We want your money

"I would have never thought that one day I'd be calling on Siemens and Rolls-Royce to invest in the United States of America," said Jeffrey Immelt, chief executive of General Electric, amid the laughter of around two dozen company directors and economic experts assembled in Washington.

This roundtable discussion, set in the elegant Benjamin-Franklin State Dining Room and hosted by Secretary of State Hillary Clinton, addressed a rather unusual topic: the promotion of foreign investment in the US.

The situation is so dire that even rival companies have become partners. With US unemployment currently over nine percent, it no longer matters whether companies that can offer work to Americans come from abroad or not.

Perhaps, in the eyes of the participants, the term "foreign" has become outdated when it comes to companies that are active around the globe and have headquarters in more than one country.

Diminishing attraction

At any rate, the era of arrogance has most certainly passed; Antonio Perez, head of Kodak and, like Immelt, part of President Obama's Jobs Council explains the obvious: one can no longer divide the world into the US, Europe, and the "irrelevant rest."

The US and Europe still have over half of the world's purchasing power, yet the two economic powerhouses account for just 17 percent of the global population, and the "irrelevant rest" is making ground in both categories - fast.

And it is becoming clear why that is: For, in reaction to Perez's assessment of the "outstanding investment conditions" in the US, a number of the executives present - most notably the Germans - show polite yet clear disagreement.

"In Europe, you've got the feeling that American companies have the clear advantage in the US," Peter Solmssen, of the Siemens board of directors, said.

That said, Solmssen added that his company felt "very American," with some 65,000 employees based in the States, not to mention the billions in export profits that come with it.

But it is the US policies such as the "Buy American Act" - which forces government contracts to be commissioned to US products - that have caused not little consternation among the managers of many multinational companies.

"Select USA"

Obama has come up with a plan to mollify the concerns of foreign investors, however; his "Select USA" initiative, conceived of a few months ago, is meant to convince foreign companies that they are welcome and that their investments will be logistically supported by the US. And, as is customary in other countries, even government ministers are encouraged to join in and persuade company heads to invest in their country.

According to data collected by Commerce Secretary Rebecca Blank, foreign investments in the US exceed $2.3 trillion. "These companies pay above-average wages and currently finance over five million jobs in all 50 states," Blank lauded.

Those numbers, however, are down compared with past years. A decade ago, for instance, a quarter of all global investments were pouring into the United States. By 2009, that figure had dropped to 12 percent.

Lack of skills

Christian König, president of ThyssenKrupp USA, is satisfied with the "Select USA" initiative. He told Deutsche Welle that he would be "happy to have a central office in Washington where we could welcome our workers." The company surveyed 67 different locations in 20 US states before deciding on Calvert, Alabama for its $5-million US location.

But there's something else bothering König: "I would also prefer to train our American workers here in the US, instead of having to send them to Germany like we're forced to do at the moment.

At the moment, America - in stark contrast to China and India - is lacking skilled workers. Martin Daum, president of Daimler Trucks North America, goes further: "If we're looking for an engineer or a researcher, we have to look outside the States."

"We would find such skilled workers in Mexico before we would find them in the United States," Daum added.

Workers often have to be trained in the basic mathematics and writing skills needed for their task, which Daum called a "limiting factor" for growth of such companies.

"We can build up a company in Mexico three or four times faster than we could in the US where the workers first have to be thoroughly trained."

But in the US, these types of jobs pay much better - some $77,000 annually on average, according to Matt Slaughter, an economist at Dartmouth University.

High costs, poor infrastructure

There are other problems, too, for managers such as Daum looking to expand to the US, for instance the increasing health insurance costs. "We're looking at a seven percent increase each year," he criticized. Complicated and expensive visa and work permit issues, as well, contributed to the downward trend.

Hans-Ulrich Engel, chief financial officer at BASF, pointed out another essential hurdle; the inadequate infrastructure in the US. "We can deal with the other smaller problems, but the infrastructure issue is more significant."

The 26 members of Obama's Jobs Council are set to meet in the coming week to tackle these problems. Secretary of State Hillary Clinton has already pointed out that there's only so much the US government can do; many laws, especially those dictating visa policy, are congressional issues.

And Clinton's State Department is facing severe budget cuts in connection with impending austerity efforts, which won't make the situation any easier.

Image problem

To solve the issue of training workers, Clinton has said she will turn to the private sector and try to attract executives for Obama's Jobs Council. Public universities and schools are simply out of funds.

Clinton has also asked the managers on the council to make their concerns public: "Statements made by businessmen have more sway," she has been quoted as saying.

Another way of solving the problem would be to enhance the attractiveness of vocational education in the US, a country where a university degree is essentially the only desirable objective for high school graduates:

"We have to promote the idea that vocational degrees are meant for good, intelligent and hard-working people."

Author: Christina Bergmann, Washington / glb
Editor: Nicole Goebel