Value of a global economy tainted by politics

This isn't the political season to want anything to do with the word "global," but no one at 3M Co. would bother denying that it's a true global company.

A Swedish CEO now runs it and last year its international sales of $18.2 billion made up 60 percent of its total sales. As of the end of last year, it employed nearly 18,000 more people outside of the United States than it did in its home country.

Located a couple of miles east of 3M's Maplewood campus is another true global company, also getting about 60 percent of its sales from international customers. It's called Lion Precision, and it manufactures sensors in Oakdale to accurately make microscopic measurements.

But unlike 3M, we're not talking about a global giant here. Lion Precision, a unit of privately held Motion Tech Automation, only has about 30 employees.

"There's just no alternative" to being a global business, said Lion Precision President Don Martin.

It's been a frustrating time lately for Martin and just about any Minnesota business executive faced with that reality. One reason is that the U.S. dollar's value has been so strong that, as Martin put it, "our prices went up by about 20 percent in Japan for no good reason."

It's also been a campaign year with politicians of both major parties blaming relatively open global trade for a number of our country's ­economic ills.

No one running a business here in 1950 could be blamed for caring only about the home market, which seems to explain why exports only accounted for about 4 percent of the U.S. economy. But as other economies in Europe and Asia grew faster than the relatively mature American economy, they became more important ­markets for American companies to enter.

And while international sales looked like a better opportunity all the time, competitors to U.S. companies started to emerge from these growing economies. That was another reason to try to capture international market share.

Now that China's economy is second only to ours in size, other countries have emerged as major economic powers in their own right and exports as a percentage of American economic output have more than tripled since 1950.

That's why trade agreements are important to executives even at small companies like Lion Precision, who want it to become easier to sell to their customers outside the United States, not harder. Martin named a few more Twin Cities manufacturers of high tech equipment a little like Lion Precision, all of them designing and assembling their products here and all of them highly dependent on their international sales.

Executives at these companies also challenge the idea that American manufacturing competitiveness has somehow slipped. After all, the output of U.S. manufacturing, adjusted for inflation, has nearly doubled in the last 30 years.

Policy arguments about tariffs and other trade issues usually don't put the concept of "trade" in terms like this, of a manufacturer trying to serve a customer abroad.

That simple desire to serve more customers seems to explain the motivation of William L. McKnight, the one-time 3M bookkeeper who became the driving force behind its early growth. Back in the 1920s, he wanted to sell 3M's innovative Wetordry sandpaper in Great Britain.

3M was a tiny company then, but here was a growth opportunity for 3M's first great innovation. McKnight was interested in trade all right; he was interested in trading 3M sandpaper for British customers' money.

That same instinct to look abroad for more customers explains how Dave Anderson got into the field of international sales at another small Minnesota operation.

Anderson now leads international efforts for Jet Edge, maker of precision cutting equipment, at its headquarters in St. Michael; his international marketing career started at Waterous Co., which makes fire pumps and water works equipment.

When he got to Jet Edge, a unit of a closely held manufacturing company, it had a lengthy list of customers outside the United States already. Even though Jet Edge has fewer than 50 employees, it competes effectively around the globe.

That's one reason why Anderson seemed baffled anyone would question the wisdom of thinking globally, at a manufacturing company of almost any size. Not only is the global market far bigger than just the home market, he said, but ceding potential customers to competitors lets them get bigger and more capable. "It would make us weaker at home if we weren't selling overseas," he said.

Asked to identify key parts of the world for Jet Edge, Anderson ticked off quite a list. He began with countries in Asia and then headed through Turkey into Eastern Europe before finally ending up in Africa.

Not long ago, the company received a large order from a customer in the Democratic Republic of the Congo, he said, "which I never thought I would sell anything to."

He thinks of various markets for Jet Edge products around the globe almost like a diversified portfolio of stocks. If customers in one area of the globe become cautious about new orders, as they have in western Europe, odds are another area will be booming.