They probably couldn't find a designer in SF that charged LESS than the designer in Germany. A company that doesn't pay invoices tends to go for the cheapest option.

Why would they care?

Because cheaper designers and developers are the ones that underrate themselves, usually because they're newer to the business and think it's pretty cool that they can get anything for what they're doing.

Which means they're less likely to be jaded, have up-front fees, verbose contracts and installation payments. As is obvious, in this case, when he talks about having 6 months of unpaid work.

Design is a global market to a large extent, there is no reason why they should choose a local one.

There's plenty of reasons to choose local though:

1. Keep money in the local economy. 2. Build a local network. 3. Have face to face meetings to get your ideas across more quickly - whiteboarding, seeing facial reactions to comps, hands-on testing, etc.

I've done remote work, and I've done work with clients in my local area. There's reasons for both, but most clients I work with want local, or at least want the ability to meet face to face on occasion. The few that didn't want to (or even declined attempts to meet f2f) either skipped out on their bill, or were wanting extremely commodity services (install wordpress on my server, fix this javascript error, etc).

Especially if they planned from the beginning not to pay.