In June, Chinese-owned electric vehicle company SF Motors announced a definitive agreement with American manufacturer AM General to purchase its commercial assembly plant in South Bend, Indiana. This plant once manufactured Hummer and Mercedes-Benz R-class vehicles, but would have been shut down as the last remaining contract expires late this year. However, under the new agreement, SF Motors will keep the current plant’s 430 American workers employed and invest approximately $30 million to renovate and retool the factory in hopes of producing electric vehicles early next year.
SF Motors, headquartered in the heart of Silicon Valley, is a subsidiary of Sokon Industry Group based in China, where demand for electric vehicles is growing but engineering capacities are limited. SF Motors previously invested $10.7 million to establish its US engineering research and development facility in Washtenaw County, Michigan, creating 150 jobs.
Indiana’s Governor Eric Holcomb stated that this deal supports the economic growth of Indiana and the employees at the AM General commercial assembly plant, further setting the stage for potential cooperation. With the effort from both sides, a series of Chinese investments came to Indiana this year. In April 2017, Beijing-based auto company BeijingWest Industries announced an $ 80 million investment in Indiana to set up its first US production facility, generating up to 441 new jobs by 2021. In February, Sutong China Tire Resources disclosed the purchase of a new plant in Anderson, Indiana with an investment of $2 million.
Indiana has deep economic and civil ties with China. The state exported a total value of $1.8 billion of goods to China in 2016, making China the fourth largest destination for exports from Indiana. China is also ranked as the state’s second largest source of imports. In addition, Indiana has a sister state relationship with Zhejiang Province, China. Chinese students make up more than one third of all international students at Indiana University Bloomington, gaining skills and knowledge, as well as contributing to the economic growth of the state.
Xinxin Zhang is a research intern at the East-West Center in Washington. She is a graduate student in public policy at the University of Chicago.