BEIJING -- The head of r&d at Chery Automobile Co. has quit, along with three other executives, potentially slowing the Chinese automaker's entry into the United States.
Xu Min, who was educated in the United States and worked at Delphi Corp. and Visteon Corp., left Chery Thursday, say industry sources. The other departing executives also have overseas degrees and experience. All four where involved in designing cars for the domestic market and for export.
Xu could not be reached for comment.
Chery suppliers say the departures were caused by a clash with locally trained engineers. Chinese automakers need engineers trained overseas to develop cars for export to the United States and Europe. But they can disrupt the companies that hire them.
"Overseas people like to manage Chery with foreign experience and style," says one supplier source. "Before the overseas Chinese came back, the local people had the real power. They don't like to lose it."
Returning Chinese tend to earn higher salaries than their local colleagues.
The departures are a setback for product development, says the source. Contracts that were negotiated by Xu but not completed are in limbo. The local executives are unlikely to use the same companies, he says. New suppliers must be found.
"Our company will be hurt by this change," adds the supplier source.
Two other automakers wanting to sell in the United States, Geely Automobile Holdings Group and Great Wall Motor Co., have hired returnees, as they are known.
Many Chinese engineers who earn doctorates in the United States are lured back to China more by the opportunity to help China's auto industry than by high salaries.
Still, their starting salaries are invariably much higher than a typical local salary. A high-end salary for a Chinese engineer with a doctorate from a local university and no international experience is about 20,000 yuan a month, or $2,500 at the current exchange rate. A returnee with a doctorate from a foreign university and overseas work experience can start at $6,300 a month.
Malcolm Bricklin's Visionary Vehicles LLC is working with Chery to develop cars to export to the United States. The original target for the start of exports was 2007, but developing cars that meet the stringent emissions and safety requirements for the United States has proved tricky.
Chery engineers have said a more likely date is 2009. Thursday's departures may push that date out even further.
You may e-mail Alysha Webb at [email protected]