Succeeding in the U.S.: Tips for German Companies

Seeking one’s fortune in America is a long-standing tradition. Right now, making the leap across the Atlantic is once again all the rage among German companies. The signs point to expansion into the U.S.—for several reasons:

First, globalization is shifting significantly toward regional production chains due to international tensions, logistical hurdles, and environmental goals. In the U.S. in particular, there is a growing desire to reduce dependence on foreign trade. At the same time, a full-fledged energy revolution is taking place in the U.S. It is based on the Inflation Reduction Act (IRA), passed in 2022. It is the most significant federal investment in U.S. history to combat climate change. In addition, the energy revolution is being fueled by the Infrastructure Investment and Jobs Act (IIJA), which promotes one-time investments in infrastructure.

With these two laws, the U.S. Congress has put together a support package of unprecedented scale. They are considered enormous catalysts for private investment in clean energy. The IRA, for example, supports e-mobility, solar energy, offshore wind farms, battery storage, green and blue hydrogen, biodiesel, heat pumps, and residential buildings. The IIJA, in turn, targets sustainable and renewable technologies—including hydrogen hubs, carbon capture, battery recycling, and critical minerals. It also addresses the education system, the training of skilled workers, and improvements to the power grid. It even seeks to decarbonize industries that are difficult to decarbonize.

Originally, the U.S. government announced subsidies totaling approximately $400 billion. Currently, however, it is estimated that over $1 trillion will be allocated for such grants over a ten-year period. That is immense! It corresponds to one-quarter of Germany’s gross domestic product.

Ease of Doing Business Index

The Ease of Doing Business Index provides another significant incentive for U.S. expansion. As the best-known and most comprehensive study on business-friendliness and corporate regulation in national economies, it confirms the common clichés about the “Land of the Free” and German bureaucracy: The U.S. is ranked 6th, while Germany is ranked 22nd—due to its pronounced bureaucracy. Anyone wishing to invest in the United States faces significantly fewer regulatory hurdles.

Added to this is the sheer size of the U.S. After India and China, the United States has the largest population. According to current surveys, the U.S. will rank fourth by 2050—and will continue to be among the world’s largest population markets, while Germany, with a population growth rate of two percent, ranks significantly lower.

Of course, the close partnership between the U.S. and the EU in general—and with Germany in particular—is also significant. We share common values, democratic principles, and the rule of law. We are also linked by deep economic ties based on the principles of liberalization and the removal of trade barriers.
So: California, here we come? Yes, gladly. Or Texas, New York, and Arkansas, for that matter. In the United States, entrepreneurs with vision are currently receiving a particularly warm welcome.

io in the U.S.

io itself opened its U.S. office back in 2006—in Bethlehem, Pennsylvania. There, its service portfolio focuses on logistics, supply chain, factory planning, and SAP. Clients have included BMW, Daimler, Bosch, Nature Sunshine, Rolls-Royce, Whole Foods Market, and Freshpet. “We’re currently receiving more inquiries from large accounts—that is, big companies,” reports Rupert Hoecherl, Managing Director at io. Of course, this is due to the growing number of client references. However, the economic upswing in America is also a significant factor, as Toth adds. “It’s leading to rising demand in the areas of production and distribution. We’re also receiving an increasing number of requests for services related to site selection and investment planning, expansion strategies, and comprehensive project support.” With an eye on current developments, he goes on to explain: “Topics such as sustainability and alternative energy are certainly becoming more prominent.”

Currently, he and the 25-person U.S. team, along with external freelancers, are involved in various projects. For the tech company BELIMO, for example, they are overseeing the design and implementation of a new production and distribution facility. For HALKEY-ROBERTS, which develops components for medical devices and the aviation industry, they are planning the expansion of the logistics center. For the cigar manufacturer JOHN MIDDLETON, they are conducting a warehouse analysis. For automotive supplier KAMAX, they are optimizing material flow, which also involves analyzing the entire logistics of production supply. And for MTU AMERICA, a manufacturer of aircraft engines, they are planning a new distribution center for spare parts, a new production warehouse, and the concept as well as a site master plan for a new production facility. So there’s a lot going on in the United States. Anyone considering expansion into the U.S. is welcome to draw inspiration from io: The company recently offered a series of webinars on the topic.