Energy & Resources

The Rockford files

Shock Horror! Chinese firm creates American jobs

The Rockford files

Lu: getting thumbs up in US

The government of Massachusetts would rather not mention China this week. The US state gave $43 million in assistance to Evergreen Solar, to help it grow into America’s third biggest solar panel manufacturer. But, as the New York Times reported this week, Evergreen will shut its factory in Devens, Massachusetts, laying off 800 workers and move production to central China. As popular Boston talk-radio hosts Todd & Tom joked darkly, “it looks like even if we subsidise our factories, they still want to move to China”.

However, there’s one Chinese company that’s trying to defuse such concerns with its own investments in American factories. Chicago-based Wanxiang America Corporation, has even been getting plaudits from Illinois politicians for employing the state’s citizens.

In fact, China Daily reports that – counter to what’s happening in New England – Wanxiang’s solar panel division is expanding in the mid-size city of Rockford. “About four months ago when John Coonrod, 50, sent his resume to Wanxiang New Energy, he could barely pronounce the Chinese company’s name,” reports the newspaper. “Coonrod, jobless for four months, found out about Wanxiang at a local employment seminar and was later recruited as a maintenance mechanic.”

The boss of Wanxiang America, Ni Pin, believes the US solar power industry is poised for “rapid growth” and forecasts that the factory will employ at least 200 locals within four years. It’s the only solar panel manufacturer in the Midwest and has benefitted from Illinois Governor Patrick Quinn’s new law that mandates the state will get 6% of its electricity from solar sources by 2015.

It is a welcome boost for Rockford which has a 14% unemployment rate. Like Massachusetts, the city offered financial incentives to lure the Chinese factory bosses, but as Wanxiang’s American plant manager Brent Anderson frames it, his Chinese employer is a catalyst for the city’s eco-development strategy, “paving the road for everyone else”.

In fact, Wanxiang America has been a phenomenal success story throughout the US. It started from humble roots in 1994 after Ni finished his doctoral degree in Kentucky. He started the business with funding of just $20,000 from his father-in-law, Lu Guanqiu.

Lu was already famous in China in the early nineties as one of China’s most successful entrepreneurs (see WiC35). In 1969 he’d founded a factory in Hangzhou that initially made farm machinery but would grow to become China’s biggest maker of automotive parts. Today the Wanxiang Group is one of Zhejiang province’s largest private sector firms and employs 40,000. It’s turnover is around $10 billion.

Ni has proven to be just as entrepreneurial as his father-in-law. In 1995 his tiny start-up had just $3.5 million in sales, but over the next 15 years he would acquire 28 American companies. Wanxiang has not got much coverage in the US press but its turnover reached $2 billion in 2010. The company employs 5,000 in the US (“almost all Americans”) across 14 states, although the biggest concentration is in Illiniois.

Wanxiang remains focused on the automotive parts business, and is manufacturing them in the US not just China. Oriental Morning Post reports that one of Ni’s acquisitions was D&R Technology, a car parts maker which specialises in sensors, based in Carol Stream, Illinois. The factory was a family firm, and the son of the founder still runs it. “We had five buyers to choose from,” says Tony Urban. “But ultimately we chose Wanxiang because we agree with Wanxiang’s ideas and values – we both believe customers and employees come first.”

No surprise, then, reckons Oriental Morning Post that the only factory President Hu Jintao will visit during his tour of the US this week is D&R’s. The newspaper says images of Hu on the factory floor will “highlight that China’s investment in the US can bring job opportunities to local people so as to enhance Americans’ awareness of China’s positive image.”

Ni, who guided the car parts makers throughout the financial crisis, told China Daily: “We purchase two to three [American] companies every year and we save and create at least a couple of hundred jobs.”

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