Encouraging
Chinese automotive suppliers to set up in Detroit might seem a
provocative move, given the problems facing the region's home-grown
suppliers.
Yet that's exactly what a US trade delegation hopes to do and it has already had some success.
The delegation is from Wayne County, a region of the state of Michigan that includes Detroit and a large chunk of the US car industry. It has just come back from a two-week visit to China encompassing four cities -- Chongqing, Wuhan, Nanjing and Beijing - that are strong in the production of automobiles and parts.
To attract FDI, Wayne County plans to open offices in three Chinese cities including Chongqing, the new mega-city which is also the site of Ford's first Chinese joint auto-making venture -- more on Chongqing here.
Wayne County Executive Robert Ficano, who led the delegation, believes the time is ripe to attract Chinese FDI to his region. Because of the growing trade and currency frictions between China and the US, he argues that China is keen to invest abroad as a way to keep trade relations sweet.
The initiative takes place against a bleak backdrop for the US component suppliers. Since Since 1999, approximately 35 suppliers have filed for Chapter 11 bankruptcy protection, hit by the combination of declining orders, pricing pressures and higher raw material costs.
Detroit's struggling carmakers are pressing suppliers to relocate manufacturing operations to China and other low-cost countries. Ford, for example, expects to buy more than $2.6bn in components from China this year, up 63% from about $1.6bn a year ago.
By encouraging Chinese suppliers to set up in Detroit's backyard, Ficano hopes to reverse the tide -- albeit slightly -- and so lessen the job losses created by this "hollowing out" of Detroit's traditional supplier base.
Following a similar trip last year, China's third-largest maker of molds, Tianjin Motor Dies, has now opened an office in Troy, Michigan and another Chinese firm, Tempo Group, is to establish an automotive R&D facility in Wayne Country with plans to hire up to 200 people.
More on the Wayne County website here.
