Charlotte is a magnet for foreign businesses. How are leaders pitching the region?
Back in 2015, Neugart USA had a decision to make.
The German-based company, which sells and builds gearboxes, came to the U.S. in 1997 and was beginning to outgrow its two small operations in Pittsburgh and Virginia.
It needed a bigger space in a viable city that had room for future growth, a strong workforce and a community where its foreign workers would feel at home.
Neugart chose Charlotte in 2015.
“Customer demands are very high and our product is easily accessible [in Charlotte],” said Christian Schilling, the vice president of Neugart. “The infrastructure, the international flights … for shipments and direct flights to Germany … the very strong presence of other European companies and the growing population and workforce. … It makes Charlotte appealing. Charlotte is becoming more and more of a name in the business world.”
Schilling is right.
More than 1,000 international businesses call the Charlotte region home, according to the Charlotte Regional Business Alliance. Since 2022 these companies have invested more than $2 billion in foreign capital into the city and have created over 5,000 new jobs, the alliance added. German-based businesses, including Neugart, make up a bulk of the foreign businesses in the region.
But, why? What makes Charlotte such an attractive city for these businesses? Well, Schilling made some excellent points.
“It’s very important that the region or the area you are in has enough to offer for people no matter where they’re from,” said Sven Gerzer, a principal with Parker Poe Consulting, a subsidiary of the law firm. “We’ve got the big international airport. It’s a growing city. We’ve got a workforce with a lot of skills here. Cost is a lot lower. Charlotte checks a lot of boxes.”
Why is foreign investment important?
Foreign direct investment is one way to increase economic growth in a region, according to the alliance.
It can bring in new jobs, new work sectors and new sources of capital.
International businesses in the Charlotte area employ over 80,000 people, or 6% of the workforce.
These businesses are mainly manufacturers, creating industrial machinery equipment, automotive parts and plastics. Their residency in Charlotte has grown the sector’s presence in the area, according to the alliance.
That growth has also led to an increase in other industries, including within domestic companies that focus on distribution and other services, the alliance adds.
The big pitch
To maintain and increase this area of economic growth, organizations like the business alliance connect with international businesses to bring them to the region.
It’s why city officials, along with representatives from Mecklenburg County, the alliance and the Charlotte Regional Visitors Authority took a trip to Munich in November. These visits allow city and business leaders to introduce foreign companies to Charlotte and pitch the city as a strong investment.
“We promote Charlotte and the broader southeast so people consider moving here,” said Dominic Lerario, a partner at Parker Poe. “Maybe they don’t come for a year or two but they’ve heard about [Charlotte]. They tell other people about it. It’s about getting the word out and flying the flag so that people don’t think of the usual suspects when they are deciding to expand in the U.S.”
So, how do people like Lerario, Gerzer and other leaders pitch Charlotte to international business?
Here are the big pitch items. Let us know if you agree.
Charlotte Douglas International Airport
Regardless of long lines and construction, Charlotte airport is one of the biggest pitch points in attracting foreign businesses to the region.
More than 53 million passengers flew through Charlotte in 2023, according to the facility. The airport offers direct flights to over 186 places, including 39 international destinations.
“From an international perspective, having those direct flights to Munich, Frankfurt, London, Paris makes a huge difference,” Gerzer said. “People don’t want to land after a 10-hour flight, go through customs and wait another two to three hours for a connecting flight. They just want to be there.”
That fueled Neugart’s decision as well, according to Schilling.
Pittsburgh International Airport offers 62 destinations to four countries, including the U.S., according to its website.
There’s also the shipment aspect. The Charlotte airport is located in a Foreign Trade Zone, which allows importers and exporters to move products with either reduced or no custom duties.
More than 207,608 tons of cargo flew through Charlotte in 2022, according to the alliance.
“We don’t do sea freight at all, so the airport is our best friend,” Schilling said. “Time is very sensitive. Our carriers fly directly into Charlotte and we get our deliveries considerably fast.”
East Coast Vibes
That fast shipment also has to do with Charlotte being in the center of the east coast.
About 60% of the U.S. is accessible to Charlotte via a two and half hour plane ride, according to the business alliance.
Also, about 70% of the U.S. population is accessible to Charlotte via a two-day trucking drive, the alliance adds. That includes places such as New York, Chicago, and Florida.
There’s also the benefit of being in the Eastern time zone.
Andreas Prokesch is the CEO of STIWA US, an Austria-based company that produces automation machinery in Rock Hill and Fort Mill.
