Fuyao Glass helps bring back small city in Ohio

In December 2008, amid the financial crisis that swept the globe, General Motors abandoned a manufacturing plant in Moraine, Ohio, where the automobile giant and its subsidiary Frigidaire had been producing vehicles and appliances for almost six decades. The shuttering left a huge void in the small Rust Belt city's labor market, as GM laid off about 1,000 workers.

A decade later, a Chinese company has helped revive that local job market, bringing back more than 2,400 jobs and investing hundreds of millions of dollars.

In 2014, Fuyao, the world's leading supplier of automotive glass, purchased part of GM's original plant in a roughly $450 million deal.

The business did not start out particularly well, as the American plant posted a loss in 2016, its first year of operations. But the investment soon started to produce results, as the company has seen two consecutive years of profits, which increased 30 percent in 2018.

"We all thank the chairman for taking this business risk that has obviously paid off," said Niraj Antani, who represents the 42nd District in the Ohio House of Representatives, where Fuyao Glass America Inc is located, during a visit to Fuyao's plant on Wednesday.

"This plant stood empty for eight years before Fuyao came in," said Antani. GM had more than 4,000 workers at its peak.

"We are very happy Fuyao is doing so well. The story of this building is very important to the Dayton community. So the fact that Fuyao is coming in now and is very successful is great," he said. Moraine is located 6 miles south of Dayton, the big city in the region.

In 2018, Fuyao posted a profit of more than $24 million.

Jeff Liu, Fuyao Glass America's president and CEO, told China Daily that he expects that figure to double in 2019.

The company also has continued to invest in the Ohio plant. Besides an initial $600 million to establish the plant, the company invests $30 million to $40 million each year, focusing primarily on innovation, renovation and increasing productivity.

More recently, after winning the auto glass business for Fiat-Chrysler SUVs, Fuyao invested $3 million in its Moraine plant.

Products from that plant also can be found in a variety of automakers' vehicles, such as the Ford F-150, the BMW X-series, the Toyota RAV 4 and many others produced domestically.

The Moraine plant has an annual capacity for 4 million original equipment manufacturer (OEM) glass sets a year and 0.5 million more units of aftermarket glass sets, according to Liu.

Aside from the 2,400 jobs Fuyao America has directly created, Liu said the supply chain is generating thousands of additional jobs in the region, bringing the total number of jobs associated with Fuyao up to 6,000.

"The hiring they've done in the local community is also very important for our region," said Antani, adding that the factory's jobs support 2,400 families.

"From the government perspective, that's also 2,400 new taxpayers, who are contributing to the city of Moraine that struggled after GM left," he said. Antani said that the city is now seeing a boon from taxes paid by Fuyao employees.

In a broader sense, Montgomery County, where Moraine is situated, and the state of Ohio also are benefiting in various ways from the thousands of additional jobs, including sales-tax revenue, as the families spend their money, according to Antani, who called it a "win-win" situation for workers, Fuyao, China and the US.

"Economically, it really helped our community," said Jamie Hoskins, operation shift manager at Fuyao America.

As a local resident who formerly worked at a steel plant, Hoskins said he had heard great things about the company, saw the good management there, and is also enjoying better pay and a safe working environment.

"I feel like a part of the family already," said Hoskins, who joined the company about a month ago and saw most of the employees were from the local community.

"Couldn't be happier," Hoskins said.

Chuck Marr, 63, who has worked at Fuyao for more than three years and used to own a business serving the former GM plant, has gotten several promotions and is now a supervisor for an aftermarket glass-production group.

He especially likes the company's performance-based evaluation system that differs from other companies like GM.

"The harder you work, the more you can learn, the better you can advance," he said, observing that the growth potential is making Fuyao attractive to younger generations.

Such promotion and talent-cultivation is a way for Fuyao to attract employees and reduce turnover, which Liu identified as the biggest challenge facing the booming plant.

The company has organized team-building events and offers benefits, such as awarding outstanding employees a chance to visit China.

It also has established training and incentive programs to decrease turnover and increase competitiveness. Those include the master training program, a one-on-one process that could lead to skill-based promotions, and the continuous improvement program, which awards individuals up to $3,000 if they make major contributions to the company.

The local government also has offered help in providing workers. Relationships have been established between Fuyao and a local community college, with the participation of government agencies.

"Our interest is in job creation, is in supporting the companies," Antani said.

Lawmakers in Ohio recently approved a 4 percent across-the-board personal income-tax cut and eliminated the bottom two tax brackets as part of the state budget. Antani said workers from Fuyao "will see that very soon".

"One of our commitments as a community is how can we mitigate the risks to make it easier for them to do business," said Erik Collins, director of community and economic development for Montgomery County.

"Fuyao took a big risk in coming to the Dayton market" on the scale as it did, he said, and the region is dedicated to helping companies reduce risks and making itself business-friendly.

JobsOhio, a local nonprofit organization dedicated to facilitating local economic development, singled out foreign direct investment (FDI) as a priority in 2018.

"We want more Fuyaos; we also want Fuyao to be able to do more," said Antani. "At the end of the day, what we want is for Fuyao to be able to have an environment in Ohio to grow, and also for other Chinese companies to be able to invest here."

Antani identified automobiles, general manufacturing and agricultural manufacturing as industries that "do very well" in the Midwestern state. And he suggested Chinese companies follow Fuyao's lead and invest in the US.

Antani and other local political leaders are extending invitations to Chinese companies despite the yearlong trade tensions between China and the US on the national level, which have just shown signs of relenting as a US trade delegation is in Shanghai for talks.

"Obviously our federal government and the Chinese government are going to work those issues out — I think it's important they do that," said Antani, who stressed that the local business bonds remain strong bilaterally.

"We know that we are a good market for Chinese products, but we are glad that the economics are changing in your country, so that you become an even better marketplace for us," said Phillip Parker, president and CEO of the Dayton Area Chamber of Commerce, who looks to help more US companies expand their businesses in China, a country with an increasingly robust middle class.

Parker said there also are major import and export opportunities.

Ohio got more of its imports from China than any other country in 2018, and China was the state's third-largest export destination, according to the US Census Bureau.

"It's the relationship that will show both of our national leaders what these relationships can do between our countries," Antani said. "And as we know, trade brings good relationships. If we are trading with each other, our economies depend on each other, relationships will improve."