62 cities of the United States compete for the investment of one manufacturer of China
Frank Jan. 16, 2017, in Waterloo, Ontario. Canada.
Updated in Jan 22, 2017
--- The rational US mayors lesson democratic players to rationalise the way of thinking, they must recognise that being elected is nothing to be proud of, but rather to be ashamed of, as it indicates that she or he was in low personal quality with deception trick to have successfully coaxed voters, unless to be confirmed by the achievements in the creation of job and revenue. --- Feb. 2, 2017
Mayor Sheldon Day of Thomasville City won in the competition of investment from China between 62 US mayors by going to China again and again with strong determination of striving for the export-items in his city as copper tubing, steel products, paper products…, but, not their Children anymore (have to look for job elsewhere).
Mayor R. Rex Parris of Lancaster City, after enjoyed happiness from helping China’s eBus maker BYD production in own city since 2009, he starts new dream of creating an oasis for Chinese investment in own town, thereby builds Lancaster as largest Chinese corporation area in California and a central hub in the new energy economy.
For accomplishing own determination, he made numerous trips to China to woo corporate leaders and government officials with his business-friendly ways. He wants to open a trade office in Beijing just for own city, and even hopes to build a Buddhist temple in own town to attract Chinese residents.
More respectable is that, after daily official work, Mayor R. Rex Parris was always busy in home to study the technologies about renewable clean energy, while, majority of democratic elected Mayors are eagerly in looking for and busying in the activities of pleasing voters for enjoying the vanity as Mayor.
In order to get more useful idea from more participants than regular council meetings, in August 2008, Mayor R. Rex Parris initiated a program of 'Walk with the Mayor' at Lancaster City Park, to attract residents get to walk for about one hour with the mayor twice a week and bring up whatever questions them like.
Two mayors were outstanding among those politicians who only have desire and instinct to plan on papers for campaigning the enjoyment of political privilege, but, have no sense and ability to improve the life of their citizen, besides by all kind of possible tricks to tax on them.
The practices of two mayors set up a mirror for evaluating politicians.
The evaluation for the personal quality of Gov-officials is unique, if she or he has no achievements in the creation of job and revenue, the harder of the work, the lower of the personal quality, because it indicates that they are in wasting more social resources.
The evaluation for the crime of Gov-officials is unique, if she or he has no achievements in the creation of job and revenue, they are criminals due to they uselessly occupied governing-position to have wasted valuable time for improving the life of national.
1.1.. Mr. Sheldon Day, the Mayor of Thomasville, Alabama
Jan. 16, 2017, I found a good mayor in the U.S., from video: The U.S. poorer town looks forward to Chinese factories.
He is Mr. Sheldon Day, the Mayor of Thomasville City, Clark County of the United States. The respectable is that he actively strives for creating employment opportunities for his citizen to avoid them from looking jobs elsewhere.
Thomasville City was the one of 62 American cities that once competed for the investment of one manufacture of China - Golden Dragon Precise Copper Tube Group. Faced with fierce competition, Mayor Sheldon Day did not retreat, but, actively strive for; he went to China again and again, totally in four times, until won.
When Golden Dragon North America plant wants to enlarge production lines, Thomasville City was no more land available, faced with new difficulty, Mayor Sheldon Day showed great intelligence and flexibility, he was wisely to look for cooperation from neighboring Town Pine Hill, Wilcox County.
Pine Hill is a small South town, the population is less than 1 thousand, the logging and paper-making was the major industries, but, it has been suffering long abandoned by textile mills and furniture plants, the Pine Hill desperately needs jobs. It located Wilcox County has a population of only 12,000 people, but the unemployment rate is as high as 16.4% that is highest in the State of Alabama, the Locals live in a difficult life. Some shops even closed for sale.
Shop closed for sale in Pine Hill
The suggestion of the Mayor Sheldon Day simply was a manner that sent delicious pies to a hungry people; both sides hit it off happily. Finally, the local governments in different counties jointly funded the purchase of land and to be free for Golden Dragon’s building new production line.
The government of Alabama State funded the construction of bridges and roads to link the production site to the major national transportation networks, and the governments of Federal and State were also jointly to have funded to improve water supplies, sewerage treatment and sewage discharges for the plant.
Thus, the government of Federal, State and Locals jointly removed the entire barriers for Golden Dragon’s building new production line.
Mr. Sheldon Day, the Mayor of Thomasville City
Mayor Sheldon Day said that Golden Dragon North America plant is one of the biggest export projects in local. Before, our children cannot find job here, now, the investments likes Golden Dragon have created the opportunities for our next generation to stay in their hometown. Now we're hoping that the biggest export items here are copper tubing products, steel products, paper products, but, not our Children.
The executive vice president of Golden Dragon North America, Mr. Karen Weill who said that: “There many of the people we hired are unemployed before, and now they start making money and spending money, so that local economy improved a lot.
Mr. Karen Weill, the executive vice president of Golden Dragon North America
For the reason that Gold Dragon Group builds plant in the United States, Mr. Karen Weill said that: there are many air-conditioning manufacturers in the United States, up to 10,000 miles’ supply chain on the sea is a risk, in particular, the potential risk of blockade or striking. Another risk is to put a lot of money on the water, while the copper is more expensive metals, and also, sometimes, customers need a more flexible delivery time, or even temporarily speed up the date of delivery. In order to truly become a global company, we must have a global layout.
