Cities Manufacturing

Chinese Companies Set Up Shop in the Motor City

A new wave of investment is happening in long-suffering Detroit. At first blush, that sounds eminently promising—the region, and the U.S. auto industry, is still rebounding from the recession, with mixed results. But the who and why paint a more complex picture.

As part of their steady push into the U.S. auto industry, “Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers,” Bill Vlasic writes in The New York Times. While they are entering the market manufacturing parts and technology, the goal is clear: to eventually sell Chinese cars in the United States.

Vlasic writes that these companies are entering the U.S. auto market “with little fanfare” in the hopes of avoiding the backlash Japanese automakers experienced in the 1980s, a strategy that thus far is working. And there are some pluses: They’re creating jobs and investing in the local community, and could inspire U.S. automakers to become more innovative in how they design, build, and market their products.

But for some, it’s too close for comfort. There are concerns about the broader trade implications, talent poaching, and potential intellectual capital violations. Some fear how Ford and GM will fare in a toe-to-toe battle with new, scrappy competitors in their own backyard. But it’s still too soon to tell what the net effect of the Chinese presence in Detroit will be.

Tags: , , , ,