GABO German American Business Outlook 2019 - January 29, 2019 6:00pm to 9:00pm
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GABO
2019 German American
Business Outlook 2019
January 29, 2019
6:00pm to 9:00pm
Deutsche Bank, 60 Wall Street, 47th Floor, New York
Hosted by:
#GABO2019
PROGRAM
GERMAN AMERICAN
BUSINESS OUTLOOK 2019
6:00 p.m. Registration
6:30 p.m. Welcome Remarks
Michaela Ludbrook
Head of Global Transaction Banking, Americas, Deutsche Bank
Rainer Bender
Global Chairman of Corporate Banking Coverage, Deutsche Bank AG
6:35 p.m. Introductory Remarks
Caroll H. Neubauer
Chairman & CEO, B. Braun Medical Inc. / Chairman, GACC New York
Peter Riehle
President & CEO, WITTENSTEIN Holding Corp. /
Chairman, German American Chambers of Commerce
6:45 p.m. Economic Update by Torsten Slok
Chief International Economist, Deutsche Bank
7:05 p.m. Presentation of Business Outlook Survey Results by Mark Tomkins
President & CEO, GACC Midwest
7:40 p.m. Transatlantic Panel Discussion
Caroll H. Neubauer
Chairman & CEO, B. Braun Medical Inc. / Chairman, GACC New York
Daniel Andrich
President & CEO, Representative of German Industry + Trade (RGIT)
Peter Riehle
President & CEO, WITTENSTEIN Holding Corp. /
Chairman, German American Chambers of Commerce
Vincent Halma
President & CEO, KION North America
Moderator: Dr. Volker Treier
Chief Executive of Foreign Trade, Member of the Executive Board, DIHK
8:25 p.m. Networking Reception
Hosted by Deutsche Bank
#GABO2019 #GERMANBUSINESS
#GACCNY #GACCMIDWEST #GACCSOUTH #GACCWEST
GREETING
Dear Reader,
It is evident that many of the pivotal economic developments in the last year continue to evolve on a
daily basis. So far, the economies of the US and Germany remain on a path of sustained growth and low
unemployment, though concerns are rising on both sides of the Atlantic.
Our German American Business Outlook (GABO) this year again provides insight into how German
subsidiaries in the US view this country as a business location and their expectations for the coming year.
The overwhelming majority anticipate moderate growth of up to 3%, though when asked about their own
sales, a post-recession high of 9% foresee a contraction in their business. Among the more key topics are
a move to diversification and M&A, while also addressing workforce and visa challenges, as well as the
importance of open markets on their supply chains. Nonetheless, the overall outlook remains optimistic.
We at the GACC and Representative of German Industry + Trade (RGIT) are committed to fostering
positive economic ties between the US and Germany. That includes highlighting the interests of our
members to ensure that their businesses thrive. And we, of course, greatly appreciate their continued
support of our organization.
Respectfully yours,
DANIEL ANDRICH DIETMAR RIEG
President & CEO, RGIT President & CEO, GACC New York
MARK TOMKINS KRISTIAN WOLF
President & CEO, GACC Midwest CEO, GACC West
STEFANIE ZISKA
President & CEO, GACC South
SURVEY
#GABO2019
GROWTH EXPECTATION FOR YOUR BUSINESS IN 2019
Growth expectation for your business in 2019
9%
9%
39% 39% Expectations for individual
businesses are still positive
Expectations for individual businesses are still
52% but 9% expect a
positive but 9% expect a contraction for their own
52%
contraction for their own
business in 2019, the highest since emerging from
business in 2019, the
the recession.
highest since emerging
from the recession.
Stronggrowth
Strong growth > 3%
> 3% Flat to
Flat tomoderate
moderategrowth
growth
0%0%
- 3%- 3%
Contraction
Contraction < <
0%0% growth
growth
#GABO2019
GROWTH EXPECTATION FOR THE US ECONOMY IN 2019
Growth expectation for the US economy in 2019
3% 10%
3%
10%
While the general
outlook for the overall
economy is still very
While thepositive, 3% of
general outlook for the overall
economycompanies expect
is still very positive, a companies
3% of
87%
contraction of the US in 2019.
expect a contraction of the US economy
economy in 2019.