Ms. Laura Lewis is a local worker who works for brass tube packing in the factory.
Ms. Laura Lewis
She said that: “I started with a wage of $11 an hour, every three months, plant will increase salary once, now, I am in $12.25 an hour, two weeks later, I can reach $13 per hour. If the Golden Dragon did not build factory here, I have to leave home to find a job.” She also said that: “the cheaper products are all from China (she means that was in low quality with an embarrassed-smile), but, since working with the people from China, my view on China-made goods have changed. I have seen Chinese people are very concern about their work, and work quality was very important to them."
Since working in factory; local people began to understand Chinese culture that was very unfamiliar before, and some employees even wrote their name on own helmet in Mandarin.
The executive director of Wilcox County Industrial Development Board, Mr. George Alford said that: “Golden Dragon Group invested $110 million to build factory and buy equipments, and spend millions of dollars each year on payroll. The number of labor force in our Wilcox County is small, so we do not need thousands of jobs to improve our future. We feel that if the Golden Dragon Group can provide about 300 jobs, by the spread of this effect in entire region, our unemployment rate will be halved. It has a great impact on us. This project relates our success in future. It is the hope of Wilcox County; we can overcome poverty and improve high unemployment rate that has been suffered for many years. I think this is like a good marriage, one of my past colleagues said, we got married, and we must keep the marriage down. So we have to work together with the Golden Dragon Group.
Mr. George Alford, the executive director of Wilcox County Industrial Development Board
As the number of consumers increased, the restaurant business was also booming.
Some of foods in a local restaurant
The rational practice of Mayor Sheldon Day made me thinking of another outstanding Mayor in the United States.
Feb, 13, 2014, I once wrote article to introduce Mr. R. Rex Parris, the Mayor of the Lancaster city, California of the United States, who was also many times to China to have successfully persuaded eBus Maker of China into Lancaster for building his city with clean energy. He also pays those homeless free one-way tickets out of his city, and trying to keep reckless Mongols motorcycle club out of city.
Obviously, Mayor R. Rex Parris has a sensible mind for that how a qualified mayor should be and how hardly strives for.
Jan. 22, 2017, morning 5:08, when I updating this article, I googled about Mr. Mayor R. Rex Parris and got some information on their official website.
“Lancaster native R. Rex Parris became the City’s third directly-elected mayor in April 2008. His immediate aggressive stance regarding the overall well-being of Lancaster residents quickly generated dramatic results which have gained nationwide recognition. Due to his fervent dedication to progress, strong leadership style and many accomplishments toward the evolution of his hometown, Parris was re-elected in 2010, 2012, and 2016. The most recent election extended his mayoral duties for another four years.”
The official webpage post a photo of Mr. Mayor R. Rex Parris.
Mayor R. Rex Parris
Oct. 27, 2013, article Lancaster Mayor R. Rex Parris has a big business dream: China reports that: Mayor R. Rex Parris dreams of creating an oasis for Chinese investment in this Mojave Desert town. He has taken numerous trips to China, wooing corporate leaders and government officials with his business-friendly ways. He talks boldly of opening a trade office in Beijing just for Lancaster, much like the one that California opened this year in Shanghai. And he even hopes to build a Buddhist temple in town to attract Chinese residents.
He hopes that Lancaster will become the largest Chinese corporation area in California. This might sound a little ambitious for a city tucked into a dusty corner of Los Angeles County not exactly known as a beacon for international commerce. But Parris' plan might just be working.
MAY 13, 2014, article Can A City Get To Net Zero? Lancaster, California reports that: The most recent National Climate Assessment supports the urgency Parris feels, but he also sees this as a good business opportunity. So he is doing all that he can as a community leader to position his community for survival and success in the world he sees coming. Becoming net zero, and producing more electricity than Lancaster uses, is just part of the mayor's overall agenda. He also wants to see Lancaster emerge as a central hub in the new energy economy.
May 04, 2016, Lancaster Mayor R. Rex Parris Praises BYD’s New Environmentally Friendly Electric Truck Line: City of Lancaster Mayor R. Rex Parris today praised the continued evolution of BYD’s environmentally friendly Master Plan, after the company announced plans to bring a full array of electric trucks to the marketplace. When other truck-makers are aimed directly at one of the key sources of pollutants in North American cities -- diesel trucks, BYD already builds a variety of superior electric busses at its North American Manufacturing Facilities located in Lancaster, and plans to build the new truck line in Lancaster as well.
Now, it was unable to be googled the source of the report on Internet, but, I clearly remember, once in home after work, Mayor R. Rex Parris was always stay in own reading room to study the technologies about renewable clean energy. While, majority of democratic elected Mayors are eagerly in looking for and busying in the activities of pleasing voters, for enjoying the vanity from showing up to public with useless saliva spraying.
More respectable is that his wife and his mother fully support his work. His family is an excellent assistant for an outstanding mayor.
