Howes: ABB robots invade, help Auburn Hills make history
Auburn Hills — American manufacturing is no oxymoron to Ulrich Spiesshofer. He's betting on it, big, in this Oakland County city.
The CEO of ABB Ltd., the Zurich-based maker of power and automation systems for utilities, industry and transportation infrastructure, officially opened Wednesday what it says is the first plant in the United States to manufacture robots for automakers and other industries.
The operation on Brown Road is expected to double ABB's employment here to roughly 1,000 employees over the next five years, another meaningful contribution by a foreign-owned company to the steadily growing high-tech presence in southeast Michigan.
"The U.S. is still the largest economy in the world," Spiesshofer said in an interview with The Detroit News. "It is prospering. It has a great phase ahead of it. The investment in robotics in the U.S. by ABB is a very conscious investment."
Detroit's automakers have "regained traction" and "found a way to compete," he says, confirming that General Motors Co., FCA US LLC and Ford Motor Co., especially, are customers. They "are leading again in certain aspects in their home market, and we want to help them."
That's just the half of it. Not too many years ago, ribbon-cuttings like the one Spiesshofer hosted at ABB's Auburn Hills plant would have been front-page news: an estimated 500 jobs to be created over the next five years; the first robotics plant in a town whose bellwether industry is one of its biggest customers; another sign that southeast Michigan is again attractive for foreign direct investment.
But that's less the news than the why. The fundamentals of the American economy are increasingly attractive to would-be foreign investors like ABB. The total "stock" of foreign investment in the United States, to use a Commerce Department metric, is $2.8 trillion. In 2012, foreign companies employed 5.8 million Americans, paying them more, on average, than those who don't.
Foreign investors like ABB see strong underlying demand in the States. Its primary customers are showing strong financial results and determination to manage their business efficiently. Lower energy costs, fueled by the fracking and shale booms, lower the cost of doing business.
A deep rule-of-law tradition, in American business if not always in its politics, projects an aura of stability. Rising labor costs in markets like China are making investment (or reinvestment known as "reshoring") in the United States a more cost-effective option; it also allows producers to be closer to their customers and to reap whatever political advantage there may be.
A survey of global business leaders by A.T. Kearney — and touted by Commerce — found that the United States is considered the best place in the world to grow a business. It also found the States to be the top destination globally for foreign-direct investment.
"Having relatively low-cost energy is a game-changer," Bruce Andrews, deputy commerce secretary and a former Ford executive, said in an interview at ABB. "We've lined up a number of fundamentals in the U.S. economy. What we're finding is people are moving back. They want to move back."
Not without some prodding from Andrews, his colleagues at Commerce and other agencies across the government. The U.S. ambassdor to Switzerland and Liechtenstein, Suzi LeVine, is a former Microsoft Corp. executive whom ABB officials credit, among others, with pushing hard for the investment in Auburn Hills.
"They're bulldog terriers," one executive said, smiling.
It hasn't always been that way. Just a few short years ago, Commerce charged three staffers with pursuing foreign direct investment in the United States, Andrews said. Now, 30 people across multiple agencies work under a program called "Select USA" to attract foreign capital to the 50 states.
This from an administration routinely criticized — often accurately — for its antipathy to business and for recurring evidence that many of its principals do not understand well how business works. To hear the ABB brass tell it, however, the question depends on the definition of "business."
ABB ain't Wall Street banks, the fat cats Washington loves to demonize. It's a high-tech global manufacturer whose investment represents a new kind of business on American soil — robotics — that Spiesshofer, a German national, insists is a way to create jobs, not kill them.
"Germany would be dead today if it hadn't invested heavily and continuously in automation," he says. "Fact is, the countries with the highest robot density in the world have the lowest unemployment rates. We don't offer robots to take away jobs. We offer robots to ... enhance competitiveness."
Given this town's checkered introduction to assembly-line robots some 30 years ago, Spiesshofer's rational reassurance may ring hollow to more than a few people in this workaday town. It shouldn't.
It's three decades later. Times change, industries restructure and the competitive balance is shifting — slowly but surely in the direction of the home team.
Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151.