Based in Shanghai, Zhongli operates its North American unit out of Troy, Michigan, which houses a 33,000-square-foot parts storage and re-packaging warehouse facility used to distribute its automotive-related rubber products manufactured in Shanghai and Wuhu, China. It also operates a 13,000-square-foot. technical centre in Madison Heights, Michigan., that performs sales, engineering, logistics and quality control functions.
The firm is set to locally produce suspension bushings and control arms currently produced by Zhongli in China. Jackson said Stern Rubber will be moulding the rubber bushings and then assemble them into the control arms and ship a completed finished part to the customer.
Jackson said even though the firm is taking on automotive product production, it is not abandoning its current sources of business. Just the opposite, it is still trying to grow that area with Zhongli's support. Right now the firm is laying the foundation to take on this production.
In addition to the expansion, the company had to get audited for a new spec – ISO/TS 16949, which is the quality management standard for suppliers to the automotive sector. The firm completed the audit in June.
“That's been a six-month, all hands on deck process to get ready for that and we just went through the audit,” Jackson said. “It's just a lot more in depth, we had to look at every single thing we did and modify or enhance to meet the tighter requirements.
“There's a lot of stuff we have to get done before we can jump into the automotive world. So hopefully within the next couple of months we'll be registered to that TS spec. We had to have that to be able to get into the auto world.”
Heckert cited a number of reasons for foreign-owned companies to locate production in the US, the main one being flexibility. It's a lot easier for a company with manufacturing in the region it serves to respond to demand because of the quicker lead times a shorter supply chain provides.
Interest rates in the US are also low, despite the dollar's strength. But Heckert cited a “Made in the USA” push that's beginning to drive more investment into US-made goods.
“If you can claim that you're doing manufacturing here in the states, that I think helps,” he said. “It helps with your relationship with the customers and it helps with the perception of your brand. All of those are reasons that I've been hearing for this shift. We certainly are seeing a number of foreign entities working on deals.”