AGG lawyer brings a bit of Germany to Georgia

Posted on November 5, 2009 10:23 by Janet Conley

On Wednesday, Arnall Golden Gregory partner Tycho Stahl was driving on the Autobahn near Münster, Germany, logging yet more miles on what has, so far, been a two-week, 3,000-mile road trip to meet with clients interested in doing business in the United States.

But his thoughts weren't only on the roadway famous for its high rates of speed. He was focused on Meriwether County, Ga., where he'd just completed a $9 million deal to bring the U.S. affiliate of a German client that makes components used in steel manufacturing to the rural south.

Tycho Stahl It's just one of a number of cross-border transactions that Stahl, a German native educated in the United States, is juggling these days. Speaking on his cell phone, he said that European companies—many of them family-owned and able to fund transactions with their own cash rather than by chasing scarce bank financing—are looking for opportunities in the United States because they have clients here.

U.S. communities are making them feel welcome with tax incentives, financial guarantees and help in training employees, constructing buildings and acquiring land and equipment.

Stahl's client, Gustav Wiegard Maschinenfabrik GmbH & Co., is a fourth-generation family business based in Witten, Germany, and its U.S. affiliate, Gustav Wiegard North America LP, is financed by a number of investors from around the globe. Wiegard manufactures huge, multi-ton rollers used to flatten cold-rolled steel.

The company, said Stahl, wants to come to the United States because one of its clients, ThyssenKrupp Steel and Stainless USA is building a $4.6 billion state-of-the-art steel and stainless steel processing facility in Calvert, Ala.

Meriwether, a rural county about 50 miles southwest of Atlanta with a population of about 22,500 spread over about 500 square miles, used a combination of incentives, financing and good chemistry to compete successfully against a number of other communities and win the deal.

Tyron C. Elliott of the Elliott Law Firm in Manchester, Ga., represented the Meriwether County Industrial Development Authority. “We've worked with Gustav Wiegard for a year, and we went to Germany to tour their plants,” he said. “We didn't know a great deal about the business of making these steel rollers, so we had to learn a lot.”

One of the things they learned, he said, is that the Wiegard executives weren't just interested in the bottom line; they were interested in developing a good, working relationship with the authorities in the region where they located.

So the Industrial Authority, along with the Metro Atlanta Chamber of Commerce and the State of Georgia worked together to offer Wiegard a deal. That deal, said Elliott, includes building the company a 30,000-square-foot, $2.5 million to $3 million plant, financed in part by the Industrial Authority via a loan from F&M Bank and Trust Co. which will be offered to Wiegard on a 10-year lease-purchase arrangement. The building will be in a state-of-the-art industrial park that already has one international business in operation, the Korean Dongwon Autopart Technology, which supplies components for the Kia Motors automobile plant in West Point, Ga.

The deal also includes financing for Wiegard's equipment and machinery, provided by another local bank, Meriwether Bank & Trust. And it includes a rebate on Georgia income and unemployment taxes under a state economic stimulus program and access to an employee job training program through a branch of West Georgia Technical College.

A number of other communities offered incentives, too, said Elliott, and delegations from Auburn and Pell City, Ala., even traveled to Germany to meet with Wiegard executives.

“There are many high-quality communities, high-quality industrial parks that have great highway access, great can-do attitude and are willing to make land available,” said Stahl. “I think where Meriwether came out ahead is they all put their shoulders together and pulled. It's the State of Georgia; it's the Metro Atlanta Chamber of Commerce; it's the county, which provided loan guarantees; the local banks; the developer; the Meriwether Industrial Authority.” And, he said, they all worked to develop relationships with Wiegard.

Wiegard, with revenues Stahl estimates in the low nine-figure range, has sales offices all over the world, including one in Washington State. But it now will consolidate its U.S. operations in Meriwether County, where the plant is expected to be up and running by mid-2010. Elliott said the plant, which is planned as a multiphase project, initially will employ 50 people, and later add about 30 more.

Stahl, who worked on the deal with about a dozen other Arnall Golden lawyers including John L. Gornall, Steven A. Kay, Neil P. Mulcahy, Hyun-Zu “Yonni” Kim, John G. Spinrad and Stephen P. “Steve” Pocalyko, said his team's work includes negotiating and drafting project agreements and contracts, handling employment-related legal work, real estate issues, environmental matters and permits and financing for construction and suppliers.

He said Wiegard, like his other European clients—the one he was driving to see on Wednesday was a supplier for the oil and gas industry interested in coming to Texas—also want their U.S lawyers to minimize their risks of doing business here.

So what Stahl and his team also do is set up U.S. arms of the company early on, negotiate with customers and suppliers so that the contractual risk stays with the U.S. entity and set up insurance so that liability stays with the U.S. entity.

“People have heard horror stories about product liability and similar things in the United States, and about lawyers run amuck. They worry about market risks.” But, he added, “Georgia has some pretty amazing [incentive programs], as do other states. All of those things help reduce the risk to foreign companies entering the U.S. market. Most Europeans when they come to the region are favorably surprised by the engagement in the region.”


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Janet ConleyThe Deal Watch Blog is devoted to bringing you the latest news in business law in Atlanta, the Southeast and the U.S. The lead writer is Daily Report associate editor Janet L. Conley.

Janet L. Conley is an attorney who returned to journalism after practicing law with Akin, Gump, Strauss, Hauer & Feld in Washington and with the Georgia Legal Services Program in Atlanta.

During her tenure at the Daily Report, Janet, now the paper's associate editor, has covered law firm economics and management, business and federal courts. In 2007, she received the Georgia Associated Press Story of the Year award and the Atlanta Press Club’s Journalist of the Year award, both for small circulation newspapers, for "Green to Gold," a series of articles on how climate change will alter business and the law.

Janet has written for The American Lawyer magazine and the National Law Journal, among other publications. She also served as managing editor of GC South magazine.

Janet holds a journalism degree from Southern College and a juris doctor degree from the University of Pennsylvania. She lives in Decatur with her husband Mark Harper, also an attorney, and their three children.

She can be reached at jconley@alm.com.

Andy PetersThe contributing writer is Daily Report staff reporter Andy Peters.

Andy Peters has been a journalist since graduating from Furman University in 1992. A short list of the subjects he’s covered includes the Georgia state Legislature, the U.S. semiconductor industry, the Alabama-Florida-Georgia “water wars” litigation, the 1999 American Airlines pilots strike, Coca-Cola and PepsiCo’s battle to acquire the Gatorade sports-drink brand, indie rock music and high school football. Andy has written for Bloomberg News, the New York Times Web site, the Macon Telegraph, the Spartanburg (S.C.) Herald-Journal and the Atlanta Business Chronicle.

Andy has written the Deal Watch column for the Daily Report since March 2006. He was born in Chattanooga, Tenn. in 1971 and grew up in Ringgold, Ga. He lives in Decatur with his wife and two children.

He can be reached at apeters@alm.com.

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