By Patrick Fitzgerald
WisBusiness.com
South Bend, Indiana wouldn’t necessarily come to mind as one of the birthing points of a relationship that would catapult Wisconsin onto the global commerce stage.
However, years ago, when Bob Kraft, co-chair of the MMAC’s China Business Council, and a colleague were attending a Notre Dame versus Florida State football game, Kraft asked his friend “How do we get China to focus their attention on this corner of the world?”
Kraft’s friend, who founded a consulting practice in Asia after his tenure as the head of the CIA in China for 30 years, replied “There isn’t any reason Wisconsin wouldn’t be attractive…”
Years later, Kraft, now the President and CEO of Openfirst LLC., and the 18 other members of the MMAC’s China Business Council have taken to that mantra with almost religious conviction since the group’s inception in 2005, and are intent are nourishing and expanding Milwaukee’s increasingly critical relationship with the biggest labor and market potential in the world.
In light of the exploding Chinese market, Wisconsin exports to China have increased by 391 percent from 2000-2006, with the machinery manufacturing sector contributing $269 million in export goods in 2006.
That realization on part of the council spawned a sister-city relationship with the economic hub of Ningbo, a port city 120 miles to the south of Shanghai with a population of roughly 8 million.
The relationship is important to both cities, given Ningbo’s location on the East China Sea coast, and Milwaukee’s central location and proximity to Chicago, Minneapolis and Madison. Together, those four U.S. cities have a population of 20 million. And within a day’s drive of Milwaukee, there are markets with 64 million people.
Souheil Badran, president of Rebtel, a global communications company whose Chinese clients are concentrated around Shanghai and Beijing, said the council has been invaluable in assisting organizations seeking access to the Chinese market.
“It opened up a whole new opportunity for us to understand the landscape politically, economically, culturally and intellectually from a business standpoint,” Badran said. “Doing business in China is very different from other places, so its important to have an organization that can give you the guidelines.”
“They have markets we want access to, and for farmers, manufacturers, and everything else we do there is an opportunity for us over there,” said Kraft.
“If you’re talking to the Chinese about where they’re going to locate their businesses, or where they’re going to create opportunities and invest, why not in the middle of one of the largest population centers in the world?”
Given the success of Wisconsin companies such as Kohler, GE Medical, Johnson Controls, and Briggs and Stratton in China in recent years, Kraft and other local business leaders realized the time was nigh to act on a relationship that was growing right under their feet.
“You just can’t sit back and think ‘well, it’d be nice if they came here,’” Kraft said. “To me, it was pretty obvious that the Chinese will come here and everything will flip.”
“That was the thinking; to create jobs here, and to be a leader in putting out the flag and saying “hey, we’re a good place to live, and we’re a good place to do business.”
Getting China to seriously consider the logistical and market advantages of Wisconsin was a problem for Kraft and other CEOs. They had come up with a strategy to sell a state not traditionally known as a major player in national or international markets.
“When you think about it, we have all the basic things,” Kraft said. “We’re centrally located, we’ve got a lot of water which will become a big issue in the next 10 to 20 years, and we’re in a relatively safe area in terms of natural disasters.”
Kraft also noted the virtues of Wisconsin’s education system through institutions like Marquette, UW-Milwaukee, UW-Madison, and Milwaukee School of Engineering, which is critical to the Chinese given their emphasis on secondary education.
“We have all the things to sustain an area in the long term, and that’s a big plus.”
Kraft, a native of Detroit, dismissed potential criticism that deepening ties with China would cost Wisconsin workers their jobs.
“We’re still one of the largest employers, on a percentage basis, of manufacturing jobs in the country,” Kraft said. “Certainly there’s a concern about jobs getting eliminated by going to China, but it’s also creating a lot of jobs over here that people don’t recognize, and the profits come back anyway.”
“People tend to look at this thing and miss the big picture, which is really, really good.”
Kraft credited Wisconsin leaders for their business savvy and long-range vision.
“The business people here are pretty good on the international scene, much better than people realize,” Kraft said. “It’s interesting, because Wisconsinites, and I can say this objectively since I’m not from here, are very modest and almost self-effacing.”
“They’re much better business people than they give themselves credit for.”
Kraft said support from business and political leaders – including Milwaukee Mayor Tom Barrett and Gov. Jim Doyle – has helped established friendships abroad. In addition, a little “pay attention to Milwaukee” arm-twisting has given the China Council the foundation needed to expand the venture.
“Everybody is on the same page with this one, because its going to be good for the state,” said Kraft, who poignantly summed up the importance of the council.
“If you’re an American company and you don’t have a China strategy, you might as well forget about it.”
