Trade: A local and international issue

A company in Grand Forks, ND, says the layoff of 300 people is not connected to the opening of a plant in Brazil that will hire 300 people.  (Company says Brazil hires were unrelated to North Dakota layoffs)

Really? I am not sure many will believe this. Especially when you read the report:

LM Wind Power said there was no connection between the two events but was instead a reaction to strong growth in wind power development in South America while the industry was losing momentum in the United States.

The Danish company has sent at least two shipments of blades from its Grand Forks plant through Duluth to a project in Brazil this year.

“The development of capacity in Brazil is about positioning the company for growth in a new and rapidly emerging market for wind energy,” wrote Christopher Springham, LM vice president for global communication, who reiterated the company’s justification of the Grand Forks layoffs, in an e-mail to the Grand Forks Herald.

Note the phrases:

  • “strong growth in wind power development in South America while the industry was losing momentum in the United States.”
  • “sent at least two shipments…from its Grand Forks plant…to a project in Brazil this year.”
  • “’The development of capacity in Brazil is about positioning the company for growth in a new and rapidly emerging market for wind energy.’”

A lack of interest in the United States for wind power led a Danish company to slow down/reduce/cut production of its product in a U.S. factory. That same company opened a plant in Brazil because that’s where the buyers are.

It should not be a surprise to see that if a company cannot sell its goods to one place it will try to sell them elsewhere. And if it is cheaper and easier to locate a factory closer to that new market, then it just makes sense. And it is pretty clear from what the company said that it does not plan to ship turbine blades from Brazil to the USA.

For U.S. journalists, this situation is a good case study of why more reporting showing international connections is needed. It is also a good example of why more local journalists should try to understand  basic global economics and how those basics play out on the local stage. (Reading The World Is Flat by Thomas Friedman is a good start.)

There are so many international connections in this story that are being ignored or down played in favor of the narrow issue of job displacement. And yes, that is important, but also important is the larger international trade story and the larger story about what countries are investing in alternative energy sources.

How much you want to bet that if the U.S. investment in wind energy was equal or better than that of Brazil that the Danish company would have kept the 300 jobs in the US and built a new plant in Brazil. But that is a political question as much as it is an economic one.

Still, it would be nice to see reporting that recognizes the global reach of companies of all sizes. And reporting that explains the connections to readers/viewers/listeners.

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Filed under International News Coverage, Story Ideas, Trade

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