International Engagement How American Workers and Businesses Succeed in the Worldwide Economy Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading U.S. companies with over $4.5 trillion in annual revenues and nearly 10 million employees. Member companies comprise nearly a third of the total value of the U.S. stock market and represent more than 40 percent of all corporate income taxes paid to the federal government. Collectively, they returned more than $114 billion in dividends to shareholders and the economy in 2006.
Roundtable companies give more than $7 billion a year in combined charitable contributions, representing nearly 60 percent of total corporate giving. They are technology innovation leaders, with $90 billion in annual research and development (R&D) spending — nearly half of the total private R&D spending in the U.S.
For more information, please contact:
Brigitte Schmidt Gwyn Senior Director, Congressional Relations 1717 Rhode Island Avenue, NW Suite 800 Washington, DC 20036 Telephone 202.496.3263 Facsimile 202.466.3509 [email protected]
Copyright © 2008 by Business Roundtable International Engagement How American Workers and Businesses Succeed in the Worldwide Economy
September 2008
Table of Contents
ABB Inc.______1 Abbott ______3 ACE Limited______5 Aetna______8 Alcoa Inc.______10 A. O. Smith Corporation______13 The Boeing Company______15 The Brink’s Company______17 CA______19 Case New Holland (CNH)______20 Caterpillar Inc.______22 Chevron______24 CIGNA Corporation______26 Con-way Inc.______29 Cummins Inc.______32 The Dow Chemical Company______34 Duke Energy______36 DuPont______38 Eastman Kodak Company______40 Eaton Corporation______43 Exxon Mobil Corporation______45 FedEx Corporation______48 General Electric______51 General Mills______53 General Motors Corporation______55 Harman International Industries Inc.______57 The Hartford Financial Services Group, Inc.______59 Honeywell______61 IBM Corporation______63 International Paper______66 John Deere______68
Business Roundtable Table of Contents (continued)
Liberty Mutual Group______71 MassMutual Financial Group______73 MasterCard Worldwide______75 The McGraw-Hill Companies______78 Merck______80 MetLife______83 Navistar______84 New York Life______86 Office Depot Inc.______88 Pfizer Inc______90 Praxair, Inc.______93 Principal Financial Group______95 The Procter & Gamble Company______98 Prudential Financial______100 SAS Institute______101 Schering-Plough Corp.______104 Siemens Corporation______106 Texas Instruments______109 Tyco International______111 United Technologies Corporation______113 Verizon Communications Inc.______115 Xerox Corporation______117 YRC Worldwide______119 “Globalization for us means appreciating the fluidity of markets around the world. Today’s manufacturing center is tomorrow’s engineering center, and we must be able to see the full potential of regions like China both as market and supplier. At the same time, we are firmly committed to growing our presence in the United States, which has the largest installed base of power and automation equipment in the world.”
— Enrique Santacana, President and CEO, ABB North America
ABB Is Both American and International
◗◗ ABB operates 30 manufacturing sites in the United States and is based in Zurich, Switzerland.
◗◗ ABB exports $500 million through its U.S. operations and is a critical part of the ABB Group’s financial success around the world. International markets are an important part of ABB’s growth in the United States.
◗◗ ABB employs nearly 9,000 workers in the United States, and it is making significant investments to expand the size of its employee base there.
◗◗ ABB benefits the U.S. economy through its powerful presence in the United States, its investments in the employee base and payroll, and its ability to export from the United States.
Access to Non-U.S. Markets Is Critical to the Company’s Success
◗◗ ABB Group’s U.S. operation accounts for $500 million in exports. The majority of ABB’s exports come from outside the company’s headquarters in Zurich, Switzerland. ABB operates in more than 100 countries.
◗◗ ABB Group reported on February 14, 2007, that orders in Asia more than doubled in the fourth quarter of 2007 compared to the same period a year earlier, due in large measure to an order for a 2,000-kilometer ultra-high-voltage power link in China.
◗◗ ABB is seeing strong growth in all its markets, particularly in the United States and Europe, where there is a large installed industry base, and in emerging markets such as Brazil, India, China and the Middle East.
◗◗ China is the single largest market in terms of revenue, followed by the United States.
◗◗ The company’s strong presence overseas combined with its global resources have helped ABB maintain strong market positions in its five core businesses — Power Products, Power Systems, Automation Products, Process Automation and Robotics.
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1 Living Up to International Responsibilities
◗◗ One of ABB’s key activities in North America is its expansion in México in San Luis Potosí. The number of personnel at that facility will go from zero to approximately 1,000 during the next two years. Employees have been hired and trained, production processes and product certifications have begun, and the transition toward full production mode is under way. The first products are expected to begin shipping later this quarter.
◗◗ ABB is committed to economic and social development, a healthy environment, and a stable society. The company is focused on ethics, compliance and sustainability. One hundred percent of employees in the United States have completed mandatory Code of Conduct certification training as well as e-learning courses on ethics, antitrust and business practices.
◗◗ Through its variable speed drives, large ship propulsion systems, turbochargers and electric power systems, ABB is helping customers reduce energy usage and, subsequently, greenhouse gas emissions.
◗◗ ABB has established the ABB Foundation to channel employee contributions to worthy causes in the communities where ABB employees work and live in the United States. The company matches employee contributions on a one-to-one basis and has given away more than $500,000.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
2 “There’s one fundamental fact that everyone at Abbott understands: The purpose of our company is to improve lives. That’s abundantly clear when your business is creating new and better medical technologies. And that knowledge is a source of pride and responsibility to all of us around the world.”
— Miles D. White, Chairman and Chief Executive Officer, Abbott
Abbott Is a Global Health Care Company “Turning Science into Caring”
◗◗ Abbott is a global, broad-based health care company devoted to discovering new medicines, new technologies and new ways to manage health. The company’s products span the continuum of care, from nutritional products and laboratory diagnostics to medical devices and pharmaceutical therapies.
◗◗ Throughout our 120-year history, Abbott people have been driven by a constant goal: to advance medical science to help people live healthier lives. It’s part of our heritage, and it continues to drive our work. Today, more than 68,000 Abbott employees around the world share the passion for “Turning Science into Caring.”
Abbott Serves Customers around the World
◗◗ Abbott has sales, manufacturing, research and development, and distribution facilities in the United States and around the world, close to where our customers need us to be.
◗◗ Abbott expanded beyond the United States as early as 1910, opening branches and operations in Canada, Europe and India. Today, Abbott has more than 100 facilities worldwide and markets products in more than 130 countries.
◗◗ In 2007, for the first time, Abbott revenues outside the United States exceeded national sales. U.S. sales were $12.9 billion, while international sales reached $13 billion.
◗◗ While Abbott expects the United States to remain an important market for many years to come, we also recognize that, with the rise of major new market economies, such as China, India, Russia and Latin America, the rest of the world will play a much larger role than ever before in the company’s future growth.
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3 Abbott Businesses Are Expanding in China
◗◗ China presents a tremendous growth opportunity for all of Abbott international businesses. With 1.3 billion people — or one-fifth of the world’s total population — China has a consumer middle class that annually grows faster than the total population of most other countries.
◗◗ Abbott opened its first office in Beijing in 1986. Today, Abbott has offices in the cities of Shanghai, Beijing, Guangzhou and Shenzhen and has more than 840 employees. The company’s largest business in China is nutrition, with sales representatives in more than 90 cities. A key advantage in this market is Abbott’s superior reputation in science and quality.
◗◗ The pharmaceutical market in China is predicted to be the seventh largest in the world by 2010. Abbott’s aggressive growth plan includes significantly increasing our presence with salesforce expansion and new product launches.
Global Citizenship Is Part of Who We Are
◗◗ Through Abbott Global AIDS Care programs, Abbott and the Abbott Fund have invested more than $100 million to advance HIV testing, treatment and support services to improve the lives of people affected by HIV/AIDS in developing countries.
◗◗ In 2007, Abbott was named to the Dow Jones Sustainability World and North American Indexes for the third consecutive year. Abbott remains a leader in economic, social and environmental performance — with the company and the Abbott Fund contributing more than $385 million in grants and products to help improve the lives of millions of people around the world.
◗◗ Abbott became the first Fortune 500 company to go carbon neutral with its fleet of sales vehicles. Abbott also improved operations to help protect the environment, including reducing carbon dioxide emissions with plans to reduce total emissions by 30 percent by 2011. Abbott continues to work toward 2010 goals to reduce water usage, waste, employee injuries and commercial vehicle fleet accidents to help generate the greatest environmental, health and safety benefits.
To learn more about Abbott, please visit www.abbott.com.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
4 “China must continue to open its markets to U.S. investment and abide by its trade commitments. But we must be very careful not to destroy a major contributor to our high standard of living: our openness to foreign trade. China’s participation in that trade is not a threat — it is among our best hopes for future prosperity.”
— Evan G. Greenberg, Chairman and CEO, ACE Limited, China Trade Magazine, May 2007
ACE Limited Is a Leading Commercial Property and Casualty Insurer with International Reach
◗◗ The ACE Group of Companies is an international leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, a component of the Standard & Poor’s 500 stock index, the ACE Group of Companies conducts its business on a worldwide basis and has Financial Strength ratings of A+ from both Standard & Poor’s and A.M. Best Company.
◗◗ ACE employs approximately 10,000 people in more than 50 countries around the world (about half of them in the United States) and conducts business with customers in more than 150 countries.
◗◗ ACE’s diverse clients include multinational corporations with complex property and casualty exposures, local businesses in countries throughout the world, and individuals purchasing personal accident and supplemental health coverage and life insurance.
International Markets Enhance ACE’s Financial Strength
◗◗ ACE’s earnings are diversified by geography and product category, with more than half of the company’s premium and income generated from outside the United States.
◗◗ In 2007, ACE opened new offices in Vietnam, Hungary, the Czech Republic, Peru, Bahrain and China.
◗◗ ACE’s fastest-growing markets are outside the United States. In Asia Pacific and Latin America, for example, the company’s accident and health insurance business is generating high double- digit growth annually.
◗◗ ACE’s U.S. employees depend on the company’s significant business expansion and success in international markets, and they support business activities throughout the ACE worldwide network. ACE shareholders also depend on the company’s successful performance in international markets.
◗◗ ACE’s ability to sustain and expand domestic employment depends on its access to foreign markets, including China. A broad base of international diversification allows the company to better prepare for, and negotiate in, the business cycles in the United States and throughout the world.
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5 China Is a Significant Growth Market for ACE
◗◗ ACE has a strategic investment in Beijing-based Huatai Insurance Company. The investment has allowed the companies to jointly develop property and casualty and life insurance products to deliver nationally in China and to establish a framework for expansion into other key financial services such as asset management. Huatai’s property and casualty company has been profitable every year since ACE’s investment five years ago.
◗◗ ACE Tempest Re Group — ACE’s reinsurance division — in 2007 established an underwriting presence at Lloyd’s Reinsurance Company (China) Limited — Lloyd’s reinsurance company based in Shanghai. Through Lloyd’s in China, ACE Tempest Re offers all lines of property and casualty reinsurance to the Chinese market.
◗◗ ESIS Inc. — the risk management services business of ACE USA — in 2007 launched ACE Environmental Health and Safety Consulting (Shanghai) Company, Ltd., which offers consulting services and products designed to identify and control risk across international and local organizations conducting business in China.
Developing China’s Insurance Market Helps Drive Financial Sector Modernization
◗◗ Insurance plays a key role in a developing economy by mitigating and managing risk for young, growing private companies and by protecting assets for a rising middle class that has begun accumulating wealth.
◗◗ International insurance companies bring their industry experience and best operating practices to the Chinese market, thereby helping the domestic industry develop.
◗◗ A modernized, well-regulated financial sector allocates capital and credit more efficiently, provides jobs, and further spurs China’s economic growth.
Living Up to International Responsibility
◗◗ Integrity First: The ACE Code of Conduct guides the business conduct of ACE employees around the world and sets an ethical benchmark for all of the company’s activities. All employees must annually review the code and confirm that they have read and understood its guidelines.
◗◗ ACE supports the communities around the world in which its employees live and work through its established ACE Foundations and through company-sponsored volunteer initiatives. Examples include the following:
yy Working with the Beijing Youth Development Foundation and China’s “Project Hope,” ACE helped to build and equip a new school for a rural community. More than 230 children from a roughly 5,800 square-mile area now have the benefit of a modern school building, dormitory, computers, library and laboratory.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
6 yy ACE also provided funding to help subsidize the school’s operating budget for the next six years. ACE supports an orphanage for young girls in China through the Half the Sky program, organized in 1988 to provide better living environments for orphaned Chinese girls.
yy Other ACE-supported programs include Casa Hope’s infantile cancer treatment center in Brazil, Seoul National University Hospital’s traffic safety program for children and the International Red Cross’ life-saving work increasing awareness of HIV/AIDS among young people in India’s Northern State of Uttar Pradesh.
◗◗ ACE believes that all of us, as individuals and corporations, have a responsibility to the planet to be good stewards of the environment. As a leading insurer and reinsurer, ACE is exploring innovative ways to engage its policyholders and other constituencies in managing climate change risk. ACE offers products and services that address environmental risk, and in its risk management modeling it takes environmental concerns into consideration. ACE also has conducted an audit of its greenhouse gas emissions with the goal of establishing its own reduction targets, and it has launched a program to engage its employees in energy conservation activities at offices around the world.
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7 “It was very clear that globalization is a very important factor of [Aetna customers’] expansion and growth and that for us to continue to meet their needs we had to follow them around the globe to offer benefits to their employees.”
— Ron Williams, Chairman and CEO, Aetna, Dow Jones, Oct.12, 2007
Aetna — American and International
◗◗ Aetna has been a trusted U.S. brand for more than 150 years.
◗◗ Today, Aetna employs about 35,000 workers in the United States in almost every state in the country.
◗◗ As a leading diversified health care benefits company, Aetna is providing comprehensive benefits coverage for its expatriate members working and/or traveling in more than 100 countries. Aetna also provides integrated health management services to local populations in the United Kingdom and is exploring similar public-private partnerships in other geographies.
Accessing Foreign Health Care Markets Is Critical to Aetna’s Customers and the Company’s Long-Term Competitive Success
◗◗ Aetna’s commitment to international operations began more than four decades ago. Starting in the 1960s, Aetna entered the international insurance markets, serving individual and group customers around the globe.
◗◗ Aetna’s U.S. customers increasingly require international service capability. Many of Aetna’s clients are expanding into foreign markets, and Aetna is committed to supporting their business objectives of attracting and retaining top talent around the globe by offering best- in-class health benefits.
◗◗ Health care needs are increasing around the world, driven by aging populations, increased incidents of chronic disease, escalating costs, and limited access to primary and specialty care. Aetna’s expertise in risk identification, medical management, product design and health information technology provides a competitive edge in these foreign markets.
◗◗ A global footprint helps make Aetna a stronger, more diversified company. Its current international business is supported by more than 600 Aetna employees.
◗◗ Participating in international markets helps Aetna better understand and serve the unique needs of its diverse U.S. customers, including Hispanics, Asian Americans and African Americans.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
8 China’s Health Care Market Presents a Significant Growth Opportunity for Aetna
◗◗ Emerging markets like China’s and India’s are rapidly evolving their health care delivery and financing systems to meet the needs of their growing middle classes. Significant prospects exist for insurance products and health management services in these emerging markets.
◗◗ With more than 62 percent of total health care expenditures coming from out-of-pocket and only 3 percent of the population being covered by supplementary private health insurance, improving the public and private health infrastructure has become an imperative for China. There are significant long-term growth opportunities for companies that can provide value- added health-related services. Aetna’s existing business in China has experienced growth and positive returns. It will continue to look for opportunities to further support the market.
Aetna Is Living Up to Its Corporate Social Responsibilities
◗◗ Aetna advocates ethical business practices around the world. The company has dedicated full-time compliance officers, and it conducts regular business conduct and integrity training programs to ensure that the company’s business practices are compliant with all U.S. and local regulations and laws pertaining to international business practice, including the U.S. Foreign Corrupt Practices Act.
◗◗ Aetna actively contributes to the communities in which it works. In 2006, for instance, Aetna and the Aetna Foundation contributed more than $22 million in grants and sponsorships in communities across the United States. More than 50 percent of the grants went to health-related organizations and events, while others were spent on volunteerism, civic and community initiatives, art and culture activities, and various educational and diversity programs.
◗◗ For example, in 2006, Aetna and the Aetna Foundation contributed more than $1.6 million to organizations addressing obesity and related health issues by encouraging better nutrition, exercise and other positive actions. Funds were distributed with a special emphasis on assisting those whose race or ethnicity hinders their access to quality health care.
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9 “We are proud of the global company we have become, the long-term thinking applied to our worldwide projects, the commitment to our values and the courage to re-engineer ourselves to meet the needs of a changing world.”
— Alain J.P. Belda, Chairman and CEO, Alcoa, Oct. 3, 2006
Alcoa Is an International Employer with a Presence Around the World
◗◗ Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa’s businesses to customers. In addition to aluminum products and components including flat-rolled products, hard alloy extrusions, and forgings, Alcoa also markets Alcoa® wheels, fastening systems, precision and investment castings, and building systems.
◗◗ Alcoa has been in the business of producing aluminum for more than 120 years, expanding into the international marketplace in the 1920s.
◗◗ Currently, Alcoa has approximately 97,000 employees in 34 countries.
International Operations Are an Important Part of a U.S. Company
◗◗ To produce aluminum, there needs to be access to alumina (bauxite) and power.
◗◗ Making aluminum is an energy-intensive process. Aluminum plants need to be located in areas where there are competitive costs for power. In many established markets, such as the United States and Europe, power supply is costly or difficult to secure.
◗◗ More than 40 percent of Alcoa’s revenues are from outside of the United States, and this number continues to grow.
◗◗ The projected primary aluminum consumption growth rates around the world are much higher than in the United States. Alcoa needs to be close to the customers who need its products.
◗◗ Still, the United States remains the largest geographic market by revenues.
Brazil Is an Integral Part of Alcoa’s Future
◗◗ Alcoa’s roots in Brazil began in 1965, growing to 6,000 employees today.
◗◗ Brazil holds the world’s third-largest bauxite reserves and represents the fourth- and sixth- most-important producer, respectively, of alumina and primary aluminum.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
10 ◗◗ Hydroelectric power is one of Brazil’s key energy assets. The country has one of the world’s most-significant installed hydropower capacity and a remaining capacity.
◗◗ Brazil is the fifth-largest country in the world in area, and it has the ninth-largest economy in purchasing power parity terms. In 2008, the projected primary aluminum consumption growth rate for Latin America is 10.1 percent. Brazil alone accounts for 6.1 percent of that.
◗◗ In recent years, Alcoa has invested more than US$2 billion on significant growth initiatives in Brazil, including the Juruti Bauxite Mine Project, the expansion of the São Luis alumina refinery, modernization of the Poços de Caldas smelter, and expansion of the Itapissuma foil mill and continuation of the investment program in power generation.
◗◗ Alcoa Latin America is responsible for roughly 6 percent of Alcoa Inc.’s global net revenue and 10 percent of the company’s global after-tax operating income. Brazil accounts for 90 percent of the region’s revenues.
◗◗ Alcoa’s safety rates in Latin America are lower than the Alcoa average.
yy Total recordable rate: Latin America = 0.47 vs. Alcoa average = 1.2
yy Lost work-day rate: Latin America = 0.07 vs. Alcoa average = 0.09
Living Up to Our Social Responsibilities
◗◗ Alcoa in Brazil leads in practicing environmental and social responsibility, including:
yy Revegetation of mined areas in Poços de Caldas (subject of Harvard case studies and the model on which legislation was designed in Brazil),
yy The environmental impact study of Alumar (the first of its kind and developed before it became obligatory) and
yy The development of volunteerism as the forefront of corporate responsibility.
◗◗ Alcoa has received many recognitions and awards, including the following:
yy Alcoa was named one of the top-most sustainable corporations in the world four years in a row at the World Economic Forum in Davos, Switzerland.
yy Alcoa was listed as one of the 10 best companies to work for in Latin America by the Great Place to Work Institute.
yy Alcoa was recognized in the 2006 Good Corporate Citizenship Guide, published by Brazilian business magazine Exame, in the categories of “Values and Transparency” and “Government and Society.”
yy Alcoa received the National Quality Award (equivalent to the Malcolm Baldridge Award in the United States), presented by the president of the Poços de Caldas (Brazil) plant.
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11 yy Alcoa was recognized as “Best in Class” in its approach to climate change disclosure in a report released by the Carbon Disclosure Project (CDP), a coalition of more than 315 worldwide investors with more than $41 trillion in assets. The CDP report is a survey of the responses of Financial Times Global 500 corporations on climate change. Alcoa also was included in the Climate Disclosure Leadership Index, a prestigious honor roll for international corporations addressing the challenges of climate change.
yy Alcoa was named one of the World’s Most Ethical Companies by Ethisphere magazine, a national publication dedicated to illuminating the important correlation between ethics and profit.
yy Alcoa was selected as a component of the Dow Jones Sustainability Indexes for the sixth consecutive year.
◗◗ Because of its success in the United States and around the world, Alcoa and the Alcoa Foundation can afford to invest in the communities in which Alcoa operates.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
12 “Our vision — and it’s an ambitious one — is global market leadership, delivering outstanding value to our customers around the world. And, at the same time, delivering above-average returns to our shareholders.”
— Paul W. Jones, Chairman and CEO, A. O. Smith, January 2006
A. O. Smith: An International Leader in Comfort and Convenience
◗◗ A. O. Smith is one of the world’s leading manufacturers of residential and commercial water heating equipment and a major manufacturer of electric motors for residential and commercial applications. A. O. Smith products provide comfort and convenience to millions of people around the world.
◗◗ Founded in 1874, today A. O. Smith employs 16,800 men and women worldwide and 4,900 in the United States.
◗◗ With 2007 sales of $2.3 billion, the company is an international leader in applying innovative technology and energy-efficient solutions to products marketed worldwide.
◗◗ A. O. Smith markets its products worldwide and has sales or distribution in more than 60 countries. The company currently has operations in the United States, Mexico, Canada, England, the Netherlands and China, and it supports a growing worldwide supply chain that is critical to its international competitiveness.
Access to International Markets Is Critical to A. O. Smith’s Long-Term Success
◗◗ A. O. Smith has had a presence in the European and Middle Eastern markets for more than 30 years, providing customers with an extensive line of commercial water heating products designed to comply with local standards.
◗◗ A. O. Smith understands the increased importance of access to international markets. Today, 24 percent of the company’s revenues come from foreign markets.
◗◗ As major customers grow outside the United States, A. O. Smith is positioned to serve them. For example, when Lowe’s® home improvement centers expanded into Canada earlier this year, A. O. Smith was able to supply Lowe’s water heater requirements from one of the company’s Canadian operations.
◗◗ A. O. Smith’s international operations support innovation and investment in the United States. The company has engineering centers of excellence in North America, Asia and Europe. These operations are fully integrated and share design data, performance test results and technical support. International engineering has allowed the company to accelerate its product development activities and has led to additional engineering investments in the United States.
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13 China Is an Important Market for A. O. Smith
◗◗ China’s growing economy and middle class have created a dynamic market for water heating products. The company expects the China residential water heater market to grow more than 6 percent this year.
◗◗ The China water heater market is highly competitive, made up of hundreds of companies. Haier, one of the world’s largest appliance manufacturers, holds the largest share of this market followed closely by A. O. Smith.
◗◗ A. O. Smith has positioned itself to compete and win in China, and it is now the second- largest residential water heater brand (as measured by market share). A. O. Smith is the only U.S. company with a sizable market presence in that country.
◗◗ Today, China represents the fastest-growing segment of A. O. Smith’s business, and sales in 2007 increased approximately 25 percent over the prior year to $146 million. China represents about 10 percent of A. O. Smith’s worldwide water heater sales and contributes attractive margins.
◗◗ One of the reasons for A. O. Smith’s success is tied to its design of an extensive line of water heating products specifically for Chinese consumers. To support that activity, the company opened a global engineering center in Nanjing in 2006. In addition to developing products for China, the global engineering center collaborates with the company’s water heater engineering functions in North America and Europe.
◗◗ The company’s electric motor presence in China has enabled the company to penetrate other international markets, most notably the commercial air conditioning markets in the Middle East and Europe.
Living Up to International Responsibilities
◗◗ A. O. Smith operates under one set of values worldwide, and it communicates its values and expectations for ethical business conduct to its employees around the globe.
◗◗ A. O. Smith is working to protect America’s homeland, and it was one of the first U.S. companies to participate in the U.S. Customs and Border Protection’s voluntary Customs-Trade Partnership Against Terrorism (C-TPAT) program in 2002. This program is designed to ensure the security of a company’s facilities, trucking fleet and supply chain. In 2007, the company received C-TPAT validation for all of its Mexican facilities.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
14 “We should embrace China’s rapid economic growth, not fear it. China’s growing middle class represents an unprecedented long-term opportunity for innovative, competitive nations like the United States.”
— Jim McNerney, Chairman, President and CEO, The Boeing Company, January 2008
The Boeing Company: An American Pioneer
◗◗ Boeing combines the strength of six pioneering American aerospace companies: Boeing Airplane Co.; Douglas Aircraft Co.; McDonnell Aircraft Corp.; North American Aviation, Inc.; and the aerospace divisions of Rockwell Int’l Corp. and Hughes Electronics Corp. These six companies, now Boeing, charted the course of aerospace history in the United States and the world. Boeing is proud of its rich American tradition of aerospace leadership and innovation.
◗◗ Today, Boeing is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. The company has customers in more than 90 countries around the world, and it is one of the largest U.S. exporters, measured by sales.
◗◗ Boeing employs more than 150,000 skilled workers across the United States — one of the most diverse, talented and innovative workforces anywhere. The company also leverages the talents of hundreds of thousands of employees working for its 22,000 American suppliers. More than 80 percent of Boeing’s supplier contracts are with U.S. companies.
◗◗ Boeing values its employees and invests heavily to help them achieve the knowledge and skills needed for the company — and for each of them individually — to succeed in today’s global environment. Last year Boeing paid more than $100 million in tuition and fees for 23,000 employees attending 900 universities and colleges around the world. More than 2,600 Boeing employees last year successfully completed their coursework and received college degrees, and nearly 6,000 Boeing managers participated in programs at the Boeing Leadership Center.
Boeing’s Market Is International
◗◗ Approximately 70 percent of Boeing’s commercial airplane revenue comes from customers outside the United States.
◗◗ To succeed in such an international market, Boeing must do more than sell its products and services to customers in other countries. Partnering with local companies is essential to Boeing’s long-term success overseas and to the continued success of its U.S. employees and suppliers.
◗◗ Although the North American market is large and important to Boeing, the biggest regional market for commercial airplanes over the next 20 years will be the Asia Pacific region. Rapidly growing economies in that region are driving annual growth rates for air travel at 6.5 percent, compared with 4.0 percent in North America and 4.2 percent in Europe.
◗◗ Boeing expects Asia Pacific airlines to account for more than one-third of the value of new airplane deliveries over the next 20 years — more than any other region.
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15 China Offers Enormous Opportunities for Boeing
◗◗ China is a dynamic market and the single largest market outside the United States for commercial airplanes.
◗◗ Air travel in China has been growing at an annual rate of 8.8 percent — faster than in any other country. Boeing estimates China’s domestic air travel market alone will grow nearly fivefold by 2026. To accommodate all that growth, China’s airlines will take delivery of an estimated 3,400 new airplanes over the next 20 years.
