Virginia, Maryland rank high in attracting foreign investment 79,000 Marylanders work for foreign-owned subsidiaries

April 11, 1997|By CAPITAL NEWS SERVICE

WASHINGTON - Maryland ranks 19th in the country for attracting jobs from U.S. subsidiaries of foreign companies, and Virginia ranks 12th, according to the Organization for International Development, a nonprofit trade association.

Robert Riva, an economist at the Regional Economic Studies Institute at Towson State University, said having both states among the top 20 is good for the region. Virginia is doing better, he said, for a variety of reasons, including politics.

"Gov. George Allen was very aggressive in his recruitment of companies to Virginia," Riva said.

Allen has traveled to Europe, Asia, Canada and Mexico on trade trips, attracting $112 million in foreign investment and close to 1,000 new jobs to Virginia, said Robert T. Skunda, Virginia's secretary of commerce and trade.

Riva said Virginia also has plenty of "cheap, undeveloped" land for companies to buy. And, he said, Virginia is enjoying a Silicon Valley-type clustering of companies. "Companies come in and take advantage of resources" provided by larger companies, he said.

But Maryland's Gov. Parris N. Glendening also is encouraging overseas investment, said Chuck Porcari, a spokesman for the state Department of Business and Economic Development. "That's a normal part of doing business in the global economy," Porcari said.

Glendening went to Europe and Asia last year, marketing Maryland's trained work force and improving business environment, and brought back new business from Germany. He also secured extended contracts for businesses already in Maryland, Porcari said.

He added the governor is proposing a 10 percent cut in the state income tax to try to make Maryland more inviting to businessmen.

Nearly 79,000 Marylanders work for the U.S. subsidiaries, up almost 93 percent since 1980, according to the trade association's report. In Virginia, 131,600 workers hold such jobs, up almost 254 percent since 1980.

Nationwide, the U.S. subsidiaries employ nearly 4.9 million workers, or about 5 percent of the work force, the association reported. That's an increase of almost 140 percent since 1980.

California ranked first in jobs from U.S. subsidiaries of foreign companies; North Dakota last.

Among the other findings of the report:

Manufacturing made up more than a third of the jobs created by foreign subsidiaries in Maryland, and four out of 10 jobs in Virginia.

In Maryland, manufacturing jobs declined by 14 percent between 1988 and 1994. In the same time period, manufacturing jobs created by foreign companies increased 14 percent. Virginia lost 6 percent of its manufacturing jobs from 1988 to 1994, but saw jobs from foreign companies increase by 34 percent.

An additional benefit of the foreign companies locating subsidiaries in the United States is spinoff employment.

For example, the Taiwanese container shipping line, Evergreen, located in Baltimore, ships more merchandise over the oceans than any other container company in the world. It supports more than 18,000 jobs in the area, for longshoremen on the loading docks, drivers taking the containers to rail stations and railroad companies and employees shipping goods around the country, Porcari said.

Richard A. Goldstein, chairman of the trade association, said many of the U.S. subsidiaries have been in the United States a long time.

Goldstein is the chief executive officer of Unilever United States Inc., a London-based company that has been producing such American household staples as Breyers ice cream, Dove soap, Wisk laundry detergent and Lipton tea.

Nancy McLernon, an association spokeswoman, said Unilever has been doing business in the United States for more than 100 years and employs some 25,000 people here.

The findings in the report are based on an analysis of employment and wage data from the U.S. departments of Commerce and Labor. The employment data is for 1994; the wage data for 1992.

Pub Date: 4/11/97

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