A few years ago, Fuyao Glass chairman Cao Dewang told a conference that, “if you want to invest in the US, you must love it first”. But over the past few weeks, he has been learning the hard way how the course of true love never does run smooth.
One of China’s most outspoken entrepreneurs, Cao has found himself in the unusual position of being castigated on both sides of the Pacific. In the US, the New York Times ran a critical article about Fuyao’s new glass plant in Ohio, citing lax safety standards and a “major culture clash” on the factory floor.
The Chinese media then picked up the allegations and in Cao’s words fabricated them yet further to generate clicks. Some believe the local press has taken him to town in retaliation for moving factories to the US after complaining about China’s high tax rates (see WiC350).
Cao decided to defend himself in a Global Times op-ed. In it, he claims that about 40% of the New York Times article is untrue. He suggests politics is to blame, highlighting the paper’s antipathy to the Trump administration and the timing of the article one week ahead of a summit to attract Chinese investment.
Cao also says he’s deeply shocked by the “despicable” behaviour of the Chinese media who should be celebrating his domestic success and his international promotion of China’s image.
Much of the New York Times article covers safety breaches. It discusses production safety fines imposed shortly after the plant was opened last October. Fuyao was fined $225,000 (a sum later reduced to $100,000) for a number of offences including inadequate procedures for shutting down machines while workers were fixing them. (Fuyao principally makes glass for the car industry.)
It quotes one former employer who says maintenance staff had to jump onto moving conveyor belts because Chinese supervisors wanted to maximise production quotas and wouldn’t shut them down first.
The Dayton Daily News also says that Fuyao was given a second $37,843 fine because of failures to shut down the power supply when furnaces were being fixed.
The plant’s union claims the company retaliates against anyone who speaks up and it has filed a complaint with the National Labour Relations Board, which has taken Fuyao to court for not cooperating with its investigation.
One of the plant’s senior managers, David Burrows, is also suing Fuyao for unfair dismissal on grounds of ethnic discrimination (he isn’t Chinese). Cao replied that Burrows and plant manager John Gauthier were fired because “they didn’t do their jobs and squandered my money”. He told the New York Times that productivity wasn’t high enough and some workers were “just idling around”.
This theme of lazy Westerners is a familiar one. Mei Xinyu from the Chinese Academy of International Trade and Cooperation penned a Global Times op-ed arguing that China is always wrongly blamed for labour disputes. What is actually happening, she says, is a “clash between the advanced efficient Chinese model and the outdated inefficient model of the host country as well as between hardworking Chinese people and some lazy locals”.
She also notes that US wages are based on time served rather than productivity achieved and hopes “Uncle Sam can calm down and reform the outdated regulations in its labour laws”.
Not all Global Times columnists have taken the same view. One New York-based journalist, Rong Xiaoqing, has written a third article arguing that Chinese bosses find discrimination based on an employee’s nationality, age or sexual orientation an “alien” concept. Rong suggests Cao would be better advised to hire the right HR professionals and lawyers to make sure it adheres to American practices.
But one social media respondent believes everyone has got it wrong. Noting the large number of articles the Global Times has published on Fuyao’s woes, the netizen concludes, “What kind of socialism is this? The US working class has been under intense assault from capitalism for 40 years. The Chinese Communist Party should be on the side of the workers not the capitalists.”
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