◗◗ The total value of those projected sales is an astounding $340 billion. The China market provides unprecedented opportunities for Boeing and the American employees and suppliers it supports.
◗◗ Boeing currently holds roughly 60 percent of the commercial airplane market in China. Its sales there and in other countries around the world contribute positively and significantly to America’s balance of trade.
Boeing Is Living Up to Its Social Responsibilities
◗◗ Boeing takes its corporate citizenship responsibilities seriously, both in the United States and in other countries around the world where it does business.
◗◗ Boeing and its employees, retirees and board members last year gave more than $90 million to organizations dedicated to education, health and human services, the environment, and the arts.
◗◗ Although most of Boeing’s giving is directed to the communities in the United States, where a vast majority of its employees live and work, the company has been increasingly involved in community programs in other countries. Among the many projects Boeing has supported in recent years are ones that brought clean water to rural villages in Africa; educated visually impaired children in western China; built libraries in India and Africa; and provided social services such as foster care to some of the poorest, most marginalized citizens of India.
◗◗ Boeing also has used its expertise in aviation to support safe, efficient travel globally. For example, Boeing helped China improve airline business practices and the safety of its air transportation system through an aggressive training program that has touched more than 37,000 Chinese aviation professionals since 1993. Boeing also helped to create the U.S.- China Aviation Cooperation Program, a joint government effort to improve safety and air traffic management in China.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
16 “Our global infrastructure gives us an important competitive advantage. As our customers expand into new markets throughout the world, we strategically posi- tion our network of expertise and advanced technology to support their growth and to meet their evolving needs for secure logistics services.”
— Michael T. Dan, Chairman of the Board, President and Chief Executive Officer, The Brink’s Company
Brink’s: A Worldwide Leader in Secure Logistics Solutions
◗◗ Since 1859, the security services provided by our Brink’s Inc. operations have evolved from a leading armored transportation carrier to a premier provider of secure transportation and logistics solutions around the world.
◗◗ Today, thousands of companies across the globe entrust Brink’s with the secure transportation and management of their most precious assets.
◗◗ With more than 9,100 vehicles, 800 facilities and 53,900 employees, Brink’s serves banks and financial institutions, retailers, government agencies, mints, jewelers, and other commercial operations in more than 50 countries.
◗◗ In 2007, the Brink’s organization reported revenues of $2.7 billion, 68 percent of which was generated by Brink’s international operations.
◗◗ In fiscal year 2007, $140 million was allocated to expanding the Brink’s network of distribution centers globally to enhance the company’s capacity to handle the complex logistics associated with the transport of large quantities of valuable items through multiple countries. Further expansion is planned for 2008.
Where There’s Risk, There’s Brink’s
◗◗ Brink’s specialized diamond and jewelry operation serves all of the major diamond and jewelry centers of the world.
◗◗ Brink’s manages nearly 72,000 ATM units worldwide for banks and other cash-dispensing operators.
◗◗ Brink’s serves cash-intensive retail businesses with proprietary cash management solutions that protect cash from theft, accelerate funds availability and enhance operations.
◗◗ Brink’s is the world’s largest provider of coin wrapping and processing services, handling more than 1.2 billion wraps per year in the United States alone.
◗◗ Brink’s growing e-Pago bill payment and collections business serves both corporate clients and end consumers throughout Latin America, creating convenience and efficiency in the manner in which people pay their household bills.
Business Roundtable | trade.businessroundtable.org
17 ◗◗ Every year, French airline companies and Airport Authorities entrust Brink’s France to inspect 16 million passengers, 26 million pieces of hand luggage, 14 million pieces of hold luggage and 11 million parcels.
◗◗ Brink’s Secure Data Solutions protect information assets, including data tapes and CD-ROMs, while in transit.
◗◗ Brink’s integrates traditional services with tailored solutions to meet customer needs, including expanded security offerings such as security consulting, alarm monitoring and guarding services, along with our core offerings.
International Partnerships Fuel Brink’s Global Growth
◗◗ Brink’s partnerships with package delivery/logistics providers in the international community deliver enhanced services at competitive prices.
◗◗ Brink’s, in conjunction with the Goldsmiths’ Company Assay Office London, offers a premier hallmarking facility within the secure premises of Brink’s Global Services at Heathrow Airport, United Kingdom.
◗◗ Brink’s partners with banks throughout the world to deliver new services to the banks and to their customers. For instance, one of Brink’s fastest-growing sources of revenue is check digitization software. The software allows users to create digital images of checks as they are accepted at the point of sale, thus reducing the cost of check clearing, reducing fraud and virtually eliminating the risk of theft.
Living Up to International Responsibilities
◗◗ The security business is inherently dangerous. Wherever we operate, our No. 1 priority is the safety of our people, and we are unrelenting in our pursuit of processes, vehicles, equipment and training to protect our employees and our customers.
◗◗ Brink’s international leadership is founded on a heritage of trust and upholds its core values of trust, integrity, respect, safety, quality and innovation throughout every aspect of its operations, in every office and in every country.
◗◗ Brink’s fosters an environment of diversity throughout its international operations, supporting and encouraging collaboration, information sharing and communication across borders.
◗◗ Brink’s supports the international community at the local level with volunteer resources, donations and services.
◗◗ Through its support of the Global Business Coalition on HIV/AIDS, Brink’s lends its leadership to the important worldwide effort to eradicate the AIDS virus.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
18 CA Is a U.S.-Based Information Technology Software Provider with Worldwide Operations
◗◗ CA, one of the world’s leading independent enterprise management software providers, unifies and simplifies complex information technology management across the enterprise for greater business results. CA helps customers effectively govern, manage and secure their IT systems.
◗◗ CA serves the majority of the Fortune® 1000 companies, as well as government organizations, educational institutions and thousands of other companies in diverse industries worldwide.
◗◗ Founded in 1976, CA has headquarters in Islandia, NY, and operates around the world.
CA’s International Business Supports U.S. Jobs
◗◗ With reported fiscal year 2007 revenues of $3.94 billion, CA serves customers in more than 140 countries. Because IT markets are growing most rapidly outside the United States, more than 40 percent of CA’s revenue comes from abroad.
◗◗ CA employs more than 14,000 workers worldwide, including 7,500 in the United States.
◗◗ CA employs engineers in the United States that develop software products that are sold in 140 countries. CA’s continued ability to expand its business in overseas markets enables it to sustain its domestic workforce of highly educated, highly skilled workers.
◗◗ Some of CA’s largest business concentrations outside the United States are in Brazil, France, Germany, India, Italy and the United Kingdom.
◗◗ However, the United States remains CA’s largest market, and CA continues to invest heavily in the United States. CA spends $1 of every $5 of revenue on R&D spending, with 80 percent of the R&D occurring in the United States.
CA Fulfills Its Social Responsibilities to Its Workers and Communities Worldwide
◗◗ CA is committed to worker development and educational growth and learning. CA assists its workers with a generous per-person, per-calendar-year payment of tuition expenses. Additionally, CA provides world-class health care to its workers; the portion of health care expense not covered by CA but paid by a CA worker is determined using a graduated scale based on the worker’s salary.
◗◗ As a global company with a local commitment, CA supports organizations, programs and initiatives worldwide that enrich the lives and well-being of others in key focus areas — education and technology — for children and young people.
◗◗ Through CA’s Together IT program, CA shares its world-class software solutions and IT expertise with nonprofit organizations to help them strengthen their IT infrastructures and build organizational capacity to ultimately better serve their clients. Organizations participating in the program include the Boys and Girls Club of America and the National Center for Missing and Exploited Children.
Business Roundtable | trade.businessroundtable.org
19 “There is not a job within CNH that isn’t dependent on customers abroad buying what we make here in the United States. Competing in international markets is crucial to our employees, their families and our shareholders.”
— Harold Boyanovsky, Chief Executive Officer, Case New Holland, Jan. 30, 2008
CNH — A Truly International Company
◗◗ Case New Holland (CNH) is a world leader in the agricultural and construction equipment businesses.
◗◗ CNH’s bedrock is the United States and Europe, but its reach is international: CNH has 12 manufacturing plants and 10 R&D centers in the United States and operations around the world. CNH brands’ products are sold in 160 countries through more than 11,000 dealers and distributors.
◗◗ CNH relies on international markets. In 2007, more than 66 percent of CNH’s net sales occurred outside of North America.
CNH’s Worldwide Operations Support U.S. Jobs and Build CNH’s Financial Stability
◗◗ In 2007, CNH exported more than 40 percent of its domestic production of agriculture and construction equipment from the United States. Its biggest sales growth was outside the United States, in Latin America, where net sales increased by 86 percent in agricultural equipment and 58 percent in construction equipment.
◗◗ These exports and international operations help support CNH’s approximately 9,000 employees in the United States.
China Is an Important Part of CNH’s Success
◗◗ CNH has been present in China for nearly 100 years with the first tractor sold to China, the earliest agricultural equipment branch in China, the first financial support for Chinese agricultural scholars to study in the United States in the 1940s, and the sale of the first precision farming technology and high horsepower four-wheel drive tractors.
◗◗ China continues to be a critical part of CNH’s financial success. In 2007, CNH’s China revenues were more than $100 million.
◗◗ The Chinese market provides important opportunities for CNH and its U.S. employees. CNH has increased its exports from the United States to China by more than 100 percent since 2005, and it intends to increase revenue in 2008 by continuing to grow sales in that market.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
20 Living Up to International Responsibilities
◗◗ CNH is committed to preparing workers to be successful in an international environment. CNH spends approximately $500 per U.S. employee annually in employee training.
◗◗ CNH has an Education Tuition Reimbursement Program for U.S. employees. Upon successful completion of approved coursework, employees are eligible for 100 percent reimbursement of tuition and lab fees, up to $7,500 per calendar year.
◗◗ CNH is an industry leader in supporting environmentally efficient agricultural and construction equipment. New Holland Agricultural Equipment was the first agricultural equipment manufacturer to support the use of B20 biodiesel and B100 biodiesel in its agricultural equipment engines. New Holland Construction Equipment’s hybrid seven-ton class crawler excavator, which reduces emissions and fuel consumption, was the first of its kind in the North American market.
◗◗ CNH’s Case IH Agricultural Equipment brand also has implemented environmentally conscious practices into its business strategy — including the use of soy-based plastic for combine and tractor panels, educating dealers and farmers on how to get the best results with biodiesel fuels, and equipping field reps with red E85 flex fuel pickup trucks.
◗◗ CNH gives back to the communities where it works. The efforts of Case Construction Equipment, for instance, successfully ensured that the local population of Pirapora (MG), Brazil, does not run the risk of water shortage anymore — their “Live Spring Project” set the course of the São Francisco River back to its normal flow.
◗◗ Nearly 80 percent of CNH’s U.S. employees participate in the company’s United Way campaign.
◗◗ CNH’s employee trade education is driven by the award-winning Web site — www.cnhtrade. com — which is a user-friendly avenue for CNH’s employees and family members to gain knowledge and awareness about the international economy. The Web site provides a virtual toolbox that teaches about the importance of international trade using fun online games and facts and is a best practice for U.S.-based exporters.
Business Roundtable | trade.businessroundtable.org
21 “We have discovered that competing against the best international competition makes us a better company. By expanding globally, we have maintained our ability to grow.”
— Jim Owens, Chairman and CEO, Caterpillar, March 22, 2006
Caterpillar’s Business Is International
◗◗ Caterpillar is an international company with American roots, bringing together technologies, know-how and people from around the world to maintain its leadership and compete successfully. Caterpillar manufactures machines and engines in every geographic region of the world, with operations in 50 countries.
◗◗ In 2007, Caterpillar exported nearly $12.7 billion worth of construction, mining and earthmoving equipment, diesel engines, and gas turbines from the United States to nearly 200 countries and territories around the world, a 20 percent increase from 2006.
◗◗ Sales and revenues in 2007 totaled $45 billion. Nearly two-thirds of sales (63 percent) occurred outside the United States.
International Operations Support U.S. Jobs and Caterpillar’s Strength as a Company
◗◗ Exports from the United States help provide jobs for tens of thousands of Caterpillar and supplier employees. Sixty percent of product manufactured in Caterpillar’s Decatur, IL, facility was exported in 2007, along with 46 percent from East Peoria, IL, and 32 percent from Aurora, IL.
◗◗ In all, Caterpillar employs about 50,000 people in the United States.
◗◗ In 2007, Caterpillar’s biggest growth was in Europe, Africa, the Middle East and the Commonwealth of Independent States, where sales increased by 34 percent. Sales in Asia Pacific were up 28 percent, and sales to the Latin America region increased by 18 percent.
◗◗ Caterpillar’s international business helps ensure that even when U.S. sales are weak, the company can continue to grow. In the second quarter of 2008, sales and revenues and profit per share were up 20 and 40 percent, respectively, over the second quarter of 2007, despite just a 7 percent increase in sales and revenues in North America.
China Is an Integral Part of Caterpillar’s International Success
◗◗ China sales of Caterpillar equipment — made in the United States, China and other parts of the world — reached almost $1.5 billion in 2007. Caterpillar plans to continue to grow its operations in China.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
22 ◗◗ Caterpillar exports to China about four times as much as it imports from China. Since 2002, Caterpillar exports to China have increased by nearly 200 percent. During that same time period, Caterpillar has increased employment in the United States by 14,000. Today, China is one of Caterpillar’s top five U.S. export markets.
◗◗ Caterpillar sells China cutting-edge products that are the result of U.S. innovation. For instance, Caterpillar sells large generator sets made in Lafayette, IN, to coal mines in China to convert coal methane gas into clean electricity. Traditionally, this gas has been burned or vented into the atmosphere. By using these highly sophisticated generator sets, Caterpillar customers in China improve mine safety, generate power for the grid from a former waste product and reduce greenhouse gas emissions.
Living Up to International Responsibilities
◗◗ Caterpillar is committed to preparing its workers for a competitive economy. Each year, Caterpillar spends almost $900 per employee on training and development activities through Cat University.
◗◗ Caterpillar is committed to safety in all its manufacturing locations, for all its products. For instance, the Caterpillar Xuzhou factory in China has one of the company’s best safety performance records.
◗◗ Caterpillar is committed to sustainable development. The company has invested more than $2 billion over the past 10 years developing cleaner products and solutions that dramatically reduce diesel engine and gas turbine emissions; substantially grown its remanufacturing business; and pursued use of alternative fuels such as landfill gas, coal seam methane and digester gas for distributed power generation. Caterpillar also is the lead corporate donor for The Nature Conservancy’s Great Rivers Partnership project, which is supporting conservation of China’s Yangtze River, along with other large river systems worldwide.
Business Roundtable | trade.businessroundtable.org
23 Chevron: A Global Energy Company with Strong Roots in the United States
◗◗ Chevron is the second-largest U.S.-based integrated energy company, producing oil, natural gas and other products essential for progress. Chevron also is committed to investing in the communities where we work, providing quality jobs, partnering with contractors and supporting local charities.
◗◗ Chevron, headquartered in California, employs approximately 27,000 people in the United States alone, and more than 1.5 million stockholders put their trust in Chevron every day.
◗◗ Chevron-branded products are sold at approximately 7,500 retail locations in the United States, primarily on the West Coast and in the South, and the company also supplies more than 2,500 service stations in southern and eastern states with Texaco-branded fuel. Chevron’s five U.S.-based refineries have the capacity to process more than 932,000 barrels of oil per day.
Chevron Is an International Leader in Energy
◗◗ Chevron is one of the world’s largest integrated energy companies, conducting business in more than 100 countries. Chevron is engaged in every aspect of the oil and natural gas industry, including exploration and production, manufacturing, marketing and transportation, chemicals manufacturing and sales, geothermal, and power generation, as well as investing in renewables and advanced technologies.
◗◗ Chevron has more than 59,000 employees operating across the energy spectrum. As a company and as individuals, the company takes great pride in contributing to the communities where we live and work. Chevron also cares deeply about the environment and is proud of the many ways in which Chevron employees work to safeguard it.
◗◗ In 2007, Chevron produced 2.62 million barrels of oil equivalent per day. About 70 percent of that volume occurred outside the United States and in more than 20 different countries. Chevron had a global refining capacity of more than 2 million barrels of oil per day at the end of 2007. Chevron’s marketing network supports more than 25,000 retail outlets on six continents, and the company has invested in 15 power-generating facilities in the United States and Asia.
Meeting the World’s Demand for More Energy: Growing International Opportunities
◗◗ The appetite for oil and other energy sources is growing dramatically, with worldwide energy consumption projected to rise more than 50 percent by 2030. That’s why Chevron is investing — $22.9 billion in 2008 alone — in a broad portfolio of energy resources.
◗◗ In 2007, Chevron invested $20 billion in exploration and production to develop the company’s portfolio of major capital projects.
◗◗ Chevron is making global investments in renewable and alternative energy and in energy efficiency. The company expects to spend $2.5 billion in this area between 2007 and 2009. Those efforts aim to modify the company’s energy portfolio over the long term. Renewables — such as geothermal and cellulosic biofuels that do not undermine the food supply — will provide raw materials for fuels, new sources for power and new benefits for the environment.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
24 ◗◗ Chevron is a strong supporter of international trade, including free trade agreements (FTAs) and bilateral investment treaties. Due to the scale of investment required by the energy industry, gold standard trade and investment principles as a part of negotiated FTAs and other bilateral and multilateral agreements should be considered a key element of America’s energy security agenda. Ensuring a stable legal framework and strong investment protections is critical to the management of risk associated with large-scale, long-term and high-risk energy investments.
China Is a Part of Chevron’s International Success
◗◗ Chevron has a presence in multiple countries around the world, including emerging energy opportunities in China. Chevron has long recognized the importance of the Chinese energy market and participates in all aspects of energy production and distribution. Currently China’s third-largest offshore producer, Chevron is a partner in the CACT Operators Group, which began production from the Huizhou fields in 1990 and participates in two fields in the Bohai Bay.
◗◗ Under the Caltex brand, Chevron operates a number of other projects including service stations, lubricants blending plants and a petrochemical joint venture with Shanghai Petroleum Corporation.
◗◗ In December 2007, Chevron signed a 30-year production-sharing contract for the Chuandongbei natural gas area in the onshore Sichuan Basin. Chevron holds a 49 percent interest in the area, which has exploration prospects and several discovered fields that are being evaluated for development.
Chevron Is Committed to Being a Responsible World Citizen
◗◗ Chevron’s definition of corporate responsibility is rooted in consistently applying the core values set out in The Chevron Way. Across the company’s international enterprise, Chevron is committed to operating in an environmentally and socially responsible way and to maximizing the positive impact of its operations on current and future generations. Social, environmental and economic considerations are integrated into the company’s core practices and decisionmaking, which include engaging and balancing the needs of communities, business partners, host governments and other stakeholders.
◗◗ Operating in a healthy social and economic environment is fundamental to achieving long-term sustainability as a business. During 2007, Chevron invested $119 million in community engagement initiatives internationally, which have focused on health, education and institutional capacity. The company became the first Corporate Champion of the Global Fund to Fight AIDS, Tuberculosis and Malaria, allocating $30 million over three years to fight these diseases.
◗◗ Chevron recognizes and shares the concerns of governments and the public about climate change. The company’s Action Plan on Climate Change is now in its sixth year of implementation. In 2007, Chevron published its Seven Principles for Addressing Climate Change and is working internationally and at the U.S. federal and state levels to build consensus on climate change policy. More information is available at www.chevron.com.
Business Roundtable | trade.businessroundtable.org
25 “CIGNA is a leading provider of cost-effective health and wellness solutions for expatriate employees around the globe, as well as direct-marketed supplemental health and life products to individuals in Asia and Europe. CIGNA International is our fastest-growing business. We see tremendous opportunity for growth inter- nationally for CIGNA’s business.”
— H. Edward Hanway, Chairman and CEO, CIGNA Corporation
CIGNA Serves Millions of People around the World
◗◗ CIGNA Corporation and its subsidiaries serve millions of people worldwide through medical, dental, behavioral health, pharmacy, vision, life, accident and disability benefit plans and insurance. Our company’s mission is to improve the health, well-being and security of those the company serves around the world.
◗◗ CIGNA employs 27,000 workers in the United States, operates in 134 offices in nearly 100 U.S. cities, and includes approximately 47 million covered lives in the United States and around the world.
◗◗ CIGNA’s international business maintains an international workforce of more than 2,200 experienced professionals and a distribution force of nearly 4,000 with local business capabilities in more than 28 countries and jurisdictions. CIGNA services 300,000 expatriates in nearly 200 countries and jurisdictions around the world.
◗◗ CIGNA is one of only a handful of companies offering world-class, worldwide health care and insurance benefits. From our American roots in Hartford, CT, and Philadelphia, we branched into Europe, Asia and the Pacific Rim. Our business mix includes mature markets such as Hong Kong, South Korea and New Zealand, as well as emerging markets including China, Thailand and Indonesia.
◗◗ CIGNA International is fast growing and well positioned for long-term growth. We are an international health care benefits business, and in addition, we direct-market life, accident and supplemental health insurance to individuals in the Asia Pacific region and other selective markets where we operate.
◗◗ CIGNA also offers health and related benefits to companies with an expatriate workforce. We provide international access to quality health care coupled with personalized service, directing customers to quality medical access to give them peace of mind, no matter where they are assigned.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
26 International Markets Enhance CIGNA’s Growth Strength
◗◗ CIGNA has active operations throughout Europe, Asia Pacific and North America and provides a range of insurance products and services in those markets. CIGNA’s international operations have helped CIGNA sustain increases in the company’s income — which is to the benefit of all CIGNA’s employees and shareholders.
◗◗ CIGNA has more than 4.4 million life, accident and health policies in force in Asia Pacific and Europe, some 400,000 health members in the United Kingdom and Spain, and nearly 300,000 expatriate members.
The Importance of China to CIGNA
◗◗ CIGNA’s history in China dates back more than 200 years and can be traced to 1792, when a predecessor company wrote its first insurance policies on cargo bound from Philadelphia to Guangzhou. In 1897, it was the first foreign insurance company licensed to do business in China and maintained its Asian regional headquarters in Shanghai until 1949.
◗◗ CIGNA has made significant contributions to the development of China’s insurance industry and to the promotion of U.S.-China relations.
◗◗ In August 2003, CIGNA was the first American insurance company to receive a license to establish a joint-venture life insurance company in China after China entered the World Trade Organization in 2001. The company began operations in the form of a joint venture with SDZ, a subsidiary of the China Merchants (CMC) Group. Beginning in the city of Shenzhen, the company is now authorized to do business in all of Guangdong province, Beijing, Shanghai, Zhejiang province, Jiangsu province and Sichuan province — together representing about 25 percent of the total Chinese population.
◗◗ In 2005, CIGNA & CMC was recognized as the leader in the direct distribution of protection- oriented life, accident and supplemental health insurance.
◗◗ CIGNA & CMC is growing very rapidly. As measured by the number of lives CIGNA protects through its programs, the company ranks among the fastest-growing U.S. life insurance joint ventures in China.
◗◗ CIGNA’s business is partly driven by the growth in the credit card industry in China, as the company cooperates on marketing programs with banks aimed at the credit customer. CIGNA continues to experience a significant increase in customer base and has achieved profitable growth in four years of operation in China.
Business Roundtable | trade.businessroundtable.org
27 ◗◗ CIGNA expects ongoing double-digit growth for the future. For CIGNA, China represents significant opportunity as the gross domestic product growth rate remains healthy, credit card growth rates are robust, insurance penetration rates are increasing and CIGNA is expanding geographically within the country.
CIGNA Lives Up to International Responsibilities
◗◗ CIGNA sponsored many business and cultural initiatives over the last decades. For example, we’ve sponsored fact-finding exchanges and industry training seminars and programs for both Chinese insurance regulators and professionals in the United States and China.
◗◗ CIGNA understands that cultural exchange is critical to enhancing and cultivating a bilateral relationship with China, particularly at difficult political times. We sponsored a series of performances in China by one of the world’s greatest musical ensembles — the Philadelphia Orchestra.
◗◗ In that same vein, CIGNA has been a sponsor of the Eisenhower Fellowship program — a program whose mandate is to foster strong relationships based on mutual understanding and the exchange of ideas.
◗◗ Many of the officials in the various branches of the Chinese government and insurance industry are Eisenhower Fellows — a direct outcome of CIGNA’s sponsorship of the program. They appreciate the value of the Fellowship in building political, cultural and social bridges between the United States and China.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
28 “Distribution and logistics management is an exceptionally dynamic market in Asia, particularly in China. This is the next great growth engine for transportation and logistics. It’s critical that we make the investments in these international markets not only to remain competitive, but to grow with and support our customers.”
— Douglas W. Stotlar, President and CEO, Con-way, Sept. 9, 2007
Con-way Is a Leading Freight Transportation and Logistics Company Supporting the International Reach of American Industry
◗◗ Con-way has a legacy of nearly 80 years as an American company serving the needs of U.S. as well as international businesses for commercial freight transportation services.
◗◗ Through its principal operating units — Con-way Freight, Con-way Truckload and Menlo Worldwide Logistics — the company employs more than 30,000 people and engages with more than 100,000 businesses in North America and around the world.
◗◗ Con-way’s services fulfill a mission-critical role for America’s companies. The organization’s vast network of fleet, facilities and personnel provides reliable transportation and logistics operations that rapidly and efficiently move goods through the supply chains of America’s businesses, ensuring that production lines keep running, distribution centers have ample inventory and store shelves are stocked.
◗◗ In 2007, the company achieved revenues of $4.7 billion from operations that spanned North America as well as 20 countries across the world’s major continents.
International Investments and Operations Complement and Reinforce Con-way’s Strength as an Enterprise
◗◗ Over the past 20 years, American business has turned to international markets for manufacturing and sourcing in response to an increasingly international economy and the desire of American consumers to have the most cost-effective products available.
◗◗ Additionally, these companies have expanded overseas to tap new markets and emerging economies with increasing demand for American goods.
◗◗ As manufacturers have extended into overseas markets, so have their transportation and logistics partners. Con-way has made extensive investments to deploy and operate the transportation and logistics networks that fuel the international operations of American businesses — and ultimately return substantial value to the United States.
◗◗ Networks such as Con-way’s form the critical support structure that connects production locations with distribution centers and consumption points throughout the United States, as well as in and between strategic international regions.
Business Roundtable | trade.businessroundtable.org
29 ◗◗ Con-way has invested in its international operations and services thus strengthening the company’s overall value as a U.S. enterprise and opening new avenues for growth. For example, in 2007, Con-way’s Menlo Worldwide Logistics division set a record for new business wins — with more than half in international markets.
◗◗ Indeed, as Con-way is able to leverage its growing overseas footprint, it expects to:
1. Generate new revenues from new markets;
2. Play a larger role providing local and regional logistics and transportation for the international operations of U.S. as well as local companies, thereby returning to the United States more dollars from international business; and
3. Provide U.S. and international customers expanding overseas with a more efficient and comprehensive “first-mile last-mile” transportation network linking international markets and the United States.
◗◗ Ultimately, Con-way expects its expanded international presence to increase volumes for its U.S. operations, creating opportunities for new U.S.-based jobs.
Asia Pacific and China Are Strategic Growth Markets for Con-way
◗◗ China is one of the world’s most rapidly expanding economies. China’s economy is growing at roughly 10 percent per year.
◗◗ The opportunity for U.S. companies to participate in China’s domestic market has never been more compelling. The rapid rise of China’s middle class and the resulting demand for consumer goods are creating a market largely untapped by U.S. companies. For freight transportation and logistics companies, China represents the greatest potential growth engine in the past 30 years.
