APC among foreign firms investing heavily in R.I.

Foreign investments play an essential and increasingly important role in our economy, both in Rhode Island and the nation as a whole.

That point was driven home during a recent celebration of “Invest in America Week,” held at American Power Conversion’s (APC) corporate headquarters in South Kingstown and attended by local, state and federal officials, including retired Rear Adm. William G. “Woody” Sutton, assistant secretary for manufacturing and services, U.S. Department of Commerce.

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Twenty percent of America’s manufacturing jobs are dependent on foreign direct investment (FDI). Sutton said global entrepreneurs favor the U.S. because of our infrastructure, work force and laws, as well as “our open and secure markets, where it is easy to buy and sell.”

“We are a welcoming society,” Sutton said, “with a culture of innovation and entrepreneurship.”

The following statistics, compiled by APC, the federal commerce department and the R.I. Economic Development Corporation, illustrate the importance of foreign investment to the economy of the nation and the state:

• The United States is the world’s largest recipient of FDI, with total stock at nearly $1.8 trillion in 2006, approximately 15 percent of the gross domestic product.

• More than five million Americans work for companies headquartered overseas. Despite representing less than 5 percent of the nation’s work force, these jobs account for 10 percent of U.S. capital investment, 15 percent of U.S. annual research and development investment, and nearly 20 percent of U.S. exports. Between 2003 and 2007, more than 3,300 new projects were started by foreign firms, yielding $184 billion in investment and about 447,000 new jobs.

• U.S. subsidiaries of foreign companies support an annual payroll of $335.9 billion, with the average compensation per worker at $66,042, which is 25 percent higher than the average for U•S. companies.

n Federal income taxes paid by U.S. subsidiaries are at an all-time high of 󈵰.1 billion.

n In Rhode Island, 22,900 residents work for companies owned by foreign entities, a 3.2 percent increase over the la•t five years.

n Rhode Island ranks 11th in the nation for the share of its work force supported by U.S. subsidiaries of fore•gn companies.

n U.S. subsidiaries support 3,100, or 6 percent, of the manufacturing jobs in the state.

Gov. Donald L. Carcieri and Saul Kaplan, RIEDC executive director, said APC was the ideal place to celebrate foreign investment in America because its French parent company, Schneider Electric, continues to enhance and upgrade the local plant, which employs 1,100 people. One of seven APC sites around the world, the South Kingstown facility is the main headquarters for software development. “More than 60 percent of the servers worldwide are running our software,” C.J. Meiser, product line developer, told the 30 or so visitors during a tour of the plant.

Laurent Vernerey, president and CEO of APC, a global leader in integrated power and cooling services, announced at the May 8 event that Schneider will invest $3 million to $4 million at the South Kingstown site to make the plant more energy efficient and “enhance working conditions” for employees. The announcement came as a relief to workers and local officials, who feared for the future of the firm when the French company acquired APC for $6.1 billion in February of 2007.

Carcieri told APC representatives that they have done a “phenomenal job” at assessing and providing what their customers need, which is exactly what he said other firms must do to create an environment that welcomes foreign investors and businessmen like Vernerey to Rhode Island. “The United States is still the best place in the world to do business,” the governor said. Carcieri joked about his own and his grandchildren’s personal stake in APC’s success because, the Providence Business News later confirmed, he has two sons-in-law who work there.

Sutton, who called his office the federal government’s “leading pro-manufacturing, pro-business entity,” said that this country is facing stiff competition for FDI from other nations and, in order for American trade to be welcomed overseas, the U.S. must welcome overseas trade here. Free trade agreements and FDI are “critical to growth and prosperity” in America, he maintained.

In 2007, APC worldwide had gross revenues of $3.5 billion, with 48 percent generated in North America. •