By Pauline Langemann | Director of Business Development | Strategic Partnerships & B2B Growth | Automotive & Advanced Manufacturing
Picture a European manufacturer that has just approved its first U.S. plant. The board is energized. The business case is solid. And within a few weeks, the site shortlist is down to two locations — chosen mostly because one has the best incentive package and the other is close to the company's largest American customer.
Two years later, the plant is running at 60% of planned output. Not because of the product or the market, but because the team cannot hire enough skilled technicians within a reasonable commute.
I have seen versions of this story more often than I would like. Having worked on both sides of the Atlantic, I have come to believe one thing firmly: where you build determines much of what you can achieve — and it is one of the hardest decisions to undo.
Site selection is a strategy decision, not a real estate decision
Too many companies hand site selection to a real estate broker or treat it as a box to tick after the market entry strategy is approved. That is backwards.
Your location shapes your labor costs and talent pipeline for the next twenty years. It defines your logistics network, your supplier ecosystem, your utility costs, and your exposure to regulatory and climate risk. It even influences how easy it is to recruit leadership — because senior engineers and plant managers choose where they want to live, too.
A building can be renovated. A production line can be redesigned. But once you have broken ground, the location is fixed. That is why it deserves the same strategic rigor as the decision to enter the market in the first place.
Five mistakes I see European manufacturers make
1. Letting incentives drive the decision. Tax abatements, grants, and training funds are real and valuable. But an incentive package is a one-time benefit layered on top of a long-term cost structure. If a site wins mainly on incentives, ask what it is compensating for. The best incentives make a good location better — they do not make a weak location viable.
2. Underestimating the labor question. In many U.S. regions, the binding constraint is not wages; it is availability. Skilled maintenance technicians, CNC machinists, electricians, and controls engineers are in short supply. A site that looks affordable on paper can become expensive fast when you factor in turnover, overtime, and the cost of recruiting from outside the region. Look at the actual depth of the local talent pool — and who else is competing for it.
3. Following the customer too closely. Locating next to your anchor customer feels logical. But it can concentrate risk and limit your ability to serve a broader market. It also puts you in the same labor market as a much larger employer. Sometimes the smarter move is a site that serves your key customer well and positions you for the next five.
4. Overlooking the supplier and logistics ecosystem. European operations often benefit from dense, mature supplier networks within a short drive. In the U.S., distances are larger and supplier clusters are more regional. Map where your critical inputs will come from, how they will move, and what happens when one link breaks. Rail access, interstate proximity, and port connections matter more than many teams expect.
5. Treating the community as an afterthought. In the U.S., economic development is deeply local. State agencies, county officials, community colleges, and utilities can be powerful partners — or sources of friction. The companies that succeed build those relationships early and treat them as part of the operating model, not just the negotiation.
The transatlantic lens
Many of these mistakes come from a reasonable place: applying European assumptions to an American market.
In Germany or Austria, a manufacturer can often count on a well-established dual vocational system producing a steady flow of trained technicians. In much of the U.S., that pipeline has to be built — through partnerships with community colleges, apprenticeship programs, and in-house training. (I wrote more about this in my recent piece on apprenticeship programs.)
In Europe, regulatory frameworks tend to be more harmonized at the national or EU level. In the U.S., the rules can change meaningfully from one state — or even one county — to the next: permitting timelines, environmental review, labor law, and tax treatment all vary.
And the sheer scale is different. A distance that would cross three countries in Europe may not leave a single U.S. state. That changes how you think about logistics, service coverage, and where your people will need to travel.
None of this makes the U.S. a harder market. It makes it a different one. The companies that do well are the ones that recalibrate early instead of discovering these differences after the ribbon is cut.
Where to start
If you are a European manufacturer weighing a U.S. location, here is the approach I recommend:
Define your criteria before you look at sites. Decide what matters most — labor depth, logistics, supplier access, total cost, quality of life for leadership — and weight it. Agree on this internally first so the incentive offers do not set your priorities for you.
Model total cost of operation, not just entry cost. Build a 10-year view that includes wages, turnover, utilities, freight, taxes, and the realistic cost of recruiting and training. Then layer incentives on top.
Stress-test the labor market. Go beyond unemployment figures. Talk to local employers, staffing firms, and technical colleges. Ask how long it takes to fill a maintenance technician role — and how long people stay.
Visit at different times. See the site, the community, and the commute on a weekday morning, not just during an incentive presentation. What your future employees experience matters.
Engage local partners early. Economic development agencies, utilities, and workforce boards can provide data and support that is hard to get anywhere else. Bring them in as partners, not just negotiating counterparts.
The bottom line
Expanding into the U.S. is one of the most exciting moves a European manufacturer can make. The market is large, the customers are ambitious, and the opportunity is real.
But the location you choose will shape your costs, your culture, and your capacity to grow for decades. Get it right, and the site becomes a competitive advantage. Get it wrong, and you will spend years working around it.
The question is not just where can we build? It is where can we build something that lasts?
At PLA International, I help manufacturers evaluate locations, structure market entry, and build the partnerships that make international expansion work across North America and Europe. If you are weighing a U.S. site — or rethinking one — I would love to hear from you. Book a conversation or connect directly.
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