2014 Regional Report: The Midwest

Midwest-2In Indianapolis, Hoosier Gasket Corporation got its foothold overseas when a major customer, Chrysler, signed a contract with a Russian tractor manufacturer. “We piggybacked on the deal,” said Hoosier Gasket’s international vice president Oleg Gostomelsky. With the support of Jeff Jackson, president and CEO, Gostomelsky continues to pay it forward by promoting Indiana’s expanding network of export training programs. He regularly teaches seminars himself to a new generation of exporters.

The advantages of internationalism expand revenues while helping offset seasonally dependent sales. “In the U.S., we’re predominantly a skin moisturizer for the dry winter months,” says Kennedy. “In the UK our products are used as a chamois cream for athletes year round.”

Kennedy’s international orientation, it turns out, is a hallmark of Northeast Ohio—and emblematic of the entire Midwest. According to the Brookings Institution, the Youngstown metropolitan area paced U.S. export growth between 2009 and 2012. During that period, the value of regional exports shot up 22 percent, totaling $4.7 billion. The rising tide of greater-Youngstown exports—led by metal products, vehicles and agricultural commodities—helped area businesses weather the recession. Now, it drives economic recovery. Benefits of exporting accrue to business- and consumer-product manufacturers alike. In a report issued last winter, HSBC Bank found globally focused consumer goods companies were “twice as profitable as their domestically oriented peers.” As a case in point: Benton Harbor, Michigan-based Whirlpool, is the white-goods giant whose $18 billion annual revenue stream splits half domestic, half international.

Increasingly, the manufacturer who concentrates solely on domestic markets is a rare bird. “One of the reasons our manufacturers are doing so well is that exports have been so strong these past five years,” says Mike Ralston, president of the Iowa Association of Business and Industry. “Exporting’s profile has been raised. Just about every company, regardless of size, is exporting now.” Expect that trend to continue.