The Economy & Business
6:00 am
Thu January 16, 2014

Chinese Auto Industry Looks To The Midwest—But Why? WYSO’s Lewis Wallace Asks Giorgio Rizzoni

The view from the old employee entrance to the Moraine GM plant, where Fuyao plans to put a new entrance to the plant.
Credit Lewis Wallace / WYSO

Last week we learned the former GM Moraine Assembly plant is getting a new tenant: a major Chinese automotive glass manufacturer, Fuyao is planning to redevelop 1.4 million square feet of the huge factory, and bring in 800 jobs. The news highlights changing dynamics in the global automotive industry: why is it beneficial today for a Chinese company to manufacture auto parts in the former home of a U.S. company that employed 4,000 people decades ago?

Giorgio Rizzoni with the Center for Automotive Research (CAR) at Ohio State University says labor costs have gone up in China and other parts of the world that once drew automobile manufacturers with promises of low costs. Meanwhile, China is making headway as a global player in the auto industry, although there are still no Chinese cars on the American market. Fuyao is an 18,000-person global company with the capital to redevelop and an interest in making glass in a location closer to its buyers, which include GM, Chrysler, Hyundai, Honda and Kia. Rizzoni says the declining power of labor union and a downward push on wages following the Great Recession make U.S. markets more appealing for international companies.

Under Construction is WYSO’s series on growth in the greater Dayton area. We dig underneath the physical and economic markers of growth to look at the human consequences. Check back Thursdays for new installments.

 

 

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