Remaking the American Dream

Since the recession began in December 2007, the number of unemployed Americans has risen to 15.1 million. Industries such as construction have halted production, shedding 1.5 million jobs, according to the U.S. Bureau of Labor Statistics, and many Americans who are still employed face stagnant wages.

But foreign companies can offer a lifeline to the United States in troubling economic times, says Micheline Maynard, a New York Times journalist and author of The Selling of the American Economy: How Foreign Companies are Remaking the American Dream."  Maynard recently spoke with NEWSWEEK's Nancy Cook about the way foreign companies have helped revitalize forgotten towns, added 5 million jobs to the U.S. economy, and provided American workers with stable jobs that pay, on average, $66,000 per year, substantially more than the average U.S. professional salary, estimated at $42,270 in 2008. Excerpts:

Your book is subtitled "How Foreign Companies are Remaking the American Dream." In a year when unemployment has skyrocketed  and many middle-class workers have seen the value of their 401(k)'s plummet, what does the American dream look like now?
The conventional view of the American dream is that you go to school, you get a good education, and you pick one of the great American companies to work for such as Coca-Cola or Exxon. But as the companies change and as they close plants, there's no longer the ease of asking your dad to get you a job at one of these places. People have to consider other options. For a growing number of people, that means working for companies that are not in the U.S. People are facing the idea that their employers may be based in London or South Asia somewhere. It's an idea that our parents and grandparents never dealt with in their lifetimes.

How is working for a foreign company different from working for a U.S. company?
There's a discomfort in working for a foreign company in that you can't just march into headquarters or into the boss's office and tell him what you think. Most American can't do that anyway. If you talk about the food business, Eight O'Clock Coffee is run by an American and still roasts coffee in Maryland. Nothing has changed in that regard, even though it is owned by an Indian company. If you work for Toyota in Lexington, Ky., you may see some Japanese faces in the factory, but it's still a factory. In early years, companies sometimes bring people over from the home office, but as they get more comfortable, they tend to hand responsibility over to locals.

Have the towns or cities where these foreign companies set up shop been changed at all by their presence?
The example that everybody uses is Georgetown, Ky., where Toyota built its first assembly plant 20 years ago. I went back a year ago, and the comparison is stunning. Before, you had literally one highway exit with a McDonald's and no place to stay. Now, there are new high schools, new parks, tons of restaurants and tons of hotels. If you're a community leader in Mississippi, you want to replicate what Georgetown did.

But isn't there a concern that towns like Georgetown will become too dependent on a single factory or industry, much the way cities in Michigan were so reliant on the auto industry?
If you look at Georgetown and how it's dependent on Toyota, there are differences. The company chose this town. It's close to places of higher education, and it's near the city of Lexington. There were already things there to attract companies. It wasn't just a place where there was a big field.

Have foreign companies with plants or factories here been hit by the recession in the same way as many American companies?
We haven't even seen the impact yet of a major foreign companies closing in the U.S, but we'll get an example of a foreign-owned plant closing when Nummi [New United Motor Manufacturing Incorporated, a joint venture between Toyota and General Motors] closes down in 2010 in Fremont, Calif. The plant employs 4,500 workers. That's a large amount of workers for a foreign manufacturing plant. The reason it was so big was that it was inherited from General Motors. I also don't know, in the future, if Toyota will be able to follow its philosophy of not laying off workers and keeping training in the plants. The foreign automobile manufacturers offered voluntary buyouts and cut production, but most of them kept people in training programs. They didn't eliminate jobs. We don't expect foreign companies to be perfect. We don't expect them to do stupid things to keep places open, but there's an extra burden on them to prove that they're good citizens, because they are not familiar to us. They're not the names that we bought or our grandparents bought. I think politics plays a big role here. Since foreign companies are still strangers in a sense, they want to make people feel like they're no threat.

What would you say to protectionists who worry that foreign companies are stealing American jobs?
When the car companies were in so much trouble last year, a study came out that said that 2 to 3 million jobs would be affected. I did my own research that showed that 5 million jobs plus had come from foreign companies into the U.S. If we got rid of those jobs, unemployment would be 14 to 15 percent. Jobs are jobs. The best answer to protectionists is saying, "I can own a house in the suburbs, I can count on stable health care, and yes, I work for a foreign company, but I work in the U.S." These jobs are going to Americans. They're not being lost. I understand why protectionists feel the way they do. There's a good deal of fear about foreign companies, but what I found researching the book was that it was an emotional issue as much as an economic one. When you talk to people working for foreign companies, you find that they have the same hopes and dreams as their parents and grandparents did about being prosperous in the United States.

© 2009