CNBC - Business Climate in USA - Why do we do business in the USA?

CNBC Street Signs


STREET SIGNS >> Let's go now to the front lines with Drew Greenblatt of Marlin Steel Wire out of Baltimore, Maryland and Max Chafkin from Inc Magazine. Drew, the head of a business advocacy group just said there is no demand for loans, but you run a business; if you would like to get a loan, could you?

DREW GREENBLATT >> Yes, we actually just did a big refinancing at the end of May and the interest rates were very favorable. Our company is growing; we are up 41% this year, so it was easy for us to get a good loan. However, there are a lot of companies having challenges. I think that is sand in the gears for a lot of factories and a lot of hiring. If you can go out there and get that loan, you'll buy another robot, you'll be able to increase your marketing campaign and do the things that you need to do to surge through to the next level.

STREET SIGNS >> I would like to know, Drew, why do you do business here in the United States?

DREW GREENBLATT >> We have great talent. The people are wonderful, smart, well-educated. We have a very good infrastructure. The legal system is very good; it protects our intellectual property.

STREET SIGNS >> Have you thought about doing business overseas and you've weighed the pros and cons and you've decided that it's actually more competitive and more cost effective for you to do it here?

DREW GREENBLATT >> The environment here is challenging. Our tax rates are twice what it is in Canada. The taxes are much higher than in China for example. But there are other mitigating factors that make it more important to put your facility here in America. Things like a stable legal structure, protecting property rights are very important for American factories.

STREET SIGNS >> Ok, well, let's talk about America and whittle it down a bit. Max, I know that you guys at Inc have done a great job outlining the best place to go right now if you want to start a business. Geographically, why are you so hot on North Dakota and Boulder, Colorado?

MAX CHAFKIN >> I'll start with North Dakota. It has the lowest unemployment rate of any state in the nation. It has an oil boom and it has relatively business-friendly regulations. Now the problem with a place like North Dakota is there's a flip side to a low unemployment rate. It means that there is a lot of competition for talent and it means if you're not selling into those hot industries, you might have a problem. You're going to be in a situation where you're trying to convince people to come to North Dakota and a lot of them have seen the move 'Fargo' and might just want to stay home. Boulder's an interesting case. It's sort of the most buzzed-about tech hub right now. There are a couple of really cool incubators that are putting kind of small loans; we're talking about 20 to 30 thousand dollars into start-up business, which has been an area where the credit needs haven't been met. So it's an interesting place as well.

STREET SIGNS >> What about Los Vegas? This is obviously a city that's had some very big highs and has been through some very big lows.

MAX CHAFKIN >> One of the things, when you look at places that have had the most job growth, it's a little bit misleading because places that have had a lot of job growth are places where there's a lot of competition. On the other hand, Los Vegas is really struggling right now and you're seeing companies move in to take advantage of that. Zappos, the shoe retailer, is moving its headquarters from the suburbs into downtown which has obviously had a lot of problems, but they feel like they can take advantage of lower real estate prices, maybe a little city energy and turn this blight into an opportunity.

STREET SIGNS >> Drew, got to leave it here; will the second half of the year for Marlin Steel be better or worse than the first half?

DREW GREENBLATT >> Very good; we're very bullish on the future. We're hiring three mechanical engineers this month. We're hiring factory workers. We're bullish on the American economy. I think the global economy is going to pull through this. I think there are some challenging waters out there, but I think overall, we're going to power through this.

STREET SIGNS >> Hopefully you will. Thank you so much Drew and Max.

DREW GREENBLATT >> Thank you.