American Dream meets the Chinese Dream: A Nightmare on Fuyao Avenue

American Factory is a 2019 documentary, distributed by Netflix and produced by Higher Ground (production company owned by Barack and Michelle Obama).

Submitted by Internationali… on January 31, 2020

The directors, Julia Reichert and Steven Bognar, have previously told the story of the closing down of the General Motors plant (GM Moraine) in Dayton, Ohio1 in the 2009 documentary The Last Truck. In 2014 Fuyao Glass, a manufacturer of automotive glass based out of China, acquired the former GM plant and began operations in late 2015. The American Factory was filmed from early 2015 until the end of 2017 and documents the trials and tribulations of the new plant, its owners, and its workers.

Despite its liberal lens – the directors clearly hope the film can help overcome “cultural differences” between China and the US, and end it on a fatuous note that "how workers, governments and businesses tackle [automation] will define the future of work" – it does provide certain insights on the relations between Chinese and American capital and the problems facing a divided and disempowered working class.

Some History: The Moraine Assembly

The story of Moraine GM, in the suburb of Dayton, is not unique. Toluca GM, Oshawa GM, Janesville GM2 all shared the same fate. At one point these factories provided hundreds of thousands of local jobs for whole generations. And while over the past 50 years the effects of automation and restructuring gradually dwindled those numbers down, it was the financial crisis of 2007-08 which finally put the nail in the coffin.

The Moraine Assembly opened its doors in 1951, at the time of the post-war economic boom. Owned by Frigidaire, a subsidiary of GM, it specialised in the building of refrigerators. Frigidaire has had a presence in Dayton since 1926, when it first repurposed the premises of the war-time aircraft manufacturer Dayton-Wright, before finally moving to the Moraine grounds. Fordism, life long jobs, union protection – this is what characterised that era and allowed for the growth of the Moraine suburb.

"In the 1950s the slogan of US capitalism was “what was good for General Motors was good for America”. This was when General Motors (GM) was the biggest, most successful and most admired (at least by other capitalists) multi-national in capitalist history. But that was at the height of the post-war boom when, in “the greatest secular boom in capitalist history” as J.K. Galbraith dubbed it, GM had 54% of the US car market."3

While socially the 1960s were a turbulent period for Dayton (a highly segregated city, it saw race riots after the murder of an African American man by an unknown white assailant), it was the 1970s however, and the crisis of profitability, which spelled the end of that ostensible era of prosperity. At the beginning of the decade, Frigidaire still employed 12,000 workers but already in 1971, in an attempt to “bring product inventories in line with product sales” the company fired 3,222.4 In 1972 workers at the plant, dissatisfied with the union (at the time, the International Union of Electrical Workers, IUE) and angry with GM over wage cuts, lay-offs and safety concerns, went on a wildcat strike for four days. Over 200 were disciplined and over 100 were fired. The IUE refused to fight their corner, saying they cannot afford to lose $1,000 per case, on a cause that’s already lost.5 These wage cuts and reductions would not be the last – it was a pattern that would continue for the next 40 years. In 1979, Frigidaire was sold, and General Motors refitted the factory to coincide with the boom for trucks and SUVs instead. Two years later, in 1981, the plant was re-opened and started producing Chevy S-10 pickup trucks. It now employed only 6,000 workers.

In 1984 a 13 day strike over collective bargaining in Canadian GM factories, involving some 36,000 Canadian auto workers and some unauthorised walkouts, led to a shortage of parts in American plants, including Moraine GM, and a $30 million loss in profits a week. Workers in key industries hold a lot of power – a break in the production process in one sector can cause a snowball effect down the line. GM workers learned to use this to their advantage. In 1996 a strike over outsourcing at two Dayton GM brake plants again left workers at the Moraine Assembly idle with a shortage of work materials. For 18 days the 3,200 striking workers at just two plants made idle 177,000 workers at 54 GM plants, essentially crippling the world’s largest automaker and costing $50 million a day in lost production. Martin Glaberman, the ex-Trotskyist and former auto worker himself, reflected on the 1996 strike:

