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

Disappointing Report on China's Economy Shakes Markets

In London and New York shares lost 3 percent, while Paris and Germany dropped around 2.4 percent More

DRC Tries Mega-Farms to Feed Population

Park at Boukanga Lonzo currently has 5,000 hectares under cultivation, crops stretching as far as eye can see, and is start of ambitious large-scale agriculture plan More

Video War, Drought Threaten Iraq's Marshlands

Areas are spawning ground for Gulf fisheries, a resting place for migrating wildfowl, source of livelihood for fishermen and herders who have called the marshes home for generations 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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs