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The Week in Germany: Business, Technology and the Environment

May 2, 2008

Eastern Germany well Poised to Attract Investment from US Firms, Houston Executives Learn

An employee checks the varnish on a newly manufactured Porsche Cayenne at the Porsche factory in Leipzig, Germany
© picture-alliance / dpa

The New Federal States in eastern Germany are an ideal investment location for U.S. firms hoping to stay on the vanguard as the global economy shifts eastward, German trade and economic officials told executives at a dinner on Wednesday, April 23 in Houston.

The states that joined the Federal Republic of Germany with reunification in 1990 offer newly rebuilt infrastructure, lower wage expectations, an educated and flexible workforce and excellent access to markets in central and Eastern Europe, the executives learned. The meeting was sponsored by Invest in Germany, the Chicago-based investment promotion agency for Germany.agency that connect US firms with investment opportunities in Germany.

State Secretary Engelbert Lütke Daldrup, whose ministry of Transport, Building and Urban affairs also promotes development in the New Federal States, explained that 80 percent of the region's infrastructure, long neglected under the East German regime, has been renewed in the last twenty years. The massive infrastructure investments over the last two decades have provided East Germany with energy and transportation systems that meet and exceed 20st century standards.

New universities and research institutions and a nationwide economic boom that saw industrial output and exports shoot up in 2007 by 10.3 percent and 14.9 percent respectively further enhance East Germany's attractiveness as a place to do business, Daldrup explained.

Many American firms have already taken advantage of the business environment in East German states, as evidenced by the fact that US firms account for nearly 50 percent of total direct investment in Eastern Germany since 1997.

German firms are also flourishing in East Germany, as Wolfgang Lindheim, an executive at Porsche Cars North America testified. In 1998, Porsche purchased property in Leipzig, the largest city in Saxony. By 2002, new Cayennes were rolling off the assembly line at the new facility. The company has now decided to expand the plant to produce its new Panamera model there.

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