When foreign companies are making, not killing, US jobs

Attacks on trading partners could set off a protectionist spiral of tariffs & import restrictions

At the airport here, there is a reminder to travellers of the jobs that global trade can bring. A shiny 2017 Volkswagen Passat is stationed near the entryway and labelled: “Designed in Germany. Built in Chattanooga.”

The American map is dotted with towns drained of jobs after homegrown factories bolted to lower-wage countries. But for many spots throughout the country, the same strategy of moving operations overseas — when practiced by foreign firms — has buoyed local fortunes.

In Chattanooga and the surrounding region, for example, more than two dozen companies from 20 countries have set up shop, generating billions of dollars in investment, employing thousands of workers and helping drive Tennessee’s jobless rate to 3.6 per cent in June, a record low for the state.

But political and business leaders here in Hamilton County, a conservative stronghold where Donald J Trump won a majority of the votes, worry that the president’s attacks on trading partners and exhortations to “Buy American” could set off a protectionist spiral of tariffs and import restrictions, hurting consumers and workers.

“I’m nervous,” Mayor Andy Berke said over sweet tea and French toast at the Bluegrass Grill on Main Street.

Berke will travel to Japan this fall in hopes of persuading more companies to hang a shingle at the foot of the Appalachians. “Trade and foreign investment is a big part of Tennessee’s portfolio, and it affects many people in our area,” he said. “And I don’t know exactly what the policies will be.”

Pushing to rewrite his predecessors’ free-trade approach, Trump has reopened the North American Free Trade Agreement with Mexico and Canada, threatened tariffs and quotas on steel imports, moved to revise a trade agreement with South Korea and signalled his support of American businesses by declaring a “Made in America” Week. A trade case accusing China of intellectual property violations is also in the works.

At the same time, the president has cited the jobs foreign businesses can bring, announcing at the White House recently that the Taiwanese electronics supplier Foxconn would create at least 3,000 jobs with the help of hefty tax credits at a new plant planned for Wisconsin. And after two Japanese carmakers announced on Friday a joint decision to build an assembly plant, he tweeted: “Toyota & Mazda to build a new $1.6B plant here in the USA and create 4K new American jobs. A great investment in American manufacturing!”

For employers and workers here, though, the labels can be confusing. “There is no such thing as just ‘American built’ anymore,” said Randy Topping, who owns a tractor and equipment dealership in Chattanooga.

He saw his business explode in 2010, thanks in part to growing sales of vehicles made by the Indian manufacturer Mahindra. Topping is now teamed up with the company and is president of Southeast Mahindra, where nearly 60 people assemble and distribute small red tractors suited to gentleman farmers.

The parts are made in the United States as well as India, South Korea and Japan. “Everything has foreign content,” he said. Production workers at Southeast Mahindra start at a wage of $12 an hour, eventually earning up to $20 an hour. The competition with rivals, both in the United States and in developing countries, can be brutal, and success is counted in nickels and minutes. Like other Southern states, Tennessee makes a selling point of the scarcity of unions, largely a result of laws exempting workers who don’t join from paying the equivalent of dues.

“It’s hard work,” Topping acknowledged as the temperature outside neared 97 degrees, making the air in the assembly shed hot and thick. “But this is a close-margin business,” he said, explaining why he is not offering more money despite adding a second shift.

Bill Phillips, 57, the production line leader, worked for Mahindra in northern Georgia for eight years before transferring to this plant in 2009. Whether it’s a foreign company or not, “it’s still a job,” said Phillips, whose shaggy gray mustache hangs on his face like an upside-down U. “I’m working. I’m making a living.”

Tennessee, which actively courts firms from abroad, ranks first in the nation in jobs created by foreign-owned companies, according to the State Economic and Community Development Department: 136,000 workers at 931 foreign-based businesses.

©2017 The New York Times News Service