"If I work in a GM brake plant in Dayton, Ohio I have a certain amount of power; and therefore a certain amount of militancy. I go out on strike and within two or three weeks I have two-thirds of General Motors shut down. […] Aided by the so-called “just in time” method of production, a few thousand workers making brake parts in Dayton, Ohio, have brought virtually all of GM’s North American car and truck production to a halt."6

But despite this power, the 1996 strike failed – UAW and GM came to an agreement which allowed GM to continue to buy outsourced parts and workers only received some concessions in return. In 1998 a similar strike followed – the longest since 1970 (when work stopped for 67 days). This time the spark was in Flint, Michigan where 9,000 went on strike, and put more than 200,000 employees out of work for 54 days. Once again UAW placated the bosses – in the deal which put an end to the strike, GM promised not to close the striking factories but at the cost of a 15% increase in productivity.

From 2003 onwards production at Moraine GM started slowing down. By 2006 sales across the automotive industry were dropping. Only 3,900 workers were still employed at the plant. In 2007 another strike wave failed to turn things around. As we wrote at the time:

"General Motors and the UAW ushered in a new round of attacks on autoworkers by hammering out a new contract while allowing a token strike to be held by some 72,000 GM workers nationwide. The strike itself forced GM plants in Canada and Mexico to halt production. In a historic attack on the benefits and wages of GM workers, UAW President Ronald Gettelfinger, shamelessly attempted to pass off this defeat as a gain for job security. This defeat recalls other historic defeats for workers over the last thirty years."7

Moraine Assembly would continue to make trucks and SUVs until December 2008. By this point employment in the plant fell to 2,400 workers, and now all lost their jobs. With no income prospects, many long time GM workers had to sell their cars and even homes in order to get by. Dayton suffered as a whole: with the historic industrial hub gone, 10,000 jobs in the community are said to have perished as a consequence. With de-industrialisation, a shrinking population, and an opioid crisis, Dayton became the quintessential Rust Belt town.

Between 1981 and 2008 more than six million vehicles were built at the GM Moraine plant. While in its time Dayton itself saw some great outbursts of class struggle8 , much more of its history is centred around union betrayals and workers being sold down the river (be that by the IUE back in the 70s, or the UAW in the 80s onward). This has left a legacy of defeat – being unable to stem the tide of lay-offs, restructuring, and ultimately closure, 2008 would have been the end of the Moraine Assembly, had Chinese capital not swooped in to the “rescue” in 2014...

A New Beginning: Fuyao Glass

Fuyao Glass was founded in 1987 by Cao Dewang, or “Chairman Cao” as he’s referred to in the documentary. Cao began to build his empire thanks to Deng Xiaoping’s economic reforms, when in 1983 the local government sold him the glass factory he worked at (as a sales manager). By 1993 Fuyao Group was listed on the Shanghai Stock Exchange, and soon after made deals with Honda and Volkswagen. Fuyao is now said to be one of the biggest producers of car glass in the world, employing 10,000 people – and for Cao, the next step was to expand into the US. The billionaire philanthropist (a fan of Andrew Carnegie) spent $200m buying out the Moraine Assembly, becoming the biggest Chinese investor in Ohio.

Fuyao is not the only Chinese company currently investing in US manufacturing – Haier Group and Lexmark in Kentucky, Shandong Yuhuang Chemical in Louisiana, and Jushi in South Carolina, have all followed suit. Chinese direct investment in the US amounted to $46 billion in 2016, $29 billion in 2017, and $5 billion in 2018. Despite this economic backdrop, the documentary finished filming before the US-China trade war really kicked off, reducing Chinese investment. And Trump, who after all was elected on his promises to help out the Rust Belt and stand up to China, is completely absent from the picture (except for one scene in which a Chinese supervisors rallies American workers to speed up production under the slogan “Make America Great Again”...). But then so is Obama, who’s $85bn state bail-out ensured the survival of GM at a cost to the working class. So what we are left with is nearly two hours of footage following around the American and Chinese workers and managers, trying to make the factory work, and Chairman Cao’s frustration with the results.

