Why Does Your Home Country Playbook Not Work in American Manufacturing?
- Philip Lamb
- May 13
- 5 min read
An army of sheep led by a lion will defeat an army of lions led by a sheep." -- Napoleon Bonaparte
The European manufacturer who builds a world-class operation in Germany, Austria, or Italy and then attempts to replicate that model in the United States is working from a playbook that does not translate. Not because American manufacturing workers are less capable -- they are not. Not because the production systems are incompatible -- most are highly transferable. The translation failure happens in the leadership layer. The management philosophy, the employment framework, the compensation architecture, and the communication culture that produced exceptional results at home will produce consistent friction, turnover, and underperformance in an American manufacturing environment if it is applied without adjustment.
This is the most expensive assumption foreign manufacturers make in their US expansion. The U.S. Department of Commerce SelectUSA program reports that European companies collectively represent the largest source of foreign direct investment in US manufacturing, with German, Austrian, Swiss, and Italian industrial companies leading the expansion. The Bureau of Economic Analysis data on foreign-owned manufacturing facilities shows that European-owned plants represent hundreds of billions in invested capital across the United States. A significant portion of that capital is underperforming because the leadership model was imported without modification.
PRL International is a retained executive search firm serving Pittsburgh and Western Pennsylvania, specializing in senior-level placements for international companies building US manufacturing operations. We have placed US operations leaders for European manufacturers entering this market at multiple stages -- greenfield builds, acquisitions of US businesses, and joint ventures with American industrial partners. The gap between the home country playbook and what actually works in American manufacturing is consistent across all of them.
What Specifically Does Not Transfer From European to American Manufacturing Management?
What specifically does not transfer from European to American manufacturing management starts with the employment law framework and extends into every layer of the management relationship.
European manufacturers, particularly German companies operating under the codetermination framework established by the Betriebsverfassungsgesetz -- the Works Constitution Act -- are accustomed to a labor relations environment defined by works councils, mandatory consultation rights, and a structured collective voice for employees in management decisions. That framework produces a disciplined, consultative management culture where major decisions are made with formal employee input and where the relationship between management and workforce is mediated by established institutional structures.
American at-will employment law produces a fundamentally different environment. The legal framework gives employers significantly more unilateral authority over employment decisions and gives employees significantly less institutional protection. What this means in practice is that the European manager who arrives in a US facility expecting the workforce to engage with management decisions through a formal consultative process will find instead a workforce that expects management to communicate directly, act decisively, and be held accountable for outcomes without a formal mediation layer. The workforce that seems passive or disengaged to a European manager is often a workforce that has not been told clearly what is expected of them and why.
The legal compliance requirements for US employers are a specific area where European manufacturers consistently underestimate their exposure. The Fair Labor Standards Act overtime exemption classifications, the Family and Medical Leave Act eligibility and notice requirements, the Americans with Disabilities Act accommodation obligations, and the EEOC's anti-discrimination enforcement framework are all areas where European companies managing their US operations from a home country HR perspective routinely create liability. A US operations leader who does not understand these requirements is not just a cultural mismatch -- they are a legal risk.
Compensation architecture is the third major transfer failure. European manufacturers frequently build their US compensation structure from their home country benchmarks, adjusted for US cost of living in a general sense. This approach consistently produces compensation packages that are below the US market for the specific roles and industries they are recruiting into. The Vice President of Operations candidate in Pittsburgh who has managed a $200 million manufacturing facility is benchmarked by the US market -- specifically by what CNH Industrial, Arconic, Kennametal, and the other mid-market and large industrial employers in Western Pennsylvania are paying for that experience. A European manufacturer offering 15 to 20 percent below that market rate because the package looks generous by German or Italian standards will not attract the candidates they need. The ones who accept below-market offers in that situation are almost never the candidates who had better options.
Why Do European Companies Send Expat Leaders When They Should Hire American Executives?
European companies send expat leaders to run US operations when they should hire American executives because they trust people they know in an environment they do not understand. It is a rational instinct that produces systematically poor outcomes.
The expat leader sent from European headquarters to manage US operations carries real advantages: they understand the parent company's culture, systems, and decision-making process. They have direct access to the resources and relationships at headquarters. They are trusted. And they are almost always the wrong person for the job of building a high-performing American manufacturing operation.
The American workforce in a manufacturing environment responds to leadership credibility that is built on demonstrated operational knowledge of their specific context. A German operations executive who does not understand the US labor market, has never managed an at-will workforce, and is navigating American regulatory compliance for the first time while simultaneously trying to build a production operation is managing two steep learning curves simultaneously. The workforce sees the learning curve. It takes longer than the company expects to build the credibility required for the team to perform.
The more effective model is a US operations leader hired specifically for their experience in the industry and geographic market where the plant is located, paired with a strong relationship with a designated headquarters counterpart who bridges the cultural and institutional gap. The US executive runs the operation. The headquarters counterpart ensures alignment with the parent company's strategy and systems. Both relationships function because they are built on complementary competence rather than one person trying to carry both roles.
What Should European Manufacturers Do Differently When Hiring US Leadership?
European manufacturers should approach US leadership hiring as a distinct executive search with a candidate profile built entirely around US market conditions, not a modified version of the home country search process.
The brief for a US operations leadership search should define the specific regulatory environment the candidate must understand, the labor market characteristics of the region where the facility is located, the compensation range built from US market data rather than European benchmarks, and the specific authority the US leader will have versus what decisions require headquarters approval. That last point is critical. The American executive who accepts a VP of Operations role and then discovers that capital expenditures above a threshold require a three-week approval cycle through Stuttgart has been misled about the scope of their authority. They will leave, often within eighteen months, and the search starts over.
The retained search firm running this assignment must have direct experience placing US operations leaders in foreign-owned manufacturing facilities. The nuances of the cross-cultural reporting relationship, the specific candidate attributes that predict success in that environment, and the ability to represent the opportunity honestly to candidates who have other options -- all of these require a search partner who has navigated this specific situation before.
For more on executive search for international companies building US operations, read International Executive Search at PRL International and How a European Manufacturer Hires Its First US Leadership Team.
If you are ready to fill a senior role or want to talk through your search, reach out at prlinternational.com/contact
Want to know what questions to ask before hiring a search firm? Download the free 7-Question Guide: https://prl-proposal.vercel.app/guide
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