European companies are sweltering from the heat of persistently high natural gas prices. The Russia-Ukraine war led to disruptions of oil and gas supplies, and resultant price spikes seem to have no end. This has propelled European companies to turn toward other countries to continue with their manufacturing ambitions.
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The U.S. remains one of the prime beneficiaries of this shift. The government has recently implemented the Inflation Reduction Act (IRA), which includes subsidies and tax breaks for clean energy. The American authorities also favor and incentivize companies involved in domestic manufacturing projects. These are attracting battered European companies to expand their manufacturing bases in the U.S.
The ease of doing business in the U.S., coupled with its solid infrastructure, available resources, and government support, are some of the main reasons why companies are moving to the U.S. Let us look at some of the European companies that are shifting and expanding their projects in the U.S.
ArcelorMittal (NYSE:MT) (DE:ARRD)
The world’s largest steel manufacturing and mining company, ArcelorMittal, has decided to reduce production at two of its German plants owing to high energy prices. Meanwhile, the company is increasing production at its Texas facility. MT stock has lost 32.8% so far this year.
OCI N.V. (DE:OIC)
Amsterdam-based OCI N.V. has decided to cut down on its European ammonia production and is instead expanding its Beaumont, Texas, plant. Interestingly, the company’s shares have gained a massive 69.1% so far this year.
Volkswagen AG (DE:VOW)
German automaker Volkswagen AG has also turned to the U.S. to expand its auto manufacturing plant in Tennessee and take a larger share of the growing EV market. Year to date, its stock has lost 20.5%.
RHI Magnesita (GB:RHIM)
The management of RHI Magnesita is highly optimistic about its investments in the U.S. Shares of the Vienna, Austria-based refractory industry player has dropped 42.3% so far this year.
Pandora A/S (GB:0NQC)
Denmark-based jewelry manufacturer, Pandora A/S, has also leaned towards North America to increase its sales of lab-created diamonds. Amid the waning demand for luxury products like jewelry, its stock has lost 52.8% year to date.
