For jobs hunt, state hires its man in Berlin

European employers drawn by South’s low costs, wages

Cornelius Schnitzler
Cornelius Schnitzler

BERLIN -- At any moment, Cornelius Schnitzler could get a call.

It could be from Little Rock, or a source in the German automotive industry or aerospace manufacturers in France. Regardless, it means he needs to rush to a plane bound for the United Kingdom, France or any other place in Europe where someone might decide to take business to Arkansas.

Schnitzler is Arkansas' man in Berlin. He's part of a group that lobbies companies on behalf of various states targeting Europe's growing interest in the American South. It's a hypercompetitive world where success or failure could mean the livelihoods of people thousands of miles away.

"The idea is to put Arkansas on the map," he said. "It's a competition."

German and European businesses are looking at the American South for everything from manufacturing plants to oil and gas operations. Arkansas opened its office in Berlin this summer. It's the latest of 15 American states, mostly Southern, that have offices in Europe.

"Companies throughout Europe that are considering expanding into the U.S. represent a significant opportunity for Arkansas to grow our foreign direct investment," said Mike Preston, executive director of the Arkansas Economic Development Commission. "Cornelius has already proven to be a tremendous asset for the state. We look forward to him representing us and generating new leads as he shares the many reasons these international companies should consider Arkansas."

Arkansas also has offices in China and Japan, where Schnitzler's colleagues fill similar roles. This week, Gov. Asa Hutchinson announced an agreement with a Chinese clothing manufacturer that is estimated to produce 400 jobs in the state.

Schnitzler's world is small. He's usually trying to beat the representatives of states such as Louisiana or Missouri to meetings with executives where he pitches Arkansas over its neighbors. Normally, the companies interested in opening plants or other operations in the U.S. focus on one geographic area that is known for specific industries. So a company looking to open an aerospace manufacturing facility might consider Arkansas and nearby areas because there is already a trained work force and history of production.

"The surrounding states are the biggest competition," Schnitzler said. "There's a trend of German companies going to the southern United States."

South Carolina is one of the first and most successful states to corner German business. The state has had an office in Munich for about 40 years, and it now has more than 160 German companies operating within its borders, creating nearly 27,000 jobs. BMW is South Carolina's biggest catch so far. The company operates a full manufacturing facility in the state, adding more than 9,000 new jobs in the past four years, according to the South Carolina Chamber of Commerce.

Those are the kinds of investments Schnitzler is after. His job is to get access to and persuade executives to do business in Arkansas. His budget, including his salary, travel and other business expenses, is $230,000.

"We're open to working with all companies," he said. "And there's a lot of interest, but some of the companies are just too small."

Another player in this game is the southern chapter of the German American Chamber of Commerce in Atlanta. For Arkansas, the German American Chamber of Commerce pitches the state's cheap access to infrastructure and aggressive pro-business stance to German businesses.

"We are the first main point of contact," said Michaela Schobert, director of consulting services for the chapter. "If the company's strategy is to come over here and open up a plant, we help find the right staff, the right location and put them in touch with necessary third parties like lawyers and CPAs."

German companies have been investing more in Arkansas in the past decade, providing more jobs and capital for the state. In 2010, German companies employed 2,000 Arkansans. In the past five years, that number has increased 85 percent to 3,700, according to data from the Arkansas Economic Development Commission.

Exports to Germany have declined during that time. According to the U.S. Department of Commerce, Germany is Arkansas' No. 12 trading partner, with state exports falling from $202 million in 2013 to $103 million in 2015.

Arkansas' top European trading partners -- France, the United Kingdom, Belgium, Netherlands and Germany -- accounted for about 17 percent of all exports from Arkansas in 2015.

The state hosts 23 German-owned companies that operate 34 locations. Most of these jobs are in automotive manufacturing and the plastics and steel industries.

French companies provide 3,700 Arkansans with jobs, mostly in the aircraft, cosmetics and automotive manufacturing industries.

While a lot of the jobs German companies bring are manufacturing, there's also room for high-skilled employees outside of manufacturing, Schobert said. Human resources professionals, for example, are usually hired locally. The same with people who work in bookkeeping or accounting because these people need to be familiar with local standards and regulations.

"It's common that the management comes over from Germany, then after a while the goal is usually to hire local people," she said.

Schobert said German and other European companies are attracted to the low wages for Southern workers and the proximity to major American cities. Opening business operations here also makes it easier for German companies to get access to the Latin American markets.

"The South is very attractive," she said. "We aren't that unionized, there's a low cost of living and the labor costs are low."

SundayMonday Business on 10/23/2016

Upcoming Events