A Look Inside The Fuyao Glass Factory – And Why Chinese Companies Are Coming To The USA
Work has started on Fuyao Glass America, the Chinese company taking up residence in the former G.M. Moraine plant south of Dayton.
Of course, all the news about Fuyao’s investment of hundreds of millions of dollars in a Dayton factory comes after years of stories about U.S. companies opening up shop in China.
You’ve heard the story before—U.S. factories move to China, jobs are lost, whole towns shattered. But lately, things are shifting: Chinese ventures in the U.S. have spiked.
In 2014, Chinese companies invested more than 12 billion dollars in projects in the U.S., including a handful of big investments in manufacturing. That’s up from about zero in the mid-2000s.
This shift is obvious in Dayton, where a Chinese auto glass maker is taking over a notorious former G.M. plant., a cavernous building that was left behind when G.M. closed up manufacturing operations at its Moraine plant in 2008. Fuyao Glass America Inc., a new subsidiary of one of China’s biggest auto-glass makers, bought up almost half of the old plant about a year ago and announced it would be bringing manufacturing operations and 800 jobs to the area. Recently the number of jobs promised nearly doubled, to over 1500.
Rebecca Ruan-O’Shaughnessy, one of the first employees of Fuyao Glass America, says they got the keys to the giant maze of a building in July.
“We didn’t know where to come in,” she says. “We just see this big building had no idea how to get in.”
Just a few years ago Dayton’s economy was in shards, and the G.M. Moraine plant stood as a sometimes painful symbol of the past. Now, a mix of Chinese and American workers are set up at tables and chairs Fuyao scrapped from G.M.’s leftovers.
Ruan-O’Shaughnessy opens the door to a classroom of dozens of attentive workers in safety vests—it’s the first day for the first 40 production workers, who were hired through a temp agency. She says the company’s already had 1800 applications just for temp jobs here that could turn into permanent, full-time jobs with benefits after 90 days.
Sitting in a bare office, John Gauthier, the president of Fuyao Glass America, says the symbolism is clear: the Recession is in the rearview for this company town.
“It means something to us here, to be able to come here and reoccupy this [and] bring this factory back to life,” Gauthier says. He moved from Mt. Zion, Illinois, where he was the manager of a glass plant that’s also been acquired by Fuyao and will remain open as a supplier to this plant.
Gauthier says entry-level workers can expect to be paid in the range of $12 to $14 an hour, which he says is similar to prevailing wages for area manufacturers, although he wouldn’t offer up a specific figure. Past experience in the auto industry is helpful for applicants, but isn’t required.
But this Midwestern story also reflects a trend: Chinese companies are opening up shops from Texas to Indiana, with more on the way. Experts say that’s partly because wages are on the rise in China, but in the U.S., real wages for manufacturing workers have been in steady decline, particularly in the case of auto parts workers. In Ohio, auto parts workers saw a wage decline of 9.4 percent from 2003 to 2013.
Thilo Hanemann is the research director at the Rhodium Group, a research firm in New York. He says China is also less dependent on cheap labor in general.
“The growth model in China is changing very rapidly and so companies are moving from low value-added goods, socks and underwear, towards more advanced goods and services,” he says.
So Chinese companies need more of the kinds of skilled labor available in the U.S. Plus, they want to be close to their customers—in this case, U.S. automakers. Between that and changes in U.S. and Chinese policy, companies like Fuyao calculate they can actually cut costs in the long-run by setting up here.
Mike Fullenkamp, a supervisor at Fuyao, says he loves what he’s heard about the head of the company, Chairman Cao. He’s got a reputation as a charitable guy.
“He’s very positive, very humble,” he says. “I mean he’s a man of wealth, but he earned it himself.”
The state of Ohio offered close to $14 million in grants and tax incentives to get the company here. The total number of jobs could top 1500, and Sinclair Community College is partnering with the company to recruit workers for the positions.
Fullenkamp takes me outside the plant on a golf cart. He says not long ago, this place looked bad, a parking lot with cracked cement, overgrown with weeds.
“The guards said they used to see a buncha coyotes running across and all that,” he says. “We’ll probably still see that, but we’re trying to tame them down a little bit. Let ‘em know it’s our home now instead of theirs.”
Fullenkamp says the company hopes to have nearly 20 lines up and running, shaping and finishing glass for almost all the major auto makers, by 2018. At five o’clock, the workers on their first day file out to their trucks and SUVs and drive off—looking ahead through glass that could, soon enough, be made in Dayton.
Lewis Wallace is WYSO’s managing editor, substitute host and economics reporter. Follow him @lewispants.
As American owned corporations continue to outsource American jobs for their own individual prosperity, it appears that China, which will become the world’s number one economy next year, has its eyes on making money using American workers. Irony is not dead. It is the changing of the guard. Thanks to the Alliance for American Manufacturing for highlighting this story.