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Huntsman money made in China challenges Obama envoy's White House hopes

Bloomberg  |  Chicago 

An early 1970s photo in a Huntsman Corp annual report shows a smiling young Jon Huntsman Jr holding a dozen eggs in polystyrene packaging, an innovation that helped make a fortune for the family business.

The chemical company and Huntsman name would later help the family scion win Utah’s governorship, make him a multimillionaire and position him for White House appointments, including as President Barack Obama’s ambassador to China. The company also is fodder for opponents as Huntsman prepares to formally announce his Republican presidential bid next week.

Huntsman Corp’s revenue in China surged 57 per cent from 2009 to 2010 during his ambassadorship, almost two decades after its entrance there, data compiled by Bloomberg shows. The company’s expansion in the world’s second-largest economy offers a target for rivals when US unemployment is shaping the 2012 presidential race.

“China has become a bigger and bigger issue in recent elections, especially exporting jobs to China,” said John Feehery, a Republican strategist in Washington who isn’t working with any of the presidential campaigns. “If I were an opposition researcher, I would have a field day with this.”

Tepid job creation is poised to be the top issue in the campaign, with the economy struggling to gain strength amid 9.1 per cent unemployment following the worst recession since the 1930s. Feehery said that environment could make recent comments by Huntsman’s chief executive officer problematic.

ASIA GROWTH
“We now employ more people between China and India than we do in North America, which is really quite phenomenal when you consider that about 90 per cent of our associates 10 years ago were in North America,” CEO Peter Huntsman, 48, a younger brother of the potential candidate, told an industry conference on June 8.

He was referring to employment in all of Asia when he mentioned those figures, said Gary Chapman, a company spokesman.

“At Huntsman Corporation, we have a rich history of creating good American jobs and providing quality American product to the rest of the world,” Chapman said in a statement. “Over the years, Huntsman Corp has grown from a small family business into a global corporation that employs thousands of US employees.”

Huntsman Corp had 2010 revenue of $9.25 billion and about 12,000 employees globally. Its chemicals and adhesives are used by a variety of companies, including by Boeing Co for its new 787 Dreamliner. Before the company went public in 2005, it was the world’s largest privately owned chemical producer.

CHINESE HISTORY
Like many companies, Huntsman Corp has placed greater emphasis on China during the past decade. Now with a presence in cities including Beijing and Shanghai, it has done business in the country since at least 1992, when it opened a technical service center, according to an April 2011 bond prospectus.

Its growth there has been through partnerships with Chinese that are typically majority-owned by the government. In May, weeks after Huntsman left his Beijing post to explore a presidential bid, his family’s company entered into its latest licence agreement with a Chinese company.

An examination of Huntsman Corp and its global expansion illustrates both the benefits and potential liabilities for Huntsman, 51, the eldest of nine children who parlayed the family business into a political career.

He joined the company in 1982, progressing to general manager of its international division before leaving in 1992 to become President George H W Bush’s ambassador to Singapore. He returned as a vice chairman in 1993 and left again in 2001 as a deputy US trade representative in President George W Bush’s administration. From mid-2009 to April, he served Obama as ambassador to China, calling on the Mandarin Chinese he learned to speak as part of a Mormon mission in Taiwan during college.

Huntsman declined an interview request through a spokesman, Tim Miller. “I am proud of my private sector experience helping to grow our family business into a successful, global enterprise that has created thousands of high-paying American jobs,” Huntsman said in a statement provided by Miller. “The company’s global outreach brought capital back to America allowing it to greatly expand the number of American employees.”

In a 2006 Bloomberg interview, Peter Huntsman predicted China sales would represent 15 to 20 per cent of total revenue by 2010. The reality didn’t quite live up to those expectations, although China revenue was 9.5 per cent of company sales in 2010.

First Published: Thu, June 16 2011. 00:24 IST
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