Chinese auto industry establishing itself in Detroit
More than 100 parts supply companies service the Detroit Three
Approximately 100 Chinese auto parts companies now exist in metro Detroit, employing local expertise and helping rebuild and reshape the auto industry.
Jerry Xu is the president of the Detroit Chinese Business Association, which serves as the starting point for most of the companies that arrive.
"Business has definitely come back in automotive. GM, Ford, the automotive sector is doing a lot better," Xu said. "From our standpoint, we see a lot of investment from China. The businesspeople want to come in to look for opportunities, to grow their business in North America. We see they're coming, and we welcome them."
Between 2007 and 2009, the world's five biggest automakers suffered a cumulative loss of $69 billion US. The past three years have shown consecutive annual earnings improvement.
Detroit's auto sector suffered some tough blows during the recent global recession but it's bouncing back and the Chinese parts suppliers are helping meet demand.
Supplier ZYNP North America opened U.S. operations in Romulus, Mich., in 2005. It's now the primary cylinder supplier for GM and Ford. The company has annual sales of $100 million in North America alone.
"Metro Detroit is half of the automotive segment. Metro Detroit has infrastructure, the network, the talent, skilled workers, cost efficiency and tax benefits. That's why we choose metro Detroit as our U.S. operation location," said Frank Yang, managing director of ZYNP International. "To put all these elements together in a single city or single area in [a] different country is not easy, but [in] Detroit, you can find all the key elements."
ZYNP has plans to hire another 100 workers in Michigan over the next few years.
Yang said it's only a matter of time before Chinese automakers start rolling entire cars off assembly lines in Detroit.
D.J. Schroeder, an applications engineering manager for ZYNP, said a Chinese presence in Detroit "was inevitable."
"Detroit has been such a hub for the auto industry for so long, and Chinese companies themselves are looking to grow and expand," he said. "There's such a rich pot of talent and expertise. To capture that, they had to be located here. That's what you're seeing."