It should surprise no one that Chinese auto makers and suppliers are making a beeline to the Motor City. The Detroit area is a magnet for automotive related companies, because it represents the greatest geographic concentration of auto makers and suppliers to be found anywhere in the world.
Everyone knows Detroit is home to General Motors, Ford and Chrysler. But because of the automotive talent and experience that resides in Southeast Michigan, other auto makers have established major technical centers and design studios in the area. Toyota, Nissan and Hyundai-Kia all have located here. In fact, Toyota recently doubled the size of its giant engineering campus.
Major Tier 1 suppliers from Germany, Japan, South Korea, U.K., France, and Italy also have built engineering centers and offices here. And two prominent automotive design schools at the College for Creative Studies and Lawrence Technological University attract students from all around the world.
That’s why the Chinese are moving in. Companies such as auto maker Changan or supplier Wangxiang don’t see shuttered factories when they look about the Detroit area, they see opportunity. Even more, they recognize they have a lot to learn from Detroit’s automotive community.
Detroit is recognized as a center of excellence for vehicle safety and emissions, two critical areas where China has a lot of catching up to do. Official sources peg China’s annual motor vehicle fatality rate at 64,000, twice that of the U.S. Unofficial sources say it could be four times higher.
China also has a well-known problem with air pollution, something U.S. auto makers have been ameliorating since the 1970s. Chinese auto makers know they will never be able to sell new cars in developed countries until they design vehicles that can meet the most stringent safety and emissions regulations. And they know they can easily hire the talent with the know-how in Detroit.
But it’s not just a one-way relationship. Chinese auto makers and suppliers have a lot to contribute to Detroit’s diversity of automotive knowledge. China graduates more engineers than any country in the world, and the U.S. currently faces a shortage of engineers.
Chinese companies already are buying closed factories and empty office buildings in Southeast Michigan and are hiring the American talent they need to staff those operations. Ultimately, these folks will provide a great knowledge and linguistic base for exporting back into China.
Some Americans chafe at the fact foreigners are moving in. But foreign direct investment has poured tens of billions of dollars into Michigan’s economy, bolstered its tax base and brought a rich cultural variety to the region. Sure beats the alternative.
The Chinese automotive industry is going to invest in America. For all the reasons listed above, it simply has no choice. But where will it put most of that investment? Japanese auto makers put their headquarters on the West Coast. The Europeans put theirs on the East Coast. Wouldn’t it be smart for Michigan to capture most of China’s automotive investment in North America? Sure it would.
That’s why Michigan's political and corporate leaders need to seek out and welcome the Chinese with open arms.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline” for WTVS-Channel 56, Detroit, and “Autoline Daily,” the online video newscast.