Foreign investment, everybody's doing it

The city government of Beijing will soon become the largest private employer in Saginaw, Michigan. In a few weeks a unit of GM there will have Chinese owners. The steering equipment producer was known as Saginaw Steering Gear, and is now called Nexteer. 8,300 people work for Nexteer around the world. The Chinese investors out-bid Korean and U.S private-equity contenders. The Beijing owners are known as Pacific Century Motors. This is the first time in history where China’s investors bought such a large U.S. industrial operation. The $450 million deal includes 22 factories, 6 engineering factories, and 14 customer-support centers, located around the world. This action tests people’s attitudes towards foreign investment. A major incentive for GM to make the deal was for Nexteer to dive into the booming Chinese auto market. Some workers see this deal as a life saver in the short-term, but aren’t sure if it’s good for them in the long-run. An unknown is whether the Chinese owners acquiring over 1,000 patents will benefit or hurt the workers. Chinese investment increases the leverage the U.S. has over China to let more U.S. firms in. Alan Wolff, an attorney for Dewey and LeBoeuf, says foreign investment built the U.S. for years. He points out that the investment bolsters U.S. manufacturing, which is better for the U.S. than Chinese manufacturing.

I think this deal shows the beginning of the increasing mix of investment between the U.S. and the world. These types of investments happened before with Japanese investors, and they created manufacturing jobs for the U.S. The interest in the unit by Korean investors also show that we will most likely see Korean owned units in the U.S. soon too. I think the increased investment in the U.S. by foreign investors improves political stability for the U.S. If countries are economically interdependent with one another, they will be much less likely to be aggressive or go to war. I understand that many workers are scared of working for foreign owners. However, the U.S. has done these investments to many countries around the world. The nations that got the investments at the very least gained jobs, and many countries have grown tremendously because of the foreign investment.

http://online.wsj.com/article/SB10001424052748703957804575602943255219552.html?mod=WSJ_auto_IndustryCollection#articleTabs%3Darticle