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Published: Friday, 6/20/2014 - Updated: 4 months ago

Stalwart Toledo leads in foreign investments

Italy has made a big impact on city’s economy

BY TYREL LINKHORN
BLADE BUSINESS WRITER
Chrysler Group LLC Chairman and CEO Sergio Marchionne saw a demonstration in the paint shop inside Chrysler Group’s Toledo Assembly Complex when he visited the plant last summer to celebrate the production launch of the all-new Jeep Cherokee. Chrysler Group LLC Chairman and CEO Sergio Marchionne saw a demonstration in the paint shop inside Chrysler Group’s Toledo Assembly Complex when he visited the plant last summer to celebrate the production launch of the all-new Jeep Cherokee.
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Fiat SpA’s purchase of Chrysler Group LLC has helped put Toledo near the top of a list that examines the share of jobs in the country’s largest metro regions that are provided by foreign-owned companies.

The report, which comes from the Brookings Institution, found 17,270 jobs in the four-county area that makes up metro Toledo are at firms whose headquarters and owners are not in the United States.

That represents 6.8 percent of the area’s private employment, the 13th highest percentage among the nation’s 100 biggest cities. Toledo’s share was the highest in Ohio. Youngstown, at 3.9 percent, had the lowest share in Ohio. Brookings said 5 percent of Ohio’s private sector jobs are at foreign-owned businesses. Thanks to Honda Motor Company, Ltd.’‍s sizable employment in central Ohio, the highest share of those jobs were from Japanese-based companies.

Nationally, there are about 5.6 million jobs in foreign-owned establishments, representing about 5 percent of the nation’s total private employment.

The figures are from 2011 — but Brookings said it gets its numbers from the federal government, and more current statistics weren’t available. The Washington-based think tank said its study is the first to look at foreign-owned businesses on a metro-area level.

Kenan Fikri, a research analyst at Brookings, said foreign-direct investment is being viewed by many as increasingly important since the great recession.

“The Chrysler Fiat example illustrates some of the benefits of foreign-direct investment very starkly,” Mr. Fikri said. “That was capital that was outside the U.S. economy. It preserved jobs in a company that U.S. banks and other U.S. companies weren’t willing to invest in and might have otherwise gone under.”

Fiat, based in Turin, Italy, became a major shareholder in Chrysler as the U.S. automaker emerged from bankruptcy reorganization in 2009. The company gradually increased its ownership stake, becoming majority owner in 2011. Fiat took full ownership of Chrysler earlier this year.

A Rubicon, left, and a 2014 Jeep Cherokee are on display at the Chrysler Toledo Assembly Complex in Toledo. A Rubicon, left, and a 2014 Jeep Cherokee are on display at the Chrysler Toledo Assembly Complex in Toledo.
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Thanks to the Chrysler plants in metro Toledo, Italy easily accounts for the largest share of the area’s foreign-owned establishment jobs. Brookings said 39 percent of jobs in foreign-owned establishments come from firms based in Italy. Canada was second, with 12 percent, followed by France at 11 percent. England and Japan both had 9 percent.

Paul Zito, vice president of international development for the Regional Growth Partnership, said his group counts more than 150 foreign-owned establishments employing more than 22,500 people in the 17-county region the RGP covers.

80fa3ea8-0adb-4a8c-876f-268f2fb0573c“The Toledo area is very dependent on foreign investment. Twenty-two thousand jobs in a population of under two million people, that’s a good chunk of the workforce,” he said.

The RGP’s data didn’t track retail jobs, such as someone who works at a T-Mobile US Inc. kiosk in the mall. T-Mobile’s parent company is based in Germany. While Brookings said those jobs don’t have a large effect on the overall economy, they do track them.

Mr. Zito said that if Brookings’ data were more current, they likely would show higher numbers. The RGP has counted more than 3,000 jobs from foreign-direct investment in the last 18 months or so. Many of those are at the Toledo Assembly complex, where more workers have been hired to build Jeeps.

Nearly three-quarters of those 17,270 jobs counted by Brookings are in the manufacturing sector. Mr. Fikri said it’s common for foreign firms to invest in an area’s strengths. In Toledo’s case that’s manufacturing — particularly in the automotive and glass sectors.

Beyond the jobs, Brookings said foreign investment can boost an economy with new technology and management practices that can take root and spread.

“There’s a renewed sense that global engagement is a requirement, not just to get ahead in today’s economy, but also to make sure you don’t fall behind,” Mr. Fikri said.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.



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