The UK continues to be a key location for multinational companies to base their European operations, despite the recent demise of the so-called "Tiger Economies" of the Pacific Rim.
Economic adversity in Asia has affected the expansion of Korean, Japanese and Taiwanese companies in the UK, but firms from the United States, undeterred, continue to invest in the country.
The number of mergers and acquisitions involving both UK and U.S. companies, as well as the expansion of established U.S. businesses in the UK, continues to grow.
In addition, U.S. companies frequently use the nation as a base for European operations.
The UK leads Europe in attracting international investment, drawing more than any other developed country in the world apart from the United States.
The UK accounts for some 40 percent of all U.S. and Japanese investment in the European Union.
High-Tech Magnet
Financial services companies, and those involved in information technology in particular, continue to regard the UK as a prime location. This can be seen from just a few recent examples of U.S. activity in the UK.
| Arlington Securities operates 18 business parks throughout the UK, with 400 tenants employing 30,000 workers. Parks like Arlington's offer clients build-to-suit facilities along with a comprehensive menu of supporting business services. |
Cisco Systems, the Silicon Valley Internet networking company, will begin manufacturing for the European market from a base at Livingston in Scotland -- the company's first plant outside the United States. It has also opened its first European R&D center in Edinburgh -- its largest outside North America.
In addition, Polaroid has opened an R&D center as part of a $54.6 million investment at its Scottish plant.
San Francisco-based First-Tel Systems Corp. has plans to open a design and development center in Glasgow for its high-end automated service delivery systems for telecommunications service providers.
And the world's leading distributor of speciality electronic components, Texas-based TTI Inc., is set to open its European integrated logistics center in Scotland.
In England too, high-tech investment continues to grow. Microsoft has an-nounced plans to invest $500 million in NTL, the UK's third-largest cable television network.
It is Microsoft's first
cable industry investment outside the U.S., and is intended to accelerate Britain's use of high capacity, broad band communications services covering voice, data and video.
In other multinational investment actions, Parametric Technology of Waltham, Mass., is buying the UK engineering software developer, Division, based in Bristol, southwest England, for $45 million.
Manufacturing Firms Expand
Perhaps the most striking example of a U.S. firm showing confidence in England as a manufacturing base for Europe came in February this year when Dana Corp., the Toledo, Ohio,-based engineering company, transferred its entire factory from Germany to Leeds in northern England.
In a move costing $6.4 million, the plant from the German factory was dismantled and shipped to Leeds on 120 trucks.
The decision to relocate was strongly influenced by the lower operating costs in the UK, where the company expects to produce $16 million worth of axle components this year.
In Northern Ireland, the giant construction equipment company Caterpillar has taken 100 percent control of FG Wilson, a generator manufacturer.
Caterpillar had owned 49 percent of the company since 1996. The company's plant in Larne has a work force of 2,000 and is Europe's largest diesel generating manufacturer. More than 90 percent of its output is exported.
Also in Northern Ireland, CMA International of North Carolina plans a multi-million dollar medical devices factory in Belfast. CMA is a provider of manufacturing and value-added services to the medical electronics industry.
"One of the compelling reasons we chose Northern Ireland was to give easy access to the world class expertise available at the Northern Ireland Bioengineering Centre on the University of Ulster's Jordanstown campus," said CMA President Richard West.
"We are excited about the commercial opportunities we believe will result from our future work together."
Bank One Sets Up Headquarters
Wales has recently attracted several major expansions from the United States. The largest, from the credit card arm of Bank One International, is the financial company's new UK headquarters in Cardiff Bay where it will create 1,000 jobs.
The Welsh Development Agency, working with Cardiff Bay Development Corp., is helping the bank to develop its facility, where operations are due to start this year.
Another leading U.S. company, Los Angeles-based International Rectifier Corp., is planning a $40.1 million high-tech manufacturing plant at Swansea that will create 500 jobs.
The government is providing extensive grant aid and training support for the plant, which will manufacture electronic motion and power control modules for the European market.
International Rectifier's decision to choose Swansea was influenced by the six-month "fast track" building program offered by the Welsh Development Agency, and the possibility of collaboration with the local university's electronics department.
Business Parks at Your Service
Private business parks can also help U.S. companies make the transition into the UK.
One of the largest is Arlington Securities, which operates 18 parks in the UK, from Glasgow in Scotland to Southampton on the south coast of England, with 400 tenants employing a total of 30,000 people.
Operators such as Arlington provide an instant service to expanding companies that can move into build-to-suit facilities or existing buildings.
Companies such as Arlington provide all the planning assistance, help with the transaction process and offer a wide degree of property ownership and lease options.
"We can provide every conceivable service a business needs in order to operate efficiently," says Arlington's James Birkett. "This includes everything from furnishing the premises, equipping it with the necessary business equipment, providing cleaning and security services, travel agency, and catering. We'll even provide a taxi-booking service and window cleaning.
"The unique selling point of such a deal is that a company can move into premises that are ideal for its purposes, have all the services it requires, and not have to worry about anything except getting on with running its business and paying just one check each quarter for the convenience."
Infineum, a joint venture between oil giants Shell and Exxon, has recently moved into a building at Arlington's business park in Reading, west of London.
Americans Welcome
The UK is used to having U.S. companies on its doorstep, and locals welcome them with enthusiasm.
As an example of this, William G. Grant Sr., president of Primex Plastics, a U.S. corporation with a plant in the northeast of England, was honored by the Durham Development Co. for his promotion of the UK.
And it is not merely U.S. companies that are reaping the benefits of establishing facilities in the UK.
Air France announced in March that it will close all its call centers in Europe and consolidate them into one single unit in London.
Praise indeed!
| Major UK Expansions |
| Company | Facility | Location |
| Cisco Systems | Manufacturing Plant | Scotland |
| Cisco Systems | R&D Facility | Scotland |
| Polaroid | R&D Facility | Scotland |
| TTI Inc. | Logistics Center | Scotland |
| Dana Corp. | Manufacturing Plant | England |
| CMA International | Manufacturing Plant | Northern Ireland |
| Bank One International | Headquarters | Wales |
| International Rectifier Corp. | Manufacturing Plant | Wales |
| Air France | Call Center | England |
Keith Walker is a London-based freelance writer.
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