EoW November 2009

Transat lant ic Cable

Washington’s economic stimulus requires any project ❈ ❈ receiving money under the plan to use steel and other construction materials, including solar panels, from signatories of the World Trade Organization’s agreement on free trade in government procurement. China has not signed. To avoid difficulties, and to reduce shipping costs, the Chinese company Suntech intends to build a solar panel assembly plant in the American Southwest – in either Arizona or Texas. Steven Chan, Suntech’s president for global sales and marketing, told the New York Times , “It’ll be to facilitate sales – ‘Buy American’ and things like that.”

The environment

China is out in front of the US in the greening of the world

Keith Bradsher, who is the Hong Kong bureau chief of the New York Times , has written, “Backed by lavish government support, the Chinese are preparing to build plants to assemble their [solar products] in the United States to bypass protectionist legislation. As Japanese auto makers did decades ago, Chinese solar companies are encouraging their US executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root.” Mr Bradsher’s article, filed from Wuxi, a top business centre in southeast China, describes an extraordinary Chinese effort to achieve global leadership in renewable energy – solar power in particular. What distinguishes this from other ambitious commercial initiatives is its swiftness and sureness – not to say boldness. President Barack Obama is on record as aspiring to make the US the world’s leading exporter of renewable energy, but China’s leaders have pre-empted the ecology-minded young president, and on his own turf. (“China Racing Ahead of US in Drive to Go Solar,” 25 th August) The Times noted that Chinese companies have played a major role in pushing down the price of solar panels by almost 50% in only a year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said in an interview in Wuxi that Suntech, to build market share, is selling solar panels on the American market for less than the cost of materials, assembly, and shipping. First Solar (Tempe, Arizona) is still the world’s number one supplier of photovoltaic cells but Suntech, based in Wuxi, is on track this year to push past Q-Cells, of Germany, into second place. Clearly, the solar power race is on, and the American industry can count on help from the Obama administration. The Departments of Energy and Treasury announced in August that they would give $2.3 billion in tax credits to clean energy equipment manufacturers. But China is solidly behind its own contenders, and industry sources interviewed by the Times were sceptical of the ability of Western companies to hold their own in competition with Chinese solar products companies with their strong advantage, especially as to labour costs. Mr Bradsher noted that recent college graduates in engineering in China command starting salaries of only around $7,000 a year. Thomas M Zarrella, chief executive of GT Solar International (Merrimack, New Hampshire), which sells specialised factory equipment to solar panel makers worldwide, was prepared to concede the Chinese hegemony. “I don’t see Europe or the United States becoming major producers of solar products,” he told the Times . “They’ll be consumers.”

Automotive

An entrepreneur bets on Italian styling – Fioravanti, no less – for the products of Detroit

“I believe in the American economy,” Roland Martin, of Martin International Technologies, told the Detroit Free Press . “You can’t build a company’s future only on Chinese customers.” The new company, whose first US office will be in Los Angeles, plans to introduce renowned Italian design and engineering to US auto makers as they move to global vehicle platforms. As reported by Mark Phelan on freep.com, Mr Martin is working with Fioravanti, the Turin-based company that created the upcoming Lexus LF-A exotic sports car. This, together with classics (notably the Dino, Daytona, 308, and 348) designed by Leonardo Fioravanti during his time with Ferrari, will be high among Mr Martin’s credentials when he pitches Fioravanti’s consultant services to companies like General Motors and Ford. (“Firm Bets on US Market, Will Bring Italian Style,” 9 th August) Martin International Technologies grew out of a decision by Mr Martin’s former employer against opening a design office in Detroit, in favour of working with Chinese auto makers. Believing this to be a mistake, Mr Martin struck out on his own, at what he deems a propitious time. He expects the US recovery to be quicker and stronger than Europe’s because of its underlying strengths and the optimism that he sees as an element of the American character. “Europeans are always afraid tomorrow will be worse than today,” he told Mr Phelan. “Americans expect it to be better.” Mr Martin probably knows that optimism – his own and America’s – will take him only so far. His real stock-in-trade is the Fioravanti affiliation. As noted by the Free Press , so strong is the reputation of Leonardo Fioravanti in the Italian auto industry that Ferrari recently took the unusual step of permitting its iconic rampant-stallion badge to be fixed on a body designed by an independent: Fioravanti. The Japanese customer for the one-of-a-kind SP1 wanted a Ferrari, but requested styling by the creator of the earlier classics.

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