Foreign Companies Flock To Maryland

January 12, 1991|By David Conn | David Conn,KPMG Peat Marwick Foreign-company employment in Maryland F: KPMG Peat Marwick

The British are coming! And the French and Germans and Japanese, too!

Foreign investment in Maryland is growing. According to Robert E. MacDonald, director of international business development at the Department of Economic and Employment Development, Maryland's efforts to woo foreign companies are paying off.

Two new reports on foreign investment in Maryland illustrate the increasingly international nature of the state's economy.

According to an unpublished department report, direct foreign investment, including land holdings and stock ownership, grew in Maryland to an estimated $3.9 billion last year from $1.8 billion in 1980.

In another report, the accounting and consulting firm KPMG Peat Marwick said more than 21,000 of Maryland's 2.4 million employees receive paychecks from 127 foreign-owned companies.

Only operations that have their headquarters in Maryland, are at least 50 percent owned by foreign companies and report directly to a foreign parent were included in the Peat Marwick report, which was released last week.

The Department of Economic and Employment Development also compiled data for companies at least 10 percent owned by foreign interests. That study shows there are about 610 foreign companies operating in the state, with 56,500 employees. Last year, 10 new companies brought $94 million in investment to Maryland and 352 new jobs, Mr. MacDonald said.

The foreign companies generate about $96 million a year in state and local taxes, the report shows.

In the last decade, a growing number of Maryland companies, or out-of-state companies with local operations, have been acquired by for

eign businesses, including Monumental Corp., First Maryland Bancorp, Fairchild Industries Inc. and Mack Trucks Inc.

Mr. MacDonald acknowledged the dangers to an economy of excessive foreign business ownership. "When an American company is in a foreign

country and they start having political or economic troubles," he said,"the first thing they think of is moving out."

The same presumably holds true for foreign companies operating in the United States. But "we're not afraid of foreign investment at all," Mr. MacDonald said. "We don't think it's a threat. We're encouraging this."

In 1984, for instance, when French luggage manufacturer Delsey S. A. began looking for a U.S. location, the department was encouraging, a Delsey spokeswoman said.

"Delsey was courted quite heavily" by the department's Office of International Trade, said Maryann Ruehrmund of Delsey Luggage Inc., which is based in Jessup.

Three years ago, the company opened a new sewing operation in Denton to manufacture its soft-sided luggage, and last year it decided to make a $10 million investment in the factory to begin making hard-sided luggage as well.

Ms. Ruerhmund said the Denton operation, where Delsey makes almost all of its soft-sided products in the United States, also will manufacture about 60 percent of the hard-sided luggage to be sold by the company in the United States. Delsey will have about 300 employees in Maryland, she said.

Delsey said its choice of Maryland was based on the port of Baltimore, the state's distribution facilities, the quality of life and the relatively low cost of living and corporate taxes. It didn't hurt that the Department of Economic and Employment Development facilitated $1.5 million in land grants, a $400,000 community development block grant and a $20,000 employee training grant from the department's Partnership for Workforce Quality program.

Delsey was one of 10 French companies to establish their U.S. headquarters in Maryland since 1980, according to Peat Marwick. United Kingdom businesses topped the list with 29 of the 95 foreign companies that came to Maryland in the 1980s.

Germany was second, with 13 companies. Next were Canada with six and Japan with five, then Italy, Denmark and Switzerland, each with four.

Of all 127 companies in Maryland with 50 percent foreign ownership, 34 were established through the acquisition of an existing company, and five were set up as joint ventures with Maryland businesses, the Peat Marwick report shows. The rest began from scratch.

"Although international business centers are developing up and down the East Coast due, in part, to major ports and air transportation facilities, international activity in Maryland is brisk and the pace is clearly accelerating," said D. Keith Cobb, a Peat Marwick managing partner.

Revenues of foreign companies in Maryland

Revenues from all U.S. operations of companies with headquarters in Maryland.

Range.. .. .. .. Total no. of companies

Less than $1 million.. .. .. .. .. .. 12

$1 million to $4.9 million.. .. .. .. 36

$5 million to $9.9 million.. .. .. .. 12

$10 million to $24.9 million.. .. .. .24

million to $49.9 million.. .. .. .18

million to $99.9 million.. .. .. .14

million to $299.9 million.. .. . .7

million-plus.. .. .. .. .. .. .. .4 Number of employees at companies with foreign bases.

Country.. .. .. .. .. .. .. .. Employees

United Kingdom.. .. .. .. .. .. .. .6,457

Ireland.. .. .. .. .. .. .. .. .. . 4,044

Canada.. .. .. .. .. .. .. .. .. .. 2,603

France.. .. .. .. .. .. .. .. .. .. 2,345

Switzerland.. .. .. .. .. .. .. .. 1,711

Japan.. .. .. .. .. .. .. .. .. .. 1,308

Other.. .. .. .. .. .. .. .. .. .. 2,987

Total.. .. .. .. .. .. .. .. .. .. 21,455

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