Remarks at Jacobs University
Bremen, October 6, 2008
Ambassador William R. Timken, Jr.
As prepared for delivery.
Dr. Treusch, faculty and students of the Jacobs University,
Mr. Wells, members of the Carl Schurz German-American Club,
Ladies and gentlemen,
It is a great pleasure to be with you here this evening. As some of you might know, I have my roots here in the Bremen area. My great grandfather was born in the village of Tarmstedt, not far from here. He left Germany to begin a new life in America with his family in 1837.
The story of the 7.2 million emigrants who left from the port of Bremerhaven between 1830 and 1974 for the United States and other countries has been documented at the German Emigration Center. The Center’s outstanding depiction of this important chapter of world history earned it the award of “European Museum of the Year” in 2007.
Certainly America would not be what it is today without the millions of immigrants from Europe. I, for one, am very proud of my great grandfather. From an early age, he worked hard. Although he didn’t have the benefit of a college education, he did an apprenticeship in carriage building, or more broadly put, transportation, an industry that over the centuries has always been at the cusp of every phase of globalization. Later in his life, he turned that knowledge into an invention, the tapered roller bearing design, which revolutionized the automobile industry in its early phases.
I know that here at this university, one of Bremen’s most famous sons is very important to you. Klaus J. Jacobs, who passed away last month, will be remembered always for his unfailing support of this institution. His financial gift was the biggest private donation ever made to a German educational institution. It will certainly allow the faculty and students here to polish the university’s growing reputation. I also believe that his donation sets an example for education in this country. In the 19th century, American universities looked to Germany as a model of academic excellence. I am happy to see that German universities are now borrowing the concept of private-public partnerships from the United States. The fact that Jacobs University was selected as one of the 365 Landmarks in the Land of Ideas, as one of the places where “Germany's Future will be made," is recognition of the importance of the educational concept behind this university. It will also strengthen Germany's reputation as a location for research in the global marketplace.
The U.S. and Germany have strong R&D links. Bremen, for example, is a major European center for space research. It is home to two key European players in the field. Both OHB Technology and Astrium work closely with NASA on joint U.S.-European space programs. On February 7, 2008, all eyes at OHB were watching as the Space Shuttle Atlantis lifted off from Cape Canaveral on its flight to the International Space Station (ISS). The European research laboratory Columbus was on board the shuttle and docked with the ISS. Over the past few years, OHB project teams have made crucial contributions to the Columbus mission. OHB was the only European company to be involved in the development of the scientific research facilities for the Columbus module and supplied the first biological experiment for the European space research laboratory.
This relationship typifies a tradition of scientific exchange programs and foundations that support joint R&D efforts. U.S. firms operating here consider Germany to be an excellent location for their R&D activities. Germany and the U.S. work jointly at the government, foundation, and privatesector levels to develop new technologies in areas such as alternative energy, the life sciences, and engineering. But I think it is important to remember that while public R&D investment supports much basic scientific research, it is in the private sector where these ideas are transformed into innovations. German-owned corporate affiliates lead in R&D by foreign firms in the U.S. accounting for 2.8 percent of the R&D spending there and 15 percent of total R&D expenditures. Scientific innovation and product breakthrough have enormous economic multiplier effects. Our collaboration is not only vital to German and U.S. economic growth but to worldwide prosperity.
Technological innovation highlights the necessity for ongoing change. My great grandfather transformed the focus of his business from building carriages and wagons to building technology for the first automobiles. The Timken Company, like any other successful business, has been marked by ongoing change. At the beginning of the 1980s, the United States was emerging from a period of low economic growth, as well as both high inflation and high unemployment. In 1985, in order to be more competitive both within the United States and abroad, the Timken Company invested two-thirds of the company’s net worth to build the only completely new alloy steel plant in the U.S. since World War II. State-of-the-art manufacturing and control processes increased productivity.
I tell this story to remind us all that the American economy has a flexible and resilient system that absorbs challenges, makes corrections, and bounces back. American economic strength is characterized by its vibrant entrepreneurial system.
