ness pro­mo­tion of­fices.

Ger­man Mit­tel­stand in the United Sta­tes – Char­lotte, NC

On the ground in the United Sta­tes, the Trump Ad­mi­nis­tra­tion has not cau­sed Ger­man Mit­tel­stand com­pa­nies to lose their con­fi­dence. This was con­fir­med by the im­pres­si­ons gathe­red in the Char­lotte, North Ca­ro­lina re­gion, where more than 300 Mit­tel­stand com­pa­nies from the Ger­man-spea­king coun­tries have set up shop. But now it is time for the lit­mus test: Can in­ter­nal pro­ce­du­res at com­pa­nies be ad­ap­ted to lo­cal re­qui­re­ments so that they ope­rate se­am­lessly on both si­des of the At­lan­tic? Is it pos­si­ble to re­cruit or train a qua­li­fied work­force? The ad­mi­nis­tra­tive ca­pa­ci­ties at sub­si­dia­ries in the United Sta­tes, par­ti­cu­larly at Mit­tel­stand com­pa­nies are much smal­ler than at the Ger­man head­quar­ters. Syn­er­gies of­ten get "lost in trans­la­tion"—and that can get in the way of growth. It is cri­ti­cal to bring in lo­cal ex­per­tise so that all re­sour­ces can work towards a com­mon goal. From the con­sul­ting stand­point, our part­nership with col­lea­gues in the Ne­xia net­work has pro­ven in­va­luable; spe­ci­fi­cally in Char­lotte we have part­ne­red with Clif­ton­Lar­so­nAl­len (CLA).

"En­gi­nee­red in Ger­many" but "Made in USA"

While Ger­man cu­st­omers pre­fer goods that are "Made in Ger­many" with prac­tically end­less pos­si­bi­li­ties for cu­st­omiza­tion, what Ame­ri­can CEOs want is to be able to purchase right away—with im­me­diate de­li­very. They are wil­ling to put up with fe­wer fea­tures or a lo­wer de­gree of cu­st­omiza­tion of the or­de­red goods. What is de­cisive for them is the ser­vice as­so­cia­ted with the purchase. This me­ans that a com­ple­tely dif­fe­rent in­fra­struc­ture is re­qui­red in the United Sta­tes (lo­gistics, warehouse and a highly re­spon­sive ser­vice de­part­ment) than is cu­st­omary in Ger­many. "En­gi­nee­red in Ger­many" is po­pu­lar in the United Sta­tes, but it still has to be "Made in the USA." There is no way of get­ting around it: Ger­man Mit­tel­stand com­pa­nies must ad­apt to lo­cal cu­st­oms with lo­cal em­ployees.

And this is where the crux of the mat­ter for an in­vest­ment lies: even if the in­vest­ment cli­mate is down­right fri­endly, many Mit­tel­stand com­pa­nies in the US re­port that it is very dif­fi­cult to find a qua­li­fied work­force there. And it is dif­fi­cult to close this gap in an age of re­stric­tive vi­sas and work per­mits in the United Sta­tes by brin­ging in more qua­li­fied ex­pat workers, i.e., from the Ger­man pa­rent com­pany. Ac­cor­din­gly the is­sue of edu­ca­tion and trai­ning was one of the top items on the agenda du­ring An­gela Mer­kel's last trip to the United Sta­tes. Ever­ything cur­rently in­di­ca­tes that the Ger­man trai­ning sys­tem is to be rol­led out across the board in the United Sta­tes in or­der to pro­duce the work­force that is so ur­gently nee­ded.

On-Site Sup­port for US In­vest­ments

Over­all the bot­tom line is clear: the United Sta­tes is open for busi­ness. The Ger­man-Ame­ri­can Com­mu­nity is more than wil­ling to as­sist new­co­mers and com­pa­nies that want to ex­pand their busi­ness there, will wel­come them with open arms and are happy to share their own ex­pe­ri­en­ces with them. Even and es­pe­cially in ti­mes of "Ame­rica First" there are ex­cel­lent op­por­tu­nities to in­vest in the US or ex­pand ope­ra­ti­ons there.

back to top