April 23rd, 2011
03:28 AM GMT
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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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Filed under: Auto industryChina


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soundoff (35 Responses)
  1. MarkS

    Don't be deceived: Detroit does not need China. China needs Detroit. The big three are doing fine now – since the Japanese companies have been on their backs, and are trying to get right-side-up.

    April 23, 2011 at 4:47 am |
  2. lol

    I don't see why, China will make less money manufacturing anything within the U.S. If they made it themselves than exported it they would save millions. Their is a reason why most manufacturers in America went to China in the first place.

    April 23, 2011 at 5:09 am |
  3. Frank Lemon

    I hope the people of Detroit don’t get their dreams crushed because of a decision by the Chinese to establish the factory somewhere else. Detroit deserve a second chance although I know that the salaries would not be as high as it used to be. But I also hope that the Chinese not take away too much market from the U.S. car manufacturers and create a new economic problem. http://www.digitalundivide.com

    April 23, 2011 at 5:20 am |
  4. Pure Michigan

    I see Detroit and Michigan will be in a one state Boom regardless if the Chinese let the great opportunity go away. People will be looking to that for advice...

    April 23, 2011 at 5:27 am |
  5. arbi

    @MarkS considering GM sells more cars to China than the USA it's pretty obvious Detroit needs China.

    April 23, 2011 at 6:35 am |
  6. GBush

    China is manufacturing in USA to overcome protectionism by USA against Chinese imports. Period. If you talk about auto technology, there are better places like Germany.

    April 23, 2011 at 7:44 am |
  7. TokyoDan

    China is a technology vampire. They will suck all the tech they can out of Detroit and then leave it for dead.

    April 23, 2011 at 7:50 am |
  8. jesicadyer

    Major company provide what is called "Auto Insurance Clearance" reduce the rates for long-time auto insurance customers. They just now reduced my rates! need to save money gas prices is killing my travel

    April 23, 2011 at 7:52 am |
  9. littledebbieoatmealcookie

    don't want to be anti-chinese, but it seems that anything that we do today to increase chinese wealth could be bad for us in the future...

    would be better, maybe, if America lowered it's wages over the next 10 years to get in line with world wages... or we should isolate ourselves and continue paying fantastic high wages.

    April 23, 2011 at 8:52 am |
  10. Kanu Mistry

    It is a subject of common sense that why China should attempt save the jobs in Detroit when they themselves have large population to feed? Why they would source something from Detroit when they themselves are able to manufacture at a much cheaper cost? Please remember, to provide employment to their billions of people will remain first priority for China. Anything that goes against this criteria is not supposed to work. Do not expect and count something which is too obvious.

    April 23, 2011 at 10:50 am |
  11. Reg

    US and non-Chinese companies moved their factories to China in the first place. We're not talking about Chinese cars, but foreign car production that was outsourced to China, while finished products re-imported into US were being sold as "American cars". So the answer is no, China cannot save Detroit jobs, for the automotive industry handed them over to China with no means or economic incentive to retrieve them. It's a clear case of the industrial elite emphasizing economic gains over national interests, while government never stopped them. Add the expectation that Chinese will reverse engineer, and come up with indigenous products as rivals, and we're clearly looking at a decline as opposed to a revival.

    April 23, 2011 at 12:01 pm |
  12. Bruce Rubin

    AS SOON AS CHINA UNDERSTANDS HOW TO MASS PRODUCE THE TECHNOLOGY DETROIT IS GONE

    April 23, 2011 at 2:07 pm |
  13. Chad Baase

    We would welcome this auto maker to visit Albion and talk to our planning commission. We may be able to offer some tax advantages to opening up in our town that are not on the negotiating table of Detroit. There is a lot of hard workers left in Albion from the Harvard Industries Plant that closed in 2002 after filing bankruptcy. We have a nice 36 acre lot that would fit this company very nicely and we are convieniantly located next to 2 major highways. I-69 and I-94.

    April 23, 2011 at 2:24 pm |
  14. John Q. Public

    Is it in our economic national interest, which is part of national security, or it should be, to open our markets and watch our technology be purloined to China for cheap simply to keep the stodgy wheels of GM functioning? I say no. We need to rely on our own people and our own engineers to rebuild the automotive sector and bring jobs back to the US. We know well that once these businesses make in-roads they will be taking more market share away from what's left of the Big Three. Why do these short-term thinking executives repeat the same errors of the past over and over, and get compensated for turning this economy back to a Third World Nation?

    April 23, 2011 at 5:23 pm |
  15. unanimouse

    China steals technology from everyone, but I've yet to see any great innovations by them, since...oh say the invention of fireworks. Please enlighten me, even if you're totally offended and want to speak garbage.

    April 23, 2011 at 5:35 pm |
  16. Teaching

    No

    April 24, 2011 at 1:40 am |
  17. Oladipo Akinyemi Omole

    Hi Eunice,
    Chinese investment in Detroit is certainly competition for sure and if the United States has allowed Japan and German automakers,surely China's investment should be welcome and would not amount to a threat.What the US seems to disapprove of is Chinese government investment per se i.e Chinese government direct investment which the US is not enthusiastic about.It appears the US wants Chinese private investors .Cheers.
    Your friend,
    Oladipo

    April 24, 2011 at 2:05 am |
  18. Wen- Lai Chen

    Many countries undestmate what PR china could. Yes, initially as a developing country, it copies, copies, but now it is a creative and innovative era. Thus, with the right govt. policies for investments, technology transfers, and etc, etc, PR China is an economic power. PR China has achieved so much that it is net export of technology, especally in the oil and gas industries..

