Have You Driven a ZhongXing Lately?
A couple of months ago, Ford announced that it was closing one of its Cleveland casting plants and furloughing one of the two famous Cleveland engine plants for a year.
DETROIT – Ford Motor Co. said Monday it will close its casting plant in Brook Park, Ohio, near Cleveland in 2009. The plant employs 1,218 hourly and salaried workers.
The company also will shutter Cleveland Engine Plant 1 in Brook Park for at least a year starting in two weeks. It employs 577 workers. A second engine plant at the complex just west of Cleveland will remain open.
The casting plant is the 10th facility to be closed as part of Ford’s “Way Forward” restructuring plan in which the company said it would close 16 facilities by 2012. The company already had announced nine of the closures.
– USA Today / May 8, 2007
A few weeks later, I noticed the following news story:
A Chinese automaker will begin exporting pickups and SUVs to Mexico this year as part of a strategy to sell the vehicles in the U.S. The vehicle will be called the ZhongXing Admiral.
Zhongxing Automobile will also build a plant in the border city of Tijuana to make SUVs and pickups and will export those vehicles to the U.S.
The Chinese SUVs will sell for a little over $12,000 in Mexico and are likely to be the first Chinese vehicles to sell in U.S. showrooms…. Assembling the Zhongxing vehicles in Tijuana will make them Mexican under North American free trade rules, so they can be exported to the United States duty-free…
– Consumeraffairs.com / June 13, 2007
It would be easy to make this discussion one of those “China Bashing” rants calling for trade bans, and all sorts of protectionist measures. It’s bad business to ignore the great potential of China. But it’s equally bad business to do nothing about the plight of U.S. manufacturing – at least for a guy living in Cleveland.
Even the Playing Field
Instead, I am an advocate of enforcing our laws, and demanding a reasonably even playing field for U.S. manufacturers. For example, consistent currency rate manipulation of the Juan by China to artificially boost U.S. imports of Chinese products has only recently drawn attention:
WASHINGTON, April 7, 2007 – Members of Congress today took much-needed action on China’s biased monetary policy with the introduction of a bill that brings relief to U.S. manufacturers faced with competing against injurious imports subsidized by China’s undervalued currency, according to a U.S. coalition that was formed last year to draw attention to the issue.
According to the U.S. Immigration and Customs Enforcement branch of the Department of Homeland Security, “In recent years, counterfeiting, piracy and other Intellectual Property Rights (IPR) violations have grown in magnitude and complexity, costing U.S. businesses billions of dollars in lost revenue and often posing health and safety risks to U.S. consumers. Industry and trade associations estimate that counterfeiting and piracy cost the U.S. economy between $200 and $250 billion per year, a total of 750,000 American jobs. “ (ICE Fact Sheet June 2007)
And yet, according to the U.S.-China Business Council, The Office of the U.S. Trade Representative (USTR) placed China on its intellectual property rights (IPR) priority watch list on April 29, 2005. USTR released a report that found that China had not fulfilled commitments made last year to reduce property rights infringement, saying that China’s steps to improve enforcement have been “seriously inadequate.”
Additionally, the health, worker safety, wage, energy and pollution problems that plague a country developing as rapidly as China are understandable. But the numbers are alarming:
China’s soaring energy use and resulting pollution are a serious threat to the country’s continued prosperity and growth, not to mention the well-being of its citizens. China has spent more than $85 billion on environmental cleanup in the last five years and could shell out $380 billion – 4% of gross domestic product – between now and 2010. But even those outlays aren’t enough to offset the pollution generated by the country’s annual growth rate of more than 8%. The problems are compounded by China’s inefficient use of electricity, oil and coal. China consumes nearly five times as much energy as the U.S. to produce each dollar of GDP – and almost 12 times as much as Japan.
– Business Week, August 22, 2005
So, what does all this have to do with UV coatings or curing? And what am I suggesting we do? Well, closing the Cleveland Engine plant is a bad thing for UV. Ford was looking into novel uses for UV for their engines. Those projects are now dead.
