### German companies flock to US with record pledges of capital investment
Strong American economy and tax incentives lure investors as Berlin frets over deindustrialisation
Jamie Smyth in New York and Patricia Nilsson in Frankfurt 16 HOURS AGO
The US is luring a record amount of capital investment from German companies attracted by its strong economy and lucrative tax incentives, just as conditions in their home market and China, their largest trading partner, are worsening.
German companies announced a record $15.7bn of capital commitments in US projects last year, up from $8.2bn a year earlier, according to data compiled by fDi Markets, a subsidiary of the Financial Times, dwarfing the $5.9bn pledged in China.
The amount heading for the US made up about 15 per cent of total commitments in 2023 in either greenfield or expansion projects overseas, compared with 6 per cent the previous year.
The investment boom covers the first year since the Biden administration passed the Inflation Reduction Act and the Chips And Science Act, which offer more than $400bn in tax credits, loans and subsidies with the aim of rebuilding US manufacturing and accelerating the energy transition.
German companies announced 185 capital projects in the US in 2023, of which 73 were in the manufacturing sector. The largest project was a $2bn investment by Volkswagen’s Scout Motors electric vehicle subsidiary in Columbia, South Carolina. Some types of foreign investment, such as M&A and other forms of equity investment, are not tracked by fDi Markets.
Senior executives at BASF and Siemens Energy — two of Germany’s largest companies — said a combination of pragmatic US government industrial policies, a strong long-term market outlook and increasing focus on supply chains was driving US investment.
“We see this huge investment potential with the new buildout of energy infrastructure in the US,” said Tim Holt, an executive board member of Siemens Energy, which this month announced plans to build a $150mn power transformer plant in Charlotte, North Carolina.
“In the past we have pretty much exported transformers from Germany, from Austria, from Croatia and from Mexico into the US. But given the market size and that we needed to do an expansion, we looked and we said the new factory is a good investment case given the market outlook.”
Holt said the Covid-19 pandemic, geopolitical tensions and supply chain disruptions at the Suez and Panama canals highlighted the need for diversification of manufacturing.
There are signs the investment boom is continuing. A survey of 224 subsidiaries of German companies in the US published on February 8 by the German American Chambers of Commerce found 96 per cent planning to expand their investments by 2026.
BASF, the world’s biggest chemical group and a major investor in China, is also expanding its US operations.
Michael Heinz, BASF’s chief executive in North America, told the FT the market size, prospects for growth over the next decade and government incentive programmes made it a “very attractive market”.
The company plans to invest €3.7bn between 2023 and 2027 in North America, which includes major expansions of petrochemical plants in Geismar, Louisiana, and in Cincinnati, Ohio.
BASF is a key example for investors and politicians concerned about creeping deindustrialisation in Germany, having announced a “permanent” downsizing of its headquarters in Ludwigshafen, with thousands of job cuts and plant closures following the surge in European energy prices when Russia invaded Ukraine.
Europe’s largest economy has been especially badly hit by the loss of cheap Russian gas, which for decades allowed it to remain a centre of heavy industry and manufacturing.
A study last year found that nearly a third of German industrial companies were planning to boost production abroad rather than at home — a figure that had doubled from the previous year.
“Europe is increasingly suffering from overregulation, slow and bureaucratic approval procedures and, above all, high costs for most production factors,” said Heinz.
“There is no doubt, that the European industry is challenged. It won’t be clear-cut, but energy-intensive industries in Europe will likely shrink rather than grow in the medium term.”
He said Germany and the EU as a whole needed to generate sufficient green electricity at competitive prices, build the right infrastructure for electricity and hydrogen, and develop less bureaucracy and faster approval procedures to remain competitive.
BASF is also a massive investor in China, where almost half of its planned global capital expenditure is planned until 2027. The company is currently building a €10bn state-of-the art petrochemical plant in Guangdong, which the company has said will largely rely on green energy that would not yet be available at necessary scale in Europe.