    The automotive and motor vehicles are no acceptance, so is the mass transport system.. It has the fastest speed train in the world, and to to all odds, it has built the hardest rail ttrack in the world.. thro' the Gobi desert., etc,.. etc.

    Yes, PR china will rule the world in terms of technology, economic and helps to maintain the global peace anf security.

    April 24, 2011 at 2:13 am |
  19. kcheng

    even if so–IS THIS REALLY WHAT THE USA WANTS???? To be a vassal state of China's??? Running to Beijing imperial court!?? Wake up America–Wake up State Dept. As far as China being the key to global peace and security–HAH Bolderdash! Whoever believes that is on crack!

    April 24, 2011 at 3:46 am |
  20. william king Thien

    Like or hate it.Your days are number.God help America.

    April 24, 2011 at 3:47 am |
  21. MarkS

    arbi wrote:
    @MarkS considering GM sells more cars to China than the USA it's pretty obvious Detroit needs China.
    ---------
    That may be true at this moment. The Japanese dearth, and the consequential return-to-prosperity of Detroit has just started.

    April 24, 2011 at 3:56 am |
  22. Paul

    The hero of Chinese market is the Chinese labor,we made it cheap cos the entrepreneur paid us low

    April 24, 2011 at 10:56 am |
  23. Reg

    Unanimouse, the "great invention" of fireworks and saltpeter from China was initially a tool of psychological terror. Later we civilised it into a means to blow life into celebrations/parties, whilst saltpeter became gunpowder. However China's innovations/inventions are always based around an offensive role: weapon and psychological offense. Hence any investment from them must be seen thru the prism of communist-dictatorial government, intent to use even it's economic investments as a national tool of coercion...weapon. Beware of this double use of China's "investments". It's so called China-towns (the world over) are not so much cultural centers as bases of covert and offensive operations. There's always a hidden and hostile agenda in any Chinese "investment".

    April 24, 2011 at 2:50 pm |
  24. alan

    China will save Chinese jobs.
    Well its all pointless now, the death of the dollar means back to walking and horses.

    April 24, 2011 at 5:49 pm |
  25. Amazon jungle

    Please do not forget electric vehicle technology is in its infancy stage. for christ sake please dont let this so called superior complex govern one's behavior based on something not even there yet. If it is there, how come there isn't car on the street every corner? Where is the car at supermarket price? Granted if someone cracked open thier mind, they may come to surprise that China may be leading in this field. Wake up!

    April 24, 2011 at 6:28 pm |
  26. cactus

    I don't believe anything can save Detroit. The unions have destroyed the US automakers. They cannot compete with wages and benefits exceeding those of our highest skilled workers, while putting out the junk they have been making. I would expect if this recession we are coming off was to double dip the whole mess would be over. If we don't have a recession for a few years the unions will be demanding higher wages and extended benefits. The Chinese will begin exporting cars to the US and if they are of the quality of Japaneese or Korean cars Detroit will be dead.

    April 24, 2011 at 10:50 pm |
  27. MarkS

    I have a stupid question.. why doesn't the Chinese just ask the Japanese for the technology? thnks

    April 25, 2011 at 3:14 am |
  28. Frans

    Those who think China is doing the world any favours will all be without a job tomorrow. China already destroyed Japan and USA economies and it will never recover. Don't sleep with the enemy they will destroy you inside out. Remember the trojan horse.

    April 26, 2011 at 12:42 am |
  29. JustAthought

    To all the diehard American, who always believe you're above all others. Who thinks our country has the power to destory others in an instance. Well.. sorry to wake you up!!! Europeans hate us and wish the worst would happen because you believe you're above all others! If we were to go head to head with any major country like Russia n or China, we would be gone in an instance! I know it's hard to swallow! China are helping us by investing because we're broke! In return, every signle goverment in China will own a piece.. maybe a few pieces of U.S. somewhere! Have you ask anyone about how much money had the U.S. borrow from China lately?

    April 26, 2011 at 9:17 pm |
  30. dave

    China is just trying to kill off America. They want us to invest there and build factories there so they can then use them against us. Don't buy Chinese goods.

    April 27, 2011 at 5:56 am |
  31. ElvinTostig

    "Detroit already has great talent – a solid pool of Chinese engineers, I was told."

    The times, they are a-changin'.

    April 27, 2011 at 6:48 am |
  32. Reg

    Mark, the Chinese don't ask, they take. They Indians and Tibetans know all about it. Chinese moles can blend in nicely with the Japanese, and take whatever information or technology they need. They're quite good at it all over the world. Truth is we've invited all this upon ourselves. Outsourcing niche and high-tech manufacturing to China was self-destructive. It's like taking drugs: makes you feel good for an instant, then wrecks you permanently. US needs to identify China as a malicious foe that it is, and feeze all their assets, including non-payment of so-called "debt". In fact China owes the world a lot more in terms of intellectual property rights and occupied territories, than anyone can ever owe China.

    April 27, 2011 at 11:23 am |
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