Sept. 20, 2009, article Lancaster mayor is anything but politically correct - latimes reports that: After each City Council meeting, Lancaster Mayor R. Rex Parris heads home, flips on his TiVo and watches a replay of the town hall proceedings. His wife makes notes of the sections she feels her husband should review, along with suggestions of what he could have done better: Temper an angry exchange.
August 01, 2008, Lancaster City Mayor R. Rex Parris gets a hug from his Mother Jeanne Powers: Lancaster City Mayor R. Rex Parris gets a hug from his Mother Jeanne Powers, 81 years old as she joins a group walking Tuesday morning with the mayor during a 'Walk with the Mayor' program that was recently initiated at Lancaster City Park. Residents get to walk for about one hour with the mayor twice a week, and bring up whatever questions them like, while getting some exercise. Dozens of people have apparently been participating in the program, which started last month and have apparently been attracting more participants than regular council meetings.
People call Southwestern Ontario, the heartland of manufacturing in Canada - as Waterloo region.
I have been living in Waterloo city for more than 10 years; I felt that the region is the final hope for hard working Canadians with the economy continues in recession.
As my oral survey in workplace, in recent years, there more and more people lost job in Canada; they are gathering in Waterloo region to seek hope for livelihood making, from oil fields, farming area, fishing area, and other cities…
However, in Waterloo region – jobs are in losing with businesses closing or outsourcing.
The sad fact encourages me to think that how to create more employment opportunities and dig the reason what is in causing businesses decline.
Jan. 27 2014, I once wrote article The Fatal DNA of RIM and Canadian Enterprises: “RIM - Research In Motion Limited, a designer, manufacturer and marketer of wireless solutions for the mobile communications that headquartered in Waterloo, Ontario. As a successful high-tech enterprise, once was the pride of Canada. Now is BlackBerry Limited, its Headquarter is just several blocks away from my home.”
“Recent years, facing new competitors rapid rising, it has been retreating. The bad news are continuous, the sales decline, the stock devaluation, downsizing, the arguments of the privatization or so, every bad news have deeply hurt my nerves.”
“However, that made me most sad is from a gossip, that a second grade pupil said that her parents are both working in RIM, once, to be laid off together, their home will no money pay for mortgage, their new house will be repossessed by bank, She worries nowhere to live?”
“RIM, the total employee is nearly 20% of the population of it headquartered city, although that include the staff who works in the branches of other cities, but big proportion are from locals. So, its rise or fall will strongly impact the life of local community. However, for RIM's declining, besides the families of the founder, the families of their staff, and the governors of Canada, I think that, there are few people would care about.”
“For RIM's decline, people can find many sound reasons, however, I think that, the most fundamental one is the stifling intellectual work environment, which is that suppresses the free exertion of intelligence of the employees without a proper channel for employees expressing their views freely to have damaged the driving force for continuously self-revolution to fit the market that increasingly rapid changes.”
People may blame RIM’s decline to economic recession, however, in the same global economic situation, why there are more cell phone maker growing up, U.S.’ Apple, China’s Huawei, …
As my observation, the main reason is the poor management, rather than economic recession.
According to the experience from 16 years working in Canada, May 18, 2016, I once wrote article How to save Canada’s manufacturers from disappearing, in which, by some real cases of businesses’ closure, I presented sad facts that how poor management killed good businesses, some of them even were simply due to the trouble making of some reckless individual.
In article, I indicate that 3M Canad aves Energy 30% by ISO50001 show the direction for optimizing businesses management in Canada.
In China, as a senior engineer in metal material, I once participated in the drafting of the application documents of the ISO90001 for Oil wells drilling pipe. The deep impression on the ISO documents is that every aspect of the production to be refined and provided concrete steps with formulates specific instructions and regulations. More importantly, each specific operation puts specific person in charge - the responsibilities are clearly assigned to the specific individuals.
The ISO standards are acting as that of powerful business-law regulates the behaviors of the business’ members by tagging responsible on the forehead of individual to be exactly accountable for punishment and reward.
Accurate accountability will dramatically motivate employee’s self-esteem, and the self-esteem will drive them consciously full-hearted work in higher speed with avoiding mistake.
In the practice of ISO, the management is being conducted by the written instructions and to be enforced by written regulations, rather than by the management staff orally according to person accord.
3M Canad aves Energy 30% by ISO50001 also shows huge profit potential that has hidden in Canadian businesses, which can be dug out by an easy and a cheaper way – work performance liked reward under accountability.
For this end, the mayors will play a significant role.
The rational practice of US Mayor Mr. R. Rex Parris and Mr. Sheldon Day inspires me to review about the issue of social governance.
Desire and pursuit of a better life is the instinct of mankind, also is everyone's struggling for. However, the development of reality always deviates from people's hope, and in going far and far away.
Endless wars, endless terror attacks, the world has been deemed as a casino for free play of killing game. Besides those life threats, people have been suffering the infinite loop of the economic or financial crisis, and now is facing dilemma in many aspect…
Whether people agree or disagree, the reality is that, as higher animal, human beings have never been able to enjoy a civilization as that of higher animal should be, but, sustained in the civilization that belongs to lower animal under the Law of the jungle - a law of survival in wolf’s world.
As my view, for such sad reality, the root cause was that ignored the quality control for the people who campaign for or work on social governing.
