Friday-Sunday, January 19-21, 2018 CHINA DAILY USA

20IN DEPTH China deepens auto ties in Michigan At the international auto show in Detroit this week, a handful of Chinese companies showed off their wares. Chinese have invested billions in the US automotive industry, with most of it going to Michigan, reports Paul Welitzkin from the Motor City.

he rising role of Chinese invest- and safety software company in Ann Arbor. ment in the US auto industry, par- He is a native of Taiwan who studied at the ticularly in the state of Michigan, University of Michigan. T was on display last November “We have a series of software products that when two organizations hosted we sell to manufacturers around the world events in the same week related to the indus- including auto-related companies,” he said. try that still defi nes the Wolverine state and Quantum software is used to help man- its economy. age an auto plant’s safety program and keep In Dearborn, home of Ford Motor Co, the track of the handling of environmental waste. Detroit Chinese Business Association (DCBA) Quantum does business in North America sponsored its US China Auto Export Forum, and China and the company has 50 employ- featuring auto industry executives, compa- ees in Ann Arbor, 120 in the Chinese main- nies, entrepreneurs and government offi cials land and 25 in Taiwan. from Michigan and Canada. Hsiao expects the US-China auto relation- Across town in a northern Detroit suburb, ship to become closer. “I think the relation- the newly established Michigan US-China ship will become even tighter. A lot of Chinese Exchange Center, hosted a delegation from companies are now setting up operations in the China Wuxi Die and Mould Trade Asso- the US and that will continue,” he said. ciation at a gathering that included auto- Hsiao is also the CEO of Logic Solutions in related companies, executives and govern- Ann Arbor, which will benefi t from the shift ment offi cials. Cai Leiming, president of the to electric vehicles (EVs) and autonomous association, signed a cooperation agreement cars. “Both EVs and driver-less vehicles will between her organization and the exchange need a lot of software for sensor systems and center to promote cross-border investment artifi cial intelligence. We can provide that and trade. software to auto companies,” he said. “The partnership with the Michigan-US Nathan Graham is an attorney with Frago- China Exchange Center is important to us men, a national law fi rm with an offi ce in because American industry, particularly the Troy, a Detroit suburb. Fragomen assists the auto industry, is somewhat mysterious to us. Feng Xingya (third from right), chairman of GAC Group. JUDY ZHU /CHINA DAILY Big 3 auto companies and their suppliers in We would like to learn more and I think we getting overseas workers to become eligible can with this platform,” said Cai. to work in the US. The Chinese have invested $3.15 billion Graham said the industry recovery has in the state since 2003 with about 73 per- spurred demand for engineers and software cent of that in auto-related companies and developers. “These people are in demand technology, according to Kevin Kerrigan, because the car of today is almost more com- senior adviser for automotive initiatives for puter than it is a machine,’’ he said. “Our busi- Michigan and the Michigan Economic Devel- ness with China has been steadily increasing opment Corp. over the last fi ve years. We are seeing more The New York-based Rhodium Group said Chinese engineers and developers who want the Chinese have invested more than $4.3 to work in the US auto industry.” billion in the US auto industry with about Graham said that the US industry is attrac- 75 percent of that in Michigan. California is tive right now. “The Chinese are intensely second with about 8 percent. interested in making money. When the US “We have been importing components industry is as strong as it is now, the Chinese from China for many years. If we have the are attracted to working here,” he said. opportunity to bring a Chinese company here that will create jobs in Michigan that is a Future investment good thing. The auto industry is truly global. Hong of the Center for Automotive We sell our products in China, so I think it’s Research said patterns are developing around reasonable to expect China to sell products Chinese investment. “(Chinese) companies here,” Kerrigan said. A production line inside the CW Bearing USA headquarters in Brian Gao (left) of the Detroit Chinese Business Association (DCBA) and