OFII General Counsel’s Conference:

How To Talk About Being A Foreign Company Operating In The U.S.

On behalf of the Organization for International Investment (OFII), Public Opinion Strategies is pleased to present the key findings of two focus groups of Republican and Democratic Hill staffers and a survey of 300 Beltway Opinion Elites.

The focus groups were conducted in Washington, DC on May 5, 2009.

The survey was conducted May 26-28 & 31, 2009 and has a margin of error of +5.66%.

2OFII General Counsel’s Conference – October 16, 2009

3OFII General Counsel’s Conference – October 16, 2009

Congressional Hill staffers told us:

Among Americans, [an] American company is

always viewed slightly better.

I think the word “foreign” is a

dangerous word for marketing.

Republican Hill Staffer

Democratic Hill Staffer

4OFII General Counsel’s Conference – October 16, 2009

5OFII General Counsel’s Conference – October 16, 2009

40% 44%

13%

Total

There is a perception that compared to American companies, the foreign status of U.S. subsidiaries of

foreign companies provides them with an advantage.Based on what you know, compared to American companies, do you believe that U.S.

subsidiaries of foreign companies generally compete and operate on an equal basis with American companies or does their status as a foreign company give them either

advantages or disadvantages compared to American companies?

Advantages DisadvantagesEqual Basis

6OFII General Counsel’s Conference – October 16, 2009

Comparing American companies with U.S. subsidiaries of foreign companies, Beltway Elite give American

companies a significant advantage on “paying their fair share of taxes” and “investing in the local community.”

81%

49%

66%

42%

19%

31% 33% 37%

Americancompanies

U.S.subsidiaries

Americancompanies

U.S.subsidiaries

Well

19%Very

Investing in the local community

Not Well Well Well Well

Paying their fair share in U.S. taxes

25%Very

12%Very

11%Not at all

Not Well Not Well Not Well

12%Not at all

9%Very

7OFII General Counsel’s Conference – October 16, 2009

8OFII General Counsel’s Conference – October 16, 2009

Fundamentally, it is STILL all about jobs.

We have several Chinese companies and they’ve gone into mill

towns that were devastated… 50 year

old workers who couldn’t do anything

else and now they have jobs. We don’t care that

the company was Chinese, we courted

them.

In our district jobs are paramount, and we’ve

got a US-owned company and a US

subsidiary of a foreign company making the same product,…and we only care about

jobs…We’re trying to get operations at both

facilities to grow.Republican Hill Staffers

9OFII General Counsel’s Conference – October 16, 2009

Related to jobs, Hill staffers are also compelled by specific examples of

companies that have demonstrated:

Commitment to the United States:

A leading pharmaceutical company has moved its worldwide R&D headquarters from Switzerland to Boston and employs over a thousand American scientists.

Longevity and/or broad presence across the United States:

A top selling manufacturer based in Japan has been operating in the United States for over 50 years and employs people in all 50 states.

Impressive financial contributions to Americans and state governments:

A leading medical technology company based in France pays $36.6 million in state taxes each year while signing $796 million in paychecks in the same state.

10OFII General Counsel’s Conference – October 16, 2009

11OFII General Counsel’s Conference – October 16, 2009

Sounds like the marketing

department came up with something to

say other than “foreign.”Republican Hill Staffer

The term “insourcing” receives some initial skepticism from Hill staffers.

BUT, staffers “get it” and overall it they view the term favorably.

When I think of “insourcing” it’s the

opposite of outsourcing... bringing jobs in... it's what we

want.Democratic Hill Staffer

12OFII General Counsel’s Conference – October 16, 2009

13OFII General Counsel’s Conference – October 16, 2009

25%

62%

Total

“Insourcing” companies have a significant image advantage over “outsourcing” companies...

17%Very

Positive Negative

Outsourcing companies

61%

8%

Total

Positive Negative

Insourcing companies

16%Very

Now, thinking some more about different types of companies, please tell me if you have a very positive, somewhat positive, somewhat negative or very negative impression of each of the following.

14OFII General Counsel’s Conference – October 16, 2009

15OFII General Counsel’s Conference – October 16, 2009

72%67% 64% 64%

12% 14% 13% 16%

Total Total Total Total

Beltway Elite have a more favorable opinion of specific foreign companies/products than when they

consider foreign companies in the aggregate.

Bayer Aspirin

Fav Unf

15%Vry

Mack Truck Lean CuisineInternational companies

Global companies

Foreign companies

U.S. sub. of foreign companies

Fav Unf Fav Unf Fav Unf

Specific ProductsConcepts

15%Vry

89%

76%72%

7% 7%

18%

Total Total Total

Fav Unf Fav Unf Fav Unf

40%Vry

24%Vry

21%Vry

Hill staffers acknowledge foreign owned companies are doing defense work.

The default position is that work related to U.S. defense should be done by American companies.

But, it makes them uncomfortable.

BUT, don’t be afraid to point out the similarities between competing companies…

You don’t have to prove you are more “American.” Simply point out that both/all companies are “global” and using an international supply chain.

16OFII General Counsel’s Conference – October 16, 2009

17OFII General Counsel’s Conference – October 16, 2009

18OFII General Counsel’s Conference – October 16, 2009

Beltway Elite rate U.S. subsidiaries of foreign companies on par with American companies when it comes to

using technology to protect the environment.

58% 60%

41%

24%

Americancompanies

U.S.subsidiaries

Well Well

Using advanced technology to operate in a way that protects the environment

Not Well Not Well

16%Vry

10%Vry

American companies U.S. subsidiaries

19OFII General Counsel’s Conference – October 16, 2009

After jobs, “using advanced technology” in a way that “protects the environment” is most important.