◗◗ For Asia in total, Con-way’s investments have expanded the number of its operating sites in the region from 13 to 155 and its warehouse capacity from 300,000 to 3.5 million square feet.
◗◗ For China in particular, Con-way’s 2007 purchase of Shanghai-based Chic Logistics gives the company a substantial presence with an outstanding geographic footprint for domestic transportation and logistics services in China.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
30 Con-way Is Living Up to International Responsibilities and Setting a Positive Example
◗◗ Con-way is keenly aware of the importance of sound business practices and operations that enable it to compete effectively in an international economy. The company pursues an active program of continual training and education to ensure that its employees are prepared with the knowledge, skills and tools to be successful in this environment.
◗◗ Con-way is committed to ensuring that its operations — wherever they may be in the world — meet or exceed applicable standards for workplace and employee safety. Within the Con- way culture, safety is a core value and constant priority that takes precedence in all business activities at all locations.
◗◗ Con-way is committed to sustainable development. As an energy-intensive business, freight transportation and logistics companies have a recognized impact on the environment. Con- way has instituted a formalized, enterprisewide sustainability initiative designed to identify, promote and employ sustainability practices in all facets of the business.
◗◗ Con-way strives to operate its companies worldwide such that it minimizes — to the extent possible for a carbon-intensive business — the company’s impact on the environment and to pursue practices that help reduce its carbon footprint. For example, in the United States Con-way has reduced the maximum governed speed of its trucks, thereby conserving fuel and lowering carbon emissions.
◗◗ Since 2006, Con-way has been an EPA SmartWay Transportation Partner — a program built on collaboration between the EPA and freight industry to increase energy efficiency while significantly reducing greenhouse gases and air pollution.
◗◗ As part of this effort, Con-way also equips its truck fleets with highly engineered aerodynamic panels to reduce drag, employs special lubricants to improve engine efficiency and limits truck idling to save fuel. The company also uses ultra-low sulfur diesel fuel, which burns cleaner and generates fewer particulates and other emissions.
◗◗ Sustainability as a business practice also extends to Con-way’s focus on health and wellness initiatives for employees and building a next generation of leaders from within the Con-way family through leadership training programs.
Business Roundtable | trade.businessroundtable.org
31 Cummins Is an International Power Leader
◗◗ Cummins, founded in Columbus, IN, in 1919, today is the world’s largest independent manufacturer of diesel engines and related products. A Fortune 250 company, Cummins has been an international power provider in overseas markets for nearly 50 years.
◗◗ Cummins does business in 190 countries and territories, and its international sales accounted for more than half its record $13 billion in revenue in 2007. Cummins employs approximately 17,000 people in the United States.
◗◗ Cummins produced nearly 1 million engines worldwide in 2007, more than half of them for international markets.
◗◗ Cummins exported $2.3 billion worth of engines, power generation systems and components to external customers in 2007 and another $1.1 billion to Cummins locations outside the United States for use in products sold internationally.
International Partnerships Help Foster Unprecedented Growth
◗◗ Cummins has enjoyed record sales and profits for the past four years, fueled by growth in its international markets, which are expanding faster than the U.S. market.
◗◗ Having a strong international presence has helped reduce the cyclicality of Cummins’ business and allowed the company to perform well even when one or more key markets were down. For example, Cummins earned record sales and profits in 2007, despite a 50 percent drop in the North America heavy-duty truck engine market.
◗◗ The company’s strong financial performance has resulted in job gains in the United States. The company has added more than 3,000 U.S. employees in the last five years and has plans to add more than 1,000 workers in its headquarters town of Columbus by the end of the decade. Fair trade is critical to Cummins’ continued growth — both internationally and in the United States.
Emerging Markets, Including China, Are an Integral Part of Cummins’ Continued Growth
◗◗ Cummins has strong and growing businesses in key emerging markets such as China, India, Brazil and Russia. Cummins’ operations in those and other international regions manufacture for their domestic or regional markets, so the jobs created complement the company’s U.S. workforce.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
32 ◗◗ Legendary former Cummins Chairman J. Irwin Miller was among the first U.S. business leaders to visit China in the mid-1970s. Today, Cummins operates 21 facilities and employs more than 5,400 people in the China.
◗◗ Cummins has been doing business in India for more than 40 years and employs approximately 5,000 people in the country.
◗◗ Cummins has increased capital investment in Asia, with plans to open a number of new facilities over the next several years. Total combined consolidated and joint venture revenues in China and India are expected to approach $6 billion in 2011 — more than double 2007 levels.
◗◗ Cummins is the market leader in the medium-duty truck engine market in Brazil.
Cummins’ Commitment to Corporate Responsibility Is International
◗◗ Cummins is only as strong as the communities in which it operates. One example of the company’s philosophy is its Every Employee Every Community initiative, which gives Cummins workers around the world the opportunity to volunteer in their communities on company time. In 2007, more than 9,000 employees contributed 38,000 hours through the program.
◗◗ In addition to the Cummins Foundation, one the oldest corporate foundations in the country, Cummins supports local causes through its 138 Community Involvement Teams (CITs) worldwide. CITs are charged with identifying local needs consistent with Cummins’ philosophy of providing assistance to organizations dedicated to improving the health, education and economic condition of those living at the margins of society.
◗◗ Part of Cummins’ mission mandates that everything we do leads to a cleaner, healthier and safer environment. Cummins has committed to reducing the greenhouse gas emissions produced at its facilities by 25 percent from 2005 to 2010, calculated as a percentage of sales.
◗◗ Cummins also is a leader in emissions technology and the clean diesel movement. The company’s products meet or exceed emissions requirements in every market in which it competes. In 2007, Cummins became the first and only company to meet the 2010 EPA emission standard for nitrogen oxides emissions with the launch of its 6.7-liter turbo diesel engine for the Dodge Ram heavy-duty pickup truck.
Business Roundtable | trade.businessroundtable.org
33 “Our company’s sustained growth depends on the global economy — access to markets, to talent, to feedstock supplies. We have demonstrated success as a leader in the global economy — and that benefits the entire Dow Chemical Company.”
— Andrew Liveris, Chairman and CEO, Dow
Dow — American and International
◗◗ Dow is a diversified chemical company that combines the power of science and technology with the “human element” to constantly improve what is essential to human progress.
◗◗ Today, Dow delivers a broad range of products and services to customers in more than 160 countries, connecting chemistry and innovation with the principles of sustainability to help provide everything from fresh water, food and pharmaceuticals to paints, packaging and personal care products.
◗◗ Dow has been headquartered in the United States for 110 years, and it currently employs 22,000 American workers throughout the country.
◗◗ In 2007, Dow exported more than $14.2 billion worth of U.S.-manufactured products.
International Operations Fuel Dow’s Growth
◗◗ International sales are critical to Dow; in 2007, 66 percent of Dow’s sales occurred outside the United States.
◗◗ Dow’s presence in international markets diversifies its financial risk and makes it a stronger company. In spite of the slowdown in the U.S. economy and flat year-over-year sales domesti- cally, Dow still experienced top line growth of 9 percent in 2007 due to strong results abroad. This level of growth has helped the company to sustain capacity production at all plants, including those in more developed markets like North America.
◗◗ Growth outside the United States allows Dow to maintain the stability of its operations domestically and support 11,000 U.S. manufacturing jobs. Dow is experiencing double-digit growth across all major emerging economies, with Russia (+47 percent), India (+32 percent) and China (+31 percent) leading the way.
◗◗ Dow’s overseas sales are driven by U.S. inputs as well as local production, which is critical to optimizing supply chain efficiencies and creating the closest relationship possible with the company’s customers. Trade and market access allow Dow to have that local production and import key raw materials (many from the United States) necessary for high-quality products.
China Is an Integral Part of Dow’s International Success
◗◗ China is increasingly important to Dow’s international strategy and growth. Exports of Dow’s U.S. products to China have more than doubled in the past year, from almost $300 million to more than $660 million.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
34 ◗◗ Trade liberalization in China has created opportunities for Dow to enter into new markets in China, including developing water purification technologies to meet local needs based on R&D created from U.S. operations.
◗◗ In China, Dow has increased sales from approximately $150 million in the mid-1990s to more than $3.3 billion in 2007. Greater China is currently Dow’s third-largest market in terms of sales, with expectations of an average 15 percent market segment growth annually.
◗◗ Dow’s most important new investment will be the Dow Center — scheduled for completion by the end of 2008 — which will include an R&D facility and a global IT center. This facility will be Dow’s business and innovation hub in the Asia Pacific market, with a profound opportunity to enhance customer growth and support throughout China and Asia Pacific.
◗◗ Dow is setting a good corporate example in China and has been awarded China’s Top Employer Award, the Best Global Companies Performing Corporate Social Responsibility in China Award, the Global Times “Most Regarded” Enterprise by Readers Award and the 2007 Best Corporate Citizenship in China Award.
Living Up to International Responsibilities
◗◗ Dow prides itself on its people-centric performance culture, which includes a strong commitment to the development and growth of its employees. In 2007, Dow invested nearly $7 million in employee training, which translated into more than 2.2 million hours of education for Dow’s workforce.
◗◗ Each year, Dow, its employees and its retirees contribute more than $6 million to United Way for targeted disbursement to the company’s neediest plant communities.
◗◗ Dow also is investing in the international communities in which it works. In Terneuzen, the Netherlands, Dow is recycling municipal household wastewater, accepting 2.6 million gallons of water every 24 hours and purifying more than 70 percent of it to generate steam and feed its manufacturing plants. The collaboration is good for the community as well as Dow, and it demonstrates the company’s commitment to sustainable operations.
◗◗ As the world’s largest producer of polyethylene, Dow has teamed with Crystalsev, one of Brazil’s largest ethanol players, to begin plans for a world-scale facility to manufacture polyethylene from sugar cane. While this effort will supply the Brazilian market, the technology is transferable to future plants in the United States.
◗◗ Dow also is committed to environmental innovation and stewardship. The use of Dow’s
STYROFOAM brand building insulation averts 65 million tons of CO2 emissions each year — saving more energy annually than Dow uses to produce all of its products worldwide. Dow’s new STYROFOAM plant in the Moscow region of Russia, for example, is helping the Russian construction industry improve its product offerings as well as supporting efforts to reduce climate change impact.
◗◗ Dow Water Solutions FILMTEC membrane technology is a key component of the world’s largest seawater desalination plant in Perth, Australia. The plant is designed to provide available drinking water for the 1.5 million residents of Perth.
®Trademark of The Dow Chemical Company (“Dow”) or an affiliated company of Dow
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35 “We must also be responsible stewards of the environment and responsive to the changing expectations of our stakeholders. We work hard to strike the right balance between economic, environmental and social considerations — a goal that is imprecise, subjective and essential to the continued viability of our company and our world.”
— Jim Rogers, Chairman, President and CEO, Duke Energy, March 25, 2008
Duke Energy Is a U.S. Utility with an International View
◗◗ Duke Energy (NYSE: DUK), one of the largest electric power companies in the United States, supplies and delivers electricity to approximately 4 million U.S. customers in its regulated jurisdictions.
◗◗ The company has approximately 35,000 megawatts of electric generating capacity in the Midwest and the Carolinas, as well as natural gas distribution services in Ohio and Kentucky. It also is a joint-venture partner in a U.S. real estate company.
◗◗ Internationally, the company’s operations consist primarily of electric generation in Central and South America, where the company has approximately 4,000 megawatts of hydroelectric and thermal generating capacity.
◗◗ With operating revenues of $12.7 billion and total assets worth $50 billion (as of Dec. 31, 2007), Duke Energy has been serving its customers’ energy needs and having a positive impact on the communities it serves, both in the United States and abroad, for more than 150 years.
Duke Energy’s International Business Supports U.S. Jobs
◗◗ As Duke Energy’s U.S. customers turn abroad in pursuit of new markets for their products and innovative ways to stay competitive, so too has Duke Energy looked to its international business for valuable new sources of earnings growth.
◗◗ In 2007, Duke Energy International generated more than $1 billion in operating revenues and approximately 14 percent of Duke Energy’s earnings before interest and taxes. The strong performance from Duke Energy International directly contributes to the financial success of the company and to the company’s many individual and institutional investors.
◗◗ Duke Energy employs more than 17,000 U.S. workers in high-quality jobs, with approximately 100 U.S. jobs directly supporting its international business.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
36 Duke Energy Is Committed to Sustainability
◗◗ Sustainability, or doing business in a way that is good for people, the planet and profits, is paramount to Duke Energy’s current strategy and future success, both domestically and internationally. Duke Energy is pleased to have been named to the Dow Jones Sustainability Index for North American companies in the electric utility sector.
◗◗ Global climate change is the biggest and most complex challenge facing the electric industry, and reduction of our environmental footprint is a major focus of Duke Energy’s sustainability plan. Duke Energy believes it has a responsibility to lead in bridging the gap between today’s high-carbon economy and a low-carbon future.
◗◗ In addition to taking a leadership role in the domestic discussion and debate regarding climate change, the company is taking bold steps and reaching beyond its borders to reduce its environmental footprint. Duke Energy International runs a business in Latin America with more than 3,000 megawatts of zero emission renewable hydrocapacity.
◗◗ Duke Energy International also is pursuing an ambitious $1 billion expansion program in Latin America that will provide much-needed generating capacity for growing Latin American markets, while maintaining a low-carbon intensity and low overall environmental footprint. Projects recently completed or under construction or development include small hydro facilities in Peru and Brazil, combined cycle expansions in Peru and Central America, and thermal power plants in Central America, Peru and other Latin markets. In addition, two of Duke Energy International’s recently completed facilities in Peru are the first facilities of any U.S. utility to be registered under the United Nations’ Clean Development Mechanism to qualify for carbon emission reduction credits.
◗◗ A strong and enduring spirit of philanthropy and volunteerism helps highlight Duke Energy’s community outreach efforts. During 2007, charitable giving by the Duke Energy Foundation, Duke Energy Corporation, and its employees and retirees in the United States and abroad totaled more than $31 million, with Duke Energy volunteers dedicating the equivalent of seven working years — roughly 15,000 hours — to community service projects.
◗◗ Throughout Duke Energy’s U.S. and foreign service territory, employees helped revitalize communities by building and repairing schools, providing heating, cooling and sanitation services to low-income residents, and maintaining sustainable wildlife habitats around Duke Energy plants.
◗◗ An unwavering commitment to safety is another key component of Duke Energy’s strategy. For example, Duke Energy International was the first company in Central America and Peru to have obtained simultaneous triple International Organization for Standardization certification, which measures integration among assets in operational quality, environment, and occupa- tional health and safety. The company also has received Brazil’s top award for industrial health and safety for the past seven years.
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37 “Globalization and sustainability are both essential and interlinked. Globalization leads to interdependence among nations. It is accelerating the exchange of information, technology, goods, services and capital — as well as people, culture and microbes. Sustainable development means meeting the needs of the present generation while safeguarding those of future generations. Global trade liberalization offers our best hope for accomplishing that.”
— Chad Holliday, Chairman and CEO, DuPont
DuPont — America’s Oldest International Corporation ... and Its Most Innovative
◗◗ DuPont was founded in 1802 and is presently a world leader in science and technology in a range of disciplines, including biotechnology, electronics, materials science, safety and security, and high-performance synthetic fibers. In 2007, its worldwide net sales were almost $30 billion, and it employed 60,000 people worldwide, with about half of them in the United States.
◗◗ DuPont operates internationally, manufacturing a wide range of products for distribution and sale to many different markets, including transportation, safety and protection, construction, motor vehicle, agriculture, home furnishings, medical, electronics, communications, protective apparel, and the nutrition and health markets.
◗◗ U.S. patents filed by DuPont scientists have increased 130 percent since 2001, while U.S. pat- ents granted increased by nearly 20 percent from 2006 to 2007. DuPont scientists currently hold more than 6,000 active U.S. patents and have more than 4,000 patents pending. New products launched in the past five years accounted for 36 percent of the company’s revenue in 2007.
◗◗ DuPont’s first international sales were in 1806 to the Kingdom of Spain. Its first sales to China were in 1846. In 2007, DuPont’s net sales outside of the United States totaled more than $18 billion.
International Operations Are Critical to DuPont’s Third Century and Beyond
◗◗ Sales outside the United States now constitute 62 percent of all DuPont sales. In 2007, DuPont achieved 18 percent of its growth outside the United States, and in the same year, DuPont exported more than $1.6 billion worth of goods and services manufactured or created in the United States. This represented an increase of 20 percent of DuPont’s exports from the United States over the previous year.
◗◗ These numbers illustrate a fact too often ignored by politicians and some portions of the American public: Liberalized international trade, particularly the ability to enter overseas markets, supports DuPont’s American workers and ensures their future prosperity.
◗◗ DuPont presently has manufacturing, technology or service center sites in more than 40 countries and does significant business in more than 70 nations in all regions of the world.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
38 China Is a Strategic Market for DuPont
◗◗ After almost 100 years of export sales to China, DuPont opened its first offices in Shanghai in 1926 and has been doing business ever since in Greater China, including Taiwan and Hong Kong.
◗◗ In 2007, DuPont’s net sales in China totaled slightly more than $2 billion.
◗◗ In 2007, DuPont had manufacturing and finishing facilities in 19 locations, including Guang- zhou, Shanghai, Shenzhen, Kuan Yin and Taoyuan.
◗◗ Recently, DuPont announced it will construct a titanium dioxide manufacturing facility near Dongying in Shandong Province. This is a strategic investment designed to strengthen this business on a global basis and keep it viable in the United States and elsewhere.
◗◗ DuPont has a major R&D facility near Shanghai and opened another R&D facility in Taiwan in 2006 to serve better the integrated circuit market.
Living Up to International Responsibilities
◗◗ For over two centuries, DuPont has led the world in its uncompromising attention to the safety and welfare of its employees. This tradition, along with attention to its corporate core values, has and will continue.
◗◗ Each year, DuPont employees working at its Delaware headquarters contribute more than $5 million to United Way, and its employees worldwide are encouraged to contribute to similar initiatives in their respective countries.
◗◗ In 2007, DuPont donated more than $30 million in cash, services and products worldwide to disasters, causes and worthy programs as a means of demonstrating responsible global corpo- rate citizenship.
◗◗ International sales and operations cannot be conducted in a vacuum, shutting out the cares and concerns of the world. DuPont believes that sustainable globalization must include capac- ity building in the developing world, specifically for the protection of the environment, the reinforcement of human rights, the rule of law, and the regulation of trans-border activities through modern and accountable international institutions. Capacity building is everyone’s responsibility, not only that of government.
◗◗ As an example, Colombia is a growth market for DuPont agricultural products and seed, but with the growing world food crisis, DuPont became interested in more than just selling prod- ucts to those customers who could afford them. DuPont began looking for ways of improving the social and economic conditions of a broader cross-section of growers in Colombia to maxi- mize the long-term health of the business. Under DuPont’s leadership, a partnership, which includes among others the Ministry of Agriculture, Finagro and the Agrarian Bank, developed a program that allows up-front financing so that farmers can afford to purchase the inputs they need for the season to maximize their yields.
Business Roundtable | trade.businessroundtable.org
39 “Free trade and open markets are vital to the future of Kodak. As the world’s fore- most imaging innovator, Kodak needs to be able to help consumers, businesses and creative professionals unleash the power of pictures and printing to enrich their lives — wherever they may be. With the pace of innovation accelerating, and the process becoming increasingly collaborative, people have more and better choices for doing everything from taking a picture to printing a catalog to producing a movie. But, to realize the true benefit from these breakthroughs, trade policies must evolve from an outdated emphasis on barriers to a free and open market.”
— Antonio Perez, CEO and Chairman of the Board, Eastman Kodak
Eastman Kodak Is the World’s Foremost Imaging Innovator
◗◗ Eastman Kodak is committed to a digitally oriented growth strategy focused on helping people all over the world better use meaningful images and information in their lives and work.
◗◗ Consumers use Kodak’s system of digital and traditional products and services to take, print and share their pictures anytime, anywhere; businesses effectively communicate with customers worldwide using Kodak solutions for prepress, conventional and digital printing, and document imaging; and creative professionals rely on Kodak technology to uniquely tell their stories through moving or still images. Kodak is frequently noted by trade and business publications as one of the most recognized and respected brands in the world.
◗◗ Kodak had global sales of $10.3 billion in 2007. Around the world, the company employs almost 27,000 people, slightly more than half of whom work in the United States.
George Eastman Made Kodak an International Company
◗◗ Shortly after George Eastman founded Eastman Kodak in the late 1800s, he recognized the need to establish international manufacturing operations to support the growing worldwide demand for his popular box-camera system. U.S. manufacturing could not keep up with European demand, for example, and emulsions on film were plagued by spoilage during the trans-Atlantic voyage.
◗◗ In 1891, Kodak’s first overseas manufacturing plant was completed in Harrow, England, to supply European demand. Since then, the company has continued to grow as a worldwide business, with corporate headquarters in Rochester, NY.
◗◗ Today, Kodak has gone through a remarkable transformation from a traditional, analog company to a new, digital technology business that continues to do business around the world. In fact, although the company has pared back its international manufacturing operations, more than 60 percent of Kodak’s sales are overseas, up from 55 percent just a few years ago.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
40 China Is an Important Growing Market for Kodak Products
◗◗ Kodak first set up a sales office in China in the 1920s, and it has been doing business there continuously ever since. Chinese owner-operators now run more than 8,000 individual Kodak Express stores, selling Kodak products and services to Chinese consumers. You can even buy Kodak film in Beijing’s Forbidden City.
◗◗ In the mid-1990s, Kodak made a significant investment in China to build a platform to supply traditional film products to Chinese consumers and the rest of Asia. Although film manufacturing has now been consolidated in Rochester, Kodak is now manufacturing many of its new digital products in China.
◗◗ For example, China is a growing market for print media. Kodak’s newest business unit, the Graphic Communications Group, manufactures advanced technology solutions for the print industry and sees China as a growing market for its products. These include high-speed digital inkjet printers for commercial applications that are manufactured in Dayton, OH, as well as extremely high-quality electrostatic digital color printers that are manufactured in Rochester.
◗◗ Consistent with founder George Eastman’s strategy of establishing manufacturing operations close to demand, in November 2006 Kodak opened its newest printing-plate manufacturing facility in Xiamen. Kodak invested $50 million in the state-of-the-art facility to produce both Kodak Electra Excel thermal printing plates, considered the largest-selling digital plate ever, and conventional printing plates for the growing China market and Asia Pacific region.
◗◗ The Xiamen plant brings to eight the number of plate production facilities around the world. Other locations include Windsor, CO, and Columbus, GA; Munich and Osterode, Germany; Leeds, UK; Sofia, Bulgaria; and Gunma, Japan. By manufacturing in so many locations, Kodak is able to produce plate solutions that are tailored to the regions in which customers are doing business.
Kodak Is a Responsible Corporate Citizen in the World
◗◗ Kodak has a longstanding record of operating with the highest standards of ethics and integrity. Kodak has been included on the 100 Best Corporate Citizens list for seven of the past eight years, and it has been named to the Global 100: Most Sustainable Corporations in the World list for four consecutive years.
◗◗ Kodak has been recognized for its commitment to maintaining high environmental and safety standards in all its manufacturing locations. For instance:
yy In 2007, Kodak received 12 awards from the International Imaging Industry Association for excellence in health and safety at facilities located in China, India, Mexico, France, England and the United States.
yy Kodak’s Wuxi manufacturing plant has received several prestigious awards for safety and environmental practices, including the Green Enterprise award from the Wuxi Environment Bureau for six consecutive years.
yy Kodak’s Xiamen plant received the Safety Model Unit award from the Haicang District Safety Administration for three years in a row.
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41 ◗◗ Kodak is committed to preparing its workers for a competitive economy. Each year Kodak spends extensively on training and development activities for employees. In the United States, Kodak collaborated with Niagara County Community College (NCCC) to launch a Health, Safety and Environment Community Training Center. The partnership offers to a broader community courses at Kodak’s modern health, safety and environment training center that are taught by NCCC faculty.
◗◗ Kodak has been a leader in energy conservation and greenhouse gas emissions reduction. Worldwide, it has successfully achieved a 29 percent reduction in its emissions since 1997. As a charter member of the U.S. EPA’s Climate Leaders program, Kodak has made a commitment to verifiable, long-term, voluntary greenhouse gas emission reductions.
◗◗ For nearly two decades, Kodak voluntarily set internal worldwide environmental and safety goals to cut emissions, reduce waste, conserve natural resources and reduce occupational injuries. The results are shared through its Web site: www.kodak.com/go/hse. Kodak will continue to set increasingly aggressive goals and publicly share the results, broadening its sustainability scope to include such areas as supplier and product performance.
◗◗ Using the concept of Design for Environment, Kodak assesses new products through the procurement of raw materials and components, R&D, manufacture, distribution, customer use, and customer disposal or end-of-life. As a result, Kodak products continue to provide more value and decrease their environmental footprints. The KODAK Digital Picture System 900 garnered the 2007 Eco-Design Award at the International Consumer Electronics Show (CES), and the company’s Easyshare ZD710 digital camera was recognized for energy-efficient design at the 2008 CES. Kodak’s award-winning work on cyan dye track technology for motion picture films could reduce water use in Hollywood alone by 30 million liters per year.
◗◗ To further best practices in supply-chain management, Kodak joined the Electronics Industry Code of Conduct (EICC) Group. The EICC promotes supplier social and environmental responsibility across the supply chain through a standards-based approach.
◗◗ Over the past 10 years, Kodak has served more than 600 communities in the United States through the Kodak American Greenway Awards program — managed in conjunction with The Conservation Fund and the National Geographic Society. The program provides grants to stimulate the planning and design of greenways in communities throughout America.
◗◗ Since 2001, Kodak has supported a Photo Voice project developed by The Nature Conservancy in the Yunnan Province of China. Through this program, people from the region take pictures to record their lives, their culture and the local environment. The photos are then shared with policymakers to help them make informed decisions about environmental, social and development issues.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
42 “Global markets are expanding rapidly and represent enormous opportunities for American business. At Eaton, we view international trade as a critical element of our overall growth and ability to create new jobs, not only abroad but in the United States as well.”
— Alexander M. Cutler, Chairman and CEO, Eaton Corporation
A Diversified Power Management Company
◗◗ Eaton Corporation is a diversified power management company, helping its customers use electrical, hydraulic and mechanical power more efficiently, safely and responsibly.
◗◗ Eaton’s total 2007 sales were $13 billion.
◗◗ The company is a global technology leader in electrical systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety.
◗◗ Eaton employs 81,000 people worldwide and sells products to customers in more than 150 countries.
◗◗ Eaton has transformed its business from its heritage as a vehicle components supplier, and today, approximately 70 percent of revenues come from the company’s electrical, aerospace and hydraulics businesses. Eaton’s truck, automotive and filtration units now account for about 30 percent of sales.
International Growth and Breadth
◗◗ Approximately 55 percent of Eaton’s revenues are driven by economies outside the United States, and about 20 percent of revenues today are coming from the emerging nations of the world.
◗◗ This dramatic increase in our international business mix is part of a strategic initiative to balance the company’s business globally, a strategy that proved particularly effective during 2007, when Eaton achieved record earnings despite a significant decline in the North American heavy-duty truck business. This was a historic milestone for the company.
◗◗ International expansion has contributed to stability in Eaton’s corporate U.S. workforce.
Business Roundtable | trade.businessroundtable.org
43 China Critical to Eaton’s Growth
◗◗ Eaton’s investment in China is long term. Since entering the market in 1993, Eaton’s business has grown significantly through strategic acquisitions and organic growth.