Fuyao Glass now provides jobs to 2,200 American workers (some from the old GM plant) and 200 Chinese workers (who have been flown in from China). In only three years the factory has had a turnover of 3,000 workers and already undergone restructuring (at one point all American bosses were fired and replaced with Chinese ones). The factory only started to make a profit in 2018, after initially causing losses of millions of dollars. The conditions in the plant are generally seen by the workers as a step down from GM – when it opened, hourly wages amounted to $12.84 (compared to $29 at GM), and there were many concerns over health and safety. No surprise then that the UAW saw an opportunity here.

At the opening ceremony of the Fuyao plant, Senator Sherrod Brown (Democratic Party) was given a platform. He welcomed the investment but encouraged the Fuyao bosses to listen to the workers and allow unionisation. Cao opposed this, seeing the UAW as a damper on efficiency and production. This episode started a whole saga of Cao trying to keep the union out of the plant, with key union activists being singled out and fired, and $1 million spent on bringing in “union avoidance consultants” and the Labor Relations Institute to discourage workers from joining the UAW.

American workers seemed initially happy with Fuyao, in the sense that jobs have finally appeared in Dayton again, and even though the wages are crap it’s better than unemployment or precarious work. The Chinese workers on the other hand have been brought in from China, live in communal housing, and get to visit their families back in China only once or twice a year (after all, as Chairman Cao says at one point, “the point of living is to work”). As both sections of the workforce settle in, the reality of the repetitive work at Fuyao and the cultural differences become clear (for one, most of the Chinese workers don’t speak English, and most communication is initially done through interpretors). The American workers are concerned about health and safety, the Chinese about meeting production targets. Chinese supervisors criticise the Americans for being “lazy” and “overconfident”, while American supervisors are jealous of the Chinese discipline (at one point, an American supervisor on a company trip to a Fuyao factory in China awkwardly “jokes” that they should tape the mouths of the American workers at home to stop the chatter and raise efficiency...). Competition between the two nationalities is encouraged from above and by the production process itself, and whatever friendships the workers make across that divide is in spite of it. Although the exact arrangement between Fuyao and the Chinese workers is never explained, it seems that essentially they are held hostage by the company (which brought them to the US in the first place, provides them with housing, and is their ticket back home). The fact that these workers work so hard all the time is dismissed as a cultural quirk, rather than anything sinister.

In fact, when the union steps in, it makes no effort whatsoever to reach out to the Chinese workers. The discourse of the UAW is nationalist in tone – what they see as the problem is that Fuyao doesn’t want to abide by American laws. It seems that not much has changed from 120 years ago when the AFL warned of the dangers of “Asiatic Coolieism”. In the end the unionisation ballot fails – 60% of workers vote NO. As a token of appreciation, Fuyao invites 10 of the “best” employees to visit China.

Unions and Capital: 'Two Gears Rotating Together'

"The Big Three automakers [GM, Ford, and Fiat Chrysler] have left workers with pollution, falling wages and working conditions, and gaping holes of poverty and unemployment in communities where the auto industry has come and gone. […] Since 1978, the UAW has co-presided with the auto industry in the destruction of some 600,000 jobs, all the while talking about “job security”. For a huge number of workers this means a substantial and permanent drop in their standard of living. The Union apparatus staggers onwards, into an ever more acute crisis of capital, in its role as the arbiter of losses and concessions for workers."9

When the American supervisors visit the Fuyao plant and offices in China, to learn from their management techniques, we get a glimpse of the famous Chinese “national-socialism”. The billionaire Chairman Cao is greeted like a hero, paintings of himself adorn the walls, while a lavish musical show about the wonders of productivity startles the Americans. In the Chinese Fuyao plants workers are subjected to regular military-style drills, get only two days off a month (eight in the US, i.e. weekends), work 12 hours shifts (8 hours in the US factory), and overtime is compulsory, as is union membership (in the state run ACFTU). According to the secretary of the Fuyao branch of the Communist Party (who also happens to be Cao’s brother-in-law...) the union and the company are “closely related to each other”, including financially, like “two gears rotating together”. Young internet-dwelling “Maoists” would do well to study the "class character" of this arrangement...