are setting up R&D (research and develop- Northville, Michigan, which opened in 2017. CW Bearing USA is a Sanjay Dhall of Detroit Flying Cars, in front of his company’s combination ment) centers especially in Michigan and History’s epicenter subsidiary of China’s Cixing Group Co Ltd. HONG XIAO/CHINA DAILY small plane and car at the DCBA’s US-China Auto Expo and Forum last California. In fact a competition is developing Qiang Hong, senior research scientist at November in Dearborn, Michigan. PAUL WELITZKIN / CHINA DAILY between Michigan and California socially in the Center for Automotive Research in Ann autonomous driving,” he said. Arbor, Michigan, said Chinese investment in Electric vehicles will become a factor, but Michigan began in the early 2000s. Success- this may depend on national policies. “EVs ful examples include Pacifi c Century buying Engineer hopes to get his fl ying car off the ground may require companies to decide if they want Nexteer in 2010. In 2013, Wanxiang America to go global or stay at home,” Hong said. Corp, the North American subsidiary of the Kerrigan agrees with Hong. Chinese auto parts conglomerate Wanxiang Like Henry Ford who toiled in a Detroit with ways to package a small plane in a car. $100,000 to $200, 000,” he said. “We are starting to see Chinese compa- Group, purchased bankrupt battery maker garage more than 100 years ago to bring “I set a limit that it had to be six feet wide, In November, China’s Zhejiang Geely nies put research and development centers A123 Systems Inc. Recently, Key Safety Sys- an invention called the automobile to the which is the same width as a mid-sized Holding Group Co (also the parent of in Michigan as they try to understand the tems unveiled the $1.6 billion purchase of masses, Sanjay Dhall labors in a Motor City car. If I can do that, then I can park it in my Swedish car company Volvo) acquired new areas of autonomy, connectivity, elec- air-bag maker Takata Corp. area airport hangar in the quest for his garage and drive to the nearest runway to Terrafugia Inc, a Boston-based company trifi cation and sharing. We see a lot of inter- “Now the (auto) investment is becoming invention: a combination car/plane. take it for a flight,” said Dhall. that plans to start selling flying cars by est from China in working with Michigan more of a two-way street. It’s not just focused “I am making this for me. I want to He expects to test fly a prototype by the 2019. companies on this new technology,” he said. on US companies going to China, but Chinese build a machine that I can drive out of my middle of 2018. Built with carbon fiber to Founded in 2006 by five graduates of “Chinese have taken the position that they companies coming to the US,” said Hong. garage and then fly me to wherever I want make it light, Dhall’s machine will be an the Massachusetts Institute of Technology, want to become a leader in the electrifi cation Kerrigan noted that the North American to go,” he said at the US China Auto Expo electric car paired with a gasoline airplane Terrafugia launched its first flying car of vehicles.’’ auto industry started in Michigan in the and Forum 2017 sponsored by the Detroit engine. “You can drive it 70 miles an hour model Transition in 2012, with an estimated “Shorter term, the export model in China late 1800s and early 1900s. “At that time Chinese Business Association in November. on the highway and fly it 400 miles,” he base price of $279,000 then. will fi nd success in selling lower-cost EVs Detroit was the epicenter of the auto industry Dhall is a pilot who is also the founder added. “The teams at Terrafugia have been at in markets other than North America and and industry giants like Ford and General and CEO of Emergent Systems, a Dearborn, Dhall believes that China would be ideal the forefront of believing in and realizing the Europe. (Eventually) you will see the Chinese Motors were stated,” he said. “Michigan has Michigan, company that creates products for his flying car. “Because China is such a vision for a fl ying car and creating the ultimate manufacture cars in North America and remained the state in the US where vehicles for auto suppliers. He came to the US in large country this would truly change how mobility solution,” said Geely Chairman Li Europe but on a smaller scale,” said Pankin are designed and built. We are still the leader 1985 and earned a mechanical engineering people travel there,” he said. Shufu, adding that Geely is committed to of the Auto Harvest Foundation. in the development of