◗◗ The company’s presence in mainland China and Taiwan now includes Eaton’s electrical, hydraulics, aerospace, truck and automotive businesses and 30 manufacturing sites.
◗◗ In 2007, Eaton set a goal of reaching $1 billion in revenues in China by 2010 and is well on the way to achieving that goal.
◗◗ Many of Eaton’s innovative technologies are key in supporting China’s efforts to build its infrastructure, including growth in the manufacturing, transportation and power sectors.
◗◗ Eaton’s rapidly expanding China operations contribute to U.S. jobs by importing selected components to service burgeoning customer demand.
Committed to Sustainable Business Development
◗◗ Eaton recognizes that many of its stakeholders have complex and changing expectations regarding sustainable business practices. However, Eaton is committed to actions that not only minimize its impact on the environment, but also improve the environment, as well as the lives of Eaton employees and communities.
◗◗ Eaton University, the company’s training unit based in Cleveland, OH, leads extensive training and development efforts for Eaton employees worldwide. Courses cover critical concepts, processes and technology to ensure employees are proficient in the range of skills and core business principles required for success. An Eaton University Regional Hub in Shanghai ensures globally consistent, locally delivered training for the company’s employees in China.
◗◗ As a values-based integrated operating company, Eaton adheres to one set of standards around the world for policies such as ethics; environment, health and safety; product quality; and human resource practices.
◗◗ High standards for operations in the United States are extended to all Eaton facilities, including those in emerging markets. For example, all Eaton plants in China today are ISO14001 certified.
◗◗ Eaton will continue to work hard to earn the trust of its many stakeholders as the company pursues its vision of becoming the most admired company in every market it serves.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
44 ExxonMobil Is the World’s Largest Publicly Traded International Oil and Gas Company
◗◗ ExxonMobil is an industry leader in almost every aspect of the energy and petrochemical business.
yy Today, the company operates facilities or markets products in most of the world’s countries, and it explores for oil and natural gas on six continents. ExxonMobil has interests in exploration and production acreage in 36 countries and production in 24 countries located in every region of the world, and it sells natural gas in almost all major and developing markets across six continents to a wide variety of customers. ExxonMobil has interests in 38 refineries located in 21 countries. There are more than 32,000 Exxon, Mobil and Esso retail service stations worldwide. ExxonMobil also is a leader in the petrochemical industry with operations in 47 wholly owned and joint-venture facilities around the world.
◗◗ At the end of 2007, ExxonMobil’s worldwide workforce numbered approximately 81,000 employees; 30,000 are located within the United States.
◗◗ ExxonMobil’s operations generated over $105 billion in tax expense to local, state and national governments in 2007.
◗◗ Today, 75 percent of ExxonMobil’s earnings are generated outside the United States.
Increased Global Energy Supplies Are Critical to Meeting the Growing Needs of Economies Worldwide
◗◗ International energy markets are growing rapidly. The economic progress of people around the world is driving a growing need for reliable, affordable and cleaner energy supplies. The global population of 6.5 billion people today will grow to about 8 billion by 2030, with close to 95 percent of this growth occurring in developing countries. For billions of people, securing energy to support essential needs is a daily struggle. Today, 2.5 billion people rely on traditional fuels such as agricultural waste and dung for basic heating and cooking, and close to 1.6 billion people are without electricity. By the year 2030 — less than 25 years from now — global energy demand will be about 40 percent greater than it was in 2005, driven mostly by growth in developing nations.
◗◗ The International Energy Agency estimates that more than $9 trillion, or $380 billion per year on average, in oil and gas investment will be needed through 2030 to meet the global energy demand. To help meet this need, ExxonMobil is investing at record levels — a total of $89 billion on six continents over the past five years, $20.9 billion in 2007 alone, and plans to invest more than $125 billion in capital spending over the next five years to deliver major projects to help meet growing world energy demand.
Business Roundtable | trade.businessroundtable.org
45 ◗◗ Energy resources — including oil and natural gas — are abundant, but they are often challenging to access and develop. Success demands new technologies and building the partnerships and strengthening the free market framework that make technological innovation and its effective application possible.
◗◗ To achieve energy security, Americans must keep doors open — to new domestic energy supplies, to supplies available on global energy markets and to the technology needed to make it all happen.
◗◗ Global liquefied natural gas (LNG) demand is expected to grow more than 4 percent per year through 2030 — representing about 16 percent of the world’s gas demand in 2030. LNG imports to the North American, European and Asia Pacific gas markets will play an increasingly important role. ExxonMobil is participating in LNG operations in Qatar and Indonesia and progressing LNG opportunities in Asia Pacific and West Africa to increase global supplies of clean-burning natural gas to help meet the growing energy needs.
China’s Growing Energy and Petrochemical Sectors Are Important Markets for ExxonMobil
◗◗ By 2015, ExxonMobil expects China will represent 25 percent of the global demand for key commodity petrochemicals.
◗◗ ExxonMobil is actively growing its presence in China. In 2007, ExxonMobil along with partners Saudi Aramco, Sinopec and Fujian Province signed contracts for the first fully integrated refining, petrochemicals and fuels-marketing joint-venture projects with foreign participation in China.
◗◗ ExxonMobil is becoming a leading international lubes marketer in China.
Supporting Community Interests Worldwide
◗◗ ExxonMobil recognizes climate change is a global issue and that greenhouse gas emissions are rising, primarily in developing countries. Further, we believe the risks to society warrant taking action, therefore, ExxonMobil’s scientists and engineers are working to reduce emissions today, while supporting the development of new technologies that could significantly reduce emissions for the long-term.
◗◗ ExxonMobil’s operational improvement targets and plans are based on reducing incidents with real environmental impact to zero and delivering superior environmental performance. The company’s worldwide marine affiliates posted their best-ever spill performance in 2007 — a spill rate of less than one teaspoon per million barrels.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
46 ◗◗ In 2007, Exxon Mobil Corporation, its divisions and affiliates, and the ExxonMobil Foundation provided a combined $173.8 million in cash, goods, and services worldwide. Of the total, $93.9 million supported communities in the United States and $79.9 million supported communities in other countries around the world. ExxonMobil employees and retirees personally donated $32.8 million through company-sponsored matching gift, disaster relief and employee-giving programs. When combined with corporate donations, ExxonMobil, together with its employees and retirees, contributed $206.6 million to community invest- ments around the world. In addition, more than 15,000 employees, retirees and their families provided more than 686,000 volunteer hours to over 5,400 charitable organizations in 29 countries through company-sponsored volunteer programs.
yy ExxonMobil has expanded efforts to improve mathematics and science education in the United States by increasing the support of unique programs that benefit both students and teachers. In 2007, ExxonMobil became a founding sponsor of the National Science and Math Initiative and committed $125 million to help increase student participation in Advanced Placement courses and help 10,000 new mathematics and science teachers graduate.
yy Since 2005, ExxonMobil has invested more than $11 million in the Educating Women and Girls Initiative – funds that have been used to provide leadership and business skills training, vocational education and teacher education/training; construct and rehabilitate schools; and support efforts to engage community support for girls’ education in developing countries. Research shows that educating women and girls yields the highest rates of return of any community investments available in the developing world.
yy ExxonMobil established its Africa Health Initiative in 2000 and since then the company has been working with local and international partners and develop effective strategies to prevent, control and treat malaria and improve the health of people on the African continent. ExxonMobil supports programs that build health care capacity at the community level, promote research and development of new drugs and vaccines, and advocate awareness and support.
yy ExxonMobil’s workplace Malaria Control Program has contributed to a decrease in the number of malaria cases among its expatriate employees, local employees and contractors working in Africa.
yy In 2004, ExxonMobil initiated a comprehensive workplace health program known as StopAIDS to help address the effects of the devastating HIV/AIDS pandemic on local employees, their families and the surrounding communities in sub-Saharan Africa. Since then the company has been assisting employees and their families to mitigate the HIV risk, which is essential for the long-term sustainability of ExxonMobil’s business and the economic growth of the region.
Business Roundtable | trade.businessroundtable.org
47 FedEx Delivers Unprecedented Access to the Global Marketplace
◗◗ FedEx started a company that created an industry — and helped to reshape the world’s expectations of what is possible.
◗◗ Today, FedEx offers time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 90 percent of the world’s gross domestic product within one to three business days.
◗◗ The company’s suite of transportation, e-commerce and business solutions is powered by more than 290,000 team members worldwide. In the United States, FedEx employs more than 233,000 people in all 50 states.
◗◗ With annual revenues of $38 billion, FedEx and its workforce are key contributors to U.S. economic growth and development.
International Markets Are Critical to FedEx Profitability and Success
◗◗ FedEx could not compete with its international competitors and serve the needs of its U.S. customers without fair access to international markets. On a level playing field, FedEx can provide global express delivery services throughout the world and expand economic growth and development to more nations through its customers.
◗◗ FedEx has long recognized the importance of access to markets abroad and has established an international network early on with FedEx Express. Through acquisitions, the company’s intercontinental operations began in 1984 with service to Europe and Asia.
◗◗ Growing FedEx service throughout the world is critical to the company’s continued success. Over the past 10 years, the international revenues of FedEx Express have grown 200 percent.
◗◗ Demand for international package delivery continues to increase. FedEx International Priority package revenue grew 16 percent in the fourth quarter of fiscal year 2008, led by increases in volume from Asia, the United States and Europe. For the full year ending May 31, 2008, FedEx International Priority package revenue grew 14 percent.
◗◗ The jobs of many of the 233,000 FedEx workers in the United States depend on the strength of FedEx international operations. Their livelihoods, as well as those of team members throughout the world, depend on the company’s continued international growth.
◗◗ Growth of U.S. exports also is critical to the health of the global economy. Goods and services exports during the first six months of 2008 were 18.8 percent higher than during the same period in 2007, according to recent trade data released by the U.S. Department of Commerce. The strength of the U.S. economy requires continued growth in U.S. exports.
◗◗ FedEx is committed to supporting the growth of U.S. businesses and linking U.S. companies and their workers to the world. In cooperation with the U.S. Department of Commerce, the company conducts workshops and symposia around the country to help entrepreneurs and small business owners discover how to source and sell their U.S. products globally, so they can benefit from international trade opportunities throughout the world.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
48 ◗◗ Since 2004, FedEx and the U.S. Commercial Service have held approximately 265 exporting seminars or outreach events around the world and exposed more than 13,000 U.S. businesses to exporting.
China Is Central to the FedEx Global Growth Strategy
◗◗ China’s air cargo market is growing at a rapid pace. The Airbus Global Market Forecast puts China in three of the top five cargo market lanes by 2025. FedEx will continue to play a critical role in the development of one of the world’s most important growth markets.
◗◗ FedEx is well positioned to succeed in China. Since entering the Chinese market in 1984, the company has expanded international express service to connect all the major cities and provinces in mainland China to its global network. In 2007, the company began serving China’s burgeoning domestic market with next-morning delivery. Today, FedEx offers this critical domestic service to more than 40 cities in China and second-day delivery to more than 200 cities.
◗◗ FedEx has made significant investments in the Chinese market to capitalize on China’s growth, including investing $150 million to build a new Asia Pacific hub at Guangzhou’s Baiyun International Airport, the biggest and busiest airport in South China. The hub will be the center point of FedEx Asia Pacific operations for the next 30 years, with 136 flights into and out of Guangzhou at start-up. When completed in December 2008, it will be the largest FedEx hub outside the United States.
Across All Borders, FedEx Invests in Its Employees and Communities
◗◗ FedEx consistently ranks among the world’s most admired and trusted employers and is continually recognized for its commitment to safety, the highest ethical and professional standards, and the needs of its customers and communities.
◗◗ As a strong international corporate citizen, FedEx employs its core business and services in support of national and international nongovernmental organizations including Red Cross/ Red Crescent, ORBIS International, Safe Kids Worldwide and Junior Achievement Worldwide.
◗◗ FedEx team members share the company’s commitment to serving the communities where they live and work. FedEx employees log more than 100,000 hours of volunteer work each year in support of various charitable and philanthropic causes.
◗◗ During times of crisis, FedEx rapidly responds to emergencies and natural disasters by donating money, facilities, expertise, aircraft and vehicles to transport aid shipments to complement the work of others at the site of the crisis. For example, in response to the recent natural disasters in China and Myanmar, FedEx has donated more than $1 million in cash and in-kind shipping to support relief efforts.
Business Roundtable | trade.businessroundtable.org
49 ◗◗ These efforts included FedEx teaming up with Heart to Heart International to deliver the first private airlift of relief supplies to China following the devastating earthquake in the Sichuan Province. The critically needed supplies, valued at more than $1.5 million, were loaded aboard a FedEx MD-11 cargo plane and delivered to the quake zone in China. FedEx employees also donated generously to the relief efforts.
◗◗ In its operations, FedEx continues to champion responsible environmental stewardship and actively pursues innovations to help protect the environment. The company has undertaken projects around the globe to develop and/or operate solar panel facilities, alternative fuel vehicles and other green technologies. For example, the FedEx hybrid-electric truck fleet has recently surpassed more than 2 million miles of revenue service.
◗◗ In the air, FedEx is upgrading its aircraft fleet by replacing narrow-body aircraft with 757 planes to increase fuel efficiency and lessen environmental impact — reducing fuel consumption up to 36 percent while providing 20 percent more capacity.
◗◗ Since the company was founded 35 years ago, FedEx has fostered a people-first culture and a positive workplace environment around the world. Today, FedEx continues to attract exceptional talent at all levels of the company and actively develops its workforce by promoting from within and providing meaningful training opportunities.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
50 “The world is inextricably global. We win by exporting, and we win by sourcing, and in some of these countries there are no competitors that can beat me.”
— Jeffrey Immelt, Chairman and CEO, General Electric, February 2004
General Electric: Bringing American Imagination to the World
◗◗ From the days of Thomas Edison, General Electric (GE) has been a U.S. and international leader in technology and innovation. With a rich history and deep U.S. roots, GE is building a better world through cutting-edge research and product development.
◗◗ GE directly employs more than 150,000 workers in the United States and has a presence in all 50 states.
◗◗ GE also is an increasingly global company. GE now operates in more than 100 countries.
Accessing International Markets Is Key to the Future of GE and Its Workers
◗◗ For the first time in GE’s history, more than half of GE’s annual revenue ($84 billion out of a total of $163 billion in 2006) came from outside the United States. Tapping into demand in growing international markets is critical to GE’s success.
◗◗ Accessing international markets supports GE’s jobs in the United States and brings revenue back to this country. In 2006, GE’s exports from the United States totaled $13.1 billion — a nearly 24 percent increase in two years. GE’s exports to the Pacific Basin grew 27 percent, and exports to Europe grew 20 percent, outpacing the overall growth of company revenues.
◗◗ GE’s exports support close to 120,000 U.S. jobs for GE and its U.S. suppliers. (The U.S. Department of Commerce calculates that each $110,000 in U.S. exports supports a U.S. job.)
◗◗ Demand for GE’s products is increasingly international. In 2007, for instance, GE’s gas turbine manufacturing facility in Greenville, SC, manufactured 86 gas turbines, 80 of which, or 93 percent, were bound for overseas markets. GE’s locomotive facility in Erie, PA, will manufacture close to 900 locomotives in 2008, with about one-third bound for exports to a variety of countries. About 200 of those locomotives will go to China.
China Is an Integral Part of GE’s International Strategy
◗◗ China is one of the largest and fastest-growing markets for GE’s infrastructure, especially aircraft engines, power, locomotives and water treatment. For instance, by 2010, China’s air traffic is expected to double to 240 million people, dramatically increasing the demand for GE’s aircraft engines.
◗◗ Today, all of GE industrial businesses have operations in China, generating $5.4 billion in revenues in 2006.
Business Roundtable | trade.businessroundtable.org
51 ◗◗ GE is a net exporter from the United States to China: In 2006, GE exported $3.7 billion from the United States to China, supporting 33,000 U.S. jobs and making China one of GE’s top five U.S. export markets.
◗◗ China also has a fast-growing demand for GE’s green technologies, including new combined- cycle power plants, wind power and filtration technology to provide safe drinking water and the recycling of wastewater emissions from steel factories.
Living Up to International Responsibilities
◗◗ GE is committed to preparing workers for the increasingly competitive economy, and it has invested more than $1 billion in training and education initiatives.
◗◗ The GE Foundation invests in GE’s communities. The Foundation made progress toward its $100 million commitment to American public education with the award of two additional grants in 2006: $20 million to the Cincinnati Public Schools district in Ohio and $15 million to Stamford Public Schools in Connecticut. The Jefferson County Public Schools district in Louisville, KY, received a similar $25 million grant in 2005.
◗◗ GE also is committed to education outside the United States, and it has put $12 million toward education programs abroad, including a partnership with Save the Children in Malawi to launch the Building a Brighter Future for Malawi Girls project.
◗◗ GE has been a leader on environmental issues at home and abroad and has committed to doubling its annual environmental research investment from $700 million in 2005 to $1.5 billion in 2010. GE has introduced more than 60 clean technology (“ecomagination”) products and reduced the company’s greenhouse gas emissions by 300,000 metric tons in 2006, saving the company’s shareowners more than $70 million in energy costs.
◗◗ GE lives and wins with socially responsible values, in the United States and globally, by respecting and enforcing labor rights and the environment in GE locations worldwide. GE is committed to safety in all its manufacturing locations, for all its products, and typically exceeds requirements set by local laws.
◗◗ GE requires its suppliers in China and throughout the world to obey laws that require them to treat workers fairly, provide a safe and healthy working environment, and protect environmental quality. GE enforces this requirement with a rigorous program to inspect suppliers and to track and follow up on the completion of needed corrective actions.
◗◗ The GE family (GE Foundation, GE Businesses and GE employees) made $219 million in contributions in 2006, with $89 million from the GE Foundation going to community and education programs. The foundation was a leader in the response to 9/11, with a $10 million contribution to the Twin Towers Fund, and GE contributed $5 million in cash and $10 million in equipment and services toward Hurricane Katrina disaster relief.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
52 “We operate in a global economy. Our strength and future as a consumer foods company will increasingly depend on our ability to meet the needs of consumers around the world.”
— Ken Powell, CEO, General Mills
General Mills — A Growing U.S. Company
◗◗ General Mills began as a flour mill on the bank of the Mississippi River in Minnesota in 1866. It was exporting U.S. flour as early as 1928. Today the company has annual sales of $13.4 billion, markets its products in more than 100 markets and is the sixth-largest food company in the world.
◗◗ General Mills manufactures and markets food products that meet the diverse range of consumer tastes around the world. Its portfolio includes some of the world’s most trusted brands, including Betty Crocker, Pillsbury, Cheerios and Green Giant products. Today, these American icons and others such as Häagen-Dazs and Nature Valley are nourishing consumers from Argentina to Australia, Canada to China.
◗◗ General Mills employs more than 11,000 American workers in nearly every state in the country. The United States remains General Mills’ largest market, with its largest workforce. The company continues to invest heavily in its employees, R&D, innovation strategies, infrastructure and communities in the United States.
International Markets Fuel General Mills’ Growth and Strength
◗◗ The international business segment of General Mills is its fastest growing, with sales rising at a robust compounded annual growth rate of 13 percent in the past four years.
◗◗ In 2007, nearly one-fourth of General Mills’ total sales came from international businesses — and that proportion is expected to continue to grow in the years ahead.
◗◗ A fast-growing international business for General Mills contributes to the solid financial health of the company, headquartered in America’s heartland. The company’s ability to continue to invest in its American operations, people and communities will increasingly depend on growing consumers’ demand for General Mills’ products overseas.
◗◗ Access to an increasingly integrated international marketplace also is fueling innovation. General Mills is seeing the growing benefits that a diverse exchange of people and thinking can bring to product development and strategies. For instance, General Mills used the insights of the Wanchai Ferry dumpling business in China and Hong Kong to build Wanchai Ferry dinner kits for French and U.S. consumers who want authentic taste and convenience.
◗◗ General Mills’ solid performance in countries with rich culinary traditions such as China is particularly notable — and speaks to the success of the company’s international insights and strategy.
Business Roundtable | trade.businessroundtable.org
53 China Is a Critical Market for General Mills
◗◗ China’s booming middle class is driving demand for quality and variety in food. General Mills is well positioned to tap into this.
◗◗ China is one of the fastest-growing markets for General Mills. Its sales in China grew by a compounded rate of nearly 30 percent over three years.
◗◗ In fewer than 10 years, General Mills has built a profitable, growing consumer foods business that strategically markets to all segments of Chinese consumers.
◗◗ Success for a consumer products company like General Mills will require continuing success and growing incomes in China. This in turn will fuel demand for General Mills and other U.S. consumer products.
Living Up to International Responsibilities
◗◗ General Mills is one of the largest corporate givers in the United States, contributing $83 million in 2007 alone — more than 5 percent of its pretax profits — to youth nutrition and fitness programs, education and scholarships, affordable housing, and arts and culture initiatives in communities across the country.
◗◗ The company has started to instill its tradition of giving and volunteerism in international communities where it has business, such as in China where it has awarded Häagen-Dazs scholarships to disabled children in the past several years.
◗◗ As a global company, General Mills also is playing a positive role in addressing intertwined challenges surrounding the use of natural resources, malnutrition and hunger, and food safety. In the past year, General Mills packed 1 million meals to feed children in five schools in Malawi. This year, feeding schoolchildren will continue in Malawi as part of a broader African Women & Children’s Hunger Project that also will include local capabilities to feed children, support the development of better agricultural practices and leverage the company’s tech- nical expertise to address agricultural and food-processing challenges in Malawi and Tanzania.
◗◗ Food-processing technology, quality control, marketing practices, labor standards and management accountabilities are some of the standard practices that General Mills is already bringing to its businesses around the world. In China, for instance, General Mills has held food-safety seminars for government regulatory officials, health inspectors and quality managers in Shanghai and Guangzhou. Such knowledge sharing can help improve the quality and safety of China’s products, as well as affirm overall high standards for the industry worldwide.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
54 “ ... if we want to succeed in the future, we must take full advantage of emerging markets.”
— Rick Wagoner, Chairman and CEO, General Motors, Oct. 12, 2007
General Motors Is a Global Automotive Leader
◗◗ General Motors (GM), the world’s largest automotive manufacturer, has been the industry leader for 76 years.
◗◗ Founded in 1908, today GM employs 284,000 people globally, including 113,231 in the United States. With its global headquarters in Detroit, GM manufactures cars and trucks in 33 countries and sells them all over the world.
◗◗ GM’s largest national market is the United States.
◗◗ In 2007, GM reported its second-best-ever international sales — 9.37 million vehicles, with record-setting sales in Asia, Europe, Latin America, Africa and the Middle East.
Emerging Markets Are Critical to GM’s Growth
◗◗ The U.S. market is still the largest and most important automotive market in the world, but much of the growth in automotive demand in recent years has come from emerging markets, such as China, Russia and Brazil. In fact, the 11 countries that GM identifies as key emerging markets have grown from 15 percent of industry unit sales in 1996 to more than 25 percent in 2007. By 2016, GM forecasts that those 11 countries will account for almost 40 percent of the automotive market.
◗◗ GM’s ability to grow in emerging markets is key to the long-term success of the company. By broadening its customer base globally, the company can continue its investment in technology and people to develop and offer the products the market demands.
◗◗ GM’s sales patterns reflected the importance of international markets. Between 1996 and 2006, the mix of GM sales shifted from 57 percent U.S. and 43 percent non-U.S. to 45 percent U.S. and 55 percent non-U.S.
◗◗ Growth in GM sales to emerging markets has been especially dramatic. In 2007, GM doubled sales volume in Russia to more than a quarter-million vehicles, achieved a sales record in Brazil with nearly a half-million vehicles sold and grew international sales of Chevrolet by more than 4 percent. GM also set a record in China with more than a million vehicles sold.
China Is an Important Part of GM’s Growth Strategy
◗◗ China is now GM’s second-largest national market.
◗◗ The growth of China’s automotive market has been remarkable. Just 10 years ago, vehicle sales in China totaled only 1.5 million units. In 2008, they are predicted to exceed 8 million vehicles.
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55 ◗◗ In 2007, GM set a record in China with more than 1 million vehicles delivered.
◗◗ GM’s China operations contribute to U.S. jobs by importing components and vehicles from the United States. GM maintains a positive trade balance in U.S.-China trade.
Corporate Responsibility
◗◗ GM prides itself on its international corporate leadership and its contributions to the communities in which it operates throughout the world.
◗◗ As a matter of policy, GM honors all local laws and respects local customs and the Global Sullivan Principles throughout its international operations. This includes requirements of its suppliers that are integrated into the terms and conditions of GM’s standard supply chain agreement that prohibits the use of child labor; forced labor; and any involuntary labor, abusive employment practices or corrupt business practices.
◗◗ GM also is giving back to the international communities in which it works. The company is a founding member of the Global Road Safety Initiative (GRSI), funded by seven of the world’s largest automotive and oil companies that have committed $10 million to road safety. GRSI will focus on the critical road-safety issues identified in the World report on road traffic injury prevention, including pedestrian safety, drinking and driving, helmet use, speed management, and seat belt use.
◗◗ GM takes environmental stewardship seriously. Over the past few years, GM and its dealers have donated hundreds of trucks to The Nature Conservancy for use in conservation projects around the world.
◗◗ GM is implementing advanced technologies in its internal combustion engines, in its hybrid vehicles and in its hydrogen-powered fuel-cell vehicles — voluntary greenhouse gas reduction initiatives that underscore GM’s commitment to continuous environmental improvement. Hundreds of buses powered by GM’s fuel-saving two-mode hybrid powertrains are saving diesel fuel for U.S. transit authorities. GM has been a leader in introducing FlexFuel vehicles in Brazil and Sweden, and in the United States GM has loaned E85 FlexFuel vehicles to U.S. state governments and other organizations to help promote the use of E85 fuel.
◗◗ Since its inception, GM Global Aid has facilitated more than $12 million in donations to disaster relief efforts in the United States, Asia and Latin America, as well as the contribution of vehicles, supplies and volunteers.
◗◗ The GM Volunteer PLUS International program, which encourages GM employees to be involved in communities where they live and work, continues to launch in new locations around the world. The program is now available in the United States, Argentina, Australia, Brazil, Canada, Chile, Colombia, Ecuador, Germany, Kenya, Poland, South Korea, the United Kingdom and Venezuela.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
56 “Our expanding global operations leverage the skills of our U.S. people while providing the critical mass for serving customers with a ‘one stop shop’ portfolio of audio and infotainment solutions.”
— Dinesh Paliwal, President, CEO and Vice Chairman, Harman International
Harman International — A Story of American Innovation
◗◗ Harman International is a U.S. company founded in 1953 by two entrepreneurs with a vision for making quality audio available to ordinary consumers. From an initial investment of $10,000, the pair soon produced an innovative FM radio tuner, followed shortly by the world’s first stereo receiver.
◗◗ Beginning in the 1980s, Harman made more than a dozen international acqusitions designed to build a portfolio covering every aspect of audio recording, mixing, enhancement and delivery. The acquired companies spanned a range of worldwide locations including Germany, Switzerland, the United Kingdom and Canada.
◗◗ Today, Harman International employs about 3,500 American workers and more than 11,000 worldwide. The company operates some 40 manufacturing and engineering sites in North America, Europe and Asia.
Seizing International Opportunities
◗◗ Harman’s access to international markets is critical to the company’s success. The company reported revenues of nearly $4 billion in fiscal year 2007, of which more than 75 percent came from abroad.
