November 02, 2007
U.S. companies carry a torch for Olympics
Otis is among the scores of U.S. companies racing for Olympics business glory, hoping to lay the groundwork for future deals in fast-growing China.
It's been a long march for Otis since the company first sold elevators to China one century ago. Working closely with Chinese manufacturers, government officials and universities, Otis now oversees 16 factories and joint ventures and 10,000 employees in China.
Otis, based in Farmington, Conn., and owned by United Technologies (UTX), hauled in $1 billion, or 10% of its global revenue last year, from its China operations, says CEO Ari Bousbib. He expects the demand for elevators to soar as millions of Chinese migrate from the countryside to cities each year.
"The Olympics will mark the beginning of prolonged growth for China and our business for the next 25 years," Bousbib says. "China shows no signs of slowing down."
Dozens of U.S. and foreign companies are official Olympics "partners" and "sponsors," paying hundreds of millions of dollars for the privilege. Others, like Otis, are riding the pre-Olympics boom.
All want a slice of the $200 billion that China is projected to spend through next year on sports venues, office and residential buildings, transportation, tourism, legal and financial services and other Olympics-related business in its cities.
"It's going to be a frenzy of commercialism here, a party like no other," says James McGregor, chairman of the JL McGregor & Co. business advisory firm in Beijing and author of One Billion Customers. "You've got an emerging economy of 1.3 billion people that's like America in the 1950s. Companies are looking to stamp their brand name on this market through the Olympics."
Not surprisingly, most of the Olympics contracts have gone to China's private and state-run businesses, such as the Chinese construction firms that proudly hung giant banners last year inside the Olympics stadium, called the "Bird's Nest" because of its nest-like steel-and-concrete design.
But U.S. companies are making a strong showing. Hyatt and JW Marriott (MAR) are opening hotels in Beijing. Caterpillar's (CAT) heavy digging and paving machines were used to build the stadium, the swimming venue and the marathon course. And so far, Visa, Coca-Cola (KO) , McDonald's (MCD) , GE (GE) and other multinationals have forked out $1.9 billion to Beijing organizers and the International Olympic Committee to be partners, sponsors and licensees.
Source: www.usatoday.com
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