In fact, there great many of democratic player are in low quality, more desire and ability for enjoying political privilege, less sense and capability for contributing the community.
Every politician would have a wish to positively influence the world, but the result is often counterproductive, especially, for the politicians in low-quality, the more efforts they made, the greater the destruction of the world.
In this regard, the widely respected democracy, in a large extent, has been developed in playing a role as a dirty ladder to assist low quality people easily seizing power and then malfunctioning social governance. The shocking facts revealed by British Chilcot report - Iraq War Inquiry was a perfect proof.
Irrational wars, financial crises, refugee flows..., democracy has developed into the source of evil in harming the world.
I have been questioning about the positive role of democracy, once wrote article to argue that It is high time to end the partisan politics, The Values and Democracy is entwined to castrate France and disorder whole world.
However, the rational practices of US Mayor Mr. R. Rex Parris and Mr. Sheldon Day lesson us that, even if in absurd democratic polity, there are also sensible officials, and even if under irrational democratic polity, as long as active efforts, a rational Gov-official can also make great contribution for society.
Feb. 28, 2016, report A Clash of Cultures at Alabama Factory shocked me very much, the good day of town Pine Hill and city Thomasville was over, due to their gave full of hope of the Golden Dragon plant seems encountered big trouble, it was that union came and organizing workers to fight against plant.
Most of democratic players respect Unions as the great value, due to they never concern effective social governing and national’s livelihood making in comparison with rational politician.
Nov. 1, 2016, I once wrote article Margaret Thatcher Changed The UK Forever By Defeating Unions and indicate that:
“There were reports that Britain will soon be developed as fourth large economy in world, for such a achievement, the first contributor should be Ms. Margaret Thatcher, it was she defeated Unions under a rational sense that Unions were attempting to substitute the rule of the mob for the rule of law, so that revived productivity in Britain.”
“Now, in Britain, the goods making is much cheaper than in Canada.”
“Dec. 5, 2015, in article The Strategic Vision for Trudeau Government of Canada, I indicate that: In the Era of agricultural economy, the geographic space is the living space. In the Era of market economy, the market space is the living space, without competitive products; a country will lose living space.”
“Obviously, rational Ms. Margaret Thatcher had hardly created foundation for Britons to strive for living space.”
Follow report introduced the plight situation of local employment and the happy of local officials for the investment of China’s business. The word "Ni hao" means how do you do, or how are you in Mandarin, which shows welcome for the arrival of guests.
Gov. Robert Bentley, flanked by Quingmin Li, Consul General China, Houston office, left, and Golden Dragon Copper USA Chairman Changjie Li, pose for photos with company, state and local officials at a May ribbon cutting ceremony during the grand opening of the company 2019s copper tubing plant in Pine Hill, Ala.
June 22, 2014, 5:00 PM
PINE HILL, Ala. — Burdened with Alabama’s highest unemployment rate, long abandoned by textile mills and furniture plants, Wilcox County desperately needs jobs.
They’re coming, and from a most unlikely place: Henan Province, China, 7,600 miles away.
Henan’s Golden Dragon Precise Copper Tube Group opened a plant here last month. It will employ more than 300 in a county known less for job opportunities than for lakes filled with bass, pine forests rich with wild turkey and boar and muddy roads best negotiated in four-wheel-drive trucks.
“Jobs that pay $15 an hour are few and far between,” says Dottie Gaston, an official in nearby Thomasville.
What’s happening in Pine Hill is starting to happen across America.
After decades of siphoning jobs from the United States, China is creating some. Chinese companies invested a record $14 billion in the United States last year, according to the Rhodium Group research firm. Collectively, they employ more than 70,000 Americans, up from virtually none a decade ago.
Powerful forces — narrowing wage gaps, tumbling U.S. energy prices, the vagaries of currency markets — are pulling Chinese companies across the Pacific. Mayors and economic development officials have lined up to welcome Chinese investors. Southern states, touting low labor and land costs, have been especially aggressive.
In the case of the Pine Hill plant, tax breaks, some Southern hospitality and a tray of homemade banana pudding helped, too.
“Get off the plane and the mayor is waiting for you,” says Hong Kong billionaire Ronnie Chan.
In March, Dothan, Alabama, held a two-day U.S.-China manufacturing symposium, drawing dozens of potential Chinese investors. On sale were T-shirts reading: “Ni hao, y’all” — combining the Chinese version of “hello” with a colloquial Southernism.
Chinese executives wandered around during a street festival, experiencing Americana by snapping photos of vintage ’60s muscle cars. A Chinese company, in a deal negotiated before the symposium, announced it would bring a 3D printing operation to Dothan.
Among other Chinese projects in the United States that are creating jobs:
— In Moraine, Ohio, Chinese glassmaker Fuyao Glass Industry Group Co. is taking over a plant that General Motors abandoned in 2008 and creating at least 800 jobs. The site puts Fuyao within four hours’ drive of auto plants in Ohio, Kentucky and Indiana.
— In Lancaster County, South Carolina, Chinese textile manufacturer Keer Group is investing $218 million in a plant to make industrial yarn and will employ 500. South Carolina nudged the deal along with a $4 million grant.
