April 23rd, 2011
03:28 AM GMT
Shanghai, China (CNN) – At the Shanghai Auto Show, car exec after car exec is talking about big investment plans - finding Chinese partners, setting up factories, possibly building cars here for other parts of the world.
It's hard to imagine Detroit – home to the American auto giants – maintaining its prominent role in the industry. However, there are rumblings in China that perhaps Detroit could be a good launch pad for Chinese companies looking to break into the U.S. market.
Detroit already has great talent - a solid pool of Chinese engineers, I was told. Execs say the technology is top notch and customers close by. Michigan officials have also been welcoming.
Pacific Century Motors is the latest Chinese company to inject money into Detroit. PCM is partly owned by the Beijing city government. For $450 million, PCM bought Nexteer, a storied unit of General Motors that makes steering equipment. Nexteer employs thousands of people in Michigan. (The sale was coordinated by Chinese auto parts maker Tempo. Tempo was also an investor in a $100 million deal to buy a brakes division of former GM parts maker Delphi.)
Chang'an Motors, Ford's Chinese partner, is opening an R&D center - and is looking to hire when it does.
GM's partner SAIC invested $500 million in the American auto titan's November IPO, leading some analysts to believe the Chinese carmaker is planting seeds in Detroit for the future.
"The Chinese never pay something for nothing," Michael Dunne, author of "American Wheels, Chinese Roads", told me. "It may still be early in the process but the direction and momentum are there."
There are a host of obstacles to a Chinese-driven Detroit revival - concerns about the city's unions, US-China trade frictions, as well as the attitude of the Chinese government towards these overseas investments. (China blocked a deal by Sichuan Tengzhong to buy GM's Hummer brand.)
But if the investment flows back to Detroit, maybe Motown will get its groove back.
Is Chinese investment Detroit's savior or a threat?
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