cadalyst
Manufacturing

Perkowski to Give Tour of China

21 Feb, 2006 By: Kenneth Wong

CEO of ASIMCO Technologies previews his National Manufacturing Week keynote address


Jack Perkowski
Jack Perkowski
The World is Flat, states the title of the book by New York Times reporter and acclaimed author Thomas Friedman. And if you are a manufacturer, China is where you should be, suggests Jack Perkowski, one of the commentators featured in Friedman's bestseller on globalization. Commenting on the automotive industry during a teleconference, Perkowski observes, "It would be difficult to be a global leader if you don't have a meaningful presence or participation in China."

Founder and CEO of ASIMCO Technologies, Perkowski is a Harvard graduate and former Paine Webber associate now heading a successful automotive parts business in China. He's also a scheduled keynote speaker at this year's National Manufacturing Week conference, March 20-23 in Rosemont, Illinois, where he will address the topic, "China: Opportunities and Challenges."

During a teleconference last December, Perkowski discussed the opportunities and challenges of doing business in China and shared his insights. Tracing China's industrial history, Perkowski pointed out, "Between 1949 and 1978, China went through a time warp. China developed very little while the rest of the world developed enormously." One of the blunders companies make with China, he said, is "bringing a business model developed for the much more developed U.S. economy and trying to implement the same thing in China." He suggested a more suitable approach might be to "take China for what it is today. It might mean going back to the U.S. business model 30 years ago."

Perkowski cautioned that, "Far from being a monolith, as most people assume it is, China is in fact very decentralized." He quipped that the common saying among the locals is, "The mountains are high; the emperor is far away." Thus, he argued, developing localized relationships is essential. Afterward, responding to questions from the media, he made the following observations:

On engineering: "China is an engineering-oriented society; 37% of the Chinese undergraduates study engineering. The critical area for the Chinese engineers is to improve its product development capabilities. Because of the time warp, when China emerges from 1978, there was a huge technology gap. That led to certain insecurities."

On labor vs. automation: "In the U.S., you put more automation in order to reduce labor, but in China labor is cheap and capital is more scarce, so you'd get far less with automation. ... Generally you'd have less automation in China."

On management: "China is not a place where you can bring in managers from other parts of the world ... and there isn't a plethora of management talent in China. So to put together an organization with a localized Chinese management team you can empower is a very challenging proposition."

On intellectual property infringement: "It tends to be the most severe where you have a product with a high cost relative to its manufacturing cost ... With products that are highly technical, require sophisticated manufacturing processes and go to the original equipment market, you find that there doesn't tend to be that much intellectual property violation ... You can protect yourself quite a bit by putting sophisticated technologies into wholly owned facilities. ... You can also break up the process and not do everything in one facility or one workshop or one location."

On India: "The infrastructure there is worse than what China was in 1994. What good Indian companies have done is to focus on something that doesn't rely on physical infrastructure but on broadband connection ... India will play a role going forward, but China is the country now dominating Asia."

When it comes to China, there are two primary rules to keep in mind, according to Perkowski: "Everything is possible; nothing is easy."


About the Author: Kenneth Wong





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