But so are the projects at scores of other industrial manufacturers in the United States. We held a great cellular telephone coating symposium a few years ago in Chicago. The attendees all felt it was a great informative event – except for the minor problem that virtually no cell phones are coated in the U.S. any longer.
From tier one automotive to appliances, giant chunks of manufacturing are disappearing. Once again, as industries embrace the technology, it is threatened. Those of us excited about the growing interest in UV by the aerospace community might have been alarmed to see the following news story a few weeks ago:
April 5, 2007 (RFE/RL) – China is planning what could be described as a technological Great Leap Forward in deciding to develop its own large civilian jet airliners. The Chinese government gave formal approval last month to the project, which will directly challenge Western manufacturers Boeing and Airbus.
– Radio Free Europe/radio Liberty
On March 14, 1985, Sam Walton, the famed Founder, Chairman and CEO of Wal-Mart wrote a letter to Wal-Mart suppliers, saying:
Our country’s international trade deficit is a serious problem. I strongly believe the future of Wal-Mart, U.S. manufacturing and our nation depends upon our ability to jointly correct this problem…. Something can and must be done to reverse this very serious threat to our free enterprise system and our great country. Our Wal-Mart Company is firmly committed to the philosophy of buying everything possible from suppliers who manufacture their products in the United States…”
– Courtesy www.wakeupwalmart.com
Wow. Could anybody have said it better than the former CEO of Fortune’s #1 company on their Global 500 list?
What would Sam Walton say today? Today Wal-Mart purchases $18 billion worth of goods from China. According to Bloomberg, in 2005 Wal-Mart alone made up one-tenth of the entire U.S. trade deficit with China. And according to China Business Weekly, if Wal-Mart were a country, it would rank as China’s eighth largest trading partner, outpacing Russia, Canada and Australia.
I am certain Sam Walton must have considered the double-whammy of a weak industrial economy – that Wal-Mart relies on U.S. manufacturing not only as suppliers – but as customers. My state of Ohio ranks fifth in number of Wal-Mart stores, with 136 stores according to Wal-Mart’s own January 2007 figures. (Just one behind Illinois with 137). Clearly the Wal-Mart store on Brookpark Road, less than three miles from Ford, will see a drop in sales as nearly 1800 local workers struggle to tighten their budgets due to loss of work.
I used to pass by Wal-Mart’s corporate headquarters in Bentonville, AR, when we were working on the first UV powder system with Baldor Electric Motor in nearby Fort Smith, AR. Baldor, clearly a leader in American motor manufacturing and a strong advocate for UV technology, now faces the same pressures in their business. According to a recent article on trends in motor manufacturing:
As manufacturers consider cost, they continue to move production closer to their customers, especially in Asia and South America. Motor supply has followed. Today, many compressors and motors are manufactured in Brazil. China has, of course, received a lot of press about its significant motor production for high-volume appliances. The lower labor costs of these countries understandably makes them appealing.”
– Appliance Magazine, March 2007
Wake Up Folks
Hey, selling this UV stuff is a hard enough job, but it’s impossible when nobody is coating their products in the United States anymore. I can only add to Sam Walton’s concern that UV coating in the U.S. – along with manufacturing at large – is at risk of annihilation.
So, what can be done?
1. Urge your congressmen to support legislation that promotes fair currency rate exchange between the U.S. and all of its trading partners.
2. Urge your congressmen to be vigilant and support investigation of any WTO country that is not vigilant about protecting intellectual property rights of U.S. companies.
3. Support global efforts to bring pollution standards, energy efficiency and worker rights into line. Pollution control is a friend of UV.
4. If the first three sound hard, visit the National Association of Manufacturers website www.nam.org – they make it easy to do something.
5. Sign up on www.wakeupwalmart.com and revive Sam Walton’s vision for keeping his customers employed.
6. Buy goods produced in the USA- at home and for your business. Buy a U.S.-made paint gun, powder coating, spray booth or UV lamp.
7. Buy a Ford Explorer and not a ZhongXing Admiral.
For further information, contact Paul Mills at email@example.com.
PCI editors welcome any input from our readers on this important topic. Letters to the editor will be published. Send to firstname.lastname@example.org or email@example.com.