— In Gregory, Texas, Tianjin Pipe is investing over $1 billion in a factory that makes pipes for oil and gas drillers. The company expects to begin production late this year or early in 2015. It will have 50 to 70 employees by the end of this year and 400 to 500 by the end of 2017.
The United States and China have long maintained a lop-sided relationship: China makes things. America buys them. The U.S. trade deficit in goods with China last year hit a record $318 billion. And for three decades, numerous U.S. manufacturers have moved operations to China.
The flow is at least starting to move the other way. One reason is that in the past decade, the cost of labor, adjusted for productivity gains, has surged 187 percent at Chinese factories, compared with just 27 percent in the United States, according to Boston Consulting Group.
In addition, Chinese electricity costs rose 66 percent, more than twice the United States’ increase. The start of large-scale U.S. shale gas production has helped contain U.S. electricity costs.
And the value of China’s currency has risen more than 30 percent against the U.S. dollar over the past decade. The higher yuan has raised the cost of Chinese goods sold abroad and, conversely, made U.S. goods more affordable in China.
Those rising costs have cut China’s competitive edge. In 2004, manufacturing cost 14 percent less in China than in the United States; that advantage has narrowed to 5 percent. If the trend toward higher wages, energy costs and a higher currency continues, Boston Consulting predicts, U.S. manufacturing will be less expensive than China’s by 2018.
Cost isn’t the only allure. As Chinese companies build more sophisticated products, they want to work more directly with U.S. customers.
“Being close to the marketplace is good for everybody,” says Loretta Lee, a Hong Kong entrepreneur who just opened a shoe factory in Tennessee.
Sometimes, political pressure nudges Chinese firms into investing in America. Tianjin Pipe, for instance, began building its Texas plant after the U.S. imposed sanctions against Chinese-made pipes in 2010, notes Thilo Hanemann, Rhodium’s research director.
Local officials here in southwestern Alabama went out of their way to lure Golden Dragon, which wanted to build a plant to make copper tubing for air conditioners.
At first, the company considered Thomasville, just across the border in Clarke County. But Thomasville didn’t have any suitable sites after Golden Dragon decided it needed three times as much space as originally sought.
“I was almost in a panic,” recalls Thomasville Mayor Sheldon Day.
But Day spotted an industrial park in Wilcox County with plenty of space. Day says he didn’t mind the project going to a neighboring county. The plant would employ Thomasville residents, too.
And there was another benefit: Wilcox County — stuck with 15.5 percent unemployment, Alabama’s highest — qualified for extra aid. It landed $8 million in state and federal grants to help build an annex road and sewage lines for the project.
Wilcox County also gave the company 100 acres of a 274-acre industrial park it bought for $1.2 million and a break on local property taxes. And Alabama offered to reimburse the company up to $20 million of its costs for building the $100 million factory. It will get the full amount if it ends up hiring 500 people, says George Alford of the Wilcox County Industrial Development Authority.
Local officials assembled all the public agencies and utilities Golden Dragon will have to deal with — from Alabama Power to the Port of Mobile — in one room on one day so company executives could have their questions answered at once.
The message, Day said, was: “If you come here, we’ll hold your hand.”
A banquet was organized with both traditional Southern fare, such as pinkeye purple hull peas, and Chinese dishes from Thomasville’s New China Buffet restaurant.
When the visiting Chinese were seen devouring homemade banana pudding, “we took them the whole tray,” Day says.
To prepare for future banquets, Thomasville is buying Chinese-style dining tables with built-in turntables.
Still, culture and language can remain a barrier. Local officials hastily replaced a black-and-white banner welcoming Golden Dragon after learning that the colors signified a funeral to the Chinese.
“Nobody wants a faux pas,” says John Clyde Riggs, executive director of a regional planning commission.
Golden Dragon and the future Dothan 3D join two other Chinese firms in Alabama: Continental Motors in Mobile makes piston engines for aircraft. And Shandong Swan USA in Montgomery makes saws for cotton gins.
Alabama and other Southern states have followed the example of South Carolina, which nabbed the first Chinese plant in America 14 years ago when appliance giant Haier built a refrigerator plant in Camden.
John Ling, who runs South Carolina’s Shanghai office, has an empty factory he’s pitching to Chinese firms. It’s been shuttered for four years — since the former owners closed it and moved the jobs to China.
“We will see more and more Chinese projects coming,” Ling says. “It’s at the very beginning.”
Follow are some links of related reports.
Supply Chain News: Chinese Manufacturers Struggle with US Operations, as Culture Clashes often Ensue
While Japanese Lean Translated Well, Top-Down, Low Cost Labor Mindset of Chinese Firms does Not, Well-Known Writer Says
SCDigest Editorial Staff
It's still relatively small in absolute terms, but the level of investment by Chinese companies in new or existing US manufacturing operations continue to grow - but a new report says labor issues continue to plague many of these operations.
The growing Chinese manufacturing presence in the US was highlighted two weeks ago, when it was announced that China's Haier would acquire the appliance business from GE - and thus its sprawling manufacturing operations centered around Louisville, KY - for about $5.4 billion.
