Midwest not on radar for foreign investment, and speakers ask why

The Midwest should be a great place for foreign companies to consider when they decide to invest in the U.S.: Costs are low, cities are safe, energy is abundant and cheap, and the region is close to many of the nation’s biggest cities and customers.

But the Midwest is not attracting its share of dollars, often because foreign companies don’t know the region, a panel of experts said on Tuesday at the first Trust Belt conference.

The event was meant to highlight the Midwest’s economic transformation from its Rust Belt image. It was sponsored by Conway, a corporate-investment company and publisher of Site Selection magazine, which focuses on development.

“The Midwest is not on the radar screen,” said Barry Johnson, chairman of the Global FDI Association, an organization aimed at encouraging foreign investment.

Yet it shouldn’t be that way, Johnson and other panelists said.

“The Midwest offers a great advantage,” he said.

“For the Chinese, the Midwest actually should be a perfect place to invest,” said another panelist, David Iwinski Jr., managing director of Blue Water Growth, a global business-consulting firm. He recently returned from an economic-development trip to China.

European companies looking to establish a foothold in the U.S. often set up along the East Coast. Asian companies do the same on the West Coast. The Midwest, as a result, is often overlooked, the panelists said.

“I think it is a great story waiting to be told,” Iwinski said.

The four-day conference at the Hyatt Regency Downtown, which concludes today, has drawn about 300 people — primarily business leaders and economic-development officials, mostly from the Midwest.

One of them, Jason Hutcheson, president and CEO of the Greater Burlington Partnership in Iowa, said he hopes to learn more about what is driving the Midwest economy and how that knowledge can be used back home.

“It’s really about understanding these trends,” he said.

Panel discussions and speakers have spoken positively about the region’s turnaround from the recession and the images of vacant factories and foreclosed homes. Today, several states in the Midwest have some of the lowest unemployment rates in the country.

“It turns out that reports of our demise were total rubbish,” said Steve Steinour, chairman, president and CEO of Huntington Bancshares, who kicked off the program on Monday. “The Midwest has been leading the economic recovery.”

One advantage that the Midwest has gained in recent years is the development of low-cost, abundant supplies of natural gas being tapped in eastern Ohio and in Pennsylvania.

It has helped keep electricity costs down and provided a cheap source of fuel for manufacturers, including chemical and plastics companies,

“It’s been a boon to the communities we’re serving. It is providing affordable energy,” said Carl Levander, chief regulatory officer for NiSource, the parent of Columbia Gas of Ohio, in a separate panel discussion on Tuesday.

Robert Powers, executive vice president and COO of American Electric Power, said lowcost source of power has been especially important after the recession.

“The availability of low-cost fossil fuels has been a dramatic shot in the arm for the manufacturing sector,” he said. But with coal-fired plants closing and absent power-plant construction, that could change.

“At some point, a collision is going to occur when demand exceeds capacity,” Powers said.