◗◗ Tapping into international markets allows Harman access to the customers of major automotive original equipment manufacturers, such as Audi, BMW, Chrysler, Dodge, Ferrari, Jeep, Lexus, Mercedes, Porsche and Toyota, among others.
◗◗ The company’s strong roots in serving the U.S. sporting and entertainment industries have made its systems a popular choice abroad as well. Harman systems now deliver the high- fidelity sound in such world-class facilities as London’s Royal Albert Hall, the Sydney Opera House and more than a dozen key venues for the upcoming 2008 Summer Olympics in Beijing.
◗◗ Further development of the company’s international business is expected from such trends as growing consumer lifestyles in emerging markets. The introduction of new mid-range products for these markets will complement Harman’s premium brands in serving the rapid growth in demand for affordable automobiles, sporting and entertainment facilities, and recorded music from U.S. artists.
Business Roundtable | trade.businessroundtable.org
57 Asia’s Importance to Harman
◗◗ Recognizing the importance of emerging Asian markets, Harman now operates branch facilities in Shenzhen, China; Nagoya, Japan; and Singapore. A software engineering center is under development for India.
◗◗ The company’s strategic plan is focused on marketing premium audio products in Asia as an alternative to low-priced local competitors. The growing affluence of Asian markets will help to leverage the company’s strategy of blending Western designs with local manufacturing competence.
◗◗ The company recently launched its first audio and navigation platform for leading automaker Hyundai, equipping a luxury Korean sports sedan with technology developed in Detroit and Germany.
Committed to Community and Responsibility
◗◗ Since 1996, the company has sponsored an annual music outreach program called Harman: How to Listen. The program has provided interaction between professional musicians and students in more than 300 schools in 25 cities across the United States.
◗◗ The company recently agreed to donate a complete sound system to the Grammy Award Museum, now under construction in Los Angeles. Similar gifts have been made to various universities and institutions in the interest of furthering studies in the audio arts.
◗◗ The company has long been committed to environmental stewardship in its manufacturing processes, and it is currently developing a special branding program to identify products that offer specific environmental benefits in terms of power consumption, weight savings and so on.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
58 “People around the world are increasingly being forced to devise and manage their own retirement savings plans. The Hartford helps people on three conti- nents to achieve that, and we believe that this will be one of the driving forces in the financial services industry for decades to come.”
— Ramani Ayer, Chairman and CEO, The Hartford
The Hartford: An American Company with a 200-Year Tradition of Excellence
◗◗ The Hartford was founded in Hartford, CT, in 1810 and has, in the years since, paid every legitimate claim presented to it. Financial strength and thoughtful risk management, combined with an unshakable set of core values, are at the heart of The Hartford’s success over the past nearly 200 years.
◗◗ The Hartford’s worldwide operations help the company fulfill its mission of helping people attain financial security and protect their assets.
◗◗ The Hartford employs 31,000 workers, more than 30,000 of whom live in the United States. Hartford employees are found in every single state in the Union.
The Importance of International Markets
◗◗ The Hartford recognizes that leadership in the financial services sector requires a proactive international strategy.
yy The Hartford has proudly served its U.S. customers for almost two centuries. As it continues this tradition here at home, the company also sees enormous opportunities to bring the skills, knowledge and financial discipline developed in the United States to the other 96 percent of the world’s population.
yy In 2000, The Hartford brought the tools and skills that made it a leader in the U.S. variable annuity market to the Japanese market. Beginning as a greenfield start-up, The Hartford quickly became the leading provider of variable annuities in the Japanese market. By the end of 2007, assets under management in Japan comprised more than 10 percent of The Hartford’s total Life operations assets under management. The company also has achieved more than a 20 percent market share in the Japanese market.
yy Building on the success in Japan, the company is expanding into similar developed markets with the same pressing demographic demands.
yy The Hartford has built a strong presence in the European market. The European, Japanese and U.S. markets combined represent 90 percent of the world’s life insurance and pension markets. The Hartford is therefore in a strong position for growth.
Business Roundtable | trade.businessroundtable.org
59 ◗◗ The Hartford also recognizes the growing demand for insurance services in other overseas markets, and it is positioning itself to win market share.
◗◗ As it has done in the past, The Hartford’s increased presence and market position abroad will continue to provide opportunities for its American workforce to grow.
Supporting the Communities Where We Live and Work
◗◗ The Hartford gives more than $7 million annually to philanthropic programs, making community giving an integral part of its company culture. From its founding partnership with the U.S. Paralympics to its popular financial literacy program for college students, Playbook for Life, The Hartford takes an active role in supporting its communities and employees worldwide. The Hartford focuses more than half of its giving in Hartford, CT, the site of its world headquarters. The company maintains a strong focus on public education.
◗◗ The Hartford places a high value on volunteerism. In addition to tutoring and mentoring programs, the company offers employees opportunities to volunteer through Habitat for Humanity, Junior Achievement, food drives, meal deliveries to the elderly and blood drives, among others. In 2007, employees logged 93,000 volunteer hours. The company offers employees paid time off for volunteerism and significant corporate support to volunteer programs in an effort to make community service fit easily within employees’ work-life balance.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
60 “It’s important for a global company to stay close to its customers, while gaining the perspectives of engineering talent in every corner of the world.”
— Dave Cote, Chairman and CEO, Honeywell, Sept. 10, 2007
Honeywell Is a Global Company
◗◗ Honeywell is a $37 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Honeywell’s shares are traded on the New York, London and Chicago Stock Exchanges.
◗◗ Honeywell has 125,000 employees located in more than 100 countries, enabling the company to be closer to its global customers. Approximately half of the company’s revenue and employees are located outside of the U.S.
International Operations Build Honeywell’s Financial Strength and Support Growth
◗◗ Honeywell’s sales increased 11 percent, earnings per share increased 20 percent and free cash flow increased 19 percent on a compound annual growth rate from 2003 to 2007, demonstrating growing demand for its products, greater productivity throughout its businesses and a stronger overall operating environment.
◗◗ For 2008, Honeywell expects revenue in the Americas to grow at a mid- to single-digit rate; in Asia-Pacific at a rate in the high teens; and in Europe, the Middle East and Africa at a mid- to high-single-digit rate, emphasizing the importance of an international business footprint for the company.
Honeywell Innovates Globally
◗◗ Honeywell has more than 17,000 scientists and engineers working in 30 laboratories and development centers — from Phoenix, AZ, to Brno, Czech Republic, to Shanghai, China — that draw on the world’s top engineering talent and position the company to respond to customers’ needs in an efficient manner.
◗◗ The company manages more than 31,000 patents and pending patent applications and approximately 8,000 trademark registrations and applications globally to protect its valuable intellectual property portfolio.
◗◗ Honeywell has more than 1,400 active licenses worldwide that leverage the value of the company’s intellectual property and strong brand equity.
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61 China Is an Integral Part of Honeywell’s Global Success and Growth
◗◗ Honeywell increased its 2007 net revenue in China by 34 percent to $839 million. The company has been doing business in China for more than 70 years, and it has built a strong regional network of engineering talent and R&D capabilities and demonstrated a commitment to local communities throughout the region.
◗◗ In October 2007, the company announced the formation of Honeywell Technology Solutions China, which integrates regional R&D and technology capabilities for the company’s busi- nesses. Approximately 20 percent of Honeywell’s total workforce in China is part of the company’s technology and engineering function.
◗◗ Honeywell is recognized as a well-known trademark in China, a designation that protects and strengthens the company’s brand and creates greater opportunities for the company to grow throughout the region.
Honeywell Is Committed to Its Local Communities Globally
◗◗ Since 2004, Honeywell Hometown Solutions (HHS), the company’s corporate citizenship initiative, has received 50 awards for corporate social responsibility.
◗◗ HHS focuses on four areas of vital importance: Family Safety and Security, Housing and Shelter, Science and Math Education, and Humanitarian Relief. HHS programs have taught 13 million children life-saving safety skills; repaired more than 155 homes and shelters for low-income homeowners in 41 markets; inspired thousands of students to pursue careers in science and technology in 48 U.S. states and 35 countries; and helped Honeywell employees and communities recover from natural disasters such as the Asian tsunami, Gulf Coast hurricanes and Juarez floods.
◗◗ The Honeywell-Nobel Initiative is a global education effort connecting students across the globe with Nobel Prize winners in chemistry and physics. The initiative combines on-campus events — the Honeywell-Nobel Laureate Lecture Series — with Web-based educational content created with Nobel Laureates and broadcast programming, reaching more than 276 million households worldwide. Eighteen select universities are participating in the lecture series, including Shanghai Jiao Tong University in China; Czech Technical University; Howard University in Washington, DC; the Government College of Engineering in India; and Tecnológico de Monterrey in Mexico.
◗◗ Honeywell Educators @ Space Academy brings middle school science and mathematics teachers from around the world to the U.S. Space & Rocket Center in Huntsville, AL, to take part in a five-day educator training program. Since 2004, 685 teachers have participated from 48 U.S. states and 35 countries, including Australia, Cameroon, China, France, India, Ireland, Italy and Mexico.
◗◗ HHS child-safety programs have reached every elementary school in the United States, including more than 73,300 schools and 240,000 principals and teachers, as well as more than 300,000 students in Canada and 200,000 Chinese students in Chengdu, Xi’an, Chongqing, Tianjin and Shenzhen.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
62 “Global integration is the new playing field — and innovation is the way you win the game. ... The ability to innovate, reinvent and adapt is a traditional strength of the U.S.”
— Samuel J. Palmisano, Chairman, President and CEO, IBM, July 25, 2007
IBM Is a Globally Integrated Enterprise
◗◗ With operations in 170 countries, IBM has transformed itself from a multinational corporation to a truly globally integrated enterprise, with linked operations and supply chains around the world. IBM spends approximately $38 billion annually procuring materials and services through its global supply chain.
◗◗ IBM expands and invests strategically by leveraging skills in the United States and around the world — semiconductor development and manufacturing in upstate New York and Vermont; global service delivery in India; global procurement missions in China; Web services in Ireland and Brazil; and a worldwide data center in Boulder, CO.
◗◗ IBM teams in each of these locations, and others in the United States and abroad, lead globally integrated operations and services for the company as a whole. By managing its talent pool on a worldwide basis, IBM is more competitive and better able to meet its clients’ needs.
Global Operations Are Critical to IBM’s Strength as a Company
◗◗ IBM’s non-U.S. operations generate more than 60 percent of company revenue.
◗◗ IBM’s biggest revenue growth is outside the United States, where IT markets are growing most rapidly.
◗◗ For instance, in China, Brazil, India and Russia, IBM is growing revenue by more than three times the worldwide rate. IBM’s business in those markets grew by 26 percent in 2007, compared to only about 8 percent in the world as a whole and 2.9 percent in the United States. Overall, the company expects the IT market in these four countries to grow at more than two times the worldwide rate, with an opportunity of more than $150 billion by 2010.
◗◗ Still, the United States remains IBM’s largest market, and IBM continues to invest heavily in the United States. For example, in 2007 more than 75 percent of IBM’s $6.2 billion in R&D spending was in the United States. Of the more than 38,700 patents issued to IBM between 1993 and 2007, 90 percent were based on inventions made in the United States. IBM’s investments in R&D have resulted in intellectual property income of approximately $1 billion annually from around the world.
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63 ◗◗ Given the rapid growth in foreign markets, IBM’s 120,000 U.S. employees, and its U.S. stockholders, depend critically on the company’s success internationally. IBM’s U.S. employees support globally integrated activities, and stockholders depend on growth fueled by international markets.
China Is an Integral Part of IBM’s International Success
◗◗ China is a key player in the global IT market, and over the medium term, IBM’s success will require success in China, which is one of the company’s fastest-growing markets. IBM’s revenue in China grew by over 30 percent in 2007.
◗◗ IBM sales are reflective of broader U.S. technology growth in China — from 2000 to 2006, U.S. technology exports to China more than tripled, to $14.1 billion.
◗◗ Just as the computer hardware market in China has already become an important source of revenue for IBM, IT services and software hold the potential for tremendous future growth as the IT market matures. This is especially important, since IBM generates three-fourths of its revenue in services and software.
Living Up to Global Responsibilities
“The very fact that so many more people all over the world are gaining equal access to the production process and the marketplace means much more trade and competition. Although this will create wealth and opportunity, it will also bring disruption and fear, both of which could threaten global integration. Legitimate concerns about job loss and skill shortages must be addressed in realistic and constructive ways.”
— Samuel J. Palmisano, Chairman, President and CEO, IBM, Foreign Affairs, May/June 2006
◗◗ Investing in U.S. workers: IBM has launched an innovative new program, Matching Accounts for Learning, through which the company will match 50 cents for every dollar of employee contribution, up to $1,000 annually, that can be used by the employee for any external learning expense. This complements existing IBM investments in worker education: In 2007 alone, IBM invested $271 million in employee training, $25 million in K–12 education initiatives, and $27 million in college, university and other education programs. In addition, IBM has created new programming to support employees who transition to the public and not-for-profit sectors.
◗◗ Promoting ethical business practices internationally: IBM helped to form the Electronic Industry Code of Conduct, a collaborative effort by electronic companies and suppliers to provide worldwide standards for labor, health and safety, ethics, environmental, and management practices. To date, IBM has conducted more than 300 supplier performance audits in China, India, Mexico, Thailand and the Philippines, and it anticipates expanding this to Eastern Europe.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
64 ◗◗ Environmental stewardship: Between 1990 and 2006, IBM avoided nearly 3 million metric tons
of CO2 emissions (equal to 44 percent of the company’s 1990 global CO2 emissions), and it has a $1 billion investment to advance green technology and services to improve data-center energy efficiency. Its end-of-equipment-life initiatives processed used equipment in 2006 equivalent to 49 percent by weight of new equipment manufactured and sold in the same year. And the company has teamed up with The Nature Conservancy to develop a computer- modeling framework to help policymakers manage river basin resources around the world.
◗◗ Enhancing U.S. technology education: IBM has been a leader in standards-based reform and invested in technology programs for pre-K–12 students and teachers, has created internships for MBA and software engineering students, and is partnering with universities around the country to create the new academic discipline of “service science.” IBM also has created Transition to Teaching, a unique initiative to grow the pool of K–12 mathematics and science teachers by encouraging the company’s qualified professionals to become second-career teachers, supported by a $15,000 tuition grant.
◗◗ Increasing diversity in the American technology industry: IBM has invested heavily in technology achievement programs for underserved and underrepresented communities, including Hispanic, African American and Native American communities. IBM also funds a program aimed at increasing interest in mathematics, science and technology among girls age 11–13.
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65 International Paper: Committed to Operational Excellence
◗◗ International Paper (NYSE:IP) is a global manufacturing company that produces recyclable paper and packaging products from renewable resources. The company is headquartered in Memphis, TN, with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa.
◗◗ Businesses include uncoated papers and industrial and consumer packaging, complemented by xpedx, the company’s North American distribution company. International Paper employs more than 64,000 people in more than 20 countries and serves customers worldwide.
◗◗ In the United States, International Paper has 46,000 employees and operates 24 pulp, paper and packaging mills and almost 200 converting, packaging and recycling facilities.
◗◗ International Paper is proudly expanding its investment in North American manufacturing. In August 2008, the company added nine new linerboard mills, 72 box plants and 30 other converting facilities. This acquisition included 14,000 employees throughout North America.
◗◗ The company distributes printing, packaging, graphic arts, maintenance and industrial products through more than 250 distribution branches located primarily in the United States.
◗◗ Operations in Europe, Asia and Latin America include pulp, paper and packaging mills and converting and packaging plants.
◗◗ In 2007, International Paper had sales of $22 billion and was ranked No. 114 among Fortune 500 companies.
◗◗ In 2008, the company was named No. 1 in the forest products sector for the sixth-consecutive year on Fortune magazine’s Most Admired companies list. International Paper also was ranked No. 1 in its industry in each of eight key attributes of reputation: innovation, people management, use of company assets, social responsibility, quality of management, financial soundness, long-term investment value, and quality of products and services.
International Paper Supports Global Free Trade
Some key export statistics, prior to International Paper’s August 2008 acquisition, include:
◗◗ Approximately $1 billion of International Paper’s $8 billion in U.S. paper and packaging sales volume in 2007 was based on the company’s direct export shipments and customer exports of International Paper products.
◗◗ International Paper’s 2007 exports to South Korea and Colombia were $50.2 million and $39 million, respectively.
◗◗ In the United States, 3,000 International Paper employees have positions directly related to export opportunities.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
66 ◗◗ The elimination of trade barriers will advance International Paper’s ability to attain greater market access for our products. Bilateral and regional negotiations on free trade agreements provide opportunities to eliminate or significantly reduce tariff and non-tariff barriers on wood and paper products with selected trading partners. These agreements open global markets for U.S. products and allow American companies to be profitable amid a slowing domestic economy.
International Paper: Promoting Forest Sustainability and Environmental Stewardship
◗◗ International Paper has a long-standing policy of using no wood from endangered forests. International Paper supports mutual recognition of forest certification standards.
◗◗ We have encouraged the adoption of CERFLOR, the SFI Standard and other systems recognized by the global Programme for the Endorsement of Forest Certification council.
◗◗ International Paper is committed to environmental stewardship and is engaged in partnerships with the U.S. Environmental Protection Agency, state agencies and nongovernmental organizations.
Living Up to International Responsibilities
◗◗ International Paper is a global community of aligned, dedicated, highly motivated people delivering superior value to customers through operational excellence. At the foundation of the company’s community is its ethical culture.
◗◗ From International Paper’s ethical foundation, and acting according to the company’s core values, International Paper is managed through three key drivers — People, Customers and Operational Excellence. ◗◗ We live in times that are characterized by new relationships, new realities and new pressures as individuals and as members of a global community. To maintain the company’s ethical compass, International Paper relies on its core values — the Principles of Excellence from the IP Way — which are solid, enduring and time-tested.
◗◗ International Paper is passionately focused on business results and customer success. The company insists on excellence and being the best and winning through great leadership and innovation.
◗◗ Ethisphere Magazine named International Paper one of the world’s most ethical companies in June 2008.
◗◗ International Paper has the greatest number of facilities certified or recommended for certification in OSHA’s Voluntary Protection Program, the U.S. government’s elite safety program.
◗◗ In 2007, the International Paper Foundation awarded more than 1,000 grants across the world focusing on environmental education, literacy and minority career development.
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67 “Trade is vital to our competitiveness, and it is critical to our goal to grow a business as great as our products.”
— Bob Lane, Chairman and CEO, Deere and Company
John Deere Is an International Company
◗◗ John Deere’s business is integrally involved in the international economy. Today, Deere manufactures in 28 countries, including the United States, and serves customers in 130 countries.
◗◗ John Deere works directly and indirectly with 30,000 suppliers worldwide and spends more than $12.6 billion per year obtaining high-quality parts and components for its factories and on to its dealers.
◗◗ In the United States, John Deere employs more than 32,000 people and overall employs nearly 58,000 people.
◗◗ Optimization of production, marketing and sales activity on an international scale is critical to the overall viability of the enterprise. Deere is a strong proponent of open economies and economic integration.
International Markets Offer Significant Potential for Growth
◗◗ Export markets are critical to Deere’s U.S. manufacturing operations. Last year, export sales of U.S.-made Deere equipment exceeded 16 percent of total new equipment sales. Today, roughly one of every three tractors produced at Deere’s Waterloo, IA, plant are exported to customers across six continents. One in four combines manufactured in East Moline, IL, are exported.
◗◗ Global food requirements continue to grow, both from population expansion and from growth in consumer purchasing power. The expansion of agricultural markets through expanded trade benefits Deere’s farmer customers both here and internationally. The economic growth resulting from trade and more open economies generates rising incomes and rising demand for agricultural products necessary to feed, clothe and fuel the world.
◗◗ Unencumbered markets also enable Deere to access high-quality materials and components at internationally competitive costs and to move these to factories and customers who need them, when they need them.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
68 ◗◗ Operating internationally expands employment opportunities for employees who work on products marketed overseas. An example is the company’s recent announcement of a multimillion dollar investment to expand manufacturing capacity some 30 percent at Harvester Works in Moline and Waterloo Works (25 percent) to meet growing worldwide demand for large combines and agricultural equipment. Participating in a growing international market allows the company to sustain and expand jobs here at home.
China Is an Important Market for John Deere
◗◗ John Deere’s engagement with the China market dates to the mid-1970s, when then- Chairman Bill Hewitt led one of the very first visiting U.S. business delegations. The company then initiated several demonstration farms (“Freedom Farms”), which showcased modern farming practices and technology to Chinese farmers, including the productivity of Deere agricultural machines.
◗◗ Today, Deere operates four manufacturing facilities in China making tractors, combines and component systems for the Chinese and export markets. In addition, Deere recently announced a joint venture to produce construction machinery. Deere’s operations also include strategic sourcing and engineering that support the company’s international operations. More than 4,000 people are employed in these operations.
◗◗ The China market represents a significant immediate and long-term opportunity for Deere, reflecting the country’s rapid current and potential growth and the implied consumption of agricultural commodities and infrastructure development. This market will not only benefit Deere’s China operations, but also will provide export opportunities for the company’s farmer customers in other parts of the world.
Corporate Citizenship — A Vital Part of Deere’s Daily Operations Worldwide
◗◗ As an international manufacturer, John Deere strives to conduct business around the world in a way that safeguards employees, customers, community neighbors and the environment. Consistent investment in state-of-the-art production facilities is undertaken with environmental stewardship in mind. An example is Deere’s newest facility, a tractor factory in Montenegro, Brazil, that discharges no wastewater and was planned and built using minimal-energy-use principles.
◗◗ Training and education enable employees to reach their potential in every discipline, from the factory floor to the corporate headquarters. Continuous learning and development is critical to the success of John Deere and to our employees’ satisfaction in the contributions they make. As John Deere continues to grow globally, changing opportunities for challenging work require professional growth through ongoing training and education. John Deere Learning, an online learning tool, provides access to a range of colleges and course curricula to assist employees in their development.
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69 ◗◗ Deere is reducing greenhouse gas (GHG) emissions from its operations and continues to reduce product emissions, helping customers reduce their emissions. In 2008, Deere announced a comprehensive, companywide GHG reduction goal as part of its participation in the U.S. Environmental Protection Agency’s Climate Leaders program. Representatives from Deere’s 15 largest global manufacturing facilities are working together to reduce emissions of GHG such as carbon dioxide, and every Deere manufacturing location is responsible for identifying energy-saving projects as part of this effort. In addition, Deere supports alternative energy sources such as wind and renewable fuels.
◗◗ Deere also supports philanthropic efforts around the world through monetary contributions, in-kind donations, sponsorships and memberships, as well as through employee volunteer efforts. The John Deere Foundation, based in the United States, last year provided donations of some $11.2 million. In other countries, smaller foundations and localized contribution programs support organizations and projects of importance in their communities.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
70 “Opening this office in Chongqing marks a significant milestone in the growth of our international operations.”
— Edmund F. Kelly, Chairman, President and CEO, Liberty Mutual Group, January 2004
Liberty Mutual Group Is International
◗◗ Liberty Mutual Group is the second-largest U.S.-based international property and casualty insurance company. It ranks 95th on the Fortune 500 list of largest corporations in the United States based on 2006 revenue, and it is the sixth-largest property and casualty insurer in the United States based on 2006 direct written premium. As of Dec. 31, 2007, Liberty Mutual Group had $94.7 billion in consolidated assets, $82.3 billion in consolidated liabilities and $25.9 billion in annual consolidated revenue.
◗◗ Liberty Mutual’s international operations, Liberty International, provide personal and small commercial lines insurance, global specialty commercial lines insurance and reinsurance business through offices in 24 countries. Liberty Syndicate 4472 at Lloyd’s of London writes on a worldwide basis.
◗◗ Liberty International is the No. 1 insurer in Venezuela; the No. 1 property and casualty company in Colombia; and a top-10 property and casualty company in Brazil, Chile, Portugal, Spain, Singapore and Thailand.
International Operations Are Critical to Liberty Mutual’s Strength as a Company
◗◗ Liberty International is an integral part of Liberty Mutual’s strategy to diversify revenue and income. In 2007, Liberty International contributed 25.4 percent of Liberty Mutual Group’s $22.5 billion in net written premium.
◗◗ Liberty Mutual’s fastest growth is in its international business, where property and casualty insurance markets are growing most rapidly. Liberty International had $5.7 billion in net written premium and growth of 23 percent in the year ended Dec. 31, 2007. It has had a sustained compound annual growth rate of 18.9 percent since 1998.
◗◗ The U.S. economy benefits from Liberty Mutual’s international operations through the revenues brought back to its U.S. operations.
China Is Strategically Important
◗◗ Liberty Mutual has had a presence in China since 1996 when it opened a Safety Representative Office in Shanghai. In 1998, Liberty Mutual opened its first Insurance Representative Office (IRO) in Chongqing, and in 2000, it opened another IRO in Beijing.
◗◗ In December 2003, Liberty Mutual opened a branch operation in Chongqing, located in the western part of China, to provide insurance to foreign businesses operating in China and personal accident insurance to individuals. In June 2005, the Chongqing office wrote its first auto-insurance policy.
◗◗ Following its conversion to a wholly owned subsidiary in 2007, Liberty Mutual will be able to expand to additional provinces.
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71 ◗◗ In 2006, China’s non-life insurance premium volume was ranked third in Asia and 11th in the world, according to Swiss Re’s Sigma report. China had a non-life total premium of $25 billion in 2006 and $20 billion in 2005.
◗◗ With 1.3 billion people, China offers significant growth opportunities to all insurance com- panies, including Liberty Mutual. However, China’s current prohibition on foreign companies selling mandatory third-party liability insurance is a barrier to full growth potential.
Living Up to International Responsibilities
◗◗ A key component of the company’s international presence, especially in Asia, is the work conducted by the Liberty Mutual Research Institute for Safety, located in Hopkinton, MA. In September 2006, the Research Institute signed a memorandum of understanding with the National Institute of Occupational and Environmental Health (NIOEH) in Vietnam to open a joint research institute in Hanoi called the Liberty SafeWork Center. The center hosts ongoing safety research projects conducted throughout Vietnam by researchers from NIOEH and Liberty Mutual’s Research Institute. The research projects are funded by Liberty Mutual.
◗◗ In 2007, the Research Institute presented to the prime minister of Vietnam the findings of a study it conducted in conjunction with NIOEH. The study’s goal was to determine the total number of injuries in the country, determine how many of those injuries happen at work and, based on the findings, provide Vietnam with a model for reporting workplace injuries as part of the prime minister’s initiative to reduce the injury burden in Vietnam dramatically over 10 years.
◗◗ In China, Liberty Mutual has developed important safety and health research partnerships with the government and prominent universities throughout the country. Between 1999 and 2005, Liberty Mutual co-organized an annual SafeWork Forum with China’s State Administration of Work Safety (SAWS). Each year more than 300 Chinese business, government and academic leaders have attended the SafeWork Forum to discuss work safety and occupational health to promote improvement of work-safety management methods in China.
◗◗ In 2006, Liberty Mutual co-sponsored the Third China International Forum on Work Safety in Beijing with the UN’s International Labour Organization and SAWS. Held every other year, this conference is the successor to the SafeWork Forum series.
◗◗ In June 2000, Liberty Mutual’s Research Institute for Safety established the Liberty Mutual SafeWork Center at Fudan University in Shanghai. The company followed this partnership by establishing the Liberty Mutual SafeWork Program at Tsinghua University in Beijing in October 2002. The cornerstone of these programs is the researcher exchange program where researchers visit each institute on an annual basis to conduct joint studies.