Using a scale from 1-10, where 1 means it's not important AT ALL to you personally, and 10 means it's extremely important to you personally, please rate how important it is to you personally that these

U.S. subsidiaries of foreign companies do each of the following.

Provides well-paid jobs for high skilled workers 73%

66%

60%

59%

58%

51%

36%

27%

% ‘8’ - ‘10’

Using advanced technology to operate in a way that protects the environment

Retrains unemployed or laid-off workers to learn new job skills

Reinvests twenty percent or more of its profits into its U.S. based operations

Relies on local U.S. suppliers for a majority of its parts, supplies, and services

Invests in local communities through charitable contributions and sponsorship of

local eventsHas been operating in the same American

community for ten years

Has one-quarter of its jobs in the United States

% ‘10’

39%

34%

31%

29%

23%

26%

10%

11%

Given the current distrust of corporations in general, knowing a company is operating ethically canbe reassuring.

There is sometimes a sense that foreign companies do better on this measure than American companies.

They [foreign companies] might have to follow stricter laws than

the U.S.Democratic Hill Staffer

20OFII General Counsel’s Conference – October 16, 2009

21OFII General Counsel’s Conference – October 16, 2009

22

Now, there is currently a proposal before Congress that would raise taxes on the U.S. subsidiaries of foreign companies

operating in the insurance industry.

American owned insurance companies are supporting this proposal because they say foreign owned insurance

companies have an unfair tax advantage when they operate in the United States.

…while…

Foreign owned insurance companies are opposing this proposal because they say a tax increase on their U.S.

operations would lead to a decrease in insurance availability and higher prices for American consumers.

Would you favor or oppose this proposal to raise taxes on the U.S. subsidiaries of foreign owned insurers?

OFII General Counsel’s Conference – October 16, 2009

23OFII General Counsel’s Conference – October 16, 2009

46%41%

Total

A plurality of Beltway Elite support the proposal to raise taxes.

Would you favor or oppose this proposal to raise taxes on the U.S. subsidiaries of foreign owned insurers?

Favor Oppose

16%Strongly

15%Strongly

By Party

54% - 36% 43% - 41%44% - 45% IND

I want good rates for me and consumers… however they do it…

Republican Hill Staffers

Increasing taxes is bad… even if it is a foreign company.

24OFII General Counsel’s Conference – October 16, 2009

25OFII General Counsel’s Conference – October 16, 2009

56%

Total

But, using some facts to push back, a majority of BeltwayElite agree that subsidiaries of foreign companies

have to abide by the same tax laws as U.S. companies.Which statement do you agree with more...

U.S. subsidiaries of foreign companies don't pay their fair share of taxes here in the U.S. because they send most of their profits overseas or hide them in offshore tax havens. …OR…

U.S. subsidiaries of foreign companies have to abide by the same tax laws that apply to any U.S. company. And, although they employ 5% of all American workers they pay 14% of all corporate

taxes in this country.

Abide by the same tax laws

31%

Don’t pay their fair share

26OFII General Counsel’s Conference – October 16, 2009

75%

Total

Further, few Beltway Elite believe that American taxpolicy should give American companies an advantage

over U.S. subsidiaries of foreign companies.On the topic of taxes, which statement do you agree more with?

We should create tax policy that gives American companies an advantage in competing with U.S. subsidiaries of foreign companies. …OR…

We should create tax policy that makes the United States the most attractive place for any company – domestic or foreign – to locate and create jobs.

Make the U.S. most attractiveplace for any company

21%

Give American companies an advantage

27OFII General Counsel’s Conference – October 16, 2009

Pick your battles.

We’re not going to win a competition pitting American companies against U.S. subsidiaries of foreign companies.

28OFII General Counsel’s Conference – October 16, 2009

Talk less about “foreign companies” and more about specific companies.

Don’t shy away from acknowledging a company’s foreign status on the Hill – staffers can’t help you if they don’t know what’s going to hurt you.

29OFII General Counsel’s Conference – October 16, 2009

We have a resonant positive message – use it.

Both direct and in-direct employment… JOBS!

If your investment helped save jobs, or revitalized a community, let staffers know.

30OFII General Counsel’s Conference – October 16, 2009

Shift the debate.

Move the discussion from the success of companies to the success of American workers.

31OFII General Counsel’s Conference – October 16, 2009

32OFII General Counsel’s Conference – October 16, 2009

And, what is more important to America's economic competitiveness? The success of American workers ...or... The success of American companies

Total

57%

31%

Total

American Workers

American Companies

National Data - June, 2009

51%

36%

American Workers

American Companies

Beltway Opinion Elite - May, 2009

Beltway Elite and national voters put the focus on the success of American workers.

The phrase “insourcing companies” works well…

Especially when juxtaposed with “outsourcing companies.”

33OFII General Counsel’s Conference – October 16, 2009

Understand our vulnerabilities.Paying our fair share in taxes and community re-investment are two soft spots.

34OFII General Counsel’s Conference – October 16, 2009

While our messaging starts with jobs, it can be taken further.Environmental protection, retraining workers, reinvesting profits, and relying on local suppliers.

All resonate.

35OFII General Counsel’s Conference – October 16, 2009

214 N. Fayette Street Alexandria, VA 22314

(703) 836-7655fax (703) 836-8117http://www.pos.org

214 N. Fayette Street Alexandria, VA 22314

(703) 836-7655fax (703) 836-8117http://www.pos.org

10 G Street, NE, Suite 500Washington, DC 20002

(202) 478-8300fax (202) 478-8301

http://www.greenbergresearch.org

10 G Street, NE, Suite 500Washington, DC 20002

(202) 478-8300fax (202) 478-8301

http://www.greenbergresearch.org