“Quality is the life of our company”

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					China plant paying off for Morgantown company

By Scott Finn, West Virginia Public Broadcasting

Studio lead: Our reporter Scott Finn has been accompanying Gov. Joe Manchin on his trade
delegation to China, the first by a sitting West Virginia governor.

They visited Shanghai first, where dozens of construction cranes dot the landscapes. Chinese
businesses need construction equipment, and they‘re willing to pay a premium for quality.

Swanson Industries of Morgantown is trying to tap into this market. They took a big step in May
when they took over a joint manufacturing facility in Shanghai. On Thursday, Finn toured the
facility and talked with its owners and workers, who are bullish on its future.

Finn: To understand how Swanson Industries got started in China, you need to meet Mr. Wu.

Wu: (In Chinese, introducing self and telling of his eight businesses, fades…)

Finn: That‘s Mr. Wu introducing himself and telling of his eight business ventures, including
valuable real estate all over China. Mr. Wu wanted to get into the burgeoning energy and
construction industry, and he knew how to negotiate the government bureaucracy. Swanson
Industries knew how to make parts for construction and mining equipment. The Chinese Business
Center at West Virginia University put them together, and it‘s been a happy marriage, says Mark
Carter, vice president of Swanson Industries.

Mark Carter: ―We thought it made a lot of sense to have a Chinese businessman with his
background and success to partner with, because we‘re so far away, to have someone here
available to run things.‖

Finn: Carter and Wu agreed to drive me to their factory. It was more than a half-hour from the
bright lights of downtown – the real Shanghai, where regular folks live and work.

Carter, talking while in car: ―We‘re in the Mihan district of Shanghai. We‘re probably several
blocks away from the factory. It‘s very much a mix of residential and industrial. A lot of the folks
that work at the factory here, and even some people I‘ve met, have commented that they live very
close to here. I‘ve met …mix of industry and residential

Finn: Little industrial parks are interspersed with apartment complexes and shops. We see
workers riding bikes and motorscooters and walking from an elevated train station nearby. Then,
we arrive.

(Door closes)
Carter: OK, this is our factory here in Shanghai. This is our Swanson Industries International.
This is our billboard advertisement. It‘s visible from the train, railway and from the roadway, so
thousands of people that pass here everyday see the products that are manufactured here in our

Finn: The stucco building is plain, utilitarian. We walk through a bright-blue sliding door and onto
the shop floor. It could be any factory in America. About a dozen men work at large machines
called lathes that slice away at metal tubes like peeling an apple.

Carter: OK, These are some of the CEC machines that we have, CEC lathes, and we‘re
machining various components that are used in the manufacturing of the hydraulic cylinders –
some shafts and some piston parts here.
Finn: Remember that slogan for the car rental company, ―We try harder‖? Swanson has to try
harder to make it in China. There‘s a natural bias in the system toward native suppliers. But
American equipment makers and suppliers have one advantage—quality. Chinese buyers think
that American equipment, by and large, is better.

It‘s a point Swanson tries to hammer home to its Chinese employees. Carter points out a large
banner across the back wall.

Carter: ―A little story behind the banners here. When we started talking to the employees, we had
some employee meetings stressing the importance of the quality of products. So after our last
visit, after we had those employee meetings, we came back and they had put up these banners in
Chinese. And the translation is ‗quality is the life of our company.‘ They took it upon themselves
to do that.‖

Finn: Through an interpreter, an engineer called Mr. Yuan talked about the painstaking steps the
plant makes to ensure quality, including detailed testing.

Mr. Yuan’s interpreter: For example, a current problem that Swanson Distribution faces is the
rust problem. He has been involved in many experiments, like nitrogren processes, to test…(fade

Finn: Carter declined to talk about the wages of workers there, except they were competitive with
other joint venture companies. He also said this is not outsourcing, but an expansion of their
business that will should help the West Virginia operations, too.

Carter: And we‘re producing a product that we have not produced previously. So, it‘s a good
opportunity for us to enter new markets and also to give us an established base here in China,
because our next vision is to move forward and to (begin) selling products in China.‖

Finn: There‘s no guarantee of success for American companies in China. But both the Chinese
and West Virginians, including our engineer, see a bright future ahead.

Engineer, Mr. Yuan: I think Swanson…has a bright future.

For West Virginia Public Broadcasting, I‘m Scott Finn in Shanghai.

Later, I got a rare treat. Thanks to the people at Swanson Industries in Morgantown, I toured their
new plant in Shanghai. They employ about 50 people in China, making cylinders for hydraulic
pumps for the construction industry.

Swanson Vice President Mark Carter was my tour guide, along with the company‘s Chinese
partner, Wu Xiao Kang (Mr. Wu.)

Mr. Wu started out in real estate but wanted a way to get into the fast-growing energy sector.
Swanson wanted to open a plant in China to get a foothold in the market and see if they could
eventually supply the construction and mining equipment companies here.

The match seems to have paid off for both. Mr. Wu dealt with the Chinese government in getting
permits, for example – a complicated and sometimes arduous ordeal. And Swanson has set up a
modern factory. In fact, it looks like any American plant except all the workers are Asian.
So I saw these workers grinding down metal cylinders on a lathe, welding certain parts, and
testing them for quality. The biggest problem: they had just received two pieces of equipment to
test the cylinders, and things were going so well they needed more. I think owner Tom DeWitt will
be thinking about an expansion soon.

So what does this do for the folks back in West Virginia? First, DeWitt says that the China
expansion hasn‘t cost a single West Virginia job. In fact, it expands the jobs for back office folks,
engineers and other white-collar people. And it will help the company grow and thrive, he says.

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