Haier had previously opened its own factory in South Carolina, but has struggled to gain much traction in the US. There have been a few other recent noteworthy Chinese manufacturing investments in the country, such as in 2014, when Fuyao Glass Industry Group acquired part of the well-known GM assembly plant in Moraine, OH, shuttered in 2008 and made famous as the focus of the documentary film "The Last Truck: Closing of a GM Plant." The new Fuyao factory began producing car windshields in late 2015, and will employ nearly 1000 workers when it ramps up to full production later this year.
Chinese direct foreign investment in the US is rising, though how much is specifically for manufacturing (greenfield or acquired sites) is hard to discern from the data. While overall Chinese DFI in the US rose from $11.9 billion in 2014 to $14.7 billion last year, that was spread across multiple areas, from banking and other service firms to commercial real estate, farming and other areas, in addition to manufacturing. That data is from the Rhodium Group, which tracks these investments.
But manufacturing is a significant part of the total, appearing to involve about $3.5 billion in investment by Chinese firms in the US in 2015. Rhodium notes that "The deal pipeline is at an all-time high at the beginning of 2016. We count more than $22 billion worth of pending acquisitions, " which it says are focused on focused on communications and other tech manufacturers (e.g., Omnivision, Western Digital), and electronics (e.g., Philips' LED unit), in addition to the GE Appliances deal.
Rhodium further reports that potential future capital expenditures related to announced greenfield projects add up to more than $10 billion, including a new Shandong Sun Paper pulp plant in Arkansas ($1.36 billion), Faraday Future's $1 billion investment in an electric vehicle plant in Nevada, and a dairy plant in California by Feihe Dairy.
Can the Chinese Make US Plants Work?
Unlike the wave of Japanese factories in the US that started showing up in the 1980s, and introduced Lean processes that led to success not only in their own plants but eventually in thousands of other US factories over time, the Chinese have largely struggled to get things right in their new US operations, according to a recent article by well-known business writer Jeffrey Rothfeder in the New Yorker magazine.
"Today, no Western manufacturer can hope to compete on a global stage without adopting some version of Lean production - an undertaking that remains difficult for many firms, because it can require altering not just assembly processes but a company's culture, especially where worker roles, management, and methods of innovation are concerned," Rothfeder writes.
But it is in these human resources areas that Chinese manufacturers are weakest, Rothfeder says.
"The country's factory boom was made possible, instead, by low wages, subpar conditions, and few benefits," Rothfeder adds. "That strategy can succeed in emerging nations, especially ones with large labor pools, but it is not feasible in developed economies."
The problems of Chinese factories are most apparent in the relationship between managers and employees, Rothfeder notes. He says Chinese firms embrace a strict top-down view of a factory as a place where the authority of supervisors is paramount, and workers are expected to take directions, perform tasks, do their work, and go home without complaining.
There have been many reports Chinese employers in the U.S complaining that American workers are too outspoken and independent and are unable to follow rules. But US workers are often pushing back. At Haier's factory in South Carolina, for example, Chinese managers had to be sent back to Asia because they were alienating workers and threatening productivity.
At the Chinese-owned Golden Dragon copper-tube factory in Wilcox County, Alabama, workers last year voted to form a union - rare in this and other Southern right to work states - amidst complaints of low pay and poor working conditions at the plant.
"The perception that employees are interchangeable and replaceable has led turnover at factories in China to average an astounding 35% a year among workers employed at least six months," Rothfeder quotes one Chinese consultant as telling him. But Chinese companies are seeing the same kind of turnover in their US plants - a death sentence in the here, where employee skills, loyalty, continuity, job satisfaction and creativityÃ¢â‚¬â€?in other words, Lean requirements - determine profitability."
Rothfeder says another factor is that many of these Chinese companies are state-owned, and feel less pressure to be profitable then privately held Chinese firms, often under bidding US rivals to gain a foothold here. But will they be around for the long term?
Rothfeder concludes with a warning to governments across the US to be circumspect about offering sweetheart deals to Chinese companies considering making investments in their regions.
"If the manufacturers turn out to be nothing more than low-paying loss leaders, cities may find that they've given away more than they receive in return," he notes.
Are you surprised with the struggles Chinese companies are having with US workers? Will they get it sorted out in the end? Let us know your thoughts at the Feedback section below.
By Brendan Kirby
on June 03, 2012 at 7:15 PM, updated June 03, 2012 at 8:01 PM
THOMASVILLE, Alabama -- Mayor Sheldon Day exudes the same enthusiasm about economic development whether he’s talking to a recruitment target or, as was the case this afternoon, to a Japanese news crew.
Representatives from the Japan Broadcasting Corp. came to see the 274-acre property in neighboring Wilcox County that soon will become home to the giant Golden Dragon Precise Copper Tube Group plant. It is one of 7 projects that will bring some $300 million in investments to the greater Thomasville area over a 3-year period.
Yuichiro Hanazawa, chief correspondent in Japan Broadcasting Corp.’s Washington bureau, wanted to know how Thomasville landed the project and how it might change local perceptions to China, where the manufacturing company is based.
Day said state tax incentives, proximity to a rail line and access to the Port of Mobile each played a role in beating out 61 other communities that bid on the project.
But most importantly, he said, is improved cooperation among neighboring cities and counties that used to compete with one another, and a realization that rural Alabama could not beat out large metro areas on their terms. In so doing, he said, Thomasville and the surrounding areas have tried to turn a perceived weakness into a positive.
