(Yicai Global) July 19 -- The Ohio-based factory set up by Chinese glassmaking tycoon, Cao Dewang, chairman of Fuyao Glass Industry Group Co. [SHE:600660] is operating fine, the executive said, dismissing a New York Times’ report saying the plant was facing cultural conflicts as fictional.
Though the factory is running at a loss, Fujian-based Fuyao will continue to increase its investment in the US as it is making an overall profit there so far this year.
The New York Times previously published an article titled Culture Clash at a Chinese-Owned Plant in Ohio. The report said Fuyao had encountered problems with labor, health and safety and cultural conflicts in its US plant. Some workers questioned whether the firm really wanted to operate in line with American regulatory standards, it added.
Cao said the report just took the word of its informal sources, but didn’t actually interview the company. “Our company’s wages in the US are 10 percent higher than those in the local area,” he said. “Though the company made a loss of tens of millions of dollars last year, it still paid workers.”
The comprehensive tax burden on China’s manufacturing sector was 35 percent higher than that in the United States, Cao told Yicai global in an interview in December. The price of land and energy was also several times higher than the US. He was optimistic that the total profit from the investment in America would earn more than 10 percent more than it would in China. However, labor relations and negative reports prevented Fuyao’s business development from progressing as smooth as expected.