Culture Clash at a Chinese-Owned Plant in Ohio

https://www.nytimes.com/2017/06/10/business/economy/ohio-factory-jobs-china.html

by vthallam • 9 years ago

93 82 9 years ago

nodesocket• 9 years ago

Makes absolute sense for Fuyao to move where their customers are. I also applaud the US growth and job creation they are creating in the process.

jacquesm• 9 years ago

Those jobs were historically there to begin with, then tooling + process + jobs were shipped overseas because that was cheaper, the resulting trade surplus made it possible for the Chinese to ship the factory back to the United States.

The big question then is can they remain profitable in the long run if they do things the US way, and if they can why couldn't the same plant be owned and operated by Americans?

mjevans• 9 years ago

As an American, my observation is that we're allergic to logic and long term planning/investment.

nickpsecurity8• 9 years ago

"and if they can why couldn't the same plant be owned and operated by Americans?"

You already know the answer to that. It's why they shipped the jobs overseas in the first place. In many cases, the workers even keep voting for the kinds of people that do it. I especially found it amusing that Trump was appealing as a capitalist to workers whose jobs were lost due to capitalism like this. Many of these areas are self-defeating. Not all but many.

arthur_trudeau• 9 years ago

It's somewhat surprising for the NYT to put forward the proposition that ethnocentrism and disregard for worker safety is a part of Chinese culture, but I guess I'll take their new wokeness as a sign of progress.

shangxiao• 9 years ago

I think it's worth pointing out that this appears to be mainly Chinese culture from the mainland. Chinese from other areas like Hong Kong and Taiwan seem to be completely different. When I visited Taipei I was pleasantly surprised to see how polite these people were, they lined up in queues to board their subway!

lacampbell2• 9 years ago

Taiwanese people love queueing. Queueing for the train, queueing waiting for the bus, and - of course - queueing around the block to wait to eat at a 'famous' restaurant (:

brobinson• 9 years ago

There's still a huge amount of 差不多 in Taiwan, unfortunately.

zhemao2• 9 years ago

It's not so much culture as regulatory environment. Chinese labor laws are more lax, or at least more laxly enforced. Things are done pretty differently in the American Midwest, with its history of labor organizing.

nfriedly• 9 years ago

I drive past this plant on occasion, and I think it's been a generally positive impact on the area. It was kind of sad when the old GM plant shut down and sat empty for several years.

bduerst2• 9 years ago

Glass is heavy and brittle, making it both expensive and difficult to ship.

Many glass mills need to be within a certain mile radius of the factories they supply because of this. NYT missed this in the article.

litany• 9 years ago

You're right, the article didn't mention difficulties shipping glass. It did mention that they wanted to be close to their customers though. I'm not really sure that your detail would have added anything as the article wasn't really about glass manufacturing. It could have been added with one or two sentences though.

bduerst2• 9 years ago

In context to the article, my point is that Fuyao is a poor example.

The author makes it seem like Fuyao's decision to build in Ohio is part of a larger trend across verticals, when in reality the nature of the glass industry demands Fuyao building local to suppliers.

hourislate• 9 years ago

The Chinese ship plenty of glass to NA. The weight is of no consequence since freight is charged per volume (40' container, 20' container). Typically a 40 ft container from China to NY State is about $3600-$4200 depending on the Logistics Company and time of year. Many of the Condo's in Toronto, Canada (condo capital of the world) are faced with Chinese glass. Glass is typically compromised when it is not packed or stored correctly. It is actually quite durable and is shipped from all over the world. A good example is the glass Apple used for its new campus, it came from Germany.

I think the problem here is "Just in Time" delivery to the Auto Manufacturers. It takes about 12 days on the water and another 5 on rail to reach the rust belt or east coast. So that is probably why they decided to start producing in the USA so they can meet tighter production and delivery schedules and take shipping lines/ports out of the equation.

Natsu• 9 years ago

From back when I was working in that industry, I was told we couldn't really compete on price with China. They were trying to get glass from China because it was cheaper than what we could make in our own float plants. We were trying to compete on quality, that is to say, delivering less broken or damaged glass.