87%
Strong
Stronggrowth
growth> 3%
> 3% Flat
Flat to
tomoderate
moderategrowth 0%0%
growth - 3%- 3%
Contraction < <
Contraction 0%0%
growth
growth
#GABO2019
#GABO2019
STRATEGIC ACTIONS: M&A AND DIVERSIFICATION
Strategic
Strategic Actions:
Actions: M&A
M&A and
and Diversification
Diversification
M&A
M&Aexecuted
M&A executedin
executed inin201
2018
2018
8 M&A
M&Aplanned
M&A plannedin
inin201
2019
2019
9 Diversification
Diversification executed
executed
Diversification executed ininin2018
2018 Diversification
2018 Diversification planned
plannedfor
Diversification planned for
for2019
2019
2019
20%20%
20%
50%50%
50%
9%9%9% 37%
37%
37%
0%
0% 5%
5% 10%
10% 15%
15% 20%
20% 25%
25% 0%
0% 10%
10% 20%
20% 30%
30% 40%
40% 50%
50% 60%
60%
#GABO2019
TOP REASONS FOR FUTURE INVESTMENT IN THE US
Top reasons for future investment in the US
Customer demand for
Customer demand for goods / services
goods / services 80%
80%
The US market’s
attractiveness for German
The US market’s attractiveness for German
subsidiaries for future
subsidiaries for future investment is based on
Proximitytotocustomer
Proximity customer base
base 71%
71%
investment is based on
customer demand, proximity to the customer base
customer
and the relative marketdemand,
stability. proximity
to the customer base and the
Relativemarket
Relative market stability
stability
35%
35% relative market stability.
#GABO2019
WORKFORCE AND VISA CHALLENGES PART 1
Workforce and Visa challenges
Degree of difficulty in attracting
skilled labor 87% of German subsidiaries
still have difficulties
13%
13%
22%
22%
attracting
87% of German skilled
subsidiaries stilllabor.
have difficulties
24%
24% This
attracting highlights
skilled the needthefor
labor. This highlights need for
pipelinespipelines
of qualifiedof qualified
employees, for example
throughemployees,
apprenticeship for example
programs.
41%
through apprenticeship
41%
programs.
Always
Always Veryoften
Very often Sometimes
Sometimes Rarely
Rarely
#GABO2019
#GABO2019
WORKFORCE AND VISA CHALLENGES PART 2
Workforce
Workforce and
and Visa
Visa challenges
challenges
Ease
Easeof
ofreceiving
receivingwork
workvisas
visas2017
2017 Ease
Easeof
ofreceiving
receivingwork
workvisas
visas2018
2018
3%
3% 3%
3%
3% 22%
22% 3%
22%
19%
19%
19% 41%
41%
39%
39%
39%
41%
36%36%
36% 37%
37%
37%
Strongly
Strongly worsened
Stronglyworsened
worsened Slightly
Slightly worsened
Slightlyworsened
worsened No
No change
Nochange
change Positive
Positive Strongly
Strongly worsened
Stronglyworsened
worsened Slightly
Slightly worsened
Slightlyworsened
worsened No
No
No change Positive
change
change Positive
SURVEY CONTINUED
#GABO2019
Importance
IMPORTANCE OF of open
OPEN markets
MARKETS
72% of surveyed companies
state open markets as very
2018
2018 72%
72% important, an increase of
19% over
72% of surveyed last year.
companies state open markets as
very important, an increase of 19% over last year.
An overwhelming
An overwhelming 90% stated that90%
open markets
are ratherstated that open
or very important markets
to their business.
2017
2017
53%
53%
are rather or very important
to their business.
#GABO2019
IMPACT OF NEW TARIFFS AND TRADE CONFLICTS PART 1
Impact of new tariffs and trade conflicts
Impact of tariffs imposed by the US
on China
While only 39% of German
4%
4%
subsidiaries in the US
13%
13%
29%
29% While only 39% of German subsidiaries in the US
reported sourcing products
reported sourcing products from China, a
from China, a staggering
staggering 83% of these companies are negatively
impacted83%
by theof these
tariffs companies
imposed areChina.
by the US on
54% 54% negatively impacted by the
tariffs imposed by the US on
Very negative
Very negative Negative
Negative No impact
No impact Positive
Positive
China.
#GABO2019
IMPACT OF NEW TARIFFS AND TRADE CONFLICTS PART 2
Impact of new tariffs and trade conflicts
Impact on business by
steel/aluminium tariffs
19% of the surveyed
14%
14%
German subsidiaries
31%
19% of the surveyed German subsidiaries
31% process steel and/or
23% process steel and/or aluminium. Of these, 64%
23% aluminium. Of these, 64%
are negatively impacted by the new tariffs on steel
are negatively impacted by
and aluminium.