“We like to think there’s a new economic development theme that is starting to emerge,” he said. “Many, many companies would prefer to locate in a rural area because of the wholesomeness of a rural area. You don’t get the traffic jams....
“We thought for years, we had to keep up with the Mobiles and the Birminghams and the Huntsvilles,” he added. “We thought we had to do economic development their way.”
Secret weapon: banana pudding
View full sizeJapanese reporter Yuichiro Hanazawa asks Thomasville Mayor Sheldon Day on Sunday, June 3, 2012, about how the area landed a Chinese copper plant. Japanese cameraman Torao "Tiger" Kono films the interview for the Japan Broadcasting Corp. (Press Register/Brendan Kirby)
Day talked about setting up a reception for the Golden Dragon announcement. He said officials contacted a local Chinese restaurant, which prepared traditional Chinese fare alongside Southern comfort food.
The Golden Dragon executives especially loved the banana pudding, Day said.
“We say banana pudding is our secret weapon,” he said. “Most big cities won’t serve banana pudding.”
Hanazawa asked the mayor about American attitudes toward China, saying he was particularly struck by the negative tone toward the country from the Republican presidential candidates.
“I feel more than ever that business partnerships can bridge the gap and bridge the differences of our governments,” Day responded.
Hanazawa said in an interview that he felt the energy and enthusiasm of the local officials he talked to.
“Now is a very good time for China to invest,” he said. “This is a good thing for China and the local area.... This is very similar to what Japan did (in America) 20 to 30 years ago.”
The area certainly could use the jobs. Unemployment in Wilcox County, 15.1 percent, is the state’s highest. Clarke County, where Thomasville is, also is above the state average.
Fighting Alabama’s highest unemployment rate
Tree-clearing work already has begun on the Wilcox County site. Golden Dragon will take ownership of about 140 acres within the next 30 days, and construction should take 18 months to 2 years. Day said he anticipates about 1,000 temporary construction jobs and 300 to 500 permanent jobs at the precision copper plant.
View full sizeGeorge Alford Jr., of the Wilcox County Industrial Development Authorities, talks on Sunday, June 3, 2012, at the site of a future Golden Dragon Copper plant about what the project means to his county, which has Alabama's highest unemployment rate. (Press Register/Brendan Kirby)
George Alford Jr., of the Wilcox County Industrial Development Authority, said the rest of the property hopefully will become the home to future businesses in what will be known as the Thomasville-West Wilcox Industrial Park.
Alford and Day said their communities have worked hard to forge an alliance in economic development. Although Thomasville has only about 4,200 residents, it is a regional retail hub, and Day counts a population of some 80,000 people who shop and eat in his city.
As a result, a big industrial project benefits Thomasville whether it is in the city limits or not, he said.
Originally, in fact, Golden Dragon had settled on a Thomasville site but then concluded it was too small to meet future expansion needs. As it happened, Day was meeting in his office with Alford the day he learned about Golden Dragon’s concerns.
Day said he walked back into his office, where he and Alford were talking about the Wilcox site as the possible location for a different project, and went back to the Golden Dragon representative with a conceptual drawing.
“Sheldon pulled a plat out of his pocket that we were meeting about and said, ‘How about this one?’” Alford said.
More Chinese investment to come?
Economic development officials said they foresee a possible avalanche of investment from China, and they are doing everything they can to court it.
Gov. Robert Bentley and other officials will meet with Hong Kong’s top official, Donald Tong, at a reception in Montgomery on Tuesday. The following day, officials leave for a 10-day mission to China and Taiwan in an effort to teach companies how to do business in Alabama.
Day said the local high school has installed a college-level welding program to prepare gradates to work for steel and metals manufacturers. He said he is working on a number of high-profile prospects, some of them even larger than Golden Dragon.
Monroe County officials want a piece of that action, as well. Pete Black, president of the Southeast Regional Development Center, said a Chinese-language instructor this fall will teach Mandarin at Monroe County High School and Monroeville Elementary School.
Black said he will join the group headed to China next week and hopes to further efforts to attract Chinese investment to Monroe County.
“It’s a work in progress,” he said. “We don’t have anything imminent.”
A Clash of Cultures at Alabama China's Factory
China’s Golden Dragon struggles to find common ground with workers
By James R. Hagerty
PINE HILL, Ala.—Golden Dragon Precise Copper Tube Group, a Chinese company that opened a factory nearly two years ago in this rural town to make pipes used in air conditioning machinery, says it has tried hard to please its American workers.
GD Copper, as the U.S. subsidiary is known, created about 290 jobs for locals with the $120 million plant in Wilcox County, Ala., which is among the dozen poorest counties in the U.S. The company hosts employees’ families at an annual picnic and gives each worker a turkey at Thanksgiving. A banner in steel-walled factory reads in part: “You control OUR future.”
Yet tensions, some from cultural misunderstandings, persist between the company and its American employees, providing a cautionary tale for the growing number of Chinese firms making acquisitions or establishing new plants in the U.S.
