The Fourth of July. What could be more American than to pop a cold Budweiser, put a hot dog on the grill, slather it with Heinz ketchup, watch the kids chase the Good Humor Ice Cream truck, and maybe catch the latest summer blockbuster?
Well, technically, you'd be drinking a beer owned by a Brazilian-Belgian conglomerate, your hot dog may well have come from Smithfield Foods, a Chinese-owned company, the Heinz ketchup partly owned by a Brazilian private equity group, the Good Humor Ice Cream truck part of a British-Dutch conglomerate, and the movie house you visit will likely belong to Dalian Wanda, a Chinese real estate giant that controls more U.S cinema screens than any American company.
You might be surprised to learn how many iconic American brands have been bought up by foreign companies. Indeed, in this era of suspicion toward free trade and globalization, you might be downright alarmed. Your ThinkPad laptop? Owned by Lenovo of China. The Chrysler Building? Owned by the Abu Dhabi Investment Council. The Chrysler car company itself? Owned by Italian automaker Fiat. Your favorite Sara Lee snacks? Owned by Grupo Bimbo of Mexico, the world’s biggest bread-maker. Gerber baby food, Holiday Inn hotels, Vaseline, Alka-Seltzer, Hellman’s Mayo and on and on: all owned by non-American conglomerates.
But before you choke on your hot dog or reach for a stiff Jim Beam (now owned by a Japanese conglomerate), calm down. Global companies generally buy American icons for good old-fashioned capitalist reasons: They want to make money. They have no incentive to destroy the brand. Rather, they want to enhance it, grow its market, improve the bottom line, even rescue it from oblivion.
Take Volvo, for example. In 2010, the Chinese auto-maker Geely bought the struggling Swedish car-maker in a high-profile deal that announced corporate China's rise to the world. At the time, Volvo was on the verge of extinction; six years and $11 billion of investment later, it reported record profits in 2015 and is a leading player in the driverless car movement.
Who owned Volvo as it was struggling to survive? Ford Motors of the U.S.
While foreign purchases can be disruptive to companies, foreign direct investment has a long record of creating jobs. Foreign companies and their U.S affiliates employ more than 8.5 million people (6 million directly, and 2.5 million indirectly) in the U.S., according to the International Trade Administration. They also contribute to innovation by spending more than $50 billion a year on research. If we take into account productivity growth arising from this foreign investment in manufacturing, this adds another 3.5 million jobs, the ITA says. All told: 12 million Americans owe their jobs to foreign investment.
Take South Carolina. The state may be “Trump Country,” but it’s also “foreign direct investment country.” The state has attracted investment from companies in 40 countries, with some 127,000 South Carolinians employed by majority-owned foreign-affiliated companies, according to the ITA. That accounts for nearly 8 percent of the state's private sector employment. Foreign investment also powers South Carolina’s export machine: The state exports nearly $31 billion worth of goods, on par with entire countries like Egypt, oil-rich Ecuador, or Bulgaria. Its top export destination? China.
Some Americans may still quail to see a totem of Americana like Anheuser-Busch fall under a global beer behemoth headquartered in Leuven, Belgium. But the parent company gave pride of place to the company they bought in 2008: its name, after all, is Anheuser-Busch Inbev. Bud Light remains the bestselling beer in America, and Budweiser is growing in popularity across emerging markets. If you owned the stock (ticker symbol: BUD) in your pension plan at the time of the purchase, you’ve seen it more than triple in value.
To be sure, whenever a larger company buys another, cost-cutting will likely lead to lost jobs, but that’s the case whether the purchaser is American or Chinese. U.S private equity firms that buy American brands have been ruthless in their “cost-cutting.” What’s more, a recent Commerce Department report notes that Americans who work for foreign-owned companies or affiliates in the U.S are generally better paid than those who work for U.S.-owned firms.
Even as the U.S. slips down in rankings that measure everything from education to healthcare access to global competitiveness, America stands above the rest of the world in its ability to attract foreign direct investment. All told, the U.S has attracted nearly $3 trillion of FDI stock, almost double the amount of its closest competitor, the United Kingdom -- a gap that will likely grow with Brexit, notwithstanding some signs of disquiet over U.S. hyperpartisanship.
And, no, the Chinese are not buying up America. Most of that investment comes from advanced economies, notably Japan, the United Kingdom, and Germany. The Commerce Department notes that 2015 was a record year, bringing in $348 billion, with some 70 percent of that investment going toward America’s ailing manufacturing sector. In 2015, foreign buyers also purchased some $87 billion in real estate. Unless those houses and commercial buildings can fly, those assets are staying home, and contributing to a range of associated service industries.
Meanwhile, U.S companies are by far the world's biggest foreign investors, with nearly $5 trillion in foreign direct investment. And lest one think U.S firms are piling solely into sweatshop manufacturing in Asia, the vast majority of U.S investments are in advanced economies, mostly in Europe.
So, go ahead, crack that Bud -- and rest assured that even if companies in Belgium, Brazil, and China ultimately own some of what you buy, eat, and watch this weekend, you'll still be doing right by America.