Dont Call Hemmings Traitor

December 11, 2006
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CASCADE TOWNSHIP — It is good fortune that Pacific Rim Alliance founder and president David Hemmings spends roughly half of any given month overseas.

If not, this fall would have been an even more trying time for the international business consultant, as the airwaves were filled with anti-Asia rhetoric from politicians and political media. Republican gubernatorial candidate Dick DeVos was vilified for his investment in China as president of Alticor, and added to the fire by arguing that the move was in no way an outsourcing initiative.

"It's an agony what the state of Michigan is going through," Hemmings said. "The world is changing so much, and it's really quite sad how hardened and fixed positions are here, while the rest of the country is doing quite well. …

"I am particularly resentful of anybody that hides the facts from people and doesn't communicate with them that it's not their fault; it's just circumstance."

Hemmings' firm is a one-stop shop for any company that wants to operate in Asia, including those with interests in offshore sourcing. Depending on the mood, people with his specific expertise are commonly referred to as "the enemy," "job-killers," "parasites," or his personal favorite, "traitors."

"The reality is that people need help," he said. "And it doesn't help that politicians misrepresent the likelihood of things getting better. It doesn't help that the media creates a panic about the situation. The only thing that can help is retooling yourself so that you are still viable."

Hemmings hails from England, a country that in his youth mined coal, produced steel, built military and commercial boats and airplanes, had five car companies, and exported virtually every product that a manufacturing nation could.

"Today, there is none of it," he said. "The forces of change made themselves felt on the British economy. Politicians couldn't recognize it, senior management was too inept to manage change, and the labor unions wouldn't allow change."

A half century later, Britain has effectively no manufacturing base, and Hemmings sees that same scenario playing out in Michigan

"But it doesn't have to be like that. We don't have to stick our head in the sand and ignore the reality of what is happening."

He pointed to Alticor, Bissell and Wolverine World Wide, West Michigan companies that have seen incredible growth as a result of embracing the global marketplace. For many companies, globalizing will include the unpopular decision to source from low-cost countries, with China a likely choice.

Hemmings is very familiar with that part of the world. He was born in England but raised in Hong Kong, and has lived in Singapore, Malaysia, Taiwan and Indonesia. He describes himself as an "international gypsy," having lived in no location for longer than two years before moving to West Michigan in 2001.

As a young man, he served briefly as an electronics engineer and later as a pilot for the Royal Air Force. He transitioned into defense contracting two decades later, arriving in Taiwan to deliver a flight simulator contract. He ended up staying in Taiwan, launching the precursor to Pacific Rim Alliance in 1990, a company that arranged Asian sales agreements and installations for defense contractors AM General, Raytheon, Hughes Electronics and other large companies that exported their technologies into the Asia-Pacific region.

In 1997, the Asian economy plummeted, and his business along with it. He began looking for a new business model, uncertain in what direction the world would turn. He enrolled in the Owner/President Management program at Harvard University, and there began researching the potential impact of China joining the World Trade Organization.

When that happened, he reasoned, it would significantly impact U.S. manufacturing. With the automotive industry's large percentage of high-paid workers doing relatively low-skill jobs, Michigan would be the most affected. He shut down his Taiwan operation and began touring the Great Lakes region, first Detroit, then Toledo, Saginaw, Flint and Lansing

"When I arrived in Grand Rapids, I was delighted to find somewhere I could actually live," Hemmings said. "I drove a stake in the ground and didn't look back."

Pacific Rim Alliance now has offices in Ann Arbor, Atlanta, Seattle, England, Singapore, Australia and Taiwan, with three locations in China. The Ann Arbor location arose out of a failed three-year battle against Detroit-area companies' low opinion of Grand Rapids

The $18 million company does not serve as a broker, but instead functions as a facilitator and educational resource on doing business with Asia. There are typically three phases in the PRA program, the first of which involves several months of research and strategy. There is no cookie-cutter model for doing business in Asia, Hemmings explained, and each company will find different opportunities and challenges.

At the conclusion of the first phase, Hemmings and the client visit Asia. He shows them the competition, potential partners, market opportunities, possible acquisition targets and development zones in which they could invest.

"At the final dinner, I always say, 'One of you in this room wants to go home, divorce your wife, sell the house, and come back and get started. Another one of you wants to go outside and cut your throat. Neither is right."

If, after careful consideration, the company opts to move forward with an offshore investment or sourcing arrangement, Pacific Rim Alliance will facilitate the process, aligning all the necessary assets and relationships, and then manage the initiative until the company is comfortable with its own operation.

"Our objective is to make the client independent of us," Hemmings said.

If done responsibly, he believes that offshore sourcing can only have a positive impact on a company. Companies are not built solely on manufacturing, he argues, as the core competency of many firms is in the brand, intellectual property, managers and distribution channel.

"If you change this one thing, the rest of the company will grow," he said.

Although he has laid West Michigan roots, Hemmings remains an international gypsy. He is not affected by jet lag, he boasts, and his West Michigan office often keeps a Shanghai schedule, kicking off the work week on Sunday night. He has a dog that barks whenever he returns home, he jokes, having little idea who he is.

His daughter, Jessica, is a professor of textiles at the University of Winchester in England.    

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