◗◗ Additionally, the company’s Loss Prevention department recently collaborated with Chongqing on a seat-belt awareness campaign, using highway message boards to encourage seat-belt use. In January 2007, the Loss Prevention representatives concluded a three-year decision driver- training program in Chongqing designed to train Liberty Mutual’s staff and policyholders safe driving techniques and to transfer training program administration to Liberty’s Chongqing staff.
◗◗ Liberty Mutual has collaborated with local government officials in Chongqing province to build the Liberty Mutual Hope School, which serves children from the Three Gorges Dam area who were displaced by the dam’s construction. The company also has helped fund projects for the deaf and research projects for the Disabled Persons’ Federation.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
72 “A driving goal for all of MassMutual’s member companies is to generate an adequate return to its owners or its U.S. life insurance participating policyholders. MassMutual International strives to make sound investments and run operations outside the U.S. to help meet that domestic goal.”
— Elaine A. Sarsynski, President and CEO, MassMutual International
MassMutual Financial Group1 Is a Leading U.S. Insurance Company with an International Presence
◗◗ MassMutual is ranked 90th on the 2007 Fortune 500 list of U.S. companies, and it has the highest ratings from three major rating agencies.2
◗◗ MassMutual, incorporated in 1851, provides life insurance, retirement products and investment services to millions of Americans.
◗◗ MassMutual and its domestic subsidiaries have more than 9,000 full-time employees in the United States; operate in all 50 states, the District of Columbia and Puerto Rico; and had 1.8 million U.S. life insurance policies in force as of year-end 2007.
◗◗ MassMutual values the growth of international markets for its U.S. policyholders. MassMutual, through its subsidiaries and affiliates, has a presence in Austria, Chile, China, France, Germany, Hong Kong, Ireland, Japan, Luxembourg, Macau, Taiwan and the United Kingdom.
International Markets Are Key to Delivering Diversified Growth for MassMutual
◗◗ MassMutual generated more than 10 percent of its total insurance earnings from outside the United States in 2007.
◗◗ Over the past five years, the compound annual growth rate of MassMutual’s international insurance sales was 46 percent.
◗◗ $4.637 billion, or nearly 16 percent, of MassMutual’s premium and fees generated in 2007 came from the international insurance operations.
The Chinese Market Presents Opportunities for MassMutual
◗◗ China’s life insurance and pension markets offer significant growth opportunities for the next 30 years.
1MassMutual Financial Group is a marketing designation (or fleet name) for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates.
2Ratings as of March 3, 2008. Ratings are subject to change.
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73 ◗◗ MassMutual, through its Hong Kong insurance subsidiary, has maintained an insurance representative office in Shanghai since 2000.
◗◗ Many U.S. insurance companies have established footholds in China either through joint ventures or in asset management companies. They wish to participate in such markets with low insurance penetration rates and to offer asset management products for China’s growing middle class.
◗◗ China has a rising and aging middle class that by 2025, according to McKinsey Consulting, is expected to number 612 million people. They will have growing needs for wealth management and retirement provisions.
◗◗ The growth and development of China’s financial markets are occurring at a fast pace and offer American financial services firms an opportunity to offer expertise and generate significant returns for their U.S. owners.
◗◗ MassMutual continually assesses opportunities in China to deliver on its strategic competencies in the life protection, asset management and at-retirement markets.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
74 “Our business is global. We do business in more than 200 countries. We have offices in more than 40 countries around the world. We’re growing faster outside the U.S., even though we’re a U.S.-headquartered company … we’re right at the cusp of having more than half of our revenue outside the U.S. If I think forward five or 10 years, if you look at the way the global economy is dispersed, I think our company is going to mirror that — a third Europe, a third the Americas and a third Asia.”
— Robert Selander, President and CEO, MasterCard, Directorship Magazine, April/May 2007
MasterCard Is a Driving Force in Worldwide Commerce
◗◗ MasterCard develops more secure, convenient and rewarding payment solutions, processing more than 18 billion transactions per year across the globe. Its worldwide footprint and diverse market experience enhance the company’s ability to advance commerce in new and emerging markets.
◗◗ Approximately 50 percent of the company’s business facilitates commerce among financial institutions, merchants and consumers outside the United States. MasterCard’s highest year- end 2007 growth rates were generated from its South Asia, Middle East and Africa region; Asia Pacific; and Latin America. About one-third of its workforce is located outside the United States.
◗◗ MasterCard has some 25,000 financial-institution customers around the world, with its bank shareholders now owning about one-third of the company’s common stock following MasterCard’s IPO in 2006.
◗◗ Maintaining a set of world-renowned brands, including MasterCard, Maestro and Cirrus, MasterCard is accepted at more than 25 million locations in 210 countries across the globe.
◗◗ MasterCard’s Priceless campaign is one of the largest single communications platforms in the world, reaching consumers in 109 countries and 50 languages.
MasterCard’s Worldwide Presence Is Critical to the Company’s Success
◗◗ Responding to increasing globalization, MasterCard facilitates cross-border commerce, fueling economic connections and driving value for customer financial institutions, merchants, businesses, governments and consumers.
◗◗ As part of MasterCard’s IPO, the company took the lead in recognizing that a new ownership and governance structure would place MasterCard in a stronger, more competitive position globally. A key component is MasterCard’s Board of Directors, considered to be one of the most globally diverse boards in the United States, with a nonexecutive chairman based in Europe.
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75 ◗◗ Employees at MasterCard continue to be a key differentiator for the company, with a high priority placed on ensuring that senior leadership has both strong and varied functional and geographic expertise.
◗◗ MasterCard places a substantial amount of resources behind its Products and Services groups in the United States to support the growth of the products driving MasterCard’s business overseas, specifically targeting opportunities for women in Asia and for the affluent markets in both Latin America and Asia.
◗◗ MasterCard continues to focus on fast-growing geographic markets, such as China, India, Brazil and Mexico, to make commerce more inclusive, more efficient and more secure.
◗◗ Twenty years ago, very few people in India were familiar with payment cards; today, there are more than 21 million credit cards and 70 million debit cards in the country. India’s consumer market ranks 12th in the world, and by 2025, India’s market is expected to be the fifth largest in the world, surpassing Germany. (Source: United Nations Economic and Social Commission for Asia and the Pacific, Economic and Social Survey of Asia and the Pacific, April 2007.)
◗◗ In 1987, MasterCard became the first internationally branded bank card to be issued in India; two years later MasterCard was the first payment association to extend its international telecom network to India to support electronic authorization and settlement.
◗◗ The Brazilian electronic payments market has grown by approximately 20 percent annually for the past several years; today, there are 150 million credit cards and 189 million debit cards in the country. (Source: ABECS — Brazilian Association of Credit Card Companies.) MasterCard serves both the unbanked and the affluent populations in Brazil.
China Is Part of MasterCard’s Worldwide Success
◗◗ In 1987, MasterCard set up office in Beijing, marking the first international card association to enter China, and one year later the Bank of China launched China’s first international credit card — a MasterCard card.
◗◗ Ten years later, in 1997, China’s first international corporate card was a MasterCard card, introduced through the Industrial and Commercial Bank of China.
◗◗ In a further demonstration of MasterCard’s commitment to China, MasterCard announced that it had the largest international ATM network in the People’s Republic of China as of February 2001.
◗◗ China’s consumer credit market is expected to account for an increasingly large segment of worldwide banking industry profits. MasterCard is rapidly introducing new and innovative payment solutions in China to address this growing market, most recently as the first international brand to launch the country’s contactless card, MasterCard PayPass.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
76 Living Up to Global Responsibilities
◗◗ At the heart of commerce, MasterCard is committed to delivering insights that advance local economies and foster business growth. In 2007, MasterCard launched the Worldwide Centers of Commerce program to analyze, evaluate and rank the role of major cities in the worldwide economy. As part of this initiative, MasterCard reached out to cities around the world, pro- viding knowledge and data to help them enhance their business climates and fuel growth.
◗◗ MasterCard fosters a positive workplace in the more than 40 countries where it has offices. The company provides its 5,000 employees excellent benefits, professional development opportunities and a chance to work all over the world. Diversity and inclusion are important values for MasterCard, which prides itself on its workforce.
◗◗ MasterCard’s philanthropy focus is deeply rooted in youth education worldwide and disaster relief. To that end, MasterCard funded the development of a Global Workplace course being taught by Junior Achievement Worldwide in 22 countries. Additionally, MasterCard set aside shares and funds from its IPO to create The MasterCard Foundation, an independent entity based in Canada but with a worldwide scope. The foundation’s mission is to broaden access to the worldwide economy through innovative microfinance programs and to increase educational opportunities for young people around the world.
◗◗ Understanding the importance of helping consumers spend responsibly, MasterCard develops and facilitates financial literacy and consumer education programs tailored to audiences around the world.
◗◗ With the support of the Indian Banking Association and in association with the India Card Council, MasterCard launched the Financial Know-How program, India’s first-of-its-kind Web- based consumer education initiative. The Web site marks the launch of an ongoing financial education program.
◗◗ In 2005, MasterCard launched its MasterCard Campus Credit Card & Financial Management Education Campaign for Chinese university students. The campaign includes a series of campus talks and a marketing strategy competition to provide students with firsthand credit-management experience.
◗◗ MasterCard helps mitigate the impact of natural disasters around the world by offering products and services such as Red Cross cards, unbanked products and services, and money transfers that help people in times of need.
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77 “The time has come to strengthen the constructive relationship between the U.S. and China. The business community needs to help the American public under- stand the importance of our relationship with China.”
— Harold McGraw III, Chairman, President and CEO, The McGraw-Hill Companies, Financial Times, April 16, 2006
The McGraw-Hill Companies Is a Leading Information Provider
◗◗ From the Industrial Revolution to the Internet Revolution, The McGraw-Hill Companies has filled a critical need for actionable information and insight by providing information, insight and analysis to individuals and businesses around the world in a broad range of markets.
◗◗ Today, with over 12,000 U.S.-based employees, The McGraw-Hill Companies is a leading international information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek, JD Power and Associates, Platts, McGraw-Hill Construction, and McGraw-Hill Aerospace and Defense.
The McGraw-Hill Companies’ International Presence
◗◗ The McGraw-Hill Companies’ international presence is large and growing — with 280 offices in 40 countries worldwide.
◗◗ The McGraw-Hill Companies’ international operations are a source of strength and growth, with consistent growth in revenues from international sources. International revenues increased from 22 percent of the corporation’s total revenues in 2005 to 26 percent in 2007.
China’s Growing Markets Are Important to The McGraw-Hill Companies
◗◗ China has the largest education market in the world with an enrollment total of more than 230 million students from elementary school through the university level. McGraw-Hill Education provides vital instructional materials to schools throughout China via joint ventures with Jiangsu Phoenix Publishing & Media Group, the largest publishing house in China; China Machine Press, the market leader in business and management publishing; and Foreign Language Teaching and Research Press, the largest foreign languages publishing house in China.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
78 ◗◗ The capitalization of the two mainland Chinese stock exchanges, at nearly $5 trillion, makes China the world’s second largest stock market. Standard & Poor’s, in a joint venture with CITIC Securities and through their wholly owned entity, S&P Information Service Limited, provides investors with a full range of market indices, financial consulting and risk management services.
◗◗ China’s automobile sales total more than 6 million units, making China the second largest market in the world for automobile sales. JD Power and Associates has operated in China since 2006, providing reports, reviews and insight on China’s growing automobile market.
◗◗ Platts, with China’s National Development Reform Commission, hosts the Platts Energy Forum, providing information and analysis on China’s growing energy markets.
◗◗ The McGraw-Hill Companies has published BusinessWeek in China for more than 20 years.
◗◗ AviationWeek, in a long-time partnership with China’s AVIC Group, publishes the monthly magazine International Aviation.
◗◗ McGraw-Hill Construction has organized annual Global Construction Summits with the China International Contractors Association since 2004 and has co-published Architectural Record with China Architecture and Building Press since 2005.
The McGraw-Hill Companies Is Helping China’s Continued Integration in the World Economy
◗◗ The market indices and research provided by Standard & Poor’s ensures transparency and investor confidence in China’s capital markets, which are critical in enabling China’s economy to continue to grow and mature in the world marketplace.
◗◗ The information and insight The McGraw-Hill Companies provides through its leading brands are vital building blocks for China’s consumers and leaders as they further integrate into the international economy.
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79 “Good health worldwide is not only vital to our way of life in the U.S.; it is a precondition of economic development everywhere. There is abundant evidence that good health becomes an engine of future economic growth because improved health leads to fuller employment, higher productivity and higher incomes. Merck’s commitment to increasing overseas sales for our innovative, life-saving products ensures that our contribution to better health also helps create prosperity in emerging economies.”
— Richard T. Clark, Chairman and CEO, Merck
Merck — Putting Patients First and Meeting Unmet Medical Needs
◗◗ Merck is an international research-driven pharmaceutical company dedicated to putting patients first. Established in 1891, Merck discovers, develops, manufactures and markets vac- cines and medicines to address unmet medical needs. The company devotes extensive efforts to increase access to medicines through far-reaching programs that not only donate Merck medicines, but also help deliver them to the people who need them.
◗◗ Today, Merck has a worldwide presence, with sales in 140 countries. While developed coun- tries form the traditional foundation of Merck’s business, the company relies on growth in the world’s emerging economies for continued success.
Merck’s International Presence
◗◗ The international trading system, in particular rules on the protection of intellectual property, is fundamental to the ability of Merck to expand its business overseas.
◗◗ With a strong R&D commitment and recent introduction of new products, including for dis- ease conditions prevalent in the developing world such as a new AIDS medicine and a vaccine against rotavirus (a leading cause of early childhood death), the company is well-positioned for growth in emerging economies.
◗◗ In recent years, Merck has expanded its operations in Latin America, the Middle East, Africa, Eastern Europe and Asia Pacific, where changes in government policies and economic conditions are making it possible for the company to earn fair returns. In many cases, these changes in government policies were enabled by international trade agreements or regional economic integration.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
80 Enabling Conditions for Innovation
◗◗ For a science- and innovation-driven company such as Merck, engagement in the global economy is critical and requires a certain policy environment. At Merck, we characterize a positive environment by referring to the Enabling Conditions for Innovation, and we have found that by engaging with both U.S. and foreign policymakers, we can facilitate their adoption in overseas markets.
◗◗ These Enabling Conditions include ethics and the rule of law, an efficient and transparent regulatory environment, open trade and investment, effective intellectual property protection, economic reform based on free market principles, and a focus on the importance of trade agreements.
Merck’s Social Responsibility
◗◗ Merck has long understood that, while our primary mission is to discover and develop new medicines and vaccines that address major burdens of illness globally, we must also do what we can to ensure that everyone who needs them has access to these life-saving products.
◗◗ To remove the barriers that stand between patients and the therapies they need, Merck engages in a wide range of business and philanthropic activities. These include:
yy Pricing: Merck has a worldwide pricing strategy for its medicines and vaccines that considers burdens of illness, levels of economic development, affordability and sustainability. Through this policy, Merck is committed to making its medicines and vaccines available at dramatically lower prices — sometimes prices at which Merck does not profit — in developing and least developed countries.
yy Patenting: We do not patent our products in least developed countries.
yy Licensing/plans to improve manufacturing costs and supply of medicines: Merck is committed to seeking additional ways to reduce the price of our AIDS medicines for people living in the world’s poorest countries and those hardest hit by the pandemic, including through partnering with external manufacturers and suppliers.
yy Donations: Merck does not believe that donating medicines and vaccines is a sustainable solution to the global access-to-medicines challenge. However, Merck recognizes that millions of patients are currently in need of medicines and cannot wait until solutions have been found to make them widely available. For this reason, Merck has donated its medicines and vaccines since 1958 through the Merck Medical Outreach Program to a selected group of qualified, U.S.-based, private voluntary organizations. In 2006, donations of Merck medicines and vaccines totaled $442 million.
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81 yy Partnerships: Merck has learned through years of experience that partnerships are the most effective way to enhance access to our medicines and vaccines. An illustrative list of the partnerships the company has includes:
yy The African Comprehensive HIV/AIDS Partnership (ACHAP): A partnership among the government of Botswana, Merck and The Merck Company Foundation, and the Bill & Melinda Gates Foundation to support and enhance Botswana’s national response to HIV/AIDS through a comprehensive approach to prevention, care, treatment and support.
yy China-MSD HIV/AIDS Partnership: A public-private partnership with China’s Ministry of Health to provide HIV/AIDS prevention, patient care, treatment and support.
yy IBANI-SE HIV/AIDS Initiative: Drawing on lessons from ACHAP, Merck is providing technical guidance and helping to facilitate a community-led, comprehensive HIV/AIDS and malaria program on Bonny Island in the Niger Delta region of Nigeria.
yy Merck’s HIV/AIDS Grants Program: More than 140 grants given in 50 countries totaling $12 million over the past 10 years to support HIV prevention, care, counseling, support and treatment.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
82 “Protection and guarantees are a key promise of our products, and a true expertise and passion for MetLife. Exporting this expertise globally helps to ensure financial security for people everywhere we do business.”
— C. Robert Henrikson, Chairman, President and CEO, MetLife
Contributing to America’s Service Sector Leadership
◗◗ As the largest U.S. life insurer, MetLife plays an important role in the nation’s service export sector, which has been a true American success story.
◗◗ Eight of 10 domestic jobs are in services, the sector has generated 23 million new jobs since the mid-1990s and each year American workers supply over $350 billion worth of services abroad.1
◗◗ The U.S. workforce has a competitive advantage in the high-value, high-skilled service sector, of which insurance is an important part. This helps explain why in the service sector the United States has a trade surplus — exporting more than we import.2
International Business Positively Impacts Our Domestic Job Base
◗◗ MetLife, through its affiliates, provides its protection, employee benefit and retirement services to more than 70 million customers across Latin America, Asia, Europe and the United States.3 MetLife companies are the largest life insurers in both the United States and Mexico, based on life insurance in-force.
◗◗ As we expand in international markets, we rely on our U.S.-based workforce for actuarial, investment and finance expertise to design and support our products marketed around the world.
Trade Engagement Keeps America Competitive Internationally
◗◗ As we expand internationally, we find that the universal need for personal financial security creates a widespread demand for our products, services and expertise. The trade and regulatory landscape contributes directly to MetLife’s ability to meet this global consumer demand.
◗◗ Over one-half of world trade takes place in the context of free trade agreements (FTAs) that countries negotiate with each other. When FTAs are based on the principles of fairness and reciprocity, they unleash opportunity for Americans while helping to foster higher standards of living for individuals in developing economies.
◗◗ For service providers such as MetLife, the regulatory level playing field achieved through FTAs is critical. Regulation applied evenly to foreign and domestic companies benefits everyone, especially consumers, and is a consistent characteristic of trade agreements.
1Coalition of Service Industries Foundation, “Services Drive U.S. Growth and Jobs,” 2007.
2U.S. Census Bureau, Foreign Trade Division, 1971 to May 2008. Statistics not yet released June–August 2008.
3“The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking, and other financial services to individuals, as well as group insurance, reinsurance, and retirement and savings products and services to corporations and other institutions.”
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83 “We are shaping our destiny by taking advantage of global synergies. Through leveraging what we have and utilizing what others have built, we can find more scale, expand our resources and continue to grow our company.”
— Dan Ustian, Chairman, President and CEO, Navistar, January 2008
Navistar Is Expanding Internationally with Strategic Acquisitions and Partnerships
◗◗ Navistar has a deep-rooted global history. Born out of world-renowned International Harvester, which operated in most every part of the world for nearly a century, the company divested its agricultural business and became Navistar in 1986.
◗◗ After several decades of focus almost solely on North America, Navistar has again established an international footprint with operations and joint ventures in South America, India and Europe.
◗◗ During the past three years (2005–07) Navistar has doubled its export sales from $501 million to $1.02 billion.
An International Presence Positions Navistar To Thrive in a Traditionally Cyclical Industry
◗◗ Taking advantage of global synergies is an important facet in controlling Navistar’s destiny. Through leveraging our own assets and using what others have built, we can capitalize on international markets and strengthen the company with businesses that do not depend solely on U.S. economic cycles.
◗◗ Mahindra International — the joint venture between International Truck and Engine Corporation and Mahindra & Mahindra — was formed in 2005 and has three components: global sourcing, engineering services and commercial vehicle development, including engine development.
◗◗ By partnering with local companies, Navistar can combine its vehicle development expertise with the cost benefits and local knowledge of the in-country partner to provide transportation solutions that meet each market’s needs.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
84 China Presents Significant Growth Opportunity for Navistar
◗◗ The explosive economic growth in China has brought about significant infrastructure needs, including local and regional goods transportation.
◗◗ Navistar is positioned to provide significant modernization opportunities to the Chinese transportation industry.
◗◗ In 2007, Navistar established a presence in China in partnership with Dong Feng to produce Navistar engines focusing on domestic and export countries.
◗◗ Navistar has established offices in China to focus on business development and global sourcing.
Global Expansion Brings Global Responsibility
◗◗ Being first to market with commercially viable hybrid trucks, Navistar brought a medium-duty diesel hybrid electric vehicle into the marketplace in 2006.
◗◗ The hybrid combination of the diesel engine and electric battery provides many advantages in dealing with the worldwide energy crisis.
◗◗ Bringing U.S. standards for emissions and safety to developing countries can only benefit their futures.
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85 “Not only are these attempts to inhibit China’s international trading unrealistic, they are potentially damaging to the U.S. economy and job growth. A prosper- ous China with a rapidly expanding middle class represents one of the most significant opportunities for the United States.”
— Sy Sternberg, Chairman and CEO, New York Life, The Wall Street Journal, Aug. 9, 2005
New York Life Is a Leading U.S. Insurance Company with an International Reach
◗◗ New York Life has provided life insurance, retirement products and investment services to millions of Americans since 1845. It is a Fortune 100 U.S. company with the highest-possible ratings from all four major financial ratings agencies.
◗◗ New York Life employs 20,000 workers in the United States, operates in all 50 states and has more than 6 million U.S. policyholders.
◗◗ Recognizing the importance of the international economy to future growth, New York Life maintains a presence in Argentina, Mexico, South Korea, Taiwan, Hong Kong, China, India and Thailand.
International Markets Enhance New York Life’s Financial Strength
◗◗ More than 20 percent of New York Life’s new life insurance sales are from outside the United States, and this figure is likely only to increase.
◗◗ New York Life’s 2006 international revenue rose by a robust 24 percent in one year — to nearly $2 billion.
China Is a Significant Growth Market
◗◗ China’s life insurance market is still significantly underpenetrated, but it is already in the world’s top 10. Premium volume was approximately $48 billion in 2006, nearly a threefold increase since 2001.
◗◗ China is expected to rank among the world’s largest life insurance markets by 2020. This growing market is already providing significant opportunities for U.S. companies — in 2006, New York Life’s insurance sales in China increased by 70 percent.
◗◗ Sales in China and other international markets provide important growth and diversification for New York Life.
◗◗ In China, New York Life partners with Haier Group, a top Chinese manufacturer that has made a significant foreign investment in South Carolina.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
86 Developing China’s Insurance Market Will Drive Financial Sector Modernization
◗◗ Insurance is a key part of broader financial sector reform in China.
◗◗ A better functioning financial system allocates capital more efficiently, makes credit available to those who need it, stimulates growth and reduces China’s reliance on exports.
Financial Strength Allows New York Life To Fulfill Its Social Responsibilities Worldwide
◗◗ New York Life’s financial strength and international reach have allowed it to respond quickly and generously to communities struck by natural disasters, such as supporting the Gulf Coast communities after Hurricane Katrina and communities in India and Thailand after the Asian tsunami.
◗◗ New York Life is playing an important role in China, India and other places without well- developed social safety nets by helping people through unforeseen contingencies and contributing to a more self-reliant, economically viable population.
◗◗ New York Life continues to focus on underserved communities worldwide. In India, for example, the company has pioneered a unique hub-and-spoke model of distribution that has allowed New York Life to provide services to dozens of previously underserved rural communities.
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87 “Many global, multinational organizations count on Office Depot to provide them with the products and services that help them take care of business in regions around the world, including Asia, Europe and Latin America. China, in particular, is an emerging market that is not only attractive to our customers but critical to our ability to profitably grow our business.”
— Steve Odland, Chairman and CEO, Office Depot
Office Depot Is a Truly International Business
◗◗ Headquartered in Delray Beach, FL, Office Depot employs approximately 49,000 associates in diverse locations throughout the world.
◗◗ Office Depot sells office products and services to customers in 43 countries throughout North America, Europe, Asia and Latin America, and it has more than 1,200 retail stores in North America and almost 400 stores, either company-owned, licensed or franchised, in other parts of the world.
◗◗ With annual sales of more than $15.5 billion, Office Depot provides more office products and services to more customers in more countries than any other company. In addition to its retail operations, Office Depot serves a wide range of customers through a dedicated sales force, telephone account managers, direct mail offerings and Web sites.
◗◗ Office Depot is on the cutting edge of Internet retail, and it is one of the world’s largest e-tailers, with $4.9 billion in online sales during the past 12 months.
International Growth Fuels Office Depot’s Success in the United States and Abroad
◗◗ Office Depot’s International Division generates more than $4 billion in reported sales. The company expects this business to continue to grow, allowing for new investments to be made in both the United States and abroad.
◗◗ Office Depot’s strong international presence is allowing the company to share best practices, leverage the Office Depot brand globally and provide outstanding service to international customers.
◗◗ Office Depot continues to invest and expand each year in the United States. The company plans to open 75 stores in the United States in 2008, new combination warehouse/crossdock facilities in North America and a new international corporate headquarters in Boca Raton, FL.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
88 China Is an Important Part of Office Depot’s Growth Strategy
◗◗ Office Depot first began operations in China with the acquisition of AsiaEC, and it since has grown the contract and direct sales business.
◗◗ The office-products market in China is large and growing rapidly. The country’s continued economic growth, and the presence of many multinational companies, will fuel even more demand for products and services.
◗◗ Office Depot’s presence in China is expanding rapidly — the company’s business grew by 50 percent in 2007 alone. The company has recently opened new offices that are ideally situated in China to grow Office Depot’s future business and source new products from throughout the region.
◗◗ Because of the number of countries Office Depot does business in across the globe and the amount of product it purchases, Office Depot’s global sourcing office can leverage its scale to purchase quality products at a low cost from manufacturers in China and other countries. These products are shipped to customers around the world, and doing so ultimately saves money for both the company and its customers.
◗◗ Office Depot’s presence in China allows the company to take more direct control of sourcing, logistics and quality assurance and better enables Office Depot to grow its private brands.
Living Up to International Responsibilities
◗◗ Office Depot’s success as a global company is built on its vision of “Delivering Winning Solutions That Inspire Worklife” and its values of integrity, innovation, inclusion, customer focus and accountability.
◗◗ Office Depot has made significant contributions to the communities in which it works in the realms of ethics, social accountability, community involvement, inclusion and environ- mental sustainability. Some examples include donating backpacks to more than 1 million disadvantaged children and supporting programs such as Dress for Success and Keep America Beautiful.
◗◗ Office Depot is committed to environmental stewardship, including buying green, being green and selling green across the globe.
◗◗ The company also is dedicated to improving the environmental performance of its suppliers and its customers. As part of that commitment, Office Depot released its Annual Green Book Catalog of Environmentally Preferable Products. The catalog contains nearly 3,000 environmentally preferable products and hundreds of tips and ideas for a greener office. The catalog became available to contract customers in the United Kingdom, Germany, France, the Netherlands and Belgium in 2006.
