How Do German "Mittelstand" Companies Select U.S. Sites?

Yesterday, German newspaper “Die Welt” ran an in-depth story “Deutsche Mittelständler zieht es in die USA” – on how one German “Mittelstand” company selected a business location in the U.S. If you’d like to know which one they picked, you’ve got to read the story.

It’s in German, of course, but is also one of the cases where I found myself wishing it had been published in English, too, because it provides many insights into the decision-making process that an audience in the U.S. regional economic development community would appreciate. That is to say, if you don’t read German, get your “German person” to translate it for you.

While I was reading it, two questions began forming in my mind.

The German journalist, Martin Greive (Twitter: @MartinGreive)- well done! – and his sources make the point that this particular company, Rapa Autoteile (automotive industry supplier) – made the choice not, or only to a very limited degree, to take advantage of the hot competition among communities and regional economic development agencies all over the U.S., who try to attract investors / manufacturers from abroad by throwing in all kinds of (tax) incentives and (infrastructural) goodies.

For this company, given certain pre-existing ties, that seems to make sense. Yet, with a whole consulting industry out there developing such incentive plans for business locations, and others (sometimes the same firms…), having specialized in taking best advantage of them, here are my two questions:

  1. *Would other German “Mittelstand” companies be well advised to follow this example, and NOT shop around more to take full advantage of the incentive Smorgasbord that many federal states and communities have prepared for them?*
  2. What role should human resources (HR) and local workforce development planning and perspectives play in their considerations?

Is your business advising companies inbound from Germany on how to select their new manufacturing / business location in the U.S.? What would you tell the German “Mittelstand” company that comes knocking on your door for help with its site selection?

Gerd Meissner

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Gerd Meissner is a Managing Partner at the Germany-USA Career Center (http://www.Germany-USA.com). The company helps American and German companies attract,  find, recruit and develop the right talent for business operations between the U.S. and Germany; he can be contacted here.