Zäh wie Leder, Schnell wie ein Windhund, Und hart wie Krupp-Stahl...
Posted on 05/13/2007 8:25:22 PM PDT by teldon30
LONDON - Another foreign company is setting up shop in the Land of Liberty. ThyssenKrupp, the German steel and engineering leviathan, announced on Friday that it would establish a $4.1 billion steel mill in Alabama.
The company had whittled its choice down from 20 states, and its board had decided on Friday morning to build the 2,700-employee steel processing plant in Alabama's Northern Mobile and Southern Washington counties. It's expected to be one of the largest private industrial development projects in the U.S.
ThyssenKrupp had also increased its planned investment from $2.9 billion because it wanted to produce more steel at the new plant. "Higher capacities and extended plant configurations were shown to be feasible and economic," the company said in a statement.
The plant, which will produce flat carbon steel and stainless steel, will begin operation in 2010, and will produce up to 5.2 million metric tons of steel a year. More than half of that will be made from steel slabs shipped from the company's mill in Brazil.
The company said it wanted to "substantially expand" its stainless steel business in North America, and that the Alabama project was "a central element of ThyssenKrupp Stainless’ growth strategy."
A weakening dollar has helped attract more foreign investment of this sort into the United States, since it effectively lowers entry costs. Capital investment in the U.S. from overseas reached $22.2 billion in 2006, according to OCO Consulting's LocoMonitor, a Belfast-based consultancy, an increase at an average annual rate of 13.4% since 2002.
There was a slight drop in FDI in 2004 as both China and India began to receive a higher numbers of projects, and electronics was the only sector to have not experienced decline. But since then states like Alabama have clamoured to attract foreign investors from the Chinese and Indian markets with tax incentives and specially prepared facilities.
America's strong regional clusters of industries, such as automotive in Detroit, and financial services in the mid-East are key attractions for foreign companies, and a close proximity to targeted markets or customers was cited as a top reason to invest in the States, according to the LocoMonitor research.
Though most of ThyssenKrupp's operations are based in Europe, it also has plants in Brazil, China, Mexico, and the U.S., where it competes with Arcelor Mittal, United Technologies and Nucor. Much of the company's steel goes to the automotive sector, with coated products representing 30% of it's carbon steel portfolio.
ThyssenKrupp, which has a market capitalization of $27 billion, also reported second quarter earnings on Friday of 1.1 billion euros ($1.5 billion), which was ahead of our analysts forecasts, and 17% above the forecasts of analysts at Citigroup, who have a "hold" rating on the shares.
Shares in ThyssenKrupp were up 43 euro cents (58 cents), or 1.1%, at 41.43 euros ($56.01), in Friday afternoon trading in Frankfurt. The company trades at 13.8 times 2007 earnings, above the sector average of 10.9. Citigroup maintained its price target of 40 euros ($54.08).
Congratulations to Alabama—and the US. This is quite a quite a coup!
Amen to that!!! They announced this at like 2:00am local time in the morning. I read where Gov Riley told them that if they had good news to wake him, but if it was bad “let me sleep”. I thought that was funny.
I feared they would give this to LA but I guess this will be another black eye for Blanco, not that she needed another one to probably finish off her political career after Katrina.
another black eye for Blanco
another reason to love this ;)
Way t' go, Bama!
MS counties alongside Mobile are going to reap benefits too...they are planning on it.
Just you watch. The Indians and the Chinese are going to start b*tchin’ about their jobs being outsourced to Alabama.
Ya’ll make that steel good, now. We’re building a bunch of cars and trucks with it, I bet.
Zäh wie Leder, Schnell wie ein Windhund, Und hart wie Krupp-Stahl...
Let them complain...plants have closed for the last 10 years in my area because of mainly China.
Plenty of people in Michigan were bitching because they know the unions cost them any consideration.
"Be proud you're a rebel cause the South's gonna do it again - yes it is!"
Wonder why AMERICAN steel companies couldn’t figure out a way to produce steel here and make a profit ?
Yep....We’ve all wondered that too....why so many foreign companies are happy to come here and invest....my personal opinion is that American companies are mostly short sighted and CEOs just want instant results for their golden parachutes.
Naw .. I think it’s just gotten to the point where the people who get their paycheck from the Union are hungry.
I work for a foreign company...they don’t crap in their own nest like Americans...none of that steel will be dumped back to Germany...you can bet on it....and i don’t blame them...i admire them for looking out for their home workers.
Not sure your point - if the German company was able to sell the steel cheaper in Germany, they would ... Do you believe the government should have that control over industry here ?
if the German company was able to sell the steel cheaper in Germany, they would”
HUH?
I'm up for a national discourse on why American companies really suck.
Out national pride was that we could make crappy products cheaper, then came the Asians. Now we make nothing.
“HUH?”
The German company has decided that by producing steel here it can deliver it’s product at a competitive price to it’s customers. It makes more profit. It also makes no sense to compete with itself, so it will NOT create the same product that it supplies from it’s German factories, unless those are at full production and the numbers work out correctly.
Simple Capitalism.
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