32%
32%
the new tariffs on steel and
aluminium.
Very negative
Very negative Negative
Negative No impact
No impact Positive
Positive
EXECUTIVE SUMMARY Only 3% of surveyed companies predict a contraction of the US economy, however, 9% see a contraction for their own business, which is the highest since the recession. A large increase of German subsidiaries are planning diversification of their business and M&A as strategic actions in 2019. One major challenge continues to be finding skilled labor, and difficulties in obtaining work visas have increased to 78% of surveyed companies. 90% of respondents say open markets are rather or very important to their business.
WELCOME REMARKS
MICHAELA LUDBROOK
Head of Global Transaction Banking, Americas, Deutsche Bank
Ms. Ludbrook is the Head of Global Transaction Banking, Americas. She joined
GTB in April 2018 as the Global Head of Strategic Execution. Prior to that, Ms.
Ludbrook has held a number of executive positions at Deutsche Bank. Before
joining Deutsche Bank, Ms. Ludbrook worked at Goldman Sachs for seven
years in the US and at JP Morgan for 15 years with assignments in London,
Tokyo and New York in a variety of functions.
RAINER BENDER
Global Chairman of Corporate Banking Coverage, Deutsche Bank AG
Mr. Bender became Global Chairman of Corporate Banking Coverage in
September 2018. He has banking experience since more than 45 years and
his focus was mainly the client coverage of multinational corporate clients.
He started with an apprenticeship in 1970, thereafter worked as branch
manager, credit officer and relationship manager. In 1990 he built a team
for multinational corporates and since then has held had various leading
positions. Prior to his global chairman role Mr. Bender has headed the
corporate banking Germany, Austria and Switzerland franchise.
INTRODUCTORY REMARKS
CAROLL H. NEUBAUER
Chairman & CEO, B. Braun Medical Inc.
Located in Bethlehem, Pennsylvania, the company is a global leader in infusion therapy
and pain management, and a pioneer in passive safety devices and PVC-free and DEHP
free products. Mr. Neubauer oversees the company's North American operations. He
also serves on the B. Braun Global Board in Germany and as Chairman of the German
American Chamber of Commerce, New York.
PETER RIEHLE
President & CEO, WITTENSTEIN Holding Corp.
As President and CEO of WITTENSTEIN Holding Corp., Mr. Riehle is responsible
for all aspects of leading the North American Headquarters of WITTENSTEIN
SE. An award-winning manufacturer of motion control and mechatronics
systems, WITTENSTEIN is renowned in the industry for the quality of its
products and for its innovations in mechatronic drive technology, servo
systems and mechanical components. Prior to his current position, Mr. Riehle
held notable leadership roles in North America spanning 20 years, including
positions as CEO and President at DMG America (DMG/Mori) in Chicago, IL,
and Vice President Sales and Marketing at Trumpf Inc. in Farmington, CT.
ECONOMIC UPDATE
TORSTEN SLOK
Chief International Economist, Deutsche Bank
Mr. Slok’s Economics team has been top-ranked by Institutional Investor in
fixed income and equities since 2010. Prior to joining Deutsche Bank in 2005,
Mr. Slok worked at the OECD in Paris and at the IMF in the Division responsible
for writing the World Economic Outlook and the Division responsible for
China, Hong Kong, and Mongolia. He has published numerous journal articles
in Journal of International Economics, Journal of International Money and
Finance, and The Econometric Journal.
SURVEY PRESENTATION
MARK TOMKINS
President & CEO, GACC Midwest
Mr. Tomkins is the President & CEO of the German American Chamber of
Commerce of the Midwest. He joined the GACC Midwest in March 2006. Prior
to this, Mr. Tomkins spent over 10 years in business development consulting,
working with businesses throughout the world in developing strategic alliances
and long-term cooperations. Prior to this, Mr. Tomkins worked in the automotive
and IT industry in Germany and the US. Within the Chamber, Mr. Tomkins has
been responsible for building the consulting services department and for assisting
German companies in their US market development and has been responsible for
numerous initiatives including the Chamber’s skilled workforce initiative, multiple
conferences, business delegations and pilot projects.
