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Business - China - Driving for profits in China
A full view to China's market, through Cummins Inc.
XIANGFAN, China -The Indianapolis Star, by Ted Evanoff -Aug 28, 2005 -- Columbus diesel maker Cummins Inc., one of Indiana's oldest manufacturers, earns multimillion-dollar profits as a leading diesel supplier in China, producing engines in its Chinese joint-venture plants... Lower pay, higher profit: Workers in the Dongfeng Cummins plant in Xiangfan, China earn about 35,000 yuan, or $4,300, a year, essentially an upper-middle income in a city where the typical factory pay is less than 25,000 yuan, or $3,100. In comparison, Cummins workers in Walesboro, Ind., earn about $35,000 a year on the 5.9-liter diesel assembly line. Factory workers across Indiana and the United States fear exports from low-wage Chinese industries could wipe out their jobs... This year, Chinese freight haulers will buy about 400,000 new diesel trucks -- a volume nearly the size of America's heavy-duty freight truck market. By 2010, China's annual truck sales are expected to reach the 1 million mark. Cummins forecasts it will have 23 percent of the market... Today, Cummins makes diesel engines, power generators, alternators, turbochargers and filters in six Chinese plants shared with Chinese firms. Cummins also is putting in an engineering center at Wuhan... By keeping engine prices as low as possible, Dongfeng Cummins makes it difficult for Chinese copycats to profitably counterfeit its products...
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