Foreign firms call Pittsburgh home

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As German Chancellor Angela Merkel makes her way home after the G-20 summit wraps up later this week, Randy Dearth would like nothing more than for her to visit his office for 10 minutes on her way to Pittsburgh International Airport.

It's not out of the realm of possibilities, actually.

Mr. Dearth is president and chief executive of Lanxess Corp., the U.S. subsidiary of German chemicals company Lanxess. His office is in Findlay, not far from the Parkway West route that many G-20 delegates will travel to get to the airport.

Ideally, Mr. Dearth would like to assemble officials from 75 or so German companies that have operations in the region "to show her our support" as Ms. Merkel seeks re-election to office in a national vote scheduled for Sunday in Germany.

But the gathering Mr. Dearth envisions also would be an opportunity to let Germany's top-ranking official know that "there are German-owned companies in Pittsburgh," he said.

Lanxess, which in 2003 spun out of Bayer, another German firm with a big presence here, has about 300 employees at its U.S. headquarters, making it one of the largest among the foreign-owned businesses that call Pittsburgh home.

Bayer, with its U.S. headquarters also in the Parkway West corridor in Robinson, has 2,700 employees in the region, including 1,200 who work at sister firm Medrad, based in Marshall.

They are among about 340 firms in the Pittsburgh area that are owned by foreign enterprises, said Jeffrey Deane, head of the international business group at accounting firm Malin Bergquist in Ross.

"Foreign investment is a strong piece of the economy and a continually growing sector in our economy," said Mr. Deane. "It's generating long-term jobs."

The decision to hold the G-20 in Pittsburgh provides those foreign-based companies a chance to trumpet the city as a great place to do business and could serve the region well in the future when it's trying to attract more investment, he said.

"We're always trying to promote that we are a global city, and that's why the G-20 is so important. So often we're competing with Charlotte, N.C., or Boston ... for investment by a foreign-owned company. The summit spotlights the region.

"Unfortunately the city has a reputation as ... industrial with steel or coal and as a dirty, dusty town. If we can get people here, we can be successful in getting them to locate here."

For its part in helping promote the city as a viable business location during and leading up to the summit, Malin Bergquist created a Web site featuring three German-owned companies with operations in the region -- Ardex Americas, Draeger Safety and Flabeg Solar -- and published the Web site, www.malinbergquist.com/g20.htm, in German and English.

"These companies aren't known like Bayer, but they're very successful and have done a lot to grow the region by generating jobs," said Mr. Deane.

Ardex, which makes specialty building materials, employs about 100 people; Draeger produces safety equipment such as breathing masks for firefighters and employs about 120 locally; and Flabeg Solar, which makes specialty glass and mirror technologies to concentrate solar power, has about 200 local employees and is building a $30 million plant in Findlay.

Ardex and Draeger are Malin's clients, and while Flabeg is not, Malin included Flabeg on the Web site because "of their desire to open up operations that could generate 200 jobs."

"The effect of foreign-owned enterprises in our region is so profound that I think it's immeasurable," said Peter Kalis, chairman and global managing partner of Pittsburgh's largest law firm, K&L Gates, which has 33 offices worldwide including 10 outside the United States.

"The interconnections within the global economy are now so pervasive they are very hard to sort out and delineate."

Besides the significance of foreign-owned companies with large operations here such as Westinghouse Electric, which is owned by Toshiba Corp. of Japan, Mr. Kalis said the region benefits from Pittsburgh-based firms with overseas facilities.

"If you look at the effect of U.S. Steel in Slovakia or PPG Industries in France or Bank of New York Mellon in the United Kingdom or Alcoa in China ... you would say equally the effect of those Pittsburgh enterprises on foreign economies is quite substantial."

A range of companies here that are either foreign-owned or with major international operations helps better position Pittsburgh going forward, said Susan Everingham, director of the Pittsburgh office of Rand Corp., the Santa Monica, Calif.-based think tank.

"As economies become more interconnected, these companies play a crucial role being multinational. They really do have inside experience on what's making the world's economy buzz and probably have good insights."

Dimitris Kraniou, a professor of business at Point Park University and a native of Greece who came to Pittsburgh as a student in the 1970s, said much of the recent investment here by foreign firms is in service and technology businesses "because of the transformation of the city from a manufacturing and industrial center to a service-oriented economy."

"Clearly it's a phenomenon: international business permeates our times."

Once the G-20 delegates leave town, the region's businesses should continue to cash in on the effect of holding the summit here, said Mr. Kalis.

"We will be unpacking the benefits from this fortunate turn of events for decades."


Joyce Gannon can be reached at jgannon@post-gazette.com or 412-263-1580.


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