BASF has been criticised for making a big bet on an autocratic state by critics who are wary that German industry is repeating the mistake it made in relying too heavily on Russia. This month, BASF said it would sell stakes in its two joint ventures in Xinjiang — where Beijing has been accused of widespread human rights abuse. This followed allegations of the use of forced labour, highlighting the risk of investing in China as both the US and EU regulators are heightening scrutiny into Xinjiang supply chains.
A report last week by the German Chamber of Industry and Commerce forecast that the US would supplant China as the nation’s top trade partner by 2025 at the latest.
Die Cellforce Fabrik in Schwarzheide, Brandenburg wird laut FAZ, die eine ‘Interne Quelle’ bei Porsche haben, wohl auch nicht gebaut. Die Fabrik wird in den USA gebaut werden.
Wer kann es verdenken. Die Investitionsbedingungen scheinen in Deutschland aktuell historisch schlecht zu sein.
Die Fabriken von RockTech in Guben und SVOLT auf dem ehemaligen Vestas Gelände, alles Folgeansiedlungen von Tesla, liegen auch alle auf Eis, musste Dietmar Woidke einräumen. In den 3 Fabriken sollte eine höhere 4 stellige Zahl Arbeitsplätze entstehen.
Rekordinvestitionen in China und den Staaten. Die Revitalisierung der deutschen Wirtschaft läuft anscheinend echt gut.
Wenn ich mich nicht irre hat die USA keine (greifende) Schuldenbremse sondern macht gerade munter neue Schulden oder?
Spannend wird es 2030, denn dann laufen beachtlich viele Standortgarantien aus.
Müssen wir jetzt so tun als wären wir überrascht? oder reicht es wenn wir sagen wir haben es kommen sehen.
Insgesamt lustig, bei uns fliehen die Arbeitgeber und in den USA die Arbeitnehmer. Am Ende läufts für keinen.
Ein hoch auf die Schuldenbremse. Wenn es in den USA nicht bald richtig rummst dann sehen wir diese Industrie nicht mehr wieder. Dankeschön. Supercool, dass wir nur 60 statt 65 Prozent verschuldet sind.
Die Erntekosten sind einfach viel zu hoch für das Produzierende Gewerbe. Am Ende sind wir “Grün” weil die ganze Industrie abgewandert sind, ob es das wert war…
Die Energiekosten sind einfach viel zu hoch für das produzierende Gewerbe. Am Ende sind wir “Grün” und klimaneutral, weil die ganze Industrie abgewandert ist.
ob es das wert war …
Da man die Zeit nicht zurückdrehen kann bleibt nur noch der Sprung nach vorne. Nimmt man eben 10-15% weitere Verschuldung gemessen am BIP in Kauf um die aktuelle Phase so schnell wie möglich zu beenden. Ein langsamer Tod rettet die Politik vielleicht für 1-2 Wahlperioden aber wenn die Unternehmen erstmal weg sind ist es weitaus schwerer diese wieder ins Land zu locken. Die Wertschöpfung welche man hier langfristig verlieren kann holt man eben nicht durch Solarpanels wieder rein.
Und wie immer: Europa darf sich nicht von den USA verarschen lassen. Deren Kleinkrieg mit China geht uns wirtschaftlich bisher wenig an, im Falle eines heißen Konflikts werden wir sowieso zu den Amis halten aber die mehr oder weniger illegalen Wirtschaftstricks sollte man nicht einfach schlucken. Politisch ein absoluter Flop nicht den gleichen Status wie Kanada oder Mexiko bekommen zu haben (auch aufgrund des fehlenden Freihandelsabkommens) doch hatte man für sowas eigentlich die WTO. Wenn die USA diese weiterhin torpedieren weil sie nicht wie China öffentlich denunziert und verurteilt werden möchte müsste Europa eben Deals im Hinterzimmer ausarbeiten.
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### German companies flock to US with record pledges of capital investment
Strong American economy and tax incentives lure investors as Berlin frets over deindustrialisation
Jamie Smyth in New York and Patricia Nilsson in Frankfurt 16 HOURS AGO
The US is luring a record amount of capital investment from German companies attracted by its strong economy and lucrative tax incentives, just as conditions in their home market and China, their largest trading partner, are worsening.
German companies announced a record $15.7bn of capital commitments in US projects last year, up from $8.2bn a year earlier, according to data compiled by fDi Markets, a subsidiary of the Financial Times, dwarfing the $5.9bn pledged in China.
The amount heading for the US made up about 15 per cent of total commitments in 2023 in either greenfield or expansion projects overseas, compared with 6 per cent the previous year.
The investment boom covers the first year since the Biden administration passed the Inflation Reduction Act and the Chips And Science Act, which offer more than $400bn in tax credits, loans and subsidies with the aim of rebuilding US manufacturing and accelerating the energy transition.
German companies announced 185 capital projects in the US in 2023, of which 73 were in the manufacturing sector. The largest project was a $2bn investment by Volkswagen’s Scout Motors electric vehicle subsidiary in Columbia, South Carolina. Some types of foreign investment, such as M&A and other forms of equity investment, are not tracked by fDi Markets.
Senior executives at BASF and Siemens Energy — two of Germany’s largest companies — said a combination of pragmatic US government industrial policies, a strong long-term market outlook and increasing focus on supply chains was driving US investment.
“We see this huge investment potential with the new buildout of energy infrastructure in the US,” said Tim Holt, an executive board member of Siemens Energy, which this month announced plans to build a $150mn power transformer plant in Charlotte, North Carolina.
“In the past we have pretty much exported transformers from Germany, from Austria, from Croatia and from Mexico into the US. But given the market size and that we needed to do an expansion, we looked and we said the new factory is a good investment case given the market outlook.”
Holt said the Covid-19 pandemic, geopolitical tensions and supply chain disruptions at the Suez and Panama canals highlighted the need for diversification of manufacturing.
There are signs the investment boom is continuing. A survey of 224 subsidiaries of German companies in the US published on February 8 by the German American Chambers of Commerce found 96 per cent planning to expand their investments by 2026.
BASF, the world’s biggest chemical group and a major investor in China, is also expanding its US operations.
Michael Heinz, BASF’s chief executive in North America, told the FT the market size, prospects for growth over the next decade and government incentive programmes made it a “very attractive market”.
The company plans to invest €3.7bn between 2023 and 2027 in North America, which includes major expansions of petrochemical plants in Geismar, Louisiana, and in Cincinnati, Ohio.
BASF is a key example for investors and politicians concerned about creeping deindustrialisation in Germany, having announced a “permanent” downsizing of its headquarters in Ludwigshafen, with thousands of job cuts and plant closures following the surge in European energy prices when Russia invaded Ukraine.
Europe’s largest economy has been especially badly hit by the loss of cheap Russian gas, which for decades allowed it to remain a centre of heavy industry and manufacturing.
A study last year found that nearly a third of German industrial companies were planning to boost production abroad rather than at home — a figure that had doubled from the previous year.
“Europe is increasingly suffering from overregulation, slow and bureaucratic approval procedures and, above all, high costs for most production factors,” said Heinz.
“There is no doubt, that the European industry is challenged. It won’t be clear-cut, but energy-intensive industries in Europe will likely shrink rather than grow in the medium term.”
He said Germany and the EU as a whole needed to generate sufficient green electricity at competitive prices, build the right infrastructure for electricity and hydrogen, and develop less bureaucracy and faster approval procedures to remain competitive.
BASF is also a massive investor in China, where almost half of its planned global capital expenditure is planned until 2027. The company is currently building a €10bn state-of-the art petrochemical plant in Guangdong, which the company has said will largely rely on green energy that would not yet be available at necessary scale in Europe.