That said, you're right--I don't remember too much trouble shipping raw glass. It was just coated in Lucite and the first sheet is always a write-off. We had more trouble when people had packs fall when trying to load them into the gantry every so often, though broken sheets were quite a pain to deal with sometimes more from a safety perspective, when the crane can't get suction on it to drop it and it's too big to safely handle.

dis-sys2• 9 years ago

They setup the factory in US because of the heavy taxes back in China. The chairman mentioned in the article gave a detailed talk touching this subject at the end of 2016 and he claimed that it is cheaper to operate in US once taxes are all factored in.

zxcmx• 9 years ago

Yes, it still does get shipped a lot of places though.

For example,"float glass" is not manufactured in New Zealand - no windows have been made there for 25 years, every single one is imported.

It seems that at the scale these plants operate, it's not economic to run one for a country of 4.5 million people (with a first world minimum wage) without tariffs or subsidies.

lacampbell2• 9 years ago

I am glad that in some countries there is still an ethos of standing up for your own citizens. I couldn't imagine any action being taken against a Chinese company for discriminatory hiring practices in New Zealand or Australia, where such discrimination is rampant, not only in employment but also in real estate.

andreiw2• 9 years ago

I dunno. Reading this article left a bad taste in my mouth. It wasn't the Chinese that turned a large portion of industrial America into a rusty meth-infused wasteland, yet it is the Chinese that are opening these factories. I applaud a desire to maintain safety standards, but if it wasn't for Fuyao, there wouldn't be anyone to unionize, you know?

it_learnses• 9 years ago

yes i suppose they should be more grateful rather than whine about pesky things such as safety control...

vthallam• 9 years ago

So, that's what all it comes down to I guess. Like, be happy because there are jobs in the first place or unionise, make them accountable for all kinds of regulations and give them a hard time?

Maybe the Chinese or perhaps anyone wouldn't have invested in the first place if they think they can not generate enough profits to sustain, so giving an easy pass for safety standards or any regulations would encourage this.

angry_octet• 9 years ago

You are going to have to provide some references to support such an outlandish statement (of pro-Chinese discrimination being prevalent). Unless you mean that real estate agencies employ Chinese people to sell to Chinese people?

Otherwise, I'd say you're talking out your arse.

tuna-piano2• 9 years ago

China is a gigantic investor in the USA. Whenever you hear the term "trade deficit" that the US has to China, there is an identical amount in "investment surplus" that the US gets from China.

That investment is everywhere - in our stock market, in our government debt, in our real estate and in our Ohio Windshield plants.

Every time you buy an iPhone, you're handing China hundreds of dollars which they then invest in America.

We very literally gave them a Windshield plant in exchange for consumer goods.

https://www.forbes.com/sites/timworstall/2016/05/16/that-chi...

nickpsecurity8• 9 years ago

The author of your link keeps repeating that things will balance simply because they will balance. That sounds like "what I say is true because I say it is true." Is there proof of this beyond the author's mere assertions?

Also, the author says we pay for stuff that turns into capital for them. They use that capital to create more businesses or own more stuff here. That doesn't sound like it's going to balance for the U.S.. It sounds more like they'll progressively have more ownership, market share, and revenues over time.

rukittenme• 9 years ago

I suppose you could look at it in the classical economic sense. I give you $1 because I value it less than a cheeseburger. You give me a cheeseburger because you value it less than a $1.

I don't think that means things even out between US and China. But I do think it means things even out overall. We may "lose" with China and "win" with others. But ultimately, as long as people are spending their own money (as they want to spend it) I can't see how a trade deficit/surplus will ever affect them.

tuna-piano2• 9 years ago

Yes, read into the balance of payments: http://www.investopedia.com/articles/03/060403.asp#axzz1rYFT...

It's basically: Stuff+Investments sent = Stuff+Investments received

Think about it this way: China sends the US an iPhone, and the US sends dollars (paper / numbers on a screen) in return. China put a lot of work into the iPhones... what did they get? They got the opportunity to buy stuff in America with dollars! What do they want to buy? They could buy stuff, like airplanes and software, or they can buy factories.

And yes, when they buy American investment products, they will (or hope to) receive more back in the future. When you buy a productive asset, or save money, you expect to receive more back in the future. So when you sell that productive asset, you give up that future benefit for a smaller benefit today.

greglindahl• 9 years ago

Every time you buy an iPhone, a tiny amount of that money stays in China. Here are then numbers for 2010: http://pcic.merage.uci.edu/papers/2011/value_ipad_iphone.pdf

See Figure 1.

qeternity• 9 years ago

China is a gigantic investor in the USA. Whenever you hear the term "trade deficit" that the US has to China, there is an identical amount in "investment surplus" that the US gets from China.

