2 Outcomes When Foreigners Buy Factories

HOLLAND, Mich. — Four years ago, a low-slung factory on the fringes of town here was stagnating and shedding workers. Then Siemens, the German industrial giant, bought the plant and folded it into a global enterprise. Today, the factory is shipping wastewater treatment equipment to Asia and the Middle East and employing twice as many workers.

Articles in this series will examine the economic, cultural and political implications of foreign purchases of American companies.

At its plant in Michigan, the German company Siemens has hired not only a staff but also contract workers like Gordon Stockhill.

“Globalization has been good for Holland,” said David J. Spyker, once the plant manager and now vice president of a Siemens unit with operations around the world.

About 60 miles to the northeast, such talk provokes contemptuous snickers. Two years have passed since a Swedish multinational shut down what had been the largest refrigerator factory in the country, a sprawling complex along the Flat River in Greenville.

The company, Electrolux, sent production to Mexico, eliminating 2,700 jobs from a town of 8,000 people.

“Everybody talks about Electrolux around here the way the rest of the country talks about Katrina,” said Becky Gebhart, manager of a nonprofit medical clinic that opened last November in Greenville, 30 miles northeast of Grand Rapids, that serves people with little or no health insurance.

As foreign buyers descend upon the United States, capturing widening swaths of the industrial landscape and putting millions of Americans to work for new owners, these two cities offer sharply competing narratives for a nation still uneasy about being on the selling end of the global economy.

And with the dollar losing much value in recent years, the pace is picking up again, as some of the country’s most valuable assets go on the block at bargain-basement prices.

For many communities, like Holland, Mich., the consequences include new jobs at decent pay, fresh capital to finance expansion and links to markets around the globe.

Yet many others, like Greenville, are suffering from being branded redundant by huge enterprises with factories around the world.

To travel Michigan today is to experience America’s often ambivalent relationship with the global economy.

Foreign capital is putting more American businesses in the control of major enterprises based in Europe or Asia. It is also creating jobs, some of them in emerging areas like alternative energy, where prospects for expansion may be greatest. And it is aiding the growth of American exports, a source of vigor in an economy hobbled by a collapsing housing market.

More than 200,000 Michigan residents worked for subsidiaries of foreign companies as of 2005, according to government data.

Yet in a state that has lost 300,000 manufacturing jobs since 2000, foreign investment has not been enough to compensate; indeed, it has sometimes exacerbated the erosion.

Gov. Jennifer M. Granholm, a Democrat, was bitterly disappointed by Electrolux’s decision to abandon Greenville.

She had promised to persuade the company to stay, assembling a package of more than 0 million in state and local tax credits. The city offered to build a new plant. The local union agreed to give up as much as million a year in wages.

“They said, ‘There is nothing you can do to compensate for the fact that we are able to pay .57 an hour in Mexico,’ ” Ms. Granholm recalled during a recent interview. “That’s when I started to say, ‘Nafta and Cafta have given us the shafta,’ ” she added, using the acronyms for the North American and Central American free trade agreements.

Electrolux bought the Greenville factory in 1986 from an American firm. It succeeded for many years, but two decades later, Electrolux — like a lot of other companies — decided it could cut labor costs by moving production to another country.

As unemployment benefits expire, many of the city’s former workers are still seeking the next job. Sales at restaurants, hardware stores and car dealerships have plummeted, prompting them to dismiss workers, adding to a downward spiral.

Despite the bitterness, Ms. Granholm has traveled to Japan and Europe in pursuit of expanded trade and foreign capital. “We don’t want to just be victims of the global economy,” she said. “Pursuing international investment is one strategy to get jobs.”

The Economic Trade-off