China knocking on area's door

CADILLAC - By 2010 China will exceed the United States as the world's largest economy, possibly putting as many as 59 percent of local businesses at risk. How to hedge the threat was the focus of an address by Brian O'Neill Friday at Baker College in Cadillac.

O'Neill, the retired general director of operations for the Delphi Corporation, spoke at a lecture luncheon sponsored by the college and Cadillac Area Chamber of Commerce. The presentation aimed to engage area businesses in global thinking.

“Sometimes we believe Cadillac is an oasis in northern Michigan and not affected by what is happening internationally,” said Baker College Cadillac President Robert VanDellen “Our economy in Cadillac is directly impacted by what is happening in China, Mexico, South America and Japan.”

A Cadillac native, O'Neill brought home the global view. He warned the more than 60 manufacturers, bankers, and others from the business community, of China's growing power and potential for self-implosion.

“Napoleon said ‘When China awakens the world will tremble.' The world is trembling,” O'Neill said. “What many don't realize is that China is trembling.”

Between 1995 and 2005, O'Neill was involved in two plant operations in the developing nation.

“I saw the most astounding transformation I've seen in my life,” he said.

Eighty-five percent of the world's capital is pouring into China, according to O'Neill. Low labor costs remain the primary catalyst for its rapid growth.

“For every employee I hire in Flint I can hire 39 (in China). For every employee in Cadillac I hire, I can hire 20 in Suzhou,” he said.

Despite low wages and a lack of environmental regulations, the country is not a business Shangri-La.

“Doing business in China is not a walk in the park,” O'Neill said. “You need to know the customs and rules and invest money, or you will fail.”

Lack of legal shields also makes protecting intellectual property rights related to products a challenge.

“You better protect it or it will pop up in some other company,” he said.

China's expeditious industrial development has caused serious internal problems. More than 200 million people are roaming the country without food or jobs, O'Neill said. He foresees the desperate shortages triggering a revolution, as it has many times in the country's past.

But establishing trade partnerships to alleviate China's deficits could translate to opportunity for American companies.

“We have places to grow food that China doesn't,” O'Neill said. “We have to consider how we can leverage that.”

O'Neill also suggested we continue to lead the world with American know-how and our expertise in medicine, farming and environmental science.

“The nation will be our partner in the world,” he said. “We have to be creative in establishing ways to handle China.”

sbarber@cadillacnews.com | 775-NEWS (6397)