Scandal plagued Chinese company, Fuyao Glass, making huge investment in Illinois. Why no fanfare and why Illinois?

By: Mark Glennon*

Fuyao Glass. You probably never heard of the Chinese company or its plans, but it recently said it will invest $400 million to expand production capacity at its plant in Decatur, Illinois.

It’s not often that a factory expansion that big in Illinois isn’t greeted with celebration and boasting by the state, including press releases by the governor.

Why not this time?

Why would Fuyao choose Illinois?

Look to Ohio for the answer to the first question. That’s where the company has its biggest U.S. production facility and where the company has been subject to extreme criticism. Local media there have covered it extensively. The Dayton Daily News, in particular, has published an excellent, lengthy series of investigative reports.

No criminal charges have been filed against Fuyao and the company says it is not a target of any investigation, but the problem is how Fuyao staffed its plant using third parties.

As reported by the Dayton Daily News and others, a federal civil complaint alleges that multiple suspects created roughly 40 businesses to enable the harboring, transportation and employment of illegal aliens at several factories, including Fuyao Glass America (FGA, Fuyao’s U.S. subsidiary) in Moraine, Ohio.

“It is alleged that many of the workers were illegally smuggled into the United States, primarily through Mexico, and encouraged to travel to the Dayton area to be employed by one of the target entities and serve as a workforce at the various factories,” the Department of Justice said.

The Dayton Daily News interviewed a former contract security employee for Fuyao, who said he saw what federal agents allege was a human smuggling and money laundering operation.

“I would count about two of the big white … vans, (an) extended cab that held on average 12 to 15 people, and about three of the silver ones every shift, on first and second,” Davis told the newspaper.

“The vans were full of foreign workers,” he said. “Sometimes one person would swipe a badge and facilitate access for a number of other people through plant gates — something forbidden for American workers.”

“How do we get 100 Chinese-born people the same day” coming to the plant to work? It takes time to get a visa.,” former security guard said in a video of the interview. Fuyao didn’t care.

From the U.S. Attorney’s press release:

The civil complaint alleges that multiple suspects created roughly 40 entities (the “target entities”) that facilitate the harboring, transportation and employment of illegal aliens at various factories. The suspects used these target entities to augment the workforces of several factories with individuals who illegally entered the United States, who are unlawfully present in the United States and/or who are working without required employment authorizations. One of these factories is FGA in Moraine. 

It is alleged that many of the workers were illegally smuggled into the United States, primarily through Mexico, and encouraged to travel to the Dayton area to be employed by one of the target entities and serve as a workforce at the various factories. Most of the workers are of Chinese or Hispanic nationality. Workers allegedly lived at “family style hotels” (boarding houses) owned by the target entities and were driven to and from work in transportation provided by the target entities….

Within days of receiving direct payments from FGA, the suspects would extensively wire funds between their various LLCs. In total, FGA has paid more than $126 million to LLCs controlled by the suspects. The money was allegedly used by the suspects for private financial gain and to purchase real estate, vehicles and luxury goods.

As indicated there, the legal investigation into Fuyao predates the Trump Administration’s crackdown on China, and complaints about Fuyao employment in Ohio go back much further.

The Dayton Daily News also reported on the awful living conditions they saw for employees:

When reporters visited the raided homes in the Dayton area, no one answered the door, the residents said they spoke only Chinese or said they couldn’t answer questions. One house in Dayton had the door open on a sweltering afternoon, through which dishes could be seen piled in the kitchen and, hanging from the ceiling, fly strips were filled with bugs….

The whole downstairs you could see and (it) was nothing but bunk beds,” [a neighbor] said. “It was so disgusting. The trash would just be everywhere….”

“The vans had to pick them up, take them shopping,” [another neighbor] said. “When they came back from shopping, they had running suits on and that’s what they went to work in for about a week and a half, two weeks until they got their Fuyao shirts and pants.”

Fuyao’s Ohio plant was the subject in a documentary, now on Netflix, made by Barack and Michelle Obama’s production company, titled American Factory.

Here’s how a review in Forbes summarized what the film showed:

The people of Dayton were ecstatic to have jobs once again. However, they quickly learned that the work expectations of the Chinese owners were radically different than the norms in the United States. It becomes uncomfortably clear that the ways of the Chinese—complete fierce loyalty to the company, 12-hour shifts, working weekends, little or no positive acknowledgement from management, lack of care about safety issues and putting the company before their own lives—will make their work lives intolerable. The factories are run like indoctrination camps. The company is sacrosanct. There will be no dissent. The orders are to make the auto-glass products quickly and cheaply, no matter what the personal, physical and emotional toll it takes on the employees. “One tongue, one company,” as a Chinese Fuyao employee puts it.

With so much contempt directed at it in Ohio, Fuyao was definitely wise not to attempt expanding its plant there.

What state would a good alternative? Aside from Ohio and Illinois, Fuyao also has facilities in Michigan and South Carolina.

Maybe Fuyao has an entirely sound business reason for choosing Illinois. It already has a large facility in Decatur, where it will now expand.

But it’s also fair to wonder if Fuyao picked a state where no questions are allowed about Chinese companies.

That’s precisely the case in Illinois with its investment by Gotion, the extremely controversial Chinese company building an E.V battery plant in Manteno, Illinois: No questions allowed.

On Gotion, Gov. JB Pritzker expressly refuses to answer any questions about the project, dismissing questioners as “MAGA Republicans” and “xenophobes.” That’s despite overwhelming evidence of ties between Gotion and the Chinese Communist Party and deep concerns about industrial spying by the company. Democrat Leon Panetta, a former CIA director, is among those who have warned about that.

Silence about Fuyao from Pritzker and other state officials is telling us something.

*Mark Glennon is founder of Wirepoints.