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U.S. Exporters Feel Favorable Trade Winds
A dock in Hong Kong. Including Hong Kong, China is the No. 3 U.S. export market.
(By Paul Hilton -- Bloomberg News)
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Nearly all of that is gone now, the lower-skilled, labor-intensive work having shifted mostly to Asia. The past two decades have seen the arrival of retail shops and chain restaurants to serve the residents of new condominium developments. Surviving manufacturers have gone high-tech, supplemented by dozens of new entrants: firms specializing in medical technology, electronic commerce, software and telecommunications equipment. The town of 60,000 people -- nearly 10 times its population in 1970 -- boasts 50,000 full-time jobs.
"There's an international wage rate for turning a screwdriver, and we're never going to be able to compete in that market," said Scott H. Neal, the city manager. "But the high-technology, high-intellectual-capital, design-and-testing work is going to be done here."
Over the past two years, MTS, one of the world's largest makers of testing equipment, has added about 100 workers in Eden Prairie, bringing its local workforce to 900 and its worldwide force to 1,600. About half the new hires are engineers focused on researching and developing new products, work done entirely in Minnesota. Last year, MTS recorded sales of almost $400 million, up from $248 million a decade ago. Exports have climbed from 44 percent of all sales in 2000 to about 60 percent today. Without that jump, the company would have spiraled down with the U.S. auto industry: Twenty years ago, sales to the Big Three automakers made up 40 percent of MTS's revenue, and as recently as 2000, those accounts were worth $30 million a year, said Emery, the chief executive. By 2002, U.S. automakers' purchases of MTS gear had fallen to about $3 million.
"They have just disappeared as customers," Emery said.
Which explains why MTS is beefing up its sales force in China and why Jeffrey P. Nelson, who heads an MTS design team focused on automotive products, goes there about every six weeks.
As MTS increases its sales, it is expanding business for local firms that supply materials, such as Micro Dynamics, which makes circuit boards. It is leaning more heavily on freight companies, including the logistics firm C.H. Robinson Worldwide, whose global headquarters is less than a mile away.
It arranges shipping for exporters and importers from Beijing to Buenos Aires to Boston, employing 1,200 people in Eden Prairie and more than 6,700 worldwide -- better than double its workforce of five years ago.
The company has set up more than 70 offices overseas, and it envisions further expansion. But the 300 technicians who oversee the system that tracks its shipments are here.
"Minnesota is now part of a global economy like everybody else," said the company's chief executive, John P. Wiehoff. "As long as Robinson is headquartered in Minnesota, growth in other parts of the world will generate jobs here."
Henderson reported from Washington.