Right now, we are going through a difficult period. Lax lending practices over the past decade led to irresponsible lending and borrowing. The Bush administration has sought to address the root cause of our financial system's stresses by helping our financial institutions stem their losses, recapitalize, and return to business. Both Secretary Paulson and Federal Reserve Chairman Bernanke have called on Congress to support measures to restore liquidity to the market, and help credit markets to function normally. This clearly will be an important issue for the next President as well. Both Senators McCain and Obama have been in close contact with the present administration on these issues. Discussions are underway on how best to build a modernized financial oversight structure that matches our modern economy, and more closely links the regulatory structure to the reasons why we regulate.
As a former businessman, my message is: rest assured that the United States remains the best place in the world to invest and do business. The German-American economic relationship is proof of that.
The hard economic data consistently demonstrate that the U.S.-German relationship is deeper, more fundamental, more interconnected and more important then ever before. Over the course of the past year, the Embassy has been tracking some of the indicators that measure the levels of connectivity that link our two countries through trade and investment. They are so broad and deep, and in some cases so seamless, that they are often taken for granted.
Our partnership is the success story of modern diplomacy. Continued success, however, will require us to look beyond the challenges of yesterday.
In the past 20 years, no two parts of the world have experienced economic integration faster and more intensely than the U.S. and EU, and in particular Germany, Europe's largest economy.
The size and growth in US - German Foreign Direct Investment (FDI) is perhaps the single most significant factor leading to our more integrated economic relationship. U.S. direct investment in Germany has more than tripled while German direct investment in the U.S. is roughly seven times what it was when the Berlin Wall fell. U.S. affiliate assets in Germany now total more than $400 billion and German assets in the U.S. are even larger at over $600 billion. German investment in the U.S. today is four times that of German exports. Only the United Kingdom and Japan have greater FDI stock in the U.S.
Rapid growth is not only in FDI, but in the acquisition of stock equities. In the first nine months of 2007 alone, U.S. investors bought more in German stocks than they had over the entire past decade.
On the trade side, the U.S. exported nearly twice as much to Germany last year as it did five years before and also imported 50 percent more during this same time frame. The rapidly accelerating FDI investment between the two economies significantly fuels this growth.
Much of this trade passes through Bremen ports. The ports of Bremerhaven and Bremen are the top European container ports for trade with the U.S. Container traffic between the U.S. and Bremen encompasses approximately one-fifth of all cargo handling in the Bremen ports and a quarter of its TEU cargo handling.
In other words, with greater trade and investment in each other’s economies, we create more jobs and improve the prosperity of our citizens.
I will stop here but not without emphasizing once again the importance of the German-American relationship. It is a story that started before the American colonies gained their independence. The first German immigrants from Bremen arrived in Philadelphia on October 16, 1683. In 1783, Bremen was one of the first states to recognize the United States’ independence. That same year the two countries signed their first trade agreement bringing about a period of great prosperity in trade between the two countries. U.S. President George Washington commissioned the U.S. Consulate in Bremen, which opened on May 21, 1796, and remained open until 1986.
One of the most interesting parts of history is to see how it plays out. What better example than Germany? I asked my Embassy and Consulate staff to document one important aspect of the German/American relationship – the impact of our economic relationship. I have given you just a sample today of the numbers they came up with.
While I think trade and investment statistics – and dollars or Euros – are one way to measure the success of a partnership, remember that people and places are behind those statistics. Every one of the numbers or facts I have mentioned this evening has a person behind it – people with jobs and businesses on both sides of the Atlantic, tourists, researchers, exchange students, family members, and, of course, good friends. It is the people that underline how important our connectivity is.
It has been my great privilege to serve as President Bush’s personal representative here in Germany for the past three years. My wife, Sue, and I will return to the United States in December. It’s been our job to promote America in Germany. By the same token, we have made sure that we relayed your thoughts and opinions to government officials in the U.S. Our governments, our industries and our citizens must take exceptional care to preserve the economic glue that increasingly holds us (and global prosperity) together.
That means every single one of us here in this room.
Thank you.
