Chinese companies have seen potential in the unemployed capital of Detroit, and are investing in American businesses and technology and employing laid-off designers and engineers. This is an effort to absorb the skills and knowledge of US automakers and auto-part manufacturers, and the strategy is likely to pay off: though currently limited to batteries and vehicle components, Chinese businesses will likely soon be selling cars here too.
Bill Vlasic, with whom we had dinner last Wednesday, notes in his May 12th article on the subject that China lags three decades behind Japan in bringing automotive business to America’s shores. Yet despite this, these Chinese businesses are determined to escape notice; anathema in an industry which “thrives on media coverage,” for fear of seeing the type of hostility Japanese automakers saw.
But it isn’t just Chinese businesses that are flocking to Detroit: the recovery of the domestic auto industry is pulling a growing number of Chinese engineers, designers, and other experts into the area. Chinese business networks and labor associations are also growing in the region, drawing Chinese non-auto industry professionals like lawyers, actuaries, and accountants to the region.
This all plays into the “Chinese Dream” of a robust Chinese economy and thriving middle-class. The phrase has been repeated over and over again in the Chinese media after first appearing in a column by Thomas Friedman in the New York Times, and has since been adopted by Xi Jinping as his personal slogan. And despite Mr. Xi’s necessarily absent (for political reasons) policy agenda, one can only assume that it refers to the imminent reemergence of China as the world’s greatest economic power.
sources:
The Economist
The New York Times
Is it just Chinese doing this? Toyota has over 1,000 engineers in its Ann Arbor technical center, Honda has over 2,000 engineers. Brose has hired American engineers. Federal Mogul, while global, has many.
Skilled, experienced engineers are a scarce resource. My sense is that Detroit – or rather southeast Michigan – is if anything strengthening its position in the engineering side of the global industry. Yes, FM teleconferences with India and elsewhere, engineers there are paid less, and there are local market needs.
So the Chinese may set up shop here. Good for us, the US, as they add to the local economy. If it leads to better vehicles inside China, well and good – there’s no direct threat of exports.
In sum, it’s better to have their engineers here than our engineers there!
I am a bit surprised that they have “The Ford Chinese Association,” which has become one of the largest employee groups at the company. I assume most of them came to Detroit through Changan Ford (the Chinese Ford). It is a good sign for Chinese. It makes it easy for Chinese workers and engineers to adjust to the American lifestyle easily. It can also help them to be more productive, which will lead to a higher production.
I doubt this is solely relationship between Chine and Detroit. Globalization means that individuals can look for jobs in global rather than local markets. While this may not be true for the factory laborer engineers and designers are more rare resources and companies are sometime willing to invest in them to get them to move from country to country. This is certainly true of CEOs now and the like with the notable example of Ghosn. I would imagine that a few European designers and engineers have made their way to China or the United States as the economy continues to stay down trodden.
China also continues to invest in America because it already has a large amount invested in the U.S. if we were to fail, then so would many other companies. As Europe, continues to try and recover the U.S. becomes more and more appealing to foreign investors. China’s interest in the U.S. has not just recently started, but has continued to grow as the become a more powerful country and their growth continues at high single digit percentage each year.