Assignment for the economics groups

Invitation for the Finnish region of

Etelä-Pohjanmaa (Zuid-Osterbötten)

to participate in the

4^th American Automotive Industry Conference

for Foreign Direct Investment

Detroit, Michigan

United States

26-30 March 2007

European Commission of Economic and Monetary Affairs

Avenue Monet 36-48

1040 Brussels/Bruxelles

Belgium

Brussels, January 29^th 2007

Dear Sir/Madam,

The international competitive forces have been shifting considerably over the last decade. Te United States and Europe are facing Asian businesses that are rapidly closing the technological gap with western companies. Especially the United States seems to have lost their position in the global automotive industry and is struggling to catch up on the technological level.

In order to maintain competitive in the global automotive markets, many American businesses that are active in this industry are attending the 4^th American Automotive Industry Conference for Foreign Direct Investment, which is held in Detroit (US) from 26 to 30 March. The main theme at this conference is ‘Investigating opportunities for foreign direct investment (FDI) in the Nordic region in Europe’. The choice for this region is derived from the abundant technological human resources in this area. All participating businesses at the conference are producers of automobiles or automotive parts for the upper segment of the market and are using the latest electronic innovations in their products. They are all looking into opportunities to start production facilities in Scandinavia within the following 5 years. The European Commission for Economic and Monetary Affairs has ensured that six Scandinavian regions are given the opportunity to present themselves as attractive regions to host the location of automotive production facilities.

During a presentation, including a Questions and Answers (Q&A) session, you are given the unique opportunity to convince these automotive companies to locate their production facilities to your region. As the average production location will employ 500-2.000 employees, participating in this conference is a unique opportunity to support the development of your region!

1. Attracting Foreign Direct Investment

We have talked extensively with representatives of the American Automotive Industry Association. During these conversations, we have learned that the American business directors are looking for the following information on your region when they decide on what region to invest in:

- You will need to specify what the best location is in your region to build a production plant. The location should be clearly indicated on a map (or Google Earth). You will have to give sound arguments why this is the best location available

- A good transportation infrastructure and main ports for shippig in raw materials to the production location and for shipping out finished products towards European markets. Also, the region must be easy to reach for American Headquarter Managers that will fly in from the United States

- Proximity of raw materials (steel) for car manufacturing and proximity of major suppliers (like car electronics, tyres, car glass, fabric for chairs/interior, paint)

- Availability of a highly skilled and low-skilled labour force for research & development and production personnel. The proximity of technical educational and research institutions are good indicators. Also, the regional unemployment rate is necessary to predict the availability of human resources.

- Economic and development characteristics of the country (National income per person, unemployment, inflation, money spent on Research & Development (R&D), Public debt ratio of the government). All this data needs to be compared to the EU-average and to the Netherlands in particular as this is another potential area that these businesses might want to invest in.

- Cultural differences between the local culture and the American culture

- Attitude of the local population towards the European Union, as being (and staying) an EU member is vital to the businesses to maintain free trading within Europe. Carry out an opinion poll among a small amount of respondents to study this and think of some good questions that will give you a good indication on people’s attitudes

- The quality of life in the particular region since American business managers will have to move there with their families. (Think about health & education conditions, , opportunities for outdoor, cultural and or touristic pass times)

- Governmental benefits and taxation issues (taxation on employment and profits)

2. Regional development subsidies

A major concern of the European Union is the sustainability of EU-members’ societies. Therefore, the European Economic and Monetary Commission financially supports European Regions in attracting foreign companies that contribute to this goal. We are very delighted that the American Agency of Production and Trade also supports our efforts in this, as they are eager to learn from European practices in this area. Therefore, both our institutions offer a combined subsidy of € 10,000,000 to regions that are able to attract foreign direct investment that conduct operations following the 2006 European Sustainability Act. This newly develped Act includes the following main criteria:

- New businesses have to use ‘clean’ energy sources and have extensive programs to reduce the energy consumption as a whole. You will need to show specific examples of what businesses can do to achieve this and what ‘clean’ energy is available to them in your region. Show a graph/pie-chart that explains what the relative share is of different energy sources in the total national energy consumption and indicate clearly what share is made upo by ‘green energy’. Investigate what the percentual difference is between the price of ‘green’ energy and that of ‘grey’(=regular) energy. Briefly explain what the governmental approach is towards reducing energy consumption and stimulating the use of ‘green’energy.

- New businesses need to reduce the use of water and recycle water as much as possible in their production and office operations. You will need to show examples of what businesses can do to achieve this and how water recycling is taken care of in your region. The whole cycle of recycling water and all organizations involved need to be explained.

- New businesses need to be actively involved in their community. This means that they (financially) support sustainable projects and/or organizations. Present at least one social/environmental/cultural project in your region that could be supported.

Six Scandinavian regions are given the opportunity to travel along with Euro-commissioner Joaquín Almunia. The decision on what regions are offered this opportunity will be based on your presentation that takes place on Thursday February 8^th. The presentation will be evaluated by one of our commission members

An extensive evaluation scheme is included for your reference.

Good luck and let us know if you need any further clarifications.

Yours sincerely,

Julian Dawe

Arjen Woltman

Hugo van der Graaf

The European Commission of Economic and Monetary Affairs, Working towards sustainable growth