American vs. Chinese Manufacturing: Which Is Stronger?

In the first of a weeklong series on U.S. economic relations with China, we examine how manufacturing in the United States measures up to its counterparts in China. American companies worry that Chinese producers are more efficient and cheaper, while some Chinese companies believe that U.S. manufacturers are more skilled.

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STEVE INSKEEP, host:

All this week, the business news focuses on the US and China.

Many people in this country believe the United States and China are just beginning an epic economic battle. They argue that Chinese producers are so efficient and so cheap that they'll work their way up the manufacturing ladder until there aren't anymore US factory jobs.

RENEE MONTAGNE, host:

But in China, many argue just the opposite, that the United States is so dominant in certain types of manufacturing that China will never catch up. NPR's Adam Davidson visited a factory in both countries to see how each side is competing.

(Soundbite of machinery)

ADAM DAVIDSON reporting:

Both China and the US have lots of auto parts makers, and that makes it easy to compare how factories in the two countries compete in the global market.

(Soundbite of machinery)

DAVIDSON: We'll start in China. Wanxiang is a major Chinese car parts firm. It's in Zhejiang, two hours south of Shanghai. Huang yu-Hong(ph) stands at a large machine.

Ms. HUANG YU-HONG (Auto Parts Worker): (Foreign language spoken)

DAVIDSON: `I'm polishing the part,' she says. The plant is clean. There are long rows of machines. At each one, a worker, almost all of them young women, wears a blue smock and white cap.

(Soundbite of scraping)

DAVIDSON: Things are different when we move to McHenry, Illinois, where the Affinia Group makes brakes under the brand name Raybestos. The factory is clean but doesn't sparkle like Wanxiang. The machines are older, the workers more casually dressed. Richard Lopez(ph) shows off his Chicago Bears number 44 shirt.

Mr. RICHARD LOPEZ (Auto Parts Worker): Sure, I watch the Bears.

DAVIDSON: Well, who's 44?

Mr. LOPEZ: Curtis Enis.

DAVIDSON: Workers wear heavy metal shirts. Some have tattoos and piercings. So far, China seems to be winning. Who wouldn't trust uniformed cleanliness over free-spirited chaos?

But then you ask the workers what they know about their jobs. Take Huang, who is polishing that two-inch diameter round silver part.

Ms. HUANG: (Foreign language spoken)

DAVIDSON: She reads the code number, but when I ask her what kind of part it is, she doesn't know. She doesn't even know if it goes in a car. Huang is from Anhui, a poor inland province. Most factory workers like her live in dormitories and see their families rarely.

Ms. HUANG: (Through Translator) I don't want to spend my whole life here, and I want to start up my own business in the future.

DAVIDSON: She dreams of opening a store that sells maternity clothes. She knows little about the machine she uses every day. She was trained to push the right buttons to start the polishing process and little else.

Back in McHenry, Rich Lopez doesn't operate one machine, he works on four simultaneously. They call it a cell.

Mr. LOPEZ: I can do anything in the cell, like this. Right now, you can run it at minus one, but if you were to want me to show you how to offset it, you know, to put it at 0, I would come in here...

DAVIDSON: Lopez came here just out of high school. In 11 years, he's become fluent in the machine tool program. He can go up to just about any machine in the factory, program it from scratch and operate it. In addition to four machines, he also does quality control. It would take at least six workers at Wanxiang to do what Lopez does alone.

Lu Guanqiu owns and runs Wanxiang. He's known as one of China's richest men, a self-made billionaire who has come a long way from the days he ran a one-man bicycle repair shop.

Mr. LU GUANQIU (Owner, Wanxiang): (Through Translator) Yes, very long, very long, and it's endless.

DAVIDSON: Lu has none of the bravado typical of American CEOs. I told him I planned to compare his company to an American one.

Mr. LU: (Through Translator) The company in the States, in terms of company's gear, in terms of technology development, I think definitely it will be much stronger than my company.

DAVIDSON: He says American companies are better at customer relations. Americans are better innovators. But the biggest difference is the productivity on the factory floor.

Mr. LU: (Through Translator) The quality of the workers in the States' companies are much better than our workers. American companies' workers, they usually really respect their job. This kind of spirit is really what we need here.

DAVIDSON: On a scale of 0 to 100, if 100 is the most advanced American company, and 0 is where Wanxiang started, with no experience, no training, where are you now?

Mr. LU: (Through Translator) I think maybe around 60. For Chinese people, 60 means we just passed examination, so for me, my company just passed examination now.

DAVIDSON: At Affinia, Rick Passarek(ph) doesn't take much comfort in that just-passing grade.

Mr. RICK PASSAREK (Affinia Group): That rating of 60 to 100, I would not be surprised that even three years ago, that rating might have been 25 to 100. So they're making progress very, very quickly.

DAVIDSON: Not long ago, Chinese auto parts weren't good enough for the US market. Now they're quite common. Even Affinia is importing parts from China for its low-end line. Passarek says no Chinese factory is competitive on higher-end parts, at least not yet.

Mr. PASSAREK: They're trying to get better because they want to be like us. They want to be that 100.

DAVIDSON: Back in China, Wanxiang's manager seems genuinely confused that anyone in the US could be scared of Chinese manufacturers, but many are. When Affinia's managers look at China, they see lower-quality products, sure, but for much less money. Rick Passarek.

Mr. PASSAREK: Their quality level is going to get better and better, and we're going to have to continue to improve our quality if we're going to be able to compete, to always stay a little bit ahead of them.

DAVIDSON: This is why there is such rapid change in manufacturing these days. US manufacturers have to constantly innovate to stay ahead, knowing that there are Chinese manufacturers working just as hard to catch up.

Adam Davidson, NPR News.

MONTAGNE: Tomorrow, the growing consumerism in China.

This is MORNING EDITION from NPR News. I'm Renee Montagne.

INSKEEP: And I'm Steve Inskeep.

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