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89 “In the U.S., we have a long tradition of believing that if someone wants to invent something useful, we must provide the incentive. Spurred by a strong, enforceable system of patent protection, my industry — with Pfizer in the lead — spends more on R&D than any other industry in the world. Now it is time to bring the power of U.S. innovation to the millions we have not yet reached, whether they are in a hospital in Tokyo, a doctor’s office in Saigon, a clinic in rural India or on a farm in China.”
— Jeffrey B. Kindler, Chairman and CEO, Pfizer, Nikkei Global Management Forum, Oct. 29, 2007
Pfizer — American Innovation and Competitiveness
◗◗ Founded in New York City in 1849, Pfizer is the world’s largest research-based pharmaceutical company, operating in more than 100 countries to develop and deliver medicines to 38 million patients each year. The company’s employees work to combat conditions that account for half of the worldwide burden of disease.
◗◗ Pfizer employs more than 33,000 people in the United States alone, including scientists, researchers and clinicians at three major research discovery and development sites around the country. Pfizer also employs skilled scientists overseas. Worldwide, its scientific talent pool is enormous, exceeding the total combined staff of the World Health Organization and the U.S. National Institutes of Medicine.
◗◗ Pfizer contributes to good jobs and economic growth in the United States. New studies show that intellectual property-intensive U.S. industries, such as the R&D-based pharmaceutical industry, pay the most per worker, at almost $66,000 per year on average.
◗◗ Pfizer’s industry leadership allows it to pursue innovative solutions to health challenges around the world and to maintain U.S. commercial dominance in the key growth market of the 21st century — biosciences. This effort is paying off. Pfizer and other U.S.-based companies remain the leading worldwide source of cutting-edge science in drug discovery, with nearly 3,000 new compounds in various stages of development in the United States in 2005, compared to fewer than 1,500 in the rest of the world, including Europe and Japan.
Accessing International Markets Is Critical to Pfizer’s Continued Success
◗◗ International demand for pharmaceutical products is critical to Pfizer’s success — although the United States remains Pfizer’s largest single market, today half of Pfizer’s nearly $50 billion annual revenues are derived from sales to markets outside the United States.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
90 ◗◗ Pfizer’s international growth enables investment in the company’s U.S. operations, which oversee high value-added management and knowledge-transfer functions such as drug target selection, clinical trial supervision, quality assurance, good manufacturing practices, risk profiling and standards for clinical trial design.
◗◗ Pfizer medicines are sold in more than 100 countries, but it is the company’s base in the large U.S. market that provides the worldwide scale and reach to succeed against competitors internationally, with patients everywhere the ultimate beneficiaries. Studies show that the supportive regulatory environment in the United States also ensures that U.S. patients often are the first to obtain these new cures and treatments.
China Is an Important Part of Pfizer’s International Growth Strategy
◗◗ China has enormous untapped demand for a key source of U.S. innovation — new medicines that save lives and enhance the quality of life for patients with chronic disease.
◗◗ By 2010, the Chinese pharmaceutical market is slated to reach $30 billion in annual sales — the fifth largest in the world. Continued rapid gross domestic product growth, rising household incomes and an aging population threatened by chronic disease will drive demand for innovative medicines developed by Pfizer and other U.S. companies.
◗◗ Accessing the Chinese market — a giant in a region forecast to be home to three of the five-largest international economies by 2017 — is critical to maintaining Pfizer’s competitive leadership worldwide.
◗◗ Pfizer is well positioned to compete in this market. In 2007, Pfizer was No. 1 in industry sales to Asia overall, and success in China is vital to maintaining worldwide leadership in the revenues that protect high value-added jobs in the United States.
◗◗ Recognizing this, Pfizer is actively investing in China — not just to sell Pfizer’s innovative products, but also to uncover and test promising new technologies and to perform the targeted clinical research needed to secure registration approval in key markets around the world.
◗◗ Pfizer’s regional engagement in Asia supports its U.S. business by shortening the time frame for commercialization of promising compounds and broadening the product launch base to multiple worldwide markets — resulting in higher shareholder returns and more jobs for U.S. workers.
Meeting Pfizer’s International Responsibilities
◗◗ Pfizer leverages its worldwide commercial success to help U.S. communities. Through the Pfizer Helpful Answers program, all Americans without prescription coverage, regardless of their age or income, can receive Pfizer medicines for free or at substantial savings. In the past five years alone, Pfizer has helped more than 5 million patients receive nearly 50 million Pfizer prescriptions for free or at substantial savings.
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91 ◗◗ Through the Pfizer Community Health Advocacy program, Pfizer is helping to improve access to quality health care information for people in communities across the country and to advance public health through education and empowering communities and individuals around the United States.
◗◗ Pfizer also is investing in its overseas communities. Along with key nongovernmental organization partners, Pfizer is helping to close critical gaps in malaria treatment and education in Ghana, Kenya and Senegal through an initiative that engages and educates treatment providers and patients to improve the utilization and effectiveness of malaria treatment and patient adherence.
◗◗ Pfizer also has invested in an Infectious Disease Institute, based in Kampala, Uganda, aimed at building capacity throughout Africa for the delivery of sustainable, high-quality care and prevention of HIV/AIDS and related infectious diseases through training and research. To date, the institute has trained more than 1,500 health care providers from 26 African countries, and it is currently providing care to approximately 10,000 patients.
◗◗ Pfizer is committed to environmental stewardship and turning environment health-safety challenges into opportunities to improve performance. The company has discontinued the use of ozone-depleting compounds in the manufacture of its products; implemented water conservation measures in 2006, reducing consumption of water by 21 million cubic meters
(equivalent to almost 6,000 million gallons); reduced CO2 emissions by 32.7 percent per million dollars of sales from 2000 to 2006; and adopted companywide environmental health and safety principles.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
92 “Infrastructure development in strong growth economies such as China, India and Brazil is driving demand for industrial gases and is one of the reasons Praxair is able to consistently grow earnings faster than the S&P 500.”
— Steve Angel, Chairman and CEO, Praxair, Inc.
International Business Sharpens Praxair’s Competitive Edge
◗◗ The industrial gases business is one of the most international. Our largest competitors are based in Germany and France, and they compete with Praxair not only in Europe, but also around the world.
◗◗ Forty-four percent of Praxair’s 2007 sales were generated in the United States. The balance was generated in the rest of North America, South America, Europe and Asia.
◗◗ While funding projects in the rapidly growing economies of Asia and South America, 55 percent of Praxair’s record level of capital expenditures in 2008 will support the North American business.
International Business Supports U.S.-Based Activities
◗◗ About half of Praxair’s 28,000 employees worldwide are employed in the United States.
◗◗ To support the company’s pipeline of new projects being constructed around the world, Praxair’s engineering center near Buffalo, NY, has hired more than 800 new employees over the past five years and will be hiring additional employees in 2008.
China, India and South America Are Significant Growth Markets
◗◗ Praxair owes it to its shareholders and employees to participate in those markets that will best contribute to the company’s financial strength not only today, but also in the future.
◗◗ Thirty percent of Praxair’s sales are generated in the strong growth economies of Brazil, China, India and Mexico, and that percentage is expected to increase. Per-capita consumption of industrial gases in China and India is only 2 percent and 1 percent of the U.S. level, respectively; in Brazil and Mexico, it is 15 percent and 20 percent, respectively.
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93 ◗◗ As these countries upgrade their industrial infrastructures, Praxair products, technologies and services will be in great demand. For example, Praxair’s oxygen-based technologies improve the efficiency and environmental performance of steel mills and cement factories; Praxair’s food-freezing and chilling technologies help customers in India and Thailand prepare seafood for export; Praxair’s nitrogen is helping to increase oil and gas supplies in Mexico; and hospitals in all of these countries benefit from Praxair’s medical oxygen, helium for MRIs and laboratory gases.
Living Up to Global Responsibilities
◗◗ With adjustments for local laws and regulations, Praxair employees adhere to the same rigorous standards of ethical and operational behavior regardless of where they work around the world. In 2007, the company achieved its best-ever personnel safety performance in a year when there was a record level of new project work being conducted.
◗◗ Praxair’s technologies help customers in many industries improve their environmental performance by reducing energy consumption and lowering harmful emissions. For example, Praxair is participating in demonstration projects to evaluate the feasibility of applying Praxair’s oxy-coal technology to coal-fired utility boilers to capture carbon dioxide emissions.
◗◗ In its own operations, most of Praxair’s environmental impact is indirect, the result of energy consumption required to operate its plants and delivery vehicles. Praxair dedicates substantial personnel and financial resources to improving the efficiency of its operations every year.
◗◗ Praxair funds health-related initiatives that are improving the quality of life in many countries around the world. Examples include Project Hope’s Children’s Medical Center and nurse training program in China, a school nutrition program in India, and a family health program in Brazil.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
94 “We believe the best way for us to thrive in a complex global environment is by staying committed to the core values that have driven our success for more than 125 years — integrity, customer focus, financial strength, people development and operational excellence.”
— J. Barry Griswell, Chairman and CEO, the Principal Financial Group®
“As a premier retirement and asset management group, our diversity of strengths and skills increases our ability to deliver innovative solutions to millions of indi- viduals and businesses around the world.”
— Larry Zimpleman, President and COO, the Principal Financial Group
The Principal® — A U.S. and International Leader
◗◗ The Principal is a U.S. company that has delivered innovative retirement and asset manage- ment solutions to millions of individuals and businesses since 1879. The Principal is a 401(k) leader in the United States.
◗◗ The Principal employs 13,600 employees in the United States, and continues to rank as one of Fortune’s 100 Best Companies to Work For.
◗◗ The Principal’s knowledge and experience has helped the company become an international leader in delivering high quality financial services to clients around the world through a diverse family of companies.
◗◗ The Principal Financial Group has $311 billion in assets under management and serves some 18.6 million customers worldwide from offices in 11 countries throughout Asia, Australia, Europe, Latin America and the United States.
Engagement in Overseas Markets Is Essential to The Principal’s Growth
◗◗ Building on our strong reputation in the United States and recognizing the importance of overseas growth, The Principal has steadily entered markets around the globe.
◗◗ Principal International, the business unit responsible for our international operations, generated over 11 percent of Principal Financial Group’s operating income in 2007 and grew earnings in excess of 40 percent last year. Together with Principal Global Investors, our global asset management unit, these two businesses are rapidly growing Principal Financial Group’s international footprint and provide the Company with very attractive opportunities in financial markets around the world.
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95 China Is an Important Growth Market for The Principal
◗◗ China is a rapidly growing country with a burgeoning middle class. The demand for financial and retirement services is large and increasing, creating important opportunities for American financial companies.
◗◗ Development of the Chinese Enterprise Annuity (EA) market, similar to the U.S. 401(k) system, represents a critical growth opportunity for firms in worldwide retirement benefits leadership positions. The assets under management for this EA program are estimated to approach $100 billion within 10 years and $1 trillion within 25 years.
◗◗ Our partner — China Construction Bank — is the third largest bank in China and was ranked 11th out of the top 1,000 global banks by The Banker Magazine with respect to capital adequacy. The bank has 14,250 bank branches, 300,000 employees and more than US$667 billion in total assets, as of June 30, 2006. We rolled out four mutual funds since November 2005 with the most recent retail mutual fund accumulating US$1.25billion (RMB 10 billion) in subscriptions in a single day.
◗◗ The joint venture has also earned awards for most innovative fund and sales distribution excellence. The Principal has integrated some of its own staff and processes into the fund company in an effort to develop worldwide best practices within the Chinese asset management industry. We have become one of the major asset management players in China.
Living Up to Global Responsibilities
◗◗ One of the Principal Financial Group’s missions is to increase retirement savings rates around the world, and to give employees an edge by helping them take steps to achieve a more successful retirement.
◗◗ The Principal has a strong commitment to the communities in which employees and customers live and work and manifest that commitment in many different ways. In 2007, the Principal Financial Group Foundation, Inc. and the Principal Financial Group gave more than $10 million in charitable donations globally including: microfinance in India; support for orphanages, a muscular dystrophy association, and homes for battered women in Chile and Brazil; and also support to the indigent elderly in Hong Kong. More than 30,000 hours were committed by Principal Financial Group employees to nonprofit agencies in 2007 as part of the company’s “volunteer time off” program, which gives each employee eight hours of paid time off to volunteer at a not-for-profit organization of his/her choice.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
96 ◗◗ The Principal was named one of the “World’s Most Ethical Companies” by Ethisphere Magazine, June 2007 for strong leadership in ethics and compliance, advancement of industry discourse on social and ethical issues, and positive engagement in the communities in which we operate.
◗◗ Effective Corporate Governance has long been important to The Principal. Ensuring the organization is governed well through effective, independent oversight of management and company operations has been an important part of our heritage and our success. We are also proud of our ever-evolving commitment to creating a culture of inclusion, where customers, suppliers and employees of all different backgrounds are welcomed, respected and valued for their differences.
◗◗ The Principal prides itself as an organization that is environmentally conscious and goes out of its way to support the natural environment, including energy efficiency, recycling and green investing.
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97 “We are focusing on achieving disproportionate growth in fast-growing develop- ing markets. Nearly 40 percent of P&G’s sales growth came from developing markets this past fiscal year, and we expect that contribution to be ever greater in the year ahead.”
— A.G. Lafley, Chairman of the Board and Chief Executive Officer, Aug. 14, 2007
P&G Is an Internationally Integrated Enterprise
◗◗ Three billion times a day, P&G brands touch the lives of people around the world. And P&G people work to make sure those brands live up to the promise to make everyday life just a little bit better, now and for generations to come.
◗◗ With operations in 90 countries and sales in more than 150 countries, P&G is an internationally integrated enterprise with linked operations and supply chains around the world.
◗◗ P&G grows strategically by leveraging the skills of its people in the United States and around the world. We are focused on growing P&G’s leading brands in our largest markets, but we never lose sight of the fact that virtually all of the world’s population growth is occurring in developing markets. These markets have contributed about 35 percent of P&G’s sales growth over the past five years.
Global Operations Support U.S. Jobs and P&G’s Strength as a Company
◗◗ P&G’s non-U.S. operations generate over 60 percent of revenue.
◗◗ Developing markets represent P&G’s most important source of future growth. Today, P&G generates over $20 billion in sales from developing markets, up from $8 billion in 2001. Our goal is to achieve $30 billion by the end of the decade.
◗◗ P&G’s 50,000 U.S. employees contribute substantially to our success overseas. One in five P&G U.S. jobs — and two in five Ohio-based P&G jobs — depends on our international business. Beyond the export of finished products, U.S.-based P&G people contribute high- value services such as consumer research, product development, engineering, logistics, finance and marketing support.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
98 China Is a Key Part of P&G’s Global Success
◗◗ P&G generates more revenue in China than any other market outside the United States. Starting from scratch in 1988, P&G China today accounts for over $3.5 billion in annual sales. P&G brands are the market leader in every product category in which we compete.
◗◗ Consumer-focused innovation is the key to our success. P&G’s world-class technologies, many of which were developed and perfected in the United States, are noticed and appreciated by Chinese consumers.
◗◗ Doing business in China is challenging, but overall, P&G has received fair treatment, and China remains relatively open to trade and investment.
Living up to Global Responsibilities
◗◗ P&G is recognized for its excellence and values: a No. 3 ranking on Fortune’s global Most Admired Companies; “Top Ten” on the Harris Interactive/Wall Street Journal list of companies with the world’s best reputation; the No. 1 ranking in Fortune’s U.S. Household & Personal Products most admired list; a No. 2 ranking on the Hay Group list of Best Companies for Leaders; and the market Sector Leader for Household Products in the Dow Jones Sustainability Index.
◗◗ P&G ranks among the top companies for executive woman (National Association for Female Executives), African Americans (Working Mother and Woman of Color magazines), working mothers (Working Mother Magazine) and best corporate citizens (Business Ethics Magazine).
◗◗ Supplier diversity is a fundamental business strategy at P&G. In 2007, P&G spent over $1.9 billion with minority- and women-owned businesses. P&G is a member of the Billion Dollar Roundtable, a forum of 14 corporations that spend more than $1 billion annually with diverse suppliers.
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99 Prudential’s International Businesses Make a Significant Contribution to the U.S. Economy
◗◗ Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $637 billion of assets under management as of Sept. 30, 2007, has operations in the United States, Asia, Europe and Latin America.
◗◗ Leveraging its heritage of life insurance and asset management expertise, Prudential is focused on helping individual and institutional customers grow and protect their wealth. The company’s well-known rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time.
◗◗ Prudential’s businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.
◗◗ With a significant portion of Prudential’s earnings generated through our international businesses, these operations are critical to the overall financial performance and strength of the company. The returns from these businesses, as well as the international investment products we offer, directly benefit U.S. institutions, such as pension funds and individual investors.
◗◗ Prudential’s international operations both directly and indirectly contribute to high-quality jobs in the United States. For example, more than 400 Prudential employees in the United States work to support our international operations. And our international businesses directly contribute to the success of our company, which employs more than 20,000 people in the United States.
◗◗ As a global corporate citizen, we are actively engaged in the communities in which we work to contribute to the positive image of the United States. Through our participation in business associations and philanthropic organizations, we are involved in activities that support the continued development of markets for U.S. businesses abroad.
Supporting the International Expansion of U.S. Companies Will Create New Jobs and Make a Significant Contribution to the U.S. Economy
◗◗ The financial services industry makes a vital contribution to the U.S. economy. In 2005, the financial services industry accounted for more than 5 percent of all American jobs and more than 8 percent, or $1 trillion, of U.S. economic output.
◗◗ Continued growth for Prudential and the entire financial services industry depends on increased access to foreign markets and lower barriers to trade and investment. Prudential Financial strongly supports a bipartisan approach to trade policy that supports the continued expansion of U.S. businesses abroad and the jobs and economic benefits this will create in the United States.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
100 “Increasingly, leadership decisions are global decisions that must take into account rapidly changing political and economic landscapes. Regulatory regimes and global standards, particularly in the technology sector, mean that companies must look to each of its offices around the globe as more than just individual outposts, but rather as an extension of its center of operations. To realize this, organizations must look to balance global reach with local presence.”
— James H. Goodnight, Founder and CEO, SAS Institute
SAS — An American and International Company
◗◗ Launched in North Carolina in 1976, SAS has evolved into the leading provider of business analytics software and the largest independent vendor in the business intelligence marketplace.
◗◗ SAS remains true to its North Carolina roots, employing more than 4,000 people in that state alone and more than 5,000 in the United States.
◗◗ In 2007, SAS’ total revenues exceeded $2.15 billion, marking the 31st consecutive year of growth and a growth rate of 15 percent above 2006 revenues. Among other things, SAS’ record of revenue growth in every year of its existence has enabled the company to reinvest more than 20 percent of revenues in R&D each year — well above the average of other large software companies — so that SAS may continually improve its products.
International Operations Are Critical to SAS’ Sustained Growth
◗◗ SAS is used at more than 44,000 business, government and nonprofit sites around the globe. To support those customers, SAS has more than 400 offices internationally in 109 countries.
◗◗ In 2007, 56 percent of SAS’ revenues were generated outside of North America. The revenue growth is attributable, in part, to the addition of 1,100 new customers from around the world.
◗◗ Sales outside the United States are growing at an unprecedented rate, which helps to stabilize the company’s revenues during periods when the domestic economy is under stress.
◗◗ This revenue growth from outside the United States is imperative to support U.S. activities. For example, in 2007, U.S. expenses were 126 percent of U.S.-generated revenues. These expenses include U.S. salaries, R&D investments in the United States and support for marketing programs for products developed in the United States but intended for the international market.
Asia Pacific’s Importance to SAS
◗◗ SAS projects tremendous sales growth from Asia Pacific, far outpacing projections for Europe or the United States. For example, sales in the ASEAN countries of the Philippines, Malaysia and Singapore have been growing at an annual rate of 40–45 percent.
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101 ◗◗ As local Asia Pacific companies become more sophisticated, international in reach and subject to competitive pressures, they must start capitalizing on their data resources and assets. That need, coupled with SAS’ commitment to the region and to its customers, helped SAS develop a leading presence in business intelligence and analytics in Asia Pacific. For 2008, SAS has already been awarded the Frost & Sullivan Business Intelligence Vendor of the Year in Asia Pacific, the fourth time that SAS has been so honored in the award’s five-year history.
◗◗ To continue to meet the growing “local” demand and to better serve its Asia Pacific customers, SAS plans to continue investing people and financial resources in the region.
◗◗ Asia Pacific provides more than market opportunities — it allows SAS to function on a global, 24/7 basis. For example, because China is 12 hours ahead of the United States, SAS can use its Chinese office, as well as its office in India, to help with product testing overnight, with the information waiting for U.S.-based workers in the morning.
Living Up to International Responsibilities
◗◗ SAS is a committed and active partner in communities where it lives, works and conducts busi- ness. The company is committed to its employees, its communities and its environment and is proactive in developing policies, actions and plans to promote all three.
◗◗ As a high-tech company, SAS is dependent on a strong educational system to prepare stu- dents for success in a knowledge-based economy. But it’s simpler than that. It fits what SAS is as a company. SAS creates products that bring knowledge to its customers. As such, educa- tion is the primary focus of the company’s philanthropic efforts. In 2007, SAS provided cash donations of $5.5 million to education institutions; provided in-kind hardware, software and educational services worth approximately $16 million; and donated other surplus equipment. It also encourages active employee volunteerism. In 2007, SAS employees reported volunteer- ing for 16,800 hours through its Employee Volunteer Fund (which provides cash contributions to education-based nonprofit organizations to which SAS’ employees volunteer their time).
◗◗ To expand opportunities for students to participate in the knowledge-based economy, SAS founder and CEO Dr. Jim Goodnight has spearheaded a state effort to put laptops in the class- room. Children today are coming into the classroom more technology literate than ever, yet we expect them to be engaged in the classroom by traditional methods of teaching such as the chalkboard. One consequence is that many of our students are not engaged, which has a number of undesirable ramifications — including, but not limited to, an increased high school dropout rate. The 1:1 Laptop Initiative is an attempt to provide more engaging methods to teach our kids and to help our teachers use knowledge-based resources in the classroom. Though still in its early stages, the initiative is showing promising anecdotal results.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
102 ◗◗ SAS is regularly recognized as one of the best places to work here in the United States and in many of the countries where it has facilities. One reason for that is the belief that the compa- ny’s most important assets are the people who work at SAS. SAS’ unique, award-winning work environment is meant to nurture and encourage creativity, innovation and quality. As a result of SAS’ attention to employees and company culture, the company’s voluntary employee turn- over rate is significantly lower worldwide than the industry average of about 20 percent.
◗◗ One measure of SAS’ corporate responsibility is its commitment to environmental sustain- ability. For the company’s customers, SAS does this through enabling them to more efficiently generate power, more efficiently use resources and minimize waste. Internally, the company has implemented programs to make its buildings more energy efficient, minimize water usage, convert data centers and machines to reduce power usage, and develop renewable sources of energy to help power the campus. Collectively, SAS is taking stock of all of its global practices for opportunities to increase sustainable behavior. SAS individual offices also are taking their own proactive steps.
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103 “Starting in 2003, Schering-Plough began a series of strategic investments in emerging markets — Brazil, Central and Eastern Europe, Turkey, Russia, China, and India. We saw these as markets of the future and began acting on this strategy before many others in our industry. We recognized that these countries, driven by the strengthening of their economies, would have the ability to expand access to improved health care for their citizens. Today, we are growing rapidly in many of these markets and expect that they will be a key contributor to our long-term performance.”
— Fred Hassan, Chairman and CEO, Schering-Plough Corp.
Schering-Plough Corp. — An International Leader in Health Care
◗◗ Schering-Plough Corp. (S-P) is a global science-based health care company based in Ken- ilworth, NJ, that discovers and develops leading prescription, consumer and animal health products. With more than 50,000 employees worldwide and 17,000 employees in the United States alone, our products reach patients and caregivers in more than 140 countries.
◗◗ The company invested $2.9 billion in 2007 to research and develop medicines. Schering- Plough Research Institute, the company’s R&D arm, offers an innovative and collaborative environment that attracts highly respected and renowned scientists from around the world to its research labs in locations such as California, Massachusetts, New Jersey, The Netherlands and Scotland.
Emerging Markets Contribute to S-P’s Performance
◗◗ Geographical diversity is a key aspect of S-P’s long-term growth strategy. The company has made significant investments over the past several years to expand its presence in interna- tional and fast-growing emerging markets. This successful geographic diversification program has resulted in strong international sales growth.
◗◗ Starting in 2003, S-P began a series of strategic investments in emerging markets, anticipat- ing that these countries would someday be important contributors to the company’s long-term performance. For instance, S-P bought out its former joint venture in China and its affiliate in Brazil. This strategy is yielding positive results.
◗◗ As growth of the pharmaceutical industry in some of the more developed countries has slowed, emerging markets still offer the promise of new growth opportunities. This growth generated overseas helps S-P continue to create and protect high-paying jobs for American workers.
China: Key to S-P’s Growth in Emerging Markets
◗◗ Because international markets continue to offer good growth opportunities for the company, S-P has invested significantly overseas. China is one country where S-P’s investment has yielded excellent results for the company’s overall growth and competitiveness.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
104 ◗◗ The health care market in China is dynamic and evolving rapidly. China is projected to be the fifth-largest pharmaceutical market in the world by 2010 (source: IMS).
◗◗ S-P began operations in China in 1986 and established representative offices in 1992 in Shanghai and Beijing. In 1994, S-P formed a joint venture in China called Shanghai Schering- Plough Pharmaceutical Co. Ltd. and established representative offices in Guangzhou in 2006 and in Chengdu in 2007.
◗◗ In 2008, S-P announced an expansion of its presence in China by establishing the Shanghai Schering-Plough Pharmaceutical Co. Ltd. as a wholly owned operation. The subsidiary is based in Shanghai and was established through the acquisition of the shares of its former joint ven- ture partners. This expansion is part of S-P’s long-term global geographic expansion strategy. Investing in the Asia Pacific region, especially China, is part of the company’s efforts to further build growth and strength in this important market.
◗◗ S-P currently employs more than 800 colleagues in China and serves health care professionals, customers and other stakeholders in the areas of allergy/respiratory, cardiovascular, central nervous system, skin care, oncology, infectious diseases and women’s health.
◗◗ S-P’s China business is performing well in a challenging environment. Especially encouraging has been the performance of CLARITYNE (marketed in the United States as Claritin®), an allergy medicine that has become the No. 1 brand in its category in China. In fact, international sales of this key product for S-P are helping drive overall growth of this American company.
S-P Lives Up to International Responsibilities
◗◗ S-P is committed to identifying and acting on key issues that impact society. The company provides donations of money, product and services to hundreds of charities around the globe. In 2007, product contributions outside of the United States totaled more than $33 million.
◗◗ S-P’s international growth also allows the company to help patients here at home. Schering- Plough Cares and other company programs provide needed medicines to patients in the United States who otherwise could not afford them. In 2007, these patient assistance programs provided over 65,000 U.S. patients with more than $100 million worth of free S-P products.
◗◗ S-P is proud to be a part of the Partnership for Prescription Assistance, an industrywide initia- tive to educate the American public on the availability of patient assistance programs for those in need.
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105 “With 70,000 employees in all 50 states, Siemens is a part of the fabric of America — providing innovative solutions to our nation’s toughest challenges in the areas of industry, energy and health care.”
— George Nolen, President and CEO, Siemens Corporation
Siemens is an International Network of Innovation
◗◗ An international powerhouse operating in the industry, energy and health care sectors, Siemens employs more than 70,000 U.S. workers and nearly 400,000 in total in 190 countries around the globe. Reported worldwide sales were $96.6 billion and new orders were $112 billion in fiscal year 2007.
