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VIDEOStimulus Dollars Flow Overseas?
By
Scott Reeves Mar 23, 2009 11:45 am
Almost certainly - but initiative aims to create jobs in the US as well.
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The legislation includes the standard “Buy American” provisions, but doesn’t make clear where the parent company should be based.
Foreign companies are well aware of this, and their consultants and lobbyists urge that any contracts awarded as part of the stimulus package should create jobs in the US rather than abroad, the Washington Post reports. Still, some of the profit will go overseas.
France’s Alcatel-Lucent (ALU), along with Bell Labs, its New Jersey-based research unit, might be a good bet to receive some of the federal money devoted to upgrading broadband networks.
Rapid transit is big on the list of congressionally approved projects, but the major equipment makers are Canada’s Bombardier, France’s Alstrom, and Japan’s Kawasaki Heavy Industries. General Electric (GE) makes railroad locomotives, not subway cars or buses.
Transurban Group of Australia appears well positioned to develop toll lanes on existing highways - a project now underway on Washington’s Beltway.
Sanyo North American, a division of the Japan-based Sanyo, is building a solar-panel plant in Oregon and apparently knows what it takes to win contracts in the US. The Washington Post reports the company has registered lobbyists in Washington for the first time since 2001.
Foreign-owned companies employ about 5.3 million workers in the US and spend about $336 billion on payroll, federal statistics show.
The coming controversy about foreign companies isn’t new. In 2006, there was a political flap about efforts by a company owned by the United Arab Emirates to manage 6 US seaports. In the last few weeks, there have been yelps about bailout money intended for American International Group (AIG) ending up in foreign banks. The reason is easy to understand (provided you aren't a member of Congress): AIG did business with the foreign banks and owed them money.
The coming flap about foreign companies receiving money through Uncle Sam’s bailout plan is likely to drown out recent screams about executive bonuses at banks. The future controversy should underscore 3 basic points: Business suffers when politics is injected into the decision-making process; most of those who now call Congress home have little or no experience in business; and most aren’t up to the job of rebuilding our economy.
But what the heck - it’s only $787 billion, and the US Treasury can always print more money, right?
No positions in stocks mentioned.
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