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The plant produces copper tubes used in air-conditioning and refrigeration. WES FRAZER FOR THE WALL STREET JOURNAL
Chinese-owned GD Copper has invested about $120 million to build a plant in Pine Hill, Ala., its first in the U.S. The operation has struggled with employee relations since production began in 2014. WES FRAZER FOR THE WALL STREET JOURNAL
A union, which workers narrowly approved in 2014, is pressing for an increase in wages that currently start at $11 an hour. Employees have alleged some unsafe work practices, such as operating hazardous machinery without adequate safeguards, leading to $38,700 in fines from the U.S. Occupational Safety and Health Administration.
GD Copper officials said they have improved safety practices.
In an attempt to bridge cultural chasms, the company in 2014 hired KC Pang to head human resources and public affairs. A 61-year-old Malaysia-born Chinese, he emigrated to the U.S. 35 years ago and has worked as a university professor and executive for FedEx Corp.
Some workers say that U.S. citizens don’t have much authority at the plant. Golden Dragon relies on about 70 workers from China, brought in on visas and described as advisers, to help run the plant. The company houses the Chinese workers in 10 prefab dormitories and employs a Chinese chef to feed them.
The Chinese workers live in prefab dormitories alongside the factory, surrounded by pine woods. PHOTO: WES FRAZER FOR THE WALL STREET JOURNAL
GD Copper says the Chinese workers are here in part for training and translating. “Our goal is to slowly train the American workers to take over the management of the company,” said Mr. Pang.
GD Copper’s president is a Chinese citizen, as are at least two department heads. Phillip Sherrill, a veteran manager of other factories who headed production and maintenance for GD Copper, left in November after about 19 months. A Chinese citizen is now handling that job. GD Copper and Mr. Sherrill declined to comment on his departure.
Some of the banners hung inside the factory have a hectoring tone. One reads: “One Quality escape erases All the good you have done in the past.”
In the 1980s, many U.S. companies stumbled as they raced into China. Some chose incompatible local partners; others tried to sell products ill-adapted for China. Now Chinese companies are working out how to operate in the U.S.
Chinese companies’ spending on acquisitions and new facilities in the U.S. last year totaled a record $15.7 billion, up 32% from 2014, according to Rhodium Group, a research firm. It is an echo of Japan’s move into the U.S., but with Chinese characteristics.
Patrick Van den Bossche, a partner at consultants A.T. Kearney, said Japanese companies arrived with well-established procedures and taught Americans to conform. By contrast, he said, Chinese companies work more by trial and error, and are more open to learning from Americans.
State and local governments gave GD Copper incentives including free land, money for worker training tax benefits and a grant of $20 million to defray capital spending.
The Chinese company was then taken aback when workers, unhappy with the pay and difficulties in communicating with Chinese bosses, began a unionization drive a few months after the plant opened. The South generally has low union-membership rates, but the United Steelworkers union represents workers at paper mills near GD Copper’s site, and its workers aligned with that union.
Alabama Gov. Robert Bentley sent letters to workers urging them to reject the union, warning that it might scare other companies away. But in November 2014, workers approved the union in a 75-74 vote. GD Copper appealed to the National Labor Relations Board to demand a new vote, arguing that the union organizers had used scare tactics.
You give them respect. They appreciate that better than money.
—KC Pang, GD Copper
KC Pang, head of human resources, at a nearby Chinese buffet restaurant. PHOTO: WES FRAZER FOR THE WALL STREET JOURNAL
By mid-2015, Golden Dragon dropped its appeal and agreed to negotiate with the Steelworkers. Daniel Flippo, a United Steelworkers official involved in the union drive, said he expects an agreement soon.
Mr. Pang has established a rapport with Mr. Flippo. The union official, who initially had trouble remembering Mr. Pang’s name, jokingly calls him P.F. Chang, after the restaurant chain.
GD Copper initially didn’t give managers and workers enough training in such areas as safety and understanding foreign cultures, Mr. Pang said.
Some American workers thought the Chinese trainers didn’t trust them. “We are independent people here, and the Chinese are so hands-on,” said an American who worked at the plant until early 2015.
Mr. Pang said that the trainers were trying to show workers how to do tasks but that communication wasn’t adequate. One problem is that some of the Chinese brought in as interpreters have limited command of English.
Mr. Pang won’t say whether Golden Dragon will agree to higher wages. “We look at all kinds of options,” including how to improve quality and productivity, he said, adding: “You give them respect. They appreciate that better than money.”
I can’t say I see much change.
—Tanya Pickens, GD Copper employee
Not all workers are mollified. “I can’t say I see much change,” said Tanya Pickens, a worker on the negotiating committee. She said American workers are punished more harshly for safety lapses than are Chinese and get shorter lunch breaks.
Mr. Pang said all salaried workers, not just Chinese, get one-hour lunch breaks, while hourly workers get 30 minutes. “All employees are treated equally and fairly,” he said.
State and local agencies provided land, roads, worker-training programs, tax breaks and other incentives to attract the Chinese company. PHOTO: WES FRAZER FOR THE WALL STREET JOURNAL
Write to James R. Hagerty at firstname.lastname@example.org
A Clash of Cultures at Alabama Factory
JAMES R. HAGERTY
Updated Feb. 28, 2016 12:55 p.m. ET