BASF has been criticised for making a big bet on an autocratic state by critics who are wary that German industry is repeating the mistake it made in relying too heavily on Russia. This month, BASF said it would sell stakes in its two joint ventures in Xinjiang — where Beijing has been accused of widespread human rights abuse. This followed allegations of the use of forced labour, highlighting the risk of investing in China as both the US and EU regulators are heightening scrutiny into Xinjiang supply chains.
A report last week by the German Chamber of Industry and Commerce forecast that the US would supplant China as the nation’s top trade partner by 2025 at the latest.
Die Cellforce Fabrik in Schwarzheide, Brandenburg wird laut FAZ, die eine ‘Interne Quelle’ bei Porsche haben, wohl auch nicht gebaut. Die Fabrik wird in den USA gebaut werden.
Wer kann es verdenken. Die Investitionsbedingungen scheinen in Deutschland aktuell historisch schlecht zu sein.
Die Fabriken von RockTech in Guben und SVOLT auf dem ehemaligen Vestas Gelände, alles Folgeansiedlungen von Tesla, liegen auch alle auf Eis, musste Dietmar Woidke einräumen. In den 3 Fabriken sollte eine höhere 4 stellige Zahl Arbeitsplätze entstehen.
Rekordinvestitionen in China und den Staaten. Die Revitalisierung der deutschen Wirtschaft läuft anscheinend echt gut.
Wenn ich mich nicht irre hat die USA keine (greifende) Schuldenbremse sondern macht gerade munter neue Schulden oder?
Spannend wird es 2030, denn dann laufen beachtlich viele Standortgarantien aus.
Müssen wir jetzt so tun als wären wir überrascht? oder reicht es wenn wir sagen wir haben es kommen sehen.
Insgesamt lustig, bei uns fliehen die Arbeitgeber und in den USA die Arbeitnehmer. Am Ende läufts für keinen.
Ein hoch auf die Schuldenbremse. Wenn es in den USA nicht bald richtig rummst dann sehen wir diese Industrie nicht mehr wieder. Dankeschön. Supercool, dass wir nur 60 statt 65 Prozent verschuldet sind.
Die Erntekosten sind einfach viel zu hoch für das Produzierende Gewerbe. Am Ende sind wir “Grün” weil die ganze Industrie abgewandert sind, ob es das wert war…
Die Energiekosten sind einfach viel zu hoch für das produzierende Gewerbe. Am Ende sind wir “Grün” und klimaneutral, weil die ganze Industrie abgewandert ist.
ob es das wert war …
Da man die Zeit nicht zurückdrehen kann bleibt nur noch der Sprung nach vorne. Nimmt man eben 10-15% weitere Verschuldung gemessen am BIP in Kauf um die aktuelle Phase so schnell wie möglich zu beenden. Ein langsamer Tod rettet die Politik vielleicht für 1-2 Wahlperioden aber wenn die Unternehmen erstmal weg sind ist es weitaus schwerer diese wieder ins Land zu locken. Die Wertschöpfung welche man hier langfristig verlieren kann holt man eben nicht durch Solarpanels wieder rein.
Und wie immer: Europa darf sich nicht von den USA verarschen lassen. Deren Kleinkrieg mit China geht uns wirtschaftlich bisher wenig an, im Falle eines heißen Konflikts werden wir sowieso zu den Amis halten aber die mehr oder weniger illegalen Wirtschaftstricks sollte man nicht einfach schlucken. Politisch ein absoluter Flop nicht den gleichen Status wie Kanada oder Mexiko bekommen zu haben (auch aufgrund des fehlenden Freihandelsabkommens) doch hatte man für sowas eigentlich die WTO. Wenn die USA diese weiterhin torpedieren weil sie nicht wie China öffentlich denunziert und verurteilt werden möchte müsste Europa eben Deals im Hinterzimmer ausarbeiten.