Skip navigation

Chinese OEs, Suppliers Face Challenges in U.S.

Understanding the different ways American workers think, create and manage; competing for talent; and meeting quality demands are some of the main hills Chinese firms must climb.

DEARBORN, MI – A different language and time zone are not the only hurdles Chinese auto companies face when setting up operations in the U.S.

The greatest obstacle to gaining traction usually is understanding how American workers think, create and manage, conclude panelists at a Detroit Chinese Business Assn. conference here.

“The United States requires a completely different labor-management style for production workers, office workers, even the forklift drivers,” Ping Yu, CEO of Jing-Jin Electric says.

Right now Jing-Jin, which assembles traction motors for electric vehicles and wants to establish a Michigan-based sales office, is looking to recruit more workers with what Yu calls “cross-nation experience,” those who are well-versed in both U.S. and Chinese management styles.

“You really need to have a very different management style (in the U.S.). We’re lacking people who know how to do this,” says Yu, who worked on alternative technology for General Motors in China and the U.S. before starting Jing-Jin in Beijing in 2008.

Not making matters easier is the intense competition for qualified workers right now, notably for engineers in southeastern Michigan, home to many supplier and OEM technical centers.

“The economy is coming back and engineers have more options, so it is getting fierce,” Jianmin Gu, deputy general manager for Chinese auto maker Changan’s U.S. research and development center in Plymouth, MI, tells Ward’s.

Changan, one of China’s Big Four domestic auto makers, opened the suburban Detroit R&D center in January with a goal to hire 30 chassis engineers this year.

So far, the company has hired six or seven people, whom Gu describes as experienced, having previously been employed by U.S. OEMs or Tier 1 suppliers.

By the end of June, Changan hopes to have about 10 engineers working on Chinese-market models from the Plymouth facility.

Being a relative unknown in the U.S. also makes the recruitment process difficult, Gu concedes, noting engineers hired thus far have come via internal referrals.

“We offer very competitive salary and benefit packages, as well as greater career opportunities, because the China market is booming,” Gu says.

China-based Atra Plastics already is producing locally for U.S. customers, including GM, to which it supplies decorative interior trim for the Lansing, MI-built Buick Enclave cross/utility vehicle from its Dearborn Heights, MI, facility.

Atra President Wei Wang says his company’s toughest task in the U.S. was landing its first contract here, especially given the strict quality levels demanded by potential OE customers.

Other supplier executives on the panel echo Wang.

“They want 30% less cost but say they want higher quality (components) than (those already made) in the U.S. That’s very complicated,” says John Zheng, president-Promax Engineering of Shanghai. Promax supplies cast, stamped, forged and molded auto parts to local customers by way of a Detroit-area warehouse near its Canton, MI, U.S. headquarters.

Despite the challenges of setting up and maintaining operations in the U.S., Jing-Jin’s Yu is pondering local manufacturing capacity for a number of reasons.

Jing-Jin’s 150-kW (201-hp) electric motors are heavy, up to 176 lbs. (80 kg), making them difficult to ship, Yu says. Plus, OEM customers typically prefer powertrain components to be made near vehicle-assembly lines for technical support and quality reasons.

While U.S. wages are much higher than those in China, “labor component in (Jing-Jin’s) cost structure is very low,” Yu says, because so much of its production process is automated. He estimates Jing-Jin employs 50-60 people on one Chinese production line.

“The benefits can outweigh the cost difference between the U.S. and China, especially when the market is smaller.”

[email protected]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.