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Michigan auto-parts vet enters Chinese joint venture

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Michigan auto-parts vet enters Chinese joint venture



Are Chinese investors smarter than most, as they buy up old factories and discarded machinery from the hollowed-out manufacturing industries of Michigan and its neighbors?

Or are many U.S. investors simply reluctant to put good money into auto industry assets and people, after seeing the collapse of so many companies and the loss of so many jobs?

A bit of both, said Tim Leuliette, former CEO of Metaldyne and Dura Automotive and a veteran auto-parts investor and executive.

Leuliette signed a joint venture agreement Monday with the China-based Tempo Group, which has already acquired several U.S. auto-parts operations and appears poised to accelerate its buying binge.

The deal between Tempo and Leuliette Partners of Birmingham will focus on doing mergers and acquisitions, plus helping to operate newly acquired entities. Eventually, Leuliette said, the partners expect to form an investment fund to do deals in chassis and powertrain systems, specialty vehicles, new energy technology and other areas.

"We will see, over the next five to 10 years, a large percentage of the investment into Michigan and into the U.S. auto industry, will come from Asia," Leuliette told me.

And why would this be good for Michigan? Or the U.S.A.?

"For this economy to grow, to provide jobs, there is a need for investment dollars," Leuliette said. And in China, where automotive is a high-growth industry and where modern technology is needed, U.S. manufacturing assets are viewed as very valuable.

But in the U.S., he added, "investors have been burned enough, and the auto industry has enough baggage, that auto investments look bad."

Bottom line: The world's fastest-growing auto markets are in Asia, Chinese investors are willing to bankroll U.S. factories that might otherwise shut down and U.S.-based outfits -- and their workers -- can get a piece of the action as auto sales jump in China, India and other global markets.

That's what Tempo's participation in the recent $450-million purchase of Nexteer Automotive, formerly the Saginaw Steering Gear unit of General Motors, was all about, along with the purchase of some former Delphi brake plants. Tempo also opened an engineering center in Canton Township after several meetings with Wayne County Executive Robert Ficano, who has led six trade missions to China since 2004.

Whatever one may think of China's trade gap with the U.S. or its currency valuation, China is sure to play a growing role in every global industry.

"Tempo's expansion will be Michigan-based," Leuliette said.

That sounds better than the last big infusion of Asian automotive investment, from Japan, that mostly helped places like Tennessee, Alabama, Mississippi and Kentucky, at Michigan's expense.

Read more: Tom Walsh: Michigan auto-parts vet enters Chinese joint venture | freep.com | Detroit Free Press http://www.freep.com/article/20101215/COL06/12150388/Michigan-auto-parts-vet-enters-Chinese-joint-venture#ixzz18Bh7aDzW

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