For Prokesch, being in the western time zones of the U.S. would decrease connectivity to the main headquarters.
“If you want to collaborate a little bit with headquarters on the same day, then you have that little time window of two, three hours per day where you can still reach everybody,” Prokesch said.
That includes reaching family members.
“We typically talk to our family on the weekends and it isn’t too late in Germany,” Schilling added.
Finding employees
Between the University of North Carolina at Charlotte and Central Piedmont Community College, Charlotte has a strong pipeline for people entering the workforce.
“We need assembly technicians, electrical assembly technicians, mechanical assembly technicians, programmers and most of the time they come from the universities,” Prokesch said.
That pipeline is created by apprenticeship programs.
Central Piedmont has about 22 employer partnerships, including Siemens Energy Inc., one of the largest international employers in the region. About six companies specially recruit junior and senior high school students every fall, according to its website.
Other community colleges in Gaston, Catawba, and Rowan-Cabarrus counties also offer extensive apprenticeship programs.
“The local economic development organizations work with the North Carolina community colleges and help them develop training programs so that maybe if the workforce isn’t there, they can still figure out a way to come up with a program to train people,” Lerario said.
The focus on creating and increasing workforce pipelines is something Neugart plans to utilize, Schilling said. Part of the company’s expansion plan is to start manufacturing in the states. When the time comes, they plan to look at apprenticeship programs the local colleges and universities offer.
And that partnership is not something you see everywhere Schilling said.
“That’s a collaboration I have never seen in Germany,” Schilling said. “Everyone is usually on their own and here’s it’s ‘Hey why not help each other.’ That’s what I love here.”
A sense of community
That community aspect is probably the most appreciated attribute of Charlotte, according to Gerzer.
A business needs to make sure the logistic sides of things can run smoothly, like transportation and finding employees, but if they can’t find a community, they’ll be foreigners forever.
“Do I fit in and more importantly, does my family fit in,” Gerzer said. “With every company that moves here, people come here as well. They need to, on a personal level, be happy and accepted. It almost doesn’t matter what background you’re coming from, you can find a community here that helps and supports you.”
For Schilling and Prokesch, community was far more vital than a direct flight to Munich or Frankfurt.
And in their case, the German community is very strong in Charlotte.
Charlotte has the highest concentration of German businesses in the United States, with more than 200 German-owned companies residing in the region. German businesses employ more than 19,900 people in the region, according to the alliance.
The German connection stems back to when BMW’s first North America manufacturing plant opened in Spartanburg in 1994. The history goes back even further when German migrants used the “Great Wagon Road” to head to North Carolina from Philadelphia.
The names Charlotte and Mecklenburg are derived from Germany, both being named after German-born Queen Charlotte of Mecklenburg-Strelitz.
“The German community is really strong here and I was really surprised by that,” Prokesch said. “In German there’s a term we use called stammtisch, basically means regular meeting, and we all meet over beers. We’re all foreigners at one point but you meet and get your tips and tricks. It’s a network. If you need a solution, there’s somebody who can give it to you.”
And it’s not just Germany or other Central European countries. Companies from Japan, Italy and the United Kingdom are also increasing their numbers in the city.
These informal groups foster community. It encourages businesses to stay in the region and encourages others to join them, Lerario said.
STIWA, for example, recently opened its new headquarters in Rock Hill, investing $30 million into the area and adding 48 new positions.
What’s a Charlotte?
There’s a ton of other selling points Charlotte has to offer. North Carolina has the lowest corporate tax rate in the country, at 2.5%. Cost of living is relatively cheaper than other big name cities companies might consider.
And, when it doesn’t randomly snow, Charlotte has great weather.
The only downside to Charlotte, according to Gerzer, is that it’s not the city most people think of when the U.S. comes to mind.
“Most foreigners and foreign companies, when they look at the U.S., they know New York, D.C., Chicago, California, Disney World and Orlando,” Gerzer said. “I think the part where Charlotte loses or misses out is that companies just don’t know about Charlotte. They go somewhere because they’ve heard it’s a good place and they’ve never considered Charlotte.”
That’s where those trips overseas come in. If the region can connect with businesses before they make their decision, introduce them to Charlotte and the accompanying perks, Gerzer said the decision would be a done deal.
“Once a company comes and visits Charlotte, we usually have a very high probability that they end up here,” Gerzer said.
And the region hopes that continues to be the case.
