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ASSIGNMENT 1 –

AMERICAN FACTORY

Amlan Turya Bala


Student ID: 2019281224  Email Address: amlanturjo22@mail.nwpu.edu.cn
Questionnaires Based on the Documentary- American Factory

1. Why did the entrepreneur (Mr. Cao Dewang) build the glass factory in the U.S?

ns. Mr. Cao Dewang built a glass factory in the U.S in order to get his company to a global
standpoint and also because of the various financial advantages that he would be getting
in the U.S. First of all, China had a VAT tax, and the United States did not. Secondly,
labour costs in the United States are very high, accounting for 40% of the operating cost,
whereas in China it only accounts for 20%, but the proportion of insurance paid by
Chinese companies was very high. Although labour costs are half as expensive
domestically, Fuyao were nearly 4% more expensive than the United States, plus the
VAT for auto glass, which is around 12%. Third, the American energy prices were lower
than China's. The price of natural gas there was one-fifth that of China's, electricity was
only 40% of China's price, gasoline cost only half of what it did in China, and the cost of
transportation and logistics were relatively low. These inputs made the price 4% to 5%
cheaper, so the overall calculation made production 16% to 17% cheaper. Moreover, if
the company shipped the glass from China to the United States, the freight costs would
increase by 15% to 20%. Also there was a gap in the flow of economy due to the closure
of the GM factory which made it easier for Fuyao to enter into Dayton, Ohio.

2. What did the workers in the glass factory in the U.S complain? And what was the
situation in the glass factory in China?

ns. The workers in the glass factory complained about the unsafe work environment in the
factory such as the high temperature furnace as well as the single person employment in
certain sections of the company which leads to difficulty for the worker. They also
complain about the drastic difference in salary of the workers in comparison to GM, since
the American workers used to get double the money they get at Fuyao. They also would
not be working during the weekends. They complained about the safety issues as there
were a lot of injuries. For a long, long time, there was no nurse there. At the old GM plant
they had a nurse on duty and a doctor on call at all times — all shifts. They had nothing
like that at the Fuyao plant at first
The situation in the glass factory in China was completely different as the workers
were extremely hard working and they even worked during the weekends. They also were
satisfied as well as encouraged with the salary that they got. The workers were also much
more efficient than the workers at the US factory.

3. What are the culture shock the U.S managers experienced when they visited the glass
factory in China?

ns. When the U.S managers of Fuyao glass visited the glass factory in China they were
extremely shocked to see the work cultures of the workers at the Chinese factory. At the
factory the US managers saw that uniformed Chinese workers start the day by standing to
attention and doing a call-and-response exercise, a type of motivational ritual that is
common in corporate China. They also see a worker picking up broken glass without the
kind of safety gear he would have in the US. When they enter the factory they are met
with open arms and an elaborate party that includes choreographed songs and dances
about “intelligent and lean manufacturing” and “market response” that bring one
American to tears. The headquarters is bright, jubilant, and passionate, compared to the
dreariness of Dayton and its vacant-eyed employees.

4. How did the Chinese managers motive the Chinese workers and encourage them to
keep up high morale? Did it work for the U. S workers? Why?

ns. The Chinese managers motivated their employees by doing a military line up drill at the
beginning of the work when the workers come into the factory. The drill was also done
during the break so that their morale didn’t go down during the day. The drill consisted of
the employees chanting “To stand still is to fall back” and clap to it.

When one of the American supervisors, when he got home from the trip to Fuyao
headquarters, he tried to get the Americans to line up in that kind of military formation
and it just did not go that well. It's like the people who signed up to work in this hot,
intense glass factory in the United States, they're making $12.84 an hour and they're not
getting paid enough to line up and be regimented like that.
5. What is the difference between the Union of the U.S and the Union of China? Do you
support the workers in the U.S glass factory to form unions? Why?

ns. The difference between the Union of the US and the Union of China is that the Chinese
union is more like a social club. The union there - because of the - the Chinese
Communist Party is so integrated and aligned with the management of Fuyao, the
traditional concept of a union that the Americans would have at the FGA, as an advocate
for the workers in opposition to the company or to take on the company, that really
doesn't exist. The union at Fuyao in China is more like an HR department that helps build
camaraderie, esprit de corps, and kind of team-building stuff.

I don’t support the workers to form a union at the US glass factory because sometimes
a union can be of nuisance to the company without being of any advantages to the
workers of the company as the involvement of a union can backfire onto the workers
itself. Rather the company as well as the workers should work towards decreasing the gap
between the two so that the workers have a place to share their grievances and get them
solved as quickly as possible.