VIDEO: Wall Street Journal goes inside Chery factory
The Wall Street Journal was allowed behind the scenes at Chinese automaker Chery, a rare privilege in Communist China. The reporter didn't discover any top-secret plans for world domination or even a rendering of what Dodge's Chery-made car would look like. But he did see German and Italian robotics being used on production lines staffed by $1-an-hour workers 16 hours a day. It's a combination the story says should be good for global success.
In Chery's research center, engineers are developing 40-50 new models and the company is building a new production line capable of turning out 700,000 cars a year.
Chery chairman Yin Tongyao says they hope their relationship with Chrysler will allow Chery to hone its cars and streamline its production process. "People look down on our products. There are many doubts about our safety and quality," says Yin says in the WSJ piece. "If we work together with Chrysler, we can go global faster."
[Source: The Wall Street Journal]
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Reader Comments (Page 1 of 2)
Ron @ Dec 5th 2007 1:25PM
Nice, but I wonder how many machine guards came down and protective masks and suits came off once the camera stopped rolling?
Please. We're allowed to see exactly what Chery wants us in the US and the rest of the world to see.
ckm @ Dec 5th 2007 1:44PM
I seriously doubt that's the case. There is no incentive to do so, except perhaps saving a very small amount of money on masks and other protective gear. It's just not worth risking millions of dollars of investment just for that, and Chery knows it. Their primary competitive advantage is very low cost labor, not doing away with safety gear.
There are a lot of ugly workplace practices in China, but there are also some world-class workplaces, particularly among companies like Chery that are trying to break out of low-grade, low-quality, China only products.
The real worrying thing about this story is that, as the reporter points out, all the technology needed for setting up an advanced car factory is readily purchasable on the world market. What is missing is the knowledge needed to build a competitive car in Western countries and Chrysler is busy transferring that knowledge to Chery.
That might be wise in the short-term, but British-Leyland did the same thing with the Japanese (Austin sent a huge engineering team there after the war) and look where that got the British car industry....
2004m3driver @ Dec 5th 2007 1:52PM
Not very business minded are you Ron. I own a factory in Vietnam and the equipment I use is very state of the art and I obey all safety procedures, its not difficult. Plus that isn't what makes cost high. No one wants dead workers, especially when they have to be retrained. Its the abundance of low cost labor that keeps prices down. Hiring one employee over here costs as much as 8 over there and thats is because I pay high.
Ian @ Dec 5th 2007 2:52PM
Indeed, I imagine retraining dead works could be quite costly. Good necromancers are not cheap.
Mike I @ Dec 5th 2007 11:25PM
2003m3driver,
Over here, in real-life American business, we don't think of dead workers as retraining fees. We think of them as people. That's the result of the American soul. Or perhaps, that is simply a result of having a soul.
Mike I @ Dec 5th 2007 11:37PM
Oh yeah, and don't ever say "business minded." Don't ever tell others that you are "business minded." First, judging by your elementary grammar, I doubt you went to any credible business school. Second, there is a difference between business and morals. The difference is the order of importance in which they come into your life: morals and then business. In America, even if the safety precautions aren't "not difficult" to follow, then we go above and beyond the ensure the safety of our employees. That is why, in America, we have business ethics classes. But I'm sure that even the best business ethics classes will do little to assist your depraved, greedy life attitude. The best business man is a respectable man who works well in business, not a slave for his business and a money hounding slavemaster to his employees.
Brent @ Dec 5th 2007 1:31PM
You may be right but the cars themselves seem to be decent. No way to tell from that video, but I wouldn't be scared to drive one that is spec'd for the US.
Cesare Consaga @ Dec 5th 2007 5:00PM
Wow, $1 an hour. And you wonder why OUR middle class is about to become extinct.
Wally @ Dec 5th 2007 5:08PM
You really need to watch the German crash testing agency (I forget the agencies name) video for the Chery Brilliance. You should be scared to drive one, they crumple like a soda can.
http://www.autoblog.com/2007/06/22/brilliance-bs6s-adac-crash-test-is-anything-but/
El Paco @ Dec 6th 2007 6:20AM
@Wally:
It's true that the Brilliance BS6 obtained awful results in EuroNCAP tests, but it's nothing to do with Chery (apart that both companies are Chinese).
http://www.answers.com/topic/chery-automobile?cat=technology
DF @ Dec 5th 2007 1:56PM
"No one wants dead workers, especially when they have to be retrained. "
I know! It's really tough to train those dead workers. They tend to be so unresponsive!
2004m3driver @ Dec 5th 2007 2:03PM
o you
s2d4 @ Dec 5th 2007 2:18PM
Once they have the knowledge from chrysler, this will be pretty scary for other car manufacturers. Imagine the chinese catching up in terms of the build quality and car designs, with the cars being built at almost 20 times less in labour costs... discount the crappy counterfeits and bare in mind the production plants for quality electronic goods such as sony ericsson phones, PC parts, apple parts etc. China is seriously taking things to the next level.... 20 years from now... *shudders
I_Hate_China @ Dec 5th 2007 5:59PM
> Once they have the knowledge from chrysler
They won't. Chery is responsible for all the R&D stuff.
> Imagine the chinese catching up in terms of the build quality and car designs, with the cars being built at almost 20 times less in labour costs...
Labor cost is a small fraction of auto manufacturing unless you happen to be GM or Ford. Toyota pays its workers $100K a year yet doesn't seem to be affected by labor cost.
When the worker efficiency is 150-175 cars/worker-year like you see in modern Toyota or Hyundai plant, labor cost hardly matters.
The very market condition of China prohibits emergence of world-class Chinese auto makers. There are like 100 automakers in China with foreigners controlling 75% of Chinese auto market. Chery is seen as a little guy trying to survive in a cut-throat market dominated by foreigners.
diddy @ Dec 5th 2007 6:18PM
what a hater. you just afraid that one day China become so strong and take over the world.
Mike I @ Dec 5th 2007 11:42PM
"what a hater. you just afraid that one day China become so strong and take over the world."
Diddy, I just afraid that America's youth is becoming dumber by the second. I just afraid of China's unethical business practices. That what I just afraid.
Ken @ Dec 5th 2007 2:20PM
Very interesting. However, the established auto makers have do so much in the last decade, no idea how a new kid will catch up.
espo19047 @ Dec 5th 2007 2:55PM
They are proud to pay people $16 for a 16 hour day.
You can get 8 people for the price of one over there but I wonder how long American workers can afford to buy anything?
I will not consider a Chinese car.
tekdemon @ Dec 5th 2007 3:14PM
1 dollar an hour is actually a good salary in most parts of china. it's not like the car plants are in the chic part of shanghai, they're usually in industrial cities where cost of living is cheap. plus most chinese factories give free housing and food.
and i dunno if they actually work 16 hour days or if they meant the plant runs for 16 hours a day.
Willem B @ Dec 5th 2007 3:44PM
You are a bit of an idiot...
16 hours in most likely 2 shifts of 8 hours each. 1$ per hour is a good wage over there. You obviously don't know much about China, or the living expenses over there. This most likely includes living on Plant property, as well as food, heat, electricity, etc. North America /= China at all. You can't really compare the two.