By The Hill Staff - 05/17/07 07:22 PM EDT
“Litigation is a major business expense in comparison to Europe,” said Gary Elliot, chairman and chief executive of ThyssenKrupp USA, a German steelmaker that last week announced it was spending $3.7 billion to build a plant in Alabama.
Elliot said elevator insurance alone costs his company about $1.5 million annually in the U.S. and nothing in Europe. At the same time, he said other factors continue to make the U.S. an attractive market for investment, including being in proximity to the growing U.S. market.
Given that Democrats control Congress, several executives expressed pessimism that there would be any changes to tort laws in the near term. Assuming Democrats, who count trial lawyers as one of their most loyal constituencies, remain in power going forward, Bayer Corporation President and Chief Executive Attila Molnar said he doesn’t see much chance for tort reform.
“It looks obviously gloomy for the future,” Molnar said.
Miller, Zin and 16 other CEOs are in town for a conference organized by the Organization for International Investment (OFII). The group met Thursday with Treasury Secretary Henry Paulson, Democratic Caucus Chairman Rahm Emanuel (Ill.) and Sens. Trent Lott (R-Miss.) and Jeff Bingaman (D-N.M.). They told a handful of reporters on May 16 that litigation is a greater disincentive to doing business in the U.S. than fears that a protectionist Congress might impose new barriers to foreign trade and investment.
At the same time, several executives expressed concerns about Congress’s moodiness on trade. Executives in Europe “still hope that protectionism will not grow, but move in the opposite direction,” said Miller.
Molnar, Miller and others said companies will continue to invest in China given the importance of having a presence in that fast-growing market. But Miller said there are negatives to investing in China, which he said in his personal view are greater than the litigation threat in the U.S.
The problems in the U.S. in his estimation are not as great as the lack of patent and intellectual property rights protections in China, Miller said.
Other companies with CEOs in town for the lobbying work include Nortel, Philips Electronics North America, Deutsche Telekom and SKF USA Inc.
OFII has been working to improve the investment climate in the U.S. since Congress moved to stop a United Arab Emirates company from taking control of a firm operating several U.S. ports. The congressional involvement in the investment by Dubai Ports World, which had been approved by the Bush administration, was considered a move that could chill foreign investment in the U.S.
However, recent actions by congressional committees and the administration suggest those pushing for greater foreign investment are making strides.
On Wednesday, the Senate Banking Committee approved a bill backed by OFII and other business groups that would reform rules governing the inter-agency Committee on Foreign Investment in the U.S. (CFIUS), which reviews foreign investments in the U.S. for national security threats. The Senate bill is similar to legislation approved earlier this year by the House, making it likely that a bill will be delivered to the president’s desk. Last year, the Senate and House approved rival CFIUS reform bills, and were unable to resolve their differences.
Separately, President Bush issued a statement last week welcoming foreign investment to the U.S., a move seen as a response to last year’s Dubai Ports controversy.