The American Factory

Context

FuYao is a Chinese manufacturing company that products glass for automobiles companies:

  • Honda
  • Toyota
  • Hyundai

The company setup a factory in Dayton Ohio in 2013 to take advantage of the abundant supply of cheap skilled labor in the region resultant of the 2008 recession.

Overarching trends

  • globalization continues to apply downward pressure of wage growth around the world for commoditized labor
  • automation continues to eliminate entire categories of jobs around the world

In depth analysis of FuYao Glass America

The opening of a plant in the new country can be seen as a acquisition of sorts.  Acquisition activities is considered a merge of the following components:

  • Culture
  • Process
  • Assets

In this case, it could be seen as a merging of FuYao’s culture and process with Dayton Ohio’s asset which is cheap skilled labor.

Below are the key conflicts with the merger

  • highly structured and propagandized environment (Chinese) versus loosely structured and casual environment (USA)
  • processes built around social norms in a weak union environment (China) versus social norms from a strong union environment (USA)
  • productivity and throughput focused paradigm (Chinese) versus safety and family focused paradigm (USA)
  • workers paid USD29/hr when working for GM before it shuttered are now paid USD17/hr under FuYao
  • governor and grassroots were encouraging unionization to encourage more say American say in the running of the plan

Key transitions

  • removal of locally hired senior management (USA) with Chinese senior management (USA) for effective implanting of culture within company
  • battling against worker unionization

Reasoning on more extreme weather patterns observed

August and September is the season for extreme weather patterns along the south eastern coast of major continents in the northern hemisphere.
Barely two weeks after Typhoon Lekima (the costliest ones in Chinese history) hits South eastern coast of the China, Hurricane Dorian (the largest one in US history) gets elevated to category 5 and is set to hit Florida, the South eastern coast of USA.

Attempt at reasoning increased magnitude of storm patterns

Both Earth rotates eastwards and the trade winds blow westwards at a constant rate. This explains why storm patterns always occur along the east coast of continents.
Intensified greenhouse effect resultant from increased carbon emission has caused greater heat to be trapped resulting in generally a warmer ocean. This leads to greater temperature difference between the upper and lower sections of the buildup and thus more severe weather patterns.
This phenomena is the most acute along the equator during the season when:
  • the northern hemisphere shifts from summer to autumn,
  • the Southern Hemisphere from winter to spring and
  • the equator is the hottest.

That happens to be during August and September.

Approaches to capping out the magnitude of the storm

  • Reduce the surface area of the water body the storm is allowed to build up momentum over. Reducing water supply in the ocean by freezing them up.
  • Reduce the delta between the hottest and coldest temperature during the year. Reduce the amount of heat trapped within the earth’s atmosphere.

 

Related references