INDUSTRY PANEL MODERATOR: DR. VOLKER TREIER Chief Executive of Foreign Trade, Member of the Executive Board, DIHK Dr. Treier is Member of the Executive Board. As the Chief Executive of Foreign Trade he is responsible for International and European Economic Affairs, the network of bi-national German Chambers, Delegations and Representations of German Industry and Commerce (AHKs) in 92 countries worldwide. CAROLL H. NEUBAUER Chairman & CEO, B. Braun Medical Inc. Located in Bethlehem, Pennsylvania, the company is a global leader in infusion therapy and pain management, and a pioneer in passive safety devices and PVC-free and DEHP free products. Mr. Neubauer oversees the company's North American operations. He also serves on the B. Braun Global Board in Germany and as Chairman of the German American Chamber of Commerce, New York. DANIEL ANDRICH President & CEO, Representative of German Industry + Trade (RGIT) Mr. Andrich is President and CEO, Representative of German Industry and Trade. Prior to this appointment, Mr. Andrich worked for the Federation of German Industries (BDI), one of RGIT’s principals in Berlin, from 2008 to 2016. At BDI, he was Senior Policy Advisor for Global Governance and Trade Promotion and most recently Executive Assistant to BDI President Ulrich Grillo. In 2012, Mr. Andrich worked at RGIT as a visiting fellow and Senior Policy Advisor. PETER RIEHLE President & CEO, WITTENSTEIN Holding Corp. As President and CEO of WITTENSTEIN Holding Corp., Mr. Riehle is responsible for all aspects of leading the North American Headquarters of WITTENSTEIN SE. An award-winning manufacturer of motion control and mechatronics systems, WITTENSTEIN is renowned in the industry for the quality of its products and for its innovations in mechatronic drive technology, servo systems and mechanical components. Prior to his current position, Mr. Riehle held notable leadership roles in North America spanning 20 years, including positions as CEO and President at DMG America (DMG/Mori) in Chicago, IL, and Vice President Sales and Marketing at Trumpf Inc. in Farmington, CT. VINCENT HALMA President & CEO, KION North America Mr. Halma is the President and CEO of KION North America Corporation - a member of the KION Group, one of the world’s two leading manufacturers of industrial trucks and supply chain solutions. His prior experience includes roles as Vice President of the Western European subsidiaries and managing director for STILL Netherlands—one of KION Group’s brand companies. Prior to the KION Group, he served in a variety of capacities at Cargotec Corporation—the leading provider of cargo handling solutions.
ABOUT US GACCs The German-American Chambers of Commerce (GACCs) in Atlanta, Chicago, Detroit, Houston, New York, Philadelphia, Pittsburgh and San Francisco all work together under the network of the GACCs. With approximately 2,500 members and an extensive national and international business network, the GACCs offer a broad spectrum of activities and services. Other German-American organizations and chapters are affiliated with the GACCs. The German Chamber Network (AHKs) is closely connected to the Chambers of Industry and Commerce (IHKs) in Germany. The umbrella organization of the IHKs is the German Association of Chambers of Industry and Commerce (DIHK), which speaks for 3.6 million business enterprises in Germany, coordinating and supporting the AHKs. GLOBALLY CONNECTED AHKs provide experience, connections, and services worldwide through 140 locations in 92 countries. The service portfolio of the AHKs is unified worldwide under the brand name DEinternational. The AHKs cooperate closely with the foreign trade and inward investment agency of the Federal Republic of Germany—Germany Trade & Invest (GTAI). www.ahk-usa.com RGIT The Representative of German Industry and Trade (RGIT) communicates the interests of German business on behalf of its principals, the Federation of German Industries (BDI) and the Association of German Chambers of Commerce and Industry (DIHK) in Washington, DC. Through its actions, RGIT highlights the importance of German business in the U.S. and encourages the further deepening of the U.S. and Germany’s already close economic ties. This material is distributed by the Representative of German Industry and Trade (RGIT) on behalf of the Federation of German Industries (BDI) and the Association of German Chambers of Commerce and Industry (DIHK). Additional information is available at the Department of Justice, Washington, DC. www.rgit-usa.com
CONTACT GACC MIDWEST GACC NEW YORK GACC SOUTH Mark Tomkins Dietmar Rieg Stefanie Ziska President & CEO President & CEO President & CEO T +1 312 494-2172 T +1 212 974-8848 T +1 404 586-6815 tomkins@gaccmidwest.org drieg@gaccny.com sziska@gaccsouth.com www.gaccmidwest.org www.gaccny.com www.gaccsouth.com GACC WEST RGIT WASHINGTON Kristian Wolf DANIEL ANDRICH President & CEO President & CEO T +1 415 248-1241 T +1 202 659-4777 kwolf@gaccwest.com dandrich@rgit-usa.com www.gaccwest.com www.rgit-usa.com
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