News / USA

More US Companies Look Global as Domestic Demand Drops

Assembly worker Julaynne Trusel works a on a 2012 Chevrolet Volt at the General Motors Hamtramck Assembly plant in Hamtramck, Michigan, July 27, 2011 (file photo).
Assembly worker Julaynne Trusel works a on a 2012 Chevrolet Volt at the General Motors Hamtramck Assembly plant in Hamtramck, Michigan, July 27, 2011 (file photo).

Multimedia

Audio
Elizabeth Lee

Since the economic recession in 2008, some U.S. companies that historically depend on the domestic market started looking elsewhere for business. In Southern California, organizations that help businesses have been encouraging them to go global to boost their bottom line.  There are reasons why most American businesses do not export their products.

California-based Tystar sells a special type of furnace.  It gets so hot that it can cook the silicone components that go in computers and cell phones.  The company assembles these furnaces in Los Angeles and sells them within the United States and overseas.

Jim Smith manages the business development side of Tystar.  He says in the last four to five years, the company started focusing more on establishing itself globally, in markets as far away as China, Singapore and South Korea.  During that time, exports grew from 20 percent to half of Tystar's business.

Smith says without overseas clients, the economic recession would have hurt the company.  But he says developing an international client base was not easy.  

"You have a language barrier that's your first challenge. Every place in the world does business differently than we do business in the United States," Smith noted.

Language and cultural barriers are not the only hurdles that discourage businesses from going global.  Vance Baugham, president of the World Trade Center Association of Los Angeles and Long Beach, says companies need extra capital to export. He says many U.S. businesses are small and have limited resources.

"When a company is small, all of its resources are usually used to the max," Baugham explained.  "In order to find the resources for taking on a global market that is the number one difficulty for them."

Baugham says this is one of the main reasons why less than 15 percent of U.S. businesses enter the global market.  Yet despite such difficulties, the drop in domestic demand caused by a tough economy has motivated some U.S. companies to look abroad.  

"Companies have to look to diversify their markets away from the domestic economy. And 95 percent of the world's consumers are actually outside the United States," said Jim MacLellan, the director of trade development at the Port of Los Angeles.

For now, U.S.-based companies seeking to sell products overseas have an advantage.  MacLellan says the weakened dollar makes U.S. exports less expensive relative to goods sold in other currencies. A decade ago, about 20 percent of the Port of L.A.'s cargo were exports.  Now exports are up to 34 percent.

In Southern California, the Port of Long Beach experienced an almost 50 percent increase in exports in the last 10 years.  Businesses located in the Los Angeles area on the west coast have the advantage of being close to these ports, and an international airport, making it cheaper to send products overseas.  

Traditionally, small companies expanded their businesses slowly, first selling locally, then regionally before considering competing in the global marketplace.  Vance Baugham says he is now seeing a new trend.

"Some of the smaller companies are going from local sales to the global market right away," Baugham added.

Baugham says he is also seeing a changing trend in imports.  With the price of fuel going up and the cost of overseas labor increasing, it is more expensive to produce items and ship them to the United States. Baugham says countries such as China are looking at manufacturing products within the U.S. to keep costs down.

You May Like

Ebola Death Toll Nears 5,000 as Virus Advances

West Africa bears heaviest burden; Mali toddler’s death raises new fears More

Jordan’s Battle With Islamic State Militants Carries Domestic Risks

Despite Western concerns that IS militants are preparing a Jordanian offensive, analysts call the kingdom's solid intel a strong deterrent More

Asian-Americans Assume Office in Record Numbers

Steadily deepening engagement in local politics pays off for politicians like Chinese-American Judy Chu More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video Comanche Chief Quanah Parker’s Century-Old House Falling Apart

One of the most fascinating people in U.S. history was Quanah Parker, the last chief of the American Indian tribe, the Comanche. He was the son of a Comanche warrior and a white woman who had been captured by the Indians. Parker was a fierce warrior until 1875 when he led his people to Fort Sill, Oklahoma, and took on a new, peaceful life. As VOA’s Greg Flakus reports from Cache, Oklahoma, Quanah’s image remains strong among his people, but part of his heritage is in danger of disappearing.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid