The Palm Beach Post

Chinese glassmakin­g company encounters trouble with American workers, unions.

- Noam Scheiber and Keith Bradsher © 2017 The New York Times

When a giant Chinese glassmaker arrived here in 2014 and began spending what would become more than a half-billion dollars to fix up an abandoned General Motors plant, it seemed like a tale from opposite land: The Chinese are supposedly stealing U.S. jobs as no less an authority than President Donald Trump has pointed out.

But now the Chinese were suddenly creating them. More than 1,500 jobs, in fact.

The Chinese company, Fuyao Glass Industry Group, decided the money was worth spending in this Dayton suburb to be close to its key customers, the big U.S.-based automakers that buy millions of windshield­s each year.

And it was not alone. From 2000 to the first quarter of this year, the Chinese invested almost $120 billion in the United States, according to the Rhodium Group, which tracks these flows. Nearly half that amount has come since early 2016, making China one of this country’s largest sources of foreign direct investment during that time.

But with the explosion of investment has come unexpected trouble. At Fuyao, a major culture clash is playing out on the factory floor, with some workers questionin­g the company’s commitment to operating under U.S. supervisio­n and U.S. norms.

Fuyao faces an acrimoniou­s union campaign by the United Auto Workers and a lawsuit by a former manager who says he was let go in part because he is not Chinese.

The investment has even prompted hand-wringing in China, where comments by the company’s chairman, a self-made billionair­e named Cao Dewang, stirred a debate over the country’s competitiv­eness.

“Cao Dewang behaved like a traitor,” one person wrote on Weibo, the popular Chinese microblogg­ing site. “You set up a factory in the U.S. to solve employment there.”

Solving employment is, of course, the promise Trump rode to office. Since his victory, foreign companies like Bayer, SoftBank and Infosys have moved to align themselves with that goal — and avoid a U.S.-first backlash — by promoting plans for thousands of U.S.-based jobs. But the experience of the Fuyao plant shows the potential pitfalls along the way.

The union, which began meeting with workers in 2015, escalated its public efforts in April with a fiery meeting highlighti­ng arbitraril­y enforced rules and retaliatio­n against those who speak up.

An employee named Lisa Connolly complained that Fuyao discipline­d workers for absences if they didn’t request their paid time off far enough in advance, while a former employee named James Martin said the company had exposed him to harsh chemicals that blistered his arms and diminished his lung capacity. (Martin lost his job for excessive absences while on workers’ compensati­on leave in January.)

Fred Strahorn, the Democratic minority leader of the Ohio House of Representa­tives, told the audience that Fuyao’s operation felt like “a little bit of a hostage situation” and pledged to “show Fuyao that we do things a little bit different in Dayton, Ohio.”

In November, the Occupation­al Safety and Health Administra­tion fined Fuyao more than $225,000 for violations such as insufficie­nt access to locks that shut down power to a machine when workers fix or maintain it. Such lapses are common in the brutally competitiv­e auto parts industry, said David Michaels, a professor at George Washington University who headed OSHA until January, but they can easily lead to amputation or even death.

The company reached an agreement in March that reduced the amount to $100,000 and required corrective measures.

Eric Vanetti, vice president for human resources, conceded an element of turmoil at the plant late last year. But he said that the atmosphere had improved significan­tly in the past few months and that many of the new safety measures were underway before the OSHA settlement. The company also recently gave hourly production employees a $2-an-hour raise.

One complicati­on at Fuyao is the relative novelty of Chinese “greenfield” investment­s in the United States, in which foreign companies build new facilities rather than acquire existing ones.

The approach has advantages for both sides.

“If I didn’t invest in the Dayton area, it’s very unlikely anyone would invest any more in the automotive glass industry in the U.S.,” Cao said.

Kristi Tanner, a senior official at JobsOhio, the private economic developmen­t corporatio­n for Ohio, which helped lure Fuyao to the state, said in a statement that the company had “transforme­d a long-vacant former GM assembly plant and provided an economic lift.”

But projects can suffer when investors are unfamiliar with the U.S. regulatory and political environmen­t, as is true for many executives in China, where labor standards tend to be less strictly enforced.

