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In reply to the discussion: STOCK MARKET WATCH -- Monday, 20 May 2013 [View all]Demeter
(85,373 posts)19. Chinese Creating New Auto Niche Within Detroit By BILL VLASIC
http://www.nytimes.com/2013/05/13/business/global/chinese-automakers-quietly-build-a-detroit-presence.html?_r=0
Dozens of companies from China are putting down roots in Detroit, part of the countrys steady push into the American auto industry. Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. While starting with batteries and auto parts, the spread of Chinese business is expected to result eventually in the sale of Chinese cars in the United States.
As businesses sprout up with little fanfare, Chinese companies seem to be trying to avoid the type of public opposition experienced by the Japanese automakers Toyota and Honda in the 1980s, when the sudden influx of foreign cars competing head-on with cars from General Motors, Ford and Chrysler was perceived as a threat to American jobs. In contrast to the Japanese, Chinese auto companies are assiduously avoiding the spotlight. Last year, the biggest carmaker in China, Shanghai Automotive Industries, opened new offices in suburban Detroit without any publicity, which is almost unheard-of in an industry that thrives on media coverage. But Chinas growth in the American auto industry is drawing notice in Washington. Last year, the Obama administration filed a complaint with the World Trade Organization that Chinas government was unfairly subsidizing the production of some parts shipped to America. And the countrys inroads into American-made batteries and electric vehicles have drawn scrutiny because that sector of the industry has been heavily subsidized by the United States government.
The American industrys overall resurgence has drawn a growing Chinese population to Detroit, with Chinese-owned suppliers bringing executives from their country and American automakers adding new talent. About 50,000 Chinese, many of them engineers and other professionals who work at General Motors and the Ford Motor Company, live in the metropolitan area. Business networks are growing too. The Detroit Chinese Business Association boasts a flourishing membership, and counts about 100 Chinese-owned businesses, mostly auto-related, in the region. The Ford Chinese Association, with 650 white-collar workers, predominantly from mainland China, has become one of the largest employee groups at the company. Its president, Raymond Xu, recalled that in 1999, when he came to Detroit to attend college, there were very few Chinese in the area. I think people are going to get more and more comfortable with it, Mr. Xu said.
Typical of the Chinese expansion are the nondescript offices of Changan Automotive in an industrial park in the suburban city of Plymouth. Changan, a major carmaker in China, set up a research center to better understand the structural chassis of a vehicle then hired about 20 Detroit engineers, some of whom had been laid off from Detroits auto companies, to staff the project.
One of his employees is Alan Wall, 54, a former contract engineer at Chrysler who lost his job during the recession.
.....................................
In one of the more prominent deals, the Wanxiang Group bought most of the assets of the battery maker A123 Systems, which filed for bankruptcy last year despite receiving $132 million of $249 million in federal grants to build two factories in Michigan. Congressional Republicans criticized the deal, saying A123s technology could support military applications in China. Still, the buyout was approved this year by the Committee on Foreign Investment in the United States, a federal government panel. Wanxiang, which has its United States headquarters near Chicago, has acquired several American auto parts and solar companies in recent years. But it attracted little attention until it took an interest in A123 Systems.
He said that Wanxiang employed several thousand American workers, and kept local management in place at companies it had bought. We act, talk and walk like an American company, Mr. Ni said. In the end, its all about making money. ....Only about 4 percent of Chinese-made light vehicles are exported now, mostly to countries in Africa and the Middle East. But the Detroit automakers are bracing for the day when competitive Chinese cars hit the American market.
The Chinese have a lot of money and they are moving fast, said Mr. Cole. Were going to see a lot more of them here.
Dozens of companies from China are putting down roots in Detroit, part of the countrys steady push into the American auto industry. Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers. While starting with batteries and auto parts, the spread of Chinese business is expected to result eventually in the sale of Chinese cars in the United States.
The Chinese are well behind the Japanese when they hit our shores 30 years ago, said David E. Cole, a founder of the Center for Automotive Research in Ann Arbor, Mich. They lack the know-how, and theyre coming here to get it.
As businesses sprout up with little fanfare, Chinese companies seem to be trying to avoid the type of public opposition experienced by the Japanese automakers Toyota and Honda in the 1980s, when the sudden influx of foreign cars competing head-on with cars from General Motors, Ford and Chrysler was perceived as a threat to American jobs. In contrast to the Japanese, Chinese auto companies are assiduously avoiding the spotlight. Last year, the biggest carmaker in China, Shanghai Automotive Industries, opened new offices in suburban Detroit without any publicity, which is almost unheard-of in an industry that thrives on media coverage. But Chinas growth in the American auto industry is drawing notice in Washington. Last year, the Obama administration filed a complaint with the World Trade Organization that Chinas government was unfairly subsidizing the production of some parts shipped to America. And the countrys inroads into American-made batteries and electric vehicles have drawn scrutiny because that sector of the industry has been heavily subsidized by the United States government.
The American industrys overall resurgence has drawn a growing Chinese population to Detroit, with Chinese-owned suppliers bringing executives from their country and American automakers adding new talent. About 50,000 Chinese, many of them engineers and other professionals who work at General Motors and the Ford Motor Company, live in the metropolitan area. Business networks are growing too. The Detroit Chinese Business Association boasts a flourishing membership, and counts about 100 Chinese-owned businesses, mostly auto-related, in the region. The Ford Chinese Association, with 650 white-collar workers, predominantly from mainland China, has become one of the largest employee groups at the company. Its president, Raymond Xu, recalled that in 1999, when he came to Detroit to attend college, there were very few Chinese in the area. I think people are going to get more and more comfortable with it, Mr. Xu said.
Typical of the Chinese expansion are the nondescript offices of Changan Automotive in an industrial park in the suburban city of Plymouth. Changan, a major carmaker in China, set up a research center to better understand the structural chassis of a vehicle then hired about 20 Detroit engineers, some of whom had been laid off from Detroits auto companies, to staff the project.
Most of the engineers are very young in China, said Hong Su, the Changan executive heading the American facility. They know how to make vehicles, but they dont know how to develop them.
One of his employees is Alan Wall, 54, a former contract engineer at Chrysler who lost his job during the recession.
.....................................
In one of the more prominent deals, the Wanxiang Group bought most of the assets of the battery maker A123 Systems, which filed for bankruptcy last year despite receiving $132 million of $249 million in federal grants to build two factories in Michigan. Congressional Republicans criticized the deal, saying A123s technology could support military applications in China. Still, the buyout was approved this year by the Committee on Foreign Investment in the United States, a federal government panel. Wanxiang, which has its United States headquarters near Chicago, has acquired several American auto parts and solar companies in recent years. But it attracted little attention until it took an interest in A123 Systems.
I wasnt surprised by the negative reaction, said Pin Ni, president of the companys American unit. The reality is we grow here like a small seed into a bigger tree, and we cannot avoid this type of response.
He said that Wanxiang employed several thousand American workers, and kept local management in place at companies it had bought. We act, talk and walk like an American company, Mr. Ni said. In the end, its all about making money. ....Only about 4 percent of Chinese-made light vehicles are exported now, mostly to countries in Africa and the Middle East. But the Detroit automakers are bracing for the day when competitive Chinese cars hit the American market.
The Chinese have a lot of money and they are moving fast, said Mr. Cole. Were going to see a lot more of them here.
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