America may be the great melting pot, but it hasn’t always fully embraced the immigrants who have arrived on its shores and helped build its foundations. For years, there have been heated debates over everything from how many visas the government should issue to whether newcomers to America are stealing jobs and lowering wages for U.S. citizens.
Indeed, former Pennsylvania Senator Rick Santorum rose to national prominence partly on his support for building a barrier along the border with Mexico. On the other side of the debate, the Obama administration has pledged to make creating a path for illegal immigrants to become legal a top priority.
But no matter where people stand on the immigration issue there is one thing that isn’t up for debate: Foreign-born entrepreneurs have founded some of the nation’s biggest companies, and have been responsible for employing millions of Americans over the course of U.S. history.
Nearly 30 years after coming to this country, Vivek Wadhwa, an Indian immigrant, two-time entrepreneur and visiting scholar at the University of California, Berkeley (he holds similar appointments at Harvard and Duke Universities) co-authored a study that found that, between 1995 and 2005, more than a quarter of the nation’s tech startups had at least one founder who was foreign born. Perhaps more important, immigrant-founded tech companies generated more than $50 billion in annual sales and, in 2005, employed some 450,000 people. The numbers are even greater if you look beyond the tech sector, he says.
“America is the most desirable country in the world for a foreigner,” says Wadhwa. “And it is also the most entrepreneurial society on earth. America encourages risk-taking. It’s called the American Dream.”
From the French-born founder of DuPont (DD) who started out selling gunpowder in the early 1800s to Hungarian-born Andy Grove, the co-founder of Intel (INTC), corporate America and Americans have long benefitted from such risk-taking immigrant entrepreneurs. With Independence Day upon us, SmartMoney surveyed the corporate landscape looking for major American companies that were founded by immigrants. From the bluest (and oldest) of blue chips to the biggest of upstart tech giants, here is a look at 10 companies that fulfill the promise of the American Dream — and provide tens of thousands of Americans with jobs.
Carnival Corporation
Founder: Ted Arison
Born in Israel
U.S. employees: 36,500
Israeli-born Arison started Carnival Cruise Lines in 1972 with a single ship – The Mardi Gras. But the party got off to a slow start. By 1974, the fledgling cruise line was struggling so much that Arison was able to buy full ownership of the company for $1. Now 35 years later, Carnival Cruise Lines has morphed into Carnival Corporation (CCL), which operates 11 separate cruise lines, and has a market cap of over $26 billion. The swine flu outbreak and consumers cutting back on travel haven’t helped the company’s bottom line this year. Analysts on average are expecting sales to fall 11% from 2008 to $13 billion, according to data from Thomson Reuters. The consensus is that 2010 will offer some calmer seas, with sales expected to rise to around $14 billion.
The photos in this article were supplied by the companies, except for the following: Pierre Omidyar and Sergey Brin are from Getty Images; Ted Arison is from the National Foundation for Advancement in the Arts.
DuPont
Founder: Éleuthère Irénée du Pont de Nemours
Born in France
U.S. employees: 25,000
DuPont (DD), the world’s second-largest chemicals company and a long-time component of the Dow Jones Industrial Average, has given the world everything from nylon to Lycra to Teflon, but it started out as a humble gunpowder manufacturer in 1802. Éleuthère Irénée du Pont de Nemours, the son of a Paris watchmaker, came to the U.S. two years earlier to escape the violence of the French Revolution. By the mid-1800s, DuPont was the largest supplier of gunpowder to the U.S. military.
Based in Wilmington, Del., the company now operates in 70 countries and employs workers in nearly 30 U.S. states. As a basic materials company and early cycle stock, DuPont is well poised to benefit from an upturn in the global economy, especially when it comes to Chinese stimulus spending, says Laurence Alexander, an analyst at Jefferies & Co., who rates the company’s shares at Outperform.
eBay
Founder: Pierre Omidyar
Born in France
U.S. employees: Approximately 10,000
French-born Pierre Omidyar’s eBay (EBAY) not only employs roughly 10,000 Americans, but there are thousands more who have made a living off of the company he founded by auctioning items from their basements and attics. Born to Iranian-immigrant parents, Omidyar moved to the U.S. when he was 6. After graduating from Tufts with a degree in computer science he went to work at a subsidiary of Apple (AAPL), grinding out code by day — and working on his entrepreneurial venture at night. Launched in 1997, eBay now claims the title of the world’s largest online marketplace, but its outsize growth has cooled off due to competition from Amazon.com (AMZN) and other online retailers. Whether new Chief Executive John Donahoe, who succeeded Meg Whitman a year ago, can reinvigorate this growth story remains to be seen, says Benchmark analyst Frederick Moran, who rates shares at Hold.
Google
Founder: Sergey Brin
Born in Russia
U.S. employees: Approximately 13,000
Born in Moscow, Brin immigrated to the U.S. at age 6. After graduating from the University of Maryland, College Park, with a bachelor’s degree in science (and with honors in mathematics and computer science), he enrolled at Stanford University’s prestigious graduate school in computer science where he met Larry Page. The two founded Google (GOOG) in 1998 and Brin — now President, Technology — is part of the three-man team (including Page and Chairman and Chief Executive Eric Schmidt) that shares day-to-day responsibility for running the company. At one point Google’s growth seemed unstoppable, but the recession has taken a toll on its share price. Regardless, the company continues to grab market share in the all-important search business, making the stock a Buy, according to Jefferies analyst Youssef Squali.