American leftists might be relieved that the UAW is not an ACFTU, but on closer inspection a different picture emerges… UAW owns stock in GM (100.15 million, making it the largest stakeholder), the AFL-CIO invests in the Democratic Party (more than $200 million in the 2016 election cycle – no wonder Senator Brown was so keen on unionisation), all the while UAW bureaucrats blow members’ money on expenses for themselves.10 The integration of the trade unions into the state machine has been a gradual worldwide phenomenon. In a speech delivered in 1937 John L. Lewis, one of the founders of the CIO (which in 1955 would merge with the AFL), accurately described the role that unions play in the imperialist epoch:

"Unionization, as opposed to communism, presupposes the relation of employment; it is based upon the wage system and it recognizes fully and unreservedly the institution of private property and the right to investment profit. It is upon the fuller development of collective bargaining, the wider expansion of the labor movement, the increased influence of labor in our national councils, that the perpetuity of our democratic institutions must largely depend."

Or as we put it,

"It is an accomplished and irreversible fact that the trades unions are subjected and incorporated into the capitalist state. Since the first decades of this century working class experience has fully confirmed our analysis and predictions. As an integral part of the state apparatus, reduced to an essential tool for the support of the national economy and to an organic factor in the maintenance of the capitalist mode of production (operating in accordance with its laws), the trade union has completely lost even the last trappings of an intermediary and apolitical organism […] The trade union arose as a tool of the working class by its bargaining over the price and conditions of employment of labour power. However, at the same time as it regulated the relationship between wage labour and capital it was inevitably destined to preserve it. The task of administering this relationship, which fundamentally supports capital's economic base, has completely absorbed both the union organisations and the people involved in them."11

The real defeat here then is not a lost ballot but the fact that the working class, after 50 years of retreat, have not yet revived the historical memory of self-organised struggle outside the union straitjacket. The documentary ends with an abrupt segment on automation, as the Fuyao bosses conspire to replace more workers with machines (channelling a quote sometimes attributed to Henry Ford: “Why is it every time I ask for a pair of hands, they come with a brain attached?”). Meanwhile a bizarre monologue from Chairman Cao is supposed to put a human face to the billionaire, who ponders whether he was happier as a young boy, missing the “croaking frogs and chirping bugs” of his childhood, and whether he’s now “taken the peace away and destroyed the environment”. C'est la vie. And so Fuyao continues in the footsteps of GM, until it too meets that harbinger of crisis, profitability, or gets under the skin of the American government.

The Future of Work?

"The Tuesday early-morning death of Fuyao Glass America Inc. forklift operator Ricky Patterson of Dayton has renewed attention on safety at the Chinese automobile glass manufacturer. […] Patterson died after being crushed between a forklift and more than a ton of glass, Moraine police records show. [...] Workers have been concerned about safety since the plant opened, according to a man who identified himself as a former Fuyao employee. “It has long been said that nothing will change in the plant until someone dies. Now, here we are,” John Durham said in a email Tuesday to this news organization."12

This tragic news, only some three months after American Factory finished filming, validated the safety concern of Fuyao workers. Ricky Patterson is not mentioned in the documentary.

And so it is. The recent strike in GM, which marked another major defeat despite mobilising some 49,000 workers and closing 34 plants, has confirmed the closure of plants in Baltimore and Warren, Michigan and the shifting of production abroad.13 As Chinese capital is trying to make inroads into the US, American capital looks for solace in Mexico. Until and unless the working class the world over finally says “enough!” this nightmare of competing capitals and endless sacrifices of labour will continue.