Foreign Investors Flocking to Tennessee
Published Apr 07, 2006
John Gregory, left, heads up Asian business development for the state, while John Word is his counterpart in European investment. In November 2006, Lori Odom, a jobs recruitment specialist for the state, succeeds Gregory to lead Asian development efforts.
When Keith Henry was looking for a place in the southern United States to locate a satellite site for his injection-molded plastic components business, he did what many before him have done.
He stopped looking after discovering Tennessee.
In 2004, the Windsor Mold Group – based in Canada’s Windsor, Ontario – opened Tenneplas in Giles County, joining more than 600 foreign companies that have set up shop in the state.
“Kudos go out to Giles County and the team they’ve got working there,” says Henry, whose firm employs 75 in Pulaski. “They made things easy for us as a prospective investor in the area.”
That ease is the product of hard work by various local and state agencies, all laboring to demonstrate Tennessee’s value to foreign companies.
Foreign investment by European countries in Tennessee dates back to the 1950s, while Asian corporations settled in the state in the early ’70s. But it was the historic decision by the Nissan Corp. to manufacture automobiles in Smyrna that opened the gates to Japanese investment that now exceeds $10 billion and employs close to 42,000 employees.
“That was the largest Japanese investment outside Japan – and it was the best deal anybody’s ever gotten,” says John Gregory, a 30-year veteran as the state’s director for Asian investment.
The state provided only $20 million worth of tax money to lure Nissan to central Tennessee. But just as important as the relatively inexpensive financial commitment was the exposure it gave the state in the eyes of other Asian firms.
“That was a pretty big public relations coup for us,” Gregory says. “It definitely gave us a leg up.”
Gregory, who retires at the end of 2006, will pass responsibility for Asian development to Lori Odom, a veteran business recruiter for ECD who, until now, has been focused primarily on domestic companies.
“This is a great opportunity because I think a growing number of Asian companies see the U.S. market as the gold standard for expanding globally,” Odom says. “And if you’re going to be in the U.S. market, Tennessee is the best place to build your business.”
Though Nissan and the related Japanese auto suppliers that followed suit are the most prominent foreign investors, the state has been equally skillful at attracting European investors. Almost 350 European countries operate satellite plants in the state.
Spearheading recruitment for European investment is John Word, who also works with Canadian investors such as Windsor Mold. He says the ability for these countries to tap into the North American market, in a state that is located near the center of the U.S. population, helps deliver these foreign investments to Tennessee.
“Everything is cheaper for Europeans here,” Word says. “And American customers don’t feel comfortable with things being made 5,000 miles away.”
The forces are slightly different behind the surge in Canadian companies investing in the state. Word says the strength of the Canadian dollar, coupled with tighter borders since 9-11, have caused Canadian companies to look south to expand their manufacturing bases.
“The border is not as easy to cross as it used to be,” Word says. “Trucks may sit for up to two or three hours.”
But to Henry, the decision was simply a matter of following his company’s customers – the auto manufacturers.
“To be considered a supplier, we felt we needed to be closer to them,” he says. “We looked at several sites, and Pulaski came out ahead for a number of reasons.”
For More Information
Southern Growth Policies Board
Southern.org
Tennessee Department of Economic and Community Development
tnecd.gov
Tennessee Valley Authority
http://tvaed.com
U.S. Export-Import Bank
exim.gov
Story by Dan Markham
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