American FOMO for the World's Factory: China

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American manufacturing companies rushed into China in the early 2000s. They went there to establish export operations back to the US, and to sell into the domestic Mainland market. I was part of that rush as a market entry and change management consultant from 2003 through 2011.

I was fortunate to have participated in the greatest factory FOMO party of the industrial age EVER.?

FOMO — the Fear of Missing Out — was the overwhelming driver of the transition. Companies that transferred all or part of their operations to China were not suffering Burning Platforms at the time.

Today, of course, 20 years on, is a different matter, with much of American manufacturing laying in rust. under- staffed, and under-skilled.

The Flood Gates Open

At the end of 2001, the World Trade Organization (WTO) granted China permanent normal trade relations (NTR) status, previously called most favored nation (MFN), when China became a full member of the WTO.?

Companies like Nike, which had long been established as foreign investors in China, were no longer lone wolves: within two years the country would become inundated with manufacturing companies from all over the world.

As Fear will do, it shunts compassion for self-interest and action. Leadership of the companies made decisions that were not always in the best interest of their employees, customers, or the United States.?

Companies justified the partial or complete moves of operations to China by citing the need to remain competitive in the global market, reduce costs, and increase profits.?

The Usual Suspects

Ford began manufacturing cars in China in the early 2000s, with the goal of taking advantage of the country's low labor costs and large consumer base. The company established a joint venture with Changan Automobile in 2001, which has since become one of the largest automotive companies in China.

Apple has also been manufacturing its products in China since the early 2000s. Its dominant supplier is Foxconn, the Taiwanese-invested company.?

Apple has been criticized for its reliance on Chinese labor and for the poor working conditions in its factories. However, Apple has defended its decision to manufacture in China by citing the need to remain competitive in the global market.

General Electric also invested millions in China, believing it was the future and the largest market in the world. However, growth in the company's key businesses, including power and medical imaging, began to slow in the 2010s from the levels GE expected.?

Government regulators also seemed increasingly hostile, holding up permits and increasing inspections of company facilities for no apparent reason. It's a story that has now become familiar for the past five years.

The Good, The Bad, and The Ugly of Globalization

However, the impact of these moves on business operations in the United States was significant, with many companies closing down factories and laying off workers.

Nevertheless, the foreign investment in China helped lift more than a billion people in the country out of poverty. It helped pave roads, build cities, new homes for hundreds of millions of families, high-speed trains that interlaced towns, tourism, an airline industry, and more.

However, frenzied development and concentration of Western manufacturing investment also brought massive problems to China: air pollution; depletion of potable water in rivers, lakes, and aquifers; health issues due to the introduction of ultra-processed foods and the lack of exercise (no more bicycles!); the fouling of land, and more.

Lessons from the FOMO Factory

For my part in the Great Industrial Migration to China, I helped reduce the anxiety of leadership and staff by leading what I call the 3-Crosses: cross-cultural understanding, cross-border communications, and cross-functional team development.

I facilitated greater cross-cultural understanding in business between leaders (governmental and business) of Chinese and Western companies, and between staff across the international date line.

Greater cross-border communications meant working across as many as 19 time zones in a single "day;" however, the rewards of helping sew together disparate parts of the world outweighed my fatigue.

And I helped build teams of people from different countries and different skill sets to — the hope was at the time — encourage engagements that would last a lifetime.

Change management within a FOMO setting isn't just about motivating leadership and staff to mobilize to realize a defined set of objectives. It should also be about relieving the natural anxiety that arises when uncontrollable changes beset people with careers, lives, and families.

If applied unwisely, FOMO can undo any good it was meant to do.?

William Dodson is a Technology Communications & Change Management Consultant specializing in ERP and AI implementations.

He is a former Organizational Change Management senior consultant for PriceWaterhouseCoopers, BearingPoint, Computer Sciences Corporation, and Sogeti.

His most recent books include:

"Artificial Intelligence for Business Leaders: The Essential Guide to Understanding and Applying AI in Organizations (2023, Cosimo Publishing, LLC), 100 pp. ISBN 979-8-9884070-7-2. In digital format and Amazon Kindle.

"The New 'Teacher's Pet': A.I. Ethical Dilemmas in Education and How to Resolve Surveillance, Authenticity, and Learning Issues" (2023, Cosimo Publishing, LLC), 77 pp. ISBN 979-8-9884070-8-9. Kindle edition: https://bit.ly/3TMrwDA

Contact him about implementing organizational change management initiatives for? digital technology innovations at: [email protected].

More about China-as-Factory to the World

China Inside Out: 10 Irreversible Trends Reshaping China and its Relationship with the World (John Wiley & Sons, 2010)

How Did China Become the World's Factory?

How America's Biggest Companies Made China Great Again - Newsweek.?

China and the World Trade Organization - Wikipedia.?