When Kristian Wolf began working for the German-American Chamber of Commerce of the Southern U.S. a decade ago, it had just five employees.
Departing as CEO and president at the end of November, Mr. Wolf will leave behind an organization with 30 full-time staffers promoting German business in an 11-state territory.
With his new five-year appointment at the German-Australian Chamber of Commerce in Sydney comes a shift in both landscape and focus. Australia is more about helping German firms procure raw materials, while the Atlanta-based chamber focuses mostly on easing small and medium-sized companies into the U.S.
Though he doesn’t take the credit, the GACC South’s membership doubled during Mr. Wolf’s tenure, and an incubator program in its infancy when he arrived has continued to attract German companies across an array of industries, he told GlobalAtlanta in a farewell interview.
The chamber’s growth in size and reach shows the relevance of a core mission that has remained unchanged since he arrived: providing consulting services to help German companies enter the sizable U.S. market, Mr. Wolf said.
For all their experience, German firms sometimes underestimate how complex it can be to navigate the regulatory, legal and tax issues in the U.S., he said.
“German companies, by and large, feel more comfortable in the U.S. market than they should. I think there’s a perception, because of the similar culture and business etiquette, that things are easy, though it’s not as clear as many Germans would think,” he added.
It can also be hard for them to distinguish themselves in a highly competitive market where sales are based more on flashy marketing plans than solid reputations.
“In Germany we always say, ‘We’ve been around for 200 years and my great-great-grandfather did it, so it must be good,'” he said.
Cars and Renewables
Often with the chamber’s help, many German firms have been able to overcome these hurdles.
German investment in the South has continued through the economic doldrums of the last few years, regardless of the negative tenor of the news, Mr. Wolf said.
“With all the gloom and doom that you get in the media, it’s surprising how strong German investment is in this region, and we don’t see it slowing down,” he said.
His case in point: Volkswagen AG announced a billion-dollar auto plant in Chattanooga, Tenn., at the height of the recession in 2009. When the plant opened in April of this year, Volkswagen company became latest in a line of German carmakers to come to the South. BMW and Mercedes-Benz have plants in South Carolina and Alabama, respectively.
Over 10 years, Mr. Wolf has learned a few things about what German companies want. They like the South for its low costs, skilled workers and active economic development agencies, which offer both monetary incentives and workforce training.
As many lament the decline of American manufacturing, the South can glean some lessons from Germany on how to keep wages high without shedding factories, Mr. Wolf said, noting that his country emphasizes workforce development through apprenticeship and efficiency through innovation.
Automotive manufacturing and renewable energy technology are just a few of the new industries emerging to fill the manufacturing capacity that has been lost in the U.S., he said.
The failure of Solyndra – the California-based solar company backed by more than $500 million in government loan guarantees – sent shock waves through the renewables sector, but worldwide demand will remain strong, Mr. Wolf said.
He cited Wacker Polysilicon North America, which makes raw materials for the solar industry at a Chattanooga plant, as well as MAGE Solar, which has been making solar installation systems in Dublin, Ga., since 2010.
There are a few others he didn’t mention. Suniva Inc., a Norcross-based manufacturer of solar cells, has landed hundreds of millions of dollars in German contracts. ZF Group has a $90 million plant making gearboxes for wind turbines in Gainesville. A German-Swedish joint venture, Georgia-Biofuels LLC, is exporting wood pellets from south Georgia to Europe, where they will be burned for electricity.
Muted Euro Effects
While the dollar’s relative weakness against the euro might make a company choose the U.S. instead of Mexico, few German firms base their relocation decisions on currency advantages, Mr. Wolf said.
Neither are they deterred by currency crises. Europe’s sovereign debt issues haven’t slowed German investment in the South, he added.
German firms are, however, facing a challenge left over from the financial crisis and recession of 2008-09. Banks are still slow to lend, which makes it harder for companies to purchase machinery and other capital goods that German companies make so well.
Mr. Wolf will officially leave his post on Nov. 30. His successor in Atlanta has not yet been named, according to the German chamber.
Visit www.gaccsouth.com for more information.
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