motor vehicles today.” degree from the University of Toledo. As for a price, “I would like to sell it as “making the fl ying car a reality.” “We haven’t seen a Chinese OEM set up an The Nexteer purchase symbolizes how the He started out 10 years ago to come up an expensive sports car — say around — PAUL WELITZKIN assembly plant in the US yet. We know that Chinese used their US auto investments to will happen. I wouldn’t be surprised if in the not only bolster its domestic industry, but next fi ve years we see a Chinese OEM mak- also to strengthen its rapidly emerg- ing cars in the US and yes I think Michigan ing economy. China’s leadership acquired by China’s Pacifi c and to learn a diff erent business and cultural an unprecedented seven-year expansion. would the ideal place for the plant,” said considers the automotive sec- Century Motors, a joint environment,” he said. “This will help them to Demand for new vehicles — especially SUVs Kerrigan. tor a major pillar of its entity formed by E-Town, a create companies capable of competing on a — remains healthy as the new year begins. economy. state-owned enterprise that global scale in an industry that is increasingly At the Detroit Chinese Business Associa- In 2010, Nex- serves as the fi nancing and turning to a global approach.” tion’s expo, companies lined up to off er their Contact the writer at teer was investing arm of the Beijing In another major Chinese investment, auto services to an industry that will be invest- paulwelitzkin@chinadaily municipal government, and supplier Yanfeng Automotive Interiors has ing billions in things like autonomous or usa.com China-based PCM Systems, emerged as a leading supplier of instrument self-driving vehicles, electrification and a manufacturer of automo- panels and cockpit systems, door panels, fl oor connectivity. tive components. In 2011, consoles, overhead consoles, lighting and William Pong is the general manager of AVIC Auto, a subsidiary of decorative trim. The company was formed Castle International Trade Co Ltd, a private- AVIC, purchased a 51 per- in 2015 as a joint venture between Yanfeng ly-owned company in Ningbo in Zhejiang cent controlling stake in Automotive Trim Systems Co Ltd and Adient, province. It employs about 230 workers who Pacifi c Century Motors. the former seating unit of Johnson Controls manufacture casting, machining, forging and Nexteer, the former Inc. stamping parts, which are used in metal- Delphi Saginaw Steering “Following the downturn in 2008 (global lurgy, automobile, chemical and engineer- Systems, became a wholly fi nancial crisis) Chinese investment in the ing industries. owned, standalone subsid- Midwest saved and strengthened some sup- “All of our parts are made for custom- iary of GM when Delphi pliers and some of their product lines,” said er’s specifi cations. We supply to Amer- Corp emerged from Chap- Jayson Pankin, president and CEO of the ica, Europe and Singapore. About 98 ter 11 bankruptcy in 2009. Auto Harvest Foundation and a former exec- percent of our sales are exports with Nexteer had been seeking utive with auto supplier Delphi Corp. about 70 percent for the auto indus- new ownership since then try,” he said. because it made steering Industry recovery Pong was not only looking for components for other car From the depths of its downturn in 2009, new customers but also potential makers outside of GM. the US auto industry has rebounded. After partners to expand overseas. “We The Nexteer acquisition selling 10.4 million vehicles in 2009, sales seek two types of partners — the and others that followed reached 17.55 million in 2016, a record. That fi rst has a Tier 1 or Tier 2 plant. showed that Chinese invest- has led to a recovery that extends from the Second is an experienced sales ment wasn’t just focused original equipment manufacturers (OEM) agent or representative in the auto on acquiring technology, like Ford and GM to industry specifi c suppli- industry,” he said. according to Hong. “While ers and even businesses that provide ancillary Tier 1 refers to a direct supplier technology was important, services. to OEMs; Tier 2 are key suppliers the Chinese also used US But US sales by Detroit’s Big 3 auto com- to Tier 1 companies. purchases to bolster their panies fell 2 percent to 17.2 million in 2017, Jimmy Hsiao is CEO of Quan- management skills, busi- according to Autodata Corp. It was their fi rst tum Compliance and Logic Solu- ness operations expertise year-over-year decline since 2009, ending tions, an environmental, health