- FMA
- The Fabricator
- FABTECH
- Canadian Metalworking
Categories
- Additive Manufacturing
- Aluminum Welding
- Arc Welding
- Assembly and Joining
- Automation and Robotics
- Bending and Forming
- Consumables
- Cutting and Weld Prep
- Electric Vehicles
- En Español
- Finishing
- Hydroforming
- Laser Cutting
- Laser Welding
- Machining
- Manufacturing Software
- Materials Handling
- Metals/Materials
- Oxyfuel Cutting
- Plasma Cutting
- Power Tools
- Punching and Other Holemaking
- Roll Forming
- Safety
- Sawing
- Shearing
- Shop Management
- Testing and Measuring
- Tube and Pipe Fabrication
- Tube and Pipe Production
- Waterjet Cutting
Industry Directory
Webcasts
Podcasts
FAB 40
Advertise
Subscribe
Account Login
Search
U.S. manufacturers set overseas investment record
- June 2, 2005
- News Release
- Shop Management
Foreign Direct Investment (FDI) by U.S. manufacturers reached a record level of more than $54 billion in 2004 after three consecutive stagnant years, according to a new study by Deloitte Research, a part of Deloitte Services LP ("Deloitte Research"). The study, "Growing the Global Corporation: Global Investment Trends of U.S. Manufacturers," stated that 2004 FDI increased 90 percent from approximately $28 billion in 2003.
"The staggering increase in FDI is partly due to improved profitability of foreign operations and enhanced confidence by manufacturers in global markets," said Kevin Gromley, Deloitte's Global Manufacturing Consulting Practice leader. "In addition, a rise in cross-border M&A activity, which has continued to climb since 2002, is fueling the growth."
The report noted that the "Global Investment Paradox" (or "high-wage paradox"), identified in previous research, is continuing, with foreign direct investment steady at about $22 billion per year from 1999 to 2003 in higher wage, developed countries in Western Europe, North America (Canada), and Asia-Pacific (including Australia), but declining in fast-growing, low-wage economies such as China and India.
"Contrary to the perception that U.S. manufacturers are moving operations abroad to reduce costs, foreign direct investments have been concentrated in high-wage countries, demonstrating that companies are focused more on growth than on cost-cutting," commented Peter Koudal, Deloitte Research's director of Global Manufacturing Research. "U.S. manufacturers may find it more difficult to manage profitable operations in these emerging countries, but if this trend continues, we believe they will lose their competitive position in rapidly emerging global manufacturing powerhouses like India and China." The share of FDI going to high-wage, developed markets was nearly 81 percent based on 2003 data, up from 61 percent in 2000. In the most striking example, U.S. manufacturing FDI into India fell to just over $50 million in 2003, down 80 percent from nearly $250 million in 1999.
Other highlights of the report include:
- China is the primary overseas destination over the next three years for U.S. manufacturing multinationals for marketing and sales operations (55 percent), sourcing (57 percent), manufacturing (38 percent) and engineering/R&D (26 percent)—this includes direct investments, as well as partnering and arm's-length contracting. Interestingly, U.S. manufacturers' focus on China contrasts with the historical allocation of DI dollars—another example of the Global Investment Paradox.
- Mexico and Central America are in second-place for marketing and sales operations (47 percent), sourcing (26 percent) and manufacturing (25 percent); India is in second place for engineering/R&D (14 percent).
- Many industries experienced increases in FDI by U.S. manufacturers during 2004, including chemicals and pharmaceuticals ($10.8 billion), computer and electronic products ($7 billion), primary and fabricated metals ($4 billion), transportation equipment ($2 billion) and "other manufacturing" (includes the beverage, paper, petroleum and coal, plastics and rubber, and medical equipment and supplies sectors) ($26.3 billion). In contrast, FDI flows declined in the food ($1.9 billion), industrial machinery ($1.6 billion) and electronic equipment, appliances, components industries ($670 million).
- Most companies are struggling to get value out of their global investments. At least 80 percent of global companies are unable to fully leverage their global investments for profits and growth. Less than 5 percent of U.S. manufacturing multinationals say they have a strong advantage in their overall supply chain cost structure, and less than 2 percent of companies have undertaken significant initiatives to optimize their supply chain network.
subscribe now
The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscription- Stay connected from anywhere
Easily access valuable industry resources now with full access to the digital edition of The Fabricator.
Easily access valuable industry resources now with full access to the digital edition of The Welder.
Easily access valuable industry resources now with full access to the digital edition of The Tube and Pipe Journal.
Easily access valuable industry resources now with full access to the digital edition of The Fabricator en Español.
- Podcasting
- Podcast:
- The Fabricator Podcast
- Published:
- 04/30/2024
- Running Time:
- 53:00
Seth Feldman of Iowa-based Wertzbaugher Services joins The Fabricator Podcast to offer his take as a Gen Zer...
- Industry Events
Pipe and Tube Conference
- May 21 - 22, 2024
- Omaha, NE
World-Class Roll Forming Workshop
- June 5 - 6, 2024
- Louisville, KY
Advanced Laser Application Workshop
- June 25 - 27, 2024
- Novi, MI
Precision Press Brake Certificate Course
- July 31 - August 1, 2024
- Elgin,