The Detroit Free Press
Wayne County Executive Robert Ficano first traveled to China in 2005 and will make his sixth visit in November, to court companies and investors interested in doing business in the jobs-starved Detroit region.
It's taken awhile for Ficano's efforts to pay off on a major scale, but last week's news that a Chinese group will buy the $2.1-billion-a-year, 6,200-employee Nexteer auto parts operation from General Motors is a big step forward.
Tempo Group, a Beijing-based auto supplier and key player in the Nexteer deal, was the first Chinese company Ficano lured to Michigan after meeting its owner, Tianbao Zhou, on that first China trip in 2005. Tempo opened a research center in Canton Township two years later.
Ficano told me last week that Zhou apologized to him because the Nexteer acquisition is in Saginaw, not Wayne County. "I said, 'Hey, don't worry about it. It's in Michigan,' " Ficano said.
Another significant aspect of the Nexteer deal is a concessionary labor contract with the UAW that paved the way for the sale. The five-year pact, ratified by Saginaw workers a week before the sale deal was struck, calls for a cash payment to UAW workers in return for giving up raises promised earlier, and a buydown provision to lower the wages of skilled trades workers.
When Ficano first talked with Tempo officials years ago, they were mulling whether to invest in Michigan or in Canada. "They were concerned about Michigan's negative labor reputation," Ficano said.
After Ficano told them Canada had strong labor unions, too, he arranged a meeting between Tempo executives and UAW Vice President Jimmy Settles. Settles convinced them that the union was flexible and could do what was necessary to deliver the productivity Tempo needed, at a wages-and-benefits cost that would enable them to compete.
Four years after that conversation, a big unionized Michigan auto plant is about to become Chinese-owned.
GM's Nexteer steering column operations will be sold to Pacific Century Motors, a joint venture between Tempo and E-Town, the investment arm of the Beijing municipal government. A ceremonial signing is planned Monday at GM's Renaissance Center headquarters; the deal is to close later this year. Purchase price was estimated by Bloomberg News at $450 million.
Last year, Tempo was a joint-venture partner in the $100-million acquisition of Delphi's brakes and suspension business, along with the Beijing government and another Chinese firm, Capitol Iron & Steel.
After a virtual halt to buzz about Chinese investment in the U.S. during the economic upheaval of 2008 and 2009, deals are now getting done, said Peter Theut, founder of China Bridge, a new Ann Arbor consulting firm focusing on trade and investment.
China has capital to invest, at a time when lots of U.S. companies are having a hard time getting bank loans.
It's funny how old hangups, whether they be about Michigan's labor climate or China's currency manipulation, can fade away when two sides need what the other's got.
It's taken awhile for Ficano's efforts to pay off on a major scale, but last week's news that a Chinese group will buy the $2.1-billion-a-year, 6,200-employee Nexteer auto parts operation from General Motors is a big step forward.
Tempo Group, a Beijing-based auto supplier and key player in the Nexteer deal, was the first Chinese company Ficano lured to Michigan after meeting its owner, Tianbao Zhou, on that first China trip in 2005. Tempo opened a research center in Canton Township two years later.
Ficano told me last week that Zhou apologized to him because the Nexteer acquisition is in Saginaw, not Wayne County. "I said, 'Hey, don't worry about it. It's in Michigan,' " Ficano said.
Another significant aspect of the Nexteer deal is a concessionary labor contract with the UAW that paved the way for the sale. The five-year pact, ratified by Saginaw workers a week before the sale deal was struck, calls for a cash payment to UAW workers in return for giving up raises promised earlier, and a buydown provision to lower the wages of skilled trades workers.
When Ficano first talked with Tempo officials years ago, they were mulling whether to invest in Michigan or in Canada. "They were concerned about Michigan's negative labor reputation," Ficano said.
After Ficano told them Canada had strong labor unions, too, he arranged a meeting between Tempo executives and UAW Vice President Jimmy Settles. Settles convinced them that the union was flexible and could do what was necessary to deliver the productivity Tempo needed, at a wages-and-benefits cost that would enable them to compete.
Four years after that conversation, a big unionized Michigan auto plant is about to become Chinese-owned.
GM's Nexteer steering column operations will be sold to Pacific Century Motors, a joint venture between Tempo and E-Town, the investment arm of the Beijing municipal government. A ceremonial signing is planned Monday at GM's Renaissance Center headquarters; the deal is to close later this year. Purchase price was estimated by Bloomberg News at $450 million.
Last year, Tempo was a joint-venture partner in the $100-million acquisition of Delphi's brakes and suspension business, along with the Beijing government and another Chinese firm, Capitol Iron & Steel.
After a virtual halt to buzz about Chinese investment in the U.S. during the economic upheaval of 2008 and 2009, deals are now getting done, said Peter Theut, founder of China Bridge, a new Ann Arbor consulting firm focusing on trade and investment.
China has capital to invest, at a time when lots of U.S. companies are having a hard time getting bank loans.
It's funny how old hangups, whether they be about Michigan's labor climate or China's currency manipulation, can fade away when two sides need what the other's got.
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