◗◗ Innovation is Siemens’ lifeblood. Last year, Siemens invested more than $5 billion in R&D worldwide and has more than 32,000 R&D workers at 150 research centers in 30 countries around the world. ◗◗ Siemens is a world leader in environmental solutions to help reduce C02 and other emissions and is a leading provider of wind and highly efficient gas turbines. The company provides cutting-edge solutions for buildings to become more energy efficient and is a market leader in air pollution control systems. Siemens is a leading manufacturer of public transportation systems — including the world’s first commercial magnetically levitating line, the Transrapid in Shanghai, China — and is the largest producer of light rail vehicles in North America.
Siemens USA is an American Success Story
◗◗ Siemens is America’s largest foreign-owned electronics and electrical engineering company. Based on sales, it is among the top-10 foreign-owned companies overall, the sixth-largest European company, and the No. 1 largest German company operating in the United States today.
◗◗ Siemens employs 70,000 workers throughout all 50 states, with more than 4,000 employees each in the states of California, New York, Pennsylvania, Texas, Florida, New Jersey and Illinois.
◗◗ The United States is headquarters to nine of Siemens’ 70 worldwide divisions, including water technologies in Pennsylvania, molecular imaging in Illinois, product lifecycle management in Texas and ultrasound in California.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
106 ◗◗ With 14 straight quarters of double-digit growth, the United States was Siemens’ largest single national market in the world for the second year in a row. Siemens USA’s fiscal 2007 revenue was $19.8 billion and new orders were $22.3 billion. Siemens USA would be ranked in the Fortune 120 if it were a stand-alone company.
◗◗ Siemens has invested heavily in the U.S. market. Eighty percent of the company’s acquisitions over the past four years have been in the United States, including USFilter, CTI Molecular, Dade Behring and others.
◗◗ Siemens USA has nearly 7,500 R&D workers in the United States and invested $1.2 billion (6 percent of total revenue) in American-based R&D in fiscal year 2007. Each year, Siemens launches more than 1,000 collaborative projects with universities and institutes worldwide, including renowned U.S. institutions such as Carnegie Mellon, MIT, University of Pennsylvania, University of Maryland, and others.
“[America] will remain the world’s largest and most dynamic economy for the foreseeable future. Few other countries allow business the level of freedom to come up with an idea, develop it, finance it, protect it, market it and ultimately make a profit from it. America’s educated workforce is a wellspring of talent, creativity and flexibility; and our universities are a magnet for the world’s best and brightest. An embedded culture of entrepreneurialism and risk-taking keeps the United States on the cutting edge and the place the world looks to for the next big trend. That’s one of the main reasons why our company, Siemens Corp., has invested more than $17 billion in the United States in the past three years.”
— George Nolen, President and CEO, Siemens USA, Pittsburgh Post-Gazette
Siemens USA is a Major Exporter
◗◗ Siemens USA’s new order exports to third parties and affiliated companies increased +45% in fiscal year 2007 to $6.2 billion compared with the previous fiscal year. Most new orders went to other countries in the Americas ($3.2 billion), followed by Europe ($2.0 billion), Asia Pacific ($785 million) and the rest of the world ($133 million).
◗◗ Sales exports to third parties and affiliated companies increased +34% in fiscal year 2007 compared with the previous year, rising to $4.6 billion. The Americas again led the way as the top export destination with $2.0 billion in fiscal year 2007, followed by Europe ($1.8 billion), Asia Pacific ($652 million) and the rest of the world ($115 million).
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107 Siemens and Corporate Social Responsibility
◗◗ Siemens is investing heavily in developing the next generation of American scientists and engineers through its Generation21 initiative. The Siemens Foundation contributes nearly $4 million annually in support of mathematics, science and technology education from grade school to graduate school.
◗◗ The Siemens Competition in Math, Science and Technology is recognized as the premier high school research competition in the United States. Students have an opportunity to achieve national recognition for research projects and earn scholarship awards ranging from $1,000 to $100,000.
◗◗ The Siemens Awards for Advanced Placement recognize the top male and female high school students in every state who have achieved the highest scores on the College Board’s AP® mathematics and science exams. The program, started in 1998, also awards scholarships to AP teachers and schools whose remarkable dedication fosters students’ current and future success.
◗◗ Siemens Science Day events, geared toward promoting interest in science among elementary and middle school students with fun, hands-on science activities, have already reached more than 35,000 students nationwide during the past two years.
◗◗ The Siemens Teacher Scholarship initiative, launched in 2005 in partnership with the Thurgood Marshall Scholarship Fund and the United Negro College Fund, encourages minority students to consider careers teaching mathematics and science. The Siemens Foundation will provide $1 million in scholarships over five years to college students majoring in education and enrolled at the nation’s historically black colleges and universities.
◗◗ Siemens Caring Hands supports Siemens employees across the United States who work in local volunteer efforts that take place through programs in the workplace or company-sponsored charitable events in the community. About 70,000 volunteer hours were contributed in 2006–2007 through 300 volunteer team projects — equal to a contribution of more than $1.3 million to the nation’s charities.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
108 “As we look ahead, we see enormous opportunities for our company to grow and also to make an impact on lives around the globe. We’ve already seen electronics innovation revolutionize the way we work and connect — and at TI, we’ve had the privilege of being at the heart and center of companies that are leading that revolution. But, what we’ve seen and done so far is merely the beginning. Our potential to grow and make a difference is enormous, and we are investing today to open new possibilities — for our customers, for this company and for our world.”
— Richard K. Templeton, Chairman, President and CEO, Texas Instruments
Texas Instruments: Innovators around the World
◗◗ Texas Instruments (TI) provides innovative analog and embedded processing technologies to help customers create the world’s most advanced electronics. The company’s real-time signal processing technology permeates daily life in many different ways, from digital communications and entertainment to medical services, automotive systems and wide- ranging applications in between.
◗◗ TI is an innovator committed to delivering great solutions that help customers invent new electronics to make the world smarter, healthier, safer and more fun.
Worldwide Operations Support U.S. Jobs and TI’s Strength as a Company
◗◗ More than 85 percent of our revenues are generated in markets outside the United States.
◗◗ TI has manufacturing, design or sales operations in more than 25 countries.
◗◗ TI has approximately 30,300 employees worldwide.
◗◗ TI’s success in rapidly growing markets supports innovation, research and manufacturing in the United States.
◗◗ Promoting policies that enhance U.S. competitiveness is at the core of who TI is and the company’s advocacy at home.
China Is a Key Part of TI’s International Success
◗◗ With its fast-growing economy and a rapidly expanding consumer base, China is the world’s largest semiconductor market. To be a worldwide leader, TI must compete and win in China.
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109 ◗◗ TI has developed semiconductor solutions that enable high-end, multimedia-rich smart- phones, featuring interactive gaming, multimegapixel imaging, location-based services and Web browsing, as well as entry-level handsets, which help more people, especially in rural China, get connected — to family, information and opportunities.
◗◗ TI started its China University Program in 1996 and has assisted 141 of China’s universities in establishing more than 160 labs in the past 12 years. In 2007, TI invited three universities in China to join its worldwide Leadership University Program. These universities are working with TI on future TI signal processing funded programs.
◗◗ TI established TI Innovation Fund and TI Outstanding Educator Award to support quality engineering education and semiconductor-related research in China’s universities.
TI Supports the Communities Where We Live and Work
As an international leader in technologies that are driving profound social change, TI must take responsibility for driving the scope, direction and pace of that change. TI’s commitment to building a better future is ingrained in everything the company does, from conscientious product development and consideration for environmental impact to employee safety and philanthropic care for communities.
◗◗ Top safety rate among the U.S. semiconductor companies.
◗◗ Global ISO9001, ISO14001 and ISO/TS 16949 certifications.
◗◗ Developer of world’s first Leadership in Energy and Environmental Design certified semicon- ductor manufacturing facility.
◗◗ Recycle an average of nearly 4 million gallons of water every day.
◗◗ Enable about 65 percent of U.S. workers to telecommute at least part of their day.
◗◗ Provide human rights training to employees and security personnel worldwide.
◗◗ Host global diversity conferences to foster an inclusive working environment.
◗◗ Donate millions to improve the quality of life in TI communities. In 2007, TI donated $19.9 million to agencies, programs and charities through TI and TI Foundation, giving in communities where the company operates.
◗◗ Issue corporate grants to support K–12 and university science, technology, engineering and math research and education programs in the United States. In 2007, approximately $9.4 mil- lion in such grants were awarded. The TI Foundation provided grants of more than $4.3 million to support education institutions in 2007.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
110 “As a global company that provides vital products and services to customers around the world, Tyco is investing in important emerging markets in order to grow our business in the United States and compete on a global scale.”
— Ed Breen, Chairman and CEO, Tyco International, April 30, 2008
Tyco — A Highly Diversified International Company
◗◗ Tyco International is a leading international provider of electronic security products and services, fire protection products and services, valves and controls, and a wide range of industrial products.
◗◗ Tyco has major international and U.S. operations, which support each other. With 2007 revenue of more than $18 billion, Tyco has 118,000 employees around the world and operations in more than 60 countries. In the United States, Tyco employs 41,000 employees in more than 400 facilities in every state.
◗◗ Tyco relies on 220,000 suppliers around the world. This international supply chain, together with Tyco’s employees, provides vital products and services that help make the world safer, more secure and more productive.
◗◗ Tyco was founded in 1960 as a research laboratory to do experimental work for the U.S. government. In 1964, the company went public and later began to acquire other companies to fill gaps in its development and distribution network. Today, Tyco is an innovative manufacturing and service company with leading brands in high-growth industries such as electronic security (ADT), fire protection, and industrial valves and controls.
◗◗ To grow and maintain technology leadership as a company, Tyco fosters a culture that consistently encourages innovative thinking. Through various programs, Tyco celebrates and rewards employees whose creativity and innovation have contributed to Tyco’s recognition as a leader in developing advanced technologies.
International Markets Are Critical to Tyco and U.S. Growth
◗◗ Today, Tyco exports about $500 million of American-made products overseas each year — products such as industrial valves and fire suppression products. These exports support Tyco’s American workers and ongoing investment in R&D and high-skilled jobs.
◗◗ Revenues from overseas markets comprise more than 50 percent of Tyco’s business. Access to international markets is critical to Tyco’s ongoing financial success.
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111 ◗◗ Tyco’s competitive strengths include leading market positions in fragmented and growing markets. The international nature of our business and our extensive sales networks allow us to offer our services and products worldwide to increasingly international customers. In 2007, services accounted for more than one-third of Tyco’s revenues.
Accessing the Chinese Market Is Important to Tyco’s Future
◗◗ China is a large and increasingly important country for Tyco International. With one of the world’s fastest-growing economies, China is making significant public infrastructure investments in its cities.
◗◗ These investments have created opportunities for Tyco to build a substantial presence in China by serving customers in need of security and fire protection solutions and industrial products to deliver energy, power and water. Tyco’s China revenues in 2007 were approximately $260 million, and the company’s annual growth rate exceeds 20 percent. Tyco International is uniquely positioned to support China’s robust growth and expansion.
Meeting Our Responsibilities — Giving Back
◗◗ Tyco’s commitment extends beyond business matters into communities around the world. The company’s involvement as an international citizen is driven by a strategy focusing resources on issues and opportunities in which Tyco can have an impact — notably in life safety, environmental sustainability, and education and mentoring.
◗◗ In the United States, Tyco is investing in its workers and in their skills for the future. We believe that continuing education is an essential element for the success of our employees and our business. The company provides online learning programs aimed at providing employees with relevant technology courses and reference tools to improve their skills and adapt to changing technologies.
◗◗ Tyco also supports education around the world. In China, Tyco has established a partnership with Shanghai Jiao Tong University to support the education of outstanding engineering students.
◗◗ In the United States, ADT Security Services, Inc., provides a program to address the scourge of domestic violence. The ADT AWARE® (Abused Women’s Active Response Emergency) program is active in more than 160 communities nationwide. A coordinated effort among ADT Security Services, representatives of local law enforcement agencies, prosecutor’s offices and battered women’s shelters, the program is credited with helping save the lives of victims of serious domestic violence and has given other victims the peace of mind to escape an abusive partner.
◗◗ Overseas, Tyco also is helping to build better lives and futures. In several developing countries such as Honduras and Guatemala, residents of impoverished, isolated towns are receiving — for the first time — safe drinking water, working latrines and improved hygiene thanks to Tyco’s support of Water For People, a nonprofit organization dedicated to such projects.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
112 United Technologies Is an American Company with International Reach
◗◗ United Technologies Corporation, a global provider of products and services, employs 85,000 workers in the United States. UTC is the largest private employer in the state of Connecticut.
◗◗ Founded by inventors, UTC operations range from elevators and escalators, refrigeration, and security systems to fuel cells and commercial and military helicopters. Our business units — Otis, Carrier, UTC Fire & Security, UTC Power, Pratt & Whitney, Hamilton Sundstrand, and Sikorsky — develop, manufacture and service the products they distribute around the world.
◗◗ In 2007, UTC’s aerospace businesses alone exported more than $5.6 billion in aircraft engines, spare parts, helicopters and other related products. These export activities were supported by our large network of U.S.-based suppliers.
International Presence Is Critical to UTC’s Operations and Growth
◗◗ UTC has always been an international business — its first international sale was in the late 1800s. Presence in overseas markets has provided UTC with the scale and efficiency to continue its commitment to innovation, quality and people.
◗◗ Otis, a $12 billion company with more than 80 percent of revenues coming from outside the United States, is supplying more than 1,300 elevator and escalator units for projects related to the Beijing Olympics, representing more than $100 million in sales. The installation and service aspects of the elevator business require physical proximity to customers. These non-U.S. operations are critical to UTC’s overall success.
◗◗ Otis’ main competitors are headquartered in Germany, Switzerland and Finland. American pro-competitiveness policies provide a strong framework as we engage internationally.
UTC’s International Business Benefits U.S. Workers
◗◗ UTC’s overall success enables significant and continuing investments in innovation. In 2007, UTC spent $3.6 billion in company and customer-funded R&D. More than $2.4 billion of these investments were made in the United States.
◗◗ Company R&D is critical to the development of new American products for export, such as Pratt & Whitney’s next-generation product family. The Geared Turbofan engine, scheduled to begin flight testing in 2008, targets double-digit improvements in fuel burn, environmental emissions, engine noise and operating costs.
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113 Living Up to Global Responsibilities
◗◗ UTC enables its workforce to pursue a lifetime of learning and skill development through its Employee Scholar Program. Established in 1996 and available to every one of UTC’s employees around the world, participants receive full tuition, expenses and paid study time for accredited programs. Graduates are awarded UTC stock or comparable compensation. Since 1996, UTC has invested more than $688 million in this flagship program, and employees have earned more than 23,000 degrees.
◗◗ UTC is committed to responsible and environmentally sound business practices in both its products and services and its operations. UTC Power’s fuel cell bus is twice as efficient as a diesel bus and could provide emergency power to a shelter or small office building during a blackout. Carrier’s chillers use refrigerants with zero chlorine and zero ozone-layer impact. Otis elevators have regenerative drives to use less energy on lifts and give back energy on descents.
◗◗ UTC stands behind its energy philosophy. The company uses 20 percent less absolute energy and 47 percent less water than it did in 1997. By 2010, UTC is on target to reduce greenhouse gas emissions and water consumption by 12 percent and 10 percent, respectively, from 2007 levels.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
114 Verizon — Delivering Innovation in Communications
◗◗ Verizon Communications Inc., headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, govern- ment and wholesale customers. A Dow 30 company, Verizon employs a diverse workforce of more than 228,000.
◗◗ Verizon’s Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings custom- ers the benefits of converged communications, information and entertainment services over the nation’s most advanced fiber-optic network. Verizon Wireless operates America’s most reliable wireless network, serving nearly 69 million customers nationwide.
Leveraging the Power of an International Network
◗◗ Verizon, through its Verizon Business (VZB) unit, has 322 offices across six continents. Its international IP network serves 2,700 cities in 150 countries. Its data networks cover more than 485,000 international route miles, and VZB has investment in more than 65 submarine cable systems worldwide.
◗◗ Verizon’s VZB unit is an international IP leader that has been ranked No. 1 by TeleGeography as the most connected public Internet backbone network for nine consecutive years.
◗◗ Verizon’s VZB unit is the premier partner for delivering network-based communications and IT solutions to businesses worldwide, serving 97 percent of the Fortune 500 companies and offering end-to-end integrated solutions, including managed services, security, collaboration, mobility and professional services capabilities — combined with unsurpassed reach.
Increasing International Capacity Is Critical to Meeting the Growing Needs of Businesses and Economies Worldwide
◗◗ In today’s increasingly globalized economy, the demand for international communications is growing steadily, and Verizon plays a key role in providing the capacity to meet that demand. For example, the growth in traffic between the United States and China and other Asia Pacific locations has driven Verizon to participate in the first next-generation undersea optical cable system directly linking the United States with mainland China, Taiwan and South Korea. This Trans-Pacific Express cable (TPE) also will provide U.S. businesses transit capabilities and route diversity to India, Hong Kong, Vietnam and Thailand. Verizon worked with initial con- sortium members China Telecom, China Netcom, China Unicom, Korea Telecom and Chunghwa Telecom (Taiwan) to build this new capacity.
◗◗ These new routes will be shorter and should reduce latency for customers by 10 to 15 percent. The new fiber-optic cable can support the equivalent of 62 million simultaneous phone calls, more than 60 times the overall capacity of the existing cable directly linking the United States and China. Customers also will be able to take advantage of a network architecture design called meshing, which provides alternate paths for rerouting traffic to another path in the event of a cable cut or network disruption.
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115 ◗◗ The TPE will use the latest optical technology to provide greater capacity and higher speeds to meet the dramatic increase in demand for IP, data and voice communications traffic in the fast-growing Asia Pacific region. In addition to meeting the immediate demands for capacity, the TPE cable will provide multinational customers with numerous long-term benefits, includ- ing improved performance and reliability.
◗◗ In a global knowledge-driven economy, it is the networks deployed internationally and domes- tically that provide for the quick and secure exchange of data and ideas that will ensure future economic success. Verizon is proud to be a leader in the advancement of network capabilities to these internationally significant regions.
Corporate Responsibility at Verizon: Helping the World Communicate
◗◗ The Verizon Foundation has invested more than $400 million in the United States and around the world to help others. The Foundation has awarded more than $69.4 million in grants to charitable and nonprofit agencies serving the needs of diverse communities. The centerpiece program is Thinkfinity.org, a free, online learning resource for K–12 educators and literacy pro- fessionals that is available to anyone with an Internet connection. The Foundation’s long-term, $31 million commitment to Thinkfinity reflects Verizon’s strong commitment to helping unlock the promise of literacy for children, adults and families around the world.
◗◗ The Verizon Foundation has supported UNESCO (United Nations Educational, Scientific and Cultural Organization) in its efforts to promote literacy at national, regional and international levels. Verizon participated in a summit hosted by Georgetown University to support UNESCO’s Education for All program. In addition, the Verizon Foundation was the corporate sponsor of the India Regional Conference in Support of Global Literacy, held in New Delhi.
◗◗ The Verizon Foundation partnered with Georgetown University and ProLiteracy Worldwide to develop online resources for adult literacy programs. These resources will be hosted on the school’s Global Education Consortium (GEC) portal. The GEC is a network of 100 universities around the world devoted to improving literacy. The Foundation also has supported the volun- teer efforts of our global employees through grants to literacy projects in Argentina, England and India.
◗◗ Verizon’s state-of-the-art networks enable it to offer the most advanced communications services available today — services that drive productivity while mitigating adverse environmental impacts. The company’s expansive global network provides the foundation for e-commerce. By replacing bricks and mortar for business-to-business or business-to- consumer e-commerce, companies can control their procurement and distribution costs while reducing their carbon footprints.
◗◗ Numerous multinational corporations worldwide are using VZB communications services to go green and work smarter. They are employing advanced collaboration solutions such as high-definition conferencing and telepresence to improve productivity across their operations, reduce employee air travel and support their overall corporate social responsibility initiatives.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
116 “As a global company with an internationally respected brand, Xerox is uniquely positioned to use its global footprint to continually evaluate what should be done and where, making maximum use of the local capabilities and continuously improving our competitiveness. More than half our workforce and revenues are outside of the United States, which led us this year to modify and globalize our operations. By rethinking where in the world we do business, we have been able to match the location of our resources in the sourcing group to the geographies we source from, thus improving connections with local economies, cultures and suppliers. This enables us to improve speed in what we do, work more globally and improve our competitiveness.”
— Wim Appelo, President, Xerox Strategic Services Group
Xerox — An American Success Story
◗◗ Xerox was founded as the Haloid Company in 1906 in Rochester, NY. Haloid’s president, Joe Wilson, took a gamble on a technology that more than 20 other major corporations had dismissed. The engineers at Haloid took the invention of a patent attorney from Queens, NY, and turned it into the world’s first plain paper copier, revolutionizing the world of business communications. Today, Xerox is the world’s leading document-management technology and services enterprise, with 2007 revenue reaching $17.2 billion.
◗◗ Xerox employs 28,000 American workers in states from California to Texas to Florida in manufacturing and assembly, R&D, and other skilled jobs.
◗◗ Xerox is investing in the future, with high-end research driving innovation. In 2007, Xerox spent $912 million, or 5.3 percent of revenue, on research, development and engineering.
International Markets Are a Key Component of Xerox’s Success
◗◗ Xerox operates in an international business environment, serving a wide range of markets with more than 50 percent of the company’s revenue generated from customers outside the United States. This worldwide reach and effective business model — combined with competitive offerings and strong recurring revenues — position the company well to continue building value for customers and shareholders. The company now has operations in Latin America, Europe and Eurasia, the Middle East, and Asia.
◗◗ Although Xerox operates in nearly every country in the world, much of its engineering, research and manufacturing capabilities are centered in the United States. In fact, its flagship graphic arts printer, the iGen3 Digital production press, is manufactured solely in the United States, outside of Rochester, and shipped worldwide. The plant was named assembly plant of the year in 2005 by Assembly magazine.
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117 Xerox’s International Citizenship
◗◗ Xerox invests in its employees. “At Xerox, training and development are key to maintaining our competitiveness and developing our talent base,” says Tim Conlon, Xerox’s chief learning officer. “We offer training for employees worldwide through traditional classroom settings as well as online learning. We encourage employee participation in advance degree programs, and in the U.S., we support this with tuition assistance.”
◗◗ In addition, Xerox employees are given myriad opportunities to give back to local communi- ties, including the ability to take up to one year’s paid leave to participate in a social service program.
◗◗ Xerox is deeply involved in its local communities and in improving educational opportunities for all. This includes direct support of technology-related programs at graduate schools. This fall, Xerox provided a $1 million grant to MIT to fund graduate fellowships in green technolo- gies, smart document technology and more, and it is supporting a program at North Carolina State University that will lead to new courses in professional service management and innova- tion management. In January, Xerox Canada announced a project with Athabasca University to develop a research program focused on advancing mobile learning and e-learning for students living in remote regions of Canada.
◗◗ Xerox also is investing in students at all levels to improve their chances of succeeding in school through programs such as the Xerox Science Consultant Program and For Inspiration and Recognition of Science and Technology Program.
◗◗ Xerox is committed to building American science competitiveness. The company is part of a coalition seeking to develop the growth of the services sciences field through reforming the federal government’s support for science research and curriculum development.
◗◗ In France, Xerox’s Grenoble research center has more than 40 collaborations under way with the European Union, universities and corporations.
◗◗ Over the past 40 years, Xerox has demonstrated leadership in sustainability and citizenship by designing “waste-free” products built in “waste-free” plants, investing in innovation that delivers measurable benefits to the environment, supporting educational and community projects around the world, and many other integrated initiatives.
◗◗ Xerox is committed to promoting a cleaner, healthier planet for future generations through fighting climate change. Since 2002, Xerox has reduced its own emissions of greenhouse gases by 18 percent, substantially exceeding its pledge to reduce 10 percent by 2012. Since then, Xerox has set a new, higher goal of a 25 percent reduction by 2012. Xerox also is a member of the U.S. Climate Action Partnership, a group of corporations and environmental organizations working together to enact a meaningful cap on greenhouse gas emissions as quickly as possible.
◗◗ Xerox’s commitment to remanufacturing has allowed it to keep 2.8 million copiers, fax machines and multifunction devices out of landfills, which amounts to 2 billion pounds of waste that might have otherwise wound up in the ground.
International Engagement: How American Workers and Businesses Succeed in the Worldwide Economy
118 “We see a continual shifting in trade patterns throughout the world. Through our global logistics solutions, YRC Logistics helps clients better control their length- ening supply chains and maintain or enhance the marketplace value of their products.”
— Jim Ritchie, President and CEO, YRC Logistics
YRC Logistics Connects International Markets
◗◗ Headquartered in Overland Park, KS, YRC Logistics is an international logistics services com- pany that enables companies to improve their transportation network and overall supply-chain efficiency by offering transportation, distribution and international logistics solutions.
◗◗ YRC Logistics owns and operates more than 370 logistics facilities in 21 countries and regions in North America, Asia, Europe and South America. The company provides logistics solutions in and between 82 countries and employs nearly 6,000 people worldwide with parent company YRC Worldwide employing an additional 55,000 people in the United States.
◗◗ Recent expansion of the YRC Logistics international footprint includes joint ventures with Shanghai-based Jin Jiang International for global freight forwarding and logistics services, acquisition of Shanghai-based Jiayu Logistics Limited for less-than-truckload ground transportation within China, a new logistics office in Argentina, and additional service capabilities in Mexico.
International Operations Strengthen YRC Logistics
◗◗ Approximately 50 percent of 2007 revenue for YRC Logistics came from its international operations. International operations grew by 6.53 percent over the prior year.
◗◗ International operations continue to offer growth opportunities for YRC Logistics. The United States exported and imported goods worth $1.16 trillion and $1.95 trillion, respectively, throughout 2007, and this trade supports the company’s growth.
China Is Part of YRC Logistics’ International Success
◗◗ In 2007, YRC Logistics experienced its greatest international revenue growth from business related to China. Representing approximately 65 percent of international revenue for the com- pany, the China business grew at nearly 8 percent.
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119 ◗◗ The China market will likely accelerate as a source of revenue for YRC Logistics. China is the fastest-growing export market for U.S. goods. The U.S.-China Business Council quotes U.S. exports to China climbed 16.6 percent through November 2007, to $58.3 billion.
◗◗ In addition, a survey by the U.S.-China Business Council states that 96 percent of respon- dents see accessing or serving the China market as the primary reason for investing in China. The Jiayu transportation network, with its 3,000 vehicles and 1,600 employees, will help U.S. manufacturers access the China market.
Living Up to International Responsibilities
◗◗ YRC Worldwide provides employees with opportunities to advance their professional education through a number of means, including scholarship assistance and partnerships with major uni- versities. The company recruits employees for a wide variety of disciplines, including logistics/ supply chain, engineering, technology, accounting, finance, marketing and sales.
◗◗ YRC Logistics is working with Beijing-based Tsinghua University to support the advance- ment of the logistics profession within China through educational initiatives, including intern programs, merit scholarships and financial aid. Tsinghua graduate school ranks first in the National Evaluation of Graduate Schools.
◗◗ YRC Logistics is lending a hand to the school children of China. Project Dream helps young girls complete their primary education. The opening of Dream School provides a safe and comfortable condition for learning in a remote, mountainous area of China where schools had been closed due to lack of funds.
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