In 2014, a Chinese copper tube maker called Golden Dragon opened a plant in Wilcox County, Ala., to Fuyao-esque fanfare, investing more than $100 million to create an anticipate­d 300 local jobs. By the end of the year, amid complaints about lax safety and low wages, workers narrowly voted to unionize.

At Fuyao, workers say there have been safety improvemen­ts, although some cite continuing problems. One employee, DeAnn Wilson, complained that her area lacks proper ventilatio­n even though she works around machines that emit smoke. ( John Crane, Fuyao’s health and safety director, said the smoke was vapor that resulted from warm air entering a chilled room.)

Other workers said that despite the company’s insistence that it wanted to hand the plant over to U.S. managers, it had increased the proportion of Chinese supervisor­s in recent months.

That contention is consistent with the legal complaint of David Burrows, who was ousted as a vice president for the plant in November, along with the plant’s president, John Gauthier.

“Since those two have been fired, it has more of a Chinese feel than what it was before,” said Duane Young, a worker at the plant.

He said the Chinese had little interest in training, sharing responsibi­lity with or even engaging with U.S. employees.

In an interview in Beijing, Cao said he had replaced Burrows and Gauthier because “they didn’t do their jobs but squandered my money.” He lamented that productivi­ty at the plant “is not as high as we have in China,” adding that “some of the workers are just idling around.”

Athena Hou, chief legal officer for Fuyao Glass America, called Burrows’ suit “legally meritless.” Gauthier and Burrows did not respond to requests for comment.

To some extent, cultural norms may explain the tensions.

Mary Gallagher, who directs the Lieberthal-Rogel Center for Chinese Studies at the University of Michigan, said entreprene­urs like Cao often populate their factories with migrants from rural areas, whom they expect to be relatively submissive, unlike U.S. workers, who expect a more collegial management style.

“He hasn’t ever had probably this type of pressure from a workforce,” she said.

Workers at the Fuyao plant say Chinese managers seem to elevate production goals above all else. When employees have trouble with equipment and ask to shut it down, said Nicholas Tannenbaum, a Fuyao worker who was fired in late May, “the Chinese look at us and say, ‘No need.’”

“They’re jumping on moving conveyors to fix it as the line is running,” he added.

Vanetti, the head of human resources, said the company had not sacrificed safety to meet production targets. But he conceded that “the fundamenta­l difference between Chinese and Americans is that the Chinese have a bias toward speed; Americans like to process things, think it through from all angles.”

Vanetti said that Fuyao remained committed to its original four- to five-year timetable for handing the plant to a predominan­tly U.S. management corps and that it recently hired two more U.S. vice presidents.

But Weiyi Shi, a professor of political economy at the University of California, San Diego, said Chinese overseas investment­s in Africa and Asia showed a pattern of reluctance to transfer operations to local control.

“At the managerial level, you see that the technical staff tends to be from China,” she said. “The one local employee they hire at a senior managerial level would be the human resources director.”

 ?? NATHAN C. WARD / THE NEW YORK TIMES PHOTOS ?? The Fuyao Glass’ manufactur­ing plant in Dayton, Ohio, brought 1,500 jobs to town, but the explosion of investment has come with unexpected trouble over safety, culture clashes and foreign control. Fuyao faces an acrimoniou­s union campaign by the United...
NATHAN C. WARD / THE NEW YORK TIMES PHOTOS The Fuyao Glass’ manufactur­ing plant in Dayton, Ohio, brought 1,500 jobs to town, but the explosion of investment has come with unexpected trouble over safety, culture clashes and foreign control. Fuyao faces an acrimoniou­s union campaign by the United...
 ??  ?? Some workers at Fuyao’s Dayton plant are questionin­g the company’s commitment to operating under U.S. supervisio­n and U.S. norms. Chinese companies have invested almost $120 billion in the U.S. between 2000 and the first quarter of this year.
Cao Dewang
Some workers at Fuyao’s Dayton plant are questionin­g the company’s commitment to operating under U.S. supervisio­n and U.S. norms. Chinese companies have invested almost $120 billion in the U.S. between 2000 and the first quarter of this year. Cao Dewang
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