Global Biz

Chinese company buys US plant; workers feel safer

(Xinhua)
Updated: 2011-01-14 10:52

BELLEVILLE, Illinois - "I'm really happy for still having a job here," Rick Oberski, a 54-year-old worker with Neapco Drivelines, a subsidiary of Chinese auto supplier Wanxiang Group, told Xinhua Monday on the plant floor.

Related readings:   Hu's US visit a 'good opportunity' for ties   US, China should cooperate: Locke

Rick has to support his family, including three kids and his wife, all by himself, which was a heavy task in the tough period of 2008, when his former employer Automotive Components Holdings (ACH) Monroe Plant struggled to survive the crisis hitting the entire industry.

"If it (ACH Monroe Plant) was closed, I think I would have a hard time to find a new job being 50 some years old," said Rick.

Wanxiang America Corporation announced the buyout of ACH's driveshaft business through Neapco Drivelines, one of its US subsidiaries, at the beginning of 2008.

To the workers, the more important news was that more than 200 workers, or 80 percent of the staff, in the former plant could retain their jobs with the new employer.

Chicago-based Wanxiang America Corporation was established in 1994 and acts as the US home office of Wanxiang Group, which is based in Zhejiang province of eastern China.

The corporation now has 28 plants in the United States. It has helped many US auto component producers tide over the crisis in the past few years, saving over 3,500 jobs.

"We have grown more profitable after the acquisition. We didn't even make money in 2008 because the first year here was terrible for business. But we had a good year in 2010, as the sales was four times from the first year (2008), and the profit in 2010 almost doubled from last year (2009)," said J. Robert Mangini, executive vice president of Neapco Drivelines. "We also look for a good year in 2011 and 2012."

With business experiencing a turnaround, the company has employed more people to expand production in the recent two years.

Mangini said the company has managed to keep the ratio of so-called direct-labor people, who add value directly to products, such as workers on the plant floor, at a high level.

Ray Adamczyk, manufacturing vice president of Neapco Drivelines, hoped the company would increase its staff members by 20 percent to 30 percent annually in the next three years.

Adamczyk said the acquisition brought cheap yet high-quality supplies to the plant. About 35 percent of components are from China's Wanxiang, and they are much cheaper than those in the United States.

"We are looking forward to expanding from our current customers, and we also have opportunity to expand and have different products. As the company goes well, we will have more salaries," said Adamczyk.

Moreover, the deal isn't unilaterally beneficial. "We also send product-developing engineers to China. They and Wanxiang's engineers sit there, face to face, to work together on the product development process," said Mangini. "This program has been on road for 2 to 3 years and will help the Chinese company to improve its product quality step by step."