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The encyclopedia · People & Management · Operational decision · 2014–2019

Fuyao bought a closed GM plant — and hit a wall of American labor culture

In 2014 Fuyao reopened GM's Ohio plant. The Chinese factory floor met the union town, and the clash cost a lost vote, OSHA fines and years of losses.

Fuyao Glass America

HearsayWidely repeated, and we cannot show you a document for it. Read it for the lesson, not as fact.

What it means today

A management system that fits one workforce does not travel inside a shipping container. Importing the tools while expecting the people on the ground to change is the difference between Toyota's Kentucky and Fuyao's Ohio.

What happened

In January 2014 Fuyao Glass America, the US arm of Chinese glassmaker Fuyao, bought 1.4 million square feet of the shuttered GM Moraine Assembly plant in Ohio, investing $240 million and promising 800 jobs. By October 2016 the plant was in full-scale production and total US investment had reached $1 billion. It was the most visible experiment in transplanting a Chinese factory system onto American soil.

The transplant did not take. The Chinese management style — tight control, long hours, loyalty to the boss — collided with the expectations of a Rust Belt workforce that knew the union shop. In 2017 the plant's workers voted 886 to 441 against forming a union, a defeat that left safety and pay grievances unresolved. In July 2019 OSHA fined the plant $724,380 for nine repeated and 13 serious violations, after inspecting the site twelve times in four years. The plant struggled to turn a profit in its first two years.

The story spread beyond the factory when American Factory, a film shot inside the plant, premiered at Sundance in January 2019 and won the Academy Award for Best Documentary Feature — putting Fuyao's culture clash in front of the world. Where Toyota had translated its production system for Kentucky, Fuyao imported the system and expected the town to adapt to it.

Why it happened

  • Management transplanted the Chinese factory model wholesale and expected the American workforce to conform, rather than translating the system as Toyota had done
  • The 886–441 vote rejected the union but did not resolve the safety and grievance problems, leaving them to accumulate until OSHA stepped in
  • Cost discipline and speed were treated as universal values; the local workforce's expectations of safety, voice and process were treated as friction to be overcome
What it costa lost union vote, $724,380 in OSHA fines and lossescostly

The lesson

A factory system fits the workforce it was built in. The tools were imported; the expectations were not. Safety and voice are not friction to grind away — they are the price of a plant.

Aftermath

The plant kept running, but the opening years were a running argument: a union vote lost 886–441, twelve OSHA inspections, a $724,380 fine and a string of loss-making quarters. American Factory turned the clash into the most-seen factory story in the world, and Fuyao became the cautionary counter-example to Toyota's Georgetown.

Sources

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    Somewhere, someone solved the problem this company failed at. 2nd Opinion →