Metalforming Companies Wary Of Chinese Business Practices

March 10, 2008
| By Pete Daly |
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GRAND RAPIDS — A lobbyist for the Precision Metalforming Association told representatives of West Michigan companies recently that two major challenges to trade with China are “currency manipulation” by the Chinese government and the risk of theft of intellectual property created and owned by American companies.

John Guzik told a meeting of the Precision Metalforming Association of West Michigan that he knew of an incident where an American product prototype had been sent to China, illegally copied and put into production. Guzik said there was a complaint filed with the U.S. Department of Commerce, which did nothing because it said the product was not yet in production in the U.S., and thus did not fall within established guidelines for protecting intellectual property abroad.

He also told the group that a large and very expensive model of industrial press that is manufactured in the U.S. was found to have been copied by the Chinese and is being made there.

In order to compete on a global basis, many American manufacturers are forced to have some of their products made offshore. As that trend continues to grow, Guzik said, “We are seeing … that some of those countries are stealing intellectual property, which in the end hurts the entire industry.”

On the presidential campaign trail last week in Ohio — where, as in Michigan, manufacturing jobs are a major issue — Sen. Hillary Clinton harshly criticized the Chinese government for artificially holding down the value of its currency in exchange for dollars. Clinton was quoted in the Wall Street Journal as saying that “China’s steel comes here, and our jobs go there. We play by the rules, and they manipulate their currency.”

Both Clinton and Sen. Barack Obama are co-sponsors of a Senate bill that would set guidelines to determine if other countries are manipulating their currencies, which could then lead to the U.S. seeking legal action with the World Trade Organization.

At the same time, U.S. Treasury Under Secretary David McCormick said last week there are now signs within China of an understanding that it needs to move toward a market-driven currency, rather than an exchange rate set by Chinese government decree.

According to the PMA, metalforming is a $91 billion industry in North America, involving production of precision metal products by stamping, fabricating and other value-adding processes. PMA members include more than a thousand companies in 30 countries, most of them in North America. Members are metal stampers, fabricators, spinners, slide formers and roll formers, as well as suppliers of equipment, materials and services to the industry.

Members of West Michigan PMA include scores of metal-stamping companies such as Pridgeon & Clay, Grand Rapids Spring & Stamping, plus associate members such as Anchor Danly, Comerica Bank and Plante & Moran.

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