College of Engineering hosts conference on OEM sourcing and auto safety in China

DETROIT - In China, where economic modernization is in high gear and among its 1.3 billion people the thirst to own an automobile grows, the Chinese government is obliging with an ambitious 5 year transportation plan.

At a one-day conference this week hosted by Wayne State University's College of Engineering, three high-level Chinese transportation administrators shared that plan.

"China: OEM Sourcing and Safety" attracted more than 120 participants to the McGregor Conference Center Dec. 6, including many automotive supplier sales people whose Michigan-based companies are either doing or planning to extend their business in China.

There are many issues the Chinese government faces after 20 years of rapid economic development," said Dai Dongchang, Director General of China's Transport and Planning Research Institute. Balancing economic development with social parity is "a very big issue," he said. "Also, balancing development and the environment."

The Institute Dongchang heads is responsible for key projects, strategies, and management policies, and reports directly to the Chinese ministry.

China's five-year transportation plan, which has been approved but not officially announced, Dongchang said, calls for the construction of 330,000 kilometers of new roads, including the development and extension of seven national expressways spanning out from Beijing, the capital.

Concluding his presentation, Dongchang offered an invitation to all to participate in this "very heavy task" for China. "We are making a great effort and input to make it all work, and work better. Use your imagination to explore and inspire. Be a player. Be a winner."

Ford Motor Company President Jim Padilla opened the conference by describing Ford's forays in China and its experience there. Ford's "50/50 Partnership" with the Chinese includes a manufacturing plant operation in Nanchang, China for passenger vehicles, and one in Jianming for commercial vehicles. Ford is also building a Ford-Mazda engine plant in Changan.

China also imports Ford models specially tailored to the Chinese environment, including the Ford Maverick. Special versions of the Ford Volvo, Focus and Mazda 3 will be coming soon, Padilla said.

"We think China's marketplace is going to be a strong commercial market," Padilla said, "but, only if we bring them the best products." The Chinese marketplace is a "very sophisticated" one, he explained. "The Chinese want the very best - safe for the roadways, best in efficiency, and clean for the environment."

Padilla said Ford gets "very strong support" from the Chinese government, and close cooperation with the Chinese involved in its efforts. "People are eager to learn and have a strong desire to excel," he said.

"The Chinese have made huge strides in terms of developing a money market economy," he said. The Chinese economy has been growing at a 9 percent average over the past 20 years. At the same time, Ford's experience with the Chinese government has been that it grapples with decision-making, Padilla said. "The Chinese government, once they decide, are very good at implementing, but often take a long time to decide."

He continued, "You must do your homework and you must work closely with government agencies. Everything needs to be approved."

Beth Lowery, vice president of Environment and Energy for General Motors, described her company's partnership operations in China as well, which includes a training program for China OEMs on sustainability. Lowery emphasized her company's plans to launch a hybrid vehicle business in China by the end of this year. And she said, no other country presents a better opportunity to introduce GM's hydrogen fuel cell car than China.

Chinese auto safety record falls short

Albert King, Wayne State distinguished professor of Biomedical Engineering, was critical of China's auto design and roadway safety record. In China, where pedestrians and bicyclists predominate and share the roadway with motor vehicles, they are highly vulnerable, he said.

From 1970 to 2002, there were 8.79 auto-related deaths out of 100,000 people in China, compared to a 1.6 death-rate in the United States, King said. About two-thirds of these traffic fatalities are pedal cyclists and pedestrians.

"Many factors can help reduce this fatality rate," King said. "They include appropriate traffic laws, proper enforcement, driver training, and separation of pedestrian and motorized traffic in the urban areas."

Protecting the driver and passengers is also a vital concern. As the Chinese government pushes to increase production of inexpensive domestic-bred models, the Chinese appear to be scrimping on safety design, said King. "The Chinese-designed vehicle may need to improve its safety rating."

He suggested that the Chinese improve these ratings by requiring their designers to go through advanced training in impact biomechanics. "I propose that Chinese manufacturers provide the resources and the time for their designers to learn biomechanics so that over the long haul they can design safer vehicles model after model," King said.

