Some might see it as giving comfort to the enemy. But others view it simply as an unwillingness to make the same mistake twice.
Last week, executives from 26 Chinese automotive suppliers were welcomed by Detroit industry officials at a reception sponsored in part by MICHauto, a fledgling organization seeking foreign investment in Michigan’s automotive sector.
Although auto makers and suppliers are looking more and more to China as a market opportunity and a source for low-cost goods, established players also know the Chinese potentially represent a huge competitive threat – including right here in America.
In the past, when foreign companies were seeking entree to the U.S. market, Detroit was less than eager to roll out the welcome wagon.
But that’s the old, insular, more parochial Detroit, and the folks behind MICHauto appear bent on preventing all of the new automotive investment in the U.S. to continue heading south.
Since 1999, Michigan has lost one of every three of its automotive jobs as capacity has shifted mainly to places such as Kentucky, Ohio, Mississippi and Alabama, the Ann Arbor, MI-based Center for Automotive Research says.
“We won’t make the same mistakes we made with other countries,” says Thomas J. Manganello, who heads up the automotive industry group at legal firm Warner, Norcross & Judd and is the main force behind MICHauto.
“This is a global economy, and I expect eventually the Chinese will want to move to the U.S.” he adds. “And when they do, we want them here in Michigan.”
Manganello believes more of the new automotive investment by Japanese, Korean and European manufacturers might have ended up in Michigan if the state and the local industry would have been more receptive to it.
Other states have assembled coalitions of government and industry people to roll out the red carpet for foreign firms looking to set up U.S. operations even if those coming here ultimately represent new competition.
“We want to be like the Economic Development Partnership of Alabama,” Manganello says, citing one such state alliance that has been successful in luring manufacturing investment from Mercedes,and .
“We want companies to know that when they come to Michigan, we’re ready to help them out.”
In recent years, the state has been more openly courting foreign automotive investment.
Wayne County Executive Robert Ficano attended the reception and says he soon will open the county’s fourth office in China and launch its third trade mission there in October as it seeks to draw more foreign investment to southeastern Michigan.
MICHauto, launched in January, says it now has roughly two-dozen members, including tire maker Goodyear and newly landed.
For auto makers and suppliers looking for new markets and low-cost manufacturing opportunities but coming under increasing pressure from global competition, embracing the Chinese may be a damned-if-you-do-damned-if-you-don’t proposition.
But for some, at least, the choice appears clear.
“We’re open to anyone, the Germans, the Japanese, the Chinese,” Maganello says. “We want you to be in Michigan.