TPT November 2015

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66 November 2015
Global Marketplace
Trade unionism
With a droll name but workaday
problems, a Chinese-owned
copper tube factory in Alabama
confronts a learning curve
“As the US prepares for a state visit by Chinese President
Xi Jinping at the end of September, the countries’ economic
relations are undergoing a profound shift. With China facing
rising wages, a falling labour supply, and excess capacity, its
companies are crossing the seas to sink roots in neglected
corners of the US heartland.”
Writing a month before Mr Xi’s arrival in the US, the
BloombergBusiness reporters Bonnie Cao and Ye Xie turned
their attention to that shift. They found an example of it in
Wilcox, one of the poorest counties in Alabama, where last
year Golden Dragon Precise Copper Tube Group Inc built
its first US factory. A $120 million investment by its Chinese
owners was augmented by $20 million from the state of
Alabama, which outbid dozens of other states and cities for
the business and the opportunity it represented: 200 new local
jobs.
In 2014, Chinese companies committed $12 billion to projects
in the US – up from zero in the year 2000 and the fastest-
growing source of foreign direct investment in the country.
According to New York-based Rhodium Group, which tracks
cross-border investment, Chinese-affiliated companies now
employ more than 80,000 Americans.
“Like the Japanese and Koreans before them, Chinese
companies want to invest in their export market,” Bloomberg
was told by David Loevinger, a former China specialist at the
US Treasury who is now an analyst at fund manager TCW
Group, in Los Angeles. “As exporters move up the value
chain, you increasingly want to get closer to your customers.”
That was a consideration for Golden Dragon, whose choice of
Alabama was dictated largely by its proximity to the company’s
clients in the American South. But it appears that another
factor was taken too much for granted: the state’s reputation
as one in which trade unions exercise comparatively little
influence.
Adaptation and individualism
Right-to-work legislation in effect in Alabama guarantees that
no person can be compelled, as a condition of employment,
to join a labour union – which helps explain why barely
ten per cent of the state’s workers belong to unions. So is
neighbouring Mississippi one of the 23 right-to-work states.
But, according to Daniel Flippo of the United Steelworkers
(USW), when Golden Dragon set up shop in Wilcox, it offered
workers $11 an hour, compared with $18 paid by a similar
factory in Mississippi.
The Bloomberg reporters noted that, although tens of millions
of China’s workers belong to trade unions, those groups
have no say as to pay or conditions. In Alabama, they wrote,
Golden Dragon was “caught unawares.” (“Chinese Build US
Factories, Bringing Tensions Along with Jobs,” 30 August)
Chen Mingxu – who studied in Britain and led the company’s
factory in Mexico before coming to Wilcox as manager, in May
– protested that $11 was only a starting salary, for workers
with no experience. Even so, and despite pressure from state
and company officials, the Golden Dragon workers voted
to unionise. The company, adapting quickly, raised wages,
addressed safety concerns, and eased its rules on sick leave
and the clocking-in procedure, among other issues raised by
the workforce.
› Derek Scissors of the Washington-based American
Enterprise Institute has said that Chinese investment in
the US could increase to $100 billion over the next five years.
And one of the goals of President Xi’s visit is to make progress
on a treaty aimed at promoting Chinese ventures in the US.
For its part, China under the treaty envisioned by Mr Xi would
liberalise areas in which foreign investment is now barred or
restricted. Among the prospective changes: US banks would
be permitted to own Chinese subsidiaries outright, retailers
could run their own distribution networks, and manufacturers
could operate without a local partner.
› As these large sums and lofty aims are discussed, the
example of a copper tubing factory in Alabama suggests
that some cross-cultural challenges lie ahead.
Mr Chen, the plant manager, is philosophical about the
workplace friction. “As our former leader Deng Xiaoping put
it,” he told BloombergBusiness, somewhat obscurely, “we’ll
cross the river by touching the stones.”
A Golden Dragon engineer was more direct. “Individualism is
strong among US workers,” said Qiao Gaopan. “They don’t
listen to you but have lots of opinions.”
Technology
Condenser tubes coated with
durable and water-averse
graphene hold promise
for improved power plant
performance
An illustration accompanying the R&D Magazine article
“Making Power Plants More Efficient” (1 June) shows an
uncoated copper condenser tube alongside a similar tube
coated with graphene. When exposed to water vapour at
100°C the uncoated tube produced an inefficient water film
while the coated tube shows the more desirable dropwise
condensation.
These results, reported in Nano Letters, a monthly peer-
reviewed scientific journal published by the American
Chemical Society (ACS), apparently establish that a layer of
graphene just one atom thick can improve the rate of heat
transfer by a factor of four – and potentially even more than