Why Chinese supplier exec scares America
Wanxiang snags U.S. plants, saves jobs, sets off alarms
Photo credit: ERIK UNGER
Pin Ni, president of auto parts behemoth Wanxiang America Corp., does not conjure the image of a conqueror.
He is small in stature and boyish in appearance, his salt-and-pepper hair the only betrayal of his 48 years. He's also quick to admit he is not always right. And even when he is, he'd rather not fight about it.
For the president of a $2.5 billion corporation that has spent two decades gobbling up foundering U.S. companies, Ni is remarkably low-profile. He eschews most media interviews, drives himself to work in his Lincoln MKZ, flies economy and prefers Super 8 hotels.
While acquiring more than two dozen companies, mostly auto parts makers, since launching Wanxiang America out of his home in 1994 as the North American offshoot of a privately held Chinese conglomerate, Ni has never issued a company press release announcing a purchase and has never asked an acquisition target to take the Wanxiang (wahn-SHAHN') name.
"We are a little different from some other people's approach, where either it's mine or yours. Ours is always, 'Let's work together,'" Ni said in an interview at his Elgin, Ill., headquarters.
Despite a recent barrage of criticism from American politicians and corporate rivals, Ni insists Wanxiang has never sent a single job or a single penny back to China. What is made here stays here, he says.
In China, Wanxiang's founder and CEO -- and Ni's father-in-law -- is Lu Guanqiu. Worth $2.6 billion, according to Forbes' list of world billionaires, Lu started Wanxiang in 1969 with $500 in capital and survived the Cultural Revolution by acquiring scrap steel from nearby villages to make farming tools.
In some ways, Wanxiang's business model hasn't changed. But today it gathers companies, pulls in $16 billion in revenue and employs 40,000 people. The American arm also is a ready-made customer for the Chinese parent's products. Profits from the American operations are plowed back into American investments.
Now the company is in the spotlight after winning the bidding for A123 Systems Inc., a bankrupt Waltham, Mass., battery maker.
Rival bidder Johnson Controls Inc. of Milwaukee challenged the Bankruptcy Court's decision, citing national security concerns related to A123's core technology. And Wanxiang's purchase of a company that has received hundreds of millions of dollars in U.S. taxpayer subsidies also has been a flashpoint -- so much so that a bill was floated in Congress recently aiming to block such sales in the future.
The A123 deal has people talking: Is China trying to snatch up and profit from America's handiwork?
Ni concedes he has not done enough to inform people about Wanxiang America. It's a company, he says, that started on "U.S. soil with U.S. sunshine and U.S. water and grew up to be a big apple tree."
Friends and colleagues put it more bluntly. "Why are we worried about the nationality of someone who is investing in America? Why are we stereotyping?" says Robert Remenar, CEO of Diversified Machine Inc., a maker of aluminum and ductile iron castings in Lockport, N.Y. He worked with Ni on a potential purchase in 2010 and considers Ni a trusted adviser.
In June, Remenar, an auto industry veteran who also worked at General Motors and Delphi Corp., stepped down as CEO of former Delphi unit Nexteer Automotive to become CEO of supplier Diversified Machine's CEO. He remains on Nexteer's board.
In 2010, while Remenar was CEO of Nexteer, Pacific Century Motors, a joint venture between Tempo Group of Beijing and an affiliate of the Beijing municipal government, acquired Nexteer from GM for $450 million.
Roger Brown, a managing partner at Summit Strategic Investments, of suburban Nashville, who has done deals with Ni, says, "Pin is the opposite of a New York banker. Everyone tries to compare him to Warren Buffett. Pin is his own Warren Buffett."
Says Brown: "He is taking companies on their last breath, standing up, helping them and turning them into success stories."
Ni is from Hangzhou, southwest of Shanghai, also home to Wanxiang Group. His father worked in the Chinese government's auto industry administration; his mother was an accountant for a bus manufacturer.
At Zhejiang University, Ni was ranked at the top of his class. He spent a year learning English and then applied and was accepted to the University of Kentucky in 1992.
In the meantime, he worked at Wanxiang. He met his wife, Lu's daughter, there. The couple now has three children, all U.S. citizens.
Two years into Ni's studies in Kentucky, his father-in-law asked him to set up a U.S. outpost of Wanxiang.
Walking through a spotless Elgin warehouse filled with neatly stacked boxes of Wanxiang's signature product -- universal joints imported from China -- Ni explains one policy: Workers earn a small bonus on every dollar of merchandise they ship out successfully; bonuses are docked for every mistake.
"Making money is not difficult. Sharing money is difficult," Ni says. "If you know how to share the money then you don't have to worry about building anything because everyone else is helping you build it."
Vince Bond Jr. contributed to this report