Company Profile - Who is Fuyao?
Pronounced “Fwee-ow.”
Chairman is Cao Dewang.
Est. in 1987.
Products sold under brand name ‘FY’
Number of employees: 17,871.
Sales turnover: 10.24 Million Yuan.
China’s largest glass manufacturer. Has 15 percent of auto glass global market and 70 percent of home market. Ranked second in global auto glass market in 2011.
Recently added roof windows and door parts such as window frames to product lineup.
Listed on Shanghai Stock Exchange.
Supplies auto glass to Alfa Romeo, BMW, GM, Hyundai, Volvo, Audi, Chrysler, Mercedes-Benz, Tata.
In Moraine, the company could employ up to 800 workers and take up 1.4 million square-feet of industrial space - a third of the former GM Moraine plant. Company will invest $200 million in the plant, which could open in 2015.
Source: www.marklines.com
Following the story
The Dayton Daily News was first to name Fuyao as company planning to bring 800 jobs to the former General Motors plant in Moraine. The newspaper has closely efforts to revitalize the plant since the automaker ceased vehicle assembly there five years ago.
With the red hot U.S. auto industry expanding at a clip not seen in years, a windshield fabrication plant along the Interstate-75 auto supply chain corridor would be a major prize for the Chinese company wanting a larger share of the auto glass market.
Chinese auto windshield maker Fuyao’s move to create that factory line in Moraine - its first in the U.S. - is consistent with the rising company’s opportunistic expansions around the globe, industry experts interviewed by the Dayton Daily News said. The auto glass market is a big one - estimated to be worth between $4 billion to $5 billion.
Sales of autos in the U.S. are predicted to hit 16.3 million in 2014, the highest since 2006, said Alec Gutierrez, a senior industry analyst at Kelley Blue Book in Irvine, Calif. The only hotter market in the world is China.
The market has come a long way since vehicle sales tumbled in 2009 to 10.5 million, a 30-year low. U.S. domestic auto makers are now beating their Japanese rivals in gaining market share with features and quality exceeding the competition, Gutierrez said.
Tom Murphy, Executive Editor of trade publication WardsAuto World in Southfield, Mich., said that in 2007 Bo Anderson, then GM’s global purchasing chief, “had some big ideas about sourcing windshields from Asia to North America.”
Seven years, a brutal recession and a series of huge government bailouts later, the auto industry is in expansion mode. The day has arrived, although not quite in the way the GM executive anticipated.
With U.S. wages down and with pay slowly rising in Asia, there’s no longer a massive labor cost advantage to assemble auto components in China and ship them across an ocean. “Today, the cost of labor is quite a bit higher in China, so it is much less compelling to source components from there to the U.S. in a lot of product sectors,” Murphy said.
“Bottom line is, the market dynamic that was so attractive to Bo Andersson in 2007 - only $3 per piece to ship a windshield from China - most likely no longer exists, so it makes sense to have more domestic manufacturing/assembly of components that will be used in North American-built vehicles.”
Murphy added: “This is a hot market right now, and every auto maker in the world needs to be present, especially to offset losses in Europe. Every Chinese supplier and automaker wants to be present in the U.S. — it’s the promised land for them.”
Chinese companies are eager to buy U.S.-based auto industry assets, especially in the auto parts arena. Acquisitions include Nexteer Automotive in Saginaw, Mich., a plant that assembles electronic steering systems that was once part of Delphi Automotive Systems, and lithium battery-maker A123 Systems in Livonia, Mich.
Murphy cites a U.S. market more competitive globally for vehicle and component manufacturing as a result of contract negotiations with the United Auto Workers and as auto plants in the South proliferate — and pay less.
Ocean freighter capacity is also down, Murphy said, raising shipping costs. “Suppliers hate paying premium shipping costs. Setting up shop locally makes sense — always has,” Murphy said.
Jamie Browning, is a former Fuyao employee who during a year in Beijing trained 250 of the company’s employees on how to install auto glass, He’s now working in the Autoglass Division for Key Communications Inc., a glass trade industry publisher.
Browning sees his former employer as the fastest-growing company in the auto glass market, having successfully boosted the quality of its products to land global supply deals for luxury models like the Bentley and Rolls Royce.
Experts say the auto glass makers are all secretive about who they supply and what contracts they win, but it goes without saying that Fuyao is fighting for share in a tight industrial group.
The largest global suppliers include Japanese Asahi Glass Co., Ltd., Pilkington Automotive Ltd., DURA Automotive Systems LLC. and Guardian Industries Corp., both of Auburn Hills, Mich., and Magna International Inc. of Ontario, Canada.
The entry of the Chinese into the market has made competition more fierce, said Jenna Reed, editor for AGRR Magazine and Glassbytes.com., a part of the same trade publishing group that employs Browning. In Moraine, Reed expects Fuyao to install giant glass kilns to bend the glass sheets into windshields. It’s expected the sheets will be imported from China and shipped by rail to the plant.
Moraine City manager Dave Hicks said the company told him it could fabricate windows of all sorts for motor vehicles in Moraine, including windshields, side and rear windows.
“We are working with the company now to establish a timeline of all the things they need to do,” he said.
About the Author