The situation is also an opportunity for U.S. suppliers "to step up and sell their technology to Chinese O.E.Ms," he said. American automobiles must pass the highest rating (5 stars) in the uniform standard rating scale. "In the U.S., we went through this stage of development several decades ago. It is up to the suppliers to convince the Chinese O.E.Ms that they need help. It's not an easy sales job."

The Chinese government wants to implement measures to improve its safety record, said Zhao Wei, president of the Academy of Transportation Sciences, in the Ministry of Communications, at a panel discussion later in the day.

Syed Mahmud, a Wayne State professor of electrical and computer engineering, suggested at an afternoon panel session that Chinese planners consider including automated highway system technology in its plans to develop China's roadways and highways. Wireless vehicle control technology that give early warning to drivers or avoid collisions by taking automatic control could reduce vehicle collisions by 31 to 85 percent, said Mahmud.

Snehamay Khasnabis, a Wayne State professor of civil and environmental engineering, at the same panel, said that fatality rates in the U.S. have been steadily decreasing for the past decade because of a concerted effort by the federal government and industry to set and adhere to safety standards.

Conference facilitates rare dialogue with Chinese

The significance of the gathering dipped below the media radar screen, but did not go unnoticed by key figures in industry, including Jim Padilla, president of the Ford Motor Company, who agreed to make a presentation, along with key leaders at GM and DaimlerChrysler involved in their respective company's China operations.

Ed Ted Griffor, a conference organizer who was instrumental in bringing the Chinese to Detroit, said the gathering was not only "huge" for the Detroit automakers, but also for the Chinese. "It was just as huge for them. We're all trying to find out what is going on and what's the right way to do things," he said.

The Chinese are facing a lot of tough problems, Griffor explained, and to pull off their ambitious plans, they are going to need a lot of help.

Griffor used his connections as a member of the MIT Alliance to help assemble the conference participants. As part of its mission, the MIT Alliance, which is made of a group of MIT alumni, tries to create opportunities to apply advancements in science, technology and best business and social methods to aid society in realizing benefit from important opportunities.

Alsus, of Farmington Hills and Grosse Pointe, a brokerage of companies focused on business development between China and the rest of the world, conceived the conference. When Alsus brought the idea to Jim Anderson, CEO of Urban Science, of Detroit, a business solutions company with offices in China, he suggested that the conference be hosted by College of Engineering where he is an alum and adjunct professor.

Griffor said that in his slide presentation, Padilla was able to suggest subtlety to the Chinese visitors what they need to do to be successful. In a section Padilla titled "China Issues" under the bullet "Expanding Chinese Industry", Griffor said Padilla was really saying, "You guys need to grow. You got young people. If you don't meet their expectations in terms of housing, vehicles, and salaries, you're going to have internal turmoil."

In his "second bullet - 'Outside Contribution for Chinese Growth', Griffor said Padilla is saying, "'Hey guys, to pull this off, you can't do it alone. You got the money coming in based on goods, and because you opened up manufacturing inside of China for outside businesses. But these tough problems, like how to build roads correctly, how to regulate emissions on vehicles, you don't have any experience. You're going to need a lot of help."

In his "third bullet - 'Modern Challenges to Vehicle Safety', "He's pointing to the fact there are all sorts of political stuff going on in this emissions and vehicle safety area," Griffor said. "China and other developing countries got a deferment at Koyoto. On the emissions side they have definite issues - pollution, waste, recycling, and then the challenges of vehicle safety."

Finally, on his last point, 'Synergies between China and Michigan', Padilla states what he believes needs to improve, said Griffor. "We need to put in wholesale-retail separate businesses from assembly and manufacturing so we can move our product into the market place," says Griffor, interpreting Padilla's point. "Bottom line: faster approvals and restructuring of the public economy. You've already restructured the external economy. You work well with our businesses in terms of exporting stuff to us. But we need to deliver our product to you."

Other conference sponsors were MIT, Alliance, Pepper Hamilton and the government of Canada.