Intel
Co-founder: Andy Grove
Born in Hungary
U.S. employees: Approximately 44,000
A refugee of the Hungarian Revolution, Grove immigrated to the U.S. under cover of darkness in 1956. After earning a bachelor’s degree from City College of New York and a Ph.D. from U.C., Berkeley in 1963, Grove worked in the semiconductor industry for the next few years until becoming the fourth employee of a start-up called Intel (INTC), which was launched in 1968. Grove transformed Intel from a maker of memory chips to a manufacturer of microprocessors. The rest, as they say, is history: Today this Dow component is the world’s largest maker of central processing units, or CPUs — the central brain in the majority of the world’s PCs. As an early cycle stock that’s very sensitive to an uptick in the global economy (and a major exporter that benefits from a weaker dollar), Intel’s fortunes look bright as the economy recovers, or so the thinking goes in the market. Investors have pushed Intel’s stock up 30% since the broader market bottomed in early March.
Nvidia
Founder: Jen-Hsun Huang
Born in Taiwan
U.S. employees: 3,300
From rising ping pong star to the co-founder of a $6 billion graphics chip maker, the career track of Taiwan-born Jen-Hsun Huang has been event-filled to say the least. As a teenager, Huang was a nationally-ranked table tennis player; he competed in his first national tournament at the age of 14 in Las Vegas. He earned a degree in electrical engineering at Oregon State University and a masters at Stanford University. In 1993, he co-founded Nvidia (NVDA) with Chris Malachowsky and immediately began serving as president and CEO. It took two years for the company’s first product to launch, but it’s been on a roll ever since. One of their crowning achievements? Graphics technology that makes the yellow first-down line appear on live football games. The stock took last fall’s crash particularly rough: It fell 76%. But so far this year it’s risen 43%.
Pfizer
Founders: Charles Pfizer and Charles Erhart
Born in Germany
U.S. employees: 30,000
It sounds like something out of a bad sci-fi movie: Two German chemists, cousins in fact, move to America seeking opportunity and find it – battling parasitic worms. But that’s how this pharma giant got its start. Charles Pfizer and Charles Erhart came to the U.S. in 1849, with a $2,500 loan, and set up shop in Williamsburg, Brooklyn. The cousins’ first pharma hit was Santonin, a drug used to fight tapeworms. Today, Pfizer (PFE) sells blockbuster drugs like the cholesterol-fighting Lipitor, which brings in $12 billion a year, more than a quarter of the company’s 2008 sales. Linda Bannister, a senior health care analyst at Edward Jones, is concerned that when Lipitor loses its patent protection in 2012, the company will be hard-pressed to replace those sales. But its pending acquisition of fellow drug maker Wyeth (WYE), which had $23 billion in sales last year, should help ease any withdrawal symptoms.
Procter & Gamble
Founders: William Procter and James Gamble
Born in England and Ireland, respectively
U.S. employees: Almost 40,000
Look around your home and you’re likely to find P&G’s (PG) products everywhere. From Tide detergent to Pampers diapers to Crest toothpaste, the nation’s biggest consumer products company and Dow component is truly a red, white and blue chip. Less well-known is that it was founded in 1837 by an English candle maker named William Procter and a soap maker from Ireland named James Gamble. Another interesting piece of P&G trivia: In 1887, the company instituted a pioneering profit-sharing program that gave employees ownership stake in the company. Today P&G investors — both those who are employed at the company and those who are not — can scoff at the notion that the U.S. equity market is suffering from a lost decade. Instead, they can take comfort in the fact that this stalwart consumer staples stock outperformed the broader market by a full 50 percentage points over the last 10 years.
U.S. Steel
Founder: Andrew Carnegie
Born in Scotland
North American (figure includes Canada) employees: 28,680
Pittsburgh’s always been the home of the Steelers, but before there was Terry Bradshaw, Chuck Noll and the Steel Curtain defense, there was Andrew Carnegie and the Carnegie Steel Company. Carnegie, a Scottish immigrant, formed the company in the 1870s. In 1901, it was sold to Elbert H. Gary and J.P. Morgan, who already owned the Federal Steel Company. Together, the two steel manufacturers formed the nucleus of United States Steel Corporation (X), which today produces 31.7 million tons of raw steel annually. The past 18 months haven’t been kind to the steel giant — sagging demand has sent the stock price down more than 65%, but the company’s been down this road before. Ten years ago, the steel industry hit a similar rough patch and U.S. Steel’s stock fell 64%, only to bounce back and gain 621% over the next six years.
Yahoo
Founder: Jerry Yang
Born in Taiwan
U.S. employees: 6,000
What started out as a directory of web sites eventually grew into one of the most trafficked sites on the internet, thanks in large part to its Taiwanese co-founder Jerry Yang. Yang, along with fellow Stanford University Ph.D. candidate, David Filo, began creating the web site that would later be named Yahoo (YHOO) in 1994. Two years later Yahoo went public, with just 46 employees. Now it employs 260 times that amount world-wide, and roughly 6,000 in the U.S. Yang traded in his title of Chief Yahoo to take the helm as CEO in 2007. But the role wasn’t for him – Yahoo’s earnings fell 1% to $1.8 billion and its stock dropped 58% to $12 a share in less than two years. Yang handed over the CEO title to Carol Bartz in January and returned to his Chief Yahoo post. Analysts like Jefferies’ Squali have high hopes that Bartz can reinvigorate Yahoo’s growth. Squali rates the company’s shares a Buy.
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