This is a bit of an oversimplification of how balance of payments resolves itself. For instance, their central bank (PBOC) has the largest FX reserves in the world. When we buy things from China, the seller can either keep USD to invest/purchase something in the US, or can buy CNY. To keep the CNY from appreciating too much and making Chinese exports uncompetitive, the PBOC sells CNY and buys those USD. They in turn use some of the proceeds to purchase US Treasuries. However they do this not because they want to invest in the US, but because they want to hedge inflation. So yes, your comment is true-ish, and global trade is an amazing thing, but it's a bit misleading to say every dollar sent abroad returns to "invest in America" in the typical sense that most people/HN commenters think of investing.

grapeshot• 9 years ago

Reminds me of what happened in the 1980s with Japanese buyouts of American TV manufacturers.

https://www.youtube.com/watch?v=aesJTsZqm6c

I don't know if history offers any good solutions here though.

analyst74• 9 years ago

Out of curiosity, is it a common practice to require foreign companies opening American branches to have a "predominantly American management corps"?

I always assumed that multi-national companies tend to send executives from their headquarters for strategic decision making, and only hire local managers for execution.

frozenport• 9 years ago

No it isn't common. I know of a company from Germany (optics), and another one from France (cheese?) and in both the mid management is from abroad.

nichtich• 9 years ago

And the factory is set up by the Chinese company. It would be an understandable demand to insists on local management if the Chinese bought the already existing local operation. But for a brand new operation it's a weird thing to ask.

omegaworks• 9 years ago

Such lapses are common in the brutally competitive auto parts industry... but they can easily lead to amputation or even death.

This is exactly why these regulations need to exist and be enforced as strictly and evenhandedly as possible. If they didn't exist, your competitors will implement any measure, including ones that compromise worker safety, to undercut your prices. Market forces will attempt to shape this industry to be the leanest it can possibly be.

Capitalism can grind fungible labor into a literal pulp if it is allowed.

fma• 9 years ago

Yep. Lack of regulation can affect more than just the employees. If that plant can pollute like they do in China - everyone in that city would all have a negative impact. The Republican administration believes regulation is bad and must be removed. It's a shame what people would believe in the name of 'jobs'.

zhemao2• 9 years ago

For an example of this in action, you need look no further than a few states South along the Mississippi.

https://www.bloomberg.com/news/features/2017-03-23/inside-al...

jbscpa• 9 years ago

"Take This Job and Shove It"

A corporate executive is assigned to help improve the efficiency of a small-town brewery in this comedy inspired by the Johnny Paycheck song. When the small town turns out to be his old hometown, however, the executive finds himself torn between his loyalties to his company and his old friends.

MachinShinn-• 9 years ago

Do you know why manufacturing left America? It has nothing to do with costs. It has everything to do with regulations and attitudes.

If you want a manufacturing industry, workers WILL get killed on site. Workers WILL get cancer from dangerous chemicals. There's no free lunch. Everyone knows this, but somehow we care more about a high school dropout getting exposed to fumes in a factory than one that ODs on heroin because he has zero job prospects.

Either blue collar workers die at 65-70 after a lifetime of work related exposure, or they die at 30 due to drug overdose. Those are your 2 and only 2 choices.

rhcom2• 9 years ago

Why are those the only two options? Why can't we continue make manufacturing safer like we have been since the Triangle Shirtwaist Factory fire?

someguydave• 9 years ago

Because at a certain point increasing safety regulation causes production under a regime to be less profitable than moving to another country with fewer safety rules. Regulators are usually not punished for destroying profit and are usually incentivized to choose safety over private profit.

k_sze• 9 years ago

"Fuyao faces [...] a lawsuit by a former manager who says he was let go in part because he is not Chinese."

Somehow the opposite scenario could sound absurd in China. Imagine "General Motors in China faces a lawsuit by a former manager who says he was let go in part because he is not white."

I'm not implying anything. I'm just pointing out that for some reason, that scenario could sound absurd, even if irrationally so. It might not have to do with differences of the judicial systems, but with differences in value and prejudice between the two cultures.

Culture